Adm. Case No. 3319. June 8, 2000.* valid marriage, cannot be considered immoral.
valid marriage, cannot be considered immoral. For immorality connotes conduct that shows
LESLIE UI, complainant, vs. ATTY. IRIS BONIFACIO, respondent.
Administrative Law; Attorneys; Disbarment; Practice of law is a privilege; Requisites for
admission to the practice of law.—The practice of law is a privilege. A bar candidate does
not have the right to enjoy the practice of the legal profession simply by passing the bar
examinations. It is a privilege that can be revoked, subject to the mandate of due process,
once a lawyer violates his oath and the dictates of legal ethics. The requisites for admission
to the practice of law are: (a) he must be a citizen of the Philippines; (b) a resident thereof;
(c) at least twenty-one (21) years of age; (d) a person of good moral character; (e) he must
show that no charges against him involving moral turpitude, are filed or pending in court;
(f) possess the
_______________
* SECOND DIVISION.
39
VOL. 333, JUNE 8, 2000
39
Ui vs. Bonifacio
required educational qualifications; and (g) pass the bar examinations.
Same; Same; Same; Possession of good moral character must be continuous as a requirement
to the enjoyment of the privilege of law practice.—Clear from the foregoing is that one of
the conditions prior to admission to the bar is that an applicant must possess good moral
character. More importantly, possession of good moral character must be continuous as a
requirement to the enjoyment of the privilege of law practice, otherwise, the loss thereof is
a ground for the revocation of such privilege.
Same; Same; Same; Lawyers, as keepers of public faith, are burdened with a higher degree
of social responsibility and thus must handle their personal affairs with greater caution.—
Simple as the facts of the case may sound, the effects of the actuations of respondent are not
only far from simple, they will have a rippling effect on how the standard norms of our legal
practitioners should be defined. Perhaps morality in our liberal society today is a far cry from
what it used to be before. This permissiveness notwithstanding, lawyers, as keepers of public
faith, are burdened with a higher degree of social responsibility and thus must handle their
personal affairs with greater caution. The facts of this case lead us to believe that perhaps
respondent would not have found herself in such a compromising situation had she exercised
prudence and been more vigilant in finding out more about Carlos Ui’s personal background
prior to her intimate involvement with him.
Same; Same; Same; To warrant disciplinary action, conduct must be “grossly immoral,” that
is, it must be so corrupt and false as to constitute a criminal act or so unprincipled as to be
reprehensible to a high degree.—All these taken together leads to the inescapable conclusion
that respondent was imprudent in managing her personal affairs. However, the fact remains
that her relationship with Carlos Ui, clothed as it was with what respondent believed was a
indifference to the moral norms of society and the opinion of good and respectable members
of the community. Moreover, for such conduct to warrant disciplinary action, the same must
be “grossly immoral,” that is, it must be so corrupt and false as to constitute a criminal act
or so unprincipled as to be reprehensible to a high degree.
40
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SUPREME COURT REPORTS ANNOTATED
Ui vs. Bonifacio
Same; Same; Same; A member of the Bar and officer of the court is not only required to
refrain from adulterous relationships x x x but must also so behave himself as to avoid scan-
dalizing the public by creating the belief that he is flouting those moral standards.—We have
held that “a member of the Bar and officer of the court is not only required to refrain from
adulterous relationships x x x but must also so behave himself as to avoid scandalizing the
public by creating the belief that he is flouting those moral standards.” Respondent’s act of
immediately distancing herself from Carlos Ui upon discovering his true civil status belies
just that alleged moral indifference and proves that she had no intention of flaunting the law
and the high moral standard of the legal profession. Complainant’s bare assertions to the
contrary deserve no credit. After all, the burden of proof rests upon the complainant, and the
Court will exercise its disciplinary powers only if she establishes her case by clear, convinc-
ing and satisfactory evidence. This, herein complainant miserably failed to do.
ADMINISTRATIVE MATTER in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
Meer, Meer & Meer for complainant.
Roco, Bunag, Kapunan, Migallos & Jardeleza for respondent.
DE LEON, JR., J.:
Before us is an administrative complaint for disbarment against Atty. Iris Bonifacio for al-
legedly carrying on an immoral relationship with Carlos L. Ui, husband of complainant,
Leslie Ui.
The relevant facts are:
On January 24, 1971 complainant Leslie Ui married Carlos L. Ui at the Our Lady of Lourdes
Church in Quezon City1 and as a result of their marital union, they had four (4) children,
_______________
1 Records, Vol. I, p. 5.
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VOL. 333, JUNE 8, 2000
41
Ui vs. Bonifacio
namely, Leilani, Lianni, Lindsay and Carl Cavin, all surnamed Ui. Sometime in December
1987, however, complainant found out that her husband, Carlos Ui, was carrying on an illicit
relationship with respondent Atty. Iris Bonifacio with whom he begot a daughter sometime
in 1986, and that they had been living together at No. 527 San Carlos Street, Ayala Alabang
Village in Muntinlupa City. Respondent who is a graduate of the College of Law of the
University of the Philippines was admitted to the Philippine Bar in 1982.
Carlos Ui admitted to complainant his relationship with the respondent. Complainant then
visited respondent at her office in the later part of June 1988 and introduced herself as the
legal wife of Carlos Ui. Whereupon, respondent admitted to her that she has a child with
Carlos Ui and alleged, however, that everything was over between her and Carlos Ui. Com-
plainant believed the representations of respondent and thought things would turn out well
from then on and that the illicit relationship between her husband and respondent would
come to an end.
However, complainant again discovered that the illicit relationship between her husband and
respondent continued, and that sometime in December 1988, respondent and her husband,
Carlos Ui, had a second child. Complainant then met again with respondent sometime in
March 1989 and pleaded with respondent to discontinue her illicit relationship with Carlos
Ui but to no avail. The illicit relationship persisted and complainant even came to know later
on that respondent had been employed by her husband in his company.
A complaint for disbarment, docketed as Adm. Case No. 3319, was then filed on August 11,
1989 by the complainant against respondent Atty. Iris Bonifacio before the Commission on
Bar Discipline of the Integrated Bar of the Philippines (hereinafter, Commission) on the
ground of immorality, more particularly, for carrying on an illicit relationship with the com-
plainant’s husband, Carlos Ui. In her Answer,2 respondent averred that she met Carlos Ui
sometime in 1983 and had
_______________
2 Records, Vol. III, p. 8.
42
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SUPREME COURT REPORTS ANNOTATED
Ui vs. Bonifacio
known him all along to be a bachelor, with the knowledge, however, that Carlos Ui had
children by a Chinese woman in Amoy, China, from whom he had long been estranged. She
stated that during one of their trips abroad, Carlos Ui formalized his intention to marry her
and they in fact got married in Hawaii, USA in 1985.3 Upon their return to Manila, respond-
ent did not live with Carlos Ui. The latter continued to live with his children in their Green-
hills residence because respondent and Carlos Ui wanted to let the children gradually to
know and accept the fact of his second marriage before they would live together.4
In 1986, respondent left the country and stayed in Hono-lulu, Hawaii and she would only
return occasionally to the Philippines to update her law practice and renew legal ties. During
one of her trips to Manila sometime in June 1988, respondent was surprised when she was
confronted by a woman who insisted that she was the lawful wife of Carlos Ui. Hurt and
desolate upon her discovery of the true civil status of Carlos Ui, respondent then left for
Honolulu, Hawaii sometime in July 1988 and returned only in March 1989 with her two (2)
children. On March 20, 1989, a few days after she reported to work with the law firm5 she
was connected with, the woman who represented herself to be the wife of Carlos Ui again
came to her office, demanding to know if Carlos Ui has been communicating with her.
It is respondent’s contention that her relationship with Carlos Ui is not illicit because they
were married abroad and that after June 1988 when respondent discovered Carlos Ui’s true
civil status, she cut off all her ties with him. Respondent averred that Carlos Ui never lived
with her in Alabang, and that he resided at 26 Potsdam Street, Greenhills, San Juan, Metro
Manila. It was respondent who lived in Alabang in a house which belonged to her mother,
Rosalinda L. Bonifacio; and that the said house was built exclusively from her par-
_______________
3 Records, Vol. III, p. 17.
4 Records, Vol. III, pp. 10-11.
5 Rilloraza Africa De Ocampo & Africa Law Offices.
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Ui vs. Bonifacio
ents’ funds.6 By way of counterclaim, respondent sought moral damages in the amount of
Ten Million Pesos (Php10,000,000.00) against complainant for having filed the present al-
legedly malicious and groundless disbarment case against respondent.
In her Reply7 dated April 6, 1990, complainant states, among others, that respondent knew
perfectly well that Car-los Ui was married to complainant and had children with her even at
the start of her relationship with Carlos Ui, and that the reason respondent went abroad was
to give birth to her two (2) children with Carlos Ui.
During the pendency of the proceedings before the Integrated Bar, complainant also charged
her husband, Carlos Ui, and respondent with the crime of Concubinage before the Office of
the Provincial Fiscal of Rizal, docketed as I.S. No. 89-5247, but the same was dismissed for
insufficiency of evidence to establish probable cause for the offense charged. The resolution
dismissing the criminal complaint against respondent reads:
Complainant’s evidence had prima facie established the existence of the “illicit relationship”
between the respondents allegedly discovered by the complainant in December 1987. The
same evidence however show that respondent Carlos Ui was still living with complainant
up to the latter part of 1988 and/or the early part of 1989.
It would therefore be logical and safe to state that the “relationship” of respondents started
and was discovered by com-plainant sometime in 1987 when she and respondent Carlos
were still living at No. 26 Potsdam Street, Northeast Greenhills, San Juan, Metro Manila and
they, admittedly, continued to live together at their conjugal home up to early (sic) part of
1989 or later 1988, when respondent Carlos left the same.
From the above, it would not be amiss to conclude that altho (sic) the relationship, illicit as
complainant puts it, had been prima facie established by complainant’s evidence, this same
evidence had
_______________
6 Records, Vol. III, p. 12.
7 Records, Vol. III, p. 26.
44
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SUPREME COURT REPORTS ANNOTATED
Ui vs. Bonifacio
failed to even prima facie establish the “fact of respondent’s cohabitation in the concept of
husband and wife at the 527 San Carlos St., Ayala Alabang house, proof of which is neces-
sary and indispensable to at least create probable cause for the offense charged. The state-
ment alone of complainant, worse, a statement only of a conclusion respecting the fact of
cohabitation does not make the complainant’s evidence thereto any better/stronger (U.S. vs.
Casipong and Mongoy, 20 Phil. 178).
It is worth stating that the evidence submitted by respondents in support of their respective
positions on the matter support and bolster the foregoing conclusion/recommendation.
WHEREFORE, it is most respectfully recommended that the instant complaint be dismissed
for want of evidence to establish probable cause for the offense charged.
RESPECTFULLY SUBMITTED.8
Complainant appealed the said Resolution of the Provincial Fiscal of Rizal to the Secretary
of Justice, but the same was dismissed9 on the ground of insufficiency of evidence to prove
her allegation that respondent and Carlos Ui lived together as husband and wife at 527 San
Carlos Street, Ayala Alabang, Muntinlupa, Metro Manila.
In the proceedings before the IBP Commission on Bar Discipline, complainant filed a Mo-
tion to Cite Respondent in Contempt of the Commission10 wherein she charged respondent
with making false allegations in her Answer and for submitting a supporting document
which was altered and intercalated. She alleged that in the Answer of respondent filed before
the Integrated Bar, respondent averred, among others, that she was married to Carlos Ui on
October 22, 1985 and attached a Certificate of Marriage to substantiate her averment. How-
ever, the Certificate of Marriage11 duly certified by the State Registrar as a true copy of the
record on file in the Hawaii State Department of Health, and duly authen-
_______________
8 Records, Vol. III, pp. 71, 73-74.
9 Records, Vol. III, pp. 75-78.
10 Records, Vol. III, pp. 113-117.
11 Records, Vol. III, pp. 125-126.
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Ui vs. Bonifacio
ticated by the Philippine Consulate General in Honolulu, Hawaii, USA revealed that the date
of marriage between Carlos Ui and respondent Atty. Iris Bonifacio was October 22, 1987,
and not October 22, 1985 as claimed by respondent in her Answer. According to complain-
ant, the reason for that false allegation was because respondent wanted to impress upon the
said IBP that the birth of her first child by Carlos Ui was within the wedlock.12 It is the
contention of complainant that such act constitutes a violation of Articles 18313 and 18414
of the Revised Penal Code, and also contempt of the Commission; and that the act of re-
spondent in making false allegations in her Answer and submitting an altered/intercalated
document are indicative of her moral perversity and lack of integrity which make her un-
worthy to be a member of the Philippine Bar.
In her Opposition (To Motion To Cite Respondent in Contempt),15 respondent averred that
she did not have the original copy of the marriage certificate because the same was in the
possession of Carlos Ui, and that she annexed such copy
_______________
12 Records, Vol. III, pp. 114-115.
13 Art. 183. False testimony in other cases and perjury in solemn affirmation.—The penalty
of arresto mayor in its maximum period to prision correccional in its minimum period shall
be imposed upon any person who, knowingly making untruthful statements and not being
included in the provisions of the next preceding articles, shall testify under oath, or make an
affidavit, upon any material matter before a competent person authorized to administer an
oath in cases in which the law so requires.
Any person who, in case of a solemn affirmation made in lieu of an oath, shall commit any
of the falsehoods mentioned in this and the three preceding articles of this section, shall
suffer the respective penalties provided therein.
14 Art. 184. Offering false testimony in evidence.—Any person who shall knowingly offer
in evidence a false witness or testimony in any judicial or official proceeding, shall be pun-
ished as guilty of false testimony and shall suffer the respective penalties provided in this
section;
15 Records, Vol. III, p. 133.
46
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SUPREME COURT REPORTS ANNOTATED
Ui vs. Bonifacio
because she relied in good faith on what appeared on the copy of the marriage certificate in
her possession.
Respondent filed her Memorandum16 on February 22, 1995 and raised the lone issue of
whether or not she has conducted herself in an immoral manner for which she deserves to
be barred from the practice of law. Respondent averred that the complaint should be dis-
missed on two (2) grounds, namely:
(i) Respondent conducted herself in a manner consistent with the requirement of good moral
character for the practice of the legal profession; and
(ii) Complainant failed to prove her allegation that respondent conducted herself in an im-
moral manner.17
In her defense, respondent contends, among others, that it was she who was the victim in
this case and not Leslie Ui because she did not know that Carlos Ui was already married,
and that upon learning of this fact, respondent immediately cut-off all her ties with Carlos
Ui. She stated that there was no reason for her to doubt at that time that the civil status of
Carlos Ui was that of a bachelor because he spent so much time with her, and he was so open
in his courtship.18
On the issue of the falsified marriage certificate, respondent alleged that it was highly in-
credible for her to have knowingly attached such marriage certificate to her Answer had she
known that the same was altered. Respondent reiterated that there was no compelling reason
for her to make it appear that her marriage to Carlos Ui took place either in 1985 or 1987,
because the fact remains that respondent and Carlos Ui got married before complainant con-
fronted respondent and informed the latter of her earlier marriage to Carlos Ui in June 1988.
Further, respondent stated that it was Carlos Ui who testified and admitted that he was the
person responsible for changing the date of the marriage certificate
_______________
16 Records, Vol. III, pp. 265-287.
17 Records, Vol. III, pp. 275, 281.
18 Records, p. 278 citing TSN dated January 22, 1993, p. 52.
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VOL. 333, JUNE 8, 2000
47
Ui vs. Bonifacio
from 1987 to 1985, and complainant did not present evidence to rebut the testimony of Car-
los Ui on this matter.
Respondent posits that complainant’s evidence, consisting of the pictures of respondent with
a child, pictures of respondent with Carlos Ui, a picture of a garage with cars, a picture of a
light colored car with Plate No. PNS 313, a picture of the same car, and portion of the house
and ground, and another picture of the same car bearing Plate No. PNS 313 and a picture of
the house and the garage,19 does not prove that she acted in an immoral manner. They have
no evidentiary value according to her. The pictures were taken by a photographer from a
private security agency and who was not presented during the hearings. Further, the respond-
ent presented the Resolution of the Provincial Fiscal of Pasig in I.S. Case No. 89-5427 dis-
missing the complaint filed by Leslie Ui against respondent for lack of evidence to establish
probable cause for the offense charged20 and the dismissal of the appeal by the Department
of Justice21 to bolster her argument that she was not guilty of any immoral or illegal act
because of her relationship with Carlos Ui. In fine, respondent claims that she entered the
relationship with Carlos Ui in good faith and that her conduct cannot be considered as will-
ful, flagrant, or shameless, nor can it suggest moral indifference. She fell in love with Carlos
Ui whom she believed to be single, and, that upon her discovery of his true civil status, she
parted ways with him.
In the Memorandum22 filed on March 20, 1995 by complainant Leslie Ui, she prayed for
the disbarment of Atty. Iris Bonifacio and reiterated that respondent committed immorality
by having intimate relations with a married man which resulted in the birth of two (2) chil-
dren. Complainant testified that respondent’s mother, Mrs. Linda Bonifacio, personally
_______________
19 Records, Vol. III, pp. 52, 54-56.
20 Records, Vol. III, pp. 71-74.
21 Resolution No. 030, Series of 1992 of the Department of Justice dated December 18,
1991, Records, Vol. III, pp. 75-78.
22 Records, Vol. III, pp. 289-300.
48
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SUPREME COURT REPORTS ANNOTATED
Ui vs. Bonifacio
knew complainant and her husband since the late 1970s because they were clients of the
bank where Mrs. Bonifacio was the Branch Manager.23 It was thus highly improbable that
respondent, who was living with her parents as of 1986, would not have been informed by
her own mother that Carlos Ui was a married man. Complainant likewise averred that re-
spondent committed disrespect towards the Commission for submitting a photocopy of a
document containing an intercalated date.
In her Reply to Complainant’s Memorandum,24 respondent stated that complainant miser-
ably failed to show sufficient proof to warrant her disbarment. Respondent insists that con-
trary to the allegations of complainant, there is no showing that respondent had knowledge
of the fact of marriage of Carlos Ui to complainant. The allegation that her mother knew
Carlos Ui to be a married man does not prove that such information was made known to
respondent.
Hearing on the case ensued, after which the Commission on Bar Discipline submitted its
Report and Recommendation, finding that:
In the case at bar, it is alleged that at the time respondent was courted by Carlos Ui, the latter
represented himself to be single. The Commission does not find said claim too difficult to
believe in the light of contemporary human experience.
Almost always, when a married man courts a single woman, he represents himself to be
single, separated, or without any firm commitment to another woman. The reason therefor
is not hard to fathom. By their very nature, single women prefer single men.
The records will show that when respondent became aware the (sic) true civil status of Carlos
Ui, she left for the United States (in July of 1988). She broke off all contacts with him. When
she returned to the Philippines in March of 1989, she lived with her brother, Atty. Teodoro
Bonifacio, Jr. Carlos Ui and respondent only talked to each other because of the children
whom he was allowed to visit. At no time did they live together.
_______________
23 Records, Vol. III, p. 296.
24 Records, Vol. III, pp. 317-321.
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VOL. 333, JUNE 8, 2000
49
Ui vs. Bonifacio
Under the foregoing circumstances, the Commission fails to find any act on the part of re-
spondent that can be considered as unprincipled or disgraceful as to be reprehensible to a
high degree. To be sure, she was more of a victim that (sic) anything else and should deserve
compassion rather than condemnation. Without cavil, this sad episode destroyed her chance
of having a normal and happy family life, a dream cherished by every single girl.
x x x”
Thereafter, the Board of Governors of the Integrated Bar of the Philippines issued a Notice
of Resolution dated December 13, 1997, the dispositive portion of which reads as follows:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the
Report and Recommendation of the Investigating Commissioner in the above-entitled case,
herein made part of this Resolution/Decision as Annex “A,” and, finding the recommenda-
tion fully supported by the evidence on record and the applicable laws and rules, the com-
plaint for Gross Immorality against Respondent is DISMISSED for lack of merit. Atty. Iris
Bonifacio is REPRIMANDED for knowingly and willfully attaching to her Answer a falsi-
fied Certificate of Marriage with a stern warning that a repetition of the same will merit a
more severe penalty.”
We agree with the findings aforequoted.
The practice of law is a privilege. A bar candidate does not have the right to enjoy the prac-
tice of the legal profession simply by passing the bar examinations. It is a privilege that can
be revoked, subject to the mandate of due process, once a lawyer violates his oath and the
dictates of legal ethics. The requisites for admission to the practice of law are:
a. he must be a citizen of the Philippines;
b. a resident thereof;
c. at least twenty-one (21) years of age;
d.a person of good moral character;
e. he must show that no charges against him involving moral turpitude, are filed or pending
in court;
f. possess the required educational qualifications; and
50
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SUPREME COURT REPORTS ANNOTATED
Ui vs. Bonifacio
g. pass the bar examinations.25 (Italics supplied)
Clear from the foregoing is that one of the conditions prior to admission to the bar is that an
applicant must possess good moral character. More importantly, possession of good moral
character must be continuous as a requirement to the enjoyment of the privilege of law prac-
tice, otherwise, the loss thereof is a ground for the revocation of such privilege. It has been
held—
If good moral character is a sine qua non for admission to the bar, then the continued pos-
session of good moral character is also a requisite for retaining membership in the legal
profession. Membership in the bar may be terminated when a lawyer ceases to have good
moral character. (Royong vs. Oblena, 117 Phil. 865).
A lawyer may be disbarred for “grossly immoral conduct, or by reason of his conviction of
a crime involving moral turpitude.” A member of the bar should have moral integrity in
addition to professional probity.
It is difficult to state with precision and to fix an inflexible standard as to what is “grossly
immoral conduct” or to specify the moral delinquency and obliquity which render a lawyer
unworthy of continuing as a member of the bar. The rule implies that what appears to be
unconventional behavior to the straight-laced may not be the immoral conduct that warrants
disbarment.
Immoral conduct has been defined as “that conduct which is willful, flagrant, or shameless,
and which shows a moral indifference to the opinion of the good and respectable members
of the community.” (7 C.J.S. 959).26
In the case at bar, it is the claim of respondent Atty. Bonifacio that when she met Carlos Ui,
she knew and believed him to be single. Respondent fell in love with him and they got mar-
ried and as a result of such marriage, she gave birth to two (2) children. Upon her knowledge
of the true civil status of Carlos Ui, she left him.
_______________
25 Ruben E. Agpalo, Legal Ethics (1985).
26 Arciga vs. Maniwang, 106 SCRA 591, 594 (1981).
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51
Ui vs. Bonifacio
Simple as the facts of the case may sound, the effects of the actuations of respondent are not
only far from simple, they will have a rippling effect on how the standard norms of our legal
practitioners should be defined. Perhaps morality in our liberal society today is a far cry from
what it used to be before. This permissiveness notwithstanding, lawyers, as keepers of public
faith, are burdened with a higher degree of social responsibility and thus must handle their
personal affairs with greater caution. The facts of this case lead us to believe that perhaps
respondent would not have found herself in such a compromising situation had she exercised
prudence and been more vigilant in finding out more about Carlos Ui’s personal background
prior to her intimate involvement with him.
Surely, circumstances existed which should have at least aroused respondent’s suspicion that
something was amiss in her relationship with Carlos Ui, and moved her to ask probing ques-
tions. For instance, respondent admitted that she knew that Carlos Ui had children with a
woman from Amoy, China, yet it appeared that she never exerted the slightest effort to find
out if Carlos Ui and this woman were indeed unmarried. Also, despite their marriage in 1987,
Carlos Ui never lived with respondent and their first child, a circumstance that is simply
incomprehensible considering respondent’s allegation that Carlos Ui was very open in court-
ing her.
All these taken together leads to the inescapable conclusion that respondent was imprudent
in managing her personal affairs. However, the fact remains that her relationship with Carlos
Ui, clothed as it was with what respondent believed was a valid marriage, cannot be consid-
ered immoral. For immorality connotes conduct that shows indifference to the moral norms
of society and the opinion of good and respectable members of the community.27 Moreover,
for such conduct to warrant disciplinary action, the same must be “grossly immoral,” that is,
it must be so corrupt and false as to consti-
_______________
27 Narag vs. Narag, 291 SCRA 454, 464 (1998).
52
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SUPREME COURT REPORTS ANNOTATED
Ui vs. Bonifacio
tute a criminal act or so unprincipled as to be reprehensible to a high degree.28
We have held that “a member of the Bar and officer of the court is not only required to
refrain from adulterous relationships x x x but must also so behave himself as to avoid scan-
dalizing the public by creating the belief that he is flouting those moral standards.”29
Respondent’s act of immediately distancing herself from Carlos Ui upon discovering his
true civil status belies just that alleged moral indifference and proves that she had no inten-
tion of flaunting the law and the high moral standard of the legal profession. Complainant’s
bare assertions to the contrary deserve no credit. After all, the burden of proof rests upon the
complainant, and the Court will exercise its disciplinary powers only if she establishes her
case by clear, convincing and satisfactory evidence.30 This, herein complainant miserably
failed to do.
On the matter of the falsified Certificate of Marriage attached by respondent to her Answer,
we find improbable to believe the averment of respondent that she merely relied on the pho-
tocopy of the Marriage Certificate which was provided her by Carlos Ui. For an event as
significant as a marriage ceremony, any normal bride would verily recall the date and year
of her marriage. It is difficult to fathom how a bride, especially a lawyer as in the case at
bar, can forget the year when she got married. Simply stated, it is contrary to human experi-
ence and highly improbable.
Furthermore, any prudent lawyer would verify the information contained in an attachment
to her pleading, especially so when she has personal knowledge of the facts and circum-
_______________
28 Reyes vs. Wong, 63 SCRA 667, 673 citing Section 27, Rule 138, New Rules of Court;
Soberano vs. Villanueva, 6 SCRA 893, 895; Mortel vs. Aspiras, December 28, 1956, 100
Phil. 586, 591-593; Royong vs. Oblena, April 30, 1963, 7 SCRA 869-870; Bolivar vs. Sim-
bol, April 29, 1966, 16 SCRA 623, 630; and Quingwa vs. Puno, February 28, 1967, 19 SCRA
439-440, 444-445.
29 Ibid.
30 Ibid.
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VOL. 333, JUNE 8, 2000
53
Ui vs. Bonifacio
stances contained therein. In attaching such Marriage Certificate with an intercalated date,
the defense of good faith of respondent on that point cannot stand.
It is the bounden duty of lawyers to adhere unwaveringly to the highest standards of moral-
ity. The legal profession exacts from its members nothing less. Lawyers are called upon to
safeguard the integrity of the Bar, free from misdeeds and acts constitutive of malpractice.
Their exalted positions as officers of the court demand no less than the highest degree of
morality.
WHEREFORE, the complaint for disbarment against respondent Atty. Iris L. Bonifacio, for
alleged immorality, is hereby DISMISSED.
However, respondent is hereby REPRIMANDED for attaching to her Answer a photocopy
of her Marriage Certifi cate, with an altered or intercalated date thereof, with a STERN
WARNING that a more severe sanction will be imposed on her for any repetition of the
same or similar offense in the future.
SO ORDERED.
Bellosillo (Actg. C.J., Chairman), Mendoza, Quisumbing and Buena, JJ., concur.
Complaint dismissed, but respondent reprimanded for altering date on marriage certificate
and with warning against repetition of similar offense.
Note.—The practice of law is a privilege granted only to those who possess the strict intel-
lectual and moral qualifications required of lawyers who are instruments in the effective and
efficient administration of justice. (In Re: Al Argosino, 270 SCRA 26 [1997])
——o0o——
54
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SUPREME COURT REPORTS ANNOTATED
Dichaves vs. Apalit
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Ui vs. Bonifacio, 333
SCRA 38, Adm. Case No. 3319 June 8, 2000
A.C. No. 6057. June 27, 2006.*
PETER T. DONTON, complainant, vs. ATTY. EMMANUEL O. TANSINGCO, respond-
ent.
Legal Ethics; Attorneys; A lawyer who assists a client in a dishonest scheme or who con-
nives in violating the law commits an act which justifies disciplinary action against the law-
yer.—The Court finds respondent liable for violation of Canon 1 and Rule 1.02 of the Code.
A lawyer should not render any service or give advice to any client which will involve defi-
ance of the laws which he is bound to uphold and obey. A lawyer who assists a client in a
dishonest scheme or who connives in violating the law commits an act which justifies disci-
plinary action against the lawyer.
_______________
* THIRD DIVISION.
2 rized by me under the following circumstances:
2 33 Don Jose Street, Bgy. San Roque, Murphy, Cubao, Quezon City.
SUPREME COURT REPORTS ANNOTATED
Donton vs. Tansingco
Same; Same; The act of a lawyer in using his knowledge of the law to achieve an unlawful
end amounts to malpractice in his office, for which he may be suspended.—Respondent had
sworn to uphold the Constitution. Thus, he violated his oath and the Code when he prepared
and notarized the Occupancy Agreement to evade the law against foreign ownership of
lands. Respondent used his knowledge of the law to achieve an unlawful end. Such an act
amounts to malpractice in his office, for which he may be suspended.
ADMINISTRATIVE CASE in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
Alentajan Law Office for complainant.
CARPIO, J.:
The Case
This is a disbarment complaint against respondent Atty. Emmanuel O. Tansingco (“respond-
ent”) for serious misconduct and deliberate violation of Canon 1,1 Rules 1.012 and 1.023 of
the Code of Professional Responsibility (“Code”).
The Facts
In his Complaint dated 20 May 2003, Peter T. Donton (“complainant”) stated that he filed a
criminal complaint for estafa thru falsification of a public document4 against Duane
_______________
1 Canon 1—A lawyer shall uphold the Constitution, obey the laws of the land and promote
respect for law and legal processes.
2 Rule 1.01.—A lawyer shall not engage in unlawful, dishonest, immoral or deceitful con-
duct.
3 Rule 1.02.—A lawyer shall not counsel or abet activities aimed at defiance of the law or
lessening confidence in the legal system.
4 Docketed as I.S. No. 02-2520 before the Office of the City Prosecutor of Marikina City.
3
VOL. 493, JUNE 27, 2006
3
Donton vs. Tansingco
O. Stier (“Stier”), Emelyn A. Maggay (“Maggay”) and respondent, as the notary public who
notarized the Occupancy Agreement.
The disbarment complaint arose when respondent filed a counter-charge for perjury5 against
complainant. Respondent, in his affidavit-complaint, stated that:
5. The OCCUPANCY AGREEMENT dated September 11, 1995 was prepared and nota-
A. Mr. Duane O. Stier is the owner and long-time resident of a real property located at No.
B. Sometime in September 1995, Mr. Stier—a U.S. citizen and thereby disqualified to own
real property in his name—agreed that the property be transferred in the name of Mr. Don-
ton, a Filipino.
C. Mr. Stier, in the presence of Mr. Donton, requested me to prepare several documents that
would guarantee recognition of him being the actual owner of the property despite the trans-
fer of title in the name of Mr. Donton.
D. For this purpose, I prepared, among others, the OCCUPANCY AGREEMENT, recog-
nizing Mr. Stier’s free and undisturbed use of the property for his residence and business
operations. The OCCUPANCY AGREEMENT was tied up with a loan which Mr. Stier had
extended to Mr. Donton.6
Complainant averred that respondent’s act of preparing the Occupancy Agreement, despite
knowledge that Stier, being a foreign national, is disqualified to own real property in his
name, constitutes serious misconduct and is a deliberate violation of the Code. Complainant
prayed that respondent be disbarred for advising Stier to do something in violation of law
and assisting Stier in carrying out a dishonest scheme.
_______________
5 Docketed as I.S. No. 03-0474.
6 Rollo, pp. 15-16. Emphasis in the original.
4 Court.
4 The Court finds respondent liable for violation of Canon 1 and Rule 1.02 of the Code.
SUPREME COURT REPORTS ANNOTATED
Donton vs. Tansingco
In his Comment dated 19 August 2003, respondent claimed that complainant filed the dis-
barment case against him upon the instigation of complainant’s counsel, Atty. Bonifacio A.
Alentajan,7 because respondent refused to act as complainant’s witness in the criminal case
against Stier and Maggay. Respondent admitted that he “prepared and notarized” the Occu-
pancy Agreement and asserted its genuineness and due execution.
In a Resolution dated 1 October 2003, the Court referred the matter to the Integrated Bar of
the Philippines (IBP) for investigation, report and recommendation.
The IBP’s Report and Recommendation
In her Report dated 26 February 2004 (“Report”), Commissioner Milagros V. San Juan
(“Commissioner San Juan”) of the IBP Commission on Bar Discipline found respondent
liable for taking part in a “scheme to circumvent the constitutional prohibition against for-
eign ownership of land in the Philippines.” Commissioner San Juan recommended respond-
ent’s suspension from the practice of law for two years and the cancellation of his commis-
sion as Notary Public.
In Resolution No. XVI-2004-222 dated 16 April 2004, the IBP Board of Governors adopted,
with modification, the Report and recommended respondent’s suspension from the practice
of law for six months.
On 28 June 2004, the IBP Board of Governors forwarded the Report to the Court as provided
under Section 12(b), Rule 139-B8 of the Rules of Court.
_______________
7 Respondent, in turn, filed a disbarment complaint against Atty. Bonifacio A. Alentajan
docketed as CBD Case No. 03-112.
8 Section 12(b), Rule 139-B of the Rules of Court provides:
SEC. 12. Review and Decision by the Board of Governors.—
xxx
5 ments.
VOL. 493, JUNE 27, 2006
5
Donton vs. Tansingco
On 28 July 2004, respondent filed a motion for reconsideration before the IBP. Respondent
stated that he was already 76 years old and would already retire by 2005 after the termination
of his pending cases. He also said that his practice of law is his only means of support for
his family and his six minor children.
In a Resolution dated 7 October 2004, the IBP denied the motion for reconsideration because
the IBP had no more jurisdiction on the case as the matter had already been referred to the
The Ruling of the Court
A lawyer should not render any service or give advice to any client which will involve defi-
ance of the laws which he is bound to uphold and obey.9 A lawyer who assists a client in a
dishonest scheme or who connives in violating the law commits an act which justifies disci-
plinary action against the lawyer.10
By his own admission, respondent admitted that Stier, a U.S. citizen, was disqualified from
owning real property.11 Yet, in his motion for reconsideration,12 respondent admitted that
he caused the transfer of ownership to the parcel of land to Stier. Respondent, however,
aware of the prohibition, quickly
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(b) If the Board, by vote of a majority of its total membership, determines that the respondent
should be suspended from the practice of law or disbarred, it shall issue a resolution setting
forth its findings and recommendations which, together with the whole record of the case,
shall forthwith be transmitted to the Supreme Court for final action.
9 E. PINEDA, LEGAL AND JUDICIAL ETHICS 35-36 (1994).
10 In re: Terrell, 2 Phil. 266 (1903).
11 Rollo, p. 15.
12 Id., at p. 99.
6
6
SUPREME COURT REPORTS ANNOTATED
Donton vs. Tansingco
rectified his act and transferred the title in complainant’s name. But respondent provided
“some safeguards” by preparing several documents,13 including the Occupancy Agreement,
that would guarantee Stier’s recognition as the actual owner of the property despite its trans-
fer in complainant’s name. In effect, respondent advised and aided Stier in circumventing
the constitutional prohibition against foreign ownership of lands14 by preparing said docu-
Respondent had sworn to uphold the Constitution. Thus, he violated his oath and the Code
when he prepared and notarized the Occupancy Agreement to evade the law against foreign
ownership of lands. Respondent used his knowledge of
_______________
13 In respondent’s 30 December 2002 affidavit, he enumerated all the documents he pre-
pared for Stier:
A. A Deed of Sale over the property, which Mr. Stier could consolidate in favor of any
person of his choice at anytime;
[Note: The deed of Sale had an open date, and the name of the transferee was to be indicated
by Mr. Stier, at his discretion.]
B. Occupancy Agreement, recognizing Mr. Stier’s free and undisturbed use of the property
for his residence and business operations;
[Note: The Occupancy Agreement was tied up with a loan which Mr. Stier had extended to
Mr. Donton.]
C. Real Estate Mortgage over the property, which Mr. Stier could enforce anytime; and
D. Irrevocable Special Power of Attorney to sell, mortgage or lease the property, which Mr.
Stier could exercise anytime.
14 Article XII, Section 7 of the 1987 Constitution provides:
SEC. 7. Save in cases of hereditary succession, no private lands shall be transferred or con-
veyed except to individuals, corporations, or associations qualified to acquire or hold lands
of the public domain.
7 ——o0o——
VOL. 493, JUNE 27, 2006
7 SCRA 1, A.C. No. 6057 June 27, 2006
Donton vs. Tansingco
the law to achieve an unlawful end. Such an act amounts to malpractice in his office, for
which he may be suspended.15
In Balinon v. De Leon,16 respondent Atty. De Leon was suspended from the practice of law
for three years for preparing an affidavit that virtually permitted him to commit concubinage.
In In re: Santiago,17 respondent Atty. Santiago was suspended from the practice of law for
one year for preparing a contract which declared the spouses to be single again after nine
years of separation and allowed them to contract separately subsequent marriages.
WHEREFORE, we find respondent Atty. Emmanuel O. Tansingco GUILTY of violation of
Canon 1 and Rule 1.02 of the Code of Professional Responsibility. Accordingly, we SUS-
PEND respondent Atty. Emmanuel O. Tansingco from the practice of law for SIX MONTHS
effective upon finality of this Decision.
Let copies of this Decision be furnished the Office of the Bar Confidant to be appended to
respondent’s personal record as an attorney, the Integrated Bar of the Philippines, the De-
partment of Justice, and all courts in the country for their information and guidance.
SO ORDERED.
Quisumbing (Chairperson), Carpio-Morales, Tinga and Velasco, Jr., JJ., concur.
Atty. Emmanuel O. Tansingco suspended from practice of law for six (6) months for viola-
tion of Canon 1 and Rule 1.02 of Code of Professional Responsibility.
Notes.—Where a lawyer uses his opposition to the motion for execution as a device to reo-
pen the case or delay the
_______________
15 In re: Santiago, 70 Phil. 66 (1940).
16 94 Phil. 277 (1954).
17 Supra.
8
8
SUPREME COURT REPORTS ANNOTATED
Dela Peña vs. Sia
execution of a decision which has long been final and executory, there is a prima facie vio-
lation of Rule 12.04 of Canon 12 of the Code of Professional Responsibility. (Hoehne vs.
Plata, 390 SCRA 555 [2002])
As a member of the bar, an attorney is charged with the duty to conduct himself with cour-
tesy, fairness and candor towards his professional colleagues, and to avoid using language
which is abusive, offensive or otherwise improper. (Datuin, Jr. vs. Soriano, 391 SCRA 1
[2002])
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Donton vs. Tansingco, 493
600
SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
A.C. No. 7204. March 7, 2007.*
CYNTHIA ADVINCULA, complainant, vs. ATTY. ERNESTO M. MACABATA,
respondent.
Legal Ethics; Attorneys; Immorality; Perhaps morality in our liberal society today is a far
cry from what it used to be, but this permissiveness notwithstanding, lawyers, as keepers of
public faith, are burdened with a high degree of social responsibility and, hence, must handle
their personal affairs with greater caution.—Simple as the facts of the case may be, the man-
ner by which we deal with respondent’s actuations shall have a rippling effect on how the
standard norms of our legal practitioners should be defined. Perhaps morality in our liberal
society today is a far cry from what it used to be. This permissiveness notwithstanding, law-
yers, as keepers of public faith, are burdened with a high degree of social responsibility and,
hence, must handle their personal affairs with greater caution.
Same; Same; Same; The exalted positions of lawyers as officers of the court demand no less
than the highest degree of morality.—It is the bounden duty of lawyers to adhere unwaver-
ingly to the highest standards of morality. The legal profession exacts from its members
nothing less. Lawyers are called upon to safeguard the integrity of the Bar, free from mis-
deeds and acts constitutive of malpractice. Their exalted positions as officers of the court
demand no less than the highest degree of morality. We explained in Barrientos v. Daarol,
218 SCRA 30 (1993) that, “as officers of the court, lawyers must not only in fact be of good
moral character but must also be seen to be of good moral character and leading lives in
accordance with the highest moral standards of the community.” Lawyers are expected to
abide by the tenets of morality, not only upon admission to the Bar but also throughout their
legal career, in order to maintain their good standing in this exclusive and honored fraternity.
They may be suspended from the practice of law or disbarred for any misconduct, even if it
pertains to his private activities, as long as it shows him to be wanting in moral character,
honesty, probity or good demeanor.
_______________
* THIRD DIVISION.
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VOL. 517, MARCH 7, 2007
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Advincula vs. Macabata
Same; Same; Same; Words and Phrases; Good moral character is defined as what a person
really is, as distinguished from good reputation, or from the opinion generally entertained of
him, or the estimate in which he is held by the public in the place where he is known.—In
Bar Matter No. 1154, 431 SCRA 146 (2004), good moral character was defined as what a
person really is, as distinguished from good reputation, or from the opinion generally enter-
tained of him, or the estimate in which he is held by the public in the place where he is
known. Moral character is not a subjective term but one which corresponds to objective
reality. It should be noted that the requirement of good moral character has four ostensible
purposes, namely: (1) to protect the public; (2) to protect the public image of lawyers; (3) to
protect prospective clients; and (4) to protect errant lawyers from themselves.
Same; Same; Same; It is difficult to state with precision and to fix an inflexible standard as
to what is “grossly immoral conduct” or to specify the moral delinquency and obliquity
which render a lawyer unworthy of continuing as a member of the bar—the rule implies that
what appears to be unconventional behavior to the straight-laced may not be the immoral
conduct that warrants disbarment.—It is difficult to state with precision and to fix an inflex-
ible standard as to what is “grossly immoral conduct” or to specify the moral delinquency
and obliquity which render a lawyer unworthy of continuing as a member of the bar. The
rule implies that what appears to be unconventional behavior to the straight-laced may not
be the immoral conduct that warrants disbarment. In Zaguirre v. Castillo, 398 SCRA 658
(2003), we reiterated the definition of immoral conduct, as such conduct which is so willful,
flagrant, or shameless as to show indifference to the opinion of good and respectable mem-
bers of the community. Furthermore, for such conduct to warrant disciplinary action, the
same must not simply be immoral, but grossly immoral. It must be so corrupt as to constitute
a criminal act, or so unprincipled as to be reprehensible to a high degree or committed under
such scandalous or revolting circumstances as to shock the common sense of decency.
Same; Same; Same; While the act of respondent in turning the head of complainant towards
him and kissing her on the lips are distasteful, such act, even if considered offensive and
undesirable, cannot be considered grossly immoral.—Immorality has not been confined to
sexual matters, but includes conduct inconsistent with
602
602
SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
rectitude, or indicative of corruption, indecency, depravity and dissoluteness; or is willful,
flagrant, or shameless conduct showing moral indifference to opinions of respectable mem-
bers of the community, and an inconsiderate attitude toward good order and public welfare.
Guided by the definitions above, we perceived acts of kissing or besobeso on the cheeks as
mere gestures of friendship and camaraderie, forms of greetings, casual and customary. The
acts of respondent, though, in turning the head of complainant towards him and kissing her
on the lips are distasteful. However, such act, even if considered offensive and undesirable,
cannot be considered grossly immoral.
Same; Same; Same; Complainant’s bare allegation that respondent made use and took ad-
vantage of his position as a lawyer to lure her to agree to have sexual relations with him
deserves no credit—complainant miserably failed to comply with the burden of proof re-
quired of her.—Complainant’s bare allegation that respondent made use and took advantage
of his position as a lawyer to lure her to agree to have sexual relations with him, deserves no
credit. The burden of proof rests on the complainant, and she must establish the case against
the respondent by clear, convincing and satisfactory proof, disclosing a case that is free from
doubt as to compel the exercise by the Court of its disciplinary power. Thus, the adage that
“he who asserts not he who denies, must prove.” As a basic rule in evidence, the burden of
proof lies on the party who makes the allegations—ei incumbit probation, qui decit, non qui
negat; cum per rerum naturam factum negantis probation nulla sit. In the case at bar, com-
plainant miserably failed to comply with the burden of proof required of her. A mere charge
or allegation of wrongdoing does not suffice. Accusation is not synonymous with guilt.
Same; Same; Same; While it is discretionary upon the Supreme Court to impose a particular
sanction that it may deem proper against an erring lawyer, it should neither be arbitrary and
despotic nor motivated by personal animosity or prejudice, but should ever be controlled by
the imperative need to scrupulously guard the purity and independence of the bar and to
exact from the lawyer strict compliance with his duties to the court, to his client, to his
brethren in the profession and to the public.—The question as to what disciplinary sanction
should be imposed against a lawyer found guilty of misconduct requires consideration of a
number of factors. When deciding upon the appropriate sanction, the Court must consider
that the primary purposes of disciplinary proceedings are to protect the pub-
603
VOL. 517, MARCH 7, 2007
603
Advincula vs. Macabata
lic; to foster public confidence in the Bar; to preserve the integrity of the profession; and to
deter other lawyers from similar misconduct. Disciplinary proceedings are means of protect-
ing the administration of justice by requiring those who carry out this important function to
be competent, honorable and reliable men in whom courts and clients may repose confi-
dence. While it is discretionary upon the Court to impose a particular sanction that it may
deem proper against an erring lawyer, it should neither be arbitrary and despotic nor moti-
vated by personal animosity or prejudice, but should ever be controlled by the imperative
need to scrupulously guard the purity and independence of the bar and to exact from the
lawyer strict compliance with his duties to the court, to his client, to his brethren in the
profession and to the public.
Same; Same; Same; Only those acts which cause loss of moral character should merit dis-
barment or suspension, while those acts which neither affect nor erode the moral character
of the lawyer should only justify a lesser sanction unless they are of such nature and to such
extent as to clearly show the lawyer’s unfitness to continue in the practice of law; Censure
or reprimand is usually meted out for an isolated act of misconduct of a lesser nature.—The
power to disbar or suspend ought always to be exercised on the preservative and not on the
vindictive principle, with great caution and only for the most weighty reasons and only on
clear cases of misconduct which seriously affect the standing and character of the lawyer as
an officer of the court and member of the Bar. Only those acts which cause loss of moral
character should merit disbarment or suspension, while those acts which neither affect nor
erode the moral character of the lawyer should only justify a lesser sanction unless they are
of such nature and to such extent as to clearly show the lawyer’s unfitness to continue in the
practice of law. The dubious character of the act charged as well as the motivation which
induced the lawyer to commit it must be clearly demonstrated before suspension or disbar-
ment is meted out. The mitigating or aggravating circumstances that attended the commis-
sion of the offense should also be considered. Censure or reprimand is usually meted out for
an isolated act of misconduct of a lesser nature. It is also imposed for some minor infraction
of the lawyer’s duty to the court or the client. In the Matter of Darell Adams, 428 N.E. 2d
786 (Ind. 1981), a lawyer was publicly reprimanded for grabbing a female client, kissing
her, and raising her blouse which constituted illegal conduct involving moral
604
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SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
turpitude and conduct which adversely reflected on his fitness to practice law.
ADMINISTRATIVE CASE in the Supreme Court. Disbarment.
The facts are stated in the resolution of the Court.
RESOLUTION
CHICO-NAZARIO, J.:
Before Us is a complaint1 for disbarment filed by Cynthia Advincula against respondent
Atty. Ernesto M. Macabata, charging the latter with Gross Immorality.
Complainant alleged the following:
“Sometime on 1st week of December 2004 complainant [Cynthia Advincula] seek the legal
advice of the respondent [Atty. Macabata], regarding her collectibles from Queensway
Travel and Tours. As promised, he sent Demand Letter dated December 11, 2004 (copy
attached as Annex “I”) to the concerned parties.
On February 10, 2005, met (sic) at Zensho Restaurant in Tomas Morato, Quezon City to
discuss the possibility of filing the complaint against Queensway Travel and Tours because
they did not settle their accounts as demanded. After the dinner, respondent sent complainant
home and while she is about to step out of the car, respondent hold (sic) her arm and kissed
her on the cheek and embraced her very tightly.
Again, on March 6, 2005, at about past 10:00 in the morning, she met respondent at Star-
bucks coffee shop in West Avenue, Quezon City to finalize the draft of the complaint to be
filed in Court. After the meeting, respondent offered again a ride, which he usually did every
time they met. Along the way, complainant was wandering (sic) why she felt so sleepy where
in fact she just got up from bed a few hours ago. At along Roosevelt Avenue immediately
after corner of Felipe St., in San Francisco Del Monte, Quezon City when she was almost
restless respondent stopped his car and forcefully hold (sic)
_______________
1 Rollo, pp. 1–2.
605
VOL. 517, MARCH 7, 2007
605
Advincula vs. Macabata
her face and kissed her lips while the other hand was holding her breast. Complainant even
in a state of shocked (sic) succeeded in resisting his criminal attempt and immediately man-
age (sic) to go (sic) out of the car.
In the late afternoon, complainant sent a text message to respondent informing him that she
decided to refer the case with another lawyer and needs (sic) to get back the case folder from
him. The communications transpired was recorded in her cellular phone and read as follows:
Sent by complainant -
at 5:33:46 pm
forget the case. I decided to refer itwith other lawyer
Replied by respondent -
at 6:16:11 pm
“does this mean I can not c u anymore”
(Does this mean I cannot see you anymore)
Sent by complainant -
at 6:17:59 pm
I feel bad. I can’t expect that u will take advantage of the situation.
Follow-up message -
Sent by complainant at 6:29:30 pm
wrong to kiss a girl especially in the lips if you don’t have relationship with her.
Replied by respondent -
at 6:32:43 pm
“I’m veri sri. It’s not tking advantage of the situation, 2 put it rightly it s an expression of
feeling. S sri” (I’m very sorry. Its not taking advantage of the situation, to put it rightly it is
an expression of feeling)
Follow up message -
by respondent at 6:42:25 pm
I’m s sri. Il not do it again. Wil u stil c me s I can show u my sincerity” (I’m so sorry. I’ll
not do it again. Will you still see me so I can show you my sincerity)
On the following day, March 7, 2005 respondent sent another message to complainant at
3:55:32 pm saying “I don’t know wat 2 do s u may 4give me. “Im realy sri. Puede bati na
tyo.” (I don’t know what to do so you may forgive me. I’m really sorry. Puede bati na tayo).
606
606
SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
Respondent replied “talk to my lawyer in due time.” Then another message was received by
her at 4:06:33 pm saying “Ano k ba. I’m really sri. Pls. Nxt ime bhave n me.” (Ano ka ba.
I’m really sorry. Please next time behave na ko), which is a clear manifestation of admission
of guilt.”2
In his answer,3 respondent admitted that he agreed to provide legal services to the complain-
ant; that he met with complainant on 10 February 2005 and 6 March 2005, to discuss the
relevant matters relative to the case which complainant was intending to file against the
owners of Queensway Travel and Tours for collection of a sum of money; that on both oc-
casions, complainant rode with him in his car where he held and kissed complainant on the
lips as the former offered her lips to him; and, that the corner of Cooper Street and Roosevelt
Avenue, where he dropped off the complainant, was a busy street teeming with people, thus,
it would have been impossible to commit the acts imputed to him.
By way of defense, respondent further elucidated that: 1) there was a criminal case for Acts
of Lasciviousness filed by complainant against respondent pending before the Office of the
City Prosecutor in Quezon City; 2) the legal name of complainant is Cynthia Advincula
Toriana since she remains married to a certain Jinky Toriana because the civil case for the
nullification of their marriage was archived pursuant to the Order dated 6 December 2000
issued by the Regional Trial Court of Maburao, Occidental Mindoro; 3) the complainant was
living with a man not her husband; and 4) the complainant never bothered to discuss re-
spondent’s fees and it was respondent who always paid for their bills every time they met
and ate at a restaurant.
A hearing was conducted by the Commission on Bar Discipline of the Integrated Bar of the
Philippines (IBP) at the IBP Building, Ortigas Center, Pasig City, on 26 July 2005.
_______________
2 Id.
3 Id., at pp. 13–20.
607
VOL. 517, MARCH 7, 2007
607
Advincula vs. Macabata
On 30 September 2005, Investigating Commissioner Dennis A.B. Funa submitted his Report
and Recommendation,4 recommending the imposition of the penalty of one (1) month sus-
pension on respondent for violation of the Code of Professional Responsibility.
Thereafter, the IBP passed Resolution No. XVII-2006–117 dated 20 March 2006, approving
and adopting, with modification, the recommendation of the Investigating Commissioner,
thus:
“RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, with
modification, the Report and Recommendation of the Investigating Commissioner of the
above-entitled case, herein made part of this Resolution as Annex “A”; and, finding the rec-
ommendation fully supported by the evidence on record and the applicable laws and rules,
and considering the behavior of Respondent went beyond the norms of conduct required of
a lawyer when dealing with or relating with a client, Atty. Ernesto A. Macabata is SUS-
PENDED from the practice of law for three (3) months.”5
The issue to be resolved in this case is: whether respondent committed acts that are grossly
immoral or which constitute serious moral depravity that would warrant his disbarment or
suspension from the practice of law.
Simple as the facts of the case may be, the manner by which we deal with respondent’s
actuations shall have a rippling effect on how the standard norms of our legal practitioners
should be defined. Perhaps morality in our liberal society today is a far cry from what it used
to be. This permissiveness notwithstanding, lawyers, as keepers of public faith, are burdened
with a high degree of social responsibility and, hence, must handle their personal affairs with
greater caution.
The Code of Professional Responsibility provides:
_______________

4 Id., at pp. 149–155.
5 Id., at p. 148.
608
608
SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
CANON I—x x x
Rule 1.01—A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.
CANON 7—A lawyer shall at all times uphold the integrity and dignity of the legal profes-
sion and support the activities of the Integrated Bar.
xxxx
Rule 7.03—A lawyer shall not engage in conduct that adversely reflects on his fitness to
practice law, nor shall he, whether in public or private life, behave in a scandalous manner
to the discredit of the legal profession.
As may be gleaned from above, the Code of Professional Responsibility forbids lawyers
from engaging in unlawful, dishonest, immoral or deceitful conduct.
Lawyers have been repeatedly reminded that their possession of good moral character is a
continuing condition to preserve their membership in the Bar in good standing. The contin-
ued possession of good moral character is a requisite condition for remaining in the practice
of law.6 In Aldovino v. Pujalte, Jr.,7 we emphasized that:
“This Court has been exacting in its demand for integrity and good moral character of mem-
bers of the Bar. They are expected at all times to uphold the integrity and dignity of the legal
profession and refrain from any act or omission which might lessen the trust and confidence
reposed by the public in the fidelity, honesty, and integrity of the legal profession. Member-
ship in the legal profession is a privilege. And whenever it is made to appear that an attorney
is no longer worthy of the trust and confidence of the public, it becomes not only the right
but also the duty of this Court, which made him one of its officers and gave him the privilege
of ministering within its Bar, to withdraw the privilege.”
_______________
6 Mortel v. Aspiras 100 Phil. 586, 592 (1956); Cordova v. Cordova, A.C. No. 3249, 29
November 1989, 179 SCRA 680, 683.
7 A.C. No. 5082, 17 February 2004, 423 SCRA 135, 140–141.
609
VOL. 517, MARCH 7, 2007
609
Advincula vs. Macabata
It is the bounden duty of lawyers to adhere unwaveringly to the highest standards of moral-
ity. The legal profession exacts from its members nothing less. Lawyers are called upon to
safeguard the integrity of the Bar, free from misdeeds and acts constitutive of malpractice.
Their exalted positions as officers of the court demand no less than the highest degree of
morality.8 We explained in Barrientos v. Daarol9 that, “as officers of the court, lawyers must
not only in fact be of good moral character but must also be seen to be of good moral char-
acter and leading lives in accordance with the highest moral standards of the community.”
Lawyers are expected to abide by the tenets of morality, not only upon admission to the Bar
but also throughout their legal career, in order to maintain their good standing in this exclu-
sive and honored fraternity. They may be suspended from the practice of law or disbarred
for any misconduct, even if it pertains to his private activities, as long as it shows him to be
wanting in moral character, honesty, probity or good demeanor.10
In Bar Matter No. 1154,11 good moral character was defined as what a person really is, as
distinguished from good reputation, or from the opinion generally entertained of him, or the
estimate in which he is held by the public in the place where he is known. Moral character
is not a subjective term but one which corresponds to objective reality.
It should be noted that the requirement of good moral character has four ostensible purposes,
namely: (1) to protect the public; (2) to protect the public image of lawyers; (3) to
_______________
8 Ui v. Bonifacio, 388 Phil. 691, 708; 333 SCRA 38, 53 (2000).
9 A.C. No. 1512, 29 January 1993, 218 SCRA 30, 40.
10 Rural Bank of Silay, Inc. v. Pilla, 403 Phil. 1, 9; 350 SCRA 138, 145 (2001).
11 In the Matter of the Disqualification of Bar Examinee Haron S. Meling in the 2002 Bar
Examinations and for Disciplinary Action as Member of the Philippine Shari’a Bar, B.M.
No. 1154, 8 June 2004, 431 SCRA 146.
610
610
SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
protect prospective clients; and (4) to protect errant lawyers from themselves.12
In the case at bar, respondent admitted kissing complainant on the lips.
In his Answer,13 respondent confessed, thus:
“27. When she was about to get off the car, I said can I kiss you goodnight. She offered her
left cheek and I kissed it and with my left hand slightly pulled her right face towards me and
kissed her gently on the lips. We said goodnight and she got off the car.
xxxx
35. When I stopped my car I said okay. I saw her offered (sic) her left cheek and I lightly
kissed it and with my right hand slightly pulled her right cheek towards me and plant (sic) a
light kiss on her lips. There was no force used. No intimidation made, no lewd designs dis-
played. No breast holding was done. Everything happened very spontaneously with no re-
action from her except saying “sexual harassment.”
During the hearing held on 26 July 2005 at the 3rd floor, IBP Building, Dona Julia Vargas
Avenue, Ortigas City, respondent candidly recalled the following events:
ATTY. MACABATA:
That time in February, we met … I fetched her I should say, somewhere along the corner of
Edsa and Kamuning because it was then raining so we are texting each other. So I parked
my car somewhere along the corner of Edsa and Kamuning and I was there about ten to
fifteen minutes then she arrived. And so I said … she opened my car and then she went
inside so I said, would you like that we have a Japanese dinner? And she said yes, okay. So
I brought her to Zensho which is along Tomas Morato. When we were there, we discussed
about her case, we ordered food and then a little while I told her, would it be
_______________
12 Dantes v. Dantes, A.C. No. 6486, 22 September 2004, 438 SCRA 582, 589.
13 Rollo, pp. 27, 35.
611
VOL. 517, MARCH 7, 2007
611
Advincula vs. Macabata
okay for you of I (sic) order wine? She said yes so I ordered two glasses of red wine. After
that, after discussing matters about her case, so I said … it’s about 9:00 or beyond that time
already, so I said okay, let’s go. So when I said let’s go so I stood up and then I went to the
car. I went ahead of my car and she followed me then she rode on (sic) it. So I told her where
to? She told me just drop me at the same place where you have been dropping me for the
last meetings that we had and that was at the corner of Morato and Roosevelt Avenue. So,
before she went down, I told her can I kiss you goodnight? She offered her left cheek and I
kissed it and with the slight use of my right hand, I ... should I say tilted her face towards me
and when she’s already facing me I lightly kissed her on the lips. And then I said good night.
She went down the car, that’s it.
COMM. FUNA:
February 10 iyan.
xxxx
ATTY. MACABATA:
Okay. After that were through so I said let’s go because I have an appointment. So we went
out, we went inside my car and I said where to? Same place, she said, so then at the same
corner. So before she went down, before she opened the door of the car, I saw her offered
her left cheek. So I kissed her again.
COMM. FUNA:
Pardon?
ATTY. MACABATA:
I saw her offered her left cheek like that, so I kissed her again and then with the use of my
left hand, pushed a little bit her face and then kissed her again softly on the lips and that’s it.
x x x.”14 (Emphases supplied.)
It is difficult to state with precision and to fix an inflexible standard as to what is “grossly
immoral conduct” or to specify the moral delinquency and obliquity which render a lawyer
_______________
14 TSN, 26 July 2005, pp. 18–24.
612
612
SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
unworthy of continuing as a member of the bar. The rule implies that what appears to be
unconventional behavior to the straight-laced may not be the immoral conduct that warrants
disbarment.15
In Zaguirre v. Castillo,16 we reiterated the definition of immoral conduct, as such conduct
which is so willful, flagrant, or shameless as to show indifference to the opinion of good and
respectable members of the community. Furthermore, for such conduct to warrant discipli-
nary action, the same must not simply be immoral, but grossly immoral. It must be so corrupt
as to constitute a criminal act, or so unprincipled as to be reprehensible to a high degree or
committed under such scandalous or revolting circumstances as to shock the common sense
of decency.
The following cases were considered by this Court as constitutive of grossly immoral con-
duct:
In Toledo v. Toledo,17 a lawyer was disbarred from the practice of law, when he abandoned
his lawful wife and cohabited with another woman who had borne him a child.
In Obusan v. Obusan, Jr.,18 a lawyer was disbarred after complainant proved that he had
abandoned her and maintained an adulterous relationship with a married woman. This court
declared that respondent failed to maintain the highest degree of morality expected and re-
quired of a member of the bar.
In Dantes v. Dantes,19 respondent’s act of engaging in illicit relationships with two different
women during the subsistence of his marriage to the complainant constitutes grossly im-
moral conduct warranting the imposition of appropriate sanctions. Complainant’s testimony,
taken in conjunction
_______________
15 Ui v. Bonifacio, supra note 8.
16 446 Phil. 861, 867; 398 SCRA 658, 662 (2003).
17 117 Phil. 768, 776; 7 SCRA 757, 765 (1963).
18 213 Phil. 437, 440; 128 SCRA 485, 487 (1984).
19 Supra note 12 at p. 588.
613
VOL. 517, MARCH 7, 2007
613
Advincula vs. Macabata
with the documentary evidence, sufficiently established that respondent breached the high
and exacting moral standards set for members of the law profession.
In Delos Reyes v. Aznar,20 it was ruled that it was highly immoral of respondent, a married
man with children, to have taken advantage of his position as chairman of the college of
medicine in asking complainant, a student in said college, to go with him to Manila where
he had carnal knowledge of her under the threat that she would flank in all her subjects in
case she refused.
In Cojuangco, Jr. v. Palma,21 respondent lawyer was disbarred when he abandoned his law-
ful wife and three children, lured an innocent woman into marrying him and misrepresented
himself as a “bachelor” so he could contract marriage in a foreign land.
In Macarrubo v. Macarrubo,22 respondent entered into multiple marriages and then resorted
to legal remedies to sever them. There, we ruled that “[s]uch pattern of misconduct by re-
spondent undermines the institutions of marriage and family, institutions that this society
looks to for the rearing of our children, for the development of values essential to the survival
and well-being of our communities, and for the strengthening of our nation as a whole.” As
such, “there can be no other fate that awaits respondent than to be disbarred.”
In Tucay v. Tucay,23 respondent contracted marriage with another married woman and left
complainant with whom he has been married for thirty years. We ruled that such acts con-
stitute “a grossly immoral conduct and only indicative of an extremely low regard for the
fundamental ethics of his profession,” warranting respondent’s disbarment.
_______________
20 A.C. No. 1334, 28 November 1989, 179 SCRA 653, 659.
21 A.C. No. 2474, 15 September 2004, 438 SCRA 306, 315.
22 A.C. No. 6148, 27 February 2004, 424 SCRA 42, 54–55.
23 A.C. No. 5170, 17 November 1999, 318 SCRA 229, 231.
614
614
SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
In Villasanta v. Peralta,24 respondent married complainant while his first wife was still alive,
their marriage still valid and subsisting. We held that “the act of respondent of contracting
the second marriage is contrary to honesty, justice, decency and morality.” Thus, lacking the
good moral character required by the Rules of Court, respondent was disqualified from being
admitted to the bar.
In Cabrera v. Agustin,25 respondent lured an innocent woman into a simulated marriage and
thereafter satisfied his lust. We held that respondent failed to maintain that degree of moral-
ity and integrity which, at all times, is expected of members of the bar. He is, therefore,
disbarred from the practice of law.
Immorality has not been confined to sexual matters, but includes conduct inconsistent with
rectitude, or indicative of corruption, indecency, depravity and dissoluteness; or is willful,
flagrant, or shameless conduct showing moral indifference to opinions of respectable mem-
bers of the community, and an inconsiderate attitude toward good order and public wel-
fare.26
Guided by the definitions above, we perceived acts of kissing or beso-beso on the cheeks as
mere gestures of friendship and camaraderie,27 forms of greetings, casual and customary.
The acts of respondent, though, in turning the head of complainant towards him and kissing
her on the lips are distasteful. However, such act, even if considered offensive and undesir-
able, cannot be considered grossly immoral.
Complainant’s bare allegation that respondent made use and took advantage of his position
as a lawyer to lure her to
_______________
24 101 Phil. 313, 314 (1957).
25 106 Phil. 256, 259 (1960).
26 Madredijo v. Loyao, Jr., 375 Phil. 1, 17; 316 SCRA 544, 559 (1999); Alfonso v. Juanson,
A.M. No. RTJ-92–904, 7 December 1993, 228 SCRA 239, 255–256, citing Black’s Law
Dictionary, 6th ed. (1990), p. 751.
27 Atty. Aquino v. Judge Acosta, 429 Phil. 498, 510; 380 SCRA 1, 9 (2002).
615
VOL. 517, MARCH 7, 2007
615
Advincula vs. Macabata
agree to have sexual relations with him, deserves no credit. The burden of proof rests on the
complainant, and she must establish the case against the respondent by clear, convincing and
satisfactory proof,28 disclosing a case that is free from doubt as to compel the exercise by
the Court of its disciplinary power.29 Thus, the adage that “he who asserts not he who de-
nies, must prove.”30 As a basic rule in evidence, the burden of proof lies on the party who
makes the allegations—ei incumbit probation, qui decit, non qui negat; cum per rerum nat-
uram factum negantis probation nulla sit.31 In the case at bar, complainant miserably failed
to comply with the burden of proof required of her. A mere charge or allegation of wrong-
doing does not suffice. Accusation is not synonymous with guilt.32
Moreover, while respondent admitted having kissed complainant on the lips, the same was
not motivated by malice. We come to this conclusion because right after the complainant
expressed her annoyance at being kissed by the respondent through a cellular phone text
message, respondent immediately extended an apology to complainant also via cellular
phone text message. The exchange of text messages between complainant and respondent
bears this out.
Be it noted also that the incident happened in a place where there were several people in the
vicinity considering that Roosevelt Avenue is a major jeepney route for 24 hours. If respond-
ent truly had malicious designs on complainant, he
_______________
28 Angeles v. Figueroa, A.C. No. 5050, 20 September 2005, 470 SCRA 186, 195.
29 Reyes v. Wong, Adm. Case No. 547, 29 January 1975, 63 SCRA 667, 673.
30 Angeles v. Figueroa, supra note 28.
31 Uytengsu III v. Baduel, Adm. Case No. 5134, 14 December 2005, 477 SCRA 621, 632.
32 Boyboy v. Yabut, Jr., A.C. No. 5225, 29 April 2003, 401 SCRA 622, 627.
616
616
SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
could have brought her to a private place or a more remote place where he could freely
accomplish the same.
All told, as shown by the above circumstances, respondent’s acts are not grossly immoral
nor highly reprehensible to warrant disbarment or suspension.
The question as to what disciplinary sanction should be imposed against a lawyer found
guilty of misconduct requires consideration of a number of factors.33 When deciding upon
the appropriate sanction, the Court must consider that the primary purposes of disciplinary
proceedings are to protect the public; to foster public confidence in the Bar; to preserve the
integrity of the profession; and to deter other lawyers from similar misconduct.34 Discipli-
nary proceedings are means of protecting the administration of justice by requiring those
who carry out this important function to be competent, honorable and reliable men in whom
courts and clients may repose confidence.35 While it is discretionary upon the Court to im-
pose a particular sanction that it may deem proper against an erring lawyer, it should neither
be arbitrary and despotic nor motivated by personal animosity or prejudice, but should ever
be controlled by the imperative need to scrupulously guard the purity and independence of
the bar and to exact from the lawyer strict compliance with his duties to the court, to his
client, to his brethren in the profession and to the public.
The power to disbar or suspend ought always to be exercised on the preservative and not on
the vindictive principle, with great caution and only for the most weighty reasons and only
on clear cases of misconduct which seriously affect the standing and character of the lawyer
as an officer of the court
_______________
33 Agpalo, LEGAL ETHICS (4th Ed., 1989), p. 445.
34 In the Matter of a Member of the Bar of the Supreme Court of Delaware Joel D. Tenen-
baum, 6 February 2007.
35 Ting-Dumali v. Torres, A.C. No. 5161, 14 April 2004, 427 SCRA 108, 119.
617
VOL. 517, MARCH 7, 2007
617
Advincula vs. Macabata
and member of the Bar. Only those acts which cause loss of moral character should merit
disbarment or suspension, while those acts which neither affect nor erode the moral character
of the lawyer should only justify a lesser sanction unless they are of such nature and to such
extent as to clearly show the lawyer’s unfitness to continue in the practice of law. The dubi-
ous character of the act charged as well as the motivation which induced the lawyer to com-
mit it must be clearly demonstrated before suspension or disbarment is meted out. The mit-
igating or aggravating circumstances that attended the commission of the offense should also
be considered.36
Censure or reprimand is usually meted out for an isolated act of misconduct of a lesser na-
ture. It is also imposed for some minor infraction of the lawyer’s duty to the court or the
client.37 In the Matter of Darell Adams,38 a lawyer was publicly reprimanded for grabbing
a female client, kissing her, and raising her blouse which constituted illegal conduct involv-
ing moral turpitude and conduct which adversely reflected on his fitness to practice law.
Based on the circumstances of the case as discussed and considering that this is respondent’s
first offense, reprimand would suffice.
We laud complainant’s effort to seek redress for what she honestly believed to be an affront
to her honor. Surely, it was difficult and agonizing on her part to come out in the open and
accuse her lawyer of gross immoral conduct. However, her own assessment of the incidents
is highly subjective and partial, and surely needs to be corroborated or supported by more
objective evidence.
WHEREFORE, the complaint for disbarment against respondent Atty. Ernesto Macabata,
for alleged immorality, is hereby DISMISSED. However, respondent is hereby REPRI-
_______________
36 Id., at pp. 445–446.
37 Id.
38 428 N.E. 2 d 786 (Ind. 1981).
618
618
SUPREME COURT REPORTS ANNOTATED
Advincula vs. Macabata
MANDED to be more prudent and cautious in his dealing with his clients with a STERN
WARNING that a more severe sanction will be imposed on him for any repetition of the
same or similar offense in the future.
SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinez and Nachura, JJ., concur.
Callejo, Sr., J., On Leave.
Complaint for disbarment dismissed, however respondent reprimanded to be more prudent
and cautious in his dealing with his clients with stern warning against repetition of similar
offense.
Notes.—By having sexual intercourse with a girl who is only fifteen (15) years old, a judge
violated the trust reposed on his high office and utterly failed to live up to the noble ideals
and strict standards of morality required of members of the judiciary. (Naval vs. Panday, 275
SCRA 654 [1997])
A member of the Bar and officer of the court is not only required to refrain from adulterous
relationships or the keeping of mistresses but must also so behave himself as to avoid scan-
dalizing the public by creating the belief that he is flouting those moral standards. (Narag
vs. Narag, 291 SCRA 451 [1998])
——o0o——
619
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Advincula vs. Macabata,
517 SCRA 600, A.C. No. 7204 March 7, 2007
722
SUPREME COURT REPORTS ANNOTATED
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
G.R. No. 137378. October 12, 2000.*
PHILIPPINE ALUMINUM WHEELS, INC., petitioner, vs. FASGI ENTERPRISES, INC.,
respondent.
Conflict of Laws; Judgments; Enforcement of Foreign Judgments; Comity; The rules of
comity, utility and convenience of nations have established a usage among civilized states
by which final judgments of foreign courts of competent jurisdiction are reciprocally re-
spected and rendered efficacious.—Generally, in the absence of a special compact, no sov-
ereign is bound to give effect within its dominion to a judgment rendered by a tribunal of
another country; however, the rules of comity, utility and convenience of nations have es-
tablished a usage among civilized states by which final judgments of foreign courts of com-
petent jurisdiction are reciprocally respected and rendered efficacious under certain condi-
tions that may vary in different countries. In this jurisdiction, a valid judgment rendered by
a foreign tribunal may be recognized insofar as the immediate parties and the underlying
cause of action are concerned so long as it is convincingly shown that there has been an
opportunity for a full and fair hearing before a court of competent jurisdiction; that trial upon
regular proceedings has been conducted, following due citation or voluntary appearance of
the defendant and under a system of jurisprudence likely to secure an impartial administra-
tion of justice; and that there is nothing to indicate either a prejudice in court and in the
system of laws under which it is sitting or fraud in procuring the judgment. A foreign judg-
ment is presumed to be valid and binding in the country from which it comes, until a contrary
showing, on the basis of a presumption of regularity of proceedings and the giving of due
notice in the foreign forum.
Attorneys; Agency; Compromise Agreements; In this jurisdiction, it is clear that an attorney
cannot, without a client’s authorization, settle the action or subject matter of the litigation
even when he honestly believes that such a settlement will best serve his client’s interest.—
PAWI claims that its counsel, Mr. Ready, has acted without its authority. Verily, in this
jurisdiction, it is clear that an attorney cannot, without a client’s authorization, settle the
action or subject matter of the litigation even when he honestly believes that such a settle-
ment will best serve his client’s interest.
_____________
* THIRD DIVISION.
723
VOL. 342, OCTOBER 12, 2000
723
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
Same; Same; Same; Estoppel; It is an accepted rule that when a client, upon becoming aware
of the compromise and the judgment thereon, fails to promptly repudiate the action of his
attorney, he will not afterwards be heard to complain about it.—In the instant case, the sup-
plemental settlement agreement was signed by the parties, including Mr. Thomas Ready, on
06 October 1980. The agreement was lodged in the California case on 26 November 1980
or two (2) days after the pre-trial conference held on 24 November 1980. If Mr. Ready was
indeed not authorized by PAWI to enter into the supplemental settlement agreement, PAWI
could have forthwith signified to FASGI a disclaimer of the settlement. Instead, more than
a year after the execution of the supplemental settlement agreement, particularly on 09 Oc-
tober 1981, PAWI President Romeo S. Rojas sent a communication to Elena Buholzer of
FASGI that failed to mention Mr. Ready’s supposed lack of authority. On the contrary, the
letter confirmed the terms of the agreement when Mr. Rojas sought forbearance for the im-
pending delay in the opening of the first letter of credit under the schedule stipulated in the
agreement. It is an accepted rule that when a client, upon becoming aware of the compromise
and the judgment thereon, fails to promptly repudiate the action of his attorney, he will not
afterwards be heard to complain about it.
Same; Same; Same; Same; A party should not, after its opportunity to enjoy the benefits of
an agreement, be allowed to later disown the arrangement when the terms thereof ultimately
would prove to operate against its hopeful expectations.—Nor could PAWI claim any prej-
udice by the settlement. PAWI was spared from possibly paying FASGI substantial amounts
of damages and incurring heavy litigation expenses normally generated in a full-blown trial.
PAWI, under the agreement was afforded time to reimburse FASGI the price it had paid for
the defective wheels. PAWI, should not, after its opportunity to enjoy the benefits of the
agreement, be allowed to later disown the arrangement when the terms thereof ultimately
would prove to operate against its hopeful expectations.
Conflict of Laws; Judgments; Comity; There is a principle of international comity that a
court of another jurisdiction should refrain, as a matter of propriety and fairness, from so
assuming the power of passing judgment on the correctness of the application of law and the
evaluation of the facts of the judgment issued by another tribunal.—PAWI assailed not only
Mr. Ready’s authority to sign on its behalf the Supplemental Settlement Agreement but de-
nounced likewise his authority to enter into a stipulation for judgment before the California
court on 06 August 1982 on the ground that it had by then already terminated the former’s
services. For his part, Mr. Ready admitted that while he did receive a request from
724
724
SUPREME COURT REPORTS ANNOTATED
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
Manuel Singson of PAWI to withdraw from the motion of judgment, the request unfortu-
nately came too late. In an explanatory telex, Mr. Ready told Mr. Singson that under Amer-
ican Judicial Procedures when a motion for judgment had already been filed a counsel would
not be permitted to withdraw unilaterally without a court order. From the time the stipulation
for judgment was entered into on 26 April 1982 until the certificate of finality of judgment
was issued by the California court on 07 September 1982, no notification was issued by
PAWI to FASGI regarding its termination of Mr. Ready’s services. If PAWI were indeed
hoodwinked by Mr. Ready who purportedly acted in collusion with FASGI, it should have
aptly raised the issue before the forum which issued the judgment in line with the principle
of international comity that a court of another jurisdiction should refrain, as a matter of pro-
priety and fairness, from so assuming the power of passing judgment on the correctness of
the application of law and the evaluation of the facts of the judgment issued by another
tribunal.
Same; Same; Enforcement of Foreign Judgments; Fraud; Fraud, to hinder the enforcement
within this jurisdiction of a foreign judgment, must be extrinsic.—Fraud, to hinder the en-
forcement within this jurisdiction of a foreign judgment, must be extrinsic, i.e., fraud based
on facts not controverted or resolved in the case where judgment is rendered, or that which
would go to the jurisdiction of the court or would deprive the party against whom judgment
is rendered a chance to defend the action to which he has a meritorious case or defense. In
fine, intrinsic fraud, that is, fraud which goes to the very existence of the cause of action—
such as fraud in obtaining the consent to a contract—is deemed already adjudged, and it,
therefore, cannot militate against the recognition or enforcement of the foreign judgment.
Same; Same; Same; Same; Courts do not function to relieve a party from the effects of an
unwise or unfavorable contract freely entered into.—PAWI cannot, by this petition for re-
view, seek refuge over a business dealing and decision gone awry. Neither do the courts
function to relieve a party from the effects of an unwise or unfavorable contract freely en-
tered into. As has so aptly been explained by the appellate court, the overall picture might,
indeed, appear to be onerous to PAWI but it should bear emphasis that the settlement which
has become the basis for the foreign judgment has not been the start of a business venture
but the end of a failed one, and each party, naturally, has had to negotiate from either position
of strength or weakness depending on its own perception of who might have to bear the
blame for the failure and the consequence of loss.
725
VOL. 342, OCTOBER 12, 2000
725
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Singson, Valdez & Associates for petitioner.
Quasha, Ancheta, Perla & Nolasco for private respondent.
VITUG, J.:
On 01 June 1978, FASGI Enterprises Incorporated (“FASGI”), a corporation organized and
existing under and by virtue of the laws of the State of California, United States of America,
entered into a distributorship arrangement with Philippine Aluminum Wheels, Incorporated
(“PAWI”), a Philippine corporation, and Fratelli Pedrini Sarezzo S.P.A. (“FPS”), an Italian
corporation. The agreement provided for the purchase, importation and distributorship in the
United States of aluminum wheels manufactured by PAWI Pursuant to the contract, PAWI
shipped to FASGI a total of eight thousand five hundred ninety four (8,594) wheels, with an
FOB value of US$216,444.30 at the time of shipment, the first batch arriving in two con-
tainers and the second in three containers. Thereabouts, FASGI paid PAWI the FOB value
of the wheels. Unfortunately, FASGI later found the shipment to be defective and in non-
compliance with stated requirements, viz.:
“A. contrary to the terms of the Distributorship Agreement and in violation of U.S. law, the
country of origin (the Philippines) was not stamped on the wheels;
“B. the wheels did not have weight load limits stamped on them as required to avoid mount-
ing on excessively heavy vehicles, resulting in risk of damage or bodily injury to consumers
arising from possible shattering of the wheels;
“C. many of the wheels did not have an indication as to which models of automobile they
would fit;
“D. many of the wheels did not fit the model of automobiles for which they were purportedly
designed;
“E. some of the wheels did not fit any model of automobile in use in the United States;
726
726
SUPREME COURT REPORTS ANNOTATED
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
“F. most of the boxes in which the wheels were packed indicated that the wheels were ap-
proved by the Specialty Equipment Manufacturer’s Association (hereafter, ‘SEMA’); in fact
no SEMA approval has been obtained and this indication was therefore false and could result
in fraud upon retail customers purchasing the wheels.”1
On 21 September 1979, FASGI instituted an action against PAWI and FPS for breach of
contract and recovery of damages in the amount of US$2,316,591.00 before the United
States District Court for the Central District of California. In January 1980, during the pen-
dency of the case, the parties entered into a settlement, entitled “Transaction” with the cor-
responding Italian translation “Convenzione Transsativa,” where it was stipulated that FPS
and PAWI would accept the return of not less than 8,100 wheels after restoring to FASGI
the purchase price of US$268,750.00 via four (4) irrevocable letters of credit (“LC”). The
rescission of the contract of distributorship was to be effected within the period starting Jan-
uary up until April 1980.2
__________________
1 Complaint for Damages filed by FASGI before the US District Court for the Central Dis-
trict of California, Case No. 79-03661-HP, entitled “FASGI Enterprises vs. PAWI and FPS,
filed on 21 September 1979.” (Rollo, p. 68).
2 Pertinent provisions of the “Transaction” executed between the parties include:
“2) FPS and PAWI accept the return to them of the products supplied to FASGI, at the
forfeitglobal price of USA$268,750 and more precisely $13,273 for the wheels and bolts
supplied by FPS and to be returned to them, and $253,477 for wheels and caps supplied by
PAWI and to be returned to them.
“3) FASGI therefore agrees to return to PAWI not less than 8,100 wheels plus relative caps,
still in their original packing; agrees to return to FPS the 120 wheels and bolts received;
“4) PAWI reserves the right, recognized by FASGI, to take back the materials supplied—
four containers—either in one lot or in four separate lots, respectively by January, February,
March and April 1980. In case PAWI should opt for the second alternative, it must pay to
FASGI the sum of US$6,000 for storage and Custody, provided the withdrawal takes place
not later than the 30th of April, 1980.
727
VOL. 342, OCTOBER 12, 2000
727
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
In a telex message, dated 02 March 1980, PAWI president Romeo Rojas expressed the com-
pany’s inability to comply with the foregoing agreement and proposed a revised schedule of
payment. The message, in part, read:
_________________
xxx xxx xxx
“6) In case all the goods are returned in one lot by January 1980, in payment of the same and
before their shipment from Fresno, PAWI will issue four Letters of Credit, irrevocable, each
one of the same amount, payable at 90-120-150-180 days from the date of the invoice that
FASGI will issue for the goods returned.
“If on the other hand the goods are returned in four lots, the four Letters of Credit, increased
each one by $1,500 covering the amount referred to point 4), will be issued at 90 days from
the date of each shipment, which must be in January, February, March, April 1980.
“However, in both cases, each Letter of Credit must include also the USA current interests
retroactive from the first January 1980 to the each Letter of Credit maturity, in addition to
the fixed amount. Above interests will be calculated on the base of USA current ‘prime rate’
increased by two points.
The Letters of Credit must be accepted and confirmed by Crocker Bank of Fresno, Califor-
nia.
“7) The same method of payment will apply to FPS goods, and precisely Letter of Credit as
above confirmed with expiry 60 days from shipment date and relative interests from the first
January 1980.
“8) FASGI will issue the appropriate invoices for goods returning with interests calculated
from the first January 1980 on the base of USA current rate and precisely the ‘prime rate*
increased by two points.
“9) The judicial proceedings initiated by FASGI ENTERPRISES before the Los Angeles
Court will be abandoned with compensatory costs. The Parties undertake to sign any docu-
ments necessary to formalize the renunciation of any legal action.
“x x x x x x x x x
“11) With the issue of the aforesaid Letters of Credit accepted as above and of the payments
having taken place and the return of the wheels as stated above having been carried out, any
and every reason or claim between the Parties, relative to the agreement of exclusive sale as
given in point 1) of the PREMISE, the summons brought before the Los Angeles Court will
be resolved, settled and concluded.” (Rollo, pp. 100-101)
728
728
SUPREME COURT REPORTS ANNOTATED
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
‘We are most anxious in fulfilling all our obligations under compromise agreement executed
by our Mr. Giancarlo Dallera and your Van Curen. We have tried our best to comply with
our commitments, however, because of the situation as mentioned in the foregoing and cur-
rency regulations and restrictions imposed by our government on the outflow, of foreign
currency from our country, we are constrained to request for a revised schedule of shipment
and opening of L/Cs.
“After consulting with our bank and government monetary agencies and on the assumption
that we submit the required pro-forma invoices we can open the letters of credit in your favor
under the following schedule:
“A) First L/C—it will be issued in April 1980 payable 90 days thereafter
“B) Second L/C—it will be issued in June 1980 payable 90 days thereafter
“C) Third L/C—it will be issued in August 1980 payable 90 days thereafter
“D) Fourth L/C—it will be issued in November 1980 payable 90 days thereafter
“We understand your situation regarding the lease of your warehouse. For this reason, we
are willing to defray the extra storage charges resulting from this new schedule. If you cannot
renew the lease [of] your present warehouse, perhaps you can arrange to transfer to another
warehouse and storage charges transfer thereon will be for our account. We hope you un-
derstand our position. The delay and the revised schedules were caused by circumstances
totally beyond our control.”3
On 21 April 1980, again through a telex message, PAWI informed FASGI that it was im-
possible to open a letter of credit on or before April 1980 but assured that it would do its
best to comply with the suggested schedule of payments.4 In its telex reply of 29 April 1980,
FASGI insisted that PAWI should meet the terms of the proposed schedule of payments,
specifically its undertaking to open the first LC within April of 1980, and that “If the letter
of credit is not opened by April 30, 1980, then x x x [it would] immediately take all necessary
legal action to protect [its] position”5
_________________
3 Rollo, p. 106.
4 Rollo, p. 107.
5 Rollo, p. 109.
729
VOL. 342, OCTOBER 12, 2000
729
Philippine Aluminum Wheels, Inc, vs. FASGI Enterprises, Inc.
Despite its assurances, and FASGI’s insistence, PAWI failed to open the first LC in April
1980 allegedly due to Central Bank “inquiries and restrictions,” prompting FASGI to pursue
its complaint for damages against PAWI before the California district court. Pre-trial con-
ference was held on 24 November 1980. In the interim, the parties, realizing the protracted
process of litigation, resolved to enter into another arrangement, this time entitled “Supple-
mental Settlement Agreement,” on 26 November 1980. In substance, the covenant provided
that FASGI would deliver to PAWI a container of wheels for every LC opened and paid by
PAWI:
“3. Agreement
“3.1 Sellers agree to pay FASGI Two Hundred Sixty-Eight Thousand, Seven Hundred Fifty
and 00/100 Dollars ($268,750.00), plus interest and storage costs as described below. Sellers
shall pay such amount by delivering to FASGI the following four (4) irrevocable letters of
credit, confirmed by Crocker Bank, Main Branch, Fresno, California, as set forth below:
“(i) on or before June 30, 1980, a documentary letter of credit in the amount of (a) Sixty-
Five Thousand, Three Hundred Sixty-nine and 00/100 Dollars ($65,369.00), (b) plus interest
on that amount at the annual rate of 16.25% from January 1, 1980 until July 31, 1980, (c)
plus Two Thousand Nine Hundred Forty Dollars and 00/100 ($2,940.00) and (d) with inter-
est on that sum at the annual rate of 16.25% from May 1, 1980 to July 31, 1980, payable on
or after August 31, 1980;
“(ii) on or before September 1, 1980, a documentary letter of credit in the amount of (a)
Sixty-Seven Thousand, Seven Hundred Ninety-Three Dollars and Sixty-Seven Cents
($67,793.67) plus (b) Two Thousand, Nine Hundred Forty and 00/100 Dollars ($2,940.00),
plus (c) interest at an annual rate equal to the prime rate of Crocker Bank, San Francisco, in
effect from time to time, plus two percent on the amount in (a) from January 1, 1980 until
December 21, 1980, and on the amount set forth in (b) from May 1, 1980 until December
21, 1980, payable ninety days after the date of the bill of lading under the letter of credit;
“(iii) on or before November 1, 1980, a documentary letter of credit in the amount of (a)
Sixty-Seven Thousand, Seven Hundred Ninety-Three Dollars and Sixty-Seven Cents
($67,793.67) plus (b) Two Thousand, Nine Hundred Forty and 00/100 Dollars ($2,490.00),
plus (c) interest at an annual rate equal to the prime rate of Crocker Bank, San Francisco, in
730
730
SUPREME COURT REPORTS ANNOTATED
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
effect from time to time, plus two percent on the amount in (a) from January 1, 1980 until
February 21, 1981, and on the amount set forth in (b) from May 1, 1980 until February 21,
1981, payable ninety days after the date of the bill of lading under the latter of credit;
“(iv) on or before January 1, 1981, a documentary letter of credit in the amount of (a) Sixty-
Seven Thousand, Seven Hundred Ninety-Three Dollars and Sixty-Seven Cents ($67,793.67)
plus (b) Five Thousand, Eight Hundred Eighty and 00/100 Dollars ($5,880.00), plus (c) in-
terest at an annual rate equal to the prime rate of Crocker Bank, San Francisco, in effect from
time to time, plus two percent on the amount in (a) from January 1, 1980 until April 21,
1981, and on the amount set forth in (b) from May 1, 1980 until April 21, 1981, payable
ninety days after the date of the bill of lading under the latter of credit.”6
Anent the wheels still in the custody of FASGI, the supplemental settlement agreement pro-
vided that—
“3.4 (a) Upon execution of this Supplemental Settlement Agreement, the obligations of
FASGI to store or maintain the Containers and Wheels shall be limited to (i) storing the
Wheels and Containers in their present warehouse location and (ii) maintaining in effect
FASGI’s current insurance in favor of FASGI, insuring against usual commercial risks for
such storage in the principal amount of the Letters of Credit described in Paragraph 3.1.
FASGI shall bear no liability, responsibility or risk for uninsurable risks or casualties to the
Containers or Wheels.”
“x x x xxx xxx
“(e) From and after February 28, 1981, unless delivery of the Letters of Credit are delayed
past such date pursuant to the penultimate Paragraph 3.1, in which case from and after such
later date, FASGI shall have no obligation to maintain, store or deliver any of the Containers
or Wheels.”7
The deal allowed FASGI to enter before the California court the foregoing stipulations in
the event of the failure of PAWI to make good the scheduled payments; thus—
“3.5 Concurrently with execution and delivery hereof, the parties have executed and deliv-
ered a Mutual Release (the ‘Mutual Release’), and
_______________
6 Rollo, pp. 88-90.
7 Rollo, pp. 91-92.
731
VOL. 342, OCTOBER 12, 2000
731
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
a Stipulation for Judgment (the ‘Stipulation for Judgment’) with respect to the Action. In the
event of breach of this Supplemental Settlement Agreement by Sellers, FASGI shall have
the right to apply immediately to the Court for entry of Judgment pursuant to the Stipulation
for Judgment in the full amount thereof, less credit for any payments made by Sellers pur-
suant to this Supplemental Settlement Agreement. FASGI shall have the right thereafter to
enforce the Judgment against PAWI and FPS in the United States and in any other country
where assets of FPS or PAWI may be located, and FPS and PAWI hereby waive all defenses
in any such country to execution or enforcement of the Judgment by FASGI. Specifically,
FPS and PAWI each consent to the jurisdiction of the Italian and Philippine courts in any
action brought by FASGI to seek a judgment in those countries based upon a judgment
against FPS or PAWI in the Action.”8
In accordance with the aforementioned paragraph 3.5 of the agreement, the parties made the
following stipulation before the California court:
“The undersigned parties hereto, having entered into a Supplemental Settlement Agreement
in this action,
“IT IS HEREBY STIPULATED by and between plaintiff FASGI Enterprises, Inc. (FASGI)
and defendants Philippine Aluminum Wheels, Inc., (PAWI), and each of them, that judg-
ment may be entered in favor of plaintiff FASGI and against PAWI, in the amount of Two
Hundred Eighty Three Thousand Four Hundred Eighty And 01/100ths Dollars
($283,480.01).
“Plaintiff FASGI shall also be entitled to its costs of suit, and to reasonable attorneys’ fees
as determined by the Court added to the above judgment amount.”9
The foregoing supplemental settlement agreement, as well as the motion for the entry of
judgment, was executed by FASGI president Elena Buholzer and PAWI counsel Mr.
Thomas Ready.
PAWI, again, proved to be remiss in its obligation under the supplemental settlement agree-
ment. While it opened the first LC on 19 June 1980, it, however, only paid on it nine (9)
months after,
________________
8 Rollo, p. 93.
9 Rollo, pp. 113-114.
732
732
SUPREME COURT REPORTS ANNOTATED
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
or on 20 March 1981, when the letters of credit by then were supposed to have all been
already posted. This lapse, notwithstanding, FASGI promptly shipped to PAWI the first
container of wheels. Again, despite the delay incurred by PAWI on the second LC, FASGI
readily delivered the second container. Later, PAWI totally defaulted in opening and paying
the third and the fourth LCs, scheduled to be opened on or before, respectively, 01 Septem-
ber 1980 and 01 November 1980, and each to be paid ninety (90) days after the date of the
bill of lading under the LC. As so expressed in their affidavits, FASGI counsel Frank Ker
and FASGI president Elena Buholzer were more inclined to believe that PAWI’s failure to
pay was due not to any restriction by the Central Bank or any other cause than its inability
to pay. These doubts were based on the telex message of PAWI president Romeo Rojas who
attached a copy of a communication from the Central Bank notifying PAWI of the bank’s
approval of PAWI’s request to open LCs to cover payment for the re-importation of the
wheels. The communication having been sent to FASGI before the supplemental settlement
agreement was executed, FASGI speculated that at the time PAWI subsequently entered into
the supplemental settlement agreement, its request to open LCs had already been approved
by the Central Bank. Irked by PAWI’s persistent default, FASGI filed with the US District
Court of the Central District of California the following stipulation for judgment against
PAWI.
“PLEASE TAKE NOTICE that on May 17, 1982 at 10:00 A.M. in the Courtroom of the
Honorable Laughlin E. Waters of the above Court, plaintiff FASGI ENTERPRISES, INC.
(hereinafter ‘FASGI’) will move the Court for entry of Judgment against defendant PHIL-
IPPINE ALUMINUM WHEELS, INC. (hereinafter ‘PAWI’), pursuant to the Stipulation for
Judgment filed concurrently herewith, executed on behalf of FASGI and PAWI by their
respective attorneys, acting as their authorized agents.
“Judgment will be sought in the total amount of $252,850.60, including principal and interest
accrued through May 17, 1982, plus the sum of $17,500.00 as reasonable attorneys’ fees for
plaintiff in prosecuting this action.
“The Motion will be made under Rule 54 of the Federal Rules of Civil Procedure, pursuant
to and based upon the Stipulation for Judgment, the Supplemental Settlement Agreement
filed herein on or about November 21, 1980, the Memorandum of Points and Authorities
and
733
VOL. 342, OCTOBER 12, 2000
733
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
Affidavits of Elena Buholzer, Franck G. Ker and Stan Comwell all filed herewith, and upon
all the records, files and pleadings in this action.
“The Motion is made on the grounds that defendant PAWI has breached its obligations as
set forth in the Supplemental Settlement Agreement, and that the Supplemental Settlement
Agreement expressly permits FASGI to enter the Stipulation for Judgment in the event that
PAWI has not performed under the Supplemental Settlement Agreement.”10
On 24 August 1982, FASGI filed a notice of entry of judgment. A certificate of finality of
judgment was issued, on 07 September 1982, by the US District Judge of the District Court
for the Central District of California. PAWI, by this time, was approximately twenty (20)
months in arrears in its obligation under the supplemental settlement agreement.
Unable to obtain satisfaction of the final judgment within the United States, FASGI filed a
complaint for “enforcement of foreign judgment” in February 1983, before the Regional
Trial Court, Branch 61, of Makati, Philippines. The Makati court, however, in an order of
11 September 1990, dismissed the case, thereby denying the enforcement of the foreign
judgment within Philippine jurisdiction, on the ground that the decree was tainted with col-
lusion, fraud, and clear mistake of law and fact.11 The lower court ruled that the foreign
judgment ignored the reciprocal obligations of the parties. While the assailed foreign judg-
ment ordered the return by PAWI of the purchase amount, no similar order was made re-
quiring FASGI to return to PAWI the third and fourth containers of wheels.12 This situation,
the trial court maintained, amounted to an unjust enrichment on the part of FASGI. Further-
more, the trial court said, the supplemental settlement agreement and the subsequent motion
for entry of judgment upon which the California court had based its judgment were a nullity
for having been entered into by Mr. Thomas Ready, counsel for PAWI, without the latter’s
authorization.
________________
10 Rollo, pp. 117-118.
11 Rollo, pp. 237-244.
12 Ibid.
734
734
SUPREME COURT REPORTS ANNOTATED
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
FASGI appealed the decision of the trial court to the Court of Appeals, in a decision,13 dated
30 July 1997, the appellate court reversed the decision of the trial court and ordered the full
enforcement of the California judgment. Hence this appeal.
Generally, in the absence of a special compact, no sovereign is bound to give effect within
its dominion to a judgment rendered by a tribunal of another country;14 however, the rules
of comity, utility and convenience of nations have established a usage among civilized states
by which final judgments of foreign courts of competent jurisdiction are reciprocally re-
spected and rendered efficacious under certain conditions that may vary in different coun-
tries.15
In this jurisdiction, a valid judgment rendered by a foreign tribunal may be recognized inso-
far as the immediate parties and the underlying cause of action are concerned so long as it is
convincingly shown that there has been an opportunity for a full and fair hearing before a
court of competent jurisdiction; that trial upon regular proceedings has been conducted, fol-
lowing due citation or voluntary appearance of the defendant and under a system of juris-
prudence likely to secure an impartial administration of justice; and that there is nothing to
indicate either a prejudice in court and in the system of laws under which it is sitting or fraud
in procuring the judgment.16 A foreign judgment is presumed to be valid and binding in the
country from which it comes, until a contrary showing, on the basis of a presumption of
regularity of proceedings and the giving of due notice in the foreign forum. Rule 39, section
48 of the Rules of Court of the Philippines provides:
Sec. 48. Effect of foreign judgments or final orders.—The effect of a judgment or final order
of a tribunal of a foreign country, having jurisdiction to render the judgment or final order
is as follows:
________________
13 Penned by Justice Emeterio C. Cui, concurred by Justice Corona Ibay Somera and Justice
Salvador J. Valdez, Jr.
14 Cuculu vs. Louisiana Ins. Co. (La) Mart NS 464.
15 Ibid.
16 Private International Law, Jovito R. Salonga, Rex Bookstore, Manila, Philippines, 1995
Edition, p. 543.
735
VOL. 342, OCTOBER 12, 2000
735
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
xxxx
(b) In case of a judgment or final order against a person, the judgment or final order is pre-
sumptive evidence of a right as between the parties and their successors-in-interest by a
subsequent title.
In either case, the judgment or final order may be repelled by evidence a want of jurisdiction,
want of notice to the party, collusion, fraud, or clear mistake of law or fact.
In Soorajmull Nagarmull vs. Binalbagan-Isabela Sugar Co., Inc.,17 one of the early Philip-
pine cases on the enforcement of foreign judgments, this Court has ruled that a judgment for
a sum of money rendered in a foreign court is presumptive evidence of a right between the
parties and their successors-in-interest by subsequent title, but when suit for its enforcement
is brought in a Philippine court, such judgment may be repelled by evidence of want of
jurisdiction, want of notice to the party, collusion, fraud or clear mistake of law or fact. In
Northwest Orient Airlines, Inc. vs. Court of Appeals,18 the Court has said that a party at-
tacking a foreign judgment is tasked with the burden of overcoming its presumptive validity.
PAWI claims that its counsel, Mr. Ready, has acted without its authority. Verily, in this
jurisdiction, it is clear that an attorney cannot, without a client’s authorization, settle the
action or subject matter of the litigation even when he honestly believes that such a settle-
ment will best serve his client’s interest.19
In the instant case, the supplemental settlement agreement was signed by the parties, includ-
ing Mr. Thomas Ready, on 06 October 1980. The agreement was lodged in the California
case on 26 November 1980 or two (2) days after the pre-trial conference held on 24 Novem-
ber 1980. If Mr. Ready was indeed not authorized by PAWI to enter into the supplemental
settlement agreement, PAWI could have forthwith signified to FASGI a disclaimer of the
settlement. Instead, more than a year after the execution of the supple-
_______________
17 33 SCRA 46 (1970).
18 241 SCRA 192 (1995).
19 Caballero vs. Deiparine, 60 SCRA 136 (1974); Acanas vs. Sison, 8 SCRA 711 (1963).
736
736
SUPREME COURT REPORTS ANNOTATED
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
mental settlement agreement, particularly on 09 October 1981, PAWI President Romeo S.
Rojas sent a communication to Elena Buholzer of FASGI that failed to mention Mr. Ready’s
supposed lack of authority. On the contrary, the letter confirmed the terms of the agreement
when Mr. Rojas sought forbearance for the impending delay in the opening of the first letter
of credit under the schedule stipulated in the agreement.
It is an accepted rule that when a client, upon becoming aware of the compromise and the
judgment thereon, fails to promptly repudiate the action of his attorney, he will not after-
wards be heard to complain about it.20
Nor could PAWI claim any prejudice by the settlement. PAWI was spared from possibly
paying FASGI substantial amounts of damages and incurring heavy litigation expenses nor-
mally generated in a full-blown trial. PAWI, under the agreement was afforded time to re-
imburse FASGI the price it had paid for the defective wheels. PAWI, should not, after its
opportunity to enjoy the benefits of the agreement, be allowed to later disown the arrange-
ment when the terms thereof ultimately would prove to operate against its hopeful expecta-
tions.
PAWI assailed not only Mr. Ready’s authority to sign on its behalf the Supplemental Settle-
ment Agreement but denounced likewise his authority to enter into a stipulation for judgment
before the California court on 06 August 1982 on the ground that it had by then already
terminated the former’s services. For his part, Mr. Ready admitted that while he did receive
a request from Manuel Singson of PAWI to withdraw from the motion of judgment, the
request unfortunately came too late. In an explanatory telex, Mr. Ready told Mr. Singson
that under American Judicial Procedures when a motion for judgment had already been filed
a counsel would not be permitted to withdraw unilaterally without a court order. From the
time the stipulation for judgment was entered into on 26 April 1982 until the certificate of
finality of judgment was issued by the California court on 07 September 1982, no notifica-
tion was issued by PAWI to FASGI regarding its termination of Mr. Ready’s services. If
PAWI were indeed hoodwinked by Mr. Ready
_______________
20 Dungo vs. Lopena, 116 Phil. 1305.
737
VOL. 342, OCTOBER 12, 2000
737
Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
who purportedly acted in collusion with FASGI, it should have aptly raised the issue before
the forum which issued the judgment in line with the principle of international comity that a
court of another jurisdiction should refrain, as a matter of propriety and fairness, from so
assuming the power of passing judgment on the correctness of the application of law and the
evaluation of the facts of the judgment issued by another tribunal.21
Fraud, to hinder the enforcement within this jurisdiction of a foreign judgment, must be
extrinsic, i.e., fraud based on facts not controverted or resolved in the case where judgment
is rendered,22 or that which would go to the jurisdiction of the court or would deprive the
party against whom judgment is rendered a chance to defend the action to which he has a
meritorious case or defense. In fine, intrinsic fraud, that is, fraud which goes to the very
existence of the cause of action—such as fraud in obtaining the consent to a contract—is
deemed already adjudged, and it, therefore, cannot militate against the recognition or en-
forcement of the foreign judgment.23
Even while the US judgment was against both FPS and PAWI, FASGI had every right to been the start of a business venture but the end of a failed one, and each party, naturally, has
seek enforcement of the judgment solely against PAWI or, for that matter, only against FPS. had to negotiate from either position of
FASGI, in its complaint, explained: _______________
“17. There exists, and at all times relevant herein there existed, a unity of interest and own-
ership between defendant PAWI and defendant FPS, in that they are owned and controlled 24 Rollo, p. 71.
by the same shareholders and managers, such that any individuality and separateness be- 25 See Petition for Review on Certiorari, G.R. No. 137378, pp. 14-15.
tween these defendants has ceased, if it ever existed, and defendant FPS is the alter ego of 26 “Transaction,”supra.
defendant PAWI. The two entities are used interchangeably by their shareholders and man- 27 (e) From and after February 28, 1981, unless delivery of the Letters of Credit are delayed
agers, and plaintiff has found it impossible to ascertain with which entity it is dealing at any past such date pursuant to the penultimate paragraph of Paragraph 3.1, in which case from
one time. Adherence to the fiction of separate existence of these defendant corporations and after such later date, FASGI shall have no obligation to maintain, store or delivery any
would permit an abuse of the corporate privilege and would promote injustice against this of the containers or wheels.
plaintiff because assets can easily be shifted between the two compa- 739
_______________
VOL. 342, OCTOBER 12, 2000
21 Salonga, supra., at 558. 739
22 Labayen vs. Talisay-Silay Milling Co., 40 O.G., 2nd Supp. No. 3, p. 109. Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.
23 Salonga, supra. strength or weakness depending on its own perception of who might have to bear the blame
738 for the failure and the consequence of loss.28
Altogether, the Court finds no reversible error on the part of the appellate court in its ap-
738 pealed judgment.
SUPREME COURT REPORTS ANNOTATED WHEREFORE, the decision of the Court of Appeals is AFFIRMED. No costs.
Philippine Aluminum Wheels, Inc, vs. FASGI Enterprises, Inc. SO ORDERED.
nies thereby frustrating plaintiff’s attempts to collect on any judgment rendered by this Melo (Chairman), Panganiban, Purisima and Gonzaga-Reyes, JJ., concur.
Court.”24 Judgment affirmed.
Paragraph 14 of the Supplemental Settlement Agreement fixed the liability of PAWI and Notes.—A manning agency cannot be faulted for complying with the applicable foreign law.
FPS to be “joint and several” or solidary. The enforcement of the judgment against PAWI (Omanfil International Manpower Development Corporation vs. National Labor Relations
alone would not, of course, preclude it from pursuing and recovering whatever contributory Commission, 300 SCRA 455 [1998])
liability FPS might have pursuant to their own agreement. The party who claims the applicability of a foreign law has the burden of proof, and where
PAWI would argue that it was incumbent upon FASGI to first return the second and the said party has failed to discharge the burden, Philippine law applies. (Laureano vs. Court of
third containers of defective wheels before it could be required to return to FASGI the pur- Appeals, [2000])
chase price therefor,25 relying on their original agreement (the “Transaction”).26 Unfortu- ——o0o——
nately, PAWI defaulted on its covenants thereunder that thereby occasioned the subsequent
execution of the supplemental settlement agreement. This time the parties agreed, under par- _______________
agraph 3.4(e)27 thereof, that any further default by PAWI would release FASGI from any
obligation to maintain, store or deliver the rejected wheels. The supplemental settlement 28 Decision, Court of Appeals, 30 July 1997, Rollo, p. 53.
agreement evidently superseded, at the very least on this point, the previous arrangements 740
made by the parties.
PAWI cannot, by this petition for review, seek refuge over a business dealing and decision © Copyright 2020 Central Book Supply, Inc. All rights reserved. Philippine Aluminum
gone awry. Neither do the courts function to relieve a party from the effects of an unwise or Wheels, Inc. vs. FASGI Enterprises, Inc., 342 SCRA 722, G.R. No. 137378 October 12,
unfavorable contract freely entered into. As has so aptly been explained by the appellate 2000
court, the overall picture might, indeed, appear to be onerous to PAWI but it should bear
emphasis that the settlement which has become the basis for the foreign judgment has not

A.C. No. 9881. June 4, 2014.*
(formerly CBD Case No. 10-2607)
ATTY. ALAN F. PAGUIA, petitioner, vs. ATTY. MANUEL T. MOLINA, respondent.
Administrative Case; Attorneys; An administrative case against a lawyer is deemed termi-
nated if the complainant does not file a petition with the Supreme Court within fifteen (15)
days from notice of the Integrated Bar of the Philippines (IBP) Board’s resolution.—It is
worth noting that a case is deemed terminated if the complainant does not file a petition with
the Supreme Court within fifteen (15) days from notice of the Board’s resolution. This rule
is derived from Section 12(c) of Rule 139-B, which states: (c) If the respondent is exonerated
by the Board or the disciplinary sanction imposed by it is less than suspension or disbarment
(such as admonition, reprimand, or fine) it shall issue a decision exonerating respondent or
imposing such sanction. The case shall be deemed terminated unless upon petition of the
complainant or other interested party filed with the
_______________
* FIRST DIVISION.
482
482
SUPREME COURT REPORTS ANNOTATED
Paguia vs. Molina
Supreme Court within fifteen (15) days from notice of the Board’s resolution, the Supreme
Court orders otherwise.
Same; Same; When it comes to administrative cases against lawyers, two things are to be
considered: quantum of proof, which requires clearly preponderant evidence; and burden of
proof, which is on the complainant.—When it comes to administrative cases against lawyers,
two things are to be considered: quantum of proof, which requires clearly preponderant ev-
idence; and burden of proof, which is on the complainant. In the present case, we find that
the Complaint is without factual basis. Complainant Atty. Paguia charges Atty. Molina with
providing legal advice to the latter’s clients to the effect that the Times Square Preamble is
binding on complainant’s client, Mr. Abreu, who was not a signatory to the agreement. The
allegation of giving legal advice, however, was not substantiated in this case, either in the
complaint or in the corresponding hearings. Nowhere do the records state that Atty. Paguia
saw respondent giving the legal advice to the clients of the latter. Bare allegations are not
proof.
Attorneys; An attorney-at-law is not expected to know all the law. For an honest mistake or
error, an attorney is not liable.—Even if we assume that Atty. Molina did provide his clients
legal advice, he still cannot be held administratively liable without any showing that his act
was attended with bad faith or malice. The rule on mistakes committed by lawyers in the
exercise of their profession is as follows: An attorney-at-law is not expected to know all the
law. For an honest mistake or error, an attorney is not liable. Chief Justice Abbott said that,
no attorney is bound to know all the law; God forbid that it should be imagined that an
attorney or a counsel, or even a judge, is bound to know all the law. x x x. The default rule
is presumption of good faith. On the other hand, bad faith is never presumed. It is a conclu-
sion to be drawn from facts. Its determination is thus a question of fact and is evidentiary.
There is no evidence, though, to show that the legal advice, assuming it was indeed given,
was coupled with bad faith, malice, or ill will. The presumption of good faith, therefore,
stands in this case.
ADMINISTRATIVE CASE in the Supreme Court. Dishonesty.
The facts are stated in the resolution of the Court.
483
VOL. 724, JUNE 4, 2014
483
Paguia vs. Molina
RESOLUTION
SERENO, CJ.:
For resolution by this Court is the dismissal by the Integrated Bar of the Philippines (IBP)
Board of Governors of the administrative Complaint for DISHONESTY against respondent,
Atty. Manuel Molina. Atty. Molina allegedly advised his clients to enforce a contract on the
complainant’s client who had never been a party to the agreement.
The facts are as follows:
The case involves a conflict between neighbors in a four-unit compound named “Times
Square” at Times Street, Quezon City. The neighbors are the following: 1) Mr. and Mrs.
Gregorio M. Abreu, clients of Atty. Paguia; 2) Mr. and Mrs. Wilson Lim, clients of respond-
ent Molina; 3) Dr. and Mrs. Eduardo Yap; and Dr. Belinda San Juan.
The clients of Atty. Molina entered into a contract with the other unit owners save for Mr.
Abreu. The agreement, covered by a document titled “Times Square Preamble,” establishes
a set of internal rules for the neighbors on matters such as the use of the common right of
way to the exit gate, assignment of parking areas, and security. Mr. Abreu, the client of
complainant, Atty. Paguia, was not a party to the contract since the former did not agree with
the terms concerning the parking arrangements.
On 4 February 2010, Atty. Paguia filed a Complaint for Dishonesty[1] with the IBP Com-
mission on Bar Discipline against Atty. Molina[2] for allegedly giving legal advice to the
latter’s clients to the effect that the Times Square Preamble was binding on Mr. Abreu, who
was never a party to the contract.
_______________
[1] Docketed as CBD Case No. 10-2607.
[2] Rollo, pp. 2-7.
484
484
SUPREME COURT REPORTS ANNOTATED
Paguia vs. Molina
In his Answer,[3] Atty. Molina downplayed the case as a petty quarrel among neighbors. He
maintained that the Times Square Preamble[4] was entered into for purposes of maintaining
order in the residential compound. All homeowners, except Mr. Abreu, signed the docu-
ment.[5]
Respondent further stated in his Answer that Mr. and Mrs. Gregorio Abreu filed two cases
against his clients, Mr. and Mrs. William Lim, on the belief that Mr. Abreu was not bound
by the Times Square Preamble. The first case, was filed with the Housing and Land Use
Regulatory Board (HLURB), which was an action to declare the Times Square Preamble
invalid. The second suit was an action for declaratory relief. Both cases, according to re-
spondent, were dismissed.[6]
Respondent further claimed that another case had been filed in court, this time by his client,
the Lims. They were prompted to file a suit since Mr. Abreu had allegedly taken matters into
his own hands by placing two vehicles directly in front of the gate of the Lims, thus blocking
the latter’s egress to Times Street. The Lims filed with the Regional Trial Court, Branch 96,
Quezon City, a Complaint for Injunction and Damages, coupled with a prayer for the imme-
diate issuance of a Temporary Restraining Order and/or Preliminary Injunction, which was
docketed as Civil Case No. Q-08-63579. According to respondent, the RTC granted the re-
lief prayed for in an Order dated 12 December 2008.[7]
Atty. Molina concluded that the above facts sufficiently served as his answer to the Com-
plaint.
On 3 August 2010, Investigating Commissioner Victor C. Fernandez rendered a Report and
Recommendation. He recommended dismissal for lack of merit, based on the following
______________
[3]Rollo, pp. 23-37; Filed on 5 March 2010.
[4] Id., at pp. 8-14.
[5] Id., at p. 24. Answer, p. 2.
[6] Id., at pp. 24-25.
[7] Id., at p. 25.
485
VOL. 724, JUNE 4, 2014
485
Paguia vs. Molina
grounds: 1) the complaint consisted only of bare allegations; and 2) even assuming that re-
spondent Molina gave an erroneous legal advice, he could not be held accountable in the
absence of proof of malice or bad faith.[8]
On 14 May 2011, the IBP Board of Governors passed Resolution No. XIX-2011-210, adopt-
ing and approving the Report and Recommendation of the Investigating Commissioner.[9]
Atty. Paguia filed a Motion for Reconsideration dated 2 August 2011, but was denied by the
IBP Board of Governors on 29 December 2012.[10] Notices of the denial were received by
the parties on 21 March 2013.[11]
No petition for review has been filed with this Court.
It is worth noting that a case is deemed terminated if the complainant does not file a petition
with the Supreme Court within fifteen (15) days from notice of the Board’s resolution. This
rule is derived from Section 12(c) of Rule 139-B, which states:
(c) If the respondent is exonerated by the Board or the disciplinary sanction imposed by it
is less than suspension or disbarment (such as admonition, reprimand, or fine) it shall issue
a decision exonerating respondent or imposing such sanction. The case shall be deemed ter-
minated unless upon petition of the complainant or other interested party filed with the Su-
preme Court within fifteen (15) days from notice of the Board’s resolution, the Supreme
Court orders otherwise. (Underscoring supplied)
In this case, Atty. Paguia received notice of the Board’s resolution on 21 March 2013, as
evidenced by a registry return receipt. To this date, this Court has yet to receive a peti-
_______________
[8] Id., at pp. 89-92.
[9] Id., at p. 88.
[10] Id., at p. 87.
[11] Id., at pp. 96-97.
486
486
SUPREME COURT REPORTS ANNOTATED
Paguia vs. Molina
tion for review from Atty. Paguia. Thus, for his failure to file a petition for review with the
Court within 15 days, this case is deemed terminated pursuant to the abovementioned Sec-
tion 12(c).
Nevertheless, we have gone over the records but we have no reason to deviate from the
findings of the IBP Board of Governors.
When it comes to administrative cases against lawyers, two things are to be considered:
quantum of proof, which requires clearly preponderant evidence; and burden of proof, which
is on the complainant.[12]
In the present case, we find that the Complaint is without factual basis. Complainant Atty.
Paguia charges Atty. Molina with providing legal advice to the latter’s clients to the effect
that the Times Square Preamble is binding on complainant’s client, Mr. Abreu, who was not
a signatory to the agreement. The allegation of giving legal advice, however, was not sub-
stantiated in this case, either in the complaint or in the corresponding hearings. Nowhere do
the records state that Atty. Paguia saw respondent giving the legal advice to the clients of
the latter. Bare allegations are not proof.[13]
Even if we assume that Atty. Molina did provide his clients legal advice, he still cannot be
held administratively liable without any showing that his act was attended with bad faith or
malice. The rule on mistakes committed by lawyers in the exercise of their profession is as
follows:
An attorney-at-law is not expected to know all the law. For an honest mistake or error, an
attorney is not liable. Chief Justice Abbott said that, no attorney is bound to know all the
law; God forbid that it should be imag-
_______________
[12] De Zuzuarregui, Jr. v. Soguilon, 589 Phil. 64; 568 SCRA 68 (2008).
[13] Real v. Bello, 513 SCRA 111 (2007).
487
VOL. 724, JUNE 4, 2014
487
Paguia vs. Molina
ined that an attorney or a counsel, or even a judge, is bound to know all the law. x x x.[14]
The default rule is presumption of good faith. On the other hand, bad faith is never presumed.
It is a conclusion to be drawn from facts. Its determination is thus a question of fact and is
evidentiary.[15] There is no evidence, though, to show that the legal advice, assuming it was
indeed given, was coupled with bad faith, malice, or ill will. The presumption of good faith,
therefore, stands in this case.
The foregoing considered, complainant failed to prove his case by clear preponderance of
evidence.
WHEREFORE, the Resolution of the IBP Board of Governors adopting and approving the
Decision of the Investigating Commissioner is hereby AFFIRMED.
SO ORDERED.
Leonardo-De Castro, Bersamin, Villarama, Jr. and Reyes, JJ., concur.
Resolution of IBP Board of Governors affirmed.
Notes.—An administrative case against a lawyer may not be dismissed or rendered moot
and academic by her act of voluntarily terminating her membership in the Bar regardless of
the reason for doing so — to terminate one’s membership in the Bar voluntarily, it is imper-
ative that the lawyer first prove that the voluntary withdrawal of membership is not a ploy
to further prejudice the public or to evade liability. (Pacana, Jr. vs. Pascual-Lopez, 594
SCRA 1 [2009])
_______________
[14] Id.
[15] Magaling vs. Peter Ong, G.R. No. 173333, 13 August 2008, 562 SCRA 152.
488
488
SUPREME COURT REPORTS ANNOTATED
Paguia vs. Molina
Under Section 27, Rule 138 of the Rules of Court, a member of the bar may be disbarred or
suspended from his office as attorney by the Supreme Court for any violation of the Law-
yer’s Oath. (Sy vs. Esponilla, 712 SCRA 130 [2013])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Paguia vs. Molina, 724
SCRA 481, A.C. No. 9881 (formerly CBD Case No. 10-2607) June 4, 2014
A.C. No. 6677. June 10, 2014.*
EUPROCINA I. CRISOSTOMO, MARILYN L. SOLIS, EVELYN MARQUIZO, ROSE-
MARIE BALATUCAN, MILDRED BATANG, MARILEN MINERALES, and MELINDA
D. SIOTING, complainants, vs. ATTY. PHILIP Z. A. NAZARENO, respondent.
Remedial Law; Civil Procedure; Certification Against Forum Shopping; Under Section 5,
Rule 7 of the Rules of Court, the submission of false entries in a certification against forum
shopping constitutes indirect or direct contempt of court, and subjects the erring
1
_______________
* EN BANC.
2
2
SUPREME COURT REPORTS ANNOTATED
Crisostomo vs. Nazareno
counsel to the corresponding administrative and criminal actions.—Separate from the pro-
scription against forum shopping is the violation of the certification requirement against fo-
rum shopping, which was distinguished in the case of Sps. Ong v. Court of Appeals, 384
SCRA 139 (2002), as follows: The distinction between the prohibition against forum shop-
ping and the certification requirement should by now be too elementary to be misunderstood.
To reiterate, compliance with the certification against forum shopping is separate from and
independent of the avoidance of the act of forum shopping itself. There is a difference in the
treatment between failure to comply with the certification requirement and violation of the
prohibition against forum shopping not only in terms of imposable sanctions but also in the
manner of enforcing them. The former constitutes sufficient cause for the dismissal without
prejudice to the filing of the complaint or initiatory pleading upon motion and after hearing,
while the latter is a ground for summary dismissal thereof and for direct contempt. x x x.
Under Section 5, Rule 7 of the Rules of Court, the submission of false entries in a certifica-
tion against forum shopping constitutes indirect or direct contempt of court, and subjects the
erring counsel to the corresponding administrative and criminal actions.
Notarial Law; It is a standing rule that for every notarial act, the notary shall record in the
notarial register at the time of the notarization, among others, the entry and page number of
the document notarized, and that he shall give to each instrument or document executed,
sworn to, or acknowledged before him a number corresponding to the one in his register.—
Separately, the Court further finds Atty. Nazareno guilty of malpractice as a notary public,
considering that he assigned only one document number (i.e., Doc. No. 1968) to the certifi-
cations against forum shopping attached to the six (6) April 1, 2004 complaints for rescission
and ejectment despite the fact that each of them should have been treated as a separate no-
tarial act. It is a standing rule that for every notarial act, the notary shall record in the notarial
register at the time of the notarization, among others, the entry and page number of the doc-
ument notarized, and that he shall give to each instrument or document executed, sworn to,
or acknowledged before him a number corresponding to the one in his register. Evidently,
Atty. Nazareno did not comply with the foregoing rule.
3 qualified or authorized may act as notaries public. Notarization converts a private document
VOL. 726, JUNE 10, 2014
3 its face. Courts, administrative agencies and the public at large must be able to rely upon the
Crisostomo vs. Nazareno
Same; Notary Public; Atty. Nazareno notarized the certifications against forum shopping
attached to all the aforementioned complaints, fully aware that they identically asserted a
material falsehood, i.e., that Rudex had not commenced any actions or proceedings or was
not aware of any pending actions or proceedings involving the same issues in any other
forum.—Atty. Nazareno notarized the certifications against forum shopping attached to all
the aforementioned complaints, fully aware that they identically asserted a material false-
hood, i.e., that Rudex had not commenced any actions or proceedings or was not aware of
any pending actions or proceedings involving the same issues in any other forum. The ad-
ministrative liability of an erring notary public in this respect was clearly delineated as a
violation of Rule 1.01, Canon 1 of the Code in the case of Heirs of the Late Spouses Vil-
lanueva v. Atty. Beradio, 512 SCRA 17 (2007), to wit: Where admittedly the notary public
has personal knowledge of a false statement or information contained in the instrument to
be notarized, yet proceeds to affix his or her notarial seal on it, the Court must not hesitate
to discipline the notary public accordingly as the circumstances of the case may dictate.
Otherwise, the integrity and sanctity of the notarization process may be undermined and
public confidence on notarial documents diminished. In this case, respondent’s conduct
amounted to a breach of Canon 1 of the Code of Professional Responsibility, which requires
lawyers to obey the laws of the land and promote respect for the law and legal processes.
Respondent also violated Rule 1.01 of the Code which proscribes lawyers from engaging in
unlawful, dishonest, immoral, or deceitful conduct. (Emphasis supplied) In said case, the
lawyer who knowingly notarized a document containing false statements had his notarial
commission revoked and was disqualified from being commissioned as such for a period of
one (1) year. Thus, for his malpractice as a notary public, the Court is wont to additionally
impose the same penalties of such nature against him. However, due to the multiplicity of
his infractions on this front, coupled with his willful malfeasance in discharging the office,
the Court deems it proper to revoke his existing commission and permanently disqualify him
from being commissioned as a notary public.
Same; Same; Notarization is not an empty, meaningless, routinary act. It is invested with
substantive public interest, such that only those who are qualified or authorized may act as
notaries public.—
4
4
SUPREME COURT REPORTS ANNOTATED
Crisostomo vs. Nazareno
Indeed, respondent ought to be reminded that: Notarization is not an empty, meaningless,
routinary act. It is invested with substantive public interest, such that only those who are
into a public document thus making that document admissible in evidence without further
proof of its authenticity. A notarial document is by law entitled to full faith and credit upon
acknowledgment executed by a notary public and appended to a private instrument. x x x x
When a notary public certifies to the due execution and delivery of the document under his
hand and seal he gives the document the force of evidence. Indeed, one of the purposes of
requiring documents to be acknowledged before a notary public, in addition to the solemnity
which should surround the execution and delivery of documents, is to authorize such docu-
ments to be given without further proof of their execution and delivery. Where the notary
public is a lawyer, a graver responsibility is placed upon him by reason of his solemn oath
to obey the laws and to do no falsehood or consent to the doing of any. Failing in this, he
must accept the consequences of his unwarranted actions.
ADMINISTRATIVE CASE in the Supreme Court. Making False Declarations in the Certi-
fications Against Forum Shopping and Malpractice as a Notary Public.
The facts are stated in the opinion of the Court.
Thelma Jader-Manalo for complainants.
PERLAS-BERNABE, J.:
For the Court’s resolution is an administrative complaint[1] filed by complainants Euprocina
I. Crisostomo (Crisostomo), Marilyn L. Solis (Solis), Evelyn Marquizo (Marquizo), Rose-
marie Balatucan (Balatucan), Mildred Batang (Batang), Marilen Minerales (Minerales), and
Melinda D. Sioting (Sioting) against respondent Atty. Philip Z. A. Nazareno (Atty. Naza-
reno), charging him with making false declarations in the
_______________
[1] Rollo, pp. 1-12.
5
VOL. 726, JUNE 10, 2014
5
Crisostomo vs. Nazareno
certifications against forum shopping subject of this case in disregard of Section 5, Rule 7
of the Rules of Court, and malpractice as a notary public in violation of the Code of Profes-
sional Responsibility.
The Facts
Sometime in 2001, complainants individually purchased housing units (subject properties)
in Patricia South Villa Subdivision, Anabu-II, Imus, Cavite, from Rudex International De-
velopment Corp. (Rudex).[2] In view of several inadequacies and construction defects[3] in
the housing units and the subdivision itself, complainants sought the rescission of their re-
spective contracts to sell before the Housing and Land Use Regulatory Board (HLURB),
seeking the refund of the monthly amortizations they had paid.[4] The first batch of re-
_______________
[2] Id., at p. 167.
[3] Complainants uniformly alleged the following defects in the subdivision and subject
properties:
1. the walls and stairs of the house started to crack;
2. the rain water is oozing in the window;
3. the foundation of the house is weak;
4. bad smell is coming out of the lavatory, comfort room and floor drainage;
5. the water tank is too small for the subdivision, water being supplied is dirty, unsanitary
and not potable and inadequate;
6. defective road, the water stays in the middle of the street;
7. defective clogged drainage;
8. no garbage disposal;
9. no security guard;
10. no street lights; and
11. no open areas for parks and garden as in the supposed area, the water tank was in-
stalled. (See id., at p. 86.)
[4] See the complainants’ individual complaints; id., at pp. 83-139, 260-261 and 275-283.
6 plaint[16] against Sps. Sioting before the HLURB for the rescission of their contract to sell
6 Yet, in the certification against forum shopping attached thereto executed by the Head of its
SUPREME COURT REPORTS ANNOTATED
Crisostomo vs. Nazareno
scission cases was filed by herein complainants Sioting[5] on May 24, 2002, and Crisos-
tomo[6] and Marquizo[7] on June 10, 2002, while the second batch of rescission cases was
filed by complainants Balatucan[8] on March 3, 2003, Solis[9] and Ederlinda M. Vil-
lanueva[10] (represented by Minerales) on May 12, 2003, and Batang[11] on July 29, 2003.
In all the foregoing rescission cases, Rudex was represented by herein respondent Atty. Naz-
areno.
Judgments of default were eventually rendered against Rudex in the first batch of rescission
cases.[12] Sometime in August 2003, Rudex filed three (3) petitions for review[13] before
the HLURB assailing the same. In the certifications against forum shopping attached to the
said petitions, Rudex, through its President Ruben P. Baes, and legal counsel Atty. Nazareno,
stated that it has not commenced or has knowledge of any similar action or proceeding in-
volving the same issues pending before any court, tribunal or agency[14] — this, notwith-
standing the fact that Rudex, under the representation of Atty. Nazareno, previously filed an
ejectment case on September 9, 2002 against Sioting and her husband, Rodrigo
_______________
[5] Id., at pp. 275-283.
[6] Id., at pp. 6 and 83-92.
[7] Id., at pp. 6 and 102-111.
[8] Id., at pp. 6 and 112-121.
[9] Id., at p. 6.
[10] Id., at pp. 6 and 130-139.
[11] Id., at pp. 6 and 122-129.
[12] The HLURB rendered a Judgment by Default in favor of Sioting on May 27, 2003. (id.,
at pp. 7 and 298-304.) The HLURB also rendered a Judgment by Default in favor of Crisos-
tomo and Marquizo on July 7, 2003 and March 27, 2003, respectively. (id., at p. 6.)
[13] Id., at p. 264. See also petition filed against Sioting; id., at pp. 180-192, against Crisos-
tomo; id., at pp. 635-650, and against Marquizo; id., at pp. 651-663.
[14] Id., at pp. 7-8, 153 and 171.
7
VOL. 726, JUNE 10, 2014
7
Crisostomo vs. Nazareno
Sioting (Sps. Sioting), before the Municipal Trial Court of Imus, Cavite (MTC).[15]
On January 29, 2004, Rudex, again represented by Atty. Nazareno, filed another com-
and the latter’s ejectment, similar to its pending September 9, 2002 ejectment complaint.
Credit and Collection department, Norilyn D. Unisan,[17] Rudex declared that it has not
commenced or is not aware of any action or proceeding involving the same issues pending
before any court, tribunal or agency.[18] The said certification was notarized by Atty. Naz-
areno himself.[19]
On April 1, 2004, six (6) similar complaints[20] for rescission of contracts to sell and eject-
ment, plus damages for nonpayment of amortizations due, were filed by Atty. Nazareno, on
behalf of Rudex, against the other complainants before the HLURB. The certifications
against forum shopping attached thereto likewise stated that Rudex has not commenced or
has
_______________
[15] Id., at p. 470. See Decision dated November 18, 2004; id., at pp. 470-475.
[16] Id., at pp. 167-170.
[17] Id., at p. 171.
[18] The specific portion of the certification against forum shopping of the complaint reads:
4. That [Rudex] has not commenced any other action or proceeding involving the same
issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency.
5. If I should learn that a similar action or proceeding has been filed or is pending before
the Supreme Court, the Court of Appeals, or any other tribunal or agency, I undertake to
report such fact to [the HLURB] within five (5) days thereafter. (Id.)
xxxx
[19] Id.
[20] Id., at pp. 13-17, 24-28, 35-40, 46-50, 59-64 and 72-76.
8 In a Report and Recommendation[27] dated March 8, 2012, Integrated Bar of the Philippines
8 Atty. Nazareno for a period of six (6) months for his administrative violations.
SUPREME COURT REPORTS ANNOTATED
Crisostomo vs. Nazareno
any knowledge of any similar pending action before any court, tribunal or agency.[21]
On February 21, 2005, complainants jointly filed the present administrative complaint for
disbarment against Atty. Nazareno, claiming that in the certifications against forum shop-
ping attached to the complaints for rescission and ejectment of Rudex filed while Atty. Naz-
areno was its counsel, the latter made false declarations therein that no similar actions or
proceedings have been commenced by Rudex or remained pending before any other court,
tribunal or agency when, in fact, similar actions or proceedings for rescission had been filed
by herein complainants before the HLURB against Rudex and Atty. Nazareno, and an eject-
ment complaint was filed by Rudex, represented by Atty. Nazareno, against Sps. Sioting. In
addition, complainants asserted that Atty. Nazareno committed malpractice as a notary pub-
lic since he only assigned one (1) document number (i.e., Doc. No. 1968) in all the certifi-
cations against forum shopping that were separately attached to the six (6) April 1, 2004
complaints for rescission and ejectment.[22]
Despite notice, Atty. Nazareno failed to file his comment and refute the administrative
charges against him.[23]
In the interim, the HLURB, in the Resolutions dated April 14, 2005[24] and May 12,
2005,[25] dismissed Rudex’s complaints for rescission and ejectment[26] on the ground that
its state-
_______________
[21] Id., at pp. 2-3.
[22] See id., at pp. 1-9.
[23] Id., at pp. 729-730.
[24] Id., at pp. 476-477. Signed by Housing and Land Use Arbiter Ma. Perpetua Y. Aquino
and Director Belen G. Ceniza.
[25] Id., at pp. 478-479. Signed by Housing and Land Use Arbiter Raymundo A. Foronda
and Director Belen G. Ceniza.
[26] Rudex’s complaints for rescission and ejectment were dismissed in favor of Ederlinda
M. Villanueva, Crisostomo, Solis, Balatucan, Batang, and Sioting. (There is no resolution
attached to the
9
VOL. 726, JUNE 10, 2014
9
Crisostomo vs. Nazareno
ments in the certifications against forum shopping attached thereto were false due to the
existence of similar pending cases in violation of Section 5, Rule 7 of the Rules of Court.
The IBP’s Report and Recommendation
(IBP) Investigating Commissioner Oliver A. Cachapero recommended the suspension of
The Investigating Commissioner found, among others, that there were unassailable proofs
that the certification against forum shopping attached to Rudex’s ejectment complaint
against Sps. Sioting had been erroneously declared, considering that at the time Rudex filed
the said complaint in September 2002, Sps. Sioting’s rescission complaint against Rudex,
filed on May 24, 2002, was already pending. Hence, it was incumbent upon Rudex to have
declared its existence, more so, since both complaints involve the same transaction and es-
sential facts, and a decision on the rescission complaint would amount to res judicata on the
ejectment complaint.[28] In this relation, the Investigating Commissioner observed that
Atty. Nazareno cannot claim innocence of his omission since he was not only Rudex’s coun-
sel but the notarizing officer as well. Having knowingly made false entries in the subject
certifications against forum shopping, the Investigating Commissioner recommended that
Atty. Nazareno be held administratively liable and thereby penalized with six (6) months
suspension.[29]
_______________
records of this case acting on Rudex’s complaint for rescission and ejectment against Mar-
quizo.)
[27] Rollo, pp. 727-732.
[28] Id., at pp. 730-731.
[29] Id., at pp. 731-732.
10
10
SUPREME COURT REPORTS ANNOTATED
Crisostomo vs. Nazareno
In a Resolution[30] dated April 15, 2013, the IBP Board of Governors adopted and approved
the Investigating Commissioner’s Report and Recommendation, but modified the recom-
mended penalty from a suspension of six (6) months to only one (1) month.
The Issue Before the Court
The essential issue in this case is whether or not Atty. Nazareno should be held administra-
tively liable and accordingly suspended for a period of one (1) month.
The Court’s Ruling
The Court affirms the IBP’s findings with modification as to the penalty imposed.
Separate from the proscription against forum shopping[31] is the violation of the certifica-
tion requirement against forum shopping, which was distinguished in the case of Sps. Ong
v. CA[32] as follows:
The distinction between the prohibition against forum shopping and the certification require-
ment should by now be too elementary to be misunderstood. To reiterate,
_______________
[30] Id., at p. 726. IBP Resolution No. XX-2013-434.
[31] “Forum shopping is an act of a party, against whom an adverse judgment or order has
been rendered in one forum, of seeking and possibly getting a favorable opinion in another
forum, other than by appeal or special civil action for certiorari. It may also be the institution
of two or more actions or proceedings grounded on the same cause on the supposition that
one or the other court would make a favorable disposition. The established rule is that for
forum shopping to exist, both actions must involve the same transactions, same essential
facts and circumstances, and must raise identical causes of actions, subject matter, and is-
sues. x x x.” (Cruz v. Caraos, 550 Phil. 98, 107; 521 SCRA 510, 520-521 [2007].)
[32] 433 Phil. 490; 384 SCRA 139 (2002).
11
VOL. 726, JUNE 10, 2014
11
Crisostomo vs. Nazareno
compliance with the certification against forum shopping is separate from and independent
of the avoidance of the act of forum shopping itself. There is a difference in the treatment
between failure to comply with the certification requirement and violation of the prohibition
against forum shopping not only in terms of imposable sanctions but also in the manner of
enforcing them. The former constitutes sufficient cause for the dismissal without prejudice
to the filing of the complaint or initiatory pleading upon motion and after hearing, while the
latter is a ground for summary dismissal thereof and for direct contempt. x x x.[33]
Under Section 5, Rule 7 of the Rules of Court, the submission of false entries in a certifica-
tion against forum shopping constitutes indirect or direct contempt of court, and subjects the
erring counsel to the corresponding administrative and criminal actions, viz.:
Section 5. Certification against forum shopping.
—The plaintiff or principal party shall certify under oath in the complaint or other initiatory
pleading asserting a claim for relief, or in a sworn certification annexed thereto and simul-
taneously filed therewith: (a) that he has not theretofore commenced any action or filed any
claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the
best of his knowledge, no such other action or claim is pending therein; (b) if there is such
other pending action or claim, a complete statement of the present status thereof; and (c) if
he should thereafter learn that the same or similar action or claim has been filed or is pending,
he shall report that fact within five (5) days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment
of the complaint
_______________
[33] Id., at pp. 501-502; p. 148.
12
12
SUPREME COURT REPORTS ANNOTATED
Crisostomo vs. Nazareno
or other initiatory pleading but shall be cause for the dismissal of the case without prejudice,
unless otherwise provided, upon motion and after hearing. The submission of a false certifi-
cation or noncompliance with any of the undertakings therein shall constitute indirect con-
tempt of court, without prejudice to the corresponding administrative and criminal actions.
If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping,
the same shall be ground for summary dismissal with prejudice and shall constitute direct
contempt, as well as a cause for administrative sanctions. (Emphases supplied)
In the realm of legal ethics, said infraction may be considered as a violation of Rule 1.01,
Canon 1 and Rule 10.01, Canon 10 of the Code of Professional Responsibility (Code) which
read as follows:
CANON 1 — A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE
LAWS OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PRO-
CESSES.
Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral or deceitful con-
duct.
xxxx
CANON 10 — A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE
COURT.
Rule 10.01 — A lawyer shall not do any falsehood, nor consent to the doing of any in Court;
nor shall he mislead, or allow the Court to be misled by any artifice.
In this case, it has been established that Atty. Nazareno made false declarations in the certi-
fications against forum shopping attached to Rudex’s pleadings, for which he should be held
administratively liable.
Records show that Atty. Nazareno, acting as Rudex’s counsel, filed, in August 2003, peti-
tions for review assailing the
13
VOL. 726, JUNE 10, 2014
13
Crisostomo vs. Nazareno
judgments of default rendered in the first batch of rescission cases without disclosing in the
certifications against forum shopping the existence of the ejectment case it filed against Sps.
Sioting which involves an issue related to the complainants’ rescission cases. Further, on
January 29, 2004, Rudex, represented by Atty. Nazareno, filed a complaint for rescission
and ejectment against Sps. Sioting without disclosing in the certifications against forum
shopping the existence of Sioting’s May 24, 2002 rescission complaint against Rudex as
well as Rudex’s own September 9, 2002 ejectment complaint also against Sps. Sioting. Fi-
nally, on April 1, 2004, Atty. Nazareno, once more filed rescission and ejectment complaints
against the other complainants in this case without disclosing in the certifications against
forum shopping the existence of complainants’ own complaints for rescission.
Owing to the evident similarity of the issues involved in each set of cases, Atty. Nazareno
— as mandated by the Rules of Court and more pertinently, the canons of the Code — should
have truthfully declared the existence of the pending related cases in the certifications
against forum shopping attached to the pertinent pleadings. Considering that Atty. Nazareno
did not even bother to refute the charges against him despite due notice, the Court finds no
cogent reason to deviate from the IBP’s resolution on his administrative liability. However,
as for the penalty to be imposed, the Court deems it proper to modify the IBP’s finding on
this score.
In Molina v. Atty. Magat,[34] a penalty of six (6) months suspension from the practice of
law was imposed against the lawyer therein who was shown to have deliberately made false
and untruthful statements in one of his pleadings. Given that Atty. Nazareno’s infractions
are of a similar nature, but recognizing further that he, as may be gleaned from the foregoing
discussion, had repetitively committed the same, the
_______________
[34] See A.C. No. 1900, June 13, 2012, 672 SCRA 1.
14
14
SUPREME COURT REPORTS ANNOTATED
Crisostomo vs. Nazareno
Court hereby suspends him from the practice of law for a period of one (1) year.
Separately, the Court further finds Atty. Nazareno guilty of malpractice as a notary public,
considering that he assigned only one document number (i.e., Doc. No. 1968) to the certifi-
cations against forum shopping attached to the six (6) April 1, 2004 complaints for rescission
and ejectment despite the fact that each of them should have been treated as a separate no-
tarial act. It is a standing rule that for every notarial act, the notary shall record in the notarial
register at the time of the notarization, among others, the entry and page number of the doc-
ument notarized, and that he shall give to each instrument or document executed, sworn to,
or acknowledged before him a number corresponding to the one in his register.[35] Evi-
dently, Atty. Nazareno did not comply with the foregoing rule.
Worse, Atty. Nazareno notarized the certifications against forum shopping attached to all
the aforementioned complaints, fully aware that they identically asserted a material false-
hood, i.e., that Rudex had not commenced any actions or proceedings or was not aware of
any pending actions or proceedings involving the same issues in any other forum. The ad-
ministrative liability of an erring notary public in this respect was clearly delineated as a
violation of Rule 1.01, Canon 1 of the Code in the case of Heirs of the Late Spouses Vil-
lanueva v. Atty. Beradio,[36] to wit:
Where admittedly the notary public has personal knowledge of a false statement or infor-
mation contained in the instrument to be notarized, yet proceeds to affix his or her notarial
seal on it, the Court must not hesitate to discipline the notary public accordingly as the cir-
cumstances of the case may dictate. Otherwise, the integrity
_______________
[35] See Section 2(a) and (e), Rule VI of A.M. No. 02-8-13-SC, entitled the “2004 Rules on
Notarial Practice.”
[36] 541 Phil. 17; 512 SCRA 17 (2007).
15
VOL. 726, JUNE 10, 2014
15
Crisostomo vs. Nazareno
and sanctity of the notarization process may be undermined and public confidence on notar-
ial documents diminished. In this case, respondent’s conduct amounted to a breach of Canon
1 of the Code of Professional Responsibility, which requires lawyers to obey the laws of the
land and promote respect for the law and legal processes. Respondent also violated Rule
1.01 of the Code which proscribes lawyers from engaging in unlawful, dishonest, immoral,
or deceitful conduct.[37] (Emphasis supplied)
In said case, the lawyer who knowingly notarized a document containing false statements
had his notarial commission revoked and was disqualified from being commissioned as such
for a period of one (1) year. Thus, for his malpractice as a notary public, the Court is wont
to additionally impose the same penalties of such nature against him. However, due to the
multiplicity of his infractions on this front, coupled with his willful malfeasance in discharg-
ing the office, the Court deems it proper to revoke his existing commission and permanently
disqualify him from being commissioned as a notary public. Indeed, respondent ought to be
reminded that:[38]
Notarization is not an empty, meaningless, routinary act. It is invested with substantive pub-
lic interest, such that only those who are qualified or authorized may act as notaries public.
Notarization converts a private document into a public document thus making that document
admissible in evidence without further proof of its authenticity. A notarial document is by
law entitled to full faith and credit upon its face. Courts, administrative agencies and the
public at large must be able to rely upon the acknowledgment executed by a notary public
and appended to a private instrument.
xxxx
_______________
[37] Id., at pp. 22-23; p. 23.
[38] Bernardo v. Atty. Ramos, 433 Phil. 8, 15-18; 383 SCRA 498, 504-506 (2002).
16
16
SUPREME COURT REPORTS ANNOTATED
Crisostomo vs. Nazareno
When a notary public certifies to the due execution and delivery of the document under his
hand and seal he gives the document the force of evidence. Indeed, one of the purposes of
requiring documents to be acknowledged before a notary public, in addition to the solemnity
which should surround the execution and delivery of documents, is to authorize such docu-
ments to be given without further proof of their execution and delivery. Where the notary
public is a lawyer, a graver responsibility is placed upon him by reason of his solemn oath
to obey the laws and to do no falsehood or consent to the doing of any. Failing in this, he
must accept the consequences of his unwarranted actions.
WHEREFORE, respondent Atty. Philip Z. A. Nazareno is found GUILTY of making false
declarations in the certifications against forum shopping subject of this case, as well as mal-
practice as a notary public. Accordingly, he is SUSPENDED from the practice of law for a
period of one (1) year, effective upon his receipt of this Decision, with a STERN WARNING
that a repetition of the same or similar acts will be dealt with more severely. Further, he is
PERMANENTLY DISQUALIFIED from being commissioned as a notary public and, his
notarial commission, if currently existing, is hereby REVOKED.
Let copies of this Decision be furnished the Office of the Bar Confidant, to be appended to
respondent’s personal record as attorney. Likewise, copies shall be furnished to the Inte-
grated Bar of the Philippines and all courts in the country for their information and guidance.
SO ORDERED.
Sereno (CJ.), Carpio, Velasco, Jr., Leonardo-De Castro, Brion, Peralta, Bersamin, Del Cas-
tillo, Villarama, Jr., Perez, Mendoza, Reyes and Leonen, JJ., concur.
17
VOL. 726, JUNE 10, 2014
17
Crisostomo vs. Nazareno
Respondent Atty. Philip Z. A. Nazareno suspended from practice of law for one (1) year for
making false declarations in certifications against forum shopping and malpractice as notary
public, with stern warning against repetition of similar acts. He is permanently disqualified
from being notary public and his notarial commission is revoked.
Notes.—A notary public should not notarize a document unless the person who signs it is
the same person who executed it, personally appearing before him to attest to the contents
and the truth of what are stated therein. (Isenhardt vs. Real, 666 SCRA 20 [2012])
By notarizing the questioned document despite the absence of one of the parties, the notary
public engaged in unlawful, dishonest, immoral or deceitful conduct. (Id.)
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Crisostomo vs. Nazareno,
726 SCRA 1, A.C. No. 6677 June 10, 2014
A.C. No. 10576. January 14, 2015.*
ARCATOMY S. GUARIN, complainant, vs. ATTY. CHRISTINE A.C. LIMPIN, respond-
ent.
Attorneys; Legal Ethics; A lawyer who assists a client in a dishonest scheme or who con-
nives in violating the law commits an act which justifies disciplinary action against the law-
yer.—Members of the bar are reminded that their first duty is to comply with the rules of
procedure, rather than seek exceptions as loopholes. A lawyer who assists a client in a dis-
honest scheme or who connives in violating the law commits an act which justifies discipli-
nary action against the lawyer.
Same; Same; Disbarment; Disbarment proceedings are sui generis and can proceed inde-
pendently of civil and criminal cases.—Disbarment proceedings are sui generis and can pro-
ceed independently of civil and criminal cases. As Justice Malcolm stated “[t]he serious
consequences of disbarment or suspension should follow only where there is a clear prepon-
derance of evidence against the respondent. The presumption is that the attorney is innocent
of the charges pr[o]ferred and has performed his duty as an officer of the court in accordance
with his oath.” Grounds for such administrative action against a lawyer may be found in
Section 27, Rule 138 of the Rules of Court. Among these are (1) the use of any deceit, mal-
practice, or other gross misconduct in such office and (2) any violation of the oath which he
is required to take before the admission to practice.
ADMINISTRATIVE CASE in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
Mario C. Lorenzo for complainant.
Gatchalian, Castro & Mawis for respondent.
_______________
* THIRD DIVISION.
460
460
SUPREME COURT REPORTS ANNOTATED
Guarin vs. Limpin
VILLARAMA, JR., J.:
Before us is a complaint1 for disbarment filed by Arcatomy S. Guarin against Atty. Christine
Antenor-Cruz Limpin for allegedly filing a false General Information Sheet (GIS) with the
Securities and Exchange Commission (SEC) thus violating Canon 12 and Rule 1.013 of the
Code of Professional Responsibility (CPR).
The facts are culled from the pleadings.
In 2004, Guarin was hired by Mr. Celso G. de los Angeles as Chief Operating Officer and
thereafter as President of OneCard Company, Inc., a member of the Legacy Group of Com-
panies. He resigned from his post effective August 11, 2008 and transferred to St. Luke’s
Medical Center as the Vice President for Finance.
On November 27, 2008, Atty. Limpin, the Corporate Secretary of Legacy Card, Inc. (LCI),
another corporation under the Legacy Group, filed with the SEC a GIS for LCI for “updating
purposes.” The GIS4 identified Guarin as Chairman of the Board of Directors (BOD) and
President.
_______________
1 Docketed as CBD Case No. 09-2475. Rollo, pp. 2-5.
2 Code of Professional Responsibility, Canon 1 provides:
Canon 1 – A lawyer shall uphold the Constitution, obey the laws of the land and promote
respect for law and legal processes.
3 Code of Professional Responsibility, Rule 1.01 provides:
Rule 1.01. – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful con-
duct.
4 Rollo, p. 10. The November 27, 2008 GIS states as follows:
461
VOL. 745, JANUARY 14, 2015
461
Guarin vs. Limpin
Mired with allegations of anomalous business transactions and practices, on December 18,
2008, LCI applied for voluntary dissolution with the SEC.
On July 22, 2009, Guarin filed this complaint with the Integrated Bar of the Philippines
Commission on Bar Discipline (IBP CBD) claiming that Atty. Limpin violated Canon 1 and
Rule 1.01 of the CPR by knowingly listing him as a stockholder, Chairman of the Board and
President of LCI when she knew that he had already resigned and had never held any share
nor was he elected as chairperson of the BOD or been President of LCI. He also never re-
ceived any notice of meeting or agenda where his appointment as Chairman would be taken
up. He has never accepted any appointment as Chairman and President of LCI.
Atty. Limpin admits that she filed the GIS with the SEC listing Guarin as a stockholder, the
Chairman of the BOD and President of LCI. She argued that the GIS was provisional to
comply with SEC requirements. It would have been corrected in the future but unfortunately
LCI filed for voluntary dissolution shortly thereafter. She averred that the GIS was made
and submitted in good faith and that her certification served to attest to the information from
the last BOD meeting held on March 3, 2008.5
She asserted that Guarin knew that he was a stockholder. Atty. Limpin said that on October
13, 2008, she sent Guarin a text message and asked him to meet with her so he may sign a
Deed of Assignment concerning shareholdings. Guarin responded in the affirmative and said
that he would meet with her on Friday, October 17, 2008. Guarin, however, neglected to
show up at the arranged time and place for reasons un
_______________
5 Id., at pp. 58-60. But see Rollo, p. 8 where GIS states that Date of Actual Meeting was
March 10, 2008.
462
462
SUPREME COURT REPORTS ANNOTATED
Guarin vs. Limpin
known to Atty. Limpin. On the strength of Guarin’s positive reply, Atty. Limpin filed the
GIS on November 27, 2008.
To belie the claim that LCI never held any board meeting, Atty. Limpin presented Secre-
tary’s Certificates dated May 16, 2006,6 May 22, 2006,7 and June 13, 20078 bearing
Guarin’s signature.
Moreover, Atty. Limpin stated that there were pending criminal complaints against the di-
rectors and officers of LCI, where she and Guarin are corespondents: Senator Roxas, et al.
v. Celso de los Angeles, et al.9 and SEC v. Legacy Card, Inc.10 In those proceedings, Guarin
raised as a defense that the November 27, 2008 GIS was spurious and/or perjured. She
averred that this Court held that “when the criminal prosecution based on the same act
charged is still pending in court, any administrative disciplinary proceedings for the same
act must await the outcome of the criminal case to avoid contradictory findings.”11 During
the mandatory preliminary conference, however, both parties stipulated that the complaint
filed by Senator Roxas was dismissed as to Guarin.12
Lastly, Atty. Limpin contends that Guarin failed to present sufficient evidence to warrant
disbarment. She stated that merely presenting the GIS does not constitute as proof of any
unethical conduct, harassment and malpractice.
In its Report,13 the IBP CBD found that Atty. Limpin violated Canon 1, Rules 1.01 and
1.0214 of the CPR and thus
_______________
6 Id., at p. 66.
7 Id., at p. 67.
8 Id., at p. 68.
9 I.S. No. XV-05-INV-09C-00982.
10 I.S. No. XVI-INV-09B-0128.
11 Rollo, pp. 57-58.
12 Id., at p. 93.
13 Id., at pp. 165-168. Penned by Commissioner Eduardo V. De Mesa.
14 Code of Professional Responsibility, Rule 1.02 provides:
463
VOL. 745, JANUARY 14, 2015
463
Guarin vs. Limpin
recommended that she be suspended from the practice of law for three months. It noted that
based on the submissions of the parties, Guarin was never a stockholder of LCI consequently
making him ineligible to be a member of the BOD. Neither was there proof that Guarin acted
as the President of LCI but was a mere signatory of LCI’s bank accounts. This made the
verified statement of Atty. Limpin untrue.15
Moreover, it was noted that only Mr. Celso de los Angeles had the authority to appoint or
designate directors or officers of Legacy. Atty. Limpin was aware that this procedure was
not legally permissible. Despite knowing this to be irregular, she allowed herself to be dic-
tated upon and falsely certified that Guarin was a stockholder, chairman and president of the
company. The Secretary’s Certificates with Guarin’s signature Atty. Limpin presented were
of no moment since in these Guarin merely acceded to become a signatory of bank accounts
and these do not show that Guarin was a stockholder.
The IBP Board of Governors in its April 15, 2013 Resolution16 adopted in toto the CBD
Report. Atty. Limpin moved for reconsideration17 but was denied in the March 21, 2014
Resolution18 of the IBP Board of Governors.
We adopt the report and recommendation of the IBP. Atty. Limpin has violated Canon 1,
Rule 1.01 and Rule 1.02 of the CPR.
Members of the bar are reminded that their first duty is to comply with the rules of procedure,
rather than seek excep-
_______________
Rule 1.02. – A lawyer shall not counsel or abet activities aimed at defiance of the law or at
lessening confidence in the legal system.
15 Rollo, p. 167.
16 Id., at p. 164.
17 Id., at pp. 148-152.
18 Id., at pp. 162-163.
464
464
SUPREME COURT REPORTS ANNOTATED
Guarin vs. Limpin
tions as loopholes.19 A lawyer who assists a client in a dishonest scheme or who connives
in violating the law commits an act which justifies disciplinary action against the lawyer.20
Disbarment proceedings are sui generis and can proceed independently of civil and criminal
cases. As Justice Malcolm stated “[t]he serious consequences of disbarment or suspension
should follow only where there is a clear preponderance of evidence against the respondent.
The presumption is that the attorney is innocent of the charges pr[o]ferred and has performed
his duty as an officer of the court in accordance with his oath.”21
Grounds for such administrative action against a lawyer may be found in Section 27,22 Rule
138 of the Rules of Court. Among these are (1) the use of any deceit, malpractice, or other
gross misconduct in such office and (2) any violation of the oath which he is required to take
before the admission to practice.
After going through the submissions and stipulations of the parties, we agree with the IBP
that there is no indication that
_______________
19 Suico Industrial Corp. v. Lagura-Yap, G.R No. 177711, September 5, 2012, 680 SCRA
145, 162.
20 Donton v. Tansingco, 526 Phil. 1, 5; 493 SCRA 1, 5 (2006).
21 In re Tionko, 43 Phil. 191, 194 (1922).
22 Rules of Court, Rule 138, Section 27 provides:
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 Su-
preme 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
wilful disobedience of any lawful order of a superior court, or for corruptly or willfully ap-
pearing as an attorney for a party to a case without authority so to do. The practice of solic-
iting cases at law for the purpose of gain, either personally or through paid agents or brokers,
constitutes malpractice.
465
VOL. 745, JANUARY 14, 2015
465
Guarin vs. Limpin
Guarin held any share to the corporation and that he is therefore ineligible to hold a seat in
the BOD and be the president of the company.23 It is undisputed that Atty. Limpin filed and
_______________
23 Corporation Code, Sections 23 and 25, provide:
SEC. 23. The Board of Directors or Trustees.—Unless otherwise provided in this Code,
the corporate powers of all corporations formed under this Code shall be exercised, all busi-
ness conducted and all property of such corporations controlled and held by the board of
directors or trustees to be elected from among the holders of stocks, or where there is no
stock, from among the members of the corporation, who shall hold office for one (1) year
until their successors are elected and qualified.
Every director must own at least one (1) share of the capital stock of the corporation of which
he is a director, which share shall stand in his name on the books of the corporation. Any
director who ceases to be the owner of at least one (1) share of the capital stock of the cor-
poration of which he is a director shall thereby cease to be a director. Trustees of nonstock
corporations must be members thereof. A majority of the directors or trustees of all corpo-
rations organized under this Code must be residents of the Philippines.
SEC. 25. Corporate officers, quorum.—Immediately after their election, the directors of
a corporation must formally organize by the election of a president, who shall be a director,
a treasurer who may or may not be a director, a secretary who shall be a resident and citizen
of the Philippines, and such other officers as may be provided for in the bylaws. Any two
(2) or more positions may be held concurrently by the same person, except that no one shall
act as president and secretary or as president and treasurer at the same time.
The directors or trustees and officers to be elected shall perform the duties enjoined on them
by law and by the bylaws of the corporation. Unless the articles of incorporation or the by-
laws provide for a greater majority, a majority of the number of directors or trustees as fixed
in the articles of incorporation shall constitute a quorum for the transaction of corporate
business, and every decision of at least a majority of the directors or trustees present at a
meeting at which there is a quo-
466
466
SUPREME COURT REPORTS ANNOTATED
Guarin vs. Limpin
certified that Guarin was a stockholder of LCI in the GIS. While she posits that she had made
the same in good faith, her certification also contained a stipulation that she made a due
verification of the statements contained therein. That Atty. Limpin believed that Guarin
would sign a Deed of Assignment is inconsequential: he never signed the instrument. We
also note that there was no submission which would support the allegation that Guarin was
in fact a stockholder. We thus find that in filing a GIS that contained false information, Atty.
Limpin committed an infraction which did not conform to her oath as a lawyer in accord
with Canon 1 and Rule 1.01 ofthe CPR.
We also agree with the IBP that in allowing herself to be swayed by the business practice of
having Mr. de los Angeles appoint the members of the BOD and officers of the corporation
despite the rules enunciated in the Corporation Code with respect to the election of such
officers, Atty. Limpin has transgressed Rule 1.02 of the CPR.
However, considering the seriousness of Atty. Limpin’s action in submitting a false docu-
ment we see it fit to increase the recommended penalty to six months suspension from the
practice of law.
WHEREFORE, we find respondent Atty. Christine A.C. Limpin GUILTY of violation of
Canon 1, Rule 1.01 and Rule 1.02 of the Code of Professional Responsibility. Accordingly,
we SUSPEND respondent Atty. Christine A.C. Limpin from the practice of law for SIX (6)
MONTHS effective upon finality of this Decision, with a warning that a repetition of the
same or similar act in the future will be dealt with more severely.
_______________
rum shall be valid as a corporate act, except for the election of officers which shall require
the vote of a majority of all the members of the board.
Directors or trustees cannot attend or vote by proxy at board meetings. (Emphasis supplied)
467
VOL. 745, JANUARY 14, 2015
467
Guarin vs. Limpin
Let copies of this Decision be furnished the Office of the Bar Confidant to be appended to
respondent’s personal record as an attorney, the Integrated Bar of the Philippines, the De-
partment of Justice, and all courts in the country for their information and guidance.
SO ORDERED.
Velasco, Jr. (Chairperson), Peralta, Reyes and Jardeleza, JJ., concur.
Respondent Atty. Christine A.C. Limpin suspended from practice of law for six (6) months
for violation of Canon 1, Rule 1.01 and Rule 1.02 of Code of Professional Responsibility,
with warning against repetition of similar act.
Notes.—Any gross misconduct of an attorney in his professional or private capacity shows
him unfit to manage the affairs of others and is a ground for the imposition of the penalty of
suspension or disbarment. (Rafols, Jr. vs. Barrios, Jr., 615 SCRA 206 [2010])
Disciplinary proceedings against lawyers are sui generic — neither purely civil nor purely
criminal, they do not involve a trial of an action or a suit, but is rather an investigation by
the Court into the conduct of one of its officers, and not being intended to inflict punishment,
it is in no sense a criminal prosecution. (Re: Letter of the UP Law Faculty Entitled “Restor-
ing Integrity: A Statement by the Faculty of the University of the Philippines College of Law
on the Allegations of Plagiarism and Misrepresentation in the Supreme Court,” 644 SCRA
543 [2011])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Guarin vs. Limpin, 745
SCRA 459, A.C. No. 10576 January 14, 2015
CASES REPORTED
SUPREME COURT REPORTS ANNOTATED
____________________
A.C. No. 7973 and A.C. No. 10457. February 3, 2015.*
MELVYN G. GARCIA, complainant, vs. ATTY. RAUL H. SESBREÑO, respondent.
Attorneys; Disbarment; Suspension; Moral Turpitude; Section 27, Rule 138 of the Rules of
Court states that a member of the bar may be disbarred or suspended as attorney by the
Supreme Court (SC) by reason of his conviction of a crime involving moral turpitude.—
Section 27, Rule 138 of the Rules of Court states that a member of the bar may be disbarred
or suspended as attorney by this Court by reason of his conviction of a crime involving moral
turpitude. This Court has ruled that disbarment is the appropriate penalty for conviction by
final judgment for a crime involving moral
_______________
* EN BANC.
2 “[i]t is understood that such x x x accessory penalties of the law as have not been expressly
2 Sesbreño has been granted pardon, there is nothing in the records that shows that it was a
SUPREME COURT REPORTS ANNOTATED
Garcia vs. Sesbreño
turpitude. Moral turpitude is an act of baseness, vileness, or depravity in the private duties
which a man owes to his fellow men or to society in general, contrary to justice, honesty,
modesty, or good morals.
Same; Same; Commutation; The Supreme Court (SC) did not accept Sesbreño’s argument
that the executive clemency restored his full civil and political rights; The Order of Commu-
tation did not state that the pardon was absolute and unconditional.—We cannot accept
Sesbreño’s argument that the executive clemency restored his full civil and political rights.
Sesbreño cited In re Atty. Parcasio, 69 SCRA 336 (1976), to bolster his argument. In that
case, Atty. Parcasio was granted “an absolute and unconditional pardon” which restored his
“full civil and political rights,” a circumstance not present in these cases. Here, the Order of
Commutation did not state that the pardon was absolute and unconditional. The accessory
penalties were not mentioned when the original sentence was recited in the Order of Com-
mutation and they were also not mentioned in stating the commuted sentence. It only states:
By virtue of the authority conferred upon me by the Constitution and upon the recommen-
dation of the Board of Pardons and Parole, the original sentence of prisoner RAUL
SESBREÑO y HERDA convicted by the Regional Trial Court, Cebu City and Supreme
Court and sentenced to an indeterminate prison term of from 9 years and 1 day to 16 years
and 4 months imprisonment and to pay an indemnity of P50,000.00 is/are hereby commuted
to an indeterminate prison term of from 7 years and 6 months to 10 years imprisonment and
to pay an indemnity of P50,000.00. Again, there was no mention that the executive clemency
was absolute and unconditional and restored Sesbreño to his full civil and political rights.
Presidency; Executive Clemency; There are four (4) acts of executive clemency that the
President can extend: the President can grant reprieves, commutations, pardons, and remit
fines and forfeitures, after conviction by final judgment.—There are four acts of executive
clemency that the President can extend: the President can grant reprieves, commutations,
pardons, and remit fines and forfeitures, after conviction by final judgment. In this case, the
executive clemency merely “commuted to an indeterminate prison term of 7 years and 6
months to 10 years imprisonment” the penalty imposed on Sesbreño. Commutation is a mere
reduction of pen-
3
VOL. 749, FEBRUARY 3, 2015
3
Garcia vs. Sesbreño
alty. Commutation only partially extinguished criminal liability. The penalty for Sesbreño’s
crime was never wiped out. He served the commuted or reduced penalty, for which reason
he was released from prison. More importantly, the Final Release and Discharge stated that
remitted herein shall subsist.” Hence, the Parcasio case has no application here. Even if
full and unconditional pardon. In addition, the practice of law is not a right but a privilege.
It is granted only to those possessing good moral character. A violation of the high moral
standards of the legal profession justifies the imposition of the appropriate penalty against a
lawyer, including the penalty of disbarment.
ADMINISTRATIVE CASES in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
PER CURIAM:
Two complaints for disbarment were filed by Dr. Melvyn G. Garcia (Garcia) against Atty.
Raul H. Sesbreño (Sesbreño). The two cases, docketed as A.C. No. 7973 and A.C. No.
10457, were consolidated in the Court’s Resolution dated 30 September 2014.
A.C. No. 7973
On 30 July 2008, Garcia filed a complaint for disbarment against Sesbreño before the Office
of the Bar Confidant. The case was docketed as A.C. No. 7973. Garcia alleged that in 1965,
he married Virginia Alcantara in Cebu. They had two children, Maria Margarita and Angie
Ruth. In 1971, he and Virginia separated. He became a dentist and practiced his profession
in Cabanatuan City. Garcia alleged that in 1992, Virginia filed a petition for the annulment
of their marriage, which was eventually granted.
4
4
SUPREME COURT REPORTS ANNOTATED
Garcia vs. Sesbreño
Garcia alleged that in 2005 while he was in Japan, Sesbreño, representing Maria Margarita
and Angie Ruth, filed an action for support against him and his sister Milagros Garcia Soli-
man. At the time of the filing of the case, Maria Margarita was already 39 years old while
Angie Ruth was 35 years old. The case was dismissed. In 2007, Garcia returned from Japan.
When Sesbreño and Garcia’s children learned about his return, Sesbreño filed a Second
Amended Complaint against him. Garcia alleged that he learned that Sesbreño was convicted
by the Regional Trial Court of Cebu City, Branch 18, for Homicide in Criminal Case No.
CBU-31733. Garcia alleged that Sesbreño is only on parole. Garcia alleged that homicide is
a crime against moral turpitude; and thus, Sesbreño should not be allowed to continue his
practice of law.
In his Comment, Sesbreño alleged that on 15 August 2008, Garcia filed a similar complaint
against him before the Integrated Bar of the Philippines, Commission on Bar Discipline
(IBP-CBD), docketed as CBC Case No. 08-2273. Sesbreño alleged that Garcia’s complaint
was motivated by resentment and desire for revenge because he acted as pro bono counsel
for Maria Margarita and Angie Ruth.
In the Court’s Resolution dated 18 January 2010, the Court referred A.C. No. 7973 to the
IBP for investigation, report and recommendation.
A.C. No. 10457 (CBC Case No. 08-2273)
A day prior to the filing of A.C. No. 7973, or on 29 July 2008, Garcia filed a complaint for
disbarment against Sesbreño before the IBP-CBD. He alleged that Sesbreño is practicing
law despite his previous conviction for homicide in Criminal Case No. CBU-31733, and
despite the facts that he is only on parole and that he has not fully served his sentence. Garcia
alleged that Sesbreño violated Section 27, Rule 138 of the Rules of Court by continuing to
engage in the practice of law despite his conviction of a crime involving moral
5 earmarks of moral turpitude. Paraphrasing what the Supreme Court observed in Soriano v.
VOL. 749, FEBRUARY 3, 2015
5 drunks who may have shattered the stillness of the early morning with their boisterous antics,
Garcia vs. Sesbreño
turpitude. Upon the directive of the IBP-CBD, Garcia submitted his verified complaint
against Sesbreño alleging basically the same facts he alleged in A.C. No. 7973.
In his answer to the complaint, Sesbreño alleged that his sentence was commuted and the
phrase “with the inherent accessory penalties provided by law” was deleted. Sesbreño argued
that even if the accessory penalty was not deleted, the disqualification applies only during
the term of the sentence. Sesbreño further alleged that homicide does not involve moral tur-
pitude. Sesbreño claimed that Garcia’s complaint was motivated by extreme malice, bad
faith, and desire to retaliate against him for representing Garcia’s daughters in court.
The IBP-CBD consolidated A.C. No. 7973 with CBD Case No. 08-2273. The parties agreed
on the sole issue to be resolved: whether moral turpitude is involved in a conviction for
homicide.
The IBP-CBD ruled that the Regional Trial Court of Cebu found Sesbreño guilty of murder
and sentenced him to suffer the penalty of reclusion perpetua. On appeal, this Court down-
graded the crime to homicide and sentenced Sesbreño to suffer the penalty of imprisonment
for 9 years and 1 day of prisión mayor as minimum to 16 years and 4 months of reclusion
temporal as maximum. The IBP-CBD found that Sesbreño was released from confinement
on 27 July 2001 following his acceptance of the conditions of his parole on 10 July 2001.
The IBP-CBD ruled that conviction for a crime involving moral turpitude is a ground for
disbarment or suspension. Citing International Rice Research Institute v. National Labor
Relations Commission,1 the IBP-CBD further ruled that homicide may or may not involve
moral turpitude depending on the degree of the crime. The IBP-CBD reviewed the decision
of this Court convicting Sesbreño for the crime of homicide,
_______________
1 G.R. No. 97239, 12 May 1993, 221 SCRA 760.
6
6
SUPREME COURT REPORTS ANNOTATED
Garcia vs. Sesbreño
and found that the circumstances leading to the death of the victim involved moral turpitude.
The IBP-CBD stated:
Neither victim Luciano Amparado nor his companion Christopher Yapchangco was shown
to be a foe of respondent and neither had the victim Luciano nor his companion Christopher
shown to have wronged the respondent. They simply happened to be at the wrong place and
time the early morning of June 3, 1993.
The circumstances leading to the death of Luciano solely caused by respondent, bear the
Dizon, supra, the respondent, by his conduct, displayed extreme arrogance and feeling of
self-importance. Respondent acted like a god who deserved not to be slighted by a couple of
natural display of loud bravado of drunken men who had one too many. Respondent’s inor-
dinate overreaction to the ramblings of drunken men who were not even directed at respond-
ent reflected poorly on his fitness to be a member of the legal profession. Respondent was
not only vindictive without a cause; he was cruel with a misplaced sense of superiority.2
Following the ruling of this Court in Soriano v. Atty. Dizon3 where the respondent was
disbarred for having been convicted of frustrated homicide, the IBP-CBD recommended that
Sesbreño be disbarred and his name stricken from the Roll of Attorneys.
In its Resolution No. XX-2013-19 dated 12 February 2013, the IBP Board of Governors
adopted and approved the Report and Recommendation of the IBP-CBD.
_______________
2 Rollo (A.C. No. 10457), pp. 275-276.
3 515 Phil. 635; 480 SCRA 1 (2006).
7

VOL. 749, FEBRUARY 3, 2015
7 While x x x generally but not always, crimes mala in se involve moral turpitude, while
Garcia vs. Sesbreño
On 6 May 2013, Sesbreño filed a motion for reconsideration before the IBP-CBD. Sesbreño
alleged that the IBP-CBD misunderstood and misapplied Soriano v. Atty. Dizon. He alleged
that the attendant circumstances in Soriano are disparate, distinct, and different from his
case. He further alleged that there was no condition set on the grant of executive clemency
to him; and thus, he was restored to his full civil and political rights. Finally, Sesbreño al-
leged that after his wife died in an ambush, he already stopped appearing as private prose-
cutor in the case for bigamy against Garcia and that he already advised his clients to settle
their other cases. He alleged that Garcia already withdrew the complaints against him.
On 11 February 2014, the IBP Board of Governors passed Resolution No. XX-2014-31
denying Sesbreño’s motion for reconsideration. The IBP-CBD transmitted the records of the
case to the Office of the Bar Confidant on 20 May 2014. CBD Case No. 08-2273 was re-
docketed as A.C. No. 10457. In the Court’s Resolution dated 30 September 2014, the Court
consolidated A.C. No. 7973 and A.C. No. 10457.
The only issue in these cases is whether conviction for the crime of homicide involves moral
turpitude.
We adopt the findings and recommendation of the IBP-CBD and approve Resolution No.
XX-2013-19 dated 12 February 2013 and Resolution No. XX-2014-31 dated 11 February
2014 of the IBP Board of Governors.
Section 27, Rule 138 of the Rules of Court states that a member of the bar may be disbarred
or suspended as attorney by this Court by reason of his conviction of a crime involving moral
turpitude. This Court has ruled that disbarment is the appropriate penalty for conviction by
final judgment for a crime involving moral turpitude.4 Moral turpitude is an act of
_______________
4 Re: SC Decision Dated May 20, 2008 in G.R. No. 161455 Under Rule 139-B of the Rules
of Court v. Atty. Rodolfo D. Pactolin, A.C. No. 7940, 24 April 2012, 670 SCRA 366.
8
8 stances show the presence of moral turpitude.
SUPREME COURT REPORTS ANNOTATED
Garcia vs. Sesbreño
baseness, vileness, or depravity in the private duties which a man owes to his fellow men or
to society in general, contrary to justice, honesty, modesty, or good morals.5
The question of whether conviction for homicide involves moral turpitude was discussed by
this Court in International Rice Research Institute v. NLRC,6 where it ruled:
This is not to say that all convictions of the crime of homicide do not involve moral turpitude.
Homicide may or may not involve moral turpitude depending on the degree of the crime.
Moral turpitude is not involved in every criminal act and is not shown by every known and
intentional violation of statute, but whether any particular conviction involves moral turpi-
tude may be a question of fact and frequently depends on all the surrounding circumstances.
crimes mala prohibita do not, it cannot always be ascertained whether moral turpitude does
or does not exist by classifying a crime as malum in se or as malum prohibitum, since there
are crimes which are mala in se and yet rarely involve moral turpitude and there are crimes
which involve moral turpitude and are mala prohibita only. It follows therefore, that moral
turpitude is somewhat a vague and indefinite term, the meaning of which must be left to the
process of judicial inclusion or exclusion as the cases are reached.7
In People v. Sesbreño,8 the Court found Sesbreño guilty of homicide and ruled:
WHEREFORE, the assailed decision of the Regional Trial Court of Cebu City, Branch 18,
in Criminal
_______________
5 Catalan, Jr. v. Silvosa, A.C. No. 7360, 24 July 2012, 677 SCRA 352.
6 International Rice Research Institute v. NLRC, supra note 1.
7 Id., at p. 768.
8 372 Phil. 762; 314 SCRA 87 (1999).
9
VOL. 749, FEBRUARY 3, 2015
9
Garcia vs. Sesbreño
Case No. CBU-31733 is hereby MODIFIED. Appellant Raul H. Sesbreño is hereby found
GUILTY of HOMICIDE and hereby sentenced to suffer a prison term of 9 years and 1 day
of prisión mayor, as a minimum, to 16 years and 4 months of reclusion temporal, as a max-
imum, with accessory penalties provided by law, to indemnify the heirs of the deceased
Luciano Amparado in the amount of P50,000.00 and to pay the costs.
SO ORDERED.9
We reviewed the Decision of this Court and we agree with the IBP-CBD that the circum-
The Decision showed that the victim Luciano Amparado (Amparado) and his companion
Christopher Yapchangco (Yapchangco) were walking and just passed by Sesbreño’s house
when the latter, without any provocation from the former, went out of his house, aimed his
rifle, and started firing at them. According to Yapchangco, they were about five meters, more
or less, from the gate of Sesbreño when they heard the screeching sound of the gate and
when they turned around, they saw Sesbreño aiming his rifle at them. Yapchangco and Am-
parado ran away but Amparado was hit. An eyewitness, Rizaldy Rabanes (Rabanes), recalled
that he heard shots and opened the window of his house. He saw Yapchangco and Amparado
running away while Sesbreño was firing his firearm rapidly, hitting Rabanes’ house in the
process. Another witness, Edwin Parune, saw Amparado fall down after being shot, then
saw Sesbreño in the middle of the street, carrying a long firearm, and walking back towards
the gate of his house. The IBP-CBD correctly stated that Amparado and Yapchangco were
just at the wrong place and time. They did not do anything that justified the indiscriminate
firing done by Sesbreño that eventually led to the death of Amparado.
_______________
9 Id., at p. 795; p. 116.
10
10
SUPREME COURT REPORTS ANNOTATED
Garcia vs. Sesbreño
We cannot accept Sesbreño’s argument that the executive clemency restored his full civil
and political rights. Sesbreño cited In re Atty. Parcasio10 to bolster his argument. In that
case, Atty. Parcasio was granted “an absolute and unconditional pardon”11 which restored
his “full civil and political rights,”12 a circumstance not present in these cases. Here, the
Order of Commutation13 did not state that the pardon was absolute and unconditional. The
accessory penalties were not mentioned when the original sentence was recited in the Order
of Commutation and they were also not mentioned in stating the commuted sentence. It only
states:
By virtue of the authority conferred upon me by the Constitution and upon the recommen-
dation of the Board of Pardons and Parole, the original sentence of prisoner RAUL
SESBREÑO y HERDA convicted by the Regional Trial Court, Cebu City and Supreme
Court and sentenced to an indeterminate prison term of from 9 years and 1 day to 16 years
and 4 months imprisonment and to pay an indemnity of P50,000.00 is/are hereby commuted
to an indeterminate prison term of from 7 years and 6 months to 10 years imprisonment and
to pay an indemnity of P50,000.00.14
Again, there was no mention that the executive clemency was absolute and unconditional
and restored Sesbreño to his full civil and political rights.
There are four acts of executive clemency that the President can extend: the President can
grant reprieves, commutations, pardons, and remit fines and forfeitures, after convic
_______________
10 161 Phil. 437; 69 SCRA 336 (1976).
11 Id., at p. 441; p. 338.
12 Id.
13 Rollo (A.C. No. 10457), p. 154.
14 Id.
11
VOL. 749, FEBRUARY 3, 2015
11
Garcia vs. Sesbreño
tion by final judgment.15 In this case, the executive clemency merely “commuted to an in-
determinate prison term of 7 years and 6 months to 10 years imprisonment” the penalty
imposed on Sesbreño. Commutation is a mere reduction of penalty.16 Commutation only
partially extinguished criminal liability.17 The penalty for Sesbreño’s crime was never
wiped out. He served the commuted or reduced penalty, for which reason he was released
from prison. More importantly, the Final Release and Discharge18 stated that “[i]t is under-
stood that such x x x accessory penalties of the law as have not been expressly remitted
herein shall subsist.” Hence, the Parcasio case has no application here. Even if Sesbreño has
been granted pardon, there is nothing in the records that shows that it was a full and uncon-
ditional pardon. In addition, the practice of law is not a right but a privilege.19 It is granted
only to those possessing good moral character.20 A violation of the high moral standards of
the legal profession justifies the imposition of the appropriate penalty against a lawyer, in-
cluding the penalty of disbarment.21
WHEREFORE, respondent Raul H. Sesbreño is DISBARRED effective immediately upon
his receipt of this Decision.
Let copies of this Decision be furnished the Office of the Bar Confidant, the Integrated Bar
of the Philippines for distribution to all its chapters, and the Office of the Court Administra-
tor for dissemination to all courts all over the coun-
_______________
15 Section 19, Article VII, 1987 Constitution. See Garcia v. Chairman, Commission on
Audit, G.R. No. 75025, 14 September 1993, 226 SCRA 356.
16 Cabantag v. Wolfe, 6 Phil. 273 (1906).
17 Article 94, Revised Penal Code.
18 Rollo (A.C. No. 10457), p. 155.
19 Overgaard v. Valdez, 588 Phil. 422; 567 SCRA 118 (2008).
20 Id.
21 Id.
12
12
SUPREME COURT REPORTS ANNOTATED
Garcia vs. Sesbreño
try. Let a copy of this Decision be attached to the personal records of respondent.
SO ORDERED.
Sereno (CJ.), Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del Castillo,
Villarama, Jr., Perez, Mendoza, Perlas-Bernabe, Leonen and Jardeleza, JJ., concur.
Brion, J., On Leave.
Reyes, J., No part.
Respondent Raul H. Sesbreño disbarred.
Notes.—The accused sentenced to reclusion perpetua could not avail themselves of parole
if their appeal is dismissed, unless they also apply for executive clemency and ask for the
commutation of their sentences; Republic Act No. 4108, as amended, otherwise known as
the Indeterminate Sentence Law, does not apply to persons convicted of offenses punishable
with death penalty or life imprisonment, and in this regard, the penalty of reclusion perpetua
is considered synonymous to life imprisonment for purposes of the Indeterminate Sentence
Law. (People vs. Rocha, 531 SCRA 761 [2007])
Deceitful conduct involves moral turpitude and includes anything done contrary to justice,
modesty or good morals — 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. (Overgaard vs. Valdez, 567 SCRA 118 [2008])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Garcia vs. Sesbreño, 749
SCRA 1, A.C. No. 10457 February 3, 2015
A.C. No. 10050. December 3, 2013.*
VICTORIA C. HEENAN, complainant, vs. ATTY. ERLINDA ESPEJO, respondent.
Attorneys; Legal Ethics; Failure to Pay Just Debts; Gross Misconduct; The deliberate failure
to pay just debts and the issuance of worthless checks constitute gross misconduct, for which
a lawyer may be sanctioned.—Atty. Espejo did not deny obtaining a loan from Victoria or
traverse allegations that she issued unfunded checks to pay her obligation. It has already
been settled that the deliberate
_______________
* EN BANC.
291
failure to pay just debts and the issuance of worthless checks constitute gross misconduct,
for which a lawyer may be sanctioned. Verily, lawyers must at all times faithfully perform
their duties to society, to the bar, to the courts and to their clients. In Tomlin II v. Moya II,
483 SCRA 154 (2006), We explained that the prompt payment of financial obligations is
one of the duties of a lawyer, thus: In the present case, respondent admitted his monetary
obligations to the complaint but offered no justifiable reason for his continued refusal to pay.
Complainant made several demands, both verbal and written, but respondent just ignored
them and even made himself scarce. Although he acknowledged his financial obligations to
complainant, respondent never offered nor made arrangements to pay his debt. On the con-
trary, he refused to recognize any wrong doing nor shown remorse for issuing worthless
checks, an act constituting gross misconduct. Respondent must be reminded that it is his
duty as a lawyer to faithfully perform at all times his duties to society, to the bar, to the
courts and to his clients. As part of his duties, he must promptly pay his financial obligations.
Same; Same; Same; Same; A lawyer may be disciplined not only for malpractice and dis-
honesty in his profession but also for gross misconduct outside of his professional capac-
ity.—The fact that Atty. Espejo obtained the loan and issued the worthless checks in her
private capacity and not as an attorney of Victoria is of no moment. As We have held in
several cases, a lawyer may be disciplined not only for malpractice and dishonesty in his
profession but also for gross misconduct outside of his professional capacity. While the
Court may not ordinarily discipline a lawyer for misconduct committed in his nonprofes-
sional or private capacity, the Court may be justified in suspending or removing him as an
attorney where his misconduct outside of the lawyer’s professional dealings is so gross in
character as to show him morally unfit and unworthy of the privilege which his licenses and
the law confer.
Same; Same; Same; Same; Conduct Unbecoming a Lawyer; The misconduct of Atty. Espejo
is aggravated by her unjustified refusal to obey the orders of the Integrated Bar of the Phil-
ippines (IBP) directing her to file an answer to the complaint of Victoria and to appear at the
scheduled mandatory conference. This constitutes blatant disrespect for the Integrated Bar
of the Philippines (IBP) which amounts to conduct unbecoming a lawyer.—The misconduct
of Atty. Espejo is
292
aggravated by her unjustified refusal to obey the orders of the IBP directing her to file an
answer to the complaint of Victoria and to appear at the scheduled mandatory conference.
This constitutes blatant disrespect for the IBP which amounts to conduct unbecoming a law-
yer. In Almendarez, Jr. v. Langit, 496 SCRA 402 (2006), We held that a lawyer must main-
tain respect not only for the courts, but also for judicial officers and other duly constituted
authorities, including the IBP: The misconduct of respondent is aggravated by his unjustified
refusal to heed the orders of the IBP requiring him to file an answer to the complaint-affidavit
and, afterwards, to appear at the mandatory conference. Although respondent did not appear
at the conference, the IBP gave him another chance to defend himself through a position
paper. Still, respondent ignored this directive, exhibiting a blatant disrespect for authority.
Indeed, he is justly charged with conduct unbecoming a lawyer, for a lawyer is expected to
uphold the law and promote respect for legal processes. Further, a lawyer must observe and
maintain respect not only to the courts, but also to judicial officers and other duly constituted
authorities, including the IBP. Under Rule 139-B of the Rules of Court, the Court has em-
powered the IBP to conduct proceedings for the disbarment, suspension, or discipline of
attorneys.
Same; Administrative Complaints; Disciplinary proceedings against lawyers do not involve
a trial of an action, but rather investigations by the Supreme Court into the conduct of one
of its officers. The only question for determination in these proceedings is whether or not
the attorney is still fit to be allowed to continue as a member of the Bar. Thus, the Supreme
Court cannot rule on the issue of the amount of money that should be returned to the com-
plainant.—We, however, cannot sustain the IBP’s recommendation ordering Atty. Espejo to
return the money she borrowed from Victoria. In disciplinary proceedings against lawyers,
the only issue is whether the officer of the court is still fit to be allowed to continue as a
member of the Bar. Our only concern is the determination of respondent’s administrative
liability. Our findings have no material bearing on other judicial action which the parties
may choose to file against each other. Furthermore, disciplinary proceedings against lawyers
do not involve a trial of an action, but rather investigations by the Court into the conduct of
one of its officers. The only question for determination in these proceedings is whether or
not the attorney is still fit to be allowed to continue as a member of the Bar. Thus, this
293
Court cannot rule on the issue of the amount of money that should be returned to the com-
plainant.
ADMINISTRATIVE CASE in the Supreme Court. Violation of the Lawyer’s Oath.
The facts are stated in the opinion of the Court.
Emil Bien F. Ongkiko for complainant.
VELASCO, JR., J.:
This resolves the administrative complaint filed by Victoria Heenan (Victoria) against Atty.
Erlinda Espejo (Atty. Espejo) before the Commission on Bar Discipline (CBD) of the Inte-
grated Bar of the Philippines (IBP) for violation of lawyer’s oath, docketed as CBD Case
No. 10-2631.
The Facts
Sometime in January 2009, Victoria met Atty. Espejo through her godmother, Corazon Eu-
sebio (Corazon). Following the introduction, Corazon told Victoria that Atty. Espejo was
her lawyer in need of money and wanted to borrow two hundred fifty thousand pesos (PhP
250,000) from her (Victoria). Shortly thereafter, Victoria went to the house of Corazon for
a meeting with Atty. Espejo where they discussed the terms of the loan. Since Atty. Espejo
was introduced to her as her godmother’s lawyer, Victoria found no reason to distrust the
former. Hence, during the same meeting, Victoria agreed to accomodate Atty. Espejo and
there and then handed to the latter the amount of PhP 250,000. To secure the payment of the
loan, Atty. Espejo simultaneously issued and turned over to Victoria a check[1] dated Feb-
ruary 2, 2009 for two hundred seventy-five thousand pesos (PhP 275,000) covering the loan
amount and agreed interest.
_______________
[1] Rollo, p. 34. The Real Bank Check No. 3026852, Annex “A” of Victoria C. Heenan’s
Position Paper.
294
On due date, Atty. Espejo requested Victoria to delay the deposit of the check for the reason
that she was still waiting for the release of the proceeds of a bank loan to fund the check.
However, after a couple of months of waiting, Victoria received no word from Atty. Espejo
as to whether or not the check was already funded enough.
In July 2009, Victoria received an Espejo-issued check dated July 10, 2009 in the amount of
fifty thousand pesos (PhP 50,000)[2] representing the interest which accrued due to the late
payment of the principal obligation. Victoria deposited the said check but, to her dismay, the
check bounced due to insufficiency of funds. Atty. Espejo failed to pay despite Victoria’s
repeated demands.
Worried that she would not be able to recover the amount thus lent, Victoria decided to
deposit to her account the first check in the amount of PhP 275,000, but without notifying
Atty. Espejo of the fact. However, the said check was also dishonored due to insufficiency
of funds.
Victoria thereafter became more aggressive in her efforts to recover her money. She, for
instance, personally handed to Atty. Espejo a demand letter dated August 3, 2009.[3] When
Atty. Espejo still refused to pay, Victoria filed a criminal complaint against Atty. Espejo on
August 18, 2009 for violation of Batas Pambansa Blg. 22 and Estafa under Article 315 of
the Revised Penal Code, as amended, before the Quezon City Prosecutor’s Office.[4]
Atty. Espejo disregarded the notices and subpoenas issued by the Quezon City Prosecutor’s
Office which she personally received and continued to ignore Victoria’s demands. She at-
tended only one (1) scheduled preliminary investigation where she promised to pay her loan
obligation.[5]
_______________
[2] Id., at p. 35. The Real Bank Check No. 3152815, Annex “B” of Victoria C. Heenan’s
Position Paper.
[3] Id., at p. 36. Annex “C” of Victoria C. Heenan’s Position Paper.
[4] Id., at p. 38.
[5] Id., at pp. 21-22.
295
In November 2009, Atty. Espejo issued another check dated December 8, 2009 in the amount
of two hundred seventy five thousand pesos (PhP 275,000). However, to Victoria’s chagrin,
the said check was again dishonored due to insufficiency of funds.[6]
Atty. Espejo did not file any counter-affidavit or pleading to answer the charges against her.
On November 17, 2009, the case was submitted for resolution without Atty. Espejo’s parti-
cipation.[7]
Victoria thereafter filed the instant administrative case against Atty. Espejo before the CBD.
On March 1, 2010, the CBD, through Director for Bar Discipline Alicia A. Risos-Vidal,
issued an Order[8] directing Atty. Espejo to submit her Answer to Victoria’s administrative
complaint failing which would render her in default. The warning, notwithstanding, Atty.
Espejo did not submit any Answer.
On May 5, 2010, IBP Commissioner Rebecca Villanueva-Malala (Commissioner Vil-
lanueva-Malala) notified the parties to appear for a mandatory conference set on June 2,
2010. The notice stated that nonappearance of either of the parties shall be deemed a waiver
of her right to participate in further proceedings.[9]
At the mandatory conference, only Victoria appeared.[10] Thus, Commissioner Villanueva-
Malala issued an Order[11] noting Atty. Espejo’s failure to appear during the mandatory
conference and her failure to file an Answer. Accordingly, Atty. Espejo was declared in
default. Victoria, on the other hand, was directed to file her verified position paper, which
she filed on June 11, 2010.[12]
_______________
[6] Id., at p. 50.
[7] Id., at p. 22.
 [8] Id., at p. 10.
[9] Id., at p. 11.
[10] Id., at p. 12.
[11] Id., at p. 13.
[12] Id., at pp. 17-45.
296
Findings and Recommendation of the IBP
In its Report and Recommendation[13] dated July 15, 2010, the CBD recommended the
suspension of Atty. Espejo from the practice of law and as a member of the Bar for a period
of five (5) years. The CBD reasoned:
The failure of a lawyer to answer the complaint for disbarment despite due notice and to
appear on the scheduled hearings set, shows his flouting resistance to lawful orders of the
court and illustrates his deficiency for his oath of office as a lawyer, which deserves disci-
plinary sanction.
Moreover, respondent[’s] acts of issuing checks with insufficient funds and despite repeated
demands [she] failed to comply with her obligation and her disregard and failure to appear
for preliminary investigation and to submit her counter-affidavit to answer the charges
against her for Estafa and Violation of BP 22, constitute grave misconduct that also warrant
disciplinary action against respondent.
On December 14, 2012, the Board of Governors passed a Resolution[14] adopting the Report
and Recommendation of the CBD with the modification lowering Atty. Espejo’s suspension
from five (5) years to two (2) years. Atty. Espejo was also ordered to return to Victoria the
amount of PhP 250,000 within thirty (30) days from receipt of notice with legal interest
reckoned from the time the demand was made. The Resolution reads:
RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and AP-
PROVED, with modification, the Report and Recommendation of the Investigating Com-
missioner in the above-entitled case, herein made part of this Resolution as Annex “A”, and
_______________
[13] Id., at pp. 49-51.
[14] Id., at p. 48.
297
finding the recommendation fully supported by the evidence on record and applicable laws
and rules, and considering respondent’s grave misconduct, Atty. Erlinda Espejo is hereby
SUSPENDED from the practice of law for two (2) years and Ordered to Return to complain-
ant the amount of Two Hundred Fifty Thousand (P250,000.00) Pesos within thirty (30) days
from receipt of notice with legal interest reckoned from the time the demand was made.
On August 8, 2013, the CBD transmitted to this Court the Notice of the Resolution pertaining
to Resolution No. XX-2012-419 along with the records of this case.[15]
The Court’s Ruling
We sustain the findings of the IBP and adopt its recommendation in part.
Atty. Espejo did not deny obtaining a loan from Victoria or traverse allegations that she
issued unfunded checks to pay her obligation. It has already been settled that the deliberate
failure to pay just debts and the issuance of worthless checks constitute gross misconduct,
for which a lawyer may be sanctioned.[16] Verily, lawyers must at all times faithfully per-
form their duties to society, to the bar, to the courts and to their clients. In Tomlin II v. Moya
II, We explained that the prompt payment of financial obligations is one of the duties of a
lawyer, thus:
In the present case, respondent admitted his monetary obligations to the complaint but of-
fered no justifiable reason for his continued refusal to pay. Complainant made several de-
mands, both verbal and written, but respondent just ignored them and even made himself
scarce. Although he acknowledged his financial obligations to complainant, respondent
never offered nor made
_______________
[15] Id., at p. 47.
[16] Lao v. Medel, A.C. No. 5916, July 1, 2003, 405 SCRA 227.
298
arrangements to pay his debt. On the contrary, he refused to recognize any wrong doing nor
shown remorse for issuing worthless checks, an act constituting gross misconduct. Respond-
ent must be reminded that it is his duty as a lawyer to faithfully perform at all times his duties
to society, to the bar, to the courts and to his clients. As part of his duties, he must promptly
pay his financial obligations.[17]
The fact that Atty. Espejo obtained the loan and issued the worthless checks in her private
capacity and not as an attorney of Victoria is of no moment. As We have held in several
cases, a lawyer may be disciplined not only for malpractice and dishonesty in his profession
but also for gross misconduct outside of his professional capacity. While the Court may not
ordinarily discipline a lawyer for misconduct committed in his nonprofessional or private
capacity, the Court may be justified in suspending or removing him as an attorney where his
misconduct outside of the lawyer’s professional dealings is so gross in character as to show
him morally unfit and unworthy of the privilege which his licenses and the law confer.[18]
In Wilkie v. Limos, We reiterated that the issuance of a series of worthless checks, which is
exactly what Atty. Espejo committed in this case, manifests a lawyer’s low regard for her
commitment to her oath, for which she may be disciplined. Thus:
We have held that the issuance of checks which were later dishonored for having been drawn
against a closed account indicates a lawyer’s unfitness for the trust and confidence reposed
on her. It shows a lack of personal honesty and good moral character as to render her un-
worthy of public confidence. The issuance of a series of worthless checks also shows the
remorseless attitude of respondent, unmindful to the deleterious effects of such act to the
public interest and public order. It also mani-
_______________
[17] A.C. No. 6971, February 23, 2006, 483 SCRA 154, 159-160.
[18] Lao v. Medel, supra note 16, at p. 233.
299
fests a lawyer’s low regard to her commitment to the oath she has taken when she joined her
peers, seriously and irreparably tarnishing the image of the profession she should hold in
high esteem.
xxxx
In Barrios v. Martinez, we disbarred the respondent who issued worthless checks for which
he was convicted in the criminal case filed against him.
In Lao v. Medel, we held that the deliberate failure to pay just debts and the issuance of
worthless checks constitute gross misconduct, for which a lawyer may be sanctioned with
one-year suspension from the practice of law. The same sanction was imposed on the re-
spondent-lawyer in Rangwani v. Dino having been found guilty of gross misconduct for
issuing bad checks in payment of a piece of property the title of which was only entrusted to
him by the complainant.[19]
Further, the misconduct of Atty. Espejo is aggravated by her unjustified refusal to obey the
orders of the IBP directing her to file an answer to the complaint of Victoria and to appear
at the scheduled mandatory conference. This constitutes blatant disrespect for the IBP which
amounts to conduct unbecoming a lawyer. In Almendarez, Jr. v. Langit, We held that a law-
yer must maintain respect not only for the courts, but also for judicial officers and other duly
constituted authorities, including the IBP:
The misconduct of respondent is aggravated by his unjustified refusal to heed the orders of
the IBP requiring him to file an answer to the complaint-affidavit and, afterwards, to appear
at the mandatory conference. Although respondent did not appear at the conference, the IBP
gave him another chance to defend himself through a position paper. Still, respondent ig-
nored this directive, exhibiting a blatant disrespect for authority. Indeed, he
_______________
[19] Wilkie v. Limos, A.C. No. 7505, October 24, 2008, 570 SCRA 1, 8, 10.
300
is justly charged with conduct unbecoming a lawyer, for a lawyer is expected to uphold the
law and promote respect for legal processes. Further, a lawyer must observe and maintain
respect not only to the courts, but also to judicial officers and other duly constituted author-
ities, including the IBP. Under Rule 139-B of the Rules of Court, the Court has empowered
the IBP to conduct proceedings for the disbarment, suspension, or discipline of attor-
neys.[20]
Undoubtedly, Atty. Espejo’s issuance of worthless checks and her blatant refusal to heed the
directives of the Quezon City Prosecutor’s Office and the IBP contravene Canon 1, Rule
1.01; Canon 7, Rule 7.03; and Canon 11 of the Code of Professional Responsibility, which
provide:
CANON 1 – A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS
OF THE LAND AND PROMOTE RESPECT FOR THE LAW AND LEGAL PRO-
CESSES.
Rule 1.01. – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.
CANON 7 – A LAWYER SHALL AT ALL TIMES UPHOLD THE INTEGRITY AND
DIGNITY OF THE LEGAL PROFESSION AND SUPPORT THE ACTIVITIES OF THE
INTEGRATED BAR.
Rule 7.03 – A lawyer shall not engage in conduct that adversely reflects on his fitness to
practice law, nor shall he, whether in public or private life, behave in a scandalous manner
to the discredit of the legal profession.
CANON 11 – A LAWYER SHALL OBSERVE AND MAINTAIN THE RESPECT DUE
TO THE COURTS AND TO JUDICIAL OFFICES AND SHOULD INSIST ON SIMILAR
CONDUCT BY OTHERS.
We find the penalty of suspension from the practice of law for two (2) years, as recom-
mended by the IBP, commensurate under the circumstances.
_______________
[20] A.C. No. 7057, July 25, 2006, 496 SCRA 402, 408.
301
We, however, cannot sustain the IBP’s recommendation ordering Atty. Espejo to return the
money she borrowed from Victoria. In disciplinary proceedings against lawyers, the only
issue is whether the officer of the court is still fit to be allowed to continue as a member of
the Bar. Our only concern is the determination of respondent’s administrative liability. Our
findings have no material bearing on other judicial action which the parties may choose to
file against each other.[21] Furthermore, disciplinary proceedings against lawyers do not
involve a trial of an action, but rather investigations by the Court into the conduct of one of
its officers. The only question for determination in these proceedings is whether or not the
attorney is still fit to be allowed to continue as a member of the Bar. Thus, this Court cannot
rule on the issue of the amount of money that should be returned to the complainant.[22]
WHEREFORE, We find Atty. Erlinda B. Espejo GUILTY of gross misconduct and of vio-
lating Canons 1, 7 and 11 of the Code of Professional Responsibility. We SUSPEND re-
spondent from the practice of law for two (2) years, effective immediately.
Let copies of this Decision be furnished the Office of the Court Administrator for dissemi-
nation to all courts, the Integrated Bar of the Philippines and the Office of the Bar Confidant
and recorded in the personal files of respondent.
SO ORDERED.
Sereno (CJ.), Carpio, Brion, Peralta, Bersamin, Del Castillo, Abad, Villarama, Jr., Perez,
Mendoza, Reyes, Perlas-Bernabe and Leonen, JJ., concur.
Leonardo-De Castro, J., On official leave.
_______________
[21] Roa v. Moreno, A.C. No. 8232, April 21, 2010, 618 SCRA 693, 700.
[22] Ronquillo v. Cezar, A.C. No. 6288, June 16, 2006, 491 SCRA 1, 8.
302
Atty. Erlinda B. Espejo suspended from practice of law for two (2) years for gross miscon-
duct and for violation of Canons 1, 7 and 11 of Code of Professional Responsibility.
Note.—Section 27, Rule 138 of the Rules of Court states that when a lawyer is found guilty
of gross immoral conduct or gross misconduct, he may be suspended or disbarred. (Abella
vs. Barrios, Jr., 698 SCRA 683 [2013])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Heenan vs. Espejo, 711
SCRA 290, A.C. No. 10050 December 3, 2013
A.C. No. 6760. January 30, 2013.*
ANASTACIO N. TEODORO III, complainant, vs. ATTY. ROMEO S. GONZALES, re-
spondent.
Remedial Law; Civil Procedure; Forum Shopping; There is forum shopping when the ele-
ments of litis pendencia are present or where a final judgment in one case will amount to res
judicata in another. They are as follows: (a) identity of parties, or at least such parties that
represent the same interests in both actions, (b) identity of rights or causes of action, and (c)
identity of relief sought.—Forum shopping exists when, as a result of an adverse decision in
one forum, or in anticipation thereof, a party seeks a favorable opinion in another forum
through means other than appeal or certiorari. There is forum shopping when the elements
of litis pendencia are present or where a final judgment in one case will amount to res judi-
cata in another. They are as follows: (a) identity of parties, or at least such parties that rep-
resent the same interests in both actions, (b) identity of rights or causes of action, and (c)
identity of relief sought. Under this test, we find that Atty. Gonzales committed forum shop-
ping when he filed Civil Case No. 00-99207 while Special Proceeding No. 99-95587 was
pending.
Attorneys; Legal Ethics; Lawyers should be reminded that their primary duty is to assist the
courts in the administration of justice.
_______________
* SECOND DIVISION.
485
VOL. 689, JANUARY 30, 2013
485
Teodoro III vs. Gonzales
Any conduct [that] tends to delay, impede or obstruct the administration of justice contra-
venes this obligation.—Lawyers should be reminded that their primary duty is to assist the
courts in the administration of justice. Any conduct [that] tends to delay, impede or obstruct
the administration of justice contravenes [this obligation].” The Court has repeatedly warned
lawyers against resorting to forum shopping since the practice clogs the Court dockets and
can lead to conflicting rulings. Willful and deliberate forum shopping has been made pun-
ishable either as direct or indirect contempt of court in SC Administrative Circular No. 04-
94 dated April 1, 1994.
Same; Same; Forum Shopping; Code of Professional Responsibility; In engaging in forum
shopping, Atty. Gonzales violated Canon 1 of the Code of Professional Responsibility which
directs lawyers to obey the laws of the land and promote respect for the law and legal pro-
cesses.—In engaging in forum shopping, Atty. Gonzales violated Canon 1 of the Code of
Professional Responsibility which directs lawyers to obey the laws of the land and promote
respect for the law and legal processes. He also disregarded his duty to assist in the speedy
and efficient administration of justice, and the prohibition against unduly delaying a case by
misusing court processes.
Same; Same; Same; Atty. Gonzales’ act of forum shopping disregarded his duty to obey and
promote respect for the law and legal processes, as well as the prohibition against unduly
delaying a case by misusing court processes.—Lawyers are also censured for minor infrac-
tions against the lawyer’s duty to the Court or the client. As earlier stated, Atty. Gonzales’
act of forum shopping disregarded his duty to obey and promote respect for the law and legal
processes, as well as the prohibition against unduly delaying a case by misusing court pro-
cesses. It also violated his duty as an officer of the court to assist in the speedy and efficient
administration of justice.
ADMINISTRATIVE CASE in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
486
486
SUPREME COURT REPORTS ANNOTATED
Teodoro III vs. Gonzales
BRION, J.:
We resolve this disbarment complaint against Atty. Romeo S. Gonzales for violation of the
Code of Professional Responsibility for the forum shopping he allegedly committed.
In his complaint,1 Anastacio N. Teodoro III related that Atty. Gonzales acted as counsel of
Araceli Teodoro-Marcial in two civil cases that the latter filed against him. The first case,
Special Proceeding No. 99-95587,2 involved the settlement of the intestate estate of Manuela
Teodoro. While the settlement proceeding was pending, Atty. Gonzales assisted Teodoro-
Marcial in filing Civil Case No. 00-99207,3 for Annulment of Document, Reconveyance
and Damages, without indicating the special proceeding earlier filed. The filing of the civil
cases, according to Anastacio, was a deliberate act of forum shopping that warrants the dis-
barment of Atty. Gonzales.
Atty. Gonzales admitted that he assisted Teodoro-Marcial in filing the two cases. He as-
serted, however, that he did not violate the forum shopping rule as the cases were not iden-
tical in terms of parties, subject matter and remedies. Atty. Gonzales also opined that the
complainant only filed the disbarment case to harass him.4
The Investigating Commissioner’s Findings
In our Resolution5 dated March 13, 2006, we referred the disbarment complaint to the Com-
mission on Bar Discipline of the Integrated Bar of the Philippines (IBP) for investigation,
report and recommendation. In his Report and Recommendation6 dated July 5, 2010, Com-
missioner Caesar R. Dulay
_______________
1 Rollo, pp. 1-8.
2 Id., at pp. 14-16.
3 Id., at pp. 19-23.
4 Id., at pp. 39-45.
5 Id., at p. 46.
6 Id., at pp. 145-154.
487
VOL. 689, JANUARY 30, 2013
487
Teodoro III vs. Gonzales
found Atty. Gonzales administratively liable for forum shopping.
According to Commissioner Dulay, both Special Proceeding No. 99-95587 and Civil Case
No. 00-99207 hinged on the same substantial issue, i.e., on whether Manuela held the Malate
property in trust for Carmen Teodoro-Reyes, Donato T. Teodoro, Jorge I. Teodoro and Te-
odoro-Marcial.
In Special Proceeding No. 99-95587, Carmen, Donato, Jorge I. Teodoro, Jorge T. Teodoro
and Teodoro-Marcial claimed that they are the heirs of Manuela. During her lifetime, Ma-
nuela was the registered owner of a parcel of land located in Malate, Manila. According to
the heirs, Manuela held the lot in trust for them, but she sold it to Anastacio and Rogelio Ng.
Thus, the heirs prayed for the issuance of letters of administration so that Manuela’s prop-
erties could be inventoried and settled in accordance with law.
In Civil Case No. 00-99207, the heirs of Manuela claimed to be the beneficiaries of a trust
held by Manuela over the same parcel of land contested in Special Proceeding No. 99-95587.
They alleged that during her lifetime, Manuela sold a portion of this land to Anastacio. They
asked the trial court to annul the Deed of Absolute Sale executed by Manuela; to cancel the
resulting Transfer Certificate of Title in the name of Anastacio; and to issue a new one in
their names.
The commissioner found that a ruling in either case would result in res judicata over the
other. Thus, Atty. Gonzales committed forum shopping when he instituted Civil Case No.
00-99207 without indicating that Special Proceeding No. 99-95587 was still pending. In
committing forum shopping, Atty. Gonzales disregarded the Supreme Court Circular pro-
hibiting forum shopping and thus violated Canon 1 of the Code of Professional Responsibil-
ity.
Commissioner Dulay recommended that Atty. Gonzales be suspended for one month from
the practice of law, with a
488
488
SUPREME COURT REPORTS ANNOTATED
Teodoro III vs. Gonzales
warning that a repetition of a similar offense would merit a more severe penalty.
The Board of Governors of the IBP reversed the commissioner’s recommendation. In a res-
olution7 dated December 10, 2011, the Board of Governors dismissed the case against Atty.
Gonzales for lack of merit.
The Issue
The case directly poses to us the question of whether Atty. Gonzales committed forum shop-
ping and thereby violated the Code of Professional Responsibility.
The Court’s Ruling
We agree with the findings of the commissioner and accordingly reverse the resolution of
the IBP Board of Governors, but we modify the commissioner’s recommended penalty to
censure and a warning that another violation would merit a more severe penalty.
Forum shopping exists when, as a result of an adverse decision in one forum, or in anticipa-
tion thereof, a party seeks a favorable opinion in another forum through means other than
appeal or certiorari.8
There is forum shopping when the elements of litis pendencia are present or where a final
judgment in one case will amount to res judicata in another. They are as follows: (a) identity
of parties, or at least such parties that represent the same interests in both actions, (b) identity
of rights or causes of action, and (c) identity of relief sought.9
_______________
7 Id., at p. 144.
8 Polanco v. Cruz, G.R. No. 182426, February 13, 2009, 579 SCRA 489, 495.
9 Id., at pp. 495-496.
489
VOL. 689, JANUARY 30, 2013
489
Teodoro III vs. Gonzales
Under this test, we find that Atty. Gonzales committed forum shopping when he filed Civil
Case No. 00-99207 while Special Proceeding No. 99-95587 was pending.
Identity of Parties
An identity of parties exists in Special Proceeding No. 99-95587 and Civil Case No. 00-
99207. In both cases, the initiating parties are the same, to wit: Carmen, Donato, Teodoro-
Marcial, Jorge I. Teodoro, Rowena Teodoro, Abigail Teodoro and Jorge T. Teodoro. They
represented the same interest in both cases. All claimed to be the legitimate heirs of Manuela
and co-owners of the land that she held in trust for them.
Meanwhile, Anastacio, the oppositor in Special Proceeding No. 99-95587, is also the sole
defendant in Civil Case No. 00-99207. In both cases, he espoused the same interest, as trans-
feree-owner of the lot allegedly held in trust by Manuela.
Identity of causes of action
The test of identity of causes of action does not depend on the form of an action taken, but
on whether the same evidence would support and establish the former and the present causes
of action.10 The heirs of Manuela cannot avoid the application of res judicata by simply
varying the form of their action or by adopting a different method of presenting it.11
In Special Proceeding No. 99-95587, the trial court held that it had no jurisdiction over the
case, as Manuela left no
_______________
10 Mendoza v. La Mallorca Bus Company, 172 Phil. 237, 241; 82 SCRA 243, 247 (1978).
11 Linzag v. Court of Appeals, 353 Phil. 506, 518; 291 SCRA 304, 320 (1998), citing Filin-
vest Credit Corporation v. Intermediate Appellate Court, G.R. No. 66641 March 6, 1992,
207 SCRA 59, 63; Sangalang v. Caparas, L-49749, June 18, 1987, 151 SCRA 53; and Ibabao
v. Intermediate Appellate Court, L-74848, May 20, 1987, 150 SCRA 76, 85.
490
490
SUPREME COURT REPORTS ANNOTATED
Teodoro III vs. Gonzales
properties at the time of her death. The lot in Malate, Manila, which was the sole property
that the heirs of Manuela claim should be included in her estate, has been sold to Rogelio
and Anastacio when Manuela was still alive. The trial court did not give credence to their
claim that Manuela held the property in trust for them.
Meanwhile, in Civil Case No. 00-99207, the trial court issued an order granting Anastacio’s
Motion for Demurrer to Evidence. It held that the heirs of Manuela had been unable to prove
their claim that Manuela held the lot in trust for their benefit. Neither were they able to prove
that the sale of a portion of the lot to Anastacio was void.
In both cases, the issue of whether Manuela held the lot in Malate, Manila in trust had to be
decided by the trial court. The initiating parties’ claim in the two cases depended on the
existence of the trust Manuela allegedly held in their favor. Thus, the evidence necessary to
prove their claim was the same.
Identity of relief sought
In Special Proceeding No. 99-95587, the heirs of Manuela prayed for the issuance of letters
of administration, the liquidation of Manuela’s estate, and its distribution among her legal
heirs.
Meanwhile, in Civil Case No. 00-99207, the heirs of Manuela asked for the annulment of
the deed of absolute sale Manuela executed in favor of Anastacio. They likewise asked the
court to cancel the resulting Transfer Certificate of Title issued in favor of the latter, and to
issue a new one in their names.
While the reliefs prayed for in the initiatory pleadings of the two cases are different in form,
a ruling in one case would have resolved the other, and vice versa. To illustrate, had the lot
been declared as part of the estate of Manuela in Special Proceeding No. 99-95587, there
would have been no need for a
491
VOL. 689, JANUARY 30, 2013
491
Teodoro III vs. Gonzales
decision annulling the sale in Civil Case No. 00-99207. Conversely, had the sale in Civil
Case No. 00-99207 been annulled, then the property would go back to the hands of the heirs
of Manuela. Placing the property under administration, as prayed for in Special Proceeding
No. 99-95587, would have been unnecessary.
Thus, the relief prayed for, the facts upon which it is based, and the parties are substantially
similar in the two cases. Since the elements of litis pendentia and res judicata are present,
Atty. Gonzales committed forum shopping when he filed Civil Case No. 00-99207 without
indicating that Special Proceeding No. 99-95587 was still pending.
As Commissioner Dulay observed:
Respondent was fully aware, since he was the counsel for both cases, that he raised the issue
of trust with respect to the Malate property in the 1999 Letters [of] Administration case and
that he was raising the same similar issue of trust in the 2000 annulment case xxx
To advise his client therefore to execute the affidavit of non-forum shopping for the second
case (annulment case) and state that there is no pending case involving the same or similar
issue would constitute misconduct which should be subject to disciplinary action. It was his
duty to advise his client properly, and his failure to do so, in fact his deliberate assertion that
there was no falsity in the affidavit is indicative of a predisposition to take lightly his duty
as a lawyer to promote respect and obedience to the law.12
“Lawyers should be reminded that their primary duty is to assist the courts in the administra-
tion of justice. Any conduct [that] tends to delay, impede or obstruct the administration of
justice contravenes [this obligation].”13
The Court has repeatedly warned lawyers against resorting to forum shopping since the prac-
tice clogs the Court dockets
_______________
12 Rollo, pp. 153-154.
13 Lim v. Atty. Montano, 518 Phil. 361, 371; 483 SCRA 192, 202 (2006).
492
492
SUPREME COURT REPORTS ANNOTATED
Teodoro III vs. Gonzales
and can lead to conflicting rulings.14 Willful and deliberate forum shopping has been made
punishable either as direct or indirect contempt of court in SC Administrative Circular No.
04-94 dated April 1, 1994.15
In engaging in forum shopping, Atty. Gonzales violated Canon 1 of the Code of Professional
Responsibility which directs lawyers to obey the laws of the land and promote respect for
the law and legal processes. He also disregarded his duty to assist in the speedy and efficient
administration of justice,16 and the prohibition against unduly delaying a case by misusing
court processes.17
To our mind, however, the supreme penalty of disbarment would be very harsh in light of
all the circumstances of this case. Neither is the commissioner’s recommended penalty of
suspension consistent with prior rulings of the Court.
In Guanzon, Vda. de, etc. v. Judge Yrad, Jr., etc., et al.18 we severely censured Renecio
Espiritu, the counsel who filed a petition in the Court of Appeals thirty-three days after a
similar petition had been filed with the Supreme Court. We also found him guilty of direct
contempt.
The present case finds favorable comparison with Guanzon. Like Espiritu, Atty. Gonzales
misused court processes in contravention of the express rule against forum shopping. We
held then that Espiritu should be penalized and we imposed the penalty of censure—the
penalty usually imposed for an isolated act of misconduct of a lesser nature.19
_______________
14 Ibid.
15 Additional requisites for civil complaints, petitions and other initiatory pleadings filed in
all courts and agencies, other than the Supreme Court and the Court of Appeals, to prevent
forum shopping or multiple filing of such pleadings.
16 Canon 12, Code of Professional Responsibility.
17 Rule 12.04 of Canon 12, Code of Professional Responsibility.
18 218 Phil. 692, 697; 133 SCRA 727, 731 (1984).
19 Advincula v. Macabata, A.C. No. 7204, March 7, 2007, 517 SCRA 600, 617.
493
VOL. 689, JANUARY 30, 2013
493
Teodoro III vs. Gonzales
Lawyers are also censured for minor infractions against the lawyer’s duty to the Court or the
client.20 As earlier stated, Atty. Gonzales’ act of forum shopping disregarded his duty to
obey and promote respect for the law and legal processes, as well as the prohibition against
unduly delaying a case by misusing court processes.21 It also violated his duty as an officer
of the court to assist in the speedy and efficient administration of justice.22
WHEREFORE, we find the basis for the complaint meritorious and accordingly CENSURE
Atty. Romeo S. Gonzales for resorting to forum shopping. He is WARNED that any future
violation of his duties as a lawyer will be dealt with more severely. A copy of this reprimand
should be attached to Atty. Romeo S. Gonzales’ personal file in the Office of the Bar Con-
fidant.
SO ORDERED.
Carpio, Del Castillo, Perez and Perlas-Bernabe, JJ., concur.
Atty. Romeo S. Gonzales censured for resorting to forum shopping.
Notes.—There is no forum shopping where there is no identity of relief and cause of action
in two cases filed. (Co vs. Lim, 604 SCRA 702 [2009])
In filing a certiorari petition, one aggrieved by a court’s judgment, order or resolution must
verify his/her petition and must also attach a sworn certification of non-forum shopping. (Go
vs. Sunbanun, 642 SCRA 367 [2011])
——o0o——
_______________
20 Ibid.
21 Rule 12.04 of Canon 12, Code of Professional Responsibility.
22 Canon 12, Code of Professional Responsibility.
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Teodoro III vs. Gonzales,
689 SCRA 484, A.C. No. 6760 January 30, 2013
A.C. No. 4697. November 25, 2014.*
FLORENCIO A. SALADAGA, complainant, vs. ATTY. ARTURO B. ASTORGA, re-
spondent.
A.C. No. 4728. November 25, 2014.*
FLORENCIO A. SALADAGA, complainant, vs. ATTY. ARTURO B. ASTORGA, re-
spondent.
Attorneys; A lawyer who drafts a contract must see to it that the agreement faithfully and
clearly reflects the intention of the contracting parties.—Respondent, as owner of the prop-
erty, had the right to mortgage it to complainant but, as a lawyer, he should have seen to it
that his agreement with complainant is embodied in an instrument that clearly expresses the
intent of the contracting parties. A lawyer who drafts a contract must see to it that the agree-
ment faithfully and clearly reflects the intention of the contracting parties. Otherwise, the
respective rights and obligations of the contracting parties will be uncertain, which opens
the door to legal disputes between the said parties. Indeed, the uncertainty caused by re-
spondent’s poor formulation of the “Deed of Sale with Right to Repurchase” was a signifi-
cant factor in the legal controversy between respondent and complainant. Such poor formu-
lation reflects at the very least negatively on the legal competence of respondent.
Same; Code of Professional Responsibility; Under Canon 1 of the Code of Professional Re-
sponsibility, a lawyer is not only mandated to personally obey the laws and the legal pro-
cesses, he is moreover expected to inspire respect and obedience thereto. On the other hand,
Rule 1.01 states the norm of conduct that is expected of all lawyers.—Under Canon 1, a
lawyer is not only mandated to personally obey the laws and the legal processes, he is more-
over expected to inspire respect and obedience thereto. On the other hand, Rule 1.01 states
the norm of conduct that is expected of all lawyers. Any act or omission that is contrary to,
prohibited or unauthorized by, in defiance of, disobedient to, or disregards the law is “un-
lawful.” “Unlaw-
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* EN BANC.
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SUPREME COURT REPORTS ANNOTATED
Saladaga vs. Astorga
ful” conduct does not necessarily imply the element of criminality although the concept is
broad enough to include such element.
Same; In Roa v. Moreno, 618 SCRA 693 (2010), the Supreme Court (SC) pronounced that
[i]n disciplinary proceedings against lawyers, the only issue is whether the officer of the
court is still fit to be allowed to continue as a member of the Bar.—In Roa v. Moreno, 618
SCRA 693 (2010), the Court pronounced that “[i]n disciplinary proceedings against lawyers,
the only issue is whether the officer of the court is still fit to be allowed to continue as a
member of the Bar. Our only concern is the determination of respondent’s administrative
liability. Our findings have no material bearing on other judicial action which the parties
may choose to file against each other.” While the respondent lawyer’s wrongful actuations
may give rise at the same time to criminal, civil, and administrative liabilities, each must be
determined in the appropriate case; and every case must be resolved in accordance with the
facts and the law applicable and the quantum of proof required in each. Section 5, in relation
to Sections 1 and 2, Rule 133 of the Rules of Court states that in administrative cases, such
as the ones at bar, only substantial evidence is required, not proof beyond reasonable doubt
as in criminal cases, or preponderance of evidence as in civil cases. Substantial evidence is
that amount of relevant evidence which a reasonable mind might accept as adequate to jus-
tify a conclusion.
Civil Liability; When a criminal action is instituted, the civil action for the recovery of civil
liability arising from the offense charged shall be deemed instituted with the criminal action
unless the offended party waives the civil action, reserves the right to institute it separately
or institutes the civil action prior to the criminal action.—When a criminal action is insti-
tuted, the civil action for the recovery of civil liability arising from the offense charged shall
be deemed instituted with the criminal action unless the offended party waives the civil ac-
tion, reserves the right to institute it separately or institutes the civil action prior to the crim-
inal action. Unless the complainant waived the civil action, reserved the right to institute it
separately, or instituted the civil action prior to the criminal action, then his civil action for
the recovery of civil liability arising from the estafa committed by respondent is deemed
instituted with Criminal Case No. 3112-A. The civil liability that complainant may recover
in Criminal Case No. 3112-A includes restitution; reparation of the
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Saladaga vs. Astorga
damage caused him; and/or indemnification for consequential damages, which may already
cover the P15,000.00 consideration complainant had paid for the subject property.
ADMINISTRATIVE CASE in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
Norjue I. Juego for the late Florencio A. Saladaga.
LEONARDO-DE CASTRO, J.:
Membership in the legal profession is a high personal privilege burdened with conditions,1
including continuing fidelity to the law and constant possession of moral fitness. Lawyers,
as guardians of the law, play a vital role in the preservation of society, and a consequent
obligation of lawyers is to maintain the highest standards of ethical conduct.2 Failure to live
by the standards of the legal profession and to discharge the burden of the privilege conferred
on one as a member of the bar warrant the suspension or revocation of that privilege.
The Factual Antecedents
Complainant Florencio A. Saladaga and respondent Atty. Arturo B. Astorga entered into a
“Deed of Sale with Right to Repurchase” on December 2, 1981 where respondent sold (with
right of repurchase) to complainant a parcel of coconut land located at Barangay Bunga,
Baybay, Leyte covered by Transfer Certificate of Title (TCT) No. T-662 for P15,000.00.
Under the said deed, respondent represented that he has “the perfect right to dispose as owner
in fee simple” the subject property and that the said property is “free from all liens and
_______________
1 Manzano v. Soriano, 602 Phil. 419, 421; 584 SCRA 1, 3 (2009).
2 Preamble, 2nd paragraph, American Bar Association Model Code of Professional Re-
sponsibility (1983), cited in Code of Professional Responsibility (Annotated), p. 1.
606
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SUPREME COURT REPORTS ANNOTATED
Saladaga vs. Astorga
encumbrances.”3 The deed also provided that respondent, as vendor a retro, had two years
within which to repurchase the property, and if not repurchased within the said period, “the
parties shall renew [the] instrument/agreement.”4
Respondent failed to exercise his right of repurchase within the period provided in the deed,
and no renewal of the contract was made even after complainant sent respondent a final
demand dated May 10, 1984 for the latter to repurchase the property. Complainant remained
in peaceful possession of the property until December 1989 when he received letters from
the Rural Bank of Albuera (Leyte), Inc. (RBAI) informing him that the property was mort-
gaged by respondent to RBAI, that the bank had subsequently foreclosed on the property,
and that complainant should therefore vacate the property.5
Complainant was alarmed and made an investigation. He learned the following:
1. TCT No. T-662 was already cancelled by TCT No. T-3211 in the name of Philippine
National Bank (PNB) as early as November 17, 1972 after foreclosure proceedings;
2. TCT No. T-3211 was cancelled by TCT No. T-7235 in the names of respondent and his
wife on January 4, 1982 pursuant to a deed of sale dated March 27, 1979 between PNB and
respondent;
3. Respondent mortgaged the subject property to RBAI on March 14, 1984, RBAI fore-
closed on the property, and subsequently obtained TCT No. TP-10635 on March 27, 1991.6
_______________
3 Joint Memorandum for complainant, Rollo, Vol. III, pp. 173-205, 173-174, 192-193.
4 Id., at pp. 192-193.
5 Id., at pp. 174-175, 195-197.
6 Id., at pp. 175, 198-203.
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Saladaga vs. Astorga
Complainant was subsequently dispossessed of the property by RBAI.7
Aggrieved, complainant instituted a criminal complaint for estafa against respondent with
the Office of the Provincial Prosecutor of Leyte, docketed as I.S. No. 95-144. The Provincial
Prosecutor of Leyte approved the Resolution8 dated April 21, 1995 in I.S. No. 95-144 find-
ing that “[t]he facts of [the] case are sufficient to engender a well-founded belief that Estafa
x x x has been committed and that respondent herein is probably guilty thereof.”9 Accord-
ingly, an Information10 dated January 8, 1996 was filed before the Municipal Trial Court
(MTC) of Baybay, Leyte, formally charging respondent with the crime of estafa under Arti-
cle 316, paragraphs 1 and 2 of the Revised Penal Code,11 committed as follows:
On March 14, 1984, accused representing himself as the owner of a parcel of land known as
Lot No. 7661 of the Baybay Cadastre, mortgaged the same to the Rural Bank of Albuera,
Albuera, Leyte, within the jurisdiction of this Honorable Court, knowing fully well that the
possessor and owner at that time was private complainant Florencio Saladaga by virtue of a
Pacto de Retro Sale which accused executed in favor of private complainant on 2nd Decem-
ber, 1981, without first redeeming/repurchasing the same. [P]rivate complainant knowing of
ac-
_______________
7 Id., Vol. II, p. 67.
8 Id., at pp. 21-25.
9 Id., at p. 24.
10 Id., at p. 26.
11 ART. 316. Other forms of swindling.—The penalty of arresto mayor in its minimum
and medium periods and a fine of not less than the value of the damage caused and not more
than three times such value, shall be imposed upon:
1. Any person who, pretending to be the owner of any real property, shall convey, sell,
encumber, or mortgage the same;
2. Any person who, knowing that real property is encumbered, shall dispose of the same,
although such encumbrance be not recorded[.]
608
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SUPREME COURT REPORTS ANNOTATED
Saladaga vs. Astorga
cused[’s] unlawful act only on or about the last week of February, 1991 when the rural bank
dispossessed him of the property, the mortgage having been foreclosed, private complainant
thereby suffered damages and was prejudiced by accused[’s] unlawful transaction and mis-
representation.
The aforementioned estafa case against respondent was docketed as Criminal Case No.
3112-A.
Complainant likewise instituted the instant administrative cases against respondent by filing
before this Court an Affidavit-Complaint12 dated January 28, 1997 and Supplemental Com-
plaint13 dated February 27, 1997, which were docketed as A.C. No. 4697 and A.C. No.
4728, respectively. In both complaints, complainant sought the disbarment of respondent.
The administrative cases were referred to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.14
In his Consolidated Answer15 dated August 16, 2003 filed before the IBP, respondent de-
nied that his agreement with complainant was a pacto de retro sale. He claimed that it was
an equitable mortgage and that, if only complainant rendered an accounting of his benefits
from the produce of the land, the total amount would have exceeded P15,000.00.
Report and Recommendation of the Investigating Commissioner and Resolution of the IBP
Board of Governors
_______________
12 Rollo, Vol. I, pp. 2-5.
13 Id., Vol. II, pp. 1-7.
14 Id., Vol. I, p. 51; Resolution dated February 14, 2000.
15 Id., Vol. III, pp. 146-154.
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Saladaga vs. Astorga
In a Report and Recommendation16 dated April 29, 2005, the Investigating Commissioner
of the IBP’s Commission on Bar Discipline found that respondent was in bad faith when he
dealt with complainant and executed the “Deed of Sale with Right to Repurchase” but later
on claimed that the agreement was one of equitable mortgage. Respondent was also guilty
of deceit or fraud when he represented in the “Deed of Sale with Right to Repurchase” dated
December 2, 1981 that the property was covered by TCT No. T-662, even giving complain-
ant the owner’s copy of the said certificate of title, when the said TCT had already been
cancelled on November 17, 1972 by TCT No. T-3211 in the name of Philippine National
Bank (PNB). Respondent made matters even worse, when he had TCT No. T-3211 cancelled
with the issuance of TCT No. T-7235 under his and his wife’s name on January 4, 1982
without informing complainant. This was compounded by respondent’s subsequent mort-
gage of the property to RBAI, which led to the acquisition of the property by RBAI and the
dispossession thereof of complainant. Thus, the Investigating Commissioner recommended
that respondent be (1) suspended from the practice of law for one year, with warning that a
similar misdeed in the future shall be dealt with more severity, and (2) ordered to return the
sum of P15,000.00, the amount he received as consideration for the pacto de retro sale, with
interest at the legal rate.
Considering respondent’s “commission of unlawful acts, especially crimes involving moral
turpitude, acts of dishonesty, grossly immoral conduct and deceit,” the IBP Board of Gov-
ernors adopted and approved the Investigating Commissioner’s Report and Recommenda-
tion with modification as follows: respondent is (1) suspended from the practice of law for
two years, with warning that a similar misdeed in the future shall be dealt with more severity,
and (2) ordered to return the sum
_______________
16 Id., Vol. II, pp. 52-69.
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SUPREME COURT REPORTS ANNOTATED
Saladaga vs. Astorga
of P15,000.00 received in consideration of the pacto de retro sale, with legal interest.17
The Court’s Ruling
The Court agrees with the recommendation of the IBP Board of Governors to suspend re-
spondent from the practice of law for two years, but it refrains from ordering respondent to
return the P15,000.00 consideration, plus interest.
Respondent does not deny executing the “Deed of Sale with Right to Repurchase” dated
December 2, 1981 in favor of complainant. However, respondent insists that the deed is not
one of sale with pacto de retro, but one of equitable mortgage. Thus, respondent argues that
he still had the legal right to mortgage the subject property to other persons. Respondent
additionally asserts that complainant should render an accounting of the produce the latter
had collected from the said property, which would already exceed the P15,000.00 consider-
ation stated in the deed.
There is no merit in respondent’s defense.
Regardless of whether the written contract between respondent and complainant is actually
one of sale with pacto de retro or of equitable mortgage, respondent’s actuations in his trans-
action with complainant, as well as in the present administrative cases, clearly show a disre-
gard for the highest standards of legal proficiency, morality, honesty, integrity, and fair deal-
ing required from lawyers, for which respondent should be held administratively liable.
When respondent was admitted to the legal profession, he took an oath where he undertook
to “obey the laws,” “do no falsehood,” and “conduct [him]self as a lawyer according to the
best of [his] knowledge and discretion.”18 He gravely violated his oath.
_______________
17 Id., at pp. 50-51, Notice of Resolution.
18 The Lawyer’s Oath states in full:
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Saladaga vs. Astorga
The Investigating Commissioner correctly found, and the IBP Board of Governors rightly
agreed, that respondent caused the ambiguity or vagueness in the “Deed of Sale with Right
to Repurchase” as he was the one who prepared or drafted the said instrument. Respondent
could have simply denominated the instrument as a deed of mortgage and referred to himself
and complainant as “mortgagor” and “mortgagee,” respectively, rather than as “vendor a
retro” and “vendee a retro.” If only respondent had been more circumspect and careful in
the drafting and preparation of the deed, then the controversy between him and complainant
could have been avoided or, at the very least, easily resolved. His imprecise and misleading
wording of the said deed on its face betrayed lack of legal competence on his part. He thereby
fell short of his oath to “conduct [him]self as a lawyer according to the best of [his]
knowledge and discretion.”
More significantly, respondent transgressed the laws and the fundamental tenet of human
relations as embodied in Article 19 of the Civil Code:
Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.
_______________
I, _________, do solemnly swear that I will maintain allegiance to the Republic of the Phil-
ippines; I will support its Constitution and obey the laws as well as the legal orders of the
duly constituted authorities therein; I will do no falsehood, nor consent to the doing of any
in court; I will not wittingly or willingly promote or sue any groundless, false or unlawful
suit, nor give aid nor consent to the same. I will delay no man for money or malice, and will
conduct myself as a lawyer according to the best of my knowledge and discretion with all
good fidelity as well to the courts as to my clients; and I impose upon myself this voluntary
obligation without any mental reservation or purpose of evasion. So help me God. (Empha-
ses supplied)
612
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SUPREME COURT REPORTS ANNOTATED
Saladaga vs. Astorga
Respondent, as owner of the property, had the right to mortgage it to complainant but, as a
lawyer, he should have seen to it that his agreement with complainant is embodied in an
instrument that clearly expresses the intent of the contracting parties. A lawyer who drafts a
contract must see to it that the agreement faithfully and clearly reflects the intention of the
contracting parties. Otherwise, the respective rights and obligations of the contracting parties
will be uncertain, which opens the door to legal disputes between the said parties. Indeed,
the uncertainty caused by respondent’s poor formulation of the “Deed of Sale with Right to
Repurchase” was a significant factor in the legal controversy between respondent and com-
plainant. Such poor formulation reflects at the very least negatively on the legal competence
of respondent.
Under Section 63 of the Land Registration Act,19 the law in effect at the time the PNB
acquired the subject property and obtained TCT No. T-3211 in its name in 1972, where a
decree in favor of a purchaser who acquires mortgaged property in foreclosure proceedings
becomes final, such purchaser becomes entitled to the issuance of a new certificate of title
in his name and a memorandum thereof shall be “indorsed upon the mortgagor’s original
certificate.”20 TCT No. T-662, which
_______________
19 Act No. 496 enacted on November 6, 1902.
20 Section 63 of the Land Registration Act provides:
Sec. 63. Mortgages of registered land may be foreclosed in the manner provided in the
Code of Procedure in Civil Actions and Special Proceedings. A certified copy of the final
decree of the court affirming the sale under foreclosure proceedings may be filed with the
register of deeds after the time for appealing therefrom has expired, and the purchaser shall
thereupon be entitled to the entry of a new certificate and to the issuance of a new owner’s
duplicate certificate, a memorandum thereof being at the same time likewise indorsed upon
the mortgagor’s original certificate and the mortgagee’s duplicate, if any, being first deliv-
ered up and canceled: Provided, however, That nothing contained in this Act
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Saladaga vs. Astorga
respondent gave complainant when they entered into the “Deed of Sale with Right to Repur-
chase” dated December 2, 1981, does not bear such memorandum but only a memorandum
on the mortgage of the property to PNB in 1963 and the subsequent amendment of the mort-
gage.
Respondent dealt with complainant with bad faith, falsehood, and deceit when he entered
into the “Deed of Sale with Right to Repurchase” dated December 2, 1981 with the latter.
He made it appear that the property was covered by TCT No. T-662 under his name, even
giving complainant the owner’s copy of the said certificate of title, when the truth is that the
said TCT had already been cancelled some nine years earlier by TCT No. T-3211 in the
name of PNB. He did not even care to correct the wrong statement in the deed when he was
subsequently issued a new copy of TCT No. T-7235 on January 4, 1982,21 or barely a month
after the execution of the said deed. All told, respondent clearly committed an act of gross
dishonesty and deceit against complainant.
Canon 1 and Rule 1.01 of the Code of Professional Responsibility provide:
CANON 1 – A lawyer shall uphold the constitution, obey the laws of the land and promote
respect for law and legal processes.
_______________
shall be construed to prevent the mortgagor or other person interested from directly impeach-
ing by any proper legal proceedings any foreclosure proceedings affecting registered land,
prior to the entry of a new certificate of title. (Emphasis supplied)
21 It appears from the annotations/memoranda at the back of TCT No. T-3211 that said
certificate of title was cancelled by TCT No. T-7235 when the deed of sale dated March 27,
1979 between PNB and respondent was registered with the Register of Deeds. Respondent,
however, lost his owner’s duplicate and was issued a new copy of such owner’s duplicate
on January 4, 1982. (Rollo, Vol. III, p. 200.)
614
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SUPREME COURT REPORTS ANNOTATED
Saladaga vs. Astorga
Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.
Under Canon 1, a lawyer is not only mandated to personally obey the laws and the legal
processes, he is moreover expected to inspire respect and obedience thereto. On the other
hand, Rule 1.01 states the norm of conduct that is expected of all lawyers.22
Any act or omission that is contrary to, prohibited or unauthorized by, in defiance of, diso-
bedient to, or disregards the law is “unlawful.” “Unlawful” conduct does not necessarily
imply the element of criminality although the concept is broad enough to include such ele-
ment.23
To be “dishonest” means the disposition to lie, cheat, deceive, defraud or betray; be untrust-
worthy; lacking in integrity, honesty, probity, integrity in principle, fairness and straightfor-
wardness. On the other hand, conduct that is “deceitful” means as follows:
[Having] the proclivity for fraudulent and deceptive misrepresentation, artifice or device that
is used upon another who is ignorant of the true facts, to the prejudice and damage of the
party imposed upon. In order to be deceitful, the person must either have knowledge of the
falsity or acted in reckless and conscious ignorance thereof, especially if the parties are not
on equal terms, and was done with the intent that the aggrieved party act thereon, and the
latter indeed acted in reliance of the false statement or deed in the manner contemplated to
his injury.24
The actions of respondent in connection with the execution of the “Deed of Sale with Right
to Repurchase” clearly fall within the concept of unlawful, dishonest, and deceitful con-
_______________
22 Code of Professional Responsibility (Annotated), pp. 1, 16.
23 Id., citing Black’s Law Dictionary (6th ed.), p. 1536.
24 Id., at pp. 6-7.
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Saladaga vs. Astorga
duct. They violate Article 19 of the Civil Code. They show a disregard for Section 63 of the
Land Registration Act. They also reflect bad faith, dishonesty, and deceit on respondent’s
part. Thus, respondent deserves to be sanctioned.
Respondent’s breach of his oath, violation of the laws, lack of good faith, and dishonesty are
compounded by his gross disregard of this Court’s directives, as well as the orders of the
IBP’s Investigating Commissioner (who was acting as an agent of this Court pursuant to the
Court’s referral of these cases to the IBP for investigation, report and recommendation),
which caused delay in the resolution of these administrative cases.
In particular, the Court required respondent to comment on complainant’s Affidavit-Com-
plaint in A.C. No. 4697 and Supplemental Complaint in A.C. No. 4728 on March 12, 1997
and June 25, 1997, respectively.25 While he requested for several extensions of time within
which to submit his comment, no such comment was submitted prompting the Court to re-
quire him in a Resolution dated February 4, 1998 to (1) show cause why he should not be
disciplinarily dealt with or held in contempt for such failure, and (2) submit the consolidated
comment.26 Respondent neither showed cause why he should not be disciplinarily dealt
with or held in contempt for such failure, nor submitted the consolidated comment.
When these cases were referred to the IBP and during the proceedings before the IBP’s
Investigating Commissioner, respondent was again required several times to submit his con-
solidated answer. He only complied on August 28, 2003, or more than six years after this
Court originally required him to do so. The Investigating Commissioner also directed the
parties to submit their respective position papers. Despite
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25 Rollo, Vol. I, p. 25, and Vol. II, p. 37, respectively.
26 Id., Vol. I, p. 40.
616
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SUPREME COURT REPORTS ANNOTATED
Saladaga vs. Astorga
having been given several opportunities to submit the same, respondent did not file any po-
sition paper.27
Respondent’s disregard of the directives of this Court and of the Investigating Commis-
sioner, which caused undue delay in these administrative cases, contravenes the following
provisions of the Code of Professional Responsibility:
CANON 11 – A lawyer shall observe and maintain the respect due to the courts and to judi-
cial officers and should insist on similar conduct by others.
xxxx
CANON 12 – A lawyer shall exert every effort and consider it his duty to assist in the speedy
and efficient administration of justice.
xxxx
Rule 12.03 – A lawyer shall not, after obtaining extensions of time to file pleadings, memo-
randa or briefs, let the period lapse without submitting the same or offering an explanation
for his failure to do so.
Rule 12.04 – A lawyer shall not unduly delay a case, impede the execution of a judgment or
misuse court processes.
Respondent’s infractions are aggravated by the fact that he has already been imposed a dis-
ciplinary sanction before. In Nuñez v. Atty. Astorga,28 respondent was held liable for con-
duct unbecoming an attorney for which he was fined P2,000.00.
Given the foregoing, the suspension of respondent from the practice of law for two years, as
recommended by the IBP Board of Governors, is proper.
The Court, however, will not adopt the recommendation of the IBP to order respondent to
return the sum of P15,000.00 he received from complainant under the “Deed of Sale with
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27 Id., Vol. III, pp. 222-224, Order dated January 24, 2005.
28 492 Phil. 450, 460; 452 SCRA 353, 361 (2005).
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617
Saladaga vs. Astorga
Right to Repurchase.” This is a civil liability best determined and awarded in a civil case
rather than the present administrative cases.
In Roa v. Moreno,29 the Court pronounced that “[i]n disciplinary proceedings against law-
yers, the only issue is whether the officer of the court is still fit to be allowed to continue as
a member of the Bar. Our only concern is the determination of respondent’s administrative
liability. Our findings have no material bearing on other judicial action which the parties
may choose to file against each other.” While the respondent lawyer’s wrongful actuations
may give rise at the same time to criminal, civil, and administrative liabilities, each must be
determined in the appropriate case; and every case must be resolved in accordance with the
facts and the law applicable and the quantum of proof required in each. Section 5,30 in re-
lation to Sections 131 and 2,32 Rule 133 of the Rules of Court
_______________
29 A.C. No. 8382, April 21, 2010, 618 SCRA 693, 700.
30 SECTION 5. Substantial evidence.—In cases filed before administrative or quasi-ju-
dicial bodies, a fact may be deemed established if it is supported by substantial evidence, or
that amount of relevant evidence which a reasonable mind might accept as adequate to jus-
tify a conclusion.
31 SECTION 1. Preponderance of evidence, how determined.—In civil cases, the party
having the burden of proof must establish his case by a preponderance of evidence. In de-
termining where the preponderance or superior weight of evidence on the issues involved
lies, the court may consider all the facts and circumstances of the case, the witnesses’ manner
of testifying, their intelligence, their means and opportunity of knowing the facts to which
they are testifying the nature of the facts to which they testify, the probability or improba-
bility of their testimony, their interest or want of interest, and also their personal credibility
so far as the same may legitimately appear upon the trial. The court may also consider the
number of witnesses, though the preponderance is not necessarily with the greater number.
32 SECTION 2. Proof beyond reasonable doubt.—In a criminal case, the accused is en-
titled to an acquittal, unless his guilt is shown beyond reasonable doubt. Proof beyond rea-
sonable doubt does not
618
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SUPREME COURT REPORTS ANNOTATED
Saladaga vs. Astorga
states that in administrative cases, such as the ones at bar, only substantial evidence is re-
quired, not proof beyond reasonable doubt as in criminal cases, or preponderance of evi-
dence as in civil cases. Substantial evidence is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.33
The Court notes that based on the same factual antecedents as the present administrative
cases, complainant instituted a criminal case for estafa against respondent, docketed as Crim-
inal Case No. 3112-A, before the MTC. When a criminal action is instituted, the civil action
for the recovery of civil liability arising from the offense charged shall be deemed instituted
with the criminal action unless the offended party waives the civil action, reserves the right
to institute it separately or institutes the civil action prior to the criminal action.34 Unless
the complainant waived the civil action, reserved the right to institute it separately, or insti-
tuted the civil action prior to the criminal action, then his civil action for the recovery of civil
liability arising from the estafa committed by respondent is deemed instituted with Criminal
Case No. 3112-A. The civil liability that complainant may recover in Criminal Case No.
3112-A includes restitution; reparation of the damage caused him; and/or indemnification
for consequential damages,35 which may already cover the P15,000.00 consideration com-
plainant had paid for the subject property.
WHEREFORE, respondent is hereby found GUILTY of the following: breach of the Law-
yer’s Oath; unlawful, dishon-
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mean such a degree of proof as, excluding possibility of error, produces absolute certainty.
Moral certainty only is required, or that degree of proof which produces conviction in an
unprejudiced mind.
33 Peña v. Paterno, A.C. No. 4191, June 10, 2013, 698 SCRA 1, 12-13.
34 Rule 111, Section 1(a) of the Revised Rules of Criminal Procedure.
35 Articles 104 to 107 of the Revised Penal Code.
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Saladaga vs. Astorga
est, and deceitful conduct; and disrespect for the Court and causing undue delay of these
cases, for which he is SUSPENDED from the practice of law for a period of two (2) years,
reckoned from receipt of this Decision, with WARNING that a similar misconduct in the
future shall be dealt with more severely.
Let a copy of this Decision be furnished the Office of the Bar Confidant and the Integrated
Bar of the Philippines for their information and guidance. The Court Administrator is di-
rected to circulate this Decision to all courts in the country.
SO ORDERED.
Sereno (CJ.), Carpio, Velasco, Jr., Peralta, Bersamin, Del Castillo, Villarama, Jr., Perez,
Mendoza, Reyes, Leonen and Jardeleza, JJ., concur.
Brion, J., On Leave.
Perlas-Bernabe, J., On Official Leave.
Respondent suspended from practice of law for two (2) years for breach of Lawyer’s Oath;
unlawful, dishonest and deceitful conduct; and disrespect for the Supreme Court and causing
undue delay of these cases, with warning against repetition of similar misconduct.
Notes.—Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor
purely criminal, they do not involve a trial of an action or a suit, but is rather an investigation
by the Court into the conduct of one of its officers. Not being intended to inflict punishment,
it is in no sense a criminal prosecution. (Ylaya vs. Gacott, 689 SCRA 452 [2013])
In administrative cases against lawyers, the quantum of proof required is preponderance of
evidence which the complainant has the burden to discharge. (Id.)
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Saladaga vs. Astorga, 741
SCRA 603, A.C. No. 4697 November 25, 2014
A.C. No. 10579. December 10, 2014.*
ERLINDA FOSTER, complainant, vs. ATTY. JAIME V. AGTANG, respondent.
Attorneys; Legal Ethics; It is well-established that a lawyer’s conduct is not confined to the
performance of his professional duties. A lawyer may be disciplined for misconduct com-
mitted either in his professional or private capacity.—Rule 1.0, Canon 1 of the CPR, pro-
vides that “[a] lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.”
It is well-established that a lawyer’s conduct is “not confined to the performance of his pro-
fessional duties. A lawyer may be disciplined for misconduct committed either in his pro-
fessional or private capacity. The test is whether his conduct shows him to be wanting in
moral character, honesty, probity, and good demeanor, or whether it renders him unworthy
to continue as an officer of the court.”
Same; Same; As a lawyer, he is not only expected to be knowledgeable in the matter of filing
fees, but he is likewise duty-bound to disclose to his client the actual amount due, consistent
with the values of honesty and good faith expected of all members of the legal profession.—
In this case, respondent is guilty of engaging in dishonest and deceitful conduct, both in his
professional and private capacity. As a lawyer, he clearly misled complainant into believing
that the filing fees for her case were worth more than the prescribed amount in the rules, due
to feigned reasons such as the high value of the land involved and the extra expenses to be
incurred by court employees. In other words, he resorted to overpricing, an act customarily
related to depravity and dishonesty. He demanded the amount of P150,000.00 as filing fee,
when in truth, the same amounted only to P22,410.00. His defense that it was complainant
who suggested that amount deserves no iota of credence. For one, it is highly improbable
that complainant, who was then plagued with the rigors of litigation, would propose such
amount that would further burden her financial resources. Assuming that the complainant
was more than willing to shell out an exorbitant amount just to initiate her complaint with
_______________
* EN BANC.
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VOL. 744, DECEMBER 10, 2014
243
Foster vs. Agtang
the trial court, still, respondent should not have accepted the excessive amount. As a lawyer,
he is not only expected to be knowledgeable in the matter of filing fees, but he is likewise
duty-bound to disclose to his client the actual amount due, consistent with the values of
honesty and good faith expected of all members of the legal profession.
Same; Same; A lawyer’s failure to return upon demand the funds held by him on behalf of
his client gives rise to the presumption that he has appropriated the same for his own use in
violation of the trust reposed in him by his client.—The “fiduciary nature of the relationship
between the counsel and his client imposes on the lawyer the duty to account for the money
or property collected or received for or from his client.” Money entrusted to a lawyer for a
specific purpose but not used for the purpose should be immediately returned. A lawyer’s
failure to return upon demand the funds held by him on behalf of his client gives rise to the
presumption that he has appropriated the same for his own use in violation of the trust re-
posed in him by his client. Such act is a gross violation of general morality as well as of
professional ethics. It impairs public confidence in the legal profession and deserves punish-
ment.
Same; Same; Somewhat showing a propensity to demand excessive and unwarranted
amounts from his client, respondent displayed a reprehensible conduct when he asked for
the amount of P50,000.00 as “representation expenses” allegedly for the benefit of the judge
handling the case, in exchange for a favorable decision.—Somewhat showing a propensity
to demand excessive and unwarranted amounts from his client, respondent displayed a rep-
rehensible conduct when he asked for the amount of P50,000.00 as “representation ex-
penses” allegedly for the benefit of the judge handling the case, in exchange for a favorable
decision. Respondent himself signed a receipt showing that he initially took the amount of
P25,000.00 and, worse, he subsequently demanded and received the other half of the amount
at the time the case had already been dismissed. Undoubtedly, this act is tantamount to gross
misconduct that necessarily warrants the supreme penalty of disbarment.
Same; Same; The act of demanding a sum of money from his client, purportedly to be used
as a bribe to ensure a positive outcome of a case, is not only an abuse of his client’s trust but
an overt act of
244
244
SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
undermining the trust and faith of the public in the legal profession and the entire Judiciary.
This is the height of indecency.—The act of demanding a sum of money from his client,
purportedly to be used as a bribe to ensure a positive outcome of a case, is not only an abuse
of his client’s trust but an overt act of undermining the trust and faith of the public in the
legal profession and the entire Judiciary. This is the height of indecency. As officers of the
court, lawyers owe their utmost fidelity to public service and the administration of justice.
In no way should a lawyer indulge in any act that would damage the image of judges, lest
the public’s perception of the dispensation of justice be overshadowed by iniquitous doubts.
The denial of respondent and his claim that the amount was given gratuitously would not
excuse him from any liability. The absence of proof that the said amount was indeed used
as a bribe is of no moment. To tolerate respondent’s actuations would seriously erode the
public’s trust in the courts.
Same; Same; A lawyer shall not borrow money from his client unless the client’s interests
are fully protected by the nature of the case or by independent advice. Neither shall a lawyer
lend money to a client except, when in the interest of justice, he has to advance necessary
expenses in a legal matter he is handling for the client.—Respondent’s unbecoming conduct
towards complainant did not stop here. Records reveal that he likewise violated Rule 16.04,
Canon 16 of the CPR, which states that “[a] lawyer shall not borrow money from his client
unless the client’s interests are fully protected by the nature of the case or by independent
advice. Neither shall a lawyer lend money to a client except, when in the interest of justice,
he has to advance necessary expenses in a legal matter he is handling for the client.”
Same; Same; Failure to Pay Just Debts; Time and again, the Court has consistently held that
deliberate failure to pay just debts constitutes gross misconduct, for which a lawyer may be
sanctioned with suspension from the practice of law.—Time and again, the Court has con-
sistently held that deliberate failure to pay just debts constitutes gross misconduct, for which
a lawyer may be sanctioned with suspension from the practice of law. Lawyers are instru-
ments for the administration of justice and vanguards of our legal system. They are expected
to maintain not only legal proficiency, but also a high standard of morality, honesty, integrity
and fair dealing so that the
245
VOL. 744, DECEMBER 10, 2014
245
Foster vs. Agtang
people’s faith and confidence in the judicial system is ensured. They must, at all times, faith-
fully perform their duties to society, to the bar, the courts and their clients, which include
prompt payment of financial obligations.
Same; Same; Conflict of Interests; Code of Professional Responsibility; Rule 15.03, Canon
15 of the Code of Professional Responsibility (CPR), provides that “[a] lawyer shall not
represent conflicting interest except by written consent of all concerned given after a full
disclosure of the facts.”—Rule 15.03, Canon 15 of the CPR, provides that “[a] lawyer shall
not represent conflicting interest except by written consent of all concerned given after a full
disclosure of the facts.” The relationship between a lawyer and his/her client should ideally
be imbued with the highest level of trust and confidence. This is the standard of confidenti-
ality that must prevail to promote a full disclosure of the client’s most confidential infor-
mation to his/her lawyer for an unhampered exchange of information between them. Need-
less to state, a client can only entrust confidential information to his/her lawyer based on an
expectation from the lawyer of utmost secrecy and discretion; the lawyer, for his part, is
duty-bound to observe candor, fairness and loyalty in all dealings and transactions with the
client. Part of the lawyer’s duty in this regard is to avoid representing conflicting interests.
Thus, even if lucrative fees offered by prospective clients are at stake, a lawyer must decline
professional employment if the same would trigger the violation of the prohibition against
conflict of interest. The only exception provided in the rules is a written consent from all the
parties after full disclosure.
Same; Same; The representation of conflicting interests is prohibited not only because the
relation of attorney and client is one of trust and confidence of the highest degree, but also
because of the principles of public policy and good taste.—The representation of conflicting
interests is prohibited “not only because the relation of attorney and client is one of trust and
confidence of the highest degree, but also because of the principles of public policy and good
taste. An attorney has the duty to deserve the fullest confidence of his client and represent
him with undivided loyalty. Once this confidence is abused or violated the entire profession
suffers.”
246
246
SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
Same; Same; Suspension; Disbarment; Lawyer’s Oath; A member of the Bar may be penal-
ized, even disbarred or suspended from his office as an attorney, for violation of the lawyer’s
oath and/or for breach of the ethics of the legal profession as embodied in the Code of Pro-
fessional Responsibility (CPR).—A member of the Bar may be penalized, even disbarred or
suspended from his office as an attorney, for violation of the lawyer’s oath and/or for breach
of the ethics of the legal profession as embodied in the CPR. 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.” The appropriate penalty for an errant law-
yer depends on the exercise of sound judicial discretion based on the surrounding facts.
Same; Same; Same; Same; Grounds by Which a Lawyer May be Suspended or Disbarred.—
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 au-
thority. 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.
Same; Same; Disbarment; Penalties; For taking advantage of the unfortunate situation of the
complainant, for engaging in dishonest and deceitful conduct, for maligning the judge and
the Judiciary, for undermining the trust and faith of the public in the legal profession and the
entire judiciary, and for representing conflicting interests, respondent deserves no less than
the penalty of disbarment.—For taking advantage of the unfortunate situation of the com-
plainant, for engaging in dishonest and deceitful conduct, for maligning the judge and the
Judiciary, for undermining the trust and faith of the public in the legal profession and the
entire judiciary, and for representing conflicting interests, respondent deserves no less than
the penalty of disbarment.
247
VOL. 744, DECEMBER 10, 2014
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Foster vs. Agtang
Same; Same; Same; The Supreme Court (SC) cannot order respondent to return the money
he borrowed from complainant in his private capacity; In disciplinary proceedings against
lawyers, the only issue is whether the officer of the court is still fit to be allowed to continue
as a member of the Bar.—Notably, the Court cannot order respondent to return the money
he borrowed from complainant in his private capacity. In Tria-Samonte v. Obias, 707 SCRA
1 (2013), the Court held that it cannot order the lawyer to return money to complainant if he
or she acted in a private capacity because its findings in administrative cases have no bearing
on liabilities which have no intrinsic link to the lawyer’s professional engagement. In disci-
plinary proceedings against lawyers, the only issue is whether the officer of the court is still
fit to be allowed to continue as a member of the Bar. The only concern of the Court is the
determination of respondent’s administrative liability. Its findings have no material bearing
on other judicial actions which the parties may choose against each other.
ADMINISTRATIVE CASE in the Supreme Court. Unlawful, Dishonest, Immoral and De-
ceitful Acts as a Lawyer.
The facts are stated in the opinion of the Court.
PER CURIAM:
This refers to the Resolution1 of the Board of Governors (BOG), Integrated Bar of the Phil-
ippines (IBP), dated March 23, 2014, affirming with modification the findings of the Inves-
tigating Commissioner, who recommended the suspension of respondent Atty. Jaime V. Ag-
tang (respondent) from the practice of law for one (1) year for ethical impropriety and or-
dered the payment of his unpaid obligations to complainant.
From the records, it appears that the IBP, thru its Commission on Bar Discipline (CBD),
received a complaint,2 dated May 31, 2011, filed by Erlinda Foster (complainant) against
_______________
1 Rollo, pp. 192-193.
2 Id., at pp. 5-9.
248
248
SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
respondent for “unlawful, dishonest, immoral and deceitful”3 acts as a lawyer.
In its July 1, 2011 Order,4 the IBP-CBD directed respondent to file his Answer within 15
days from receipt of the order. Respondent failed to do so and complainant sent a query as
to the status of her complaint. On October 10, 2011, the Investigating Commissioner issued
the Order5 setting the case for mandatory conference/hearing on November 16, 2011. It was
only on November 11, 2011, or five (5) days before the scheduled conference when respond-
ent filed his verified Answer.6
During the conference, only the complainant together with her husband appeared. She sub-
mitted a set of documents contained in a folder, copies of which were furnished the respond-
ent. The Investigating Commissioner7 indicated that the said documents would be reviewed
and the parties would be informed if there was a need for clarificatory questioning; other-
wise, the case would be submitted for resolution based on the documents on file. The
Minutes8 of the mandatory conference showed that respondent arrived at 11:10 o’clock in
the morning or after the proceeding was terminated.
On December 12, 2011, the complainant filed her Reply to respondent’s Answer.
On April 18, 2012, complainant submitted copies of the January 24, 2012 Decisions9 of the
Municipal Trial Court in Small Claims Case Nos. 2011-0077 and 2011-0079, ordering re-
spondent [defendant therein] to pay complainant and her
_______________
3 Id., at p. 9.
4 Id., at p. 35.
5 Id., at p. 43.
6 Id., at pp. 45-49.
7 Atty. Loreto C. Ata, Commissioner, Commission on Bar Discipline, Integrated Bar of the
Philippines.
8 Rollo, p. 44.
9 Id., at pp. 110-120.
249
VOL. 744, DECEMBER 10, 2014
249
Foster vs. Agtang
husband the sum of P100,000.00 and P22,000.00, respectively, with interest at the rate of
12% per annum from December 8, 2011 until fully paid, plus cost of suit.10
Complainant’s Position
From the records, it appears that complainant was referred to respondent in connection with
her legal problem regarding a deed of absolute sale she entered into with Tierra Realty,
which respondent had notarized. After their discussion, complainant agreed to engage his
legal services for the filing of the appropriate case in court, for which they signed a contract.
Complainant paid respondent P20,000.00 as acceptance fee and P5,000.00 for incidental
expenses.11
On September 28, 2009, respondent wrote a letter12 to Tropical Villas Subdivision in rela-
tion to the legal problem referred by complainant. He then visited the latter in her home and
asked for a loan of P100,000.00, payable in sixty (60) days, for the repair of his car. Com-
plainant, having trust and confidence on respondent being her lawyer, agreed to lend the
amount without interest. A promissory note13 evidenced the loan.
In November 2009, complainant became aware that Tierra Realty was attempting to transfer
to its name a lot she had previously purchased. She referred the matter to respondent who
recommended the immediate filing of a case for reformation of contract with damages. On
November 8, 2009, respondent requested and thereafter received from complainant the
amount of P150,000.00, as filing fee.14 When asked about the exorbitant amount, respond-
ent cited the high value of the land and the sheriffs’ travel expenses and accommodations in
_______________
10 Id.
11 Id., at p. 11.
12 Id., at pp. 12-13.
13 Id., at p. 14.
14 Id., at p. 15.
250
250
SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
Manila, for the service of the summons to the defendant corporation. Later, complainant
confirmed that the fees paid for the filing of Civil Case No. 14791-65, entitled Erlinda Foster
v. Tierra Realty and Development Corporation, only amounted to P22,410.00 per trial court
records.15
During a conversation with the Registrar of Deeds, complainant also discovered that re-
spondent was the one who notarized the document being questioned in the civil case she
filed. When asked about this, respondent merely replied that he would take a collaborating
counsel to handle complainant’s case. Upon reading a copy of the complaint filed by re-
spondent with the trial court, complainant noticed that: 1] the major differences in the doc-
uments issued by Tierra Realty were not alleged; 2] the contract to buy and sell and the deed
of conditional sale were not attached thereto; 3] the complaint discussed the method of pay-
ment which was not the point of contention in the case; and 4] the very anomalies she com-
plained of were not mentioned. Respondent, however, assured her that those matters could
be brought up during the hearings.
On April 23, 2010, respondent wrote to complainant, requesting that the latter extend to him
the amount of P70,000.00 or P50,000.00 “in the moment of urgency or emergency.”16 Com-
plainant obliged the request and gave respondent the sum of P22,000.00.
On August 31, 2010, respondent came to complainant’s house and demanded the sum of
P50,000.00, purportedly to be given to the judge in exchange for a favorable ruling. Com-
plainant expressed her misgivings on this proposition but she eventually gave the amount of
P25,000.00 which was covered by a receipt,17 stating that “it is understood that the balance
of P25,000.00 shall be paid later after favorable judgment for
_______________
15 Id., at p. 16.
16 Id., at p. 29.
17 Id., at p. 31.
251
VOL. 744, DECEMBER 10, 2014
251
Foster vs. Agtang
plaintiff Erlinda Foster.” On November 2, 2010, respondent insisted that the remaining
amount be given by complainant prior to the next hearing of the case, because the judge was
allegedly asking for the balance. Yet again, complainant handed to respondent the amount
of P25,000.00.18
On September 29, 2010, complainant’s case was dismissed. Not having been notified by
respondent, complainant learned of the dismissal on December 14, 2010, when she person-
ally checked the status of the case with the court. She went to the office of respondent, but
he was not there. Instead, one of the office staff gave her a copy of the order of dismissal.
On December 15, 2010, respondent visited complainant and gave her a copy of the motion
for reconsideration. On January 15, 2011, complainant went to see respondent and requested
him to prepare a reply to the comment filed by Tierra Realty on the motion for reconsidera-
tion; to include additional facts because the Land Registration Authority would not accept
the documents unless these were amended; and to make the additional averment that the
defendant was using false documents.
On January 18, 2011, respondent’s driver delivered to complainant a copy of the reply with
a message from him that the matters she requested to be included were mentioned therein.
Upon reading the same, however, complainant discovered that these matters were not so
included. On the same occasion, the driver also asked for P2,500.00 on respondent’s di-
rective for the reimbursement of the value of a bottle of wine given to the judge as a present.
Complainant was also told that oral arguments on the case had been set the following
month.19
On February 2, 2011, complainant decided to terminate the services of respondent as her
counsel and wrote him a letter
_______________
18 Id., at pp. 31-32.
19 Id., at p. 101.
252
252
SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
of termination,20 after her friend gave her copies of documents showing that respondent had
been acquainted with Tierra Realty since December 2007. Subsequently, complainant wrote
to respondent, requesting him to pay her the amounts he received from her less the contract
fee and the actual cost of the filing fees. Respondent never replied.
Respondent’s Position
In his Answer,21 respondent alleged that he was 72 years old and had been engaged in the
practice of law since March 1972, and was President of the IBP Ilocos Norte Chapter from
1998 to 1999. He admitted the fact that he notarized the Deed of Absolute Sale subject of
complainant’s case, but he qualified that he was not paid his notarial fees therefor. He like-
wise admitted acting as counsel for complainant for which he claimed to have received
P10,000.00 as acceptance fee and P5,000.00 for incidental fees. Anent the loan of
P100,000.00, respondent averred that it was complainant, at the behest of her husband, who
willingly offered the amount to him for his patience in visiting them at home and for his
services. The transaction was declared as “no loan” and he was told not to worry about its
payment. As regards the amount of P150,000.00 he received for filing fees, respondent
claimed that the said amount was suggested by the complainant herself who was persistent
in covering the incidental expenses in the handling of the case. He denied having said that
the sheriffs of the court would need the money for their hotel accommodations. Complain-
ant’s husband approved of the amount. In the same vein, respondent denied having asked
for a loan of P50,000.00 and having received P22,000.00 from complainant. He also denied
having told her that the case would be discussed with the judge who would rule in their favor
at the very next hearing. Instead, it was complainant who was both-
_______________
20 Id., at p. 33.
21 Id., at pp. 45-49.
253
VOL. 744, DECEMBER 10, 2014
253
Foster vs. Agtang
ered by the possibility that the other party would befriend the judge. He never said that he
would personally present a bottle of wine to the judge.
Further, respondent belied the Registrar’s comment as to his representation of Tierra Realty
in the past. Respondent saw nothing wrong in this situation since complainant was fully
aware that another counsel was assisting him in the handling of cases. Having been fully
informed of the nature of her cause of action and the consequences of the suit, complainant
was aware of the applicable law on reformation of contracts. Finally, by way of counter-
claim, respondent demanded just compensation for the services he had rendered in other
cases for the complainant.
Reply of Complainant
In her Reply,22 complainant mainly countered respondent’s defenses by making reference
to the receipts in her possession, all evidencing that respondent accepted the amounts men-
tioned in the complaint. Complainant also emphasized that respondent and Tierra Realty had
relations long before she met him. While respondent was employed as Provincial Legal Of-
ficer of the Provincial Government of Ilocos Norte, he was involved in the preparation of
several documents involving Flying V, an oil company owned by Ernest Villavicencio, who
likewise owned Tierra Realty. Complainant insisted that the amount of P100,000.00 she ex-
tended to respondent was never considered as “no loan.”
On June 26, 2012, complainant furnished the Investigating Commissioner copies of the Res-
olution, dated June 20, 2012, issued by the Office of the City Prosecutor of Laoag City,
finding probable cause against respondent for estafa.23
_______________
22 Id., at pp. 86-97.
23 Id., at pp. 136-139.
254
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SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
Findings and Recommendation of the IBP
In its July 3, 2012 Report and Recommendation,24 the Investigating Commissioner found
respondent guilty of ethical impropriety and recommended his suspension from the practice
of law for one (1) year.
In its September 28, 2013 Resolution, the IBP-BOG adopted and approved with modifica-
tion the recommendation of suspension by the Investigating Commissioner and ordered re-
spondent to return to complainant: 1) his loan of P122,000.00; and 2) the balance of the
filing fee amounting to P127,590.00.
Respondent received a copy of the said resolution on January 16, 2014 to which he filed a
motion for reconsideration.25 Complainant filed her opposition thereto, informing the IBP-
BOG that an information charging respondent for estafa had already been filed in court and
that a corresponding order for his arrest had been issued.26
In its March 23, 2014 Resolution, the IBP-BOG denied respondent’s motion for reconsider-
ation but modified the penalty of his suspension from the practice of law by reducing it from
one (1) year to three (3) months. Respondent was likewise ordered to return the balance of
the filing fee received from complainant amounting to P127,590.00.
No petition for review was filed with the Court.
The only issue in this case is whether respondent violated the Code of Professional Respon-
sibility (CPR).
The Court’s Ruling
The Court sustains the findings and recommendation of the Investigating Commissioner
with respect to respondent’s
_______________
24 Id., at pp. 145-161.
25 Id., at pp. 162-165.
26 Id., at pp. 168-179.
255
VOL. 744, DECEMBER 10, 2014
255
Foster vs. Agtang
violation of Rules 1 and 16 of the CPR. The Court, however, modifies the conclusion on his
alleged violation of Rule 15, on representing conflicting interests. The Court also differs on
the penalty.
Rule 1.0, Canon 1 of the CPR, provides that “[a] lawyer shall not engage in unlawful, dis-
honest, immoral or deceitful conduct.” It is well-established that a lawyer’s conduct is “not
confined to the performance of his professional duties. A lawyer may be disciplined for
misconduct committed either in his professional or private capacity. The test is whether his
conduct shows him to be wanting in moral character, honesty, probity, and good demeanor,
or whether it renders him unworthy to continue as an officer of the court.”27
In this case, respondent is guilty of engaging in dishonest and deceitful conduct, both in his
professional and private capacity. As a lawyer, he clearly misled complainant into believing
that the filing fees for her case were worth more than the prescribed amount in the rules, due
to feigned reasons such as the high value of the land involved and the extra expenses to be
incurred by court employees. In other words, he resorted to overpricing, an act customarily
related to depravity and dishonesty. He demanded the amount of P150,000.00 as filing fee,
when in truth, the same amounted only to P22,410.00. His defense that it was complainant
who suggested that amount deserves no iota of credence. For one, it is highly improbable
that complainant, who was then plagued with the rigors of litigation, would propose such
amount that would further burden her financial resources. Assuming that the complainant
was more than willing to shell out an exorbitant amount just to initiate her complaint with
the trial court, still, respondent should not have accepted the excessive amount. As a lawyer,
he is not only expected to be knowledgeable in the matter of filing fees, but he is likewise
duty-
_______________
27 Navarro v. Solidum, Jr., A.C. No. 9872, January 28, 2014, 714 SCRA 586, citing Roa v.
Moreno, A.C. No. 8382, April 21, 2010, 618 SCRA 693, 699.
256
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SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
bound to disclose to his client the actual amount due, consistent with the values of honesty
and good faith expected of all members of the legal profession.
Moreover, the “fiduciary nature of the relationship between the counsel and his client im-
poses on the lawyer the duty to account for the money or property collected or received for
or from his client.”28 Money entrusted to a lawyer for a specific purpose but not used for
the purpose should be immediately returned. A lawyer’s failure to return upon demand the
funds held by him on behalf of his client gives rise to the presumption that he has appropri-
ated the same for his own use in violation of the trust reposed in him by his client. Such act
is a gross violation of general morality as well as of professional ethics. It impairs public
confidence in the legal profession and deserves punishment.29
It is clear that respondent failed to fulfill this duty. As pointed out, he received various
amounts from complainant but he could not account for all of them. Worse, he could not
deny the authenticity of the receipts presented by complainant. Upon demand, he failed to
return the excess money from the alleged filing fees and other expenses. His possession
gives rise to the presumption that he has misappropriated it for his own use to the prejudice
of, and in violation of the trust reposed in him by, the client.30 When a lawyer receives
money from the client for a particular purpose, the lawyer is bound to render an accounting
to the client showing that the money was spent for the intended purpose. Consequently, if
the lawyer does not use the money for the intended purpose, the lawyer must immediately
return the money to the client.31
_______________
28 Belleza v. Macasa, 611 Phil. 179, 190; 593 SCRA 549, 560 (2009).
29 Dhaliwal v. Dumaguing, A.C. No. 9390, August 1, 2012, 678 SCRA 68.
30 Belleza v. Macasa, supra at p. 191; p. 561.
31 Freeman v. Reyes, A.C. No. 6246, November 15, 2011, 660 SCRA 48, 63.
257
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Foster vs. Agtang
Somewhat showing a propensity to demand excessive and unwarranted amounts from his
client, respondent displayed a reprehensible conduct when he asked for the amount of
P50,000.00 as “representation expenses” allegedly for the benefit of the judge handling the
case, in exchange for a favorable decision. Respondent himself signed a receipt showing that
he initially took the amount of P25,000.00 and, worse, he subsequently demanded and re-
ceived the other half of the amount at the time the case had already been dismissed. Un-
doubtedly, this act is tantamount to gross misconduct that necessarily warrants the supreme
penalty of disbarment. The act of demanding a sum of money from his client, purportedly to
be used as a bribe to ensure a positive outcome of a case, is not only an abuse of his client’s
trust but an overt act of undermining the trust and faith of the public in the legal profession
and the entire Judiciary. This is the height of indecency. As officers of the court, lawyers
owe their utmost fidelity to public service and the administration of justice. In no way should
a lawyer indulge in any act that would damage the image of judges, lest the public’s percep-
tion of the dispensation of justice be overshadowed by iniquitous doubts. The denial of re-
spondent and his claim that the amount was given gratuitously would not excuse him from
any liability. The absence of proof that the said amount was indeed used as a bribe is of no
moment. To tolerate respondent’s actuations would seriously erode the public’s trust in the
courts.
As it turned out, complainant’s case was dismissed as early as September 29, 2010. At this
juncture, respondent proved himself to be negligent in his duty as he failed to inform his
client of the status of the case, and left the client to personally inquire with the court. Surely,
respondent was not only guilty of misconduct but was also remiss in his duty to his client.
Respondent’s unbecoming conduct towards complainant did not stop here. Records reveal
that he likewise violated Rule 16.04, Canon 16 of the CPR, which states that “[a] lawyer
shall not borrow money from his client unless the client’s
258
258
SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
interests are fully protected by the nature of the case or by independent advice. Neither shall
a lawyer lend money to a client except, when in the interest of justice, he has to advance
necessary expenses in a legal matter he is handling for the client.” In his private capacity, he
requested from his client, not just one, but two loans of considerable amounts. The first time,
he visited his client in her home and borrowed P100,000.00 for the repair of his car; and the
next time, he implored her to extend to him a loan of P70,000.00 or P50,000.00 “in the
moment of urgency or emergency” but was only given P22,000.00 by complainant. These
transactions were evidenced by promissory notes and receipts, the authenticity of which was
never questioned by respondent. These acts were committed by respondent in his private
capacity, seemingly unrelated to his relationship with complainant, but were indubitably ac-
quiesced to by complainant because of the trust and confidence reposed in him as a lawyer.
Nowhere in the records, particularly in the defenses raised by respondent, was it implied that
these loans fell within the exceptions provided by the rules. The loans of P100,000.00 and
P22,000.00 were surely not protected by the nature of the case or by independent advice.
Respondent’s assertion that the amounts were given to him out of the liberality of complain-
ant and were, thus, considered as “no loan,” does not justify his inappropriate behavior. The
acts of requesting and receiving money as loans from his client and thereafter failing to pay
the same are indicative of his lack of integrity and sense of fair dealing. Up to the present,
respondent has not yet paid his obligations to complainant.
Time and again, the Court has consistently held that deliberate failure to pay just debts con-
stitutes gross misconduct, for which a lawyer may be sanctioned with suspension from the
practice of law. Lawyers are instruments for the administration of justice and vanguards of
our legal system. They are expected to maintain not only legal proficiency, but also a high
standard of morality, honesty, integrity and fair dealing so that the people’s faith and confi-
dence in the judicial system
259
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259
Foster vs. Agtang
is ensured. They must, at all times, faithfully perform their duties to society, to the bar, the
courts and their clients, which include prompt payment of financial obligations.32
Verily, when the Code or the Rules speaks of “conduct” or “misconduct,” the reference is
not confined to one’s behavior exhibited in connection with the performance of the lawyer’s
professional duties, but also covers any misconduct which, albeit unrelated to the actual
practice of his profession, would show him to be unfit for the office and unworthy of the
privileges which his license and the law vest him with. Unfortunately, respondent must be
found guilty of misconduct on both scores.
With respect to respondent’s alleged representation of conflicting interests, the Court finds
it proper to modify the findings of the Investigating Commissioner who concluded that com-
plainant presented insufficient evidence of respondent’s “lawyering” for the opposing party,
Tierra Realty.
Rule 15.03, Canon 15 of the CPR, provides that “[a] lawyer shall not represent conflicting
interest except by written consent of all concerned given after a full disclosure of the facts.”
The relationship between a lawyer and his/her client should ideally be imbued with the high-
est level of trust and confidence. This is the standard of confidentiality that must prevail to
promote a full disclosure of the client’s most confidential information to his/her lawyer for
an unhampered exchange of information between them. Needless to state, a client can only
entrust confidential information to his/her lawyer based on an expectation from the lawyer
of utmost secrecy and discretion; the lawyer, for his part, is duty-bound to observe candor,
fairness and loyalty in all dealings and transactions with the client. Part of the lawyer’s duty
in this
_______________
32 Yuhico v. Gutierrez, A.C. No. 8391, November 23, 2010, 635 SCRA 684, 688.
260
260
SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
regard is to avoid representing conflicting interests.33 Thus, even if lucrative fees offered
by prospective clients are at stake, a lawyer must decline professional employment if the
same would trigger the violation of the prohibition against conflict of interest. The only ex-
ception provided in the rules is a written consent from all the parties after full disclosure.
The Court deviates from the findings of the IBP. There is substantial evidence to hold re-
spondent liable for representing conflicting interests in handling the case of complainant
against Tierra Realty, a corporation to which he had rendered services in the past. The Court
cannot ignore the fact that respondent admitted to having notarized the deed of sale, which
was the very document being questioned in complainant’s case. While the Investigating
Commissioner found that the complaint in Civil Case No. 14791-65 did not question the
validity of the said contract, and that only the intentions of the parties as to some provisions
thereof were challenged, the Court still finds that the purpose for which the proscription was
made exists. The Court cannot brush aside the dissatisfied observations of the complainant
as to the allegations lacking in the complaint against Tierra Realty and the clear admission
of respondent that he was the one who notarized the assailed document. Regardless of
whether it was the validity of the entire document or the intention of the parties as to some
of its provisions raised, respondent fell short of prudence in action when he accepted com-
plainant’s case, knowing fully that he was involved in the execution of the very transaction
under question. Neither his unpaid notarial fees nor the participation of a collaborating coun-
sel would excuse him from such indiscretion. It is apparent that respondent was retained by
clients who had close dealings with each other. More significantly, there is no record of any
written consent from any of the parties involved.
_______________
33 Aniñon v. Sabitsana, Jr., A.C. No. 5098, April 11, 2012, 669 SCRA 76, 81.
261
VOL. 744, DECEMBER 10, 2014
261
Foster vs. Agtang
The representation of conflicting interests is prohibited “not only because the relation of
attorney and client is one of trust and confidence of the highest degree, but also because of
the principles of public policy and good taste. An attorney has the duty to deserve the fullest
confidence of his client and represent him with undivided loyalty. Once this confidence is
abused or violated the entire profession suffers.”34
Penalties and Pecuniary Liabilities
A member of the Bar may be penalized, even disbarred or suspended from his office as an
attorney, for violation of the lawyer’s oath and/or for breach of the ethics of the legal pro-
fession as embodied in the CPR.35 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.”36 The appropriate penalty for an errant lawyer depends on the exercise of
sound judicial discretion based on the surrounding facts.37
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 au-
thority. A lawyer may be disbarred or suspended for misconduct, whether in his professional
or private capacity, which shows him to be wanting in
_______________
34 Tiania v. Ocampo, A.C. No. 2285, August 12, 1991, 200 SCRA 472, citing Hilado v.
David, 84 Phil. 576, 579 (1949).
35 Catu v. Rellosa, 569 Phil. 539, 550; 546 SCRA 209, 221 (2008).
36 Barcenas v. Alvero, A.C. No. 8159, April 23, 2010, 619 SCRA 1, 11.
37 Lim-Santiago v. Sagucio, 520 Phil. 538, 552; 486 SCRA 10, 25 (2006).
262
262
SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
moral character, honesty, probity and good demeanor, or unworthy to continue as an officer
of the court.
Here, respondent demonstrated not just a negligent disregard of his duties as a lawyer but a
wanton betrayal of the trust of his client and, in general, the public. Accordingly, the Court
finds that the suspension for three (3) months recommended by the IBP-BOG is not suffi-
cient 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 incom-
petence 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.
For taking advantage of the unfortunate situation of the complainant, for engaging in dis-
honest and deceitful conduct, for maligning the judge and the Judiciary, for undermining the
trust and faith of the public in the legal profession and the entire judiciary, and for represent-
ing conflicting interests, respondent deserves no less than the penalty of disbarment.38
Notably, the Court cannot order respondent to return the money he borrowed from com-
plainant in his private capacity. In Tria-Samonte v. Obias,39 the Court held that it cannot
order the lawyer to return money to complainant if he or she acted in a private capacity
because its findings in administrative cases have no bearing on liabilities which have no
intrinsic link to the lawyer’s professional engagement. In disciplinary proceedings against
lawyers, the only issue is whether the officer of the court is still fit to be allowed to continue
as a member of the Bar. The only concern of the Court is the determination of respondent’s
administrative liability. Its findings have no material bearing on other judicial actions which
the parties may choose against each other.
_______________
38 Pacana, Jr. v. Pascual-Lopez, 611 Phil. 399, 410; 594 SCRA 1, 13 (2009).
39 A.C. No. 4945, October 8, 2013, 707 SCRA 1.
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VOL. 744, DECEMBER 10, 2014
263
Foster vs. Agtang
To rule otherwise would in effect deprive respondent of his right to appeal since administra-
tive cases are filed directly with the Court. Furthermore, the quantum of evidence required
in civil cases is different from the quantum of evidence required in administrative cases. In
civil cases, preponderance of evidence is required. Preponderance of evidence is “a phrase
which, in the last analysis, means probability of the truth. It is evidence which is more con-
vincing to the court as worthier of belief than that which is offered in opposition thereto.”40
In administrative cases, only substantial evidence is needed. Substantial evidence, which is
more than a mere scintilla but is such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion, would suffice to hold one administratively liable.41
Furthermore, the Court has to consider the prescriptive period applicable to civil cases in
contrast to administrative cases which are, as a rule, imprescriptible.42
Thus, the IBP-BOG was correct in ordering respondent to return the amount of P127,590.00
representing the balance of the filing fees he received from complainant, as this was inti-
mately related to the lawyer-client relationship between them. Similar to this is the amount
of P50,000.00 which respondent received from complainant, as representation expenses for
the handling of the civil case and for the purported purchase of a bottle of wine for the judge.
These were connected to his professional relationship with the complainant. While respond-
ent’s deplorable act of requesting the said amount for the benefit of the judge is stained with
mendacity, respondent should be ordered to return the same as it was borne out of their
professional relationship. As to his other
_______________
40 Go v. Court of Appeals, 403 Phil. 883, 890-891; 351 SCRA 145, 152 (2001).
41 Tapiador v. Office of the Ombudsman, 429 Phil. 47, 54; 379 SCRA 322, 329 (2002).
42 Frias v. Bautista-Lozada, 523 Phil. 17, 19; 489 SCRA 345, 347 (2006).
264
264
SUPREME COURT REPORTS ANNOTATED
Foster vs. Agtang
obligations, respondent was already adjudged as liable for the personal loans he contracted
with complainant, per the small claims cases filed against him.
All told, in the exercise of its disciplinary powers, “the Court merely calls upon a member
of the Bar to account for his actuations as an officer of the Court with the end in view of
preserving the purity of the legal profession.”43 The Court likewise aims to ensure the
proper and honest administration of justice by “purging the profession of members who, by
their misconduct, have proven themselves no longer worthy to be entrusted with the duties
and responsibilities of an attorney.”44
WHEREFORE, finding the respondent, Atty. Jaime V. Agtang, GUILTY of gross miscon-
duct in violation of the Code of Professional Responsibility, the Court hereby DISBARS
him from the practice of law and ORDERS him to pay the complainant, Erlinda Foster, the
amounts of P127,590.00, P50,000.00 and P2,500.00.
Let a copy of this Decision be sent to the Office of the Bar Confidant, the Integrated Bar of
the Philippines and the Office of the Court Administrator to be circulated to all courts.
SO ORDERED.
Sereno (CJ.), Carpio, Velasco, Jr., Leonardo-De Castro, Del Castillo, Villarama, Jr., Men-
doza, Reyes, Perlas-Bernabe and Leonen, JJ., concur.
Brion, J., On Leave.
Peralta, J., No Part.
Bersamin, Perez and Jardeleza, JJ., On Official Leave.
_______________
43 Suzuki v. Tiamson, 508 Phil. 130, 142; 471 SCRA 129, 141 (2005).
44 Id.
265
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265
Foster vs. Agtang
Atty. Jaime V. Agtang disbarred for gross misconduct in violation of the Code of Profes-
sional Responsibility. He is ordered to pay complainant the amounts of P127,590.00;
P50,000.00; and P2,500.00.
Notes.—A complaint for disbarment shall state clearly and concisely the facts complained
of and shall be supported by affidavits of persons having personal knowledge of the facts
therein alleged and/or by such documents as may substantiate such facts. (International Mi-
litia of People against Corruption and Terrorism vs. Davide, Jr., 512 SCRA 194 [2007])
The procedural requirement observed in ordinary civil proceedings that only the real party-
in-interest must initiate the suit does not apply in disbarment cases. (Figueras vs. Jimenez,
718 SCRA 450 [2014])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Foster vs. Agtang, 744
SCRA 242, A.C. No. 10579 December 10, 2014
VOL. 355, MARCH 26, 2001
285
Malcampo-Sin vs. Sin
G.R. No. 137590. March 26, 2001.*
FLORENCE MALCAMPO-SIN, petitioner, vs. PHILIPP T. SIN, respondent.
Marriage; Husband and Wife; Annulment of Marriage; The protection of marriage as a sa-
cred institution requires not just the defense of a true and genuine union but the exposure of
an invalid one as well.—It can be argued that since the lower court dismissed the petition,
the evil sought to be prevented (i.e., dissolution of the marriage) did not come about, hence,
the lack of participation of the State was cured. Not so. The task of protecting marriage as
an inviolable social institution requires vigilant and zealous participation and not mere pro-
forma compliance. The protection of marriage as a sacred institution requires not just the
defense of a true and genuine union but the exposure of an invalid one as well. This is made
clear by the following pronouncement: “(8) The trial court must order the prosecuting attor-
ney or fiscal and the Solicitor General to appear as counsel for the state. No decision shall
be handed down unless the Solicitor General issues a certification, which will be quoted in
the decision, briefly stating therein his reasons for his agreement or opposition as the case
may be, to the petition. The Solicitor General shall discharge the equivalent function of the
defensor vinculi contemplated under Canon 1095 (italics ours).”
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Romeo B. Igot Law Offices for petitioner.
Margaret Chua for respondent.
PARDO, J.:
The Family Code emphasizes the permanent nature of marriage, hailing it as the foundation
of the family.1 It is this inviolability which is central to our traditional and religious concepts
of morality and provides the very bedrock on which our society finds stabil-
________________
* FIRST DIVISION.
1 Article I, Family Code of the Philippines.
286
286
SUPREME COURT REPORTS ANNOTATED
Malcampo-Sin vs. Sin
ity.2 Marriage is immutable and when both spouses give their consent to enter it, their con-
sent becomes irrevocable, unchanged even by their independent wills.
However, this inviolability depends on whether the marriage exists and is valid. If it is void
ab initio, the “permanence” of the union becomes irrelevant, and the Court can step in to
declare it so. Article 36 of the Family Code is the justification.3 Where it applies and is duly
proven, a judicial declaration can free the parties from the rights, obligations, burdens and
consequences stemming from their marriage.
A declaration of nullity of marriage under Article 36 of the Family Code requires the appli-
cation of procedural and substantive guidelines. While compliance with these requirements
mostly devolves upon petitioner, the State is likewise mandated to actively intervene in the
procedure. Should there be non-compliance by the State with its statutory duty, there is a
need to remand the case to the lower court for proper trial.
The Case
What is before the Court4 is an appeal from a decision of the Court of Appeals5 which
affirmed the decision of the Regional Trial
_______________
2 Article XV, Section 1, “The State recognizes the Filipino family as the foundation of the
nation. Accordingly, it shall strengthen, its solidarity and actively promote its total develop-
ment.” Section 2, “Marriage, as an inviolable social institution, is the foundation of the fam-
ily and shall be protected by the State.”
3 Article 36, Family Code of the Philippines, “A marriage contracted by any party who, at
the time of the celebration, was psychologically incapacitated to comply with the essential
marital obligations of marriage, shall likewise be void even if such incapacity becomes man-
ifest only after its solemnization, x x x”
4 Via an appeal under Rule 45, 1997 Rules of Civil Procedure, as amended. Malcampo-Sin vs. Sin
5 In CA-G.R. CV No. 51304, promulgated on April 30, 1998, Callejo, Sr., ponente, Umali Hence, this appeal.14
and Gutierrez, JJ., (now an Associate Justice of this Court), concurring. The Court’s Ruling
287 We note that throughout the trial in the lower court, the State did not participate in the pro-
ceedings. While Fiscal Jose Danilo C. Jabson15 filed with the trial court a manifestation
VOL. 355, MARCH 26, 2001 dated November 16, 1994, stating that he found no collusion between the parties,16 he did
287 not actively participate therein. Other than entering his appearance at certain hearings of the
Malcampo-Sin vs. Sin case, nothing more was heard from him. Neither did the presiding Judge take any step to
Court, Branch 158, Pasig City6 dismissing petitioner Florence Malcampo-Sin’s (hereafter encourage the fiscal to contribute to the proceedings.
“Florence”) petition for declaration of nullity of marriage due to psychological incapacity The Family Code mandates:
for insufficiency of evidence. “Article 48. In all cases of annulment or declaration of absolute nullity of marriage, the Court
The Facts shall order the prosecuting attorney or fiscal assigned to it to appear on behalf of the State
On January 4, 1987, after a two-year courtship and engagement, Florence and respondent to take steps to prevent collusion between the parties and to take care that evidence is not
Philipp T. Sin (hereafter “Philipp”), a Portugese citizen, were married at St. Jude Catholic fabricated or suppressed (italics ours).
Parish in San Miguel, Manila.7 “In the cases referred to in the preceeding paragraph, no judgment shall be based upon a
On September 20, 1994, Florence filed with the Regional Trial Court, Branch 158, Pasig stipulation of facts or confession of judgment.”
City, a complaint for “declaration of nullity of marriage” against Philipp.8 Trial ensued and It can be argued that since the lower court dismissed the petition, the evil sought to be pre-
the parties presented their respective documentary and testimonial evidence. vented (i.e., dissolution of the marriage) did not come about, hence, the lack of participation
On June 16, 1995, the trial court dismissed Florence’s petition.9 of the State was cured. Not so. The task of protecting marriage as an inviolable social insti-
On December 19, 1995, Florence filed with the trial court a notice of appeal to the Court of tution requires vigilant and zealous participation and not mere pro-forma compliance. The
Appeals.10 protection of marriage as a sacred institution requires not just the defense of a true and gen-
After due proceedings, on April 30, 1998, the Court of Appeals promulgated its decision, uine union but the exposure of an invalid one as well. This is made clear by the following
the dispositive portion of which reads: pronouncement:
“IN THE LIGHT OF ALL THE FOREGOING, the Appeal is DISMISSED. The Decision “(8) The trial court must order the prosecuting attorney or fiscal and the Solicitor General to
appealed from is AFFIRMED. Cost against the Appellant.”11 appear as counsel for the state. No decision shall be handed down unless the Solicitor Gen-
On June 23, 1998, petitioner filed with the Court of Appeals a motion for reconsideration of eral issues a certification,
the aforequoted decision.12 ______________
On January 19, 1999, the Court of Appeals denied petitioner’s motion for reconsideration.13
______________ 14 On August 30, 1999, we resolved to give due course to the petition, Rollo, p. 144.
15 4th Asst. Provincial Prosecutor.
6 In Civil Case No. 3190, dated June 16, 1995, Judge Jose S. Hernandez, presiding. 16 Regional Trial Court Record, p. 17.
7 Regional Trial Court Record, p. 37. 289
8 Petition, Rollo, p. 16.
9 Regional Trial Court Record, pp. 81-83. VOL. 355, MARCH 26, 2001
10 Docketed as CA-G.R. CV No. 51304, CA Rollo, p. 3. 289
11 Petition, Annex “A,” Rollo, p. 45. Malcampo-Sin vs. Sin
12 Petition, Rollo, p. 15. which will be quoted in the decision,17 briefly stating therein his reasons for his agreement
13 Petition, Rollo, p. 16, CA Rollo, p. 142. or opposition as the case may be, to the petition. The Solicitor-General shall discharge the
288 equivalent function of the defensor vinculi contemplated under Canon 1095 (italics
ours).”18
288 The records are bereft of any evidence that the State participated in the prosecution of the
SUPREME COURT REPORTS ANNOTATED case not just at the trial level but on appeal with the Court of Appeals as well. Other than the
“manifestation” filed with the trial court on November 16, 1994, the State did not file any
pleading, motion or position paper, at any stage of the proceedings.
In Republic of the Philippines v. Erlinda Matias Dagdag,19 while we upheld the validity of
the marriage, we nevertheless characterized the decision of the trial court as “prematurely
rendered” since the investigating prosecutor was not given an opportunity to present contro-
verting evidence before the judgment was rendered. This stresses the importance of the par-
ticipation of the State.
Having so ruled, we decline to rule on the factual disputes of the case, this being within the
province of the trial court upon proper re-trial.
Obiter Dictum
For purposes of re-trial, we guide the parties thus: In Republic vs. Court of Appeals,20 the
guidelines in the interpretation and application of Article 36 of the Family Code are as fol-
lows (omitting guideline [8] in the enumeration as it was already earlier quoted):
“(1) The burden of proof to show the nullity of the marriage belongs to the plaintiff. Any
doubt should be resolved in favor of the existence and continuation of the marriage and
against its dissolution and nullity. This is rooted in the fact that both our Constitution and
our laws cherish the validity of marriage and unity of the family. Thus, our Constitution de-
_______________
17 No such certification appears in the decisions of the trial court and the Court of Appeals.
18 Republic v. Court of Appeals, 335 Phil. 664, 679-680; 268 SCRA 198 (1997).
19 G.R. No. 109975, February 9, 2001, 351 SCRA 425.
20 Supra, Note 18, pp. 676-678.
290
290
SUPREME COURT REPORTS ANNOTATED
Malcampo-Sin vs. Sin
votes an entire Article on the Family, recognizing it “as the foundation of the nation.” it
decrees marriage as legally “inviolable,” thereby protecting it from dissolution at the whim
of the parties. Both the family and marriage are to be “protected” by the state. The Family
Code echoes this constitutional edict on marriage and the family and emphasizes their per-
manence, inviolability and solidarity.
“(2) The root cause of the psychological incapacity must be: a) medically or clinically iden-
tified, b) alleged in the complaint, c) sufficiently proven by experts and d) clearly explained
in the decision. Article 36 of the Family Code requires that the incapacity must be psycho-
logical—not physical, although its manifestations and/or symptoms may be physical. The
evidence must convince the court that the parties, or one of them, was mentally or psychi-
cally (sic) ill to such an extent that the person could not have known the obligations he was
assuming, or knowing them, could not have given valid assumption thereof. Although no
example of such incapacity need be given here so as not to limit the application of the pro-
vision under the principle of ejusdem generis, nevertheless such root cause must be identi-
fied as a psychological illness and its incapacitating nature fully explained. Expert evidence
may be given by qualified psychiatrists and clinical psychologists.
“(3) The incapacity must be proven to be existing at “the time of the celebration” of the
marriage. The evidence must show that the illness was existing when the parties exchanged
their “I do’s.” The manifestation of the illness need not be perceivable at such time, but the
illness itself must have attached at such moment, or prior thereto.
“(4) Such incapacity must also be shown to be medically or clinically permanent or incura-
ble. Such incurability may be absolute or even relative only in regard to the other spouse,
not necessarily absolutely against everyone of the same sex. Furthermore, such incapacity
must be relevant to the assumption of marriage obligations, not necessarily to those not re-
lated to marriage, like the exercise of a profession or employment in a job. Hence, a pedia-
trician may be effective in diagnosing illnesses of children and prescribing medicine to cure
them but may not be psychologically capacitated to procreate, bear and raise his/her own
children as an essential obligation of marriage.
“(5) Such illness must be grave enough to bring about the disability of the party to assume
the essential obligations of marriage. Thus, “mild characteriological peculiarities, mood
changes, occasional emotional outbursts” cannot be accepted as root causes. The illness must
be shown as downright incapacity or inability, not refusal, neglect or difficulty, much less
ill will. In other words, there is a natal or supervening disabling
291
VOL. 355, MARCH 26, 2001
291
Malcampo-Sin vs. Sin
factor in the person, an adverse integral element in the personality structure that effectively
incapacitates the person from really accepting and thereby complying with the obligations
essential to marriage.
“(6) The essential marital obligations must be those embraced by Articles 68 up to 71 of the
Family Code as regards the husband and wife as well as Articles 220, 221 and 225 of the
same Code in regard to parents and their children. Such non-complied marital obligation(s)
must also be stated in the petition, proven by evidence and included in the text of the deci-
sion.
“(7) Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic
Church in the Philippines, while not controlling or decisive, should be given great respect
by our courts.”
The Fallo
WHEREFORE, the Court REVERSES and SETS ASIDE the appealed decision of the Court
of Appeals in CA-G.R. CV No. 51304, promulgated On April 30, 1998 and the decision of
the Regional Trial Court, Branch 158, Pasig City in Civil Case No. 3190, dated June 16,
1995.
Let the case be REMANDED to the trial court for proper trial.
No costs.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Puno, Kapunan and Ynares-Santiago, JJ., concur.
Judgments of the Court of Appeals and the trial court reversed and set aside, case remanded
to the latter.
Notes.—A grant of annulment of marriage or legal separation by default is fraught with the
danger of collusion, hence, in all cases for annulment, declaration of nullity of marriage and
legal separation, the prosecuting attorney or fiscal is ordered to appear on behalf of the state
for the purpose of preventing any collusion between the parties and to take care that their
evidence is not fabricated or suppressed. (Tuason vs. Court of Appeals, 256 SCRA 158
[1996])
292
292
SUPREME COURT REPORTS ANNOTATED
Tan vs. Philippine Banking Corporation
The ruling in People v. Mendoza, 95 Phil. 843 (1954) and People v. Aragon, 100 Phil. 1033
(1957) that no judicial decree is necessary to establish the invalidity of a marriage which is
void ab initio has been overturned—the prevailing rule is found in Article 40 of the Family
Code. (Te vs. Court of Appeals, 346 SCRA 327 [2000])
Whether or not psychological incapacity exists in a given case calling for annulment of a
marriage, depends crucially, more than in any field of the law, on the facts of the case, and
in regard to psychological incapacity as a ground for annulment of marriage, it is trite to say
that no case is on “all fours” with another case. (Republic vs. Dagdag, 351 SCRA 425
[2001])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Malcampo-Sin vs. Sin, 355
SCRA 285, G.R. No. 137590 March 26, 2001
A.C. No. 9872. January 28, 2014.*
NATIVIDAD P. NAVARRO and HILDA S. PRESBITERO, complainants, vs. ATTY.
IVAN M. SOLIDUM, JR., respondent.
Attorneys; Legal Ethics; A lawyer may be disciplined for misconduct committed either in
his professional or private capacity.—It is clear that respondent violated Rule 1.01 of the
Code of Professional Responsibility. We have ruled that conduct, as used in the Rule, is not
confined to the performance of a lawyer’s professional duties. A lawyer may be disciplined
for misconduct committed either in his professional or private capacity. The test is whether
his conduct shows him to be wanting in moral character, honesty, probity, and good de-
meanor, or whether it renders him unworthy to continue as an officer of the court.
Same; Attorney-Client Relationship; The fiduciary nature of the relationship between the
counsel and his client imposes on the lawyer the duty to account for the money or property
collected or received for or from his client.—The fiduciary nature of the relationship be-
tween the counsel and his client imposes on the lawyer the duty to account
_______________
* EN BANC.
587
for the money or property collected or received for or from his client. We agree with the
IBP-CBD that respondent failed to fulfill this duty. In this case, the IBP-CBD pointed out
that respondent received various amounts from complainants but he could not account for
all of them.
Same; Legal Ethics; A lawyer’s failure to return the excess money in his possession gives
rise to the presumption that he has misappropriated it for his own use to the prejudice of, and
in violation of the trust reposed in him by, the client.—Clearly, respondent had been negli-
gent in properly accounting for the money he received from his client, Presbitero. Indeed,
his failure to return the excess money in his possession gives rise to the presumption that he
has misappropriated it for his own use to the prejudice of, and in violation of the trust reposed
in him by, the client. Rule 16.04 of the Code of Professional Responsibility provides: Rule
16.04.—A lawyer shall not borrow money from his client unless the client’s interests are
fully protected by the nature of the case or by independent advice. Neither shall a lawyer
lend money to a client except, when in the interest of justice, he has to advance necessary
expenses in a legal matter he is handling for the client.
Same; Same; Code of Professional Responsibility; Respondent violated Rule 16.04 of the
Code of Professional Responsibility, which presumes that the client is disadvantaged by the
lawyer’s ability to use all the legal maneuverings to renege on his obligation.—While re-
spondent’s loan from Presbitero was secured by a MOA, postdated checks and real estate
mortgage, it turned out that respondent misrepresented the value of the property he mort-
gaged and that the checks he issued were not drawn from his account but from that of his
son. Respondent eventually questioned the terms of the MOA that he himself prepared on
the ground that the interest rate imposed on his loan was unconscionable. Finally, the checks
issued by respondent to Presbitero were dishonored because the accounts were already
closed. The interest of his client, Presbitero, as lender in this case, was not fully protected.
Respondent violated Rule 16.04 of the Code of Professional Responsibility, which presumes
that the client is disadvantaged by the lawyer’s ability to use all the legal maneuverings to
renege on his obligation. In his dealings with his client Presbitero, respondent took ad-
vantage of his knowledge of the law as well as the trust and confidence reposed in him by
his client.
588
Same; Disbarment; Respondent employed his knowledge and skill of the law and took ad-
vantage of his client to secure undue gains for himself that warrants his removal from the
practice of law.—We modify the recommendation of the IBP Board of Governors imposing
on respondent the penalty of suspension from the practice of law for two years. Given the
facts of the case, we see no reason to deviate from the recommendation of the IBP-CBD
imposing on respondent the penalty of disbarment. Respondent failed to live up to the high
standard of morality, honesty, integrity, and fair dealing required of him as a member of the
legal profession. Instead, respondent employed his knowledge and skill of the law and took
advantage of his client to secure undue gains for himself that warrants his removal from the
practice of law.
Same; In disciplinary proceedings against lawyers, the only issue is whether the officer of
the court is still fit to be allowed to continue as a member of the Bar.—In disciplinary pro-
ceedings against lawyers, the only issue is whether the officer of the court is still fit to be
allowed to continue as a member of the Bar. Our only concern is the determination of re-
spondent’s administrative liability. Our findings have no material bearing on other judicial
action which the parties may choose to file against each other. Nevertheless, when a lawyer
receives money from a client for a particular purpose involving the client-attorney relation-
ship, he is bound to render an accounting to the client showing that the money was spent for
that particular purpose. If the lawyer does not use the money for the intended purpose, he
must immediately return the money to his client. Respondent was given an opportunity to
render an accounting, and he failed. He must return the full amount of the advances given
him by Presbitero, amounting to P50,000.
ADMINISTRATIVE MATTER in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
Bimbo Lavides for respondent.
PER CURIAM:
This case originated from a complaint for disbarment, dated 26 May 2008, filed by Natividad
P. Navarro (Navarro)
589
and Hilda S. Presbitero (Presbitero) against Atty. Ivan M. Solidum, Jr. (respondent) before
the Integrated Bar of the Philippines Commission on Bar Discipline (IBP-CBD).
From the Report, dated 1 July 2009, of the IBP-CBD, we gathered the following facts of the
case:
On 4 April 2006, respondent signed a retainer agreement with Presbitero to follow up the
release of the payment for the latter’s 2.7-hectare property located in Bacolod which was the
subject of a Voluntary Offer to Sell (VOS) to the Department of Agrarian Reform (DAR).
The agreement also included the payment of the debts of Presbitero’s late husband to the
Philippine National Bank (PNB), the sale of the retained areas of the property, and the col-
lection of the rentals due for the retained areas from their occupants. It appeared that the
DAR was supposed to pay P700,000 for the property but it was mortgaged by Presbitero and
her late husband to PNB for P1,200,000. Presbitero alleged that PNB’s claim had already
prescribed, and she engaged the services of respondent to represent her in the matter. Re-
spondent proposed the filing of a case for quieting of title against PNB. Respondent and
Presbitero agreed to an attorney’s fee of 10% of the proceeds from the VOS or the sale of
the property, with the expenses to be advanced by Presbitero but deductible from respond-
ent’s fees. Respondent received P50,000 from Presbitero, supposedly for the expenses of the
case, but nothing came out of it.
In May 2006, Presbitero’s daughter, Ma. Theresa P. Yulo (Yulo), also engaged respondent’s
services to handle the registration of her 18.85-hectare lot located in Nasud-ong, Caradio-
an, Himamaylan, Negros. Yulo convinced her sister, Navarro, to finance the expenses for
the registration of the property. Respondent undertook to register the property in considera-
tion of 30% of the value of the property once it is registered. Respondent obtained P200,000
from Navarro for the registration expenses. Navarro later learned that the registration decree
over the property was already issued in the name of one Teodoro Yulo. Navarro alleged that
she would not have
590
spent for the registration of the property if respondent only apprised her of the real situation
of the property.
On 25 May 2006, respondent obtained a loan of P1,000,000 from Navarro to finance his
sugar trading business. Respondent and Navarro executed a Memorandum of Agreement
(MOA) and agreed that the loan (a) shall be for a period of one year; (b) shall earn interest
at the rate of 10% per month; and (c) shall be secured by a real estate mortgage over a prop-
erty located in Barangay Alijis, Bacolod City, covered by Transfer Certificate of Title No.
304688. They also agreed that respondent shall issue postdated checks to cover the principal
amount of the loan as well as the interest thereon. Respondent delivered the checks to Na-
varro, drawn against an account in Metrobank, Bacolod City Branch, and signed them in the
presence of Navarro.
In June 2006, respondent obtained an additional loan of P1,000,000 from Navarro, covered
by a second MOA with the same terms and conditions as the first MOA. Respondent sent
Navarro, through a messenger, postdated checks drawn against an account in Bank of Com-
merce, Bacolod City Branch. Respondent likewise discussed with Navarro about securing a
“Tolling Agreement” with Victorias Milling Company, Inc. but no agreement was signed.
At the same time, respondent obtained a loan of P1,000,000 from Presbitero covered by a
third MOA, except that the real estate mortgage was over a 263-square-meter property lo-
cated in Barangay Taculing, Bacolod City. Respondent sent Presbitero postdated checks
drawn against an account in Metrobank, Bacolod City Branch.
Presbitero was dissatisfied with the value of the 263-square-meter property mortgaged under
the third MOA, and respondent promised to execute a real estate mortgage over a 1,000-
square-meter parcel of land adjacent to the 4,000-square-meter property he mortgaged to
Navarro. However, respondent did not execute a deed for the additional security.
591
Respondent paid the loan interest for the first few months. He was able to pay complainants
a total of P900,000. Thereafter, he failed to pay either the principal amount or the interest
thereon. In September 2006, the checks issued by respondent to complainants could no
longer be negotiated because the accounts against which they were drawn were already
closed. When complainants called respondent’s attention, he promised to pay the agreed
interest for September and October 2006 but asked for a reduction of the interest to 7% for
the succeeding months.
In November 2006, respondent withdrew as counsel for Yulo. On the other hand, Presbitero
terminated the services of respondent as counsel. Complainants then filed petitions for the
judicial foreclosure of the mortgages executed by respondent in their favor. Respondent
countered that the 10% monthly interest on the loan was usurious and illegal. Complainants
also filed cases for estafa and violation of Batas Pambansa Blg. 22 against respondent.
Complainants alleged that respondent induced them to grant him loans by offering very high
interest rates. He also prepared and signed the checks which turned out to be drawn against
his son’s accounts. Complainants further alleged that respondent deceived them regarding
the identity and value of the property he mortgaged because he showed them a different
property from that which he owned. Presbitero further alleged that respondent mortgaged
his 263-square-meter property to her for P1,000,000 but he later sold it for only P150,000.
Respondent, for his defense, alleged that he was engaged in sugar and realty business and
that it was Yulo who convinced Presbitero and Navarro to extend him loans. Yulo also as-
sured him that Presbitero would help him with the refining of raw sugar through Victorias
Milling Company, Inc. Respondent alleged that Navarro fixed the interest rate and he agreed
because he needed the money. He alleged that their business transactions were secured by
real estate mortgages
592
and covered by postdated checks. Respondent denied that the property he mortgaged to Pres-
bitero was less than the value of the loan. He also denied that he sold the property because
the sale was actually rescinded. Respondent claimed that the property he mortgaged to Na-
varro was valuable and it was actually worth more than P8,000,000.
Respondent alleged that he was able to pay complainants when business was good but he
was unable to continue paying when the price of sugar went down and when the business
with Victorias Milling Company, Inc. did not push through because Presbitero did not help
him. Respondent also denied that he was hiding from complainants.
Respondent further alleged that it was Yulo who owed him P530,000 as interest due for
September to December 2005. He denied making any false representations. He claimed that
complainants were aware that he could no longer open a current account and they were the
ones who proposed that his wife and son issue the checks. Respondent further alleged that
he already started with the titling of Yulo’s lot but his services were terminated before it
could be completed.
A supplemental complaint was filed charging respondent with accepting cases while under
suspension. In response, respondent alleged that he accepted Presbitero’s case in February
2006 and learned of his suspension only in May 2006.
After conducting a hearing and considering the position papers submitted by the parties, the
IBP-CBD found that respondent violated the Code of Professional Responsibility.
The IBP-CBD found that respondent borrowed P2,000,000 from Navarro and P1,000,000
from Presbitero which he failed to pay in accordance with the MOAs he executed. The IBP-
CBD found that based on the documents presented by the parties, respondent did not act in
good faith in obtaining the loans. The IBP-CBD found that respondent either promised or
agreed to pay the very high interest rates of the loans although he knew them to be exorbitant
in accordance with
593
jurisprudence. Respondent likewise failed to deny that he misled Navarro and her husband
regarding the identity of the property mortgaged to them. Respondent also mortgaged a prop-
erty to Presbitero for P1,000,000 but documents showed that its value was only P300,000.
Documents also showed that he sold that property for only P150,000. Respondent conspired
with Yulo to secure loans by promising her a 10% commission and later claimed that they
agreed that Yulo would “ride” on the loan by borrowing P300,000 from the amount he ob-
tained from Navarro and Presbitero. Respondent could not explain how he lost all the money
he borrowed in three months except for his claim that the price of sugar went down.
The IBP-CBD found that respondent misled Navarro and Presbitero regarding the issuance
of the postdated checks, and there was nothing in the records that would show that he in-
formed them that it would be his wife or son who would issue the checks. The IBP-CBD
also found that respondent had not been transparent in liquidating the money he received in
connection with Presbitero’s VOS with DAR. He was also negligent in his accounting re-
garding the registration of Yulo’s property which was financed by Navarro.
The IBP-CBD found that respondent was guilty of violating Rule 1.01 of the Code of Pro-
fessional Responsibility for committing the following acts:
(1) signing drawn checks against the account of his son as if they were from his own account;
(2) misrepresenting to Navarro the identity of the lot he mortgaged to her;
(3) misrepresenting to Presbitero the true value of the 263-square-meter lot he mortgaged to
her;
(4) conspiring with Yulo to obtain the loans from complainants;
(5) agreeing or promising to pay 10% interest on his loans although he knew that it was
exorbitant; and
594
(6) failing to pay his loans because the checks he issued were dishonored as the accounts
were already closed.
The IBP-CBD also found that respondent violated Canon 16 and Rule 16.01 of the Code of
Professional Responsibility when he failed to properly account for the various funds he re-
ceived from complainants.
In addition, the IBP-CBD found that respondent violated Rule 16.04 of the Code of Profes-
sional Responsibility which prohibits borrowing money from a client unless the client’s in-
terest is fully protected or the client is given independent advice.
On the matter of practicing law while under suspension, the IBP-CBD found that the records
were not clear whether the notice of suspension respondent received on 29 May 2006 was
the report and recommendation of the IBP-CBD or the final decision of this Court. The IBP-
CBD likewise found that there was insufficient evidence to prove that respondent mishan-
dled his cases.
The IBP-CBD recommended that respondent be meted the penalty of disbarment.
In Resolution No. XIX-2011-267 dated 14 May 2011, the IBP Board of Governors adopted
and approved the recommendation of the IBP-CBD with modification by reducing the rec-
ommended penalty from disbarment to suspension from the practice of law for two years.
The IBP Board of Governors likewise ordered respondent to return the amount of his unpaid
obligation to complainants.
Complainants filed a motion for reconsideration, praying that the penalty of disbarment be
instead imposed upon respondent.
The only issue in this case is whether respondent violated the Code of Professional Respon-
sibility.
595
The records show that respondent violated at least four provisions of the Code of Profes-
sional Responsibility.
Rule 1.01 of the Code of Professional Responsibility provides:
Rule 1.01.—A lawyer shall not engage in unlawful, dishonest, immoral or deceitful con-
duct.
With respect to his client, Presbitero, it was established that respondent agreed to pay a high
interest rate on the loan he obtained from her. He drafted the MOA. Yet, when he could no
longer pay his loan, he sought to nullify the same MOA he drafted on the ground that the
interest rate was unconscionable. It was also established that respondent mortgaged a 263-
square-meter property to Presbitero for P1,000,000 but he later sold the property for only
P150,000, showing that he deceived his client as to the real value of the mortgaged property.
Respondent’s allegation that the sale was eventually rescinded did not distract from the fact
that he did not apprise Presbitero as to the real value of the property.
Respondent failed to refute that the checks he issued to his client Presbitero and to Navarro
belonged to his son, Ivan Garcia Solidum III whose name is similar to his name. He only
claimed that complainants knew that he could no longer open a current bank account, and
that they even suggested that his wife or son issue the checks for him. However, we are
inclined to agree with the IBP-CBD’s finding that he made complainants believe that the
account belonged to him. In fact, respondent signed in the presence of Navarro the first batch
of checks he issued to Navarro. Respondent sent the second batch of checks to Navarro and
the third batch of checks to Presbitero through a messenger, and complainants believed that
the checks belonged to accounts in respondent’s name.
596
It is clear that respondent violated Rule 1.01 of the Code of Professional Responsibility. We
have ruled that conduct, as used in the Rule, is not confined to the performance of a lawyer’s
professional duties.1 A lawyer may be disciplined for misconduct committed either in his
professional or private capacity.2 The test is whether his conduct shows him to be wanting
in moral character, honesty, probity, and good demeanor, or whether it renders him unworthy
to continue as an officer of the court.3
In this case, the loan agreements with Navarro were done in respondent’s private capacity.
Although Navarro financed the registration of Yulo’s lot, respondent and Navarro had no
lawyer-client relationship. However, respondent was Presbitero’s counsel at the time she
granted him a loan. It was established that respondent misled Presbitero on the value of the
property he mortgaged as a collateral for his loan from her. To appease Presbitero, respond-
ent even made a Deed of Undertaking that he would give her another 1,000-square-meter lot
as additional collateral but he failed to do so.
Clearly, respondent is guilty of engaging in dishonest and deceitful conduct, both in his pro-
fessional capacity with respect to his client, Presbitero, and in his private capacity with re-
spect to complainant Navarro. Both Presbitero and Navarro allowed respondent to draft the
terms of the loan agreements. Respondent drafted the MOAs knowing that the interest rates
were exorbitant. Later, using his knowledge of the law, he assailed the validity of the same
MOAs he prepared. He issued checks that were drawn from his son’s account whose name
was similar to his without informing complainants. Further, there is nothing in the records
that will show that respondent paid or undertook to pay the loans he obtained from com-
plainants.
_______________
1 Roa v. Moreno, A.C. No. 8382, 21 April 2010, 618 SCRA 693.
2 Id.
3 Id.
597
Canon 16 and Rule 16.01 of the Code of Professional Responsibility provide:
CANON 16.—A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND
PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.
Rule 16.01.—A lawyer shall account for all money or property collected or received for or
from the client.
The fiduciary nature of the relationship between the counsel and his client imposes on the
lawyer the duty to account for the money or property collected or received for or from his
client.4 We agree with the IBP-CBD that respondent failed to fulfill this duty. In this case,
the IBP-CBD pointed out that respondent received various amounts from complainants but
he could not account for all of them.
Navarro, who financed the registration of Yulo’s 18.85-hectare lot, claimed that respondent
received P265,000 from her. Respondent countered that P105,000 was paid for real estate
taxes but he could not present any receipt to prove his claim. Respondent also claimed that
he paid P70,000 to the surveyor but the receipt was only for P15,000. Respondent claimed
that he paid P50,000 for filing fee, publication fee, and other expenses but again, he could
not substantiate his claims with any receipt. As pointed out by the IBP-CBD, respondent had
been less than diligent in accounting for the funds he received from Navarro for the regis-
tration of Yulo’s property. Unfortunately, the records are not clear whether respondent ren-
dered an accounting to Yulo who had since passed away.
As regards Presbitero, it was established during the clarificatory hearing that respondent
received P50,000 from Presbitero. As the IBP-CBD pointed out, the records do not
_______________
4 Belleza v. Macasa, A.C. No. 7815, 23 July 2009, 593 SCRA 549.
598
show how respondent spent the funds because he was not transparent in liquidating the
money he received from Presbitero.
Clearly, respondent had been negligent in properly accounting for the money he received
from his client, Presbitero. Indeed, his failure to return the excess money in his possession
gives rise to the presumption that he has misappropriated it for his own use to the prejudice
of, and in violation of the trust reposed in him by, the client.5
Rule 16.04 of the Code of Professional Responsibility provides:
Rule 16.04.—A lawyer shall not borrow money from his client unless the client’s interests
are fully protected by the nature of the case or by independent advice. Neither shall a lawyer
lend money to a client except, when in the interest of justice, he has to advance necessary
expenses in a legal matter he is handling for the client.
Here, respondent does not deny that he borrowed P1,000,000 from his client Presbitero. At
the time he secured the loan, respondent was already the retained counsel of Presbitero.
While respondent’s loan from Presbitero was secured by a MOA, postdated checks and real
estate mortgage, it turned out that respondent misrepresented the value of the property he
mortgaged and that the checks he issued were not drawn from his account but from that of
his son. Respondent eventually questioned the terms of the MOA that he himself prepared
on the ground that the interest rate imposed on his loan was unconscionable. Finally, the
checks issued by respondent to Presbitero were dishonored because the accounts were al-
ready closed. The interest of his client, Presbitero, as lender in this case, was not fully pro-
tected. Respondent vio-
_______________
5 Id.
599
lated Rule 16.04 of the Code of Professional Responsibility, which presumes that the client
is disadvantaged by the lawyer’s ability to use all the legal maneuverings to renege on his
obligation.6 In his dealings with his client Presbitero, respondent took advantage of his
knowledge of the law as well as the trust and confidence reposed in him by his client.
We modify the recommendation of the IBP Board of Governors imposing on respondent the
penalty of suspension from the practice of law for two years. Given the facts of the case, we
see no reason to deviate from the recommendation of the IBP-CBD imposing on respondent
the penalty of disbarment. Respondent failed to live up to the high standard of morality,
honesty, integrity, and fair dealing required of him as a member of the legal profession.7
Instead, respondent employed his knowledge and skill of the law and took advantage of his
client to secure undue gains for himself8 that warrants his removal from the practice of law.
Likewise, we cannot sustain the IBP Board of Governors’ recommendation ordering re-
spondent to return his unpaid obligation to complainants, except for advances for the ex-
penses he received from his client, Presbitero, that were not accounted at all. In disciplinary
proceedings against lawyers, the only issue is whether the officer of the court is still fit to be
allowed to continue as a member of the Bar.9 Our only concern is the determination of re-
spondent’s administrative liability.10 Our findings have no material bearing on other judicial
action which the parties may choose to file against each other.11 Nevertheless, when a law-
yer receives money from a client for a particular purpose involving the client-attorney rela-
tionship, he is bound to ren-
_______________
6 Frias v. Atty. Lozada, 513 Phil. 512; 477 SCRA 393 (2005).
7 Tabang v. Atty. Gacott, A.C. No. 6490, 9 July 2013, 700 SCRA 788.
8 Id.
9 Roa v. Moreno, supra note 1.
10 Id.
11 Id.
600
der an accounting to the client showing that the money was spent for that particular pur-
pose.12 If the lawyer does not use the money for the intended purpose, he must immediately
return the money to his client.13 Respondent was given an opportunity to render an account-
ing, and he failed. He must return the full amount of the advances given him by Presbitero,
amounting to P50,000.
WHEREFORE, the Court finds Atty. Ivan M. Solidum, Jr. GUILTY of violating Rule 1.01,
Canon 16, Rule 16.01, and Rule 16.04 of the Code of Professional Responsibility. Accord-
ingly, the Court DISBARS him from the practice of law effective immediately upon his
receipt of this Decision.
Atty. Solidum is ORDERED to return the advances he received from Hilda S. Presbitero,
amounting to P50,000, and to submit to the Office of the Bar Confidant his compliance with
this order within thirty days from finality of this Decision.
Let copies of this Decision be furnished the Office of the Bar Confidant, the Integrated Bar
of the Philippines for distribution to all its chapters, and the Office of the Court Administra-
tor for dissemination to all courts all over the country. Let a copy of this Decision be attached
to the personal records of respondent.
SO ORDERED.
Sereno (CJ.), Carpio, Velasco, Jr., Leonardo-De Castro, Brion, Peralta, Bersamin, Del Cas-
tillo, Abad, Villarama, Jr., Perez, Mendoza, Reyes, Perlas-Bernabe and Leonen, JJ., concur.
Atty. Ivan M. Solidum, Jr. disbarred for violation of Rule 1.01, Canon 16, Rule 16.01, and
Rule 16.04 of Code of Professional Responsibility. Atty. Solidum ordered to return advances
from Hilda S. Presbitero.
_______________
12 Freeman v. Reyes, A.C. No. 6246, 15 November 2011, 660 SCRA 48.
13 Id.
601
Notes.―The Court is mindful that disbarment is the most severe form of disciplinary sanc-
tion and, as such, the power to disbar must always be exercised with great caution, and only
for the most imperative reasons and in clear cases of misconduct affecting the standing and
moral character of the lawyer as an officer of the court and a member of the bar. (Reddi vs.
Sebrio, Jr., 577 SCRA 175 [2009])
Even if it were true that no attorney-client relationship existed between them, case law has
it that an attorney may be removed, or otherwise disciplined, not only for malpractice and
dishonesty in the profession, but also for gross misconduct not connected with his profes-
sional duties, making him unfit for the office and unworthy of the privileges which his li-
cense and the law confer upon him. (Barcenas vs. Alvero, 619 SCRA 1 [2010])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Navarro vs. Solidum, Jr.,
714 SCRA 586, A.C. No. 9872 January 28, 2014
A.C. No. 11078. July 19, 2016.*
VERLITA V. MERCULLO and RAYMOND VEDANO, complainants, vs. ATTY. MARIE
FRANCES E. RAMON, respondent.
Attorneys; Lawyer’s Oath; Any conduct unbecoming of a lawyer constitutes a violation of
his oath.—The Lawyer’s Oath is a source of the obligations and duties of every lawyer. Any
violation of the oath may be punished with either disbarment, or suspension from the practice
of law, or other commensurate disciplinary action. Every lawyer must at no time be wanting
in probity and moral fiber which are not only conditions precedent to his admission to the
Bar, but are also essential for his continued membership in the Law Profession. Any conduct
unbecoming of a lawyer constitutes a violation of his oath.
Same; Same; The respondent certainly transgressed the Lawyer’s Oath by receiving money
from the complainants after having made them believe that she could assist them in ensuring
the redemption in their mother’s behalf.—The respondent certainly transgressed the Law-
yer’s Oath by receiving money from the complainants after having made them believe that
she could assist them in ensuring the redemption in their mother’s behalf. She was convinc-
ing about her ability to work on the redemption because she had worked in the NHFMC.
She did not inform them soon enough, however, that she had meanwhile ceased to be con-
nected with the agency. It was her duty to have so informed them. She further misled them
about her ability to realize the redemption by falsely informing them about having started
the redemption process. She concealed from them the real story that she had not even initi-
ated the redemption proceedings that she had assured them she would do. Everything she
did was dishonest and deceitful in order to have them part with the substantial sum of
P350,000.00. She took advantage of the complainants who had reposed their full trust and
confidence in her ability to perform the task by virtue of her being a lawyer. Surely, the
totality of her actuations inevitably eroded public trust in the Legal Profession.
_______________
* EN BANC.
124
124
SUPREME COURT REPORTS ANNOTATED
Mercullo vs. Ramon
Same; Legal Ethics; As a lawyer, the respondent was proscribed from engaging in unlawful,
dishonest, immoral or deceitful conduct in her dealings with others, especially clients whom
she should serve with competence and diligence.—As a lawyer, the respondent was pro-
scribed from engaging in unlawful, dishonest, immoral or deceitful conduct in her dealings
with others, especially clients whom she should serve with competence and diligence. Her
duty required her to maintain fealty to them, binding her not to neglect the legal matter en-
trusted to her. Thus, her neglect in connection therewith rendered her liable. Moreover, the
unfulfilled promise of returning the money and her refusal to communicate with the com-
plainants on the matter of her engagement aggravated the neglect and dishonesty attending
her dealings with the complainants.
Same; Same; A lawyer in her shoes should comply with the orders of the Court and of the
Court’s duly constituted authorities, like the Integrated Bar of the Philippines (IBP), the of-
fice that the Court has particularly tasked to carry out the specific function of investigating
attorney misconduct.—Yet another dereliction of the respondent was her wanton disregard
of the several notices sent to her by the IBP in this case. Such disregard could only be wrong
because it reflected her undisguised contempt of the proceedings of the IBP, a body that the
Court has invested with the authority to investigate the disbarment complaint against her.
She thus exhibited her irresponsibility as well as her utter disrespect for the Court and the
rest of the Judiciary. It cannot be understated that a lawyer in her shoes should comply with
the orders of the Court and of the Court’s duly constituted authorities, like the IBP, the office
that the Court has particularly tasked to carry out the specific function of investigating attor-
ney misconduct.
Same; Same; Penalties; Her professional misconduct warranted a longer suspension from
the practice of law because she had caused material prejudice to the clients’ interest.—The
respondent deserves severe chastisement and appropriate sanctions. In this regard, the IBP
Board of Governors recommended her suspension for two years from the practice of law,
and her return of the amount of P350,000.00 to the complainants. The recommended penalty
is not commensurate to the gravity of the misconduct committed. She merited a heavier
sanction of suspension from the practice of law for five years. Her professional misconduct
warranted a longer suspension
125
VOL. 797, JULY 19, 2016
125
Mercullo vs. Ramon
from the practice of law because she had caused material prejudice to the clients’ interest.
She should somehow be taught to be more ethical and professional in dealing with trusting
clients like the complainants and their mother, who were innocently too willing to repose
their utmost trust in her abilities as a lawyer and in her trustworthiness as a legal professional.
In this connection, we state that the usual mitigation of the recommended penalty by virtue
of the misconduct being her first offense cannot be carried out in her favor considering that
she had disregarded the several notices sent to her by the IBP in this case. As to the return
of the P350,000.00 to the complainant, requiring her to restitute with legal interest is only
fair and just because she did not comply in the least with her ethical undertaking to work on
the redemption of the property of the mother of the complainants. In addition, she is sternly
warned against a similar infraction in the future; otherwise, the Court will have her suffer a
more severe penalty.
ADMINISTRATIVE CASE in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
BERSAMIN, J.:
This case concerns the complaint for the disbarment of Atty. Marie Frances E. Ramon for
violating Rule 1.01, Canon 1 of the Code of Professional Responsibility and the Lawyer’s
Oath for deceiving the complainants in order to obtain the substantial amount of P350,000.00
on the pretext of having the foreclosed asset of the latter’s mother redeemed.
Antecedents
In the period from 2002 to 2011, the National Home Mortgage Finance Corporation
(NHMFC) sent several demand letters to Carmelite T. Vedano1 regarding her unpaid obli-
gations secured by the mortgage covering her residential property in
_______________
1 Rollo, pp. 9-11.
126
126
SUPREME COURT REPORTS ANNOTATED
Mercullo vs. Ramon
Novaliches, Caloocan City.2 To avoid the foreclosure of the mortgage, Carmelita authorized
her children, Verlita Mercullo and Raymond Vedaño (complainants herein), to inquire from
the NHMFC about the status of the obligations. Verlita and Raymond learned that their
mother’s arrears had amounted to P350,000.00, and that the matter of the mortgage was
under the charge of respondent Atty. Ramon, but who was not around at that time.
On June 20, 2012, Carmelita received a letter from the sheriff of the Regional Trial Court
(RTC) in Caloocan City, stating that her property would be put up for auction in July 2013.
Verlita and Raymond thus went to the NHMFC to see the respondent, who advised them
about their right to redeem the property within one year from the foreclosure.3
In August 2013, Verlita and Raymond called up the respondent, and expressed their intention
to redeem the property by paying the redemption price. The latter agreed and scheduled an
appointment with them on August 30, 2013.
On August 30, 2013, the respondent arrived at the designated meeting place at around 1:30
p.m., carrying the folder that Verlita and Raymond had seen at the NHFMC when they in-
quired on the status of their mother’s property. After the respondent had oriented them on
the procedure for redemption, the complainants handed P350,000.00 to the respondent, who
signed an acknowledgment receipt.4 The respondent issued two acknowledgment receipts
for the redemption price and for litigation expenses,5 presenting to the complainants her
NHMFC identification card. Before leaving them, she promised to inform them as soon as
the documents for redemption were ready for their mother’s signature.6
_______________
2 Id., at p. 12.
3 Id., at p. 3.
4 Id., at p. 14.
5 Id., at pp. 15-16.
6 Id., at p. 4.
127
128
VOL. 797, JULY 19, 2016
127 128
Mercullo vs. Ramon SUPREME COURT REPORTS ANNOTATED
On September 4, 2013, the respondent met with Verlita and handed a letter7 that she had Mercullo vs. Ramon
signed, along with the special power of attorney (SPA) for Carmelita’s signature.8 The letter There, they discovered that the respondent had not deposited the redemption price and had
reads: not filed the letter of intent for redeeming the property.10
Office of the Clerk of Court and Ex Officio Sheriff On December 5, 2013, Verlita and Raymond again went to Branch 145 of the Regional Trial
Regional Trial Court Court in Makati City where the respondent had a hearing, and handed to her their demand
Caloocan City letter requiring her to return the amount she had received for the redemption.11 She
acknowledged the letter and promised to return the money on December 16, 2013 by depos-
Re: Redemption of the property covered by EJF No. 7484-2013 iting the amount in Verlita’s bank account. However, she did not fulfill her promise and did
not show up for her subsequent scheduled hearings in Branch 145.12
Dear Arty. Dabalos, With their attempts to reach the respondent being in vain, Verlita and Raymond brought their
disbarment complaint in the Integrated Bar of the Philippines (IBP).
Please assist Ms. Carmelita Vedano, through her Attorney-in-Fact in redeeming the property
covered by EJF No. 7484-2013. Please provide the necessary computation as to the full re- Findings and Recommendation of the IBP
demption amount in order for Ms. Vedano to redeem the same.
The respondent did not submit her answer when required to do so. She also did not attend
Thank you. the mandatory conference set by the IBP despite notice. Hence, the investigation proceeded
ex parte.13
Truly yours, IBP Commissioner Arsenio P. Adriano submitted his Report and Recommendation,14
whereby he found the respondent to have violated Rule 1.01 of the Code of Professional
(Sgd.) Responsibility for engaging in deceitful conduct, and recommended her suspension from the
Atty. Marie Frances E. Ramon practice of law for two years, and her return to the complainants of P350,000.00, with legal
interest from December 2, 2013.
Verlita and Raymond went to the NHMFC on September 9, 2013 to follow up on the re-
demption, but discovered that the respondent had already ceased to be connected with the _______________
NHMFC. On September 20, 2013, they met with her at Branch 145 of the Regional Trial
Court in Makati City where she was attending a hearing. She informed them that the re- 10 Id.
demption was under process, and that the certificate of redemption would be issued in two 11 Id., at p. 19.
to three weeks time.9 12 Id., at p. 6.
After communicating through text messages with the respondent, Verlita and Raymond fi- 13 Id., at p. 37.
nally went to see the Clerk of Court of the Regional Trial Court in Caloocan City on No- 14 Id., at pp. 37-38.
vember 27, 2013 to inquire on the status of the redemption.
_______________
129
7 Id., at p. 17.
8 Id., at p. 18. VOL. 797, JULY 19, 2016
9 Id., at p. 5. 129
Mercullo vs. Ramon
The IBP Board of Governors adopted Commissioner Adriano’s recommendation as stated
in its Resolution No. XXI-2014-929,15 viz.:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED AND APPROVED, the
Report and Recommendation of the Investigating Commissioner in the above entitled case,
herein made part of this Resolution as Annex “A,” and finding the recommendation to be
fully supported by the evidence on record and applicable laws, and for violation of Rule 1.01
of the Code of Professional Responsibility, Atty. Marie Frances E. Ramon is hereby SUS-
PENDED from the practice of law for two (2) years and Ordered to Return the amount of
Three Hundred Fifty Thousand (P350,000.00) Pesos to Complainant.
Ruling of the Court
The Court declares the respondent guilty of dishonesty and deceit.
The Lawyer’s Oath is a source of the obligations and duties of every lawyer. Any violation
of the oath may be punished with either disbarment, or suspension from the practice of law,
or other commensurate disciplinary action.16 Every lawyer must at no time be wanting in
probity and moral fiber which are not only conditions precedent to his admission to the Bar,
but are also essential for his continued membership in the Law Profession.17 Any conduct
unbecoming of a lawyer constitutes a violation of his oath.
The respondent certainly transgressed the Lawyer’s Oath by receiving money from the com-
plainants after having made
_______________
15 Id., at p. 36.
16 Vitriolo v. Dasig, A.C. No. 4984, April 1, 2003, 400 SCRA 172, 179.
17 Penilla v. Alcid, Jr., A.C. No. 9149, September 4, 2013, 705 SCRA 1, 11.
130
130
SUPREME COURT REPORTS ANNOTATED
Mercullo vs. Ramon
them believe that she could assist them in ensuring the redemption in their mother’s behalf.
She was convincing about her ability to work on the redemption because she had worked in
the NHFMC. She did not inform them soon enough, however, that she had meanwhile ceased
to be connected with the agency. It was her duty to have so informed them. She further
misled them about her ability to realize the redemption by falsely informing them about
having started the redemption process. She concealed from them the real story that she had
not even initiated the redemption proceedings that she had assured them she would do. Eve-
rything she did was dishonest and deceitful in order to have them part with the substantial
sum of P350,000.00. She took advantage of the complainants who had reposed their full
trust and confidence in her ability to perform the task by virtue of her being a lawyer. Surely,
the totality of her actuations inevitably eroded public trust in the Legal Profession.
As a lawyer, the respondent was proscribed from engaging in unlawful, dishonest, immoral
or deceitful conduct in her dealings with others, especially clients whom she should serve
with competence and diligence.18 Her duty required her to maintain fealty to them, binding
her not to neglect the legal matter entrusted to her. Thus, her neglect in connection therewith
rendered her liable.19 Moreover, the unfulfilled promise of returning the money and her
refusal to communicate with the complainants on the matter of her engagement aggravated
the neglect and dishonesty attending her dealings with the complainants.
The respondent’s conduct patently breached Rule 1.01, Canon 1 of the Code of Professional
Responsibility, which provides:
_______________
18 Arroyo-Posidio v. Vitan, A.C. No. 6051, April 2, 2007, 520 SCRA 1, 8.
19 Rule 18.03, Code of Professional Responsibility.
131
VOL. 797, JULY 19, 2016
131
Mercullo vs. Ramon
CANON 1 – A lawyer shall uphold the constitution, obey the laws of the land and promote
respect for law and for legal processes.
Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral, or deceitful con-
duct.
Evil intent was not essential in order to bring the unlawful act or omission of the respondent
within the coverage of Rule 1.01 of the Code of Professional Responsibility.20 The Code
exacted from her not only a firm respect for the law and legal processes but also the utmost
degree of fidelity and good faith in dealing with clients and the moneys entrusted by them
pursuant to their fiduciary relationship.21
Yet another dereliction of the respondent was her wanton disregard of the several notices
sent to her by the IBP in this case. Such disregard could only be wrong because it reflected
her undisguised contempt of the proceedings of the IBP, a body that the Court has invested
with the authority to investigate the disbarment complaint against her. She thus exhibited
her irresponsibility as well as her utter disrespect for the Court and the rest of the Judiciary.
It cannot be understated that a lawyer in her shoes should comply with the orders of the
Court and of the Court’s duly constituted authorities, like the IBP, the office that the Court
has particularly tasked to carry out the specific function of investigating attorney miscon-
duct.22
The respondent deserves severe chastisement and appropriate sanctions. In this regard, the
IBP Board of Governors
_______________
20 Re: Report on the Financial Audit Conducted on the Books of Accounts of Atty. Raquel
G. Kho, Clerk of Court IV, Regional Trial Court, Oras, Eastern Samar, A.M. No. P-06-2177,
April 13, 2007, 521 SCRA 25, 28-29.
21 Anacta v. Resurreccion, A.C. No. 9074, August 14, 2012, 678 SCRA 352, 360.
22 Pesto v. Millo, A.C. No. 9612, March 13, 2013, 693 SCRA 281, 289-290.
132
132
SUPREME COURT REPORTS ANNOTATED
Mercullo vs. Ramon
recommended her suspension for two years from the practice of law, and her return of the
amount of P350,000.00 to the complainants. The recommended penalty is not commensurate
to the gravity of the misconduct committed. She merited a heavier sanction of suspension
from the practice of law for five years. Her professional misconduct warranted a longer sus-
pension from the practice of law because she had caused material prejudice to the clients’
interest.23 She should somehow be taught to be more ethical and professional in dealing
with trusting clients like the complainants and their mother, who were innocently too willing
to repose their utmost trust in her abilities as a lawyer and in her trustworthiness as a legal
professional. In this connection, we state that the usual mitigation of the recommended pen-
alty by virtue of the misconduct being her first offense cannot be carried out in her favor
considering that she had disregarded the several notices sent to her by the IBP in this case.
As to the return of the P350,000.00 to the complainant, requiring her to restitute with legal
interest is only fair and just because she did not comply in the least with her ethical under-
taking to work on the redemption of the property of the mother of the complainants. In ad-
dition, she is sternly warned against a similar infraction in the future; otherwise, the Court
will have her suffer a more severe penalty.
WHEREFORE, the Court FINDS and HOLDS ATTY. MARIE FRANCES E. RAMON
guilty of violating Canon 1, Rule 1.01 of the Code of Professional Responsibility and the
Lawyer’s Oath; SUSPENDS HER FROM THE PRACTICE OF LAW FOR A PERIOD OF
FIVE YEARS EFFECTIVE FROM NOTICE, with the STERN WARNING that any similar
infraction in the future will be dealt with more severely; ORDERS her to return to the com-
plainants the sum of P350,000.00 within 30 days from notice, plus legal interest of 6% per
annum reckoned from the finality of this decision
_______________
23 Agpalo, Legal Ethics, p. 518, 2009 ed.
133
VOL. 797, JULY 19, 2016
133
Mercullo vs. Ramon
until full payment; and DIRECTS her to promptly submit to this Court written proof of her
compliance within the same period of 30 days from notice of this decision.
Let copies of this decision be furnished to the Office of the Bar Confidant, to be appended
to Atty. Marie Frances E. Ramon’s personal record as an attorney; to the Integrated Bar of
the Philippines; and to the Office of the Court Administrator for dissemination to all courts
throughout the country for their information and guidance.
SO ORDERED.
Sereno (CJ.), Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Del Castillo, Perez, Reyes,
Perlas-Bernabe, Leonen, Jardeleza and Caguioa, JJ., concur.
Brion, J., On Leave.
Mendoza, J., On Official Leave.
Atty. Marie Frances E. Ramon suspended from practice of law for five (5) years for violation
of Canon 1, Rule 1.01 of the Code of Professional Responsibility and Lawyer’s Oath, with
stern warning against similar infraction.
Notes.—Section 27, Rule 138 of the Rules of Court provides that a lawyer may be removed
or suspended from the practice of law, inter alia, for gross misconduct and violation of the
lawyer’s oath. (Lahm III vs. Mayor, Jr., 666 SCRA 1 [2012])
Rule 1.01 of the Code of Professional Responsibility states that “[a] lawyer shall not engage
in unlawful, dishonest, immoral or deceitful conduct.” (Anacta vs. Resurreccion, 678 SCRA
352 [2012])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Mercullo vs. Ramon, 797
SCRA 123, A.C. No. 11078 July 19, 2016
A.C. No. 10573. January 13, 2015.*
FERNANDO W. CHU, complainant, vs. ATTY. JOSE C. GUICO, JR., respondent.
Attorneys; Disbarment; Burden of Proof; In disbarment proceedings, the burden of proof
rests on the complainant to establish respondent attorney’s liability by clear, convincing and
satisfactory evidence.—In disbarment proceedings, the burden of proof rests on the com-
plainant to establish respondent attorney’s liability by clear, convincing and satisfactory ev-
idence. Indeed, this Court has consistently required clearly preponderant evidence to justify
the imposition of either disbarment or suspension as penalty.
Same; Same; Every lawyer should not render any service or give advice to any client that
would involve defiance of the very laws that he was bound to uphold and obey, for he or she
was always bound as an attorney to be law abiding, and thus to uphold the integrity and
dignity of the Legal Profession.—The sworn obligation to respect the law and the legal pro-
cesses under the Lawyer’s Oath and the Code of Professional Responsibility is a continuing
condition for every lawyer to retain membership in the Legal Profession. To discharge the
obligation, every lawyer should not render any service or give advice to any client that would
involve defiance of the very laws that he was bound to uphold and obey, for he or she was
always bound as an attorney to be law abiding, and thus to uphold the integrity and dignity
of the Legal Profession. Verily, he or she must act and comport himself or herself in such a
manner that would promote public confidence in the integrity of the Legal Profession. Any
lawyer found to violate this obligation forfeits his or her privilege to continue such member-
ship in the legal profession.
Same; Same; Lawyer’s Oath; Code of Professional Responsibility; Atty. Guico willingly
and wittingly violated the law in appearing to counsel Chu to raise the large sums of money
in order to obtain a favorable decision in the labor case; His acts constituted gross dishonesty
and deceit, and were a flagrant breach of his ethical com-
_______________
* EN BANC.
258
258
SUPREME COURT REPORTS ANNOTATED
Chu vs. Guico, Jr.
mitments under the Lawyer’s Oath not to delay any man for money or malice; and under
Rule 1.01 of the Code of Professional Responsibility (CPR) that forbade him from engaging
in unlawful, dishonest, immoral or deceitful conduct.—Atty. Guico willingly and wittingly
violated the law in appearing to counsel Chu to raise the large sums of money in order to
obtain a favorable decision in the labor case. He thus violated the law against bribery and
corruption. He compounded his violation by actually using said illegality as his means of
obtaining a huge sum from the client that he soon appropriated for his own personal interest.
His acts constituted gross dishonesty and deceit, and were a flagrant breach of his ethical
commitments under the Lawyer’s Oath not to delay any man for money or malice; and under
Rule 1.01 of the Code of Professional Responsibility that forbade him from engaging in
unlawful, dishonest, immoral or deceitful conduct. His deviant conduct eroded the faith of
the people in him as an individual lawyer as well as in the Legal Profession as a whole. In
doing so, he ceased to be a servant of the law.
Same; Same; Gross Misconduct; Any gross misconduct by an attorney in his professional or
private capacity renders him unfit to manage the affairs of others, and is a ground for the
imposition of the penalty of suspension or disbarment, because good moral character is an
essential qualification for the admission of an attorney and for the continuance of such priv-
ilege.—Atty. Guico committed grave misconduct and disgraced the Legal Profession. Grave
misconduct is “improper or wrong conduct, the transgression of some established and defi-
nite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies a
wrongful intent and not mere error of judgment.” There is no question that any gross mis-
conduct by an attorney in his professional or private capacity renders him unfit to manage
the affairs of others, and is a ground for the imposition of the penalty of suspension or dis-
barment, because good moral character is an essential qualification for the admission of an
attorney and for the continuance of such privilege.
Same; Same; The recommendation of the Integrated Bar of the Philippines (IBP) Board of
Governors that Atty. Guico be ordered to return the amount of P580,000.00 to Chu is well-
taken; Although the purpose for the amount was unlawful, it would be unjust not to require
Atty. Guico to fully account for and to return the money to Chu.—The recommendation of
the IBP Board of Governors that
259
VOL. 745, JANUARY 13, 2015
259
Chu vs. Guico, Jr.
Atty. Guico be ordered to return the amount of P580,000.00 to Chu is well-taken. That
amount was exacted by Atty. Guico from Chu in the guise of serving the latter’s interest as
the client. Although the purpose for the amount was unlawful, it would be unjust not to
require Atty. Guico to fully account for and to return the money to Chu. It did not matter
that this proceeding is administrative in character, for, as the Court has pointed out in
Bayonla v. Reyes, 660 SCRA 490 (2011): Although the Court renders this decision in an
administrative proceeding primarily to exact the ethical responsibility on a member of the
Philippine Bar, the Court’s silence about the respondent lawyer’s legal obligation to restitute
the complainant will be both unfair and inequitable. No victim of gross ethical misconduct
concerning the client’s funds or property should be required to still litigate in another pro-
ceeding what the administrative proceeding has already established as the respondent’s lia-
bility.
ADMINISTRATIVE CASE in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
Ernesto R. Arellano for complainant.
Ronald O. Layawen for respondent.
PER CURIAM:
Fernando W. Chu invokes the Court’s disciplinary authority in resolving this disbarment 4 Id., at p. 99.
complaint against his former lawyer, respondent Atty. Jose C. Guico, Jr., whom he has ac- 5 Id., at pp. 99-100.
cused of gross misconduct. 6 Id., at pp. 6-13.
7 Id., at p. 100.
Antecedents 261

Chu retained Atty. Guico as counsel to handle the labor disputes involving his company, VOL. 745, JANUARY 13, 2015
CVC San Lorenzo Ruiz Corporation (CVC).1 Atty. Guico’s legal services included handling 261
a complaint for illegal dismissal brought against CVC (NLRC Case No. RAB-III-08-9261- Chu vs. Guico, Jr.
05 entitled Kilusan ng Chu followed up on the status of the CVC case with Atty. Guico in December 2007. How-
_______________ ever, Atty. Guico referred him to Nardo who in turn said that he would only know the status
after Christmas. On January 11, 2008, Chu again called Nardo, who invited him to lunch at
1 Rollo, p. 98. the Ihaw Balot Plaza in Quezon City. Once there, Chu asked Nardo if the NLRC Commis-
260 sioner had accepted the money, but Nardo replied in the negative and simply told Chu to
wait. Nardo assured that the money was still with Atty. Guico who would return it should
260 the NLRC Commissioner not accept it.8
SUPREME COURT REPORTS ANNOTATED On January 19, 2009, the NLRC promulgated a decision adverse to CVC.9 Chu confronted
Chu vs. Guico, Jr. Atty. Guico, who in turn referred Chu to Nardo for the filing of a motion for reconsideration.
Manggagawang Makabayan (KMM) Katipunan CVC San Lorenzo Ruiz Chapter, Ladivico After the denial of the motion for reconsideration, Atty. Guico caused the preparation and
Adriano, et al. v. CVC San Lorenzo Ruiz Corp. and Fernando Chu).2 On September 7, 2006, filing of an appeal in the Court of Appeals. Finally, Chu terminated Atty. Guico as legal
Labor Arbiter Herminio V. Suelo rendered a decision adverse to CVC.3 Atty. Guico filed a counsel on May 25, 2009.10
timely appeal in behalf of CVC. In his position paper,11 Atty. Guico described the administrative complaint as replete with
According to Chu, a Christmas party held on December 5, 2006 at Atty. Guico’s residence lies and inconsistencies, and insisted that the charge was only meant for harassment. He
in Commonwealth, Quezon City, Atty. Guico asked him to prepare a substantial amount of denied demanding and receiving money from Chu, a denial that Nardo corroborated with his
money to be given to the NLRC Commissioner handling the appeal to insure a favorable own affidavit.12 He further denied handing to Chu a draft decision printed on used paper
decision.4 On June 10, 2007, Chu called Atty. Guico to inform him that he had raised emanating from his office, surmising that the used paper must have been among those freely
P300,000.00 for the purpose. Atty. Guico told him to proceed to his office at No. 48 Times lying around in his office that had been pilfered by Chu’s witnesses in the criminal complaint
Street, Quezon City, and to give the money to his assistant, Reynaldo (Nardo) Manahan. he had handled for Chu.13
Chu complied, and later on called Atty. Guico to confirm that he had delivered the money _______________
to Nardo. Subsequently, Atty. Guico instructed Chu to meet him on July 5, 2007 at the UCC
Coffee Shop on T. Morato Street, Quezon City. At the UCC Coffee Shop, Atty. Guico 8 Id., at pp. 100-101.
handed Chu a copy of an alleged draft decision of the NLRC in favor of CVC.5 The draft 9 Id., at pp. 154-168.
decision6 was printed on the dorsal portion of used paper apparently emanating from the 10 Id., at p. 170.
office of Atty. Guico. On that occasion, the latter told Chu to raise another P300,000.00 to 11 Id., at pp. 187-202.
encourage the NLRC Commissioner to issue the decision. But Chu could only produce 12 Id., at pp. 219-220.
P280,000.00, which he brought to Atty. Guico’s office on July 10, 2007 accompanied by his 13 Id., at pp. 192-200.
son, Christopher Chu, and one Bonifacio Elipane. However, it was Nardo who received the 262
amount without issuing any receipt.7
_______________ 262
SUPREME COURT REPORTS ANNOTATED
2 Id., at p. 109. Chu vs. Guico, Jr.
3 Id., at pp. 115-132.
Findings and Recommendation of the
IBP Board of Governors
IBP Commissioner Cecilio A.C. Villanueva found that Atty. Guico had violated Rules 1.01
and 1.02, Canon I of the Code of Professional Responsibility for demanding and receiving
P580,000.00 from Chu; and recommended the disbarment of Atty. Guico in view of his act
of extortion and misrepresentation that caused dishonor to and contempt for the legal pro-
fession.14
On February 12, 2013, the IBP Board of Governors adopted the findings of IBP Commis-
sioner Villanueva in its Resolution No. XX-2013-87,15 but modified the recommended pen-
alty of disbarment to three years suspension, viz.:
RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and AP-
PROVED, with modification, the Report and Recommendation of the Investigating Com-
missioner in the above entitled case, herein made part of this Resolution as Annex “A,” and
finding the recommendation fully supported by the evidence on record and the applicable
laws and rules and considering Respondent’s violation of Canon 1, Rules 1.01 and 1.02 of
the Code of Professional Responsibility, Atty. Jose C. Guico, Jr. is hereby SUSPENDED
from the practice of law for three (3) years with Warning that a repetition of the same or
similar act shall be dealt with more severely and Ordered to Return the amount of Five Hun-
dred Eighty Thousand (P580,000.00) Pesos with legal interest within thirty (30) days from
receipt of notice.
Atty. Guico moved for reconsideration,16 but the IBP Board of Governors denied his motion
for reconsideration on March 23, 2014 in Resolution No. XXI-2014-173.17
_______________
14 Id., at pp. 226-230.
15 Id., at pp. 224-225.
16 Id., at pp. 231-252.
17 Id., at pp. 528-529.
263
VOL. 745, JANUARY 13, 2015
263
Chu vs. Guico, Jr.
Neither of the parties brought a petition for review vis-à-vis Resolution No. XX-2013-87
and Resolution No. XXI-2014-173.
Issue
Did Atty. Guico violate the Lawyer’s Oath and Rules 1.01 and 1.02, Canon I of the Code of
Professional Responsibility for demanding and receiving P580,000.00 from Chu to guaran-
tee a favorable decision from the NLRC?
Ruling of the Court
In disbarment proceedings, the burden of proof rests on the complainant to establish re-
spondent attorney’s liability by clear, convincing and satisfactory evidence. Indeed, this
Court has consistently required clearly preponderant evidence to justify the imposition of
either disbarment or suspension as penalty.18
Chu submitted the affidavits of his witnesses,19 and presented the draft decision that Atty.
Guico had represented to him as having come from the NLRC. Chu credibly insisted that
the draft decision was printed on the dorsal portion of used paper emanating from Atty.
Guico’s office,20 inferring that Atty. Guico commonly printed documents on used paper in
his law office. Despite denying being the source of the draft decision presented by Chu, Atty.
Guico’s participation in the generation of the draft decision was undeniable. For one, Atty.
Guico impliedly admitted Chu’s insistence by conceding that the used paper had originated
from his office, claiming only that used paper was just “scattered around his office.”21
_______________
18 Aba v. De Guzman, A.C. No. 7649, December 14, 2011, 662 SCRA 361, 371; Ceniza v.
Rubia, A.C. No. 6166, October 2, 2009, 602 SCRA 1, 8.
19 Rollo, pp. 24-25.
20 Id., at pp. 5, 16-23.
21 Id., at p. 248.
264
264
SUPREME COURT REPORTS ANNOTATED
Chu vs. Guico, Jr.
In that context, Atty. Guico’s attempt to downplay the sourcing of used paper from his office
was futile because he did not expressly belie the forthright statement of Chu. All that Atty.
Guico stated by way of deflecting the imputation was that the used paper containing the draft
decision could have been easily taken from his office by Chu’s witnesses in a criminal case
that he had handled for Chu,22 pointing out that everything in his office, except the filing
cabinets and his desk, was “open to the public x x x and just anybody has access to every-
thing found therein.”23 In our view, therefore, Atty. Guico made the implied admission be-
cause he was fully aware that the used paper had unquestionably come from his office.
The testimony of Chu, and the circumstances narrated by Chu and his witnesses, especially
the act of Atty. Guico of presenting to Chu the supposed draft decision that had been printed
on used paper emanating from Atty. Guico’s office, sufficed to confirm that he had commit-
ted the imputed gross misconduct by demanding and receiving P580,000.00 from Chu to
obtain a favorable decision. Atty. Guico offered only his general denial of the allegations in
his defense, but such denial did not overcome the affirmative testimony of Chu. We cannot
but conclude that the production of the draft decision by Atty. Guico was intended to moti-
vate Chu to raise money to ensure the chances of obtaining the favorable result in the labor
case. As such, Chu discharged his burden of proof as the complainant to establish his com-
plaint against Atty. Guico. In this administrative case, a fact may be deemed established if
it is supported by substantial evidence, or that amount of relevant evidence which a reason-
able mind might accept as adequate to justify a conclusion.24
What is the condign penalty for Atty. Guico?
In taking the Lawyer’s Oath, Atty. Guico bound himself to:
_______________
22 Id.
23 Id.
24 Section 5, Rule 133, Rules of Court.
265
VOL. 745, JANUARY 13, 2015
265
Chu vs. Guico, Jr.
x x x maintain allegiance to the Republic of the Philippines; x x x support its Constitution
and obey the laws as well as the legal orders of the duly constituted authorities therein; x x x
do no falsehood, nor consent to the doing of any in court; x x x delay no man for money or
malice x x x.
The Code of Professional Responsibility echoes the Lawyer’s Oath, to wit:
CANON 1 — A lawyer shall uphold the constitution, obey the laws of the land and promote
respect for law and for legal processes.
Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.
Rule 1.02 — A lawyer shall not counsel or abet activities aimed at defiance of the law or at
lessening confidence in the legal system.
The sworn obligation to respect the law and the legal processes under the Lawyer’s Oath
and the Code of Professional Responsibility is a continuing condition for every lawyer to
retain membership in the Legal Profession. To discharge the obligation, every lawyer should
not render any service or give advice to any client that would involve defiance of the very
laws that he was bound to uphold and obey,25 for he or she was always bound as an attorney
to be law abiding, and thus to uphold the integrity and dignity of the Legal Profession.26
Verily, he or she must act and comport himself or herself in such a manner that would pro-
mote public confidence in the integrity of the Legal Profession.27 Any lawyer found to vio-
late
_______________
25 Donton v. Tansingco, A.C. No. 6057, June 27, 2006, 493 SCRA 1, 5.
26 Canon 7, Code of Professional Responsibility.
27 Rangwani v. Diño, A.C. No. 5454, November 23, 2004, 443 SCRA 408, 419; Ducat, Jr.
v. Villalon, A.C. No. 3910, August 14, 2000, 337 SCRA 622, 628.
266
266
SUPREME COURT REPORTS ANNOTATED
Chu vs. Guico, Jr.
this obligation forfeits his or her privilege to continue such membership in the legal profes-
sion.
Atty. Guico willingly and wittingly violated the law in appearing to counsel Chu to raise the
large sums of money in order to obtain a favorable decision in the labor case. He thus vio-
lated the law against bribery and corruption. He compounded his violation by actually using
said illegality as his means of obtaining a huge sum from the client that he soon appropriated
for his own personal interest. His acts constituted gross dishonesty and deceit, and were a
flagrant breach of his ethical commitments under the Lawyer’s Oath not to delay any man
for money or malice; and under Rule 1.01 of the Code of Professional Responsibility that
forbade him from engaging in unlawful, dishonest, immoral or deceitful conduct. His deviant
conduct eroded the faith of the people in him as an individual lawyer as well as in the Legal
Profession as a whole. In doing so, he ceased to be a servant of the law.
Atty. Guico committed grave misconduct and disgraced the Legal Profession. Grave mis-
conduct is “improper or wrong conduct, the transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and implies a wrong-
ful intent and not mere error of judgment.”28 There is no question that any gross misconduct
by an attorney in his professional or private capacity renders him unfit to manage the affairs
of others, and is a ground for the imposition of the penalty of suspension or disbarment,
because good moral character is an essential qualification for the admission of an attorney
and for the continuance of such privilege.29
Accordingly, the recommendation of the IBP Board of Governors to suspend him from the
practice of law for three (3) years would be too soft a penalty. Instead, he should be dis-
_______________
28 Whitson v. Atienza, A.C. No. 5535, August 28, 2003, 410 SCRA 10.
29 Id.
267
VOL. 745, JANUARY 13, 2015
267
Chu vs. Guico, Jr.
barred,30 for he exhibited his unworthiness of retaining his membership in the legal profes-
sion. As the Court has reminded in Samonte v. Abellana:31
Disciplinary proceedings against lawyers are designed to ensure that whoever is granted the
privilege to practice law in this country should remain faithful to the Lawyer’s Oath. Only
thereby can lawyers preserve their fitness to remain as members of the Law Profession. Any
resort to falsehood or deception, including adopting artifices to cover up one’s misdeeds
committed against clients and the rest of the trusting public, evinces an unworthiness to
continue enjoying the privilege to practice law and highlights the unfitness to remain a mem-
ber of the Law Profession. It deserves for the guilty lawyer stern disciplinary sanctions.
Lastly, the recommendation of the IBP Board of Governors that Atty. Guico be ordered to
return the amount of P580,000.00 to Chu is well-taken. That amount was exacted by Atty.
Guico from Chu in the guise of serving the latter’s interest as the client. Although the pur-
pose for the amount was unlawful, it would be unjust not to require Atty. Guico to fully
account for and to return the money to Chu. It did not matter that this proceeding is admin-
istrative in character, for, as the Court has pointed out in Bayonla v. Reyes:32
Although the Court renders this decision in an administrative proceeding primarily to exact
the ethical responsibility on a member of the Philippine Bar, the Court’s silence about the
respondent lawyer’s legal obligation to restitute the complainant will be both unfair and in-
equitable. No victim of gross ethical misconduct concerning the client’s funds or property
should be re-
_______________
30 Ong v. Grijaldo, A.C. No. 4724, April 30, 2003, 402 SCRA 1, 11.
31 A.C. No. 3452, June 23, 2014, 727 SCRA 80.
32 A.C. No. 4808, November 22, 2011, 660 SCRA 490, 506.
268
268
SUPREME COURT REPORTS ANNOTATED
Chu vs. Guico, Jr.
quired to still litigate in another proceeding what the administrative proceeding has already
established as the respondent’s liability. x x x
ACCORDINGLY, the Court FINDS and DECLARES respondent ATTY. JOSE C. GUICO,
JR. GUILTY of the violation of the Lawyer’s Oath, and Rules 1.01 and 1.02, Canon 1 of the
Code of Professional Responsibility, and DISBARS him from membership in the Integrated
Bar of the Philippines. His name is ORDERED STRICKEN from the Roll of Attorneys.
Let copies of this Decision be furnished to the Office of the Bar Confidant, to be appended
to Atty. Guico’s personal record as an attorney; to the Integrated Bar of the Philippines; and
to all courts and quasi-judicial offices in the country for their information and guidance.
SO ORDERED.
Sereno (CJ.), Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del Castillo, Vi-
llarama, Jr., Perez, Mendoza, Reyes, Perlas-Bernabe, Leonen and Jardeleza, JJ., concur.
Brion, J., On Leave.
Respondent Atty. Jose C. Guico, Jr. disbarred for violation of Lawyer’s Oath and Rules 1.01
and 1.02, Canon 1 of Code of Professional Responsibility.
Notes.—In view of the nature of disbarment proceedings, the certification against forum
shopping to be attached to the complaint, if one is required at all in such proceedings, must
refer to another administrative case for disciplinary proceedings against the same respond-
ent. (Pena vs. Aparicio, 525 SCRA 444 [2007])
Deliberate failure to pay just debts and the issuance of worthless checks constitute gross
misconduct, for which a lawyer may be sanctioned with one year’s suspension from
269
VOL. 745, JANUARY 13, 2015
269
Chu vs. Guico, Jr.
the practice of law, or a suspension of six months upon partial payment of the obligation.
(Cham vs. Paita-Moya, 556 SCRA 1 [2008])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Chu vs. Guico, Jr., 745
SCRA 257, A.C. No. 10573 January 13, 2015
G.R. No. 173188. January 15, 2014.*
THE CONJUGAL PARTNERSHIP OF THE SPOUSES VICENTE CADAVEDO and
BENITA ARCOY-CADAVEDO (both deceased), substituted by their heirs, namely: HER-
MINIA, PASTORA, Heirs of FRUCTUOSA, Heirs of RAQUEL, EVANGELINE, VI-
CENTE, JR., and ARMANDO, all surnamed CADAVEDO, petitioners, vs. VICTORINO
(VIC) T. LACAYA, married to Rosa Legados, respondents.
Attorney’s Fees; As the rules stand, controversies involving written and oral agreements on
attorney’s fees shall be resolved in favor of the former.—We highlight that as observed by
both the RTC and the CA and agreed as well by both parties, the alleged contingent fee
agreement consisting of one-half of the subject lot was not reduced to writing prior to or, at
most, at the start of Atty. Lacaya’s engagement as the spouses Cadavedo’s counsel in Civil
Case No. 1721. An agreement between the lawyer and his client, providing for the former’s
compensation, is subject to the ordinary rules governing contracts in general. As the rules
stand, controversies involving written and oral agreements on attorney’s fees shall be re-
solved in favor of the former. Hence, the contingency fee of P2,000.00 stipulated in the
amended complaint prevails over the alleged oral contingency fee agreement of one-half of
the subject lot.
Same; Champertous Contracts; Doctrine of Maintenance; Doctrine of Champerty; The doc-
trine of maintenance was directed “against wanton and inofficious intermeddling in the dis-
putes of others in which the intermeddler has no interest whatever, and where the assistance
rendered is without justification or excuse.” Champerty, on the other hand, is characterized
by “the receipt of a share of the proceeds of the litigation by the intermeddler.” Some com-
mon law court decisions, however, add a second factor in determining champertous con-
tracts, namely, that the lawyer must also, “at his own expense maintain, and take all the risks
of, the litigation.”—Champerty, along with maintenance (of which champerty is an aggra-
vated form), is a common law doctrine that traces its origin to
_______________
* SECOND DIVISION.
398
the medieval period. The doctrine of maintenance was directed “against wanton and inoffi-
cious intermeddling in the disputes of others in which the intermeddler has no interest what-
ever, and where the assistance rendered is without justification or excuse.” Champerty, on
the other hand, is characterized by “the receipt of a share of the proceeds of the litigation by
the intermeddler.” Some common law court decisions, however, add a second factor in de-
termining champertous contracts, namely, that the lawyer must also, “at his own expense
maintain, and take all the risks of, the litigation.” The doctrines of champerty and mainte-
nance were created in response “to medieval practice of assigning doubtful or fraudulent
claims to persons of wealth and influence in the expectation that such individuals would
enjoy greater success in prosecuting those claims in court, in exchange for which they would
receive an entitlement to the spoils of the litigation.” “In order to safeguard the administra-
tion of justice, instances of champerty and maintenance were made subject to criminal and
tortuous liability and a common law rule was developed, striking down champertous agree-
ments and contracts of maintenance as being unenforceable on the grounds of public policy.”
Same; Same; As matters currently stand, any agreement by a lawyer to “conduct the litiga-
tion in his own account, to pay the expenses thereof or to save his client therefrom and to
receive as his fee a portion of the proceeds of the judgment is obnoxious to the law.” The
rule of the profession that forbids a lawyer from contracting with his client for part of the
thing in litigation in exchange for conducting the case at the lawyer’s expense is designed to
prevent the lawyer from acquiring an interest between him and his client.—As matters cur-
rently stand, any agreement by a lawyer to “conduct the litigation in his own account, to pay
the expenses thereof or to save his client therefrom and to receive as his fee a portion of the
proceeds of the judgment is obnoxious to the law.” The rule of the profession that forbids a
lawyer from contracting with his client for part of the thing in litigation in exchange for
conducting the case at the lawyer’s expense is designed to prevent the lawyer from acquiring
an interest between him and his client. To permit these arrangements is to enable the lawyer
to “acquire additional stake in the outcome of the action which might lead him to consider
his own recovery rather than that of his client or to accept a settlement which might take
399
care of his interest in the verdict to the sacrifice of that of his client in violation of his duty
of undivided fidelity to his client’s cause.”
Same; While Civil Case No. 1721 took twelve years to be finally resolved, that period of
time, as matters then stood, was not a sufficient reason to justify a large fee in the absence
of any showing that special skills and additional work had been involved.—We likewise
strike down the questioned attorney’s fee and declare it void for being excessive and uncon-
scionable. The contingent fee of one-half of the subject lot was allegedly agreed to secure
the services of Atty. Lacaya in Civil Case No. 1721. Plainly, it was intended for only one
action as the two other civil cases had not yet been instituted at that time. While Civil Case
No. 1721 took twelve years to be finally resolved, that period of time, as matters then stood,
was not a sufficient reason to justify a large fee in the absence of any showing that special
skills and additional work had been involved. The issue involved in that case, as observed
by the RTC (and with which we agree), was simple and did not require of Atty. Lacaya
extensive skill, effort and research. The issue simply dealt with the prohibition against the
sale of a homestead lot within five years from its acquisition. That Atty. Lacaya also served
as the spouses Cadavedo’s counsel in the two subsequent cases did not and could not other-
wise justify an attorney’s fee of one-half of the subject lot. As asserted by the petitioners,
the spouses Cadavedo and Atty. Lacaya made separate arrangements for the costs and ex-
penses for each of these two cases. Thus, the expenses for the two subsequent cases had been
considered and taken cared of.
Attorneys; Legal Ethics; Article 1491 (5) of the Civil Code forbids lawyers from acquiring,
by purchase or assignment, the property that has been the subject of litigation in which they
have taken part by virtue of their profession.—Article 1491 (5) of the Civil Code forbids
lawyers from acquiring, by purchase or assignment, the property that has been the subject of
litigation in which they have taken part by virtue of their profession. The same proscription
is provided under Rule 10 of the Canons of Professional Ethics. A thing is in litigation if
there is a contest or litigation over it in court or when it is subject of the judicial action.
Following this definition, we find that the subject lot was still in litigation when Atty. Lacaya
acquired the disputed one-half portion.
400
Civil Law; Contracts; Under Article 1409 of the Civil Code, contracts which are contrary to
public policy and those expressly prohibited or declared void by law are considered inexist-
ent and void from the beginning.—Whether we consider these transactions — the transfer
of the disputed one-half portion and the compromise agreement — independently of each
other or resulting from one another, we find them to be prohibited and void by reason of
public policy. Under Article 1409 of the Civil Code, contracts which are contrary to public
policy and those expressly prohibited or declared void by law are considered inexistent and
void from the beginning.
Attorney’s Fees; Contingent Fee Contracts; Words and Phrases; A contingent fee contract is
an agreement in writing where the fee, often a fixed percentage of what may be recovered
in the action, is made to depend upon the success of the litigation.—While contingent fee
agreements are indeed recognized in this jurisdiction as a valid exception to the prohibitions
under Article 1491 (5) of the Civil Code, contrary to the CA’s position, however, this recog-
nition does not apply to the present case. A contingent fee contract is an agreement in writing
where the fee, often a fixed percentage of what may be recovered in the action, is made to
depend upon the success of the litigation. The payment of the contingent fee is not made
during the pendency of the litigation involving the client’s property but only after the judg-
ment has been rendered in the case handled by the lawyer.
Civil Law; Contracts; Void Contracts; A contract whose cause, object or purpose is contrary
to law, morals, good customs, public order or public policy is inexistent and void from the
beginning.—A contract whose cause, object or purpose is contrary to law, morals, good
customs, public order or public policy is inexistent and void from the beginning. It can never
be ratified nor the action or defense for the declaration of the inexistence of the contract
prescribe; and any contract directly resulting from such illegal contract is likewise void and
inexistent.
Attorney’s Fees; Quantum Meruit; Words and Phrases; Quantum meruit — meaning ‘as
much as he deserves’ — is used as basis for determining a lawyer’s professional fees in the
absence of a contract taking into account certain factors in fixing the amount of legal fees.—
“Quantum meruit — meaning ‘as much as he deserves’ — is used as basis for determining
a lawyer’s professional fees in the absence of a contract x x x taking into account certain
factors in
401
fixing the amount of legal fees.” “Its essential requisite is the acceptance of the benefits by
one sought to be charged for the services rendered under circumstances as reasonably to
notify him that the lawyer performing the task was expecting to be paid compensation” for
it. The doctrine of quantum meruit is a device to prevent undue enrichment based on the
equitable postulate that it is unjust for a person to retain benefit without paying for it.
Same; Same; Under Section 24, Rule 138 of the Rules of Court and Canon 20 of the Code
of Professional Responsibility, factors such as the importance of the subject matter of the
controversy, the time spent and the extent of the services rendered, the customary charges
for similar services, the amount involved in the controversy and the benefits resulting to the
client from the service, to name a few, are considered in determining the reasonableness of
the fees to which a lawyer is entitled.—Under Section 24, Rule 138 of the Rules of Court
and Canon 20 of the Code of Professional Responsibility, factors such as the importance of
the subject matter of the controversy, the time spent and the extent of the services rendered,
the customary charges for similar services, the amount involved in the controversy and the
benefits resulting to the client from the service, to name a few, are considered in determining
the reasonableness of the fees to which a lawyer is entitled.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Pacatang Law Office for petitioners.
Lacaya & Tabiliran Law Office for respondents.
BRION, J.:
We resolve in this Rule 45 petition for review on certiorari[1] the challenge to the October
11, 2005 decision[2] and the May 9,
_______________
[1] Rollo, pp. 15-41.
[2] Penned by Associate Justice Teresita Dy-Liacco Flores, and concurred in by Associate
Justices Rodrigo F. Lim, Jr. and Ramon R. Garcia; id., at pp. 45-60.
402
2006 resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 56948. The CA re-
versed and set aside the September 17, 1996 decision[4] of the Regional Trial Court (RTC),
Branch 10, of Dipolog City in Civil Case No. 4038, granting in part the complaint for recov-
ery of possession of property filed by the petitioners, the Conjugal Partnership of the Spouses
Vicente Cadavedo and Benita Arcoy-Cadavedo against Atty. Victorino (Vic) T. Lacaya,
married to Rosa Legados (collectively, the respondents).
The Factual Antecedents
The Spouses Vicente Cadavedo and Benita Arcoy-Cadavedo (collectively, the spouses Ca-
davedo) acquired a homestead grant over a 230,765-square meter parcel of land known as
Lot 5415 (subject lot) located in Gumay, Piñan, Zamboanga del Norte. They were issued
Homestead Patent No. V-15414 on March 13, 1953 and Original Certificate of Title No. P-
376 on July 2, 1953. On April 30, 1955, the spouses Cadavedo sold the subject lot to the
spouses Vicente Ames and Martha Fernandez (the spouses Ames). Transfer Certificate of
Title (TCT) No. T-4792 was subsequently issued in the name of the spouses Ames.
The present controversy arose when the spouses Cadavedo filed an action[5] before the RTC
(then Court of First Instance) of Zamboanga City against the spouses Ames for sum of
money and/or voiding of contract of sale of homestead after the latter failed to pay the bal-
ance of the purchase price. The spouses Cadavedo initially engaged the services of Atty.
Rosendo Bandal who, for health reasons, later withdrew from the case; he was substituted
by Atty. Lacaya.
_______________
[3] Id., at p. 71.
[4] Penned by Judge Wilfredo C. Martinez; id., at pp. 82-97.
[5] Docketed as Civil Case No. 1721 (Cadavedo v. Ames).
403
On February 24, 1969, Atty. Lacaya amended the complaint to assert the nullity of the sale
and the issuance of TCT No. T-4792 in the names of the spouses Ames as gross violation of
the public land law. The amended complaint stated that the spouses Cadavedo hired Atty.
Lacaya on a contingency fee basis. The contingency fee stipulation specifically reads:
10. That due to the above circumstances, the plaintiffs were forced to hire a lawyer on
contingent basis and if they become the prevailing parties in the case at bar, they will pay
the sum of P2,000.00 for attorney’s fees[.][6]
In a decision dated February 1, 1972, the RTC upheld the sale of the subject lot to the spouses
Ames. The spouses Cadavedo, thru Atty. Lacaya, appealed the case to the CA.
On September 18, 1975, and while the appeal before the CA in Civil Case No. 1721 was
pending, the spouses Ames sold the subject lot to their children. The spouses Ames’ TCT
No. T-4792 was subsequently cancelled and TCT No. T-25984 was issued in their children’s
names. On October 11, 1976, the spouses Ames mortgaged the subject lot with the Devel-
opment Bank of the Philippines (DBP) in the names of their children.
On August 13, 1980, the CA issued its decision in Civil Case No. 1721, reversing the deci-
sion of the RTC and declaring the deed of sale, transfer of rights, claims and interest to the
spouses Ames null and void ab initio. It directed the spouses Cadavedo to return the initial
payment and ordered the Register of Deeds to cancel the spouses Ames’ TCT No. T-4792
and to reissue another title in the name of the spouses Cadavedo. The case eventually reached
this Court via the
_______________
[6] Rollo, p. 47; emphasis ours.
404
spouses Ames’ petition for review on certiorari which this Court dismissed for lack of merit.
Meanwhile, the spouses Ames defaulted in their obligation with the DBP. Thus, the DBP
caused the publication of a notice of foreclosure sale of the subject lot as covered by TCT
No. T-25984 (under the name of the spouses Ames’ children). Atty. Lacaya immediately
informed the spouses Cadavedo of the foreclosure sale and filed an Affidavit of Third Party
Claim with the Office of the Provincial Sheriff on September 14, 1981.
With the finality of the judgment in Civil Case No. 1721, Atty. Lacaya filed on September
21, 1981 a motion for the issuance of a writ of execution.
On September 23, 1981, and pending the RTC’s resolution of the motion for the issuance of
a writ of execution, the spouses Ames filed a complaint[7] before the RTC against the
spouses Cadavedo for Quieting of Title or Enforcement of Civil Rights due Planters in Good
Faith with prayer for Preliminary Injunction. The spouses Cadavedo, thru Atty. Lacaya, filed
a motion to dismiss on the ground of res judicata and to cancel TCT No. T-25984 (under the
name of the spouses Ames’ children).
On October 16, 1981, the RTC granted the motion for the issuance of a writ of execution in
Civil Case No. 1721, and the spouses Cadavedo were placed in possession of the subject lot
on October 24, 1981. Atty. Lacaya asked for one-half of the subject lot as attorney’s fees.
He caused the subdivision of the subject lot into two equal portions, based on area, and
selected the more valuable and productive half for himself; and assigned the other half to the
spouses Cadavedo.
Unsatisfied with the division, Vicente and his sons-in-law entered the portion assigned to
the respondents and ejected them. The latter responded by filing a counter-suit for forcible
_______________
[7] Docketed as Civil Case No. 3352 (Ames v. Cadavedo).
405
entry before the Municipal Trial Court (MTC); the ejectment case was docketed as Civil
Case No. 215. This incident occurred while Civil Case No. 3352 was pending.
On May 13, 1982, Vicente and Atty. Lacaya entered into an amicable settlement (compro-
mise agreement)[8] in Civil Case No. 215 (the ejectment case), re-adjusting the area and
portion obtained by each. Atty. Lacaya acquired 10.5383 hectares pursuant to the agreement.
The MTC approved the compromise agreement in a decision dated June 10, 1982.
Meanwhile, on May 21, 1982, the spouses Cadavedo filed before the RTC an action against
the DBP for Injunction; it was docketed as Civil Case No. 3443 (Cadavedo v. DBP). The
RTC subsequently denied the petition, prompting the spouses Cadavedo to elevate the case
to the CA via a petition for certiorari. The CA dismissed the petition in its decision of January
31, 1984.
_______________
[8] Id., at pp. 89-90. The compromise agreement, in part, reads:
I.
That defendants recognize the possession of plaintiff Vic T. Lacaya, Sr. over the northern
half of Lot 5415 to be designated as Lot 5415-A, being his share as payment of attorney’s
fees on contingent basis originally covered by O.C.T. No. P0376 and now covered by T.C.T.
No. T-25984 in the name of Rosario Ames, et al., situated at Lower Gumay, Piñan,
Zamboanga del Norte;
xxxx
III.
That the parties shall cause these portions to be surveyed and segregated from each other by
a licensed surveyor and the portion of Vic T. Lacaya, Sr. shall be identified as Lot 5415-A;
that of Vicente Cadavedo as Lot 5415-B; x x x
IV.
That the defendants shall vacate the premises of the portions belonging to the plaintiffs and,
in fact, have already vacated the premises in question and restored the plaintiffs in their
respective peaceful possession thereof since March 5, 1982[.] [emphasis ours]
406
The records do not clearly disclose the proceedings subsequent to the CA decision in Civil
Case No. 3443. However, on August 18, 1988, TCT No. 41051 was issued in the name of
the spouses Cadavedo concerning the subject lot.
On August 9, 1988, the spouses Cadavedo filed before the RTC an action[9] against the
respondents, assailing the MTC-approved compromise agreement. The case was docketed
as Civil Case No. 4038 and is the root of the present case. The spouses Cadavedo prayed,
among others, that the respondents be ejected from their one-half portion of the subject lot;
that they be ordered to render an accounting of the produce of this one-half portion from
1981; and that the RTC fix the attorney’s fees on a quantum meruit basis, with due consid-
eration of the expenses that Atty. Lacaya incurred while handling the civil cases.
During the pendency of Civil Case No. 4038, the spouses Cadavedo executed a Deed of
Partition of Estate in favor of their eight children. Consequently, TCT No. 41051 was can-
celled and TCT No. 41690 was issued in the names of the latter. The records are not clear
on the proceedings and status of Civil Case No. 3352.
The Ruling of the RTC
In the September 17, 1996 decision[10] in Civil Case No. 4038, the RTC declared the con-
tingent fee of 10.5383 hectares as excessive and unconscionable. The RTC reduced the land
area to 5.2691 hectares and ordered the respondents to vacate and restore the remaining
5.2692 hectares to the spouses Cadavedo.
_______________
[9] Action for “Judicial Determination of Attorney’s Fees, Recovery of Possession, Ac-
counting of Products, Ejectment and Damages with Prayer for Receivership and Preliminary
Mandatory/Prohibitory Injunction.”
[10] Supra note 4.
407
The RTC noted that, as stated in the amended complaint filed by Atty. Lacaya, the agreed
attorney’s fee on contingent basis was P2,000.00. Nevertheless, the RTC also pointed out
that the parties novated this agreement when they executed the compromise agreement in
Civil Case No. 215 (ejectment case), thereby giving Atty. Lacaya one-half of the subject lot.
The RTC added that Vicente’s decision to give Atty. Lacaya one-half of the subject lot, sans
approval of Benita, was a valid act of administration and binds the conjugal partnership. The
RTC reasoned out that the disposition redounded to the benefit of the conjugal partnership
as it was done precisely to remunerate Atty. Lacaya for his services to recover the property
itself.
These considerations notwithstanding, the RTC considered the one-half portion of the sub-
ject lot, as Atty. Lacaya’s contingent fee, excessive, unreasonable and unconscionable. The
RTC was convinced that the issues involved in Civil Case No. 1721 were not sufficiently
difficult and complicated to command such an excessive award; neither did it require Atty.
Lacaya to devote much of his time or skill, or to perform extensive research.
Finally, the RTC deemed the respondents’ possession, prior to the judgment, of the excess
portion of their share in the subject lot to be in good faith. The respondents were thus entitled
to receive its fruits.
On the spouses Cadavedo’s motion for reconsideration, the RTC modified the decision in its
resolution[11] dated December 27, 1996. The RTC ordered the respondents to account for
and deliver the produce and income, valued at P7,500.00 per annum, of the 5.2692 hectares
that the RTC ordered the spouses Ames to restore to the spouses Cadavedo, from October
10, 1988 until final restoration of the premises.
The respondents appealed the case before the CA.
_______________
[11] Rollo, pp. 98-100.
408
The Ruling of the CA
In its decision[12] dated October 11, 2005, the CA reversed and set aside the RTC’s Sep-
tember 17, 1996 decision and maintained the partition and distribution of the subject lot
under the compromise agreement. In so ruling, the CA noted the following facts: (1) Atty.
Lacaya served as the spouses Cadavedo’s counsel from 1969 until 1988, when the latter filed
the present case against Atty. Lacaya; (2) during the nineteen (19) years of their attorney-
client relationship, Atty. Lacaya represented the spouses Cadavedo in three civil cases —
Civil Case No. 1721, Civil Case No. 3352, and Civil Case No. 3443; (3) the first civil case
lasted for twelve years and even reached this Court, the second civil case lasted for seven
years, while the third civil case lasted for six years and went all the way to the CA; (4) the
spouses Cadavedo and Atty. Lacaya entered into a compromise agreement concerning the
division of the subject lot where Atty. Lacaya ultimately agreed to acquire a smaller portion;
(5) the MTC approved the compromise agreement; (6) Atty. Lacaya defrayed all of the liti-
gation expenses in Civil Case No. 1721; and (7) the spouses Cadavedo expressly recognized
that Atty. Lacaya served them in several cases.
Considering these established facts and consistent with Canon 20.01 of the Code of Profes-
sional Responsibility (enumerating the factors that should guide the determination of the
lawyer’s fees), the CA ruled that the time spent and the extent of the services Atty. Lacaya
rendered for the spouses Cadavedo in the three cases, the probability of him losing other
employment resulting from his engagement, the benefits resulting to the spouses Cadavedo,
and the contingency of his fees justified the compromise agreement and rendered the agreed
fee under the compromise agreement reasonable.
_______________
[12] Supra note 2.
409
The Petition
In the present petition, the petitioners essentially argue that the CA erred in: (1) granting the
attorney’s fee consisting of one-half or 10.5383 hectares of the subject lot to Atty. Lacaya,
instead of confirming the agreed contingent attorney’s fees of P2,000.00; (2) not holding the
respondents accountable for the produce, harvests and income of the 10.5383-hectare portion
(that they obtained from the spouses Cadavedo) from 1988 up to the present; and (3) up-
holding the validity of the purported oral contract between the spouses Cadavedo and Atty.
Lacaya when it was champertous and dealt with property then still subject of Civil Case No.
1721.[13]
The petitioners argue that stipulations on a lawyer’s compensation for professional services,
especially those contained in the pleadings filed in courts, control the amount of the attor-
ney’s fees to which the lawyer shall be entitled and should prevail over oral agreements. In
this case, the spouses Cadavedo and Atty. Lacaya agreed that the latter’s contingent attor-
ney’s fee was P2,000.00 in cash, not one-half of the subject lot. This agreement was clearly
stipulated in the amended complaint filed in Civil Case No. 1721. Thus, Atty. Lacaya is
bound by the expressly stipulated fee and cannot insist on unilaterally changing its terms
without violating their contract.
The petitioners add that the one-half portion of the subject lot as Atty. Lacaya’s contingent
attorney’s fee is excessive and unreasonable. They highlight the RTC’s observations and
argue that the issues involved in Civil Case No. 1721, pursuant to which the alleged contin-
gent fee of one-half of the subject lot was agreed by the parties, were not novel and did not
_______________
[13] See also the Petitioners’ Memorandum dated September 26, 2007, Rollo, pp. 157-196;
Reply to the respondents’ comment to the petition dated May 8, 2007 (id., at pp. 138-140),
and Reply to the Respondents’ Memorandum dated November 12, 2007 (id., at pp. 242-
250).
410
involve difficult questions of law; neither did the case require much of Atty. Lacaya’s time,
skill and effort in research. They point out that the two subsequent civil cases should not be
considered in determining the reasonable contingent fee to which Atty. Lacaya should be
entitled for his services in Civil Case No. 1721, as those cases had not yet been instituted at
that time. Thus, these cases should not be considered in fixing the attorney’s fees. The peti-
tioners also claim that the spouses Cadavedo concluded separate agreements on the expenses
and costs for each of these subsequent cases, and that Atty. Lacaya did not even record any
attorney’s lien in the spouses Cadavedo’s TCT covering the subject lot.
The petitioners further direct the Court’s attention to the fact that Atty. Lacaya, in taking
over the case from Atty. Bandal, agreed to defray all of the litigation expenses in exchange
for one-half of the subject lot should they win the case. They insist that this agreement is a
champertous contract that is contrary to public policy, prohibited by law for violation of the
fiduciary relationship between a lawyer and a client.
Finally, the petitioners maintain that the compromise agreement in Civil Case No. 215 (eject-
ment case) did not novate their original stipulated agreement on the attorney’s fees. They
reason that Civil Case No. 215 did not decide the issue of attorney’s fees between the spouses
Cadavedo and Atty. Lacaya for the latter’s services in Civil Case No. 1721.
The Case for the Respondents
In their defense,[14] the respondents counter that the attorney’s fee stipulated in the amended
complaint was not the agreed fee of Atty. Lacaya for his legal services. They argue
_______________
[14] Comment to the Petition dated November 17, 2006 (id., at pp. 116-135). See also the
respondents’ Memorandum dated October 24, 2007 (id., at pp. 212-239).
411
that the questioned stipulation for attorney’s fees was in the nature of a penalty that, if
granted, would inure to the spouses Cadavedo and not to Atty. Lacaya.
The respondents point out that: (1) both Vicente and Atty. Lacaya caused the survey and
subdivision of the subject lot immediately after the spouses Cadavedo reacquired its posses-
sion with the RTC’s approval of their motion for execution of judgment in Civil Case No.
1721; (2) Vicente expressly ratified and confirmed the agreement on the contingent attor-
ney’s fee consisting of one-half of the subject lot; (3) the MTC in Civil Case No. 215 (eject-
ment case) approved the compromise agreement; (4) Vicente is the legally designated ad-
ministrator of the conjugal partnership, hence the compromise agreement ratifying the trans-
fer bound the partnership and could not have been invalidated by the absence of Benita’s
acquiescence; and (5) the compromise agreement merely inscribed and ratified the earlier
oral agreement between the spouses Cadavedo and Atty. Lacaya which is not contrary to
law, morals, good customs, public order and public policy.
While the case is pending before this Court, Atty. Lacaya died.[15] He was substituted by
his wife — Rosa — and their children — Victoriano D.L. Lacaya, Jr., Rosevic Lacaya-
Ocampo, Reymar L. Lacaya, Marcelito L. Lacaya, Raymundito L. Lacaya, Laila Lacaya-
Matabalan, Marivic Lacaya-Barba, Rosalie L. Lacaya and Ma. Vic-Vic Lacaya-Camaon-
gay.[16]
The Court’s Ruling
We resolve to GRANT the petition.
_______________
[15] Copy of the Death Certificate indicated the date of death as September 18, 2007; id., at
p. 205.
[16] Formal Notice of Death and Substitution of Parties dated October 3, 2007; id., at pp.
200-204.
412
The subject lot was the core of four successive and overlapping cases prior to the present
controversy. In three of these cases, Atty. Lacaya stood as the spouses Cadavedo’s coun-
sel. For ease of discussion, we summarize these cases (including the dates and proceedings
pertinent to each) as follows:
Civil Case No. 1721 — Cadavedo v. Ames (Sum of money and/or voiding of contract of
sale of homestead), filed on January 10, 1967. The writ of execution was granted on October
16, 1981.
Civil Case No. 3352 — Ames v. Cadavedo (Quieting of Title and/or Enforcement of Civil
Rights due Planters in Good Faith with Application for Preliminary injunction), filed on
September 23, 1981.
Civil Case No. 3443 — Cadavedo v. DBP (Action for Injunction with Preliminary Injunc-
tion), filed on May 21, 1982.
Civil Case No. 215 — Atty. Lacaya v. Vicente Cadavedo, et al. (Ejectment Case), filed
between the latter part of 1981 and early part of 1982. The parties executed the compromise
agreement on May 13, 1982.
Civil Case No. 4038 — petitioners v. respondents (the present case).
The agreement on attorney’s fee
consisting of one-half of the sub-
ject lot is void; the petitioners are
entitled to recover possession
The core issue for our resolution is whether the attorney’s fee consisting of one-half of the
subject lot is valid and reasonable, and binds the petitioners. We rule in the NEGATIVE for
the reasons discussed below.
413
A. The written agreement providing
for a contingent fee of P2,000.00
should prevail over the oral agreement
providing for one-half of the subject lot
The spouses Cadavedo and Atty. Lacaya agreed on a contingent fee of P2,000.00 and not,
as asserted by the latter, one-half of the subject lot. The stipulation contained in the amended
complaint filed by Atty. Lacaya clearly stated that the spouses Cadavedo hired the former
on a contingency basis; the Spouses Cadavedo undertook to pay their lawyer P2,000.00 as
attorney’s fees should the case be decided in their favor.
Contrary to the respondents’ contention, this stipulation is not in the nature of a penalty that
the court would award the winning party, to be paid by the losing party. The stipulation is
a representation to the court concerning the agreement between the spouses Cadavedo and
Atty. Lacaya, on the latter’s compensation for his services in the case; it is not the attorney’s
fees in the nature of damages which the former prays from the court as an incident to the
main action.
At this point, we highlight that as observed by both the RTC and the CA and agreed as well
by both parties, the alleged contingent fee agreement consisting of one-half of the subject
lot was not reduced to writing prior to or, at most, at the start of Atty. Lacaya’s engagement
as the spouses Cadavedo’s counsel in Civil Case No. 1721. An agreement between the law-
yer and his client, providing for the former’s compensation, is subject to the ordinary rules
governing contracts in general. As the rules stand, controversies involving written and oral
agreements on attorney’s fees shall be resolved in favor of the former.[17] Hence, the con-
tingency fee of P2,000.00 stipulated in the amended complaint prevails over
_______________
[17] Rules of Court, Rule 138, Section 24.
414
the alleged oral contingency fee agreement of one-half of the subject lot.
B. The contingent fee agreement
between the spouses Cadavedo and
Atty. Lacaya, awarding the latter one-
half of the subject lot, is champertous
Granting arguendo that the spouses Cadavedo and Atty. Lacaya indeed entered into an oral
contingent fee agreement securing to the latter one-half of the subject lot, the agreement is
nevertheless void.
In their account, the respondents insist that Atty. Lacaya agreed to represent the spouses
Cadavedo in Civil Case No. 1721 and assumed the litigation expenses, without providing
for reimbursement, in exchange for a contingency fee consisting of one-half of the subject
lot. This agreement is champertous and is contrary to public policy.[18]
Champerty, along with maintenance (of which champerty is an aggravated form), is a com-
mon law doctrine that traces its origin to the medieval period.[19] The doctrine of mainte-
nance was directed “against wanton and inofficious intermeddling in the disputes of others
in which the intermeddler has no interest whatever, and where the assistance rendered is
without justification or excuse.”[20] Champerty, on the other
_______________
[18] Bautista v. Atty. Gonzales, 261 Phil. 266, 281; 182 SCRA 151, 164 (1990).
[19] The Role of the Doctrines of Champerty and Maintenance in Arbitration by Jern-Fei
Ng, www.essexcourt.net/uploads/JERN-FEI%20NG.pdf. See also Contracts, Champerty,
Common Law Rule Modified by Modern Statutes and Decisions, California Law Review,
Vol. 1, No. 2, January 1913, pp. 178-180, 179, www.jstor.org/stable/
3474485?seq=2; and www.danielnelson.ca/pdfs/Fundraising%20for%
20Litigation.pdf.
[20] The Role of the Doctrines of Champerty and Maintenance in Arbitration by Jern-Fei
Ng, www.essexcourt.net/uploads/JERN-
415
hand, is characterized by “the receipt of a share of the proceeds of the litigation by the inter-
meddler.”[21] Some common law court decisions, however, add a second factor in deter-
mining champertous contracts, namely, that the lawyer must also, “at his own expense main-
tain, and take all the risks of, the litigation.”[22]
The doctrines of champerty and maintenance were created in response “to medieval practice
of assigning doubtful or fraudulent claims to persons of wealth and influence in the expec-
tation that such individuals would enjoy greater success in prosecuting those claims in court,
in exchange for which they would receive an entitlement to the spoils of the litigation.”[23]
“In order to safeguard the administration of justice, instances of champerty and maintenance
were made subject to criminal and tortuous liability and a common law rule was developed,
striking down champertous agreements and contracts of maintenance as being unenforceable
on the grounds of public policy.”[24]
_______________
FEI%20NG.pdf, citing British Cash and Parcel Conveyors Ltd. v. Lamson Store Service Co.
Ltd. (1908) 1 K.B. 1006 at 1014, per Fletcher Moulton L.J.
[21] The Role of the Doctrines of Champerty and Maintenance in Arbitration by Jern-Fei
Ng, www.essexcourt.net/uploads/JERN-FEI%20NG.pdf, citing Giles v. Thompson (1994)
1 A.C. 142; (1993) 2 W.L.R. 908; (1993) 3 All E.R. 321 at 328, per Steyn L.J. See also
Contracts, Champerty, Common Law Rule Modified by Modern Statutes and Decisions,
California Law Review, Vol. 1, No. 2, January 1913, pp. 178-180, 179, www.jstor.org/sta-
ble/3474485?seq=2.
[22] Contracts, Champerty, Common Law Rule Modified by Modern Statutes and Deci-
sions, California Law Review, Vol. 1, No. 2, January 1913, pp. 178-180, 179,
www.jstor.org/stable/3474485?seq=2.
[23] The Role of the Doctrines of Champerty and Maintenance in Arbitration by Jern-Fei
Ng, www.essexcourt.net/uploads/JERN-FEI%20NG.pdf.
[24] The Role of the Doctrines of Champerty and Maintenance in Arbitration by Jern-Fei
Ng, www.essexcourt.net/uploads/JERN-FEI%20NG.pdf. See also Contracts, Champerty,
Common Law Rule
416
In this jurisdiction, we maintain the rules on champerty, as adopted from American deci-
sions, for public policy considerations.[25] As matters currently stand, any agreement by a
lawyer to “conduct the litigation in his own account, to pay the
_______________
Modified by Modern Statutes and Decisions, California Law Review, Vol. 1, No. 2, January
1913, pp. 178180, 179, www.jstor.org/stable/
3474485?seq=2.
Recent foreign legal developments vary at their treatment of champertous contracts. Several
jurisdictions have abolished criminal and tortuous liability for champerty (and maintenance).
To name a few: Australia — abolished by the Maintenance, Champerty and Barratry Aboli-
tion Act of 1993 for New South Wales and the Wrongs Act 1958 and Crimes Act 1958 for
Victoria; England and Wales — by the Criminal Law Act 1967. (en.wikipe-
dia.org/wiki/Champerty_and_
maintenance) and www.essexcourt.net/uploads/JERN-FEI%20NG.pdf. Other jurisdictions,
particularly some states in the United States of America, have relaxed the application of this
common law doctrine or have adopted it in a modified form as the peculiar conditions of the
society that gave rise to this doctrine have changed (Contracts, Champerty, Common Law
Rule Modified by Modern Statutes and Decisions, California Law Review, Vol. 1, No. 2,
January 1913, pp. 178-180, 180, www.jstor.org/stable/3474485?seq=2). Other American
states have completely repudiated it unless a statute specifically treats a contract as cham-
pertous. These states include: Arkansas, California, Connecticut, Delaware, Idaho, Mary-
land, Michigan, New Jersey, New York, Texas and West Virginia (Contracts, Champerty,
Common Law Rule Modified by Modern Statutes and Decisions, California Law Review,
Vol. 1, No. 2, January 1913, pp. 178-180, 180, www.jstor.org/stable/3474485?seq=2). Other
jurisdictions, like Canada for one, have retained the rule against champerty on public policy
considerations, the purpose being to prevent one party from inciting another to initiate or
defend litigation that would never have been brought or defended; or to prevent increase in
lawsuits, harassment of defendants, and suppression or manufacturing of evidence and sub-
ornation of witness (www.danielnelson.ca/pdfs/
Fundraising%20for%20Litigation.pdf).
[25] See Bautista v. Atty. Gonzales, supra note 18, citing JBP Holding Corp. v. U.S., 166 F.
Supp. 324 (1958); and Sampliner v. Motion Pictures Patents Co., et al., 255 F. 242 (1918).
417
expenses thereof or to save his client therefrom and to receive as his fee a portion of the
proceeds of the judgment is obnoxious to the law.”[26] The rule of the profession that forbids
a lawyer from contracting with his client for part of the thing in litigation in exchange for
conducting the case at the lawyer’s expense is designed to prevent the lawyer from acquiring
an interest between him and his client. To permit these arrangements is to enable the lawyer
to “acquire additional stake in the outcome of the action which might lead him to consider
his own recovery rather than that of his client or to accept a settlement which might take care
of his interest in the verdict to the sacrifice of that of his client in violation of his duty of
undivided fidelity to his client’s cause.”[27]
In Bautista v. Atty. Gonzales,[28] the Court struck down the contingent fee agreement be-
tween therein respondent Atty. Ramon A. Gonzales and his client for being contrary to pub-
lic policy. There, the Court held that an agreement between a lawyer and his client that does
not provide for reimbursement of litigation expenses paid by the former is against public
policy, especially if the lawyer has agreed to carry on the action at his expense in consider-
ation of some bargain to have a part of the thing in dispute. It violates the fiduciary relation-
ship between the lawyer and his client.[29]
In addition to its champertous character, the contingent fee arrangement in this case ex-
pressly transgresses the Canons of Professional Ethics and, impliedly, the Code of Profes-
sional Responsibility.[30] Under Rule 42 of the Canons of Professional
_______________
[26] Agpalo, Legal and Judicial Ethics (2002), Seventh Edition, p. 392.
[27] Agpalo, Legal and Judicial Ethics (2002), Seventh Edition, p. 392, citing A.B.A. Op.
288 (Oct. 11, 1954); Low v. Hutchinson, 37 Mel 96 (1853).
[28] Supra note 18.
[29] Id., at p. 281.
[30] See CANON 16, specifically Rule 16.04, of the Code of Professional Responsibility.
The pertinent portion of Rule 16.04 reads:
418
Ethics, a lawyer may not properly agree with a client that the lawyer shall pay or beat the
expense of litigation.[31] The same reasons discussed above underlie this rule.
C. The attorney’s fee consisting of
one-half of the subject lot is excessive
and unconscionable
We likewise strike down the questioned attorney’s fee and declare it void for being excessive
and unconscionable. The contingent fee of one-half of the subject lot was allegedly agreed
to secure the services of Atty. Lacaya in Civil Case No. 1721. Plainly, it was intended for
only one action as the two other civil cases had not yet been instituted at that time. While
Civil Case No. 1721 took twelve years to be finally resolved, that period of time, as matters
then stood, was not a sufficient reason to justify a large fee in the absence of any showing
that special skills and additional work had been involved. The issue involved in that case, as
observed by the RTC (and with which we agree), was simple and did not require of Atty.
Lacaya extensive skill, effort and research. The issue simply dealt with the prohibition
against the sale of a homestead lot within five years from its acquisition.
That Atty. Lacaya also served as the spouses Cadavedo’s counsel in the two subsequent
cases did not and could not otherwise justify an attorney’s fee of one-half of the subject
_______________
“Rule 16.04 – x x x Neither shall a lawyer lend money to a client except, when in the
interest of justice, he has to advance necessary expenses in a legal matter he is handling for
the client.”
[31] Rule 42 of the Canons of Professional Ethics reads in full:
“42. Expenses.
A lawyer may not properly agree with a client that the lawyer shall pay or beat the expense
of litigation; he may in good faith advance expenses as a matter of convenience, but subject
to reimbursement.” (emphasis ours)
419
lot. As asserted by the petitioners, the spouses Cadavedo and Atty. Lacaya made separate
arrangements for the costs and expenses for each of these two cases. Thus, the expenses for
the two subsequent cases had been considered and taken cared of.
Based on these considerations, we therefore find one-half of the subject lot as attorney’s fee
excessive and unreasonable.
D. Atty. Lacaya’s acquisition of the
one-half portion contravenes Article
1491 (5) of the Civil Code
Article 1491 (5) of the Civil Code forbids lawyers from acquiring, by purchase or assign-
ment, the property that has been the subject of litigation in which they have taken part by
virtue of their profession.[32] The same proscription is provided under Rule 10 of the Can-
ons of Professional Ethics.[33]
_______________
[32] The pertinent provision of Article 1491 reads:
“Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial
auction, either in person or through the mediation of another:
xxxx
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other
officers and employees connected with the administration of justice, the property and rights
in litigation or levied upon an execution before the court within whose jurisdiction or terri-
tory they exercise their respective functions; this prohibition includes the act of acquiring by
assignment and shall apply to lawyers, with respect to the property and rights which may be
the object of any litigation in which they may take part by virtue of their profession[.] [Em-
phases ours]
[33] Rule 10 of the Canons of Professional Ethics provides:
“10. Acquiring interest in litigation.
The lawyer should not purchase any interest in the subject matter of the litigation which he
is conducting.”
420
A thing is in litigation if there is a contest or litigation over it in court or when it is subject
of the judicial action.[34] Following this definition, we find that the subject lot was still in
litigation when Atty. Lacaya acquired the disputed one-half portion. We note in this regard
the following established facts: (1) on September 21, 1981, Atty. Lacaya filed a motion for
the issuance of a writ of execution in Civil Case No. 1721; (2) on September 23, 1981, the
spouses Ames filed Civil Case No. 3352 against the spouses Cadavedo; (3) on October 16,
1981, the RTC granted the motion filed for the issuance of a writ of execution in Civil Case
No. 1721 and the spouses Cadavedo took possession of the subject lot on October 24, 1981;
(4) soon after, the subject lot was surveyed and subdivided into two equal portions, and Atty.
Lacaya took possession of one of the subdivided portions; and (5) on May 13, 1982, Vicente
and Atty. Lacaya executed the compromise agreement.
From these timelines, whether by virtue of the alleged oral contingent fee agreement or an
agreement subsequently entered into, Atty. Lacaya acquired the disputed one-half portion
(which was after October 24, 1981) while Civil Case No. 3352 and the motion for the issu-
ance of a writ of execution in Civil Case No. 1721 were already pending before the lower
courts. Similarly, the compromise agreement, including the subsequent judicial approval,
was effected during the pendency of Civil Case No. 3352. In all of these, the relationship of
a lawyer and a client still existed between Atty. Lacaya and the spouses Cadavedo.
_______________
See also Pabugais v. Sahijwani, 467 Phil. 1111, 1120; 423 SCRA 596, 604 (2004); Valencia
v. Atty. Cabanting, 273 Phil. 534, 543; 196 SCRA 302, 307 (1991); and Ordonio v. Eduarte,
Adm. Mat. No. 3216, March 16, 1992, 207 SCRA 229, 232.
[34] Vda. de Gurrea v. Suplico, 522 Phil. 295, 308-309; 488 SCRA 332, 345 (2006); and
Valencia v. Atty. Cabanting, supra at p. 542; p. 307.
421
Thus, whether we consider these transactions — the transfer of the disputed one-half portion
and the compromise agreement — independently of each other or resulting from one another,
we find them to be prohibited and void[35] by reason of public policy.[36] Under Article
1409 of the Civil Code, contracts which are contrary to public policy and those expressly
prohibited or declared void by law are considered inexistent and void from the begin-
ning.[37]
What did not escape this Court’s attention is the CA’s failure to note that the transfer violated
the provisions of Article 1491 (5) of the Civil Code, although it recognized the concurrence
of the transfer and the execution of the compromise agreement with the pendency of the two
civil cases subsequent to Civil Case No. 1721.[38] In reversing the RTC ruling, the CA gave
weight to the compromise agreement and in so doing, found justification in the unproved
oral contingent fee agreement.
While contingent fee agreements are indeed recognized in this jurisdiction as a valid excep-
tion to the prohibitions under Article 1491 (5) of the Civil Code,[39] contrary to the CA’s
position, however, this recognition does not apply to the present case. A contingent fee con-
tract is an agreement in writing where the fee, often a fixed percentage of what may be
recovered in the action, is made to depend upon the success of the
_______________
[35] Vda. de Gurrea v. Suplico, supra, at p. 310; p. 347. See also Pabugais v. Sahijwani,
supra note 33, at p. 1121; p. 604.
[36] See Fornilda v. The Br. 164, RTC IVth Judicial Region, Pasig, 248 Phil. 523, 531
(1988); and Valencia v. Atty. Cabanting, supra note 33, at p. 542; p. 307.
[37] See paragraphs 1 and 7, Article 1409 of the Civil Code. See also Vda. de Gurrea v.
Suplico, supra note 34, at p. 310; p. 347.
[38] Rollo, p. 58.
[39] See Fabillo v. Intermediate Appellate Court, G.R. No. 68838, March 11, 1991, 195
SCRA 28, 35; and Director of Lands v. Larrazabal, 177 Phil. 467, 479; 88 SCRA 513, 526
(1979).
422
litigation.[40] The payment of the contingent fee is not made during the pendency of the
litigation involving the client’s property but only after the judgment has been rendered in
the case handled by the lawyer.[41]
In the present case, we reiterate that the transfer or assignment of the disputed one-half por-
tion to Atty. Lacaya took place while the subject lot was still under litigation and the lawyer-
client relationship still existed between him and the spouses Cadavedo. Thus, the general
prohibition provided under Article 1491 of the Civil Code, rather than the exception pro-
vided in jurisprudence, applies. The CA seriously erred in upholding the compromise agree-
ment on the basis of the unproved oral contingent fee agreement.
Notably, Atty. Lacaya, in undertaking the spouses Cadavedo’s cause pursuant to the terms
of the alleged oral contingent fee agreement, in effect, became a co-proprietor having an
equal, if not more, stake as the spouses Cadavedo. Again, this is void by reason of public
policy; it undermines the fiduciary relationship between him and his clients.[42]
E. The compromise agreement could
not validate the void oral contingent
fee agreement; neither did it supersede
the written contingent fee agreement
The compromise agreement entered into between Vicente and Atty. Lacaya in Civil Case
No. 215 (ejectment case) was intended to ratify and confirm Atty. Lacaya’s acquisition and
possession of the disputed one-half portion which were made in violation of Article 1491
(5) of the Civil Code. As earlier
_______________
[40] See Director of Lands v. Larrazabal, supra, at p. 475; p. 520.
[41] See Biascan v. Atty. Lopez, 456 Phil. 173, 180; 409 SCRA 1, 6 (2003); and Fabillo v.
Intermediate Appellate Court, supra note 39, at p. 39.
[42] See Valencia v. Atty. Cabanting, supra note 33, at p. 542; p. 308; and Bautista v. Atty.
Gonzales, supra note 18, at p. 281; p. 164.
423
discussed, such acquisition is void; the compromise agreement, which had for its object a
void transaction, should be void.
A contract whose cause, object or purpose is contrary to law, morals, good customs, public
order or public policy is inexistent and void from the beginning.[43] It can never be rati-
fied[44] nor the action or defense for the declaration of the inexistence of the contract pre-
scribe;[45] and any contract directly resulting from such illegal contract is likewise void and
inexistent.[46]
Consequently, the compromise agreement did not supersede the written contingent fee
agreement providing for attorney’s fee of P2,000.00; neither did it preclude the petitioners
from questioning its validity even though Vicente might have knowingly and voluntarily
acquiesced thereto and although the MTC approved it in its June 10, 1982 decision in the
ejectment case. The MTC could not have acquired jurisdiction over the subject matter of the
void compromise agreement; its judgment in the ejectment case could not have attained fi-
nality and can thus be attacked at any time. Moreover, an ejectment case concerns itself only
with the issue of possession de facto; it will not preclude the filing of a separate action for
recovery of possession founded on ownership. Hence, contrary to the CA’s position, the
petitioners — in filing the present action and praying for, among others, the recovery of
possession of the disputed one-half portion and for judicial determination of the reasonable
fees due Atty. Lacaya for his services — were not barred by the compromise agreement.
_______________
[43] Civil Code of the Philippines, Article 1409 (1).
[44] Id., last paragraph.
[45] Id., Article 1410.
[46] Id., Article 1422.
424
Atty. Lacaya is entitled to receive
attorney’s fees on a quantum me-
ruit basis
In view of their respective assertions and defenses, the parties, in effect, impliedly set aside
any express stipulation on the attorney’s fees, and the petitioners, by express contention,
submit the reasonableness of such fees to the court’s discretion. We thus have to fix the
attorney’s fees on a quantum meruit basis.
“Quantum meruit — meaning ‘as much as he deserves’ — is used as basis for determining
a lawyer’s professional fees in the absence of a contract x x x taking into account certain
factors in fixing the amount of legal fees.”[47] “Its essential requisite is the acceptance of
the benefits by one sought to be charged for the services rendered under circumstances as
reasonably to notify him that the lawyer performing the task was expecting to be paid com-
pensation”[48] for it. The doctrine of quantum meruit is a device to prevent undue enrich-
ment based on the equitable postulate that it is unjust for a person to retain benefit without
paying for it.[49]
Under Section 24, Rule 138 of the Rules of Court[50] and
_______________
[47] Spouses Garcia v. Atty. Bala, 512 Phil. 486, 494; 476 SCRA 85, 95 (2005); citation
omitted.
[48] Agpalo, Legal and Judicial Ethics (2002), Seventh Edition, p. 395, citing Dallas Joint
Stock Land Bank v. Colbert, 127 SW2d 1004.
[49] Agpalo, Legal and Judicial Ethics (2002), Seventh Edition, p. 395, citing Traders Royal
Bank Employees Union-Independent v. NLRC, 269 SCRA 733 (1997).
[50] Section 24, Rule 138 of the Rules of Court, in part, reads:
“SEC. 24. Compensation of attorneys; agreement as to fees.—An attorney shall be enti-
tled to have and recover from his client no more than a reasonable compensation for his
services, with a view to the importance of the subject matter of the controversy, the extent
of the services rendered, and the professional standing of the attorney. x x x A written con-
tract
425
Canon 20 of the Code of Professional Responsibility,[51] factors such as the importance of
the subject matter of the controversy, the time spent and the extent of the services rendered,
the customary charges for similar services, the amount involved in the controversy and the
benefits resulting to the client from the service, to name a few, are considered in determining
the reasonableness of the fees to which a lawyer is entitled.
In the present case, the following considerations guide this Court in considering and setting
Atty. Lacaya’s fees based on quantum meruit: (1) the questions involved in these civil cases
were not novel and did not require of Atty. Lacaya considerable effort in terms of time, skill
or the performance of extensive research; (2) Atty. Lacaya rendered legal services
_______________
for services shall control the amount to be paid therefor unless found by the court to be
unconscionable or unreasonable.”
[51] The pertinent provision of Canon 20 of the Code of Professional Responsibility reads:
“CANON 20 — x x x x
Rule 20.01 — A lawyer shall be guided by the following factors in determining his fees:
a) The time spent and the extent of the services rendered or required;
b) The novelty and difficulty of the questions involved;
c) The importance of the subject matter;
d) The skill demanded;
e) The probability of losing other employment as a result of the acceptance of the proffered
case;
f) The customary charges for similar services and the schedule of fees of the IBP chapter
to which he belongs;
g) The amount involved in the controversy and the benefits resulting to the client from the
service; the contingency or certainty of compensation; the character of the employment,
whether occasional or established; and
h) The professional standing of the lawyer.”
426
for the Spouses Cadavedo in three civil cases beginning in 1969 until 1988 when the peti-
tioners filed the instant case; (3) the first of these civil cases (Cadavedo v. Ames) lasted for
twelve years and reaching up to this Court; the second (Ames v. Cadavedo) lasted for seven
years; and the third (Cadavedo and Lacaya v. DBP) lasted for six years, reaching up to the
CA; and (4) the property subject of these civil cases is of a considerable size of 230,765
square meters or 23.0765 hectares.
All things considered, we hold as fair and equitable the RTC’s considerations in appreciating
the character of the services that Atty. Lacaya rendered in the three cases, subject to modi-
fication on valuation. We believe and so hold that the respondents are entitled to two (2)
hectares (or approximately one-tenth [1/10] of the subject lot), with the fruits previously
received from the disputed one-half portion, as attorney’s fees. They shall return to the pe-
titioners the remainder of the disputed one-half portion.
The allotted portion of the subject lot properly recognizes that litigation should be for the
benefit of the client, not the lawyer, particularly in a legal situation when the law itself holds
clear and express protection to the rights of the client to the disputed property (a homestead
lot). Premium consideration, in other words, is on the rights of the owner, not on the lawyer
who only helped the owner protect his rights. Matters cannot be the other way around; oth-
erwise, the lawyer does indeed effectively acquire a property right over the disputed prop-
erty. If at all, due recognition of parity between a lawyer and a client should be on the fruits
of the disputed property, which in this case, the Court properly accords.
WHEREFORE, in view of these considerations, we hereby GRANT the petition. We AF-
FIRM the decision dated September 17, 1996 and the resolution dated December 27, 1996
of the Regional Trial Court of Dipolog City, Branch 10, in Civil Case No. 4038, with the
MODIFICATION that the respondents, the spouses Victorino (Vic) T. Lacaya and Rosa
427
Legados, are entitled to two (2) hectares (or approximately one-tenth [1/10] of the subject
lot) as attorney’s fees. The fruits that the respondents previously received from the disputed
one-half portion shall also form part of the attorney’s fees. We hereby ORDER the respond-
ents to return to the petitioners the remainder of the 10.5383-hectare portion of the subject
lot that Atty. Vicente Lacaya acquired pursuant to the compromise agreement.
SO ORDERED.
Carpio (Chairperson), Del Castillo, Perez and Perlas-Bernabe, JJ., concur.
Petition granted, judgment and resolution affirmed with modification.
Note.—A contract for a contingent fees is an agreement in writing by which the fees, usually
a fixed percentage of what may be recovered in the action, are made to depend upon the
success in the effort to enforce or defend a supposed right — contingent fees depend upon
an express contract, without which the attorney can only recover on the basis of quantum
meruit; Quantum meruit — literally meaning as much as he deserves — is used as basis for
determining an attorney’s professional fees in the absence of an express agreement; The
recovery of attorney’s fees on the basis of quantum meruit is a device that prevents an un-
scrupulous client from running away with the fruits of the legal services of counsel without
paying for it and also avoids unjust enrichment on the part of the attorney himself. (National
Power Corporation vs. Heirs of Macabangkit Sangkay, 656 SCRA 60 [2011])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. The Conjugal Partnership
of the Spouses Vicente Cadavedo and Benita Arcoy-Cadavedo vs. Lacaya, 713 SCRA 397,
G.R. No. 173188 January 15, 2014
VOL. 409, AUGUST 19, 2003
299
Khan, Jr. vs. Simbillo
A.C. No. 5299. August 19, 2003.*
ATTY. ISMAEL G. KHAN, JR., Assistant Court Administrator and Chief, Public Infor-
mation Office, complainant, vs. ATTY. RIZALINO T. SIMBILLO, respondent.
G.R. No. 157053. August 19, 2003.*
ATTY. RIZALINO T. SIMBILLO, petitioner, vs. IBP COMMISSION ON BAR DISCI-
PLINE and ATTY. ISMAEL G. KHAN, JR., in his capacity as Assistant Court Administra-
tor and Chief, Public Information Office, respondents.
Administrative Law; Attorneys; The practice of law is not a business; Lawyering is not pri-
marily meant to be a money-making venture and law advocacy is not a capital that neces-
sarily yields profits; Elements distinguishing the legal profession from a business.—It has
been repeatedly stressed that the practice of law is not a business. It is a profession in which
duty to public service, not money, is the primary consideration.
_______________
* FIRST DIVISION.
300
300
SUPREME COURT REPORTS ANNOTATED
Khan, Jr. vs. Simbillo
Lawyering is not primarily meant to be a money-making venture, and law advocacy is not a
capital that necessarily yields profits. The gaining of a livelihood should be a secondary
consideration. The duty to public service and to the administration of justice should be the
primary consideration of lawyers, who must subordinate their personal interests or what they
owe to themselves. The following elements distinguish the legal profession from a business:
(1) A duty of public service, of which the emolument is a by-product, and in which one may
attain the highest eminence without making much money; (2) A relation as an “officer of the
court” to the administration of justice involving thorough sincerity, integrity and reliability;
(3) A relation to clients in the highest degree of fiduciary; and (4) A relation to colleagues
at the bar characterized by candor, fairness, and unwillingness to resort to current business
methods of advertising and encroachment on their practice, or dealing directly with their
clients.
Same; Same; Solicitation of legal business is not altogether proscribed for solicitation to be
proper, it must be compatible with the dignity of the legal profession.—The solicitation of
legal business is not altogether proscribed. However, for solicitation to be proper, it must be
compatible with the dignity of the legal profession. If it were made in a modest and decorous
manner, it would bring no injury to the lawyer and to the bar. Thus, the use of simple signs
stating the name or names of the lawyers, the office and residence address and fields of
practice, as well as advertisement in legal periodicals bearing the same brief data, are per-
missible. Even the use of calling cards is now acceptable. Publication in reputable law lists,
in a manner consistent with the standards of conduct imposed by the canon, of brief bio-
graphical and informative data is likewise allowable.
ADMINISTRATIVE MATTER in the Supreme Court and SPECIAL CIVIL ACTION in
the Supreme Court. Certiorari.
The facts are stated in the resolution of the Court.
RESOLUTION
YNARES-SANTIAGO, J.:
This administrative complaint arose from a paid advertisement that appeared in the July 5,
2000 issue of the newspaper, Philippine Daily Inquirer, which reads: “ANNULMENT OF
MARRIAGE Specialist 532-4333/521-2667.”1
Ms. Ma. Theresa B. Espeleta, a staff member of the Public Information Office of the Su-
preme Court, called up the published
_______________
1 Rollo, p. 13.
301
VOL. 409, AUGUST 19, 2003
301
Khan, Jr. vs. Simbillo
telephone number and pretended to be an interested party. She spoke to Mrs. Simbillo, who
claimed that her husband, Atty. Rizalino Simbillo, was an expert in handling annulment
cases and can guarantee a court decree within four to six months, provided the case will not
involve separation of property or custody of children. Mrs. Simbillo also said that her hus-
band charges a fee of P48,000.00, half of which is payable at the time of filing of the case
and the other half after a decision thereon has been rendered.
Further research by the Office of the Court Administrator and the Public Information Office
revealed that similar advertisements were published in the August 2 and 6, 2000 issues of
the Manila Bulletin and August 5, 2000 issue of The Philippine Star.2
On September 1, 2000, Atty. Ismael G. Khan, Jr., in his capacity as Assistant Court Admin-
istrator and Chief of the Public Information Office, filed an administrative complaint against
Atty. Rizalino T. Simbillo for improper advertising and solicitation of his legal services, in
violation of Rule 2.03 and Rule 3.01 of the Code of Professional Responsibility and Rule
138, Section 27 of the Rules of Court.3
In his answer, respondent admitted the acts imputed to him, but argued that advertising and
solicitation per se are not prohibited acts; that the time has come to change our views about
the prohibition on advertising and solicitation; that the interest of the public is not served by
the absolute prohibition on lawyer advertising; that the Court can lift the ban on lawyer
advertising; and that the rationale behind the decades-old prohibition should be abandoned.
Thus, he prayed that he be exonerated from all the charges against him and that the Court
promulgate a ruling that advertisement of legal services offered by a lawyer is not contrary
to law, public policy and public order as long as it is dignified.4
The case was referred to the Integrated Bar of the Philippines for investigation, report and
recommendation.5 On June 29, 2002, the IBP Commission on Bar Discipline passed Reso-
lution No. XV-2002-306,6 finding respondent guilty of violation of Rules 2.03 and
_______________
2 Id., at pp. 14-15.
3 Id., at p. 9.
4 Id., at pp. 21-57.
5 Id., at p. 60.
6 Id., at p. 62.
302
302
SUPREME COURT REPORTS ANNOTATED
Khan, Jr. vs. Simbillo
3.01 of the Code of Professional Responsibility and Rule 138, Section 27 of the Rules of
Court, and suspended him from the practice of law for one (1) year with the warning that a
repetition of similar acts would be dealt with more severely. The IBP Resolution was noted
by this Court on November 11, 2002.7
In the meantime, respondent filed an Urgent Motion for Reconsideration,8 which was denied
by the IBP in Resolution No. XV-2002-606 dated October 19, 2002.9
Hence, the instant petition for certiorari, which was docketed as G.R. No. 157053 entitled,
“Atty. Rizalino T. Simbillo, Petitioner versus IBP Commission on Bar Discipline, Atty.
Ismael G. Khan, Jr., Asst. Court Administrator and Chief, Public Information Office, Re-
spondents.” This petition was consolidated with A.C. No. 5299 per the Court’s Resolution
dated March 4, 2003.
In a Resolution dated March 26, 2003, the parties were required to manifest whether or not
they were willing to submit the case for resolution on the basis of the pleadings.10 Com-
plainant filed his Manifestation on April 25, 2003, stating that he is not submitting any ad-
ditional pleading or evidence and is submitting the case for its early resolution on the basis
of pleadings and records thereof.11 Respondent, on the other hand, filed a Supplemental
Memorandum on June 20, 2003.
We agree with the IBP’s Resolutions Nos. XV-2002-306 and XV-2002-606.
Rules 2.03 and 3.01 of the Code of Professional Responsibility read:
Rule 2.03.—A lawyer shall not do or permit to be done any act designed primarily to solicit
legal business.
Rule 3.01.—A lawyer shall not use or permit the use of any false, fraudulent, misleading,
deceptive, undignified, self-laudatory or unfair statement or claim regarding his qualifica-
tions or legal services.
Rule 138, Section 27 of the Rules of Court states:
_______________
7 Id., at p. 72.
8 Id., at p. 75.
9 Id., at p. 73.
10 Id., at p. 109.
11 Id., at p. 110.
303
VOL. 409, AUGUST 19, 2003
303
Khan, Jr. vs. Simbillo
SEC. 27. Disbarment and 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 vio-
lation of the oath which he is required to take before the admission to practice, or for a willful
disobedience appearing as attorney for a party without authority to do so.
It has been repeatedly stressed that the practice of law is not a business.12 It is a profession
in which duty to public service, not money, is the primary consideration. Lawyering is not
primarily meant to be a money-making venture, and law advocacy is not a capital that nec-
essarily yields profits.13 The gaining of a livelihood should be a secondary consideration.14
The duty to public service and to the administration of justice should be the primary consid-
eration of lawyers, who must subordinate their personal interests or what they owe to them-
selves.15 The following elements distinguish the legal profession from a business:
1. A duty of public service, of which the emolument is a by-product, and in which one may
attain the highest eminence without making much money;
2. A relation as an “officer of the court” to the administration of justice involving thorough
sincerity, integrity and reliability;
3. A relation to clients in the highest degree of fiduciary;
4. A relation to colleagues at the bar characterized by candor, fairness, and unwillingness to
resort to current business methods of advertising and encroachment on their practice, or
dealing directly with their clients.16
There is no question that respondent committed the acts complained of. He himself admits
that he caused the publication of the advertisements. While he professes repentance and begs
for the
_______________
12 Cantiller v. Potenciano, A.C. No. 3195, 18 December 1989, 180 SCRA 246, 253.
13 Canlas v. Court of Appeals, G.R. No. L-77691, 8 August 1988, 164 SCRA 160, 174.
14 Agpalo R., LEGAL ETHICS, p. 12 [1997].
15 Burbe v. Magulta, A.C. No. 5713, 10 June 2002, 383 SCRA 276.
16 Agpalo, supra, at pp. 13-14, citing In re Sycip, 30 July 1979, 92 SCRA 1, 10; Pineda E.L.
LEGAL AND JUDICIAL ETHICS, p. 58 [1999].
304
304
SUPREME COURT REPORTS ANNOTATED
Khan, Jr. vs. Simbillo
Court’s indulgence, his contrition rings hollow considering the fact that he advertised his
legal services again after he pleaded for compassion and after claiming that he had no inten-
tion to violate the rules. Eight months after filing his answer, he again advertised his legal
services in the August 14, 2001 issue of the Buy & Sell Free Ads Newspaper.17 Ten months
later, he caused the same advertisement to be published in the October 5, 2001 issue of Buy
& Sell.18 Such acts of respondent are a deliberate and contemptuous affront on the Court’s
authority.
What adds to the gravity of respondent’s acts is that in advertising himself as a self-styled
“Annulment of Marriage Specialist,” he wittingly or unwittingly erodes and undermines not
only the stability but also the sanctity of an institution still considered sacrosanct despite the
contemporary climate of permissiveness in our society. Indeed, in assuring prospective cli-
ents that an annulment may be obtained in four to six months from the time of the filing of
the case,19 he in fact encourages people, who might have otherwise been disinclined and
would have refrained from dissolving their marriage bonds, to do so.
Nonetheless, the solicitation of legal business is not altogether proscribed. However, for so-
licitation to be proper, it must be compatible with the dignity of the legal profession. If it
were made in a modest and decorous manner, it would bring no injury to the lawyer and to
the bar.20 Thus, the use of simple signs stating the name or names of the lawyers, the office
and residence address and fields of practice, as well as advertisement in legal periodicals
bearing the same brief data, are permissible. Even the use of calling cards is now accepta-
ble.21 Publication in reputable law lists, in a manner consistent with the standards of conduct
imposed by the canon, of brief biographical and informative data is likewise allowable. As
explicitly stated in Ulep v. Legal Clinic, Inc.:22
Such data must not be misleading and may include only a statement of the lawyer’s name
and the names of his professional associates; ad-
_______________
17 Rollo, Vol. II, p. 41.
18 Id., at p. 110.
19 Rollo, Vol. I, p. 3.
20 Pineda, Legal and Judicial Ethics, supra, at p. 61.
21 Id., at p. 65.
22 Bar Matter No. 553, 17 June 1993, 223 SCRA 378, 407.
305
VOL. 409, AUGUST 19, 2003
305
Khan, Jr. vs. Simbillo
dresses, telephone numbers, cable addresses; branches of law practiced; date and place of
birth and admission to the bar; schools attended with dates of graduation, degrees and other
educational distinctions; public or quasi-public offices; posts of honor; legal authorships;
legal teaching positions; membership and offices in bar associations and committees thereof,
in legal and scientific societies and legal fraternities; the fact of listings in other reputable
law lists; the names and addresses of references; and, with their written consent, the names
of clients regularly represented.
The law list must be a reputable law list published primarily for that purpose; it cannot be a
rare supplemental feature of a paper, magazine, trade journal or periodical which is pub-
lished principally for other purposes. For that reason, a lawyer may not properly publish his
brief biographical and informative data in a daily paper, magazine, trade journal or society
program. Nor may a lawyer permit his name to be published in a law list, the conduct, man-
agement, or contents of which are calculated or likely to deceive or injure the public or the
bar, or to lower dignity or standing of the profession.
The use of an ordinary simple professional card is also permitted. The card may contain only
a statement of his name, the name of the law firm which he is connected with, address,
telephone number and special branch of law practiced. The publication of a simple an-
nouncement of the opening of a law firm or of changes in the partnership, associates, firm
name or office address, being for the convenience of the profession, is not objectionable. He
may likewise have his name listed in a telephone directory but not under a designation of
special branch of law. (emphasis and italics supplied)
WHEREFORE, in view of the foregoing, respondent RIZALINO T. SIMBILLO is found
GUILTY of violation of Rules 2.03 and 3.01 of the Code of Professional Responsibility and
Rule 138, Section 27 of the Rules of Court. He is SUSPENDED from the practice of law for
ONE (1) YEAR effective upon receipt of this Resolution. He is likewise STERNLY
WARNED that a repetition of the same or similar offense will be dealt with more severely.
Let copies of this Resolution be entered in his record as attorney and be furnished the Inte-
grated Bar of the Philippines and all courts in the country for their information and guidance.
SO ORDERED.
Vitug (Actg. Chairman), Carpio and Azcuna, JJ., concur.
Davide, Jr. (C.J.), Abroad on Official Business.
306
306
SUPREME COURT REPORTS ANNOTATED
Felix Gochan and Sons Realty Corporation vs. Heirs of Raymundo Baba
Respondent suspended from practice of law for one (1) year for violation of Rules 2.03 and
3.01 of the Code of Professional Responsibility and Rule 138, Sec. 27 of the Rules of Court,
with stern warning against repetition of similar offense.
Note.—While indeed the practice of law is not a business venture, a lawyer nevertheless is
entitled to be duly compensated for professional services rendered (J.K. Mercado and Sons
Agricultural Enterprises, Inc. vs. De Vera, 317 SCRA 339 [1999])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Khan, Jr. vs. Simbillo, 409
SCRA 299, A.C. No. 5299, G.R. No. 157053 August 19, 2003
A.C. No. 6622. July 10, 2012.*
MANUEL G. VILLATUYA, complainant, vs. ATTY. BEDE S. TABALINGCOS, respond-
ent.
Attorneys; Legal Ethics; A lawyer is proscribed by the Code to divide or agree to divide the
fees for legal services rendered with a person not licensed to practice law.—The first charge
of complainant against respondent for the nonpayment of the former’s share in the fees, if
proven to be true is based on an agreement that is violative of Rule 9.02 of the Code of
Professional Responsibility. A lawyer is proscribed by the Code to divide or agree to divide
the fees for legal services rendered with a person not licensed to practice law. Based on the
allegations, respondent had agreed to share with complainant the legal fees paid by clients
that complainant solicited for the respondent. Complainant, however, failed to proffer con-
vincing evidence to prove the existence of that agreement.
Same; Same; A lawyer is not prohibited from engaging in business or other lawful occupa-
tion.—A lawyer is not prohibited from engaging in business or other lawful occupation.
Impropriety arises, though, when the business is of such a nature or is conducted in such a
manner as to be inconsistent with the lawyer’s duties as a member of the bar. This incon-
sistency arises when the business is one that can readily lend itself to the procurement of
professional employment for the lawyer; or that can be used as a cloak for indirect solicita-
tion on the lawyer’s behalf; or is of a nature that, if handled by a lawyer, would be regarded
as the practice of law.
Same; Code of Professional Responsibility; Rule 15.08 of the Code of Professional Respon-
sibility mandates that the lawyer is mandated to inform the client whether the former is act-
ing as a lawyer or in another capacity.—Rule 15.08 of the Code mandates that the lawyer is
mandated to inform the client whether the former is acting as a lawyer or in another capacity.
This duty is a must in those occupations related to the practice of law. The reason is that
certain ethical considerations governing the attorney-client relation-
_______________
* EN BANC.
38
38
SUPREME COURT REPORTS ANNOTATED
Villatuya vs. Tabalingcos
ship may be operative in one and not in the other. In this case, it is confusing for the client
if it is not clear whether respondent is offering consultancy or legal services.
Evidence; Documentary Evidence; Marriage Contracts; Presumption of Regularity; Having
been issued by a government agency, the National Statistics Office (NSO) certification is
accorded much evidentiary weight and carries with it a presumption of regularity.—We can-
not give credence to the defense proffered by respondent. He has not disputed the authentic-
ity or impugned the genuineness of the NSO-certified copies of the Marriage Contracts pre-
sented by complainant to prove the former’s marriages to two other women aside from his
wife. For purposes of this disbarment proceeding, these Marriage Contracts bearing the name
of respondent are competent and convincing evidence proving that he committed bigamy,
which renders him unfit to continue as a member of the bar. The documents were certified
by the NSO, which is the official repository of civil registry records pertaining to the birth,
marriage and death of a person. Having been issued by a government agency, the NSO cer-
tification is accorded much evidentiary weight and carries with it a presumption of regular-
ity. In this case, respondent has not presented any competent evidence to rebut those docu-
ments.
Attorneys; Gross Ignorance of the Law; Respondent’s regard for marriage contracts as ordi-
nary agreements indicates either his wanton disregard of the sanctity of marriage or his gross
ignorance of the law on what course of action to take to annul a marriage under the old Civil
Code provisions.—According to the respondent, after the discovery of the second and the
third marriages, he filed civil actions to annul the Marriage Contracts. We perused the at-
tached Petitions for Annulment and found that his allegations therein treated the second and
the third marriage contracts as ordinary agreements, rather than as special contracts contem-
plated under the then Civil Code provisions on marriage. He did not invoke any grounds in
the Civil Code provisions on marriage, prior to its amendment by the Family Code. Re-
spondent’s regard for marriage contracts as ordinary agreements indicates either his wanton
disregard of the sanctity of marriage or his gross ignorance of the law on what course of
action to take to annul a marriage under the old Civil Code provisions.
39
VOL. 676, JULY 10, 2012
39
Villatuya vs. Tabalingcos
Same; Disbarment; Bigamy; Gross Immoral Conduct; Atty. Bede S. Tabalingcos’ acts of
committing bigamy twice constituted grossly immoral conduct and are grounds for disbar-
ment under Section 27, Rule 138 of the Revised Rules of Court.—Respondent exhibited a
deplorable lack of that degree of morality required of him as a member of the bar. He made
a mockery of marriage, a sacred institution demanding respect and dignity. His acts of com-
mitting bigamy twice constituted grossly immoral conduct and are grounds for disbarment
under Section 27, Rule 138 of the Revised Rules of Court.
ADMINISTRATIVE CASE in the Supreme Court. Disbarment.
The facts are stated in the opinion of the Court.
Bede S. Tabalingcos for and in his own behalf.
PER CURIAM:
In this Complaint for disbarment filed on 06 December 2004 with the Office of the Bar
Confidant, complainant Manuel G. Villatuya (complainant) charges Atty. Bede S.
Tabalingcos (respondent) with unlawful solicitation of cases, violation of the Code or Pro-
fessional Responsibility for nonpayment of fees to complainant, and gross immorality for
marrying two other women while respondent’s first marriage was subsisting.1
In a Resolution2 dated 26 January 2005, the Second Division of this Court required respond-
ent to file a Comment, which he did on 21 March 2005.3 The Complaint was referred to the
Integrated Bar of the Philippines (IBP) for investigation, report and recommendation within
sixty (60) days from receipt of the record.4
_______________
1 Rollo, p. 1.
2 Id., at p. 22.
3 Id., at pp. 22-35.
4 Id., at p. 36.
40
40
SUPREME COURT REPORTS ANNOTATED
Villatuya vs. Tabalingcos
On 23 June 2005, the Commission on Bar Discipline of the IBP (Commission) issued a
Notice5 setting the mandatory conference of the administrative case on 05 July 2005. During
the conference, complainant appeared, accompanied by his counsel and respondent. They
submitted for resolution three issues to be resolved by the Commission as follows:
1. Whether respondent violated the Code of Professional Responsibility by nonpayment
of fees to complainant
2. Whether respondent violated the rule against unlawful solicitation, and
3. Whether respondent is guilty of gross immoral conduct for having married thrice.6
The Commission ordered the parties to submit their respective verified Position Papers. Re-
spondent filed his verified Position Paper,7 on 15 July 2005 while complainant submitted
his on 01 August 2005.8
Complainant’s Accusations
Complainant averred that on February 2002, he was employed by respondent as a financial
consultant to assist the latter on technical and financial matters in the latter’s numerous pe-
titions for corporate rehabilitation filed with different courts. Complainant claimed that they
had a verbal agreement whereby he would be entitled to P50,000 for every Stay Order issued
by the court in the cases they would handle, in addition to ten percent (10%) of the fees paid
by their clients. He alleged that, from February to December 2002, respondent was able to
rake in millions of pesos from the corporate rehabilitation cases they were working on to-
gether.
_______________
5 Commission on Bar Discipline Records, Vol. II, p. 1.
6 Id., at p. 3.
7 Id., at p. 60.
8 Id., at p. 186.
41
VOL. 676, JULY 10, 2012
41
Villatuya vs. Tabalingcos
Complainant also claimed that he was entitled to the amount of P900,000 for the 18 Stay
Orders issued by the courts as a result of his work with respondent, and a total of P4,539,000
from the fees paid by their clients.9 Complainant appended to his Complaint several annexes
supporting the computation of the fees he believes are due him.
Complainant alleged that respondent engaged in unlawful solicitation of cases in violation
of Section 27 of the Code of Professional Responsibility. Allegedly respondent set up two
financial consultancy firms, Jesi and Jane Management, Inc. and Christmel Business Link,
Inc., and used them as fronts to advertise his legal services and solicit cases. Complainant
supported his allegations by attaching to his Position Paper the Articles of Incorporation of
Jesi and Jane,10 letter-proposals to clients signed by respondent on various dates11 and
proofs of payment made to the latter by their clients.12
On the third charge of gross immorality, complainant accused respondent of committing two
counts of bigamy for having married two other women while his first marriage was subsist-
ing. He submitted a Certification dated 13 July 2005 issued by the Office of the Civil Reg-
istrar General-National Statistics Office (NSO) certifying that Bede S. Tabalingcos, herein
respondent, contracted marriage thrice: first, on 15 July 1980 with Pilar M. Lozano, which
took place in Dasmariñas, Cavite; the second time on 28 September 1987 with Ma. Rowena
Garcia Piñon in the City of Manila; and the third on 07 September 1989 with Mary Jane
Elgincolin Paraiso in Ermita, Manila.13
_______________
9 Id., at p. 1.
10 Id., at pp. 10-20.
11 Id., at pp. 5 & 6.
12 Commission on Bar Discipline Records, Vol. II, pp. 202-212.
13 Id., at pp. 195, 201.
42
42
SUPREME COURT REPORTS ANNOTATED
Villatuya vs. Tabalingcos
Respondent’s Defense
In his defense, respondent denied the charges against him. He asserted that complainant was
not an employee of his law firm—Tabalingcos and Associates Law Office14—but of Jesi
and Jane Management, Inc., where the former is a major stockholder.15 Respondent alleged
that complainant was unprofessional and incompetent in performing his job as a financial
consultant, resulting in the latter’s dismissal of many rehabilitation plans they presented in
their court cases.16 Respondent also alleged that there was no verbal agreement between
them regarding the payment of fees and the sharing of professional fees paid by his clients.
He proffered documents showing that the salary of complainant had been paid.17
As to the charge of unlawful solicitation, respondent denied committing any. He contended
that his law firm had an agreement with Jesi and Jane Management, Inc., whereby the firm
would handle the legal aspect of the corporate rehabilitation case; and that the latter would
attend to the financial aspect of the case’ such as the preparation of the rehabilitation plans
to be presented in court. To support this contention, respondent attached to his Position Paper
a Joint Venture Agreement dated 10 December 2005 entered into by Tabalingcos and Asso-
ciates Law Offices and Jesi and Jane Management, Inc.;18 and an Affidavit executed by
Leoncio Balena, Vice-President for Operations of the said company.19
On the charge of gross immorality, respondent assailed the Affidavit submitted by William
Genesis, a dismissed messenger of Jesi and Jane Management, Inc., as having no proba-
_______________
14 Id., at p. 61.
15 Id., at p. 66.
16 Id., at p. 67.
17 Id., at pp. 78-82.
18 Id., at p. 74.
19 Id., at p. 75.
43
VOL. 676, JULY 10, 2012
43
Villatuya vs. Tabalingcos
tive value, since it had been retracted by the affiant himself.20 Respondent did not specifi-
cally address the allegations regarding his alleged bigamous marriages with two other
women.
On 09 January 2006, complainant filed a Motion to Admit Copies of 3 Marriage Contracts.21
To the said Motion, he attached the certified true copies of the Marriage Contracts referred
to in the Certification issued by the NSO.22 The appended Marriage Contracts matched the
dates, places and names of the contracting parties indicated in the earlier submitted NSO
Certification of the three marriages entered into by respondent. The first marriage contract
submitted was a marriage that took place between respondent and Pilar M. Lozano in
Dasmariñas, Cavite, on 15 July 1980.23 The second marriage contract was between respond-
ent and Ma. Rowena G. Piñon, and it took place at the Metropolitan Trial Court Compound
of Manila on 28 September 1987.24 The third Marriage Contract referred to a marriage be-
tween respondent and Mary Jane E. Paraiso, and it took place on 7 September 1989 in Er-
mita, Manila. In the second and third Marriage Contracts, respondent was described as single
under the entry for civil status.
On 16 January 2006, respondent submitted his Opposition to the Motion to Admit filed by
complainant, claiming that the document was not marked during the mandatory conference
or submitted during the hearing of the case.25 Thus, respondent was supposedly deprived of
the opportunity to controvert those documents.26 He disclosed that criminal cases for big-
amy were filed against him by the complainant before the
_______________
20 Id., at p. 10.
21 Id., at p. 215.
22 Id., at pp. 217-219.
23 Id., at p. 217.
24 Id., at p. 218.
25 Id., at p. 220.
26 Id., at p. 221.
44
44
SUPREME COURT REPORTS ANNOTATED
Villatuya vs. Tabalingcos
Office of the City Prosecutor of Manila. Respondent further informed the Commission that
he had filed a Petition to Declare Null and Void the Marriage Contract with Rowena Piñon
at the Regional Trial Court (RTC) of Biñan, Laguna, where it was docketed as Civil Case
No. B-3270.27 He also filed another Petition for Declaration of Nullity of Marriage Contract
with Pilar Lozano at the RTC-Calamba, where it was docketed as Civil Case No. B-3271.28
In both petitions, he claimed that he had recently discovered that there were Marriage Con-
tracts in the records of the NSO bearing his name and allegedly executed with Rowena Piñon
and Pilar Lozano on different occasions. He prayed for their annulment, because they were
purportedly null and void.
On 17 September 2007, in view of its reorganization, the Commission scheduled a clarifica-
tory hearing on 20 November 2007.29 While complainant manifested to the Commission
that he would not attend the hearing,30 respondent manifested his willingness to attend and
moved for the suspension of the resolution of the administrative case against the latter. Re-
spondent cited two Petitions he had filed with the RTC, Laguna, seeking the nullification of
the Marriage Contracts he discovered to be bearing his name.31
On 10 November 2007, complainant submitted to the Commission duplicate original copies
of two (2) Informations filed with the RTC of Manila against respondent, entitled “People
of the Philippines vs. Atty. Bede S. Tabalingcos.”32 The first criminal case, docketed as
Criminal Case No. 07-257125, was for bigamy for the marriage contracted by respondent
with Ma. Rowena Garcia Piñon while his marriage with Pilar
_______________
27 Id., at p. 226.
28 Id., at p. 231.
29 Id., at p. 237.
30 Id., at p. 238.
31 Id., at p. 244.
32 Id., at p. 239.
45
VOL. 676, JULY 10, 2012
45
Villatuya vs. Tabalingcos
Lozano was still valid.33 The other one, docketed as Criminal Case No. 07-257126, charged
respondent with having committed bigamy for contracting marriage with Mary Jane Elgin-
colin Paraiso while his marriage with Pilar Lozano was still subsisting.34 Each of the Infor-
mations recommended bail in the amount of P24,000 for his provisional liberty as accused
in the criminal cases.35
On 20 November 2007, only respondent attended the clarificatory hearing. In the same pro-
ceeding, the Commission denied his Motion to suspend the proceedings pending the out-
come of the petitions for nullification he had filed with the RTC–Laguna. Thus, the Com-
mission resolved that the administrative case against him be submitted for resolution.36
IBP’s Report and Recommendation
On 27 February 2008, the Commission promulgated its Report and Recommendation ad-
dressing the specific charges against respondent.37 The first charge, for dishonesty for the
nonpayment of certain shares in the fees, was dismissed for lack of merit. The Commission
ruled that the charge should have been filed with the proper courts since it was only empow-
ered to determine respondent’s administrative liability. On this matter, complainant failed to
prove dishonesty on the part of respondent.38 On the second charge, the Commission found
respondent to have violated the rule on the solicitation of client for having advertised his
legal services and unlawfully solicited cases. It recommended that he be reprimanded
_______________
33 Id., at p. 240.
34 Id., at p. 256.
35 Id., at pp. 241 & 243.
36 Id., at p. 256.
37 Commission on Bar Discipline Records Vol. III, pp. 2-13. The Commission’s Report and
Recommendation dated 27 February 2008 was penned by Commissioner Wilfredo E.J.E.
Reyes.
38 Id., at p. 8.
46
46
SUPREME COURT REPORTS ANNOTATED
Villatuya vs. Tabalingcos
for the violation. It failed, though, to point out exactly the specific provision he violated.39
As for the third charge, the Commission found respondent to be guilty of gross immorality
for violating Rules 1.01 and 7.03 of the Code of Professional Responsibility and Section 27
of Rule 138 of the Rules of Court. It found that complainant was able to prove through
documentary evidence that respondent committed bigamy twice by marrying two other
women while the latter’s first marriage was subsisting.40 Due to the gravity of the acts of
respondent, the Commission recommended that he be disbarred, and that his name be
stricken off the roll of attorneys.41
On 15 April 2008, the IBP Board of Governors, through its Resolution No. XVIII-2008-154,
adopted and approved the Report and Recommendation of the Investigating Commis-
sioner.42 On 01 August 2008, respondent filed a Motion for Reconsideration, arguing that
the recommendation to disbar him was premature. He contends that the Commission should
have suspended the disbarment proceedings pending the resolution of the separate cases he
had filed for the annulment of the marriage contracts bearing his name as having entered
into those contracts with other women. He further contends that the evidence proffered by
complainant to establish that the latter committed bigamy was not substantial to merit the
punishment of disbarment. Thus, respondent moved for the reconsideration of the resolution
to disbar him and likewise moved to archive the administrative proceedings pending the
outcome of the Petitions he separately filed with the RTC of Laguna for the annulment of
Marriage Contracts.43
_______________
39 Id.
40 Id., at pp. 9-10.
41 Id., at p. 13.
42 Id., at p. 1.
43 Id., at pp. 14-27.
47
VOL. 676, JULY 10, 2012
47
Villatuya vs. Tabalingcos
On 26 June 2011, the IBP Board of Governors denied the Motions for Reconsideration and
affirmed their Resolution dated 15 April 2008 recommending respondent’s disbarment.44
The Court’s Ruling
The Court affirms the recommendations of the IBP.
First Charge:
Dishonesty for nonpayment of share in the fees
While we affirm the IBP’s dismissal of the first charge against respondent, we do not concur
with the rationale behind it.
The first charge of complainant against respondent for the nonpayment of the former’s share
in the fees, if proven to be true is based on an agreement that is violative of Rule 9.0245 of
the Code of Professional Responsibility. A lawyer is proscribed by the Code to divide or
agree to divide the fees for legal services rendered with a person not licensed to practice law.
Based on the allegations, respondent had agreed to share with complainant the legal fees
paid by clients that complainant solicited for the respondent. Complainant, however, failed
_______________
44 On the 36th page succeeding Commission on Bar Discipline Records, Vol. III (no pagi-
nation on the Rollo).
45 Code of Professional Responsibility, Rule 9.02—A lawyer shall not divide or stipulate to
divide a fee for legal services with persons not licensed to practice law, except:
(a) Where there is a pre-existing agreement with a partner or associate that, upon the lat-
ter’s death, money shall be paid over a reasonable period of time to his estate or to persons
specified in the agreement; or
(b) Where a lawyer undertakes to complete unfinished legal business of a deceased lawyer;
or
(c) Where a lawyer or law firm includes non-lawyer employees in a retirement plan even
if the plan is based in whole or in part, on a profit sharing agreement.
48
48
SUPREME COURT REPORTS ANNOTATED
Villatuya vs. Tabalingcos
to proffer convincing evidence to prove the existence of that agreement.
We ruled in Tan Tek Beng v. David46 that an agreement between a lawyer and a layperson
to share the fees collected from clients secured by the layperson is null and void, and that
the lawyer involved may be disciplined for unethical conduct. Considering that complain-
ant’s allegations in this case had not been proven, the IBP correctly dismissed the charge
against respondent on this matter.
Second Charge:
Unlawful solicitation of clients
Complainant charged respondent with unlawfully soliciting clients and advertising legal ser-
vices through various business entities. Complainant submitted documentary evidence to
prove that Jesi & Jane Management Inc. and Christmel Business Link, Inc. were owned and
used as fronts by respondent to advertise the latter’s legal services and to solicit clients. In
its Report, the IBP established the truth of these allegations and ruled that respondent had
violated the rule on the solicitation of clients, but it failed to point out the specific provision
that was breached.
A review of the records reveals that respondent indeed used the business entities mentioned
in the report to solicit clients and to advertise his legal services, purporting to be specialized
in corporate rehabilitation cases. Based on the facts of the case, he violated Rule 2.0347 of
the Code, which prohibits lawyers from soliciting cases for the purpose of profit.
_______________
46 211 Phil. 547; 126 SCRA 389 (1983).
47 Code of Professional Responsibility, Rule 2.03.—A lawyer shall not do or permit to be
done any act designed primarily to solicit legal business.
49
VOL. 676, JULY 10, 2012
49
Villatuya vs. Tabalingcos
A lawyer is not prohibited from engaging in business or other lawful occupation. Impropri-
ety arises, though, when the business is of such a nature or is conducted in such a manner as
to be inconsistent with the lawyer’s duties as a member of the bar. This inconsistency arises
when the business is one that can readily lend itself to the procurement of professional em-
ployment for the lawyer; or that can be used as a cloak for indirect solicitation on the law-
yer’s behalf; or is of a nature that, if handled by a lawyer, would be regarded as the practice
of law.48
It is clear from the documentary evidence submitted by complainant that Jesi & Jane Man-
agement, Inc., which purports to be a financial and legal consultant, was indeed a vehicle
used by respondent as a means to procure professional employment; specifically for corpo-
rate rehabilitation cases. Annex “C”49 of the Complaint is a letterhead of Jesi & Jane Man-
agement, Inc., which proposed an agreement for the engagement of legal services. The letter
clearly states that, should the prospective client agree to the proposed fees, respondent would
render legal services related to the former’s loan obligation with a bank. This circumvention
is considered objectionable and violates the Code, because the letter is signed by respondent
as President of Jesi & Jane Management, Inc., and not as partner or associate of a law firm.
Rule 15.0850 of the Code mandates that the lawyer is mandated to inform the client whether
the former is acting as a lawyer or in another capacity. This duty is a must in those occupa-
tions related to the practice of law. The reason is that
_______________
48 Ruben A. Agpalo, Legal and Judicial Ethics, 124 (2009), citing A.B.A. Op. 57 (19 March
1932); Re, 97 A2d 627, 39 ALR2d 1032 (1953).
49 Rollo, p. 6.
50 Code of Professional Responsibility, Rule 15.08.—A lawyer who is engaged in another
profession or occupation concurrently with the practice of law shall make clear to his client
whether he is acting as a lawyer or in another capacity.
50

50
SUPREME COURT REPORTS ANNOTATED
Villatuya vs. Tabalingcos
certain ethical considerations governing the attorney-client relationship may be operative in
one and not in the other.51 In this case, it is confusing for the client if it is not clear whether
respondent is offering consultancy or legal services.
Considering, however, that complainant has not proven the degree of prevalence of this
practice by respondent, we affirm the recommendation to reprimand the latter for violating
Rules 2.03 and 15.08 of the Code.
Third Charge:
Bigamy
The third charge that respondent committed bigamy twice is a serious accusation. To sub-
stantiate this allegation, complainant submitted NSO-certified copies of the Marriage Con-
tracts entered into by respondent with three (3) different women. The latter objected to the
introduction of these documents, claiming that they were submitted after the administrative
case had been submitted for resolution, thus giving him no opportunity to controvert them.52
We are not persuaded by his argument.
We have consistently held that a disbarment case is sui generis. Its focus is on the qualifica-
tion and fitness of a lawyer to continue membership in the bar and not the procedural tech-
nicalities in filing the case. Thus, we explained in Garrido v. Garrido:53
“Laws dealing with double jeopardy or with procedure—such as the verification of plead-
ings and prejudicial questions, or in this case, prescription of offenses or the filing of affida-
vits of desistance by the complainant—do not apply in the determination of a lawyer’s qual-
ifications and fitness for membership in the Bar. We have so ruled in the past and we see no
reason to depart from this ruling.
_______________
51 Agpalo, supra note 48.
52 Commission on Bar Discipline Records, Vol. II, p. 221.
53 A.C. No. 6593, 04 February 2010, 611 SCRA 508.
51
VOL. 676, JULY 10, 2012
51
Villatuya vs. Tabalingcos
First, admission to the practice of law is a component of the administration of justice and is
a matter of public interest because it involves service to the public. The admission qualifi-
cations are also qualifications for the continued enjoyment of the privilege to practice law.
Second, lack of qualifications or the violation of the standards for the practice of law, like
criminal cases, is a matter of public concern that the State may inquire into through this
Court.”
In disbarment proceedings, the burden of proof rests upon the complainant. For the court to
exercise its disciplinary powers, the case against the respondent must be established by con-
vincing and satisfactory proof.54 In this case, complainant submitted NSO-certified true
copies to prove that respondent entered into two marriages while the latter’s first marriage
was still subsisting. While respondent denied entering into the second and the third mar-
riages, he resorted to vague assertions tantamount to a negative pregnant. He did not dispute
the authenticity of the NSO documents, but denied that he contracted those two other mar-
riages. He submitted copies of the two Petitions he had filed separately with the RTC of
Laguna—one in Biñan and the other in Calamba—to declare the second and the third Mar-
riage Contracts null and void.55
We find him guilty of gross immorality under the Code.
We cannot give credence to the defense proffered by respondent. He has not disputed the
authenticity or impugned the genuineness of the NSO-certified copies of the Marriage Con-
tracts presented by complainant to prove the former’s marriages to two other women aside
from his wife. For purposes of this disbarment proceeding, these Marriage Contracts bearing
the name of respondent are competent and convincing evidence proving that he committed
bigamy, which
_______________
54 Aba v. De Guzman, A.C. No. 7649, 14 December 2011, 662 SCRA 361.
55 Commission on Bar Discipline Records Volume II, pp. 226-234.
52
52
SUPREME COURT REPORTS ANNOTATED
Villatuya vs. Tabalingcos
renders him unfit to continue as a member of the bar. The documents were certified by the
NSO, which is the official repository of civil registry records pertaining to the birth, marriage
and death of a person. Having been issued by a government agency, the NSO certification
is accorded much evidentiary weight and carries with it a presumption of regularity. In this
case, respondent has not presented any competent evidence to rebut those documents.
According to the respondent, after the discovery of the second and the third marriages, he
filed civil actions to annul the Marriage Contracts. We perused the attached Petitions for
Annulment and found that his allegations therein treated the second and the third marriage
contracts as ordinary agreements, rather than as special contracts contemplated under the
then Civil Code provisions on marriage. He did not invoke any grounds in the Civil Code
provisions on marriage, prior to its amendment by the Family Code. Respondent’s regard
for marriage contracts as ordinary agreements indicates either his wanton disregard of the
sanctity of marriage or his gross ignorance of the law on what course of action to take to
annul a marriage under the old Civil Code provisions.
What has been clearly established here is the fact that respondent entered into marriage twice
while his first marriage was still subsisting. In Bustamante-Alejandro v. Alejandro,56 we
held thus:
“[W]e have in a number of cases disciplined members of the Bar whom we found guilty of
misconduct which demonstrated a lack of that good moral character required of them not
only as a condition precedent for their admission to the Bar but, likewise, for their continued
membership therein. No distinction has been made as to whether the misconduct was com-
mitted in the lawyer’s professional capacity or in his private life. This is because a lawyer
may not divide his personality so as to be an attorney at one time and a mere
_______________
56 A.C. No. 4256, February 13, 2004, 422 SCRA 527; 467 Phil. 139 (2004).
53
VOL. 676, JULY 10, 2012
53
Villatuya vs. Tabalingcos
citizen at another. He is expected to be competent, honorable and reliable at all times since
he who cannot apply and abide by the laws in his private affairs, can hardly be expected to
do so in his professional dealings nor lead others in doing so. Professional honesty and honor
are not to be expected as the accompaniment of dishonesty and dishonor in other relations.
The administration of justice, in which the lawyer plays an important role being an officer
of the court, demands a high degree of intellectual and moral competency on his part so that
the courts and clients may rightly repose confidence in him.”
Respondent exhibited a deplorable lack of that degree of morality required of him as a mem-
ber of the bar. He made a mockery of marriage, a sacred institution demanding respect and
dignity.57 His acts of committing bigamy twice constituted grossly immoral conduct and
are grounds for disbarment under Section 27, Rule 138 of the Revised Rules of Court.58
Thus, we adopt the recommendation of the IBP to disbar respondent and order that his name
be stricken from the Roll of Attorneys.
WHEREFORE, this Court resolves the following charges against Atty. Bede S. Tabalingcos
as follows:
_______________
57 Cojuangco, Jr. v. Palma, A.C. No. 2474, June 30, 2005, 462 SCRA 310; 501 Phil. 1
(2005).
58 Rule 138, Section 27. Disbarment or suspension of attorneys by Supreme Court; grounds
therefor.—A member of the bar may be disbarred or suspended from his office as attorney
by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office,
grossly immoral conduct, or by reason of his conviction of a crime involving moral turpi-
tude, or for any violation of the oath which he is required to take before the admission to
practice, or for a wilfull 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 so to do. The
practice of soliciting cases at law for the purpose of gain, either personally or through paid
agents or brokers, constitutes malpractice.
54
54
SUPREME COURT REPORTS ANNOTATED
Villatuya vs. Tabalingcos
1. The charge of dishonesty is DISMISSED for lack of merit.
2. Respondent is REPRIMANDED for acts of illegal advertisement and solicitation.
3. Atty. Bede S. Tabalingcos is DISBARRED for engaging in bigamy, a grossly immoral
conduct.
Let a copy of this Decision be attached to the personal records of Atty. Bede S. Tabalingcos
in the Office of the Bar Confidant, and another copy furnished to the Integrated Bar of the
Philippines.
The Clerk of Court is directed to strike out the name of Bede S. Tabalingcos from the Roll
of Attorneys.
SO ORDERED.
Carpio, Leonardo-De Castro, Brion, Peralta, Del Castillo, Villarama, Jr., Perez, Mendoza,
Sereno, Reyes and Perlas-Bernabe, JJ., concur.
Velasco, Jr., J., No part – relationship to a party.
Bersamin and Abad, JJ., On leave.
Charge of dishonesty dismissed, respondent reprimanded for illegal advertisement and so-
licitation. Respondent Atty. Bede S. Tabalingcos disbarred for engaging in bigamy.
Notes.—He who contracts a second marriage before the judicial declaration of nullity of the
first marriage assumes the risk of being prosecuted for bigamy, and in such a case the crim-
inal case may not be suspended on the ground of the pendency of a civil case for declaration
of nullity. (Jarillo vs. People, 601 SCRA 236 [2009])
A teacher’s act of entering into a bigamous marriage constitutes grossly immoral conduct.
(Puse vs. Delos Santos-Puse, 615 SCRA 500 [2010])
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Villatuya vs. Tabalingcos,
676 SCRA 37, A.C. No. 6622 July 10, 2012
VOL. 400, APRIL 4, 2003
543
Paas vs. Almarvez
A.M. No. P-03-1690. April 4, 2003.*
(Formerly A.M. OCA IPI No. 00-956-P)
JUDGE ESTRELLITA M. PAAS, petitioner, vs. EDGAR E. ALMARVEZ, respondent.
A.M. No. MTJ-01-1363. April 4, 2003.*
EDGAR E. ALMARVEZ, petitioner, vs. JUDGE ESTRELLITA M. PAAS, respondent.
A.M. No. 01-12-02-SC. April 4, 2003.*
IN RE: USE BY ATTY. RENERIO G. PAAS AS AN OFFICE IN HIS PRIVATE PRAC-
TICE OF HIS PROFESSION THE OFFICE OF HIS WIFE, PASAY CITY METC JUDGE
ESTRELLITA M. PAAS
Courts; Judges; Conduct; Impropriety; A judge’s conduct should indeed be free from ap-
pearance of impropriety, not only in his judicial duties but also in his everyday life.—By
allowing her husband to use the address of her court in pleadings before other courts, Judge
Paas indeed “allowed [him] to ride on her prestige for purposes of advancing his private
interest, in violation of the Code of Judicial Conduct” and of the above-stated Supreme Court
circulars, which violation is classified as a less serious charge under the Rules of Court and
is punishable under the same Rule. A judge’s official conduct should indeed be free from
the appearance of impropriety; and his behavior not only in the performance of judicial du-
ties, but also in his everyday life should be beyond reproach. This is premised on the truism
that a Judge’s official life cannot simply be detached or separated from his personal exist-
ence and that upon a Judge’s attributes depend the public perception of the Judiciary.
Attorneys; Duties; Misconduct; Using a deceptive address had no other purpose other than
to try to impress the court that he has close ties to a member of the judiciary.—On his part,
Atty. Paas was guilty of using a fraudulent, misleading, and deceptive address that had no
purpose other than to try to impress either the court in which his cases are lodged, or his
client, that he has close ties to a member of the judiciary, in violation of the following rules
of the Code of Professional Responsibility.
______________
* EN BANC.
544
544
SUPREME COURT REPORTS ANNOTATED
Paas vs. Almarvez
ADMINISTRATIVE MATTER in the Supreme Court. Discourtesy, Disrespect, Insubordi-
nation, Neglect in Performance of Duty, Disloyalty, Solicitation of Monetary Consideration
and Gross Violation of Civil Service Law.
The facts are stated in the opinion of the Court.
CARPIO-MORALES, J.:
Pasay City Metropolitan Trial Court (MeTC), Branch 44 Presiding Judge Estrellita M. Paas
administratively charged Court Aide/Utility Worker Edgar E. Almarvez with “discourtesy,
disrespect, insubordination, neglect in performing his duties, disloyalty, solicitation of mon-
etary consideration and gross violation of the Civil Service Law.” The case was docketed as
A.M. OCA IPI No. 00-956-P.
In her complaint, Judge Paas alleged that Almarvez is discourteous to his co-employees,
lawyers and party litigants; has failed to maintain the cleanliness in and around the court
premises despite order to do so, thus amounting to insubordination; was, and on several
instances, habitually absent from work or made it appear that he reported for work by signing
the logbook in the morning, only to stay out of the office the whole day; asked from detention
prisoners P100.00 to P200.00 before he released to them their Release Orders; asked for
amounts in excess of what was necessary for the purchase of stamps and pocketed the dif-
ference; once failed to mail printed matter on July 11, 2000 and kept for his own use the
amount given to him for the purpose; and divulged confidential information to litigants in
advance of its authorized release date for a monetary consideration, thus giving undue ad-
vantage or favor to the paying party, in violation of Rep. Act No. 3019 (The Anti-Graft and
Corrupt Practices Act).1
Pasay City MeTC Branch 44 Clerk of Court Pedro C. Doctolero, Jr., by his Affidavit,2 and
members of the court staff,3 by a Joint Affidavit, attested that Almarvez failed to maintain
the cleanliness in and around the court premises, and had shown discourtesy in dealing with
Judge Paas and his co-employees. Doctolero’s affidavit
______________
1 A.M. OCA IPI 00-956-P, Rollo at pp. 2-4.
2 Exhibit “B”, Ibid., at p. 5.
3 Exhibit “F”, Ibid., at p. 11.
545
VOL. 400, APRIL 4, 2003
545
Paas vs. Almarvez
also corroborated Judge Paas’ allegation that Almarvez would merely sign the logbook in
the morning and thereafter stay out of the office.
Pasay City Postmaster Emma Z. Espiritu, by Certification dated August 2, 2000,4 attested
that the alleged printed matter intended to be mailed on July 11, 2000 was not included in
the list of registered mails posted in the Pasay City Post Office on said date.
Jail Escort Russel S. Hernandez and Jail Officer II Rosendo Macabasag, both assigned to
the Pasay City Jail, by their respective affidavits,5 attested that on several occasions, they
saw Almarvez receive from detention prisoners P100.00 to P200.00 in consideration of the
release of their Release Orders.
Almarvez, by Answer of September 25, 2000,6 denied Judge Paas’ charges, and alleged that
the real reason why Judge Paas filed the case against him was because she suspected him of
helping her husband, Atty. Renerio G. Paas, conceal his marital indiscretions; since she
failed to elicit any information from him, she resorted to calling him names and other forms
of harassment; on September 6, 2000, she hurled at him the following invectives before the
other employees of the court: “Walang kuwenta, ahas ka, driver lang kita, pinaasenso kita,
walang utang na loob, pinagtatakpan mo pa ang asawa ko, ulupong;” and she insisted that
he sign a prepared resignation letter, a copy of which he was not able to keep.
Almarvez added that he had been subjected by Judge Paas to the following incidents of
oppression and abuse of authority: On July 28, 2000, he was called by the Judge to her
chambers where she berated him as follows: “Sinungaling ka, ang dami mong alam, hindi
ka nagsasabi ng totoo sa akin, gago, tanga, pirmahan mo itong resignation letter, kung hindi
kakasuhan kita ng estafa at falsification;” the next day, the Judge, on seeing him, told him
“Bakit ka nandiyan, mag-leave ka sa Lunes;” and on July 31, 2000, the Judge called him
again to her chambers and told him “Ang kapal ng mukha mo, pumasok ka pa dito, gago,
kaya kita ipinasok dito dahil driver kita.”
______________
4 Exhibit “C-1”, Ibid., at p. 8.
5 Exhibit “D” and “E”, Ibid., at pp. 7 and 10, respectively.
6 AM No. MTJ-01-1363, Rollo at pp. 2-4.
546
546
SUPREME COURT REPORTS ANNOTATED
Paas vs. Almarvez
Continuing, Almarvez claimed that on July 31, 2000, he reported the foregoing incidents to
Pasay City MeTC Executive Judge Maria Cancino Erum who advised him to report the same
to the Office of the Clerk of Court; and on August 1, 2000, he executed a sworn statement-
complaint7 against Judge Paas and went to the Office of the Court Administrator (OCA) to
file it, but he was advised to try to talk the matter over with her who then told him that they
should forget all about it.
On the merits of the charges, Almarvez denied ever requesting for money in exchange for
the release of court orders and alleged that both Hernandez and Macabasag executed their
respective affidavits because Judge Paas was a principal sponsor at their respective wed-
dings; Hernandez was in fact indebted to the Judge for helping him cover-up the escape of
a detainee under his charge; the court’s mail matters were always sealed whenever he re-
ceived them for mailing and he never tampered with their contents; the alleged unmailed
printed matter was actually posted on June 28, 2000, not on July 11, 2000, via ordinary
instead of registered mail, because the money given to him for the purpose was insufficient;
and on the days when he was out of the office, he was actually performing personal errands
for the judge and her husband, Atty. Paas, who treated him as their personal driver and mes-
senger.
As further proof of Judge Paas’ oppressive behavior towards him, Almarvez claimed that
she ordered him to undergo a drug test per Memorandum dated September 7, 2000,8 even if
he had no history of drug abuse on a periodic or continuous basis as shown by the test results
of his examination.9
The Court treated respondent’s Answer as a counter-complaint against Judge Paas and dock-
eted it as A.M. No. MTJ-01-1363.
The two administrative cases were consolidated and referred for evaluation to the OCA,
which assigned them to Executive Judge Vicente L. Yap of Pasay City RTC, Branch 114 for
investigation.
In a separate case for inhibition of Judge Paas in a criminal case, it was revealed that Judge
Paas’ husband, private practitioner Atty. Paas, was using his wife’s office as his office ad-
dress in his law practice, in support of which were submitted copies of a
______________
7 Ibid., at pp. 5-6.
8 Annex “2”, Ibid., at pp. 5-6.
9 Annex “3” and “4”, Ibid., at pp. 8-9.
547
VOL. 400, APRIL 4, 2003
547
Paas vs. Almarvez
Notice of Appeal signed by Atty. Paas, notices from Pasay City RTC Branch 109 and from
the Supreme Court with respect to the case of People vs. Louie Manabat, et al. (G.R. Nos.
140536-37) which indicated Atty. Paas’ address to be Room 203, Hall of Justice, Pasay
City,10 the office assigned to Pasay City MeTC, Branch 44.
Pursuant to Sec. 1 of Rule 139-B11 of the Rules of Court which allows the Supreme Court
to motu proprio initiate proceedings for the discipline of attorneys, this Court resolved to
docket the matter as A.M. No. 01-12-02-SC and to consolidate it with A.M. OCA IPI No.
00-956-P and A.M. No. MTJ-01-1363.
In compliance with the December 4, 2001 Resolution12 of the Court en banc, Judge and
Atty. Paas submitted their January 16, 2002 Joint Affidavit13 wherein they vehemently de-
nied the charge that the latter was using Room 203 of the Pasay City Hall of Justice as his
office address, they claiming that Atty. Paas actually holds office at 410 Natividad Building,
Escolta, Manila with his partner Atty. Herenio Martinez; Atty. Paas would visit his wife at
her office only when he has a hearing before the Pasay City courts or Prosecutor’s Office,
or when he lunches with or fetches her, or when he is a guest during special occasions such
as Christmas party and her birthday which are celebrated therein; and Judge Paas would
never consent nor tolerate the use of the court for any personal activities. Attached to the
Joint Affidavit were the separate sworn statements of Atty. Paas’ law partner Atty. Herenio
E. Martinez14 and secretary Nilda L. Gatdula15 attesting that he is
______________
10 A.M. No. 01-12-02-SC, Rollo, at pp. 3-6.
11 As provided in Sections 13-14 of Rule 139-B, Rules of Court, in proceedings initiated
motu proprio by the Supreme Court or in other proceedings when the interest of justice so
requires, the Supreme Court may refer the case for investigation to the Solicitor General or
to any officer of the Supreme Court or judge of a lower court x x x x Based upon the evidence
adduced at the investigation, the Solicitor General or other Investigator designated by the
Supreme Court shall submit to the Supreme Court a report containing his findings of fact
and recommendations together with the record and all the evidence presented in the investi-
gation for the final action of the Supreme court (Emphasis supplied). See Bautista vs. Gon-
zales, A.M. No. 1625, February 12, 1990, 182 SCRA 151, 158.
12 A.M. No. 01-12-02-SC, Rollo at p. 9.
13 Ibid., at pp. 10-11.
14 Annex “A”, Ibid., at p. 12.
15 Annex “B”, Ibid., at p. 14.
548
548
SUPREME COURT REPORTS ANNOTATED
Paas vs. Almarvez
holding office at the above-said address in Escolta, and the Joint Affidavit of the Pasay City
MeTC Branch 44 court personnel16 attesting that Atty. Paas’ visits to the court are neither
routine nor daily occurrences, and he never used the court in the practice of his profession.
On January 24, 2002, Judge Paas executed a Supplemental Affidavit17 wherein she admitted
that Atty. Paas did use her office as his return address for notices and orders in Crim. Case
Nos. 98-1197 to 98-1198, “People vs. Louie Manabat y Valencia and Raymond dela Cruz y
Salita” (now docketed in this Court as G.R. Nos. 140536-37), lodged at the Pasay City RTC,
Branch 109, but only to ensure and facilitate delivery of those notices, but after the cases
were terminated, all notices were sent to his office address in Escolta.
By Resolution of February 12, 2002,18 the Court referred the matter to the OCA for evalu-
ation, report and recommendation.
After the completion of his investigation of A.M. OCA IPI No. 00-956-P and A.M. No.
MTJ-01-1363, Judge Yap submitted his Report/Recommendation dated February 28,
2002.19
On March 11, 2002, the OCA submitted its Report on A.M. No. 01-12-02-SC dated March
1, 2002.20
I. OCA Findings and Recommendations
A. On the charges against Almarvez:
The OCA, for lack of evidence, recommended the dismissal of the charges against Almarvez
of exacting money from detainees, violating confidentiality of official communication, ab-
sence without official leave, discourtesy and insubordination. Given Almarvez’ unsatisfac-
tory performance ratings for three rating periods covering January to June 2000,21 July to
December 2000,22 and January
______________
16 Annex “C”, Ibid., at pp. 15-16.
17 Ibid., at p. 29.
18 Ibid., at p. 34.
19 A.M. OCA IPI No. 00-956-P, Rollo at pp. 271-280.
20 A.M. No. 01-12-02-SC, Rollo at pp. 37-39.
21 AM OCA IPI No. 00-956-P at pp. 118-119.
22 Ibid., at pp. 120-121.
549
VOL. 400, APRIL 4, 2003
549
Paas vs. Almarvez
to April 2001,23 however, the OCA recommended that he be duly penalized for inefficiency
in the performance of his official duties with One (1) Month suspension without pay, instead
of dismissal as warranted under Memorandum Circular No. 12, s. 1994, his supervisor hav-
ing failed to observe the procedure thereunder for dropping of employees from the rolls,
which procedure is quoted at the later portion of this decision.
B. On the charges against Judge Paas:
With respect to the complaint of Almarvez against Judge Paas, the OCA, for lack of sup-
porting evidence, recommended the dismissal of the charges of maltreatment, harassment
and verbal abuse. It found, however, that Judge Paas “had used her administrative power of
supervision and control over court personnel for her personal pride, prejudice and petti-
ness”24 when she issued her September 7, 2000 Memorandum ordering Almarvez to un-
dergo a drug test after she had already filed an administrative case against him. It thus con-
cluded that, in all probability, the purpose of Judge Paas in ordering Almarvez to undergo a
drug test was to fish for evidence to support the administrative case she had already filed
against him.
Accordingly, the OCA recommended that Judge Paas be found guilty of simple misconduct
in office, and be penalized with reprimand with a warning that a repetition of the same or
similar acts shall be dealt with more severity.
II. This Court’s Findings:
A. On the charges against Almarvez:
Indeed, this Court finds that there is no sufficient evidence to support the charge of violation
of confidentiality of official communication against Almarvez. The charge against Almarvez
in Judge Paas’ complaint-affidavit which reads:
That said ALMARVEZ being in charge of the mails had divulged informations which is
confidential in nature to party litigants in advance of
______________
23 Ibid., at pp. 122-123.
24 OCA Recommendation, A.M. No. OCA IPI No. 00-956-P, Rollo at p. 308.
550
550
SUPREME COURT REPORTS ANNOTATED
Paas vs. Almarvez
its authorized release date before the release of Court Order and Decision for consideration
of a sum of money thus giving undue advantage or favor to the paying party detrimental to
the due administration of justice.25
in fact lacks particularity. It is devoid of material details to enable Almarvez to intelligently
meet the same.
As for the charges of neglect of duty, discourtesy and insubordination which were echoed in
the affidavits of court personnel, they are also too general to support a conviction and are
contrary to what is reflected in his performance rating that he cooperated willingly, even
wholeheartedly, with his fellow employees.
On the charge of violation of Rep. Act No. 3019 (Anti-Graft and Corrupt Practices Act):
Absent any evidence to support the charge, the affiants-jail officers who claimed to have
witnessed Almarvez receive money from detention prisoners in exchange for the release of
their Release Orders not having been presented, hence, their claim remains hearsay, Almar-
vez’ categorical denial and counter-allegation that these affiants executed their affidavits
only out of fear of or favor to Judge Paas gain light.
As for the charge that Almarvez would merely sign the logbook and would thereafter leave
the office, again Judge Paas failed to present the affiant-Clerk of Court Atty. Pedro C. Doc-
tolero, Jr. While she submitted in evidence a copy of her October 6, 2000 memorandum26
requiring Almarvez to explain why he was not in the office on September 8, 11, and 13, and
October 5, 2000, despite his affixing of his signature in the logbook on those dates indicating
that he reported for work, Almarvez satisfactorily explained that on September 8, 11, and
13, 2000, he submitted himself to drug testing as required by her in her September 7, 200027
memorandum, which explanation is supported by the September 14, 2000 letter of Dr.
Rosendo P. Saulog, Medical Specialist II of the Dangerous Drug Board.28 As to his where-
abouts on October 5, 2000, Almarvez’ explanation that he was actually, present in the morn-
ing but left in the afternoon for the Supreme Court29 was not controverted.
______________
25 Ibid., at p. 3.
26 Exhibit “J”, Ibid., at p. 61.
27 Annex “2”, Ibid., at p. 20.
28 Ibid., at p. 64.
29 Exhibit “K”; Ibid., at p. 62.
551
VOL. 400, APRIL 4, 2003
551
Paas vs. Almarvez
On the charge of inefficiency, this Court concurs with the following findings of the OCA
that he should be faulted therefor:
The performance ratings of respondent Almarvez for three (3) rating periods covering Jan-
uary to June 2000, July to December 2000 and January to April 2001 evidently shows that
he failed to perform his official duties. The fact that respondent Almarvez never disputed
the performance ratings given him is tantamount to an implied acceptance thereof pursuant
to Sec. 5 Rule IX Book V of Executive Order No. 292, quoted as follows:
“Sec. 5. An employee who expresses dissatisfaction with the rating given him may appeal
through the established Grievance Procedure of the Department or Agency within fifteen
(15) days after receipt of his copy of his performance rating. Failure to file an appeal within
the prescribed period shall be deemed a waiver of such right.”
The performance ratings of respondent for the said periods are valid grounds to drop him
from the Rolls. However, considering that his superior/supervisor failed to comply with the
requirements set forth in Memorandum Circular No. 12, Series of 1994 of the Civil Service
Commission, which is hereunder quoted, and that he was able to make up and cure his inef-
ficiency after he was given the opportunity to improve his performance in his detail to
Branch 11, MeTC, Manila, as shown by his performance rating for the period April to June
2001 with a “very satisfactory” rating, dropping him from the roll will no longer be appro-
priate30 (Emphasis and italics supplied.)
Par. 2.2 of CSC Memorandum Circular No. 12, s. 1994 referred to in the above-quoted find-
ings of the OCA reads:
2.2 Unsatisfactory or Poor Performance.
(a) An official or employee who is given two (2) consecutive unsatisfactory ratings may be
dropped from the rolls after due notice. Notice shall mean that the officer or employee con-
cerned is informed in writing of his unsatisfactory performance for a semester and is suffi-
ciently warned that a succeeding unsatisfactory performance shall warrant his separation
from the service. Such notice shall be given not later than 30 days from the end of the se-
mester and shall contain sufficient information which shall enable the employee to prepare
an explanation. (Emphasis and underscoring supplied.)
______________
30 OCA Recommendation, A.M. No. OCA IPI No. 00-956-P, Rollo at pp. 307-308.
552
552
SUPREME COURT REPORTS ANNOTATED
Paas vs. Almarvez
The suspension of Almarvez for One (1) Month without pay, as recommended by the OCA,
is thus in order.
B. On the charges against Judge Paas:
Regarding the charges of abuse of authority and oppression against Judge Paas, Almarvez
failed to substantiate the same.
Judge Paas’ order for Almarvez to undergo a drug test is not an unlawful order. Per Civil
Service Commission Memorandum Circular No. 34, s. 1997, public employees are required
to undergo a drug test prior to employment to determine if they are drug-free. To be drug-
free is not merely a pre-employment prerequisite but is a continuing requirement to ensure
the highest degree of productivity of the civil service. However, considering that the order
was issued after Judge Paas filed the administrative case against Almarvez, it elicits the sus-
picion that it was only a fishing expedition against him. This is conduct unbecoming of a
member of the judiciary, for which Judge Paas should be duly reprimanded.
C. On the charges against Judge Paas and Atty. Paas:
By Judge Paas’ own admission in her January 24, 2002 Supplemental Affidavit,31 she was
aware that her husband Atty. Paas was using her office to receive court notices and orders
in a case lodged in a Pasay court. As the OCA puts it, “[w]hile the same appears to be in-
nocuous, it could be interpreted as a subtle way of sending a message that Atty. Paas is the
husband of a judge in the same building and should be given special treatment by other
judges or court personnel.”32
The following are instructive in the disposition of these charges against the judge and her
spouse, Atty. Paas:
SC Administrative Circular No. 01-99, “Enhancing the Dignity of Courts as Temples of
Justice and Promoting Respect for their Officials and Employers” reads:
As courts are temples of justice, their dignity and sanctity must, at all times be preserved and
enhanced. In inspiring public respect for the justice system, court Officials and employees
must:
______________
31 A.M. No. 01-12-02-SC, Rollo at p. 29.
32 OCA Recommendation, A.M. No. 01-12-02-SC Rollo at p. 38.
553
VOL. 400, APRIL 4, 2003
553
Paas vs. Almarvez
1. In general: (a) avoid committing any act which would constitute grounds for disciplinary
action under, as the case may be, the Canons of Judicial Ethics, Code of Judicial Conduct;
and Section 46, Chapter 7, Subtitle A, Title I, Book V of the Administrative Code of 1987
(Executive Order No. 292); and (b) faithfully comply with the norms of conduct and perform
the duties prescribed in the Code of Conduct and Ethical Standards for Public Officials and
Employees (R.A. No. 6713);
2. Zealously guard the public trust character of their offices;
xxx
6.Never use their offices as a residence or for any other purpose than for court or judicial
functions. (Emphasis and underscoring supplied.)
Canon 2 of the Code of Judicial Conduct provides that “A judge should avoid impropriety
and the appearance of impropriety in all activities.” Specifically, Rule 2.03 thereof provides
that:
Rule 2.03. A judge shall not allow family, social, or other relationships to influence judicial
conduct or judgment. The prestige of judicial office shall not be used or lent to advance the
private interests of others, nor convey or permit others to convey the impression that they
are in a special position to influence the judge. (Emphasis supplied.)
SC Circular No. 3-92,33 dated August 31, 1992, of this Court reads:
SUBJECT: PROHIBITION AGAINST USE OF HALLS OF JUSTICE FOR RESIDEN-
TIAL OR COMMERCIAL PURPOSES
All judges and court personnel are hereby reminded that the Halls of Justice may be used
only for purposes directly related to the functioning and operation of the courts of justice,
and may not be devoted to any other use, least of all as residential quarters of the judges or
court personnel, or for carrying on therein any trade or profession.
Attention is drawn to A.M. No. RTJ-89-327 (Nellie Kelly Austria vs. Judge Singuat Guerra),
a case involving unauthorized and improper use of the court’s premises for dwelling pur-
poses by respondent and his family, in which the Court, by Resolution dated October 17,
1991, found respondent Judge guilty of irresponsible and improper conduct prejudicial to
the efficient administration of justice and best interest of the service, and im-
______________
33 See Bautista vs. Costelo, Jr., A.M. No. P-94-1043, February 28, 1996, 254 SCRA 148,
157.
554
554
SUPREME COURT REPORTS ANNOTATED
Paas vs. Almarvez
posed on him the penalty of SEVERE CENSURE, the Court declaring that such use of the
court’s premises inevitably degrades the honor and dignity of the court in addition to expos-
ing judicial records to danger of loss or damage. (Underscoring supplied.)
By allowing her husband to use the address of her court in pleadings before other courts,
Judge Paas indeed “allowed [him] to ride on her prestige for purposes of advancing his pri-
vate interest, in violation of the Code of Judicial Conduct”34 and of the above-stated Su-
preme Court circulars, which violation is classified as a less serious charge under the Rules
of Court35 and is punishable under the same Rule.36
A judge’s official conduct should indeed be free from the appearance of impropriety; and
his behavior not only in the performance of judicial duties, but also in his everyday life
should be beyond reproach. This is premised on the truism that a Judge’s official life cannot
simply be detached or separated from his personal existence and that upon a Judge’s attrib-
utes depend the public perception of the Judiciary.37
On his part, Atty. Paas was guilty of using a fraudulent, misleading, and deceptive address
that had no purpose other than to try to impress either the court in which his cases are lodged,
or his client, that he has close ties to a member of the judiciary, in violation of the following
rules of the Code of Professional Responsibility:
CANON 3—A LAWYER IN MAKING KNOWN HIS LEGAL SERVICES SHALL USE
ONLY TRUE, HONEST, FAIR, DIGNIFIED AND OBJECTIVE INFORMATION OR
STATEMENT OF FACTS.
Rule 3.01. A lawyer shall not use or permit the use of any false, fraudulent, misleading,
deceptive, undignified, self-laudatory or unfair statement or claim regarding his qualifica-
tions or legal services.
CANON 10—A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE
COURT.
______________
34 OCA Recommendation, AM No. 01-12-02-SC, Rollo at p. 38.
35 Rule 140, Sec. 4 (4). This was amended on September 11, 2001 by A.M. No. 01-8-10-
SC, “Discipline of Judges of Regular and Special Courts and Justices of the Court of Appeals
and Sandiganbayan.”
36 Rule 140, Sec. 10B.
37 Balderama vs. Judge Alagar, A.M. No. RTJ-99-1449, January 18, 2002, at p. 11, 374
SCRA 59 (citations omitted).
555
VOL. 400, APRIL 4, 2003
555
Paas vs. Almarvez
Rule 10.01 A lawyer shall not do any falsehood, nor consent to the doing of any in Court;
nor shall he mislead, or allow the Court to be misled by any artifice.
CANON 13—A LAWYER SHALL RELY UPON THE MERITS OF HIS CAUSE AND
REFRAIN FROM ANY IMPROPERITY WHICH TENDS TO INFLUENCE, OR GIVES
THE APPEARANCE OF INFLUENCING THE COURT.
CANON 15—A LAWYER SHALL OBSERVE CANDOR, FAIRNESS AND LOYALTY
IN ALL HIS DEALINGS AND TRANSACTIONS WITH HIS CLIENTS.
Rule 15.06. A lawyer shall not state or imply that he is able to influence any public official,
tribunal or legislative body.
The need for relying on the merits of a lawyer’s case, instead of banking on his relationship
with a member of the bench which tends to influence or gives the appearance of influencing
the court, cannot be overemphasized. It is unprofessional and dishonorable, to say the least,
to misuse a public office to enhance a lawyer’s prestige. Public confidence in law and law-
yers may be eroded by such reprehensible and improper conduct.
This Court does not subscribe to the proffered excuse that expediency and a desire to ensure
receipt of court orders and notices prompted Atty. Paas and Judge Paas to allow him to have
his court notices sent to office of Judge Paas, especially given the fact that for his other cases,
Atty. Paas used his office address but there is no showing that he failed to receive the notices
sent to that address. While a lawyer should make the necessary arrangements to ensure that
he is properly informed of any court action, these should not violate his lawyer’s oath or the
Code of Professional Responsibility, nor provide an opportunity for a member of the judici-
ary to breach his or her responsibilities under Supreme Court circulars and the Code of Ju-
dicial Conduct.
WHEREFORE, this Court finds:
(1) In A.M. OCA IPI No. 00-956-P, respondent Edgar E. Almarvez GUILTY of inefficiency
and is hereby SUSPENDED for One (1) Month without pay;
(2) In A.M. No. MTJ-01-1363, respondent Judge Estrellita M. Paas GUILTY of conduct
unbecoming of a member of the judiciary and is hereby REPRIMANDED, with warning
that repetition of the same or similar acts shall be dealt with more severely;
556
556
SUPREME COURT REPORTS ANNOTATED
Paas vs. Almarvez
(3) In A.M. No. 01-12-02 SC,
(a) Judge Paas GUILTY of violating SC Administrative Circular No. 01-99, SC Circular No.
3-92 and Canon 2, Rule 2.03 of the Code of Judicial Conduct and is hereby ordered to pay
a FINE of TWELVE THOUSAND PESOS (P12,000.00), with warning that repetition of the
same or similar acts shall be dealt with more severely; and
(b) Atty. Renerio Paas GUILTY of SIMPLE MISCONDUCT and is hereby SUSPENDED
from the practice of law for a period of THREE (3) MONTHS, with warning that repetition
of the same or similar act shall be dealt with more severely.
This Decision shall take effect immediately.
Let copies of this Decision be furnished the Office of the Bar Confidant, Integrated Bar of
the Philippines, and appended to respondents’ personal record.
SO ORDERED.
Davide, Jr. (C.J.), Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Ynares-
Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Callejo, Sr. and Azcuna,
JJ., concur.
In A.M. OCA IPI No. 00-956-P Respondent Almarvez suspended for one (1) month without
pay for inefficiency. In A.M. No. MTJ-01-1363. Respondent Judge Paas reprimanded, with
warning against repetition of same acts of conduct unbecoming of a judge. In A.M. No. 01-
12-02-SC Respondent Judge Paas meted a P12,000 fine, with warning against repetition of
similar acts of violation of SC Administrative Circular No. 01-99, SC Circular No. 3-92 and
Canon 2, Rule 2.03 of the Code of Judicial Conduct and Atty. Renerio Paas suspended from
practice of law for three (3) months, with warning against repetition of similar act of simple
misconduct.
Note.—A judge’s private life cannot be disassociated from his public life and it is thus im-
portant that his behavior both on and off the bench be free from any appearance of impro-
priety. (Miranda vs. Mangrobang, Sr., 371 SCRA 20 [2001])
——o0o——
557
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Paas vs. Almarvez, 400
SCRA 543, A.M. No. P-03-1690, A.M. No. MTJ-01-1363, A.M. No. 01-12-02-SC April 4,
2003
Adm. Case No. 2131. May 10, 1985.*
ADRIANO E. DACANAY, complainant, vs. BAKER & MCKENZIE and JUAN G. COL-
LAS, JR., LUIS MA. GUERRERO, VICENTE A. TORRES, RAFAEL E. EVANGELISTA,
JR., ROMEO L. SALONGA, JOSE R. SANDEJAS, LUCAS M. NUNAG, J. CLARO
TESORO, NATIVIDAD B. KWAN and JOSE A. CURAMMENG, JR., respondents.
Attorneys; Use by Philippine lawyers of the firm name of an American law firm is unethi-
cal.—We hold that Baker & McKenzie, being an alien law firm, cannot practice law in the
Philippines (Sec. 1, Rule 138, Rules of Court). As admitted by the respondents in their mem-
orandum, Baker & McKenzie is a professional partner ship organized in 1949 in Chicago,
Illinois with members and associates in 30 cities around the world. Respondents, aside from
being members of the Philippine bar, practising under the firm name of Guerrero & Torres,
are members or associates of Baker & McKenzie.
Same; Same.—As pointed out by the Solicitor General, respondents’ use of the firm name
Baker & McKenzie constitutes a
_______________
* EN BANC.
350
350
SUPREME COURT REPORTS ANNOTATED
Dacanay vs. Baker & McKenzie
representation that being associated with the firm they could “render legal services of the
highest quality to multinational business enterprises and others engaged in foreign trade and
investment” (p. 3, respondents’ memo). This is unethical because Baker & McKenzie is not
authorized to practise law here.
ADMINISTRATIVE CASE in the Supreme Court.
The facts are stated in the opinion of the Court.
Adriano E. Dacanay for and in his own behalf.
Madrid, Cacho, Angeles, Dominguez & Pecson Law Office for respondents.
AQUINO, J.:
Lawyer Adriano E. Dacanay, admitted to the bar in 1954, in his 1980 verified complaint,
sought to enjoin Juan G. Collas, Jr. and nine other lawyers from practising law under the
name of Baker & McKenzie, a law firm organized in Illinois.
In a letter dated November 16, 1979 respondent Vicente A. Torres, using the letterhead of
Baker & McKenzie, which contains the names of the ten lawyers, asked Rosie Clurman for
the release of 87 shares of Cathay Products International, Inc. to H.E. Gabriel, a client.
Attorney Dacanay, in his reply dated December 7, 1979, denied any liability of Clurman to
Gabriel. He requested that he be informed whether the lawyer of Gabriel is Baker & McKen-
zie “and if not, what is your purpose in using the letterhead of another law office.” Not
having received any reply, he filed the instant complaint.
We hold that Baker & McKenzie, being an alien law firm, cannot practice law in the Philip-
pines (Sec. 1, Rule 138, Rules of Court). As admitted by the respondents in their memoran-
dum, Baker & McKenzie is a professional partnership organized in 1949 in Chicago, Illinois
with members and associates in 30 cities around the world. Respondents, aside from being
members of the Philippine bar, practising under the firm name of Guerrero & Torres, are
members or associates of Baker & Mckenzie.
351
VOL. 136, MAY 10, 1985
351
Dacanay vs. Baker & McKenzie
As pointed out by the Solicitor General, respondents’ use of the firm name Baker & McKen-
zie constitutes a representation that being associated with the firm they could “render legal
services of the highest quality to multinational business enterprises and others engaged in
foreign trade and investment” (p. 3, respondents’ memo). This is unethical because Baker &
McKenzie is not authorized to practise law here. (See Ruben E. Agpalo, Legal Ethics, 1983
Ed., p. 115.)
WHEREFORE, the respondents are enjoined from practising law under the firm name Baker
& McKenzie.
SO ORDERED.
Teehankee (Acting C.J.), Makasiar, Abad Santos, Melencio-Herrera, Escolin, Relova,
Gutierrez, Jr., De la Fuente, Cuevas and Alampay, JJ., concur.
Fernando, C.J., on official leave.
Concepcion, Jr., J., on leave.
Plana, J., no part.
Respondents are enjoined from practising law under the firm name Baker & McKenzie.
Notes.—Double role of an attorney is not regarded as unduly prejudicial to the other accused.
(People vs. Nierra, 96 SCRA 1.)
An attorney client relationship can be created by implied agreement, as when the attorney
actually rendered legal services for a person who is a close friend. The obligation of such a
person to pay attorney’s fees is based on the law of contracts/concept of facio des (I do and
you give). (Corpus vs. Court of Appeals, 98 SCRA 424.)
——o0o——
352
352
SUPREME COURT REPORTS ANNOTATED
Fundamentals of Law Practice in More Than One Jurisdiction
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Dacanay vs. Baker &
McKenzie, 136 SCRA 349, Adm. Case No. 2131 May 10, 1985
VOL. 324, JANUARY 31, 2000
113
General Bank and Trust Company vs. Ombudsman
G.R. No. 125440. January 31, 2000.*
GENERAL BANK AND TRUST COMPANY (GBTC); WORLDWIDE INSURANCE
AND SURETY COMPANY (WORLDWIDE); MIDLAND INSURANCE CORPORA-
TION (MIDLAND); and STANDARD INSURANCE CO., INC. (STANDARD), petition-
ers, vs. THE OMBUDSMAN; OMBGIO RAUL E. TOTANES and ASSISTANT SOLICI-
TOR GENERAL MAGDANGAL M. DE LEON, respondents.
Courts; Criminal Procedure; Ombudsman; Section 3(e), Republic Act 3019, Anti Graft and
Corrupt Practices Act; Elements; (a) That the accused are public officers or private persons
charged in conspiracy with them; (2) that said public officers commit the prohibited acts
_______________
* THIRD DIVISION.
114
114
SUPREME COURT REPORTS ANNOTATED
General Bank and Trust Company vs. Ombudsman
during the performance of their official duties or in relation to their public positions; (3) that
they cause undue injury to any party, whether the Government or a private party; (4) that
such injury is caused by giving unwarranted benefits, advantage or preference to such par-
ties; and (5) that the public officers have acted with manifest partiality, evident bad faith or
gross inexcusable negligence.—To be criminally liable under Section 3 (e) of RA 3019,
these elements must be present: (1) That the accused are public officers or private persons
charged in conspiracy with them; (2) that said public officers commit the prohibited acts
during the performance of their official duties or in relation to their public positions; (3) that
they cause undue injury to any party, whether the Government or a private party; (4) that
such injury is caused by giving unwarranted benefits, advantage or preference to such par-
ties; and (5) that the public officers have acted with manifest partiality, evident bad faith or
gross inexcusable negligence.
Same; Same; Same; Courts cannot interfere with the discretion of the fiscal or the Ombuds-
man to determine the specificity and adequacy of the averments of the offense charged.—In
Ocampo, IV vs. Ombudsman, we ruled that the “courts cannot interfere with the discretion
of the fiscal or the Ombudsman to determine the specificity and adequacy of the averments
of the offense charged. He may dismiss the complaint forthwith if he finds it to be insuffi-
cient in form or substance or if he otherwise finds no ground to continue with the inquiry;
or he may proceed with the investigation if the complaint is, in his view, in due and proper
form.”
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Cruz, Durian & Alday for petitioners.
The Solicitor General for respondents.
GONZAGA-REYES, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court that seeks to annul and
set aside the Ombudsman Resolution dated May 15, 1995 in OMB-CRIM-0-93-1597 which
dismissed the complaint filed by petitioners against
115
VOL. 324, JANUARY 31, 2000
115
General Bank and Trust Company vs. Ombudsman
respondent Assistant Solicitor General (ASG) Magdangal M. de Leon, and the Ombudsman
Order dated March 13, 1996 denying the Motion for Reconsideration of petitioners.
Petitioners General Bank and Trust Company (GBTC), Worldwide Insurance and Surety
Company (Worldwide), Midland Insurance Corporation (Midland) and Standard Insurance
Co., Inc. (Standard) filed a complaint against respondent ASG de Leon on July 5, 1993.
Docketed as OMB-CRIM-093-1597, the complaint accused respondent ASG de Leon of vi-
olating Section 3 (e) of Republic Act 3019 (Anti-Graft and Corrupt Practices Act), for alleg-
edly—
x x x causing undue injury to the Government of the Republic of the Philippines and the
GBTC Stockholders in giving Lucio Tan unwarranted benefit or advantage in the discharge
of his official functions by protecting and defending the interest of Lucio Tan and the Central
Bank relative to (sic) verbatim adoption of the Lucio Tan Bid as the Liquidation Plan of
GBTC under Monetary Board Resolution No. 677, March 29, 1977.1
and charged respondent administratively with malfeasance in office, for his alleged—
x x x deliberate and adamant refusal to comply with his statutory duty to protect and defend
the interest of the Government of the Republic of the Philippines as against the interest of
Lucio Tan and the Central Bank relative to the verbatim adoption of the Lucio Tan Bid as
the Liquidation Plan of GBTC under Monetary Board Resolution No. 677, March 29, 1977.2
OMB-CRIM-093-1597 was assigned to respondent Raul E. Totanes, Ombudsman Graft In-
vestigation Office II, Evaluation and Preliminary Investigation Bureau (EPIB). Respondent
Totanes dismissed the criminal case against respondent ASG de Leon in the assailed Reso-
lution dated May 15, 1995, the dispositive portion of which reads:
_______________
1 Records, Annex “1,” pp. 208-209.
2 Ibid.
116
116
SUPREME COURT REPORTS ANNOTATED
General Bank and Trust Company vs. Ombudsman
WHEREFORE, premises considered, the undersigned investigator respectfully recommends
that the above-entitled case be forthwith DISMISSED for lack of sufficient evidence to hold
respondent CRIMINALLY liable for the acts complained of in the instant complaint.
SO RESOLVED.3
Petitioners then filed a Motion for Reconsideration on July 10, 1995 that was denied in an
Order dated March 13, 1996. Hence, this petition.
The relevant facts as summarized by the Office of the Ombudsman are:
On March 27, 1977, the Monetary Board of the Central Bank passed Resolution No. 677 to
the effect that GBTC is insolvent and therefore has to stop its banking business operations.
It designated a Liquidator and approved a Liquidation Plan whereby (sic) Lucio Tan Group
shall purchase all the assets and assume all the liabilities of GBTC;
On April 07, 1977, the Central Bank of the Philippines and Arnulfo B. Aurellano in his
capacity as the Monetary Board of the Central Bank Liquidator of GBTC filed through the
Office of the Solicitor General (OSG) a Petition with the Court of First Instance of Manila,
seeking the court’s assistance in the liquidation of GBTC. The Court docketed the said peti-
tion as Spec. Proc. No. 107812, entitled “Petition for Assistance in the Liquidation of
GBTC”;
On May 05, 1982, three minority stockholders of GBTC, namely, Worldwide, Midland and
Standard through their counsel, ATTY. ANGEL C. CRUZ, filed an intervention in the said
case, praying for the annulment of the closure and liquidation of GBTC by the Monetary
Board of the Central Bank as these were allegedly done arbitrarily and in bad faith. Later,
GBTC itself joined and adopted the intervention of its aforesaid three minority stockholders;
Assistant Solicitor General Ruben E. Agpalo, to whose Team the said case was assigned by
Solicitor General Estelito P. Mendoza, re-assigned the said case from Solicitor Juan C.
Nabong to the
_______________
3 Ibid., ANNEX “A,” p. 31.
117
VOL. 324, JANUARY 31, 2000
117
General Bank and Trust Company vs. Ombudsman
herein respondent in view of Juan C. Nabong’s appointment as RTC Judge;
From that time on, all the pleadings, filed with the Liquidation Court RTC of Manila, were
signed by Assistant Solicitor General Ruben E. Agpalo and the herein respondent in behalf
of the Office of the Solicitor General (OSG).
What prompted petitioners to file a complaint against respondent ASG de Leon with the
Ombudsman is the alleged “inconsistent position” of said respondent in Spec. Proc. No.
107812 and in Civil Case No. 0005 filed with Sandiganbayan.
Civil Case No. 0005 is an ill-gotten wealth case filed by the Presidential Commission on
Good Government (PCGG) through the OSG on July 17, 1987. This case was instituted
against Lucio Tan, former President Ferdinand Marcos, Imelda R. Marcos, et al.
Petitioners point out that in Civil Case No. 0005, the first of the causes of actions therein as
stated in Par. 14 (a)-(l) to (3) alleges that:
(A) The Marcos-dominated Central Bank Closure of GBTC under MB Resolution, March
25, 1977;
(B) The LUCIO TAN’S (sic) takeover of GBTC under MB Resolution, March 29, 1977;
are illegal, fraudulent and arbitrary, made thru conspiracy with and taking advantage of the
close relationship between the LUCIO TAN Group and the deposed President and Wife,
other CB officials, with the help and manipulation of then CB Governor Gregorio S. Licaros
and former PNB President Panfilo O. Domingo x x x.4
The charge that respondent ASG de Leon espoused conflicting interests rests on the conten-
tion of petitioners that said respondent’s act of defending the legality of the Central Bank
closure of GBTC amounts to defending the interest of Lucio Tan and the Central Bank.5
Petitioners maintain that
_______________
4 Ibid., p. 6.
5 Ibid., p. 14.
118
118
SUPREME COURT REPORTS ANNOTATED
General Bank and Trust Company vs. Ombudsman
the position taken by the OSG represented by respondent ASG de Leon in Spec. Proc. No.
107812 is “against the ‘interest of the Government of the Republic of the Philippines’ as
contained in the statement of ultimate facts set forth in Par. 14(a)-(l) to (3) of EDSA-SDB
Civil Case No. 0005, ANNEX “C.”6
On December 16, 1992, counsel of petitioners wrote respondent ASG de Leon that he inhibit
himself from appearing in Spec. Proc. No. 107812 and to defend the interest of the Govern-
ment of the Philippines as against the interest of Lucio Tan in Civil Case No. 0005.7
When respondent ASG de Leon for OSG continued to represent the Central Bank in Spec.
Proc. No. 107812, petitioners then filed the complaint against respondent with the Office of
the Ombudsman.
In dismissing the case, the Office of the Ombudsman held:
Thus, the records of this case convincingly show that, whenever the herein respondent As-
sistant Solicitor General appears in court or signs any pleading in the aforesaid case, he is
doing so not in his personal capacity but in his official capacity as one of the lawyers in the
OSG, which is headed by the Solicitor General.
Everything stated in the pleadings filed by the OSG in the aforesaid case is not the personal
stand or opinion of the herein respondent but the official stand or opinion of the OSG. Hence,
OSG as counsel of the Central Bank of the Philippines in the aforesaid case is defending its
client, the Central Bank. It is not defending the interest of Lucio Tan. The fact that, under
the Liquidation Plan approved by the Monetary Board of the Central Bank, the Lucio Tan
Group purchased the assets and assumed the liabilities of GBTC, is merely incidental. What
is at issue in the aforesaid case, which is now before the Court of Appeals, is whether or not
the Monetary Board of the Central Bank acted arbitrarily or in bad faith in its actions, leading
to the closure and liquidation of GBTC.
As regards the complaint in the Sandiganbayan, docketed as Civil Case No. 0005, which is
an action for the recovery of the al-
______________
6 Ibid.
7 Ibid.
119
VOL. 324, JANUARY 31, 2000
119
General Bank and Trust Company vs. Ombudsman
leged ill-gotten wealth against Lucio Tan, et. al., the same was signed by Presidential Com-
mission on Good Government (PCGG) Chairman Ramon Diaz and Solicitor General Fran-
cisco Chavez. While it is true that the said case is in the name of the Republic of the Philip-
pines, yet it was filed by the PCGG which is the only agency involved in that case. The said
PCGG case has nothing to do with Spec. Proc. No. 107812 (CA-G.R. CV No. 39939) which
involves the issue of validity of the closure and liquidation of GBTC. Neither the Central
Bank nor GBTC Liquidator Arnulfo B. Aurellano of the Central Bank, petitioners-appellants
in the said CA G.R. CV No. 39938, are parties in the said Sandiganbayan Civil Case No.
0005.
With the Motion for Reconsideration of the Resolution having been denied, petitioners filed
this petition raising the following issues:
I.
THAT RESPONDENT OMB AND RESPONDENT INVESTIGATION OFFICER RAUL
E. TOTANES COMMITTED OUTRAGEOUSLY WRONG FINDINGS (A) THAT THE
OSG “IS NOT DEFENDING THE INTEREST OF LUCIO TAN” IN SPEC. PROC. NO.
107812, NOW CA-G.R. NO. 39939, AND (B) THAT THE EDSA CASE SANDI-
GANBAYAN CIVIL CASE NO. 0005 HAS NOTHING TO DO WITH SPEC. PROC. NO.
107812, NOW CA G.R. NO. 39939, ARE DIRECTLY CONTRADICTED BY THE
FACTS ON RECORD.
II.
THAT RESPONDENT OMBUDSMAN COMPLETELY ERRED IN NOT CONSIDER-
ING THAT THERE IS NO CONSTITUTIONAL NOR ANY LEGAL PROVISION NOR
ANY DECISIONAL AUTHORITY NOR ANY PRESIDENTIAL AUTHORITY VEST-
ING UPON OSG THE RIGHT AND OR DUTY TO REPRESENT INTEREST “IN CON-
FLICT OR OPPOSED” TO THE INTEREST OF THE REPUBLIC OF THE PHILIPPINES,
OF WHICH OSG IS THE CHIEF COUNSEL, IN ANY ILL-GOTTEN WEALTH CASE
SUCH AS THAT ARISING FROM THE ILLEGAL AND FRAUDULENT CB CLOSURE
AND LUCIO TAN’S TAKEOVER OF GBTC, AS SET FORTH IN PAR. 14 (a)-(l) TO (3),
EDSA-SDB CIVIL CASE NO 0005, ANNEX “C.”
120
120
SUPREME COURT REPORTS ANNOTATED
General Bank and Trust Company vs. Ombudsman
III.
THAT RESPONDENT OMB IS TOTALLY WRONG IN NOT FINDING THAT A PRIMA
FACIE CASE EXISTS AGAINST RESPONDENT FOR VIOLATION OF SECTION 3 (e),
RA No. 3019, AS AMENDED CONSIDERING THAT THE EVIDENCE ON RECORD,
BEING DOCUMENTARY, IS SO CLEAR AND SO PLAIN.8
The petition must be dismissed. Not only are the charges against respondent ASG de Leon
baseless, they are also misplaced.
In accusing respondent ASG de Leon of malfeasance and violation of Section 3 (e) of RA
3019, petitioners would like this Court to believe that respondent ASG de Leon, in repre-
senting the Central Bank in Spec. Proc. 107812 (now CA-GR CV No. 39939) is also defend-
ing the interest of Lucio Tan. Considering that Sandiganbayan, Civil Case No. 0005 is a
complaint against Lucio Tan filed by the PCGG through the OSG and includes averments
pertaining to the alleged illegal and arbitrary closure of GBTC, petitioners are convinced
that respondent ASG de Leon must be held personally liable for the alleged interest or posi-
tion taken by the OSG in these two cases.
To be criminally liable under Section 3 (e) of RA 3019, these elements must be present: (1)
That the accused are public officers or private persons charged in conspiracy with them; (2)
that said public officers commit the prohibited acts during the performance of their official
duties or in relation to their public positions; (3) that they cause undue injury to any party,
whether the Government or a private party; (4) that such injury is caused by giving unwar-
ranted benefits, advantage or preference to such parties; and (5) that the public officers have
acted with manifest partiality, evident bad faith or gross inexcusable negligence.9
______________
8 Ibid., p. 4.
9 Ingco vs. Sandiganbayan, 272 SCRA 563 (1997), p. 574.
121
VOL. 324, JANUARY 31, 2000
121
General Bank and Trust Company vs. Ombudsman
Respondent ASG de Leon, in representing the Central Bank in Spec. Proc. No. 107812/CA-
G.R. CV No. 39939 was acting in his official capacity as Assistant Solicitor General.10 As
Assistant Solicitor General, respondent was a member of the legal staff of the OSG tasked
to represent the Central Bank, an agency of the Government, in Spec. Proc. No. 107812/CA-
GR CV No. 39939. Based on the records, the case was originally assigned to Solicitor
Nabong, but was reassigned to respondent who at the time was a Solicitor, in view of the
appointment of Nabong as RTC judge.
In defending the validity of the closure of GBTC, respondent ASG de Leon was merely
acting in the interest of the Central Bank, which is the client of OSG. It may be true that a
successful defense of the interest of the Central Bank in said case would also inure to the
benefit of the Lucio Tan group. However, such benefit would just be an incidental result of
the position that the government has taken in justifying the closure of said bank because the
approved Liquidation Plan for GBTC provided that the Lucio Tan group shall purchase all
the assets and assume all the liabilities of GBTC and such Liquidation Plan would be in
force upon a judgment upholding the legality of the closure of GBTC.11 Whatever benefit
the Lucio Tan group would reap upon a favorable judgment in Spec. Proc. No. 107812/CA-
G.R. CV No. 39939 is but a natural consequence of a successful defense of the actions of
the Central Bank in closing GBTC. Certainly, it can-
________________
10 § 35, Chapter 12, Title III, Book IV of the Administrative Code of 1987 provides that:
The Office of the Solicitor General shall represent the Government of the Philippines, its
agencies and instrumentalities and its officials and agents in any litigation, proceeding, in-
vestigation or matter requiring the services of lawyers. When authorized by the President or
head of the office concerned, it shall also represent government owned or controlled corpo-
rations. The Office of the Solicitor General shall constitute the law office of the Government
and, as such, shall discharge duties requiring the services of lawyers.
11 Supra note 1, p. 224.
122
122
SUPREME COURT REPORTS ANNOTATED
General Bank and Trust Company vs. Ombudsman
not be deemed as an act of causing undue injury to a party by giving it unwarranted benefits
or advantage.
We affirm the finding that respondent ASG de Leon cannot be held criminally liable for
violating Section 3 (e) of RA 3019. In defending the Central Bank, respondent was perform-
ing his legal duty to defend the interest of the Government and was merely pursuing the
position taken by it. Whatever legal services respondent ASG de Leon rendered in favor of
the Central Bank in Spec. Proc. No. 107812/CA-G.R. CV No. 39939 were made in his offi-
cial capacity as a member of the legal staff of the OSG. We note that in all of the pleadings
filed by the OSG in Spec. Proc. No. 107812/CA-G.R. CV No. 39939, the signature of re-
spondent ASG de Leon appeared therein as Solicitor and later on as Assistant Solicitor Gen-
eral. However, it must be noted that these pleadings also bore the signatures of the Solicitor
General and other members of the legal staff of the Office of the Solicitor General.12
Hence, the acts of respondent ASG de Leon had the imprimatur of the OSG which had con-
sistently defended the interest of the Central Bank in Spec. Proc. No. 107812/CA-G.R. CV
_________________
12 The brief of the Central Bank in CA-G.R. CV No. 03642 was signed by Solicitor General
Mendoza, Assistant Solicitor General Agpalo and respondent Solicitor Magdangal M. de
Leon.
The Motion for Reconsideration and a Supplemental Motion for Reconsideration of the Cen-
tral Bank in the same case was signed by Solicitor General Sedfrey Ordoñez, Assistant So-
licitor General Carlos Ortega and respondent Solicitor Magdangal M. de Leon.
When the case reached the Supreme Court, the Central Bank’s comment on the petition was
signed by Solicitor General Francisco Chavez, Assistant Solicitor General Ortega and re-
spondent Solicitor Magdangal M. de Leon.
When the case was remanded to the Regional Trial Court, the memorandum for the Central
Bank was signed by Assistant Solicitor General Ortega and respondent, as Assistant Solicitor
General.
When the Central Bank appealed the adverse decision in CA-GR CV No 39939, the appel-
lant’s brief dated October 6, 1993 was signed by Solicitor General Raul I. Goco, respondent
ASG de Leon and Solicitor Irahlyn S. Lariba. (Emphasis ours)
123
VOL. 324, JANUARY 31, 2000
123
General Bank and Trust Company vs. Ombudsman
No. 39939. Four Solicitor Generals, Estelito Mendoza, Sedfrey Ordonez, Frank Chavez and
Raul I. Goco have maintained the policy of defending the closure of GBTC by the Central
Bank and respondent ASG de Leon merely acted with the other officials of the OSG in rep-
resenting the State.
To be liable under Section 3 (e) of RA 3019, the five aforementioned elements must concur.
In the absence of proof that respondent ASG de Leon acted with manifest partiality in pur-
suing the official stand of the OSG in Spec. Proc. No. 107812/CA-G.R. CV No. 39939,
respondent ASG de Leon cannot be liable under Section 3 (e) of RA 3019. Thus, the failure
of petitioners to prove the fifth element is fatal to their cause.
Petitioners harp on the alleged conflicting positions of respondent ASG de Leon in Spec.
Proc. No. 107812/CA-G.R. CV No. 39939 and in Sandiganbayan Civil Case No. 0005. How-
ever, the records fail to disclose the nature and extent of respondent ASG de Leon’s partici-
pation in Sandiganbayan Civil Case No. 0005. What has been set in detail is the participation
of respondent ASG de Leon in Spec Proc. No. 107812/CA-G.R. CV No. 39939. Assuming
arguendo that respondent ASG de Leon participated in these two cases, this Court cannot
hold him personally liable. The perceived inconsistent positions are the official positions
taken by his office as the principal law office and legal defender of the Government.13
Petitioners have already raised the issue of “inconsistent positions” of the OSG in Spec.
Proc. No. 107812 and Sandiganbayan Civil Case No. 0005 with the Court of Appeals in CA-
G.R. CV No. 033642 (Appeal of the Central Bank from the decision of the RTC of Manila,
Branch IV in Spec. Proc. No. 107812).
_______________
13 Supra note 10, § 34:
The Office of the Solicitor General shall be headed by the Solicitor General, who is the
principal law officer and legal defender of the Government. He shall have the authority and
responsibility for the exercise of the Office’s mandate and for the discharge of its duties and
functions, and shall have supervision and control over the Office and its constituent units.
124
124
SUPREME COURT REPORTS ANNOTATED
General Bank and Trust Company vs. Ombudsman
In CA-G.R. CV No. 033642, petitioners sought to have then Solicitor General Francisco
Chavez cited in contempt and subjected to disciplinary action for said inconsistency. In up-
holding the position of Solicitor General Chavez, the Court of Appeals stated in its Resolu-
tion dated July 19, 1988:
The second ground in support of the motion for contempt may have some basis per se, that
is, appellant’s counsel espouses two inconsistent positions or interests: the first, in favor of
Central Bank and Lucio Tan, which is the position taken in the case at bar, and the second,
in favor of the Republic but against Lucio Tan and his cohorts in the Civil Case before the
Sandiganbayan. The situation of the appellant’s counsel may therefore be likened to one
whose choice is between the devil and the deep blue sea.
Still and all, we are not ready to condemn appellant’s counsel because of the fix in which he
found himself. On the contrary, we might commiserate with him. He is under the payroll of
the State and he represents the State sometimes through its instrumentality like the Central
Bank and its officials, as in the instant case. In other words, the State in both cases has
knowingly allowed counsel to represent it, and for this reason, the latter may not be held in
contempt and subjected to any disciplinary action.14
This Court agrees that even the Solicitor General cannot be personally liable for the predic-
ament he found himself in Spec. Proc. No. 107812 and Sandiganbayan Civil Case No. 0005.
Basic to a prosecution under Section 3 (e) of RA 3019 is that public officers must have acted
with manifest partiality, evident bad faith or gross inexcusable negligence in performing his
legal duty. We find no reason to disturb the ruling of respondent Totanes that there was no
prima facie case against respondent ASG de Leon. The perceived conflict of interest or po-
sition undertaken by the OSG in Spec. Proc. No. 107812/CA-G.R. CV No. 39939 and in
Sandiganbayan Civil Case No. 0005 should be addressed to the OSG or the Solicitor General
in particular.
_______________
14 Supra note 1, p. 102.
125
VOL. 324, JANUARY 31, 2000
125
General Bank and Trust Company vs. Ombudsman
Furthermore, in Ocampo, IV vs. Ombudsman, we ruled that the “courts cannot interfere with
the discretion of the fiscal or the Ombudsman to determine the specificity and adequacy of
the averments of the offense charged. He may dismiss the complaint forthwith if he finds it
to be insufficient in form or substance or if he otherwise finds no ground to continue with
the inquiry; or he may proceed with the investigation if the complaint is, in his view, in due
and proper form.”15
The power of the Ombudsman to determine the merits of a complaint is mandated by the
Constitution and courts should not interfere in the exercise thereof. There is also a practical
reason behind this rule, to wit:
The rule is based not only upon respect for the investigatory and prosecutory powers granted
by the Constitution to the Office of the Ombudsman but upon practicality as well. Otherwise,
the functions of the courts will be grievously hampered by innumerable petitioners assailing
the dismissal of investigatory proceedings conducted by the Office of the Ombudsman with
regard to complaints filed before it, in much the same was that the courts would be extremely
swamped if they could be compelled to review the exercise of discretion on the part of the
fiscals or prosecuting attorneys each time they decide to file an information in court or dis- Same; Same; New trial may be granted for reasons other than those provided in section 13
miss a complaint by a private complainant.16 of Rule 124 and section 2 of Rule 121 of the Rules of Court; Reasons.—While Section 13,
IN VIEW OF THE FOREGOING, the petition is DISMISSED. Rule 124, and Section 2, Rule 121, provide for specific grounds for a new trial, i.e., newly
SO ORDERED. discovered evidence, and errors of law or irregularities committed during the trial, Section
Melo (Chairman), Vitug, Panganiban and Purisima, JJ., concur. 11, Rule 124 does not so specify, thereby leaving to the sound discretion of the court the
Petition dismissed. determination, on a case to case basis, of what would constitute meritorious circumstances
______________ warranting a new trial or retrial.
Same; Same; Grounds of; Newly discovered evidence; Requisites.—For a new trial to be
15 225 SCRA 725 (1993), pp. 729-730. granted on the ground of newly discovered evidence, it must be shown that (a) the evidence
16 Ibid., p. 730. was discovered after trial; (b) such evidence could not have been discovered and produced
126 at the trial even with the exercise of reasonable diligence; (c) the evidence is material, not
merely cumulative, corroborative, or impeaching; and (d) it must go to the merits as ought
126 to produce a different result if admitted.
SUPREME COURT REPORTS ANNOTATED Rules of Court; Purpose of; Provisions of Rules of Court promulgated to aid proper admin-
Millena vs. Court of Appeals istration of justice.—The rigid application of rules of procedure must bow to the overriding
Notes.—The Supreme Court will not interfere with the Ombudsman’s exercise of his inves- goal of courts of justice—to render justice where justice is due—to secure to every individ-
tigatory and prosecutory powers. (Knecht vs. Desierto, 291 SCRA 292 [1998]) ual all possible legal means to prove his innocence of a crime of which he is charged. The
Corollary to the investigative power of the Office of the Ombudsman is the authority to lay Rules of Court were conceived and promulgated to aid and not to obstruct the proper admin-
down its own rules of procedure. (Velasco vs. Casaclang, 294 SCRA 394 [1998]) istration of justice, to set forth guidelines in the dispensation of justice but not to bind and
——o0o—— chain the hands that dispense justice, for otherwise, courts will be mere slaves to or robots
of technical rules, shorn of judicial discretion.
© Copyright 2020 Central Book Supply, Inc. All rights reserved. General Bank and Trust Same; Suspension of rules or excepting a case from its application; Instances of.—Courts
Company vs. Ombudsman, 324 SCRA 113, G.R. No. 125440 January 31, 2000 may suspend its own rules or except a case from them for the purposes of justice or, in a
proper case, disregard them. In this jurisdiction, in not a few instances, this Court ordered a
VOL. 70, MARCH 31, 1976 new trial in criminal cases on grounds not mentioned in the statute, viz: retraction of witness,
257 negligence or incompetency of counsel, improvident plea of guilty, disqualification of an
Jose vs. Court of Appeals attorney de oficio to represent the accused in the trial court, and where a judgment was ren-
No. L-38581. March 31, 1976.* dered on a stipulation of facts entered into by both the prosecution and the defense.
LORENZO JOSE, petitioner, vs. THE COURT OF APPEALS and THE PEOPLE OF THE PETITION for review of the decision of the Court of Appeals.
PHILIPPINES, respondents.
Criminal procedure; New trial; Purpose of.—A new trial has been described as a new inven- The facts are stated in the opinion of the Court.
tion to temper the severity of a judgment or 259
________________
VOL. 70, MARCH 31, 1976
* FIRST DIVISION. 259
258 Jose vs. Court of Appeals
Francisco Carreon & Zosimo D. de Mesa for petitioner.
258 Solicitor General Estelito P. Mendoza, Assistant Solicitor General Eulogio Raquel-
SUPREME COURT REPORTS ANNOTATED Santos and Solicitor Teodoro G. Bonifacio for respondents.
Jose vs. Court of Appeals MUÑOZ PALMA, J.:
prevent the failure of justice.
Petitioner Lorenzo Jose who was convicted of illegal possession of explosives (handgre-
nade) and sentenced to suffer imprisonment of five years, seeks a new trial which was denied
him by the Court of First Instance of Pampanga, Branch III, and by respondent Court of
Appeals.
Petitioner thus poses one legal issue for the Court to resolve, viz: did respondent appellate
court commit an error of law and gravely abuse its discretion when it denied petitioner’s
motion for new trial “for the reception of (1) the written permit of petitioner to possess and
use handgrenade, and (2) the written appointment of petitioner as PC agent with Code No.
P-36-68 and Code Name ‘Safari’ (both documents are dated 31 January 1968)”? 1
The following incidents are not in dispute:
On February 8, 1968, at the poblacion of Floridablanca, Pampanga, petitioner Jose was ar-
rested by the local police leading to the filing with the Court of First Instance of Pampanga,
Branch III of several criminal cases against him to wit: illegal discharge of firearm (Crim.
Case 6235), robbery (Crim. Case 6236) and illegal possession of explosives (Crim. Case
6237). These three cases were jointly tried after which the trial judge, Hon. Honorio Romero,
in a decision dated December 15, 1969, and promulgated on January 15, 1970,2 acquitted
accused Lorenzo Jose of illegal discharge of firearm and robbery, but convicted him for
illegal possession of the handgrenade that was found on his person at the time of his arrest.
After promulgation of the judgment, petitioner on that same day filed his notice of appeal.
Nine days thereafter or more particularly on January 24, 1970, petitioner filed a motion pray-
ing that the case be reopened to permit him to present, pursuant to a reservation he had made
in the course of the trial,
________________
1 p. 19, rollo.
2 p. 21, ibid.
260
260
SUPREME COURT REPORTS ANNOTATED
Jose vs. Court of Appeals
a permit to possess the handgrenade in question. The trial court in its order of January 30,
1970 denied the motion mainly on the ground that it had lost jurisdiction over the case in
view of the perfection of the appeal by the accused on the very date the decision was prom-
ulgated.3
The records of Criminal Case 6237 were then elevated to the Court of Appeals where peti-
tioner as accused-appellant raised the issues of (1) an erroneous conviction for illegal pos-
session of explosives when there was no proof of an essential element of the crime, and (2)
erroneous denial of his motion to reopen the case for the reception of his permit to possess
the handgrenade.4 In his brief, Lorenzo Jose prayed for his acquittal or in the alternative for
the remand of the case back to the trial court for a new trial.
Resolving the appeal, respondent Appellate Court,5 rendered its decision of March 8, 1972,
affirming the findings of fact and the judgment of conviction of the court a quo, and declar-
ing that no reversible error was committed by the latter when it denied the reopening of the
case as the court had lost its “power to change, modify, or alter its decision.”6
A motion for reconsideration and/or new trial was filed with a plea that “assuming arguendo
that the court a quo lacked jurisdiction to act upon appellant’s motion for new trial because
of the perfection of the appeal, this Honorable Court—before which said motion was reiter-
ated and which has competence to act thereon—should have granted the same if for no other
reason than to prevent a miscarriage of justice which is the inevitable result of its denial.”7
This motion for reconsideration was denied in respondent court’s resolution of April 3,
1974.8
A second motion for reconsideration and/or new trial was filed by Lorenzo Jose9 but this
was also denied by the appellate court in a Resolution promulgated on July 24, 1974.10
__________________
3 pp. 20-21, ibid.
4 pp. 4-5, appellant’s brief, Court of Appeals, p. 151, ibid.
5 Third Division; L.B. Reyes, J. ponente, Gatmaitan, Palana, JJ., concurring
6 p. 56, ibid.
7 pp. 58-59, ibid.
8 p. 85, ibid.
9 pp. 86-96, ibid.
10 pp. 132-137, ibid.
261
VOL. 70, MARCH 31, 1976
261
Jose vs. Court of Appeals
Forthwith, appellant Lorenzo Jose assisted by counsel, Atty. Francisco Carreon, filed with
Us this petition for review which We denied outright on September 6, 1974, “the question
raised being factual and for insufficient showing that the finding of facts by respondent court
are unsupported by substantial evidence, and for lack of merit.”
A motion for reconsideration was filed by petitioner stressing that the following grounds
should justify this Court to review the ruling of respondent appellate court to wit:
“1. petitioners’s plight is of compelling human and legal interest, and his being imprisoned
for five (5) years when there is indubitable exculpatory evidence on hand is a result—so
harsh that the Honorable Court may well undertake a review of the case just to satisfy itself
of the justice and inevitability of such a result;
“2. a question of substance not heretofore determined by the Honorable Court is involved,
as the evidence sought to be introduced at the new trial is, technically, not newly discovered:
and
“3. the denial of a new trial in the circumstances mentioned in his above-quoted statement
of the main legal issue, is contrary to the decisions of this Honorable Court because under
these decisions the new trial should have been granted since there is a ‘strong, compelling
reason’ in this case for granting the relief prayed for, such strong compelling reason being
the very strong probability of petitioner’s acquittal if a new trial were granted. (Workmen’s
Insurance Co. vs. Augusto, 40 SCRA 123; Sison vs. Gatchalian, 51 SCRA 262; Rubio vs.
Mariano, 52 SCRA 338; Montecines vs. Court of Appeals, 53 SCRA 14; Posadas vs. Court
of Appeals, L-38071, April 25, 1974; please see Annotation: 52 SCRA 346 x x x” (pp. 157-
158, rollo)
The Solicitor General opposed the granting of the foregoing motion for reconsideration
claiming that there was neither a denial of “substantial justice nor error of any sort on the
part of respondent Court of Appeals, affirming the judgment of conviction,” and that it being
admitted by petitioner that the evidence sought to be introduced by him at the new trial is
not newly discovered evidence, the denial of the new trial “visibly papers as correct”. This
Opposition drew a lengthy reply from petitioner’s counsel.
On February 13, 1975, a Manifestation was submitted by the Solicitor General informing
the Court that in view of the “persistence of accused petitioner Lorenzo Jose both before this
Honorable Court and respondent Court of Appeals as to his alleged existing appointment as
PC Agent and/or authority to possess handgrenade,” in the interest of justice, he was
262
262
SUPREME COURT REPORTS ANNOTATED
Jose vs. Court of Appeals
constrained to make pertinent inquiries from the PC Chief, Gen. Fidel V. Ramos who in
reply sent his letter dated December 27, 1974 with enclosures, xerox copies of which are
being attached to the manifestation as Annexes A, B, C, C-1 and D.11
Annex A of the above-mentioned Manifestation of the Solicitor General reads:
“Solicitor General Estelito P. Mendoza
Padre Faura, Manila
Dear Solicitor General Mendoza:
“With reference to your letter of December 5, 1974, please be informed that Colonel Pedrito
C. de Guzman who is now Provincial Commander of Sorsogon Constabulary Command,
confirmed that he executed an affidavit on May 4, 1974 at Sorsogon, Sorsogon stating that
he appointed Mr. Lorenzo Jose of Betis, Guagua, Pampanga as PC Agent on January 31,
1968.
“The incumbent Provincial Commander of Pampanga Constabulary Command also con-
firmed the appointment of Lorenzo Jose as PC agent during the year 1968.
“Attached herewith are the pertinent papers related to the said “appointment.
“Sincerely yours,
(Sgd.) FIDEL V. RAMOS
Inclosure:
FIDEL V. RAMOS
Appointment paper
Major General, AFP
of subject person dtd
Chief of Constabulary”
Jan. 31, 1968 with
(p. 191, rollo)
Personal History
Statement
Annex B is the appointment dated January 31, 1968 of petitioner Lorenzo Jose as a PC Agent
of the Pampanga Constabulary Command with Code Number P-36-68 and Code Name “Sa-
fari” with expiration on December 31, 1968, the pertinent portion of which We quote:
“This Headquarters will, from time to time, provide you firearms and such other equipment
which it may deem necessary for your personal protection on the need basis which will be
covered by separate written authority.” (p. 192, rollo)
________________
11 pp. 189-195, ibid
263
VOL. 70, MARCH 31, 1976
263
Jose vs. Court of Appeals
In a Resolution of February 21, 1975, the Court resolved to set aside the denial of this peti-
tion for review, to give due course and consider the Petition as a special civil action. In
another Resolution of April 4, 1975, the parties were given time to submit their respective
memorandum.
This is a situation where a rigid application of rules of procedure must bow to the overriding
goal of courts of justice to render justice where justice is due—to secure to every individual
all possible legal means to prove his innocence of a crime of which he is charged. The failure
of the Court of Appeals to appreciate the merits of the situation, involving as it does the
liberty of an individual, thereby closing its ear to a plea that a miscarriage of justice be
averted, constitutes a grave abuse of discretion which calls for relief from this Court.
At the outset, We give due credit to the Solicitor General and his staff for upholding the
time-honored principle set forth in perspicuous terms by this Court in Suarez vs. Platon, et
al., that a prosecuting officer, as the representative of a sovereignty whose obligation and
interest in a criminal prosecution is not that it shall win a case but that justice shall be done,
has the solemn responsibility to assure the public that while guilt shall not escape, innocence
shall not suffer. (69 Phil. 556, 564-565, quoting Justice Sutherland of the U.S. Supreme
Court in 69 U.S. Law Review, June, 1935, No. 6, p. 309) The Solicitor General now con-
cedes that the interests of justice will best be served by remanding this case to the court of
origin for a new trial.
We do not question the correctness of the findings of the Court of Appeals that the evidence
sought to be presented by the petitioner do not fall under the category of newly-discovered
evidence because the same—his alleged appointment as an agent of the Philippine Constab-
ulary and a permit to possess a handgrenade—were supposed to be known to petitioner and
existing at the time of trial and not discovered only thereafter.
It is indeed an established rule that for a new trial to be granted on the ground of newly
discovered evidence, it must be shown that (a) the evidence was discovered after trial; (b)
such evidence could not have been discovered and produced at the trial even with the exer-
cise of reasonable diligence; (c) the evidence is material, not merely cumulative, corrobora-
tive, or impeaching; and (d) it must go to the merits as ought to produce
264
264
SUPREME COURT REPORTS ANNOTATED
Jose vs. Court of Appeals
a different result if admitted.12
However, petitioner herein does not justify his motion for a new trial on newly discovered
evidence, but rather on broader grounds of substantial justice under Sec. 11, Rule 124 of the
Rules of Court which provides:
“Power of appellate court on appeal.—Upon appeal from a judgment of the Court of First
Instance, the appellate court may reverse, affirm, or modify the judgment and increase or
reduce the penalty imposed by the trial court, remand the case to the Court of First Instance
for new trial or retrial, or dismiss the case.”
Petitioner asserts, and correctly so, that the authority of respondent appellate court over an
appealed case is broad and ample enough to embrace situations as the instant case where the
court may grant a new trial or a retrial for reasons other than that provided in Section 13 of
the same Rule, or Section 2, Rule 121 of the Rules of Court.13 While Section 13, Rule 124,
and Section 2, Rule 121, provide for specific grounds for a new trial, i.e. newly discovered
evidence, and errors of law or irregularities committed during the trial. Section 11, Rule 124
quoted above does not so specify, thereby leaving to the sound discretion of the court the
determination, on a case to case basis, of what would constitute meritorious circumstances
warranting a new trial or retrial.
_______________
12 U.S. vs. Luzon, 1905, 4 Phil. 343; People vs. Mangulabnan, et al., 1956, 99 Phil. 883;
Moran, Comments on the Rules of Court, 1970 Ed., Vol. 4, pp. 345-346.
13 Section 13, Rule 124:
“Motion for new trial.—At any time after the appeal from the lower court has been perfected
and before the judgment of the appellate court convicting the accused becomes final, the
latter may move for a new trial on the ground of newly discovered evidence material to his
defense, the motion to conform to the provisions of section 3, Rule 121.” Section 2, Rule
121:
Grounds for a new trial.-The court shall grant a new trial on any of the following grounds:
(a) That errors of law or irregularities have been committed during the trial prejudicial to the
substantial rights of the defendant;
(b) That new and material evidence has been discovered which the defendant could not with
reasonable diligence have discovered and produced at the trial, and which if introduced and
admitted, would probably change the judgment.”
265
VOL. 70, MARCH 31, 1976
265
Jose vs. Court of Appeals
Surely, the Rules of Court were conceived and promulgate to aid and not to obstruct the
proper administration of justice, to set forth guidelines in the dispensation of justice but not
to bind and chain the hand that dispense justice, for otherwise, courts will be mere slaves to
or robots of technical rules, shorn of judicial discretion.
Thus, admittedly, courts may suspend its own rules or except a case from them for the pur-
poses of justice14 or, in a proper case, disregard them.15 In this jurisdiction, in not a few
instances,15* this Court ordered a new trial in criminal cases on grounds not mentioned in
the statute, viz: retraction of witness,16 negligence or incompetency of counsel,17 improvi-
dent plea of guilty,18 disqualification of an attorney de oficio to represent the accused in the
trial court,19 and where a judgment was rendered on a stipulation of facts entered into by
both the prosecution and the defense.20
Characteristically, a new trial has been described as a new invention to temper the severity
of a judgment or prevent the failure of justice.21
Petitioner cites certain peculiar circumstances obtaining in the case now before Us which
may be classified as exceptional enough to warrant a new trial if only to afford him an op-
portunity to establish his innocence of the crime charged.
Thus—petitioner was facing a criminal prosecution for illegal possession of a handgrenade
in the court below. He claimed to be an agent of the Philippine Constabulary with a permit
to possess explosives such as the handgrenade in question. However, he found himself in a
situation where he had to make a choice—reveal his identity as an undercover agent of the
Philippine Constabulary assigned to perform intelligence work on subversive activities and
face possible reprisals or even
_______________
14 Russell vs. McLellan, 3 Wood & M. 157
15 Clark vs. Brooks, 26 How. Pr. 285.
15* See Francisco, Criminal Procedure, 1969 Ed. p. 866.
16 People vs. Oscar Castelo, et al., 111 Phil. 54
17 U.S. vs. Gimenez, 34 Phil. 74
18 People vs. Solacito, L-29209, August 25, 1969, 27 SCRA, 1037; People vs. Mengote, et
al., L-30343, July 25, 1975; People vs. Vicente del Rosario, L-33270, November 28, 1975
19 U.S. vs. Laranja, 21 Phil. 500
20 U.S. vs. Pobre, 11 Phil. 51
21 Kearney vs. Snodgrass, pp. 309, 310, 12 Or. 311
266
266
SUPREME COURT REPORTS ANNOTATED
Jose vs. Court of Appeals
liquidation at the hands of the dissidents considering that Floridablanca, the site of the inci-
dent, was in the heart of “Huklandia”, or ride on the hope of a possible exoneration or ac-
quittal based on insufficiency of the evidence of the prosecution. Without revealing his iden-
tity as an agent of the Philippine Constabulary, he claimed before the trial judge that he had
a permit to possess the handgrenade and prayed for time to present the same. The permit
however could not be produced because it would reveal his intelligence work activities.
Came the judgment of conviction and with it the staggering impact of a five-year imprison-
ment. The competent authorities then realized that it was unjust for this man to go to jail for
a crime he had not committed, hence, came the desired evidence concerning petitioner’s
appointment as a Philippine Constabulary agent and his authority to possess a handgrenade
for the protection of his person, but, it was too late according to the trial court because in the
meantime the accused had perfected his appeal.
We find and hold that the above circumstances justify a reopening of petitioner’s case to
afford him the opportunity of producing exculpating evidence. An outright acquittal from
this Court which petitioner seeks as an alternative relief is not proper. As correctly stressed
by the Solicitor General, the People is to be given the chance of examining the documentary
evidence sought to be produced, and of cross-examining the persons who executed the same,
as well as the accused himself, now petitioner, on his explanation for the non-production of
the evidence during the trial.
PREMISES CONSIDERED, We hereby set aside the judgment of conviction of the herein
petitioner, Lorenzo Jose, and remand the case to the court a quo for a new trial only for the
purpose of allowing said accused to present additional evidence in his defense. The trial
court shall inform this Court of the final outcome of the case within a reasonable time. With-
out pronouncement as to costs.
So Ordered.
Teehankee (Chairman), Makasiar, Esguerra, and Martin, JJ., concur.
Judgment set aside.
267
VOL. 70, MARCH 31, 1976
267
Jose vs. Court of Appeals
Notes.—a) Motion for new trial based on affidavit of fellow convict owning the crime re-
jected.—Where the evidence against an accused is overwhelming, much importance should
not be given to affidavits where persons serving long sentence for serious crimes committed
by them and therefore have not much, if anything, to lose, assume responsibility for crime
of which fellow prisoners had been convicted in order to save the latter from criminal re-
sponsibility. It is not improbable that said schemes are conceived and carried out for a con-
sideration, usually monetary, and that if successful, and the person convicted is finally ac-
quitted, it would still remain for the government to successfully prosecute and find guilty
the convict assuming responsibility because he might then repudiate the contents of his af-
fidavit and resort to other schemes to avoid criminal responsibility himself. (People vs.
Alquisar, L-32080, May 22, 1975).
b) Liberal construction of rule on new trial.—The rule for granting of a motion for new trial,
as all other rules of procedure, should be liberally construed to assist the parties in obtaining
a just and speedy determination of their rights. Court litigations are primarily for the search
of truth, and a liberal interpretation of the rules by which both parties are given the fullest
opportunity to adduce proofs is the best way to find out such truth. The dispensation of
justice and vindication of legitimate grievances should not be barred by technicalities. (St.
Peter Memorial Park, Inc. vs. Campos, Jr., L-38280, March 21, 1975; Banco Filipino Sav-
ings & Mortgage Bank vs. Campos, L-39905, March 21, 1975)
c) Motion for new trial based on recantations of witnesses considered.—Although a recant-
ing testimony is oftentimes regarded as unreliable, especially so where the recantation relied
upon involves a confession of perjury, and motions for new trial based on subsequent retrac-
tion by a witness are not favorably considered, yet when aside from the testimonies of the
retracting witnesses there is no evidence to support the judgment of conviction, a new trial
may be granted. In a criminal case the State is “not less interested than the individual accused
of a crime in his acquittal if he is innocent.” The retractions of witnesses constitute an evi-
dence that was discovered by the appellant after the lower court had tried and decided the
case, and while this case was pending appeal before this Court. The statements made by
these two witnesses after
268
268
SUPREME COURT REPORTS ANNOTATED
Eusebio vs. Eusebio
the trial in the court below was evidence which the appellant could not have secured during
the trial, such that, they can be considered as a newly discovered evidence that may properly
be presented in a new trial. More so, because those statements appear to be a material evi-
dence that may change the judgment that had been rendered. (People vs. Lao Wan Sing, L-
16379, August 18, 1972)
——o0o——
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Jose vs. Court of Appeals,
70 SCRA 257, No. L-38581 March 31, 1976
526
SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
G.R. Nos. 151809-12. April 12, 2005.*
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), petitioner, vs.
SANDIGANBAYAN (Fifth Division), LUCIO C. TAN, CARMEN KHAO TAN, FLOR-
ENCIO T. SANTOS, NATIVIDAD P. SANTOS, DOMINGO CHUA, TAN HUI NEE,
MARIANO TAN ENG LIAN, ESTATE OF BENITO TAN KEE HIONG (represented by
TARCIANA C. TAN), FLORENCIO N. SANTOS, JR., HARRY C. TAN, TAN ENG
CHAN, CHUNG POE KEE, MARIANO KHOO, MANUEL KHOO, MIGUEL KHOO,
JAIME KHOO, ELIZABETH KHOO, CELSO RANOLA, WILLIAM T. WONG, ERN-
ESTO B. LIM, BENJAMIN T. ALBACITA, WILLY CO, ALLIED BANKING CORP.,
ALLIED LEASING AND FINANCE CORPORATION, ASIA BREWERY, INC., BASIC
HOLDINGS CORP., FOREMOST FARMS, INC., FORTUNE TOBACCO CORP.,
GRANSPAN DEVELOPMENT CORP., HIMMEL INDUSTRIES, IRIS HOLDINGS AND
DEVELOPMENT CORP., JEWEL HOLDINGS, INC., MANUFACTURING SERVICES
AND TRADE CORP., MARANAW HOTELS & RESORT CORP., NORTHERN TO-
BACCO REDRY-ING PLANT, PROGRESSIVE FARMS, INC., SHAREHOLDINGS,
INC., SIPALAY TRADING CORP., VIRGO HOLDINGS & DEVELOPMENT CORP.,
and ATTY. ESTELITO P. MENDOZA, respondents.
_______________
* EN BANC.
527
VOL. 455, APRIL 12, 2005
527
Presidential Commission on Good Government vs. Sandiganbayan
Attorneys; Legal Ethics; In the seventeenth and eighteenth centuries, ethical standards for
lawyers were pervasive in England and other parts of Europe and principal thrust of these
standards was directed towards the litigation conduct of lawyers, underscoring the central
duty of truth and fairness in litigation as superior to any obligation to the client.—In the
seventeenth and eighteenth centuries, ethical standards for lawyers were pervasive in Eng-
land and other parts of Europe. The early statements of standards did not resemble modern
codes of conduct. They were not detailed or collected in one source but surprisingly were
comprehensive for their time. The principal thrust of the standards was directed towards the
litigation conduct of lawyers. It underscored the central duty of truth and fairness in litigation
as superior to any obligation to the client. The formulations of the litigation duties were at
times intricate, including specific pleading standards, an obligation to inform the court of
falsehoods and a duty to explore settlement alternatives. Most of the lawyer’s other basic
duties—competency, diligence, loyalty, confidentiality, reasonable fees and service to the
poor—originated in the litigation context, but ultimately had broader application to all as-
pects of a lawyer’s practice.
Same; Same; The forms of lawyer regulation in colonial and early post-revolutionary Amer-
ica did not differ markedly from those in England; Only three of the traditional core duties
can be fairly characterized as pervasive in the formal, positive law of the colonial and post-
revolutionary period: the duties of litigation fairness, competency and reasonable fees.—
The forms of lawyer regulation in colonial and early post-revolutionary America did not
differ markedly from those in England. The colonies and early states used oaths, statutes,
judicial oversight, and procedural rules to govern attorney behavior. The difference from
England was in the pervasiveness and continuity of such regulation. The standards set in
England varied over time, but the variation in early America was far greater. The American
regulation fluctuated within a single colony and differed from colony to colony. Many reg-
ulations had the effect of setting some standards of conduct, but the regulation was sporadic,
leaving gaps in the substantive standards. Only three of the traditional core duties can be
fairly characterized as pervasive in the formal, positive law of the colonial and post-revolu-
tionary period: the duties of litigation fairness, competency and reasonable fees.
528
528
SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
Same: Same; The nineteenth century has been termed the “dark ages” of legal ethics in the
United States.—The nineteenth century has been termed the “dark ages” of legal ethics in
the United States. By mid-century, American legal reformers were filling the void in two
ways. First, David Dudley Field, the drafter of the highly influential New York “Field Code,”
introduced a new set of uniform standards of conduct for lawyers. This concise statement of
eight statutory duties became law in several states in the second half of the nineteenth cen-
tury. At the same time, legal educators, such as David Hoffman and George Sharswood, and
many other lawyers were working to flesh out the broad outline of a lawyer’s duties. These
reformers wrote about legal ethics in unprecedented detail and thus brought a new level of
understanding to a lawyer’s duties. A number of mid-nineteenth century laws and statutes,
other than the Field Code, governed lawyer behavior. A few forms of colonial regulations—
e.g., the “do no falsehood” oath and the deceit prohibitions—persisted in some states. Pro-
cedural law continued to directly, or indirectly, limit an attorney’s litigation behavior. The
developing law of agency recognized basic duties of competence, loyalty and safeguarding
of client property. Evidence law started to recognize with less equivocation the attorney-
client privilege and its underlying theory of confidentiality. Thus, all of the core duties, with
the likely exception of service to the poor, had some basis in formal law. Yet, as in the
colonial and early post-revolutionary periods, these standards were isolated and did not pro-
vide a comprehensive statement of a lawyer’s duties. The reformers, by contrast, were more
comprehensive in their discussion of a lawyer’s duties, and they actually ushered a new era
in American legal ethics.
Same; Same; Toward the end of the nineteenth century, a new form of ethical standards
began to guide lawyers in their practice—the bar association code of legal ethics; The bar
codes were detailed ethical standards formulated by lawyers for lawyers.—Toward the end
of the nineteenth century, a new form of ethical standards began to guide lawyers in their
practice—the bar association code of legal ethics. The bar codes were detailed ethical stand-
ards formulated by lawyers for lawyers. They combined the two primary sources of ethical
guidance from the nineteenth century. Like the academic discourses, the bar association
codes gave detail to the statutory statements of duty and the oaths of office. Unlike the aca-
demic lectures, however, the bar association codes retained some of the
529
VOL. 455, APRIL 12, 2005
529
Presidential Commission on Good Government vs. Sandiganbayan
official imprimatur of the statutes and oaths. Over time, the bar association codes became
extremely popular that states adopted them as binding rules of law. Critical to the develop-
ment of the new codes was the re-emergence of bar associations themselves. Local bar as-
sociations formed sporadically during the colonial period, but they disbanded by the early
nineteenth century. In the late nineteenth century, bar associations began to form again, pick-
ing up where their colonial predecessors had left off. Many of the new bar associations, most
notably the Alabama State Bar Association and the American Bar Association, assumed on
the task of drafting substantive standards of conduct for their members.
Same; Same; In 1917, the Philippine Bar Association adopted as its own, Canons 1 to 32 of
the American Bar Association (ABA) Canons of Professional Ethics.—In 1917, the Philip-
pine Bar found that the oath and duties of a lawyer were insufficient to attain the full measure
of public respect to which the legal profession was entitled. In that year, the Philippine Bar
Association adopted as its own, Canons 1 to 32 of the ABA Canons of Professional Ethics.
Same; Same; Conflict of Interest; “Adverse-Interest Conflicts” and “Congruent-Interest
Conflicts,” and “Revolving Door,” Explained; Words and Phrases; As early as 1924, some
American Bar Association (ABA) members have questioned the form and function of the
canons and among their concerns was the “revolving door” or “the process by which lawyers
and others temporarily enter government service from private life and then leave it for large
fees in private practice, where they can exploit information, contacts, and influence garnered
in government service”; “Adverse-interest conflicts” exist where the matter in which the
former government lawyer represents a client in private practice is substantially related to a
matter that the lawyer dealt with while employed by the government and the interests of the
current and former are adverse; “Congruent-interest representation conflicts” are unique to
government lawyers and apply primarily to former government lawyers, prohibiting lawyers
from representing a private practice client even if the interests of the former government
client and the new client are entirely parallel.—As early as 1924, some ABA members have
questioned the form and function of the canons. Among their concerns was the “revolving
door” or “the process by which lawyers and others temporarily enter government service
from private life and then leave it for large fees in private
530
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
practice, where they can exploit information, contacts, and influence garnered in government
service.” These concerns were classified as “adverse-interest conflicts” and “congruent-in-
terest conflicts.” “Adverse-interest conflicts” exist where the matter in which the former
government lawyer represents a client in private practice is substantially related to a matter
that the lawyer dealt with while employed by the government and the interests of the current
and former are adverse. On the other hand, “congruent-interest representation conflicts” are
unique to government lawyers and apply primarily to former government lawyers. The use
of the word “conflict” is a misnomer; “congruent-interest representation conflicts” arguably
do not involve conflicts at all, as it prohibits lawyers from representing a private practice
client even if the interests of the former government client and the new client are entirely
parallel.
Same; Same; Same; Code of Professional Responsibility; On June 21, 1988, the Supreme
Court promulgated the Code of Professional Responsibility, Rule 6.03 of which dealing par-
ticularly with former government lawyers.—In cadence with these changes, the Integrated
Bar of the Philippines (IBP) adopted a proposed Code of Professional Responsibility in 1980
which it submitted to this Court for approval. The Code was drafted to reflect the local cus-
toms, traditions, and practices of the bar and to conform with new realities. On June 21,
1988, this Court promulgated the Code of Professional Responsibility. Rule 6.03 of the Code
of Professional Responsibility deals particularly with former government lawyers, and pro-
vides, viz.: Rule 6.03—A lawyer shall not, after leaving government service, accept engage-
ment or employment in connection with any matter in which he had intervened while in said
service. Rule 6.03 of the Code of Professional Responsibility retained the general structure
of paragraph 2, Canon 36 of the Canons of Professional Ethics but replaced the expansive
phrase “investigated and passed upon” with the word “intervened.” It is, therefore, properly
applicable to both “adverse-interest conflicts” and “congruent-interest conflicts.”
Same; Same; Same; Same; Words and Phrases; The American Bar Association in its Formal
Opinion 342, defined “matter” as any discrete, isolatable act as well as identifiable transac-
tion or conduct involving a particular situation and specific party, and not merely an act of
drafting, enforcing or interpreting government or agency procedures, regulations or laws, or
briefing abstract principles of law.—
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The key to unlock Rule 6.03 lies in comprehending first, the meaning of “matter” referred
to in the rule and, second, the metes and bounds of the “intervention” made by the former
government lawyer on the “matter.” The American Bar Association in its Formal Opinion
342, defined “matter” as any discrete, isolatable act as well as identifiable transaction or
conduct involving a particular situation and specific party, and not merely an act of drafting,
enforcing or interpreting government or agency procedures, regulations or laws, or briefing
abstract principles of law.
Same; Same; Same; Same; The advice given by respondent Mendoza, as then Solicitor Gen-
eral on the procedure to liquidate GENBANK is not the “matter” contemplated by Rule 6.03
of the Code of Professional Responsibility.—The “matter” or the act of respondent Mendoza
as Solicitor General involved in the case at bar is “advising the Central Bank, on how to
proceed with the said bank’s liquidation and even filing the petition for its liquidation with
the CFI of Manila.” In fine, the Court should resolve whether his act of advising the Central
Bank on the legal procedure to liquidate GENBANK is included within the concept of “mat-
ter” under Rule 6.03. The procedure of liquidation is given in black and white in Republic
Act No. 265, section 29, viz.: x x x We hold that this advice given by respondent Mendoza
on the procedure to liquidate GENBANK is not the “matter” contemplated by Rule 6.03 of
the Code of Professional Responsibility. ABA Formal Opinion No. 342 is clear as daylight
in stressing that the “drafting, enforcing or interpreting government or agency procedures,
regulations or laws, or briefing abstract principles of law” are acts which do not fall within
the scope of the term “matter” and cannot disqualify.
Same; Same; Same; Same; Responsibility cannot apply to respondent Mendoza because his
alleged intervention while a Solicitor General in Sp. Proc. No. 107812 (liquidation of Gen-
bank) is an intervention on a matter different from the matter involved in Civil Case No.
0096 (sequestration of the stocks in Allied Bank, the successor of Genbank, on the ground
that they are ill-gotten).—It can even be conceded for the sake of argument that the above
act of respondent Mendoza falls within the definition of matter per ABA Formal Opinion
No. 342. Be that as it may, the said act of respondent Mendoza which is the “matter” in-
volved in Sp. Proc. No. 107812 is entirely different from the “matter” involved in Civil Case
No. 0096. Again,
532
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
the plain facts speak for themselves. It is given that respondent Mendoza had nothing to do
with the decision of the Central Bank to liquidate GENBANK. It is also given that he did
not participate in the sale of GENBANK to Allied Bank. The “matter” where he got himself
involved was in informing Central Bank on the procedure provided by law to liquidate GEN-
BANK thru the courts and in filing the necessary petition in Sp. Proc. No. 107812 in the
then Court of First Instance. The subject “matter” of Sp. Proc. No. 107812, therefore, is not
the same nor is related to but is different from the subject “matter” in Civil Case No. 0096.
Civil Case No. 0096 involves the sequestration of the stocks owned by respondents Tan, et
al., in Allied Bank on the alleged ground that they are ill-gotten. The case does not involve
the liquidation of GENBANK. Nor does it involve the sale of GENBANK to Allied Bank.
Whether the shares of stock of the reorganized Allied Bank are ill-gotten is far removed
from the issue of the dissolution and liquidation of GENBANK. GENBANK was liquidated
by the Central Bank due, among others, to the alleged banking malpractices of its owners
and officers. In other words, the legality of the liquidation of GENBANK is not an issue in
the sequestration cases. Indeed, the jurisdiction of the PCGG does not include the dissolution
and liquidation of banks. It goes without saying that Code 6.03 of the Code of Professional
Responsibility cannot apply to respondent Mendoza because his alleged intervention while
a Solicitor General in Sp. Proc. No. 107812 is an intervention on a matter different from the
matter involved in Civil Case No. 0096.
Same; Same; Same; Same; Words and Phrases; It is the second interpretation of the word
“intervene”—which only includes an act of a person who has the power to influence the
subject proceedings, that is more appropriate under Rule 6.03 of the Code of Professional
Responsibility in light of its history—in fine, the intervention cannot be insubstantial and
insignificant.—There are, therefore, two possible interpretations of the word “intervene.”
Under the first interpretation, “intervene” includes participation in a proceeding even if the
intervention is irrelevant or has no effect or little influence. Under the second interpretation,
“intervene” only includes an act of a person who has the power to influence the subject
proceedings. We hold that this second meaning is more appropriate to give to the word “in-
tervention” under Rule 6.03 of the Code of Professional Responsibility in light of its history.
The evils sought to be remedied by the Rule do not exist where the government lawyer does
an act which can be
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Presidential Commission on Good Government vs. Sandiganbayan
considered as innocuous such as “x x x drafting, enforcing or interpreting government or
agency procedures, regulations or laws, or briefing abstract principles of law.” In fine, the
intervention cannot be insubstantial and insignificant. Originally, Canon 36 provided that a
former government lawyer “should not, after his retirement, accept employment in connec-
tion with any matter which he has investigated or passed upon while in such office or em-
ploy.” As aforediscussed, the broad sweep of the phrase “which he has investigated or passed
upon” resulted in unjust disqualification of former government lawyers. The 1969 Code re-
stricted its latitude, hence, in DR 9-101(b), the prohibition extended only to a matter in which
the lawyer, while in the government service, had “substantial responsibility.” The 1983
Model Rules further constricted the reach of the rule. MR 1.11(a) provides that “a lawyer
shall not represent a private client in connection with a matter in which the lawyer partici-
pated personally and substantially as a public officer or employee.”
Same; Same; Same; Same; Banks and Banking; Liquidation; The principal role of the court
in a liquidation of a bank is to assist the Central Bank in determining claims of creditors
against the bank—the role of the court is not strictly as a court of justice but as an agent to
assist the Central Bank in determining the claims of creditors.—It is, however, alleged that
the intervention of respondent Mendoza in Sp. Proc. No. 107812 is significant and substan-
tial. We disagree. For one, the petition in the special proceedings is an initiatory pleading,
hence, it has to be signed by respondent Mendoza as the then sitting Solicitor General. For
another, the record is arid as to the actual participation of respondent Mendoza in the subse-
quent proceedings. Indeed, the case was in slumberville for a long number of years. None of
the parties pushed for its early termination. Moreover, we note that the petition filed merely
seeks the assistance of the court in the liquidation of GENBANK. The principal role of the
court in this type of proceedings is to assist the Central Bank in determining claims of cred-
itors against the GENBANK. The role of the court is not strictly as a court of justice but as
an agent to assist the Central Bank in determining the claims of creditors. In such a proceed-
ing, the participation of the Office of the Solicitor General is not that of the usual court
litigator protecting the interest of government.
534
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
Same; Same; Same; Same; Disqualification of Counsel; Rule 6.03 of our Code of Profes-
sional Responsibility represents a commendable effort on the part of the Integrated Bar of
the Philippines to upgrade the ethics of lawyers in the government service.—Rule 6.03 of
our Code of Professional Responsibility represents a commendable effort on the part of the
IBP to upgrade the ethics of lawyers in the government service. As aforestressed, it is a take-
off from similar efforts especially by the ABA which have not been without difficulties. To
date, the legal profession in the United States is still fine tuning its DR 9-101(b) rule.
Same; Same; Same; Same; Same; Policy Considerations; Rule 6.03 is not to be interpreted
to cause a chilling effect on government recruitment of able legal talent.—In fathoming the
depth and breadth of Rule 6.03 of our Code of Professional Responsibility, the Court took
account of various policy considerations to assure that its interpretation and application to
the case at bar will achieve its end without necessarily prejudicing other values of equal
importance. Thus, the rule was not interpreted to cause a chilling effect on government re-
cruitment of able legal talent. At present, it is already difficult for government to match
compensation offered by the private sector and it is unlikely that government will be able to
reverse that situation. The observation is not inaccurate that the only card that the govern-
ment may play to recruit lawyers is have them defer present income in return for the experi-
ence and contacts that can later be exchanged for higher income in private practice. Rightly,
Judge Kaufman warned that the sacrifice of entering government service would be too great
for most men to endure should ethical rules prevent them from engaging in the practice of a
technical specialty which they devoted years in acquiring and cause the firm with which they
become associated to be disqualified. Indeed, “to make government service more difficult to
exit can only make it less appealing to enter.”
Same; Same; Same; Same; Same; Same; In interpreting Rule 6.03, the Supreme Court also
cast a harsh eye on its use as a litigation tactic to harass opposing counsel as well as deprive
his client of competent legal representation—the danger that the rule will be misused to
bludgeon an opposing counsel is not a mere guesswork.— In interpreting Rule 6.03, the
Court also cast a harsh eye on its use as a litigation tactic to harass opposing counsel as well
as deprive his
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Presidential Commission on Good Government vs. Sandiganbayan
client of competent legal representation. The danger that the rule will be misused to bludgeon
an opposing counsel is not a mere guesswork. The Court of Appeals for the District of Co-
lumbia has noted “the tactical use of motions to disqualify counsel in order to delay proceed-
ings, deprive the opposing party of counsel of its choice, and harass and embarrass the op-
ponent,” and observed that the tactic was “so prevalent in large civil cases in recent years as
to prompt frequent judicial and academic commentary.” Even the United States Supreme
Court found no quarrel with the Court of Appeals’ description of disqualification motions
as “a dangerous game.” In the case at bar, the new attempt to disqualify respondent Mendoza
is difficult to divine. The disqualification of respondent Mendoza has long been a dead issue.
It was resuscitated after the lapse of many years and only after PCGG has lost many legal
incidents in the hands of respondent Mendoza.
Same; Same; Same; Same; Same; Same; The Court in interpreting Rule 6.03 was not uncon-
cerned with the prejudice to the client which will be caused by its misapplication—it cannot
be doubted that granting a disqualification motion causes the client to lose not only the law
firm of choice, but probably an individual lawyer in whom the client has confidence.—The
Court in interpreting Rule 6.03 was not unconcerned with the prejudice to the client which
will be caused by its misapplication. It cannot be doubted that granting a disqualification
motion causes the client to lose not only the law firm of choice, but probably an individual
lawyer in whom the client has confidence. The client with a disqualified lawyer must start
again often without the benefit of the work done by the latter. The effects of this prejudice
to the right to choose an effective counsel cannot be overstated for it can result in denial of
due process.
Same; Same; Same; Same; Same; Same; The Court has to consider also the possible adverse
effect of a truncated reading of the rule on the official independence of lawyers in the gov-
ernment service.— The Court has to consider also the possible adverse effect of a truncated
reading of the rule on the official independence of lawyers in the government service. Ac-
cording to Prof. Morgan: “An individual who has the security of knowing he or she can find
private employment upon leaving the government is free to work vigorously, challenge of-
ficial positions when he or she believes them to be in error, and resist illegal demands by
superiors. An employee who lacks this
536
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
assurance of private employment does not enjoy such freedom.” He adds: “Any system that
affects the right to take a new job affects the ability to quit the old job and any limit on the
ability to quit inhibits official independence.” The case at bar involves the position of Solic-
itor General, the office once occupied by respondent Mendoza. It cannot be overly stressed
that the position of Solicitor General should be endowed with a great degree of independ-
ence. It is this independence that allows the Solicitor General to recommend acquittal of the
innocent; it is this independence that gives him the right to refuse to defend officials who
violate the trust of their office. Any undue diminution of the independence of the Solicitor
General will have a corrosive effect on the rule of law.
Same; Same; Same; Same; Same; Same; No less significant a consideration is the depriva-
tion of the former government lawyer of the freedom to exercise his profession.—No less
significant a consideration is the deprivation of the former government lawyer of the free-
dom to exercise his profession. Given the current state of our law, the disqualification of a
former government lawyer may extend to all members of his law firm. Former government
lawyers stand in danger of becoming the lepers of the legal profession.
Same; Same; Same; Same; Same; The accuracy of gauging public perceptions is a highly
speculative exercise at best which can lead to untoward results.—The mischief sought to be
remedied by Rule 6.03 of the Code of Professional Responsibility is the possible appearance
of impropriety and loss of public confidence in government. But as well observed, the accu-
racy of gauging public perceptions is a highly speculative exercise at best which can lead to
untoward results. No less than Judge Kaufman doubts that the lessening of restrictions as to
former government attorneys will have any detrimental effect on that free flow of infor-
mation between the govern-ment-client and its attorneys which the canons seek to protect.
Notably, the appearance of impropriety theory has been rejected in the 1983 ABA Model
Rules of Professional Conduct and some courts have abandoned per se disqualification based
on Canons 4 and 9 when an actual conflict of interest exists, and demand an evaluation of
the interests of the defendant, government, the witnesses in the case, and the public.
537
VOL. 455, APRIL 12, 2005
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Presidential Commission on Good Government vs. Sandiganbayan
SANDOVAL-GUTIERREZ, J., Concurring Opinion:
Attorneys; Legal Ethics; Motions to disqualify counsel from representing their clients must
be viewed with jaundiced eyes, for oftentimes they pose the very threat to the integrity of
the judicial process.—I join Mr. Justice Reynato S. Puno in his ponencia. Motions to dis-
qualify counsel from representing their clients must be viewed with jaundiced eyes, for of-
tentimes they pose the very threat to the integrity of the judicial process. Such motions are
filed to harass a particular counsel, to delay the litigation, to intimidate adversary, or for
other strategic purposes. It therefore behooves the courts to always look for the parties’ inner
motivations in filing such motions. This case illustrates the sad reality that the filing of mo-
tions for disqualification may be motivated, not by a fine sense of ethics or sincere desire to
remove from litigation an unethical practitioner, but to achieve a tactical advantage.
Courts; Judgments; An order is deemed final when it finally disposes of the pending action
so that nothing more can be done with it in the lower court.—An order is deemed final when
it finally disposes of the pending action so that nothing more can be done with it in the lower
court. On the other hand, an interlocutory order is one made during the pendency of an ac-
tion, which does not dispose of the case, but leaves it for further action by the trial court in
order to settle and determine the entire controversy.
Same; Same; Disqualification of Counsel; An order denying a motion to disqualify counsel
is final and, therefore, appealable.— With the foregoing disquisition as basis, it is my view
that an order denying a motion to disqualify counsel is final and, therefore, appealable. The
issue of whether or not Atty. Mendoza should be disqualified from representing Tan, et al.
is separable from, independent of and collateral to the main issues in Civil Cases Nos. 0096-
0099. In short, it is separable from the merits. Clearly, the present petition for certiorari, to
my mind, is dismissible.
Same; Same; Same; The PCGG may not relitigate such issue of disqualification as it was
actually litigated and finally decided in G.R. Nos. 112707-09.—It will be recalled that on
August 23, 1996, the Sandiganbayan rendered a Decision granting Tan, et al.’s petitions in
Civil Cases Nos. 0095 and 0100. Such Decision reached this Court in G.R. Nos. 112708-09.
On March 29, 1996, we affirmed it.
538
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
The PCGG could have assigned or raised as error in G.R. Nos. 112708-09 the Sandi-
ganbayan Resolution dated May 7, 1991 in Civil Case No. 0100 denying its motion to dis-
qualify Atty. Mendoza but it did not. The fact that a final Decision therein has been promul-
gated by this Court renders the Resolution dated May 7, 1991 beyond review. The PCGG
may not relitigate such issue of disqualification as it was actually litigated and finally de-
cided in G.R. Nos. 112707-09. To rule otherwise is to encourage the risk of inconsistent
judicial rulings on the basis of the same set of facts. This should not be countenanced. Public
policy, judicial orderliness, economy of judicial time and the interest of litigants, as well as
the peace and order of society, all require that stability should be accorded judicial rulings
and that controversies once decided shall remain in repose, and that there be an end to liti-
gation.
Same; Same; Same; Words and Phrases; Since the word “inter-vene” has two connotations,
one affecting interest of others and one done merely in influencing others, Rule 6.03 should
be read in the context of the former—to interpret it otherwise is to enlarge the coverage of
Rule 6.03.—Webster Dictionary defines “intervene” as “to come or happen between two
points of time or events;” “to come or be in between as something unnecessary or irrelevant;”
or “to come between as an influencing force. The ponencia defines “to intervene” as “to
enter or appear as an irrelevant or extraneous feature or circumstance.” “Intervention” is
interference that may affect the interest of others. Corollarily, the counterpart of Rule 6.03
is the Disciplinary Rule (DR) 9-101 (B) of the American Bar Association (ABA), thus: A
lawyer shall not accept private employment in a manner in which he had “substantial re-
sponsibility” while he was a public employee. Substantial responsibility envisages a lawyer
having such a heavy responsibility for the matter in question that it is likely he becomes
personally and substantially involve in the investigative or deliberative processes regarding
the matter. Since the word “intervene” has two connotations, one affecting interest of others
and one done merely in influencing others, Rule 6.03 should be read in the context of the
former. To interpret it otherwise is to enlarge the coverage of Rule 6.03. Surely, this could
not have been the intention of the drafters of our Code of Professional Responsibility.
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VOL. 455, APRIL 12, 2005
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Presidential Commission on Good Government vs. Sandiganbayan
PANGANIBAN, J., Separate Opinion:
Courts; Judgments; Res Judicata; “Bar by Former Judgment,” and “Conclusiveness of Judg-
ment,” Explained; Words and Phrases; There are two distinct concepts of res judicata—(1)
bar by former judgment and (2) conclusiveness of judgment.—The above provision com-
prehends two distinct concepts of res judicata: (1) bar by former judgment and (2) conclu-
siveness of judgment. Under the first concept, res judicata serves as an absolute proscription
of a subsequent action when the following requisites concur: (1) the former judgment or
order was final; (2) it adjudged the pertinent issue or issues on their merits; (3) it was ren-
dered by a court that had jurisdiction over the subject matter and the parties; and (4) between
the first and the second actions, there was identity of parties, of subject matter, and of causes
of action. In regard to the fourth requirement, if there is no identity of causes of action but
only an identity of issues, res judicata exists under the second concept; that is, under conclu-
siveness of judgment. In the latter concept, the rule bars the re-litigation of particular facts
or issues involving the same parties but on different claims or causes of action. Such rule,
however, does not have the same effect as a bar by former judgment, which prohibits the
prosecution of a second action upon the same claim, demand or cause of action.
Same; Same; Same; Same; Conclusiveness of judgment finds application when a fact or
question has been squarely put in issue, judicially passed upon, and adjudged in a former
suit by a court of competent jurisdiction—it has thus been conclusively settled by a judgment
or final order issued therein; While conclusiveness of judgment does not have the same ef-
fect as a bar by former judgment, which proscribes subsequent actions, it nonetheless oper-
ates as an estoppel to issues or points controverted, on which the determination of the earlier
findings or judgment has been anchored.—Conclusiveness of judgment finds application
when a fact or question has been squarely put in issue, judicially passed upon, and adjudged
in a former suit by a court of competent jurisdiction; it has thus been conclusively settled by
a judgment or final order issued therein. Insofar as the parties to that action (and persons in
privity with them) are concerned, and while the judgment or order remains unreversed or
un-vacated by a proper authority upon a timely motion or petition, such conclusively settled
fact or question cannot again be
540
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
litigated in any future or other action between the same parties or their privies, in the same
or in any other court of concurrent jurisdiction, either for the same or for a different cause
of action. Thus, the only identities required for the operation of the principle of conclusive-
ness of judgment is that between parties and issues. While it does not have the same effect
as a bar by former judgment, which proscribes subsequent actions, conclusiveness of judg-
ment nonetheless operates as an estoppel to issues or points controverted, on which the de-
termination of the earlier finding or judgment has been anchored. The dictum laid down in
such a finding or judgment becomes conclusive and continues to be binding between the
same parties, as long as the facts on which that judgment was predicated continue to be the
facts of the case or incident before the court. The binding effect and enforceability of that
dictum can no longer be relitigated, since the said issue or matter has already been resolved
and finally laid to rest in the earlier case.
Same; Same; Words and Phrases; “Final Orders and Judgments” and “Interlocutory Orders,”
Distinguished; As distinguished from an interlocutory order, a final judgment or order deci-
sively puts an end to (or disposes of) a case or a disputed issue—in respect thereto, nothing
else (except its execution) is left for the court to do.— As distinguished from an interlocutory
order, a final judgment or order decisively puts an end to (or disposes of) a case or a disputed
issue; in respect thereto, nothing else—except its execution—is left for the court to do. Once
that judgment or order is rendered, the adjudicative task of the court on the particular matter
involved is likewise ended. Such an order may refer to the entire controversy or to some
defined and separate branch thereof. On the other hand, an order is interlocutory if its effects
are merely provisional in character and still leave substantial proceedings to be further con-
ducted by the issuing court in order to put the issue or controversy to rest.
Same; Same; The general test for determining whether an order is interlocutory applies to
orders that dispose of incidents or issues that are intimately related to the very cause of action
or merits of the case but the exception lies when the order refers to a “definite and separate
branch” of the main controversy.—I have no quarrel with the general test—expounded, with
acknowledged authorities, in the Dissenting Opinions of Justices Conchita Carpio-Morales
and Callejo—for determining whether an order is interlocutory. Such
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VOL. 455, APRIL 12, 2005
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Presidential Commission on Good Government vs. Sandiganbayan
test, however, applies to orders that dispose of incidents or issues that are intimately related
to the very cause of action or merits of the case. The exception lies when the order refers to
a “definite and separate branch” of the main controversy, as held by the Court in Republic
v. Tacloban City Ice Plant.
Same; Same; The 22 April 1991 Resolution of the Sandiganbayan (Second Division) in Civil
Case No. 0005 had finally and definitively determined the issue of Atty. Mendoza’s disqual-
ification to act as counsel for Tan, et al., and since that Resolution was not appealed, it be-
came final and executory, a conclusive judgment insofar as that particular question was con-
cerned.—Under the present factual milieu, the matter of disqualification of Atty. Mendoza
as counsel for respondents is a “defined and separate branch” of the main case for “reversion,
reconveyance, and restitution” of the sequestered properties. This matter has no direct bear-
ing on the adjudication of the substantive issues in the principal controversy. The final judg-
ment resolving the main case does not depend on the determination of the particular question
raised in the Motion. The April 22, 1991 Resolution of the Sandiganbayan (Second Division)
in Civil Case No. 0005 had finally and definitively determined the issue of Atty. Mendoza’s
disqualification to act as counsel for Tan, et al. Since that Resolution was not appealed, it
became final and executory. It became a conclusive judgment insofar as that particular ques-
tion was concerned.
Same; Same; While it merely disposed of a question that was collateral to the main contro-
versy, the 22 April 1991 Resolution should be differentiated from an ordinary interlocutory
order that resolves an incident arising from the very subject matter or cause of action, or one
that is related to the disposition of the main substantive issues of the case itself.—There is,
as yet, no final adjudication of the merits of the main issues of “reversion, reconveyance and
restitution.” However, I submit that the question with respect to the disqualification of Atty.
Mendoza had nonetheless been conclusively settled. Indeed, the April 22, 1991 SBN Reso-
lution had definitively disposed of the Motion to Disqualify on its merits. Since no appeal
was taken therefrom, it became final and executory after the lapse of the reglementary pe-
riod. While it merely disposed of a question that was collateral to the main controversy, the
Resolution should be differentiated from an ordinary interlocutory order that resolves an
incident arising from the very subject matter or cause of action, or
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one that is related to the disposition of the main substantive issues of the case itself. Such an
order is not appealable, but may still be modified or rescinded upon sufficient grounds ad-
duced before final judgment. Verily, res judicata would not apply therein.
Attorneys; Legal Ethics; Code of Professional Responsibility; Conflict of Interest; Disqual-
ification of Counsel; Prescription; The prohibition in Rule 6.03 of the Code of Professional
Responsibility cannot be absolute, perpetual and permanent.—Rule 6.03 of the Code of Pro-
fessional Responsibility does not expressly specify the period of its applicability or enforce-
ability. However, I submit that one cannot infer that, ergo, the prohibition is absolute, per-
petual and permanent. All civil actions have a prescriptive period. Unless a law makes an
action imprescriptible or lays down no other period, the action is subject to a bar by pre-
scription five (5) years after the right of action accrued. Criminal offenses—even the most
heinous ones—as well as the penalties therefor, likewise prescribe. Relatedly, even so-called
perpetual penalties and multiple sentences have maximum periods. Relevantly, it is worth
pointing out that Republic Act No. 6713 prohibits public officers and employees from prac-
ticing their profession for only one year after their resignation, retirement or separation from
public office, in connection with any matter before their former office.
Same; Same; Same; Same; Same; Same; Consistent with law and jurisprudence and the pur-
pose of statutes of limitations, the prohibition on former government attorneys from involve-
ment in matters in which they took part long ago, pursuant to their official functions while
in public service, should likewise have an expiry or duration.—Prescription is intended to
suppress stale and fraudulent claims arising from transactions or facts that have been ob-
scured by defective memory or the lapse of time. It was designed to promote justice by
preventing surprises through the revival of claims that have been allowed to slumber until
relevant proofs are lost, memories faded, and witnesses no longer available. Consistent with
law and jurisprudence and the purpose of statutes of limitations, the prohibition on former
government attorneys from involvement in matters in which they took part long ago, pursu-
ant to their official functions while in public service, should likewise have an expiry or du-
ration.
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Same; Same; Same; Same; Same; Same; To perpetually and absolutely ban former govern-
ment lawyers from taking part in all cases involving some matter in which they have taken
part in some distant past, pursuant to their official functions then, would be unduly harsh,
unreasonable and unfair.—It is undeniable that government lawyers usually handle a multi-
tude of cases simultaneously or within overlapping periods of time. This is in fact a common
remonstration, especially among prosecutors, public attorneys, solicitors, government cor-
porate counsels, labor arbiters, even trial and appellate judges. Yet, as dutiful public serv-
ants, they cannot reject or shrink from assignments even if they are already overloaded with
work. Similarly, lawyers in private practice, whether by themselves or employed in law
firms, are in a comparative plight. It would not be strange or uncommon that, in a period of
five years, an attorney in government service would have handled or interfered in hundreds
of legal matters involving varied parties. Thousands of attorneys who have chosen to dedi-
cate their service to the government for some years are in such a situation. Hence, to perpet-
ually and absolutely ban them from taking part in all cases involving some matter in which
they have taken part in some distant past, pursuant to their official functions then, would be
unduly harsh, unreasonable and unfair. It would be tantamount to an unwarranted depriva-
tion of the exercise of their profession. Be it remembered that a profession, trade or calling
partakes of the nature of a property right within the meaning of our constitutional guarantees.
Same; Same; Same; Same; Same; Same; I submit that the restriction on government lawyers
specifically with respect to subsequent engagement or employment in connection with mat-
ters falling under the “congruent-interest representation conflict”—should be allowed to ex-
pire after a reasonable period when no further prejudice to the public may be contemplated—
the duration of this prohibition should be no more than five (5) years from retirement or
separation from government service.—I submit that the restraint on the exercise of one’s
profession, or right of employment including that of attorneys formerly in government ser-
vice, must survive the test of fairness and reasonableness. The restriction should not be as
pervasive and longer than is necessary to afford a fair and reasonable protection to the inter-
ests of the government. After all, the disqualification of government attorneys is a drastic
measure, and courts should hesitate to impose it except when necessary. Thus, I submit that
the
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restriction on government lawyers—specifically with respect to subsequent engagement or
employment in connection with matters falling under the “congruent-interest representation
conflict”—should be allowed to expire after a reasonable period when no further prejudice
to the public may be contemplated. The duration of this prohibition should be no more than
five (5) years from retirement or separation from government service. Five years is the pre-
scriptive period for suits for which no period is prescribed by law.
Courts; Judges; The disqualification of members of the judiciary under Section 5(b) and (d)
of Canon 3 of the New Code of Judicial Conduct should also prescribe in five (5) years from
the time they assumed their judicial position, or from the time they retire from or otherwise
end their government service.—For the same reasons, the disqualification of members of the
judiciary under Section 5(b) and (d) of Canon 3 of the New Code of Judicial Conduct should
also prescribe in five (5) years from the time they assumed their judicial position; or from
the time they retire from or otherwise end their government service.
Attorneys; The reality is that the best lawyers will want to join the more lucrative private
sector sooner or later, and the government will hardly be able to attract them if they would
later be unreasonably restricted from putting their government experience to some use—
after all, government service should afford lawyers the opportunity to improve their subse-
quent private employment.—The reality is that the best lawyers will want to join the more
lucrative private sector sooner or later, and the government will hardly be able to attract
them if they would later be unreasonably restricted from putting their government experi-
ence to some use. After all, government service should afford lawyers the opportunity to
improve their subsequent private employment. The nature of the job brings such lawyers
into inevitable contact with clients interested in their fields of expertise. Because the practice
of law is becoming increasingly specialized, the likely consequence of a wholesale approach
to disqualification would be encouragement of a two-track professional structure: govern-
ment lawyer, private lawyer. The suspicion, and the reality, of ethical improprieties unre-
lated to particular government cases would be eliminated—but at the cost of creating an
insular, static legal bureaucracy. Such a pervasive, perpetual ban would deter too many com-
petent attorneys from entering government
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Presidential Commission on Good Government vs. Sandiganbayan
service, to the detriment of the public. The Court must strike a balance. I believe that the
adoption of the aforementioned period of limitation would achieve the purpose behind Rule
6.03 of the Code of Professional Responsibility, as well as Section 5 of Canon 3 of the New
Code of Judicial Conduct.
CARPIO-MORALES, J., Dissenting Opinion:
Courts; Judgments; Law of the Case; The doctrine of law of the case does not, I believe,
apply to the present case for this is the first time that the issue to disqualify Atty. Mendoza
has been elevated before this Court.—The doctrine of law of the case does not, I believe,
apply to the present case for this is the first time that the issue to disqualify Atty. Mendoza
has been elevated before this Court. It is the decision in this case which will be the law of
the case. A reading of Republic v. Sandiganbayan cited by Justice Sandoval-Gutierrez shows
that the issue currently before this Court was not passed upon.
Same; Same; Conclusiveness of Judgment; I also believe that the doctrine of conclusiveness
of judgment does not apply since in the case at bar, the question of whether the motion to
disqualify Atty. Mendoza should be granted is undoubtedly a legal question.—I also believe
that the doctrine of conclusiveness of judgment does not apply since in the case at bar, the
question of whether the motion to disqualify Atty. Mendoza should be granted is undoubt-
edly a legal question. Moreover, Civil Case No. 005 and Civil Case No. 0096 involve two
different substantially unrelated claims.
Same; Same; With all due respect I believe that we cannot characterize the denial of PCGG’s
motion to disqualify Atty. Mendoza as a final order.—With all due respect, I believe that we
cannot characterize the denial of PCGG’s motion to disqualify Atty. Mendoza as a final
order. Black’s Law Dictionary defines interlocutory in the following manner: Provisional;
interim; temporary; not final. Something intervening between the commencement and the
end of a suit which decides some point or matter, but is not a final decision of the whole
controversy. An interlocutory order or decree is one which does not finally determine a cause
of action but only decides some intervening matter pertaining to the cause, and which re-
quires further steps to be taken in order to enable
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Presidential Commission on Good Government vs. Sandiganbayan
the court to adjudicate the cause on the merits. (Emphasis and italics supplied)
Attorneys; Legal Ethics; Code of Professional Responsibility; Rule 6.03; Conflict of Inter-
est; Disqualification of Lawyers; Prescription; Carried to its logical conclusion, Justice Pan-
ganiban’s proposal that the prohibition in Rule 6.03 merely lasts for five years would mean
that after five years from the termination of the attorney-client relationship, all lawyers
would be able to represent an interest in conflict with that of the former client and that they
would no longer be bound by the rule on privileged communication.—Justice Pan-ganiban
further suggests that the prohibition in Rule 6.03 of the Code of Professional Responsibility
is not perpetual but merely lasts for five years primarily relying on the Civil Code provisions
on prescription and the doctrine that the right to practice law is a property right protected by
the Constitution. I do not agree with this framework of analysis. Carried to its logical con-
clusion, Justice Pangani-ban’s proposal would mean that after five years from the termina-
tion of the attorney-client relationship, all lawyers would be able to represent an interest in
conflict with that of the former client and that they would no longer be bound by the rule on
privileged communication. It bears emphasis that the law is not trade nor a craft but a pro-
fession, a noble profession at that.
Same; Same; Same; Same; Same; Same; Same; While it is true that over time memory does
fade, the ravages of time have been mitigated with the invention of the paper and pen and its
modern off-spring—the computer.—Justice Panganiban justifies his theory on the ground
that in 5 years time, the lawyer will develop a mild case of amnesia such that “in all proba-
bility, the lapse of the said period would also naturally obscure to a reasonable extent a
lawyer’s memory of details of a specific case despite active participation in the proceedings
therein.” He thus cites his own personal experience as a member of this Court: Modesty
aside, in my nearly ten (10) years in this Court, I have disposed of about a thousand cases in
full-length ponencias and countless cases by way of unsigned minute or extended Resolu-
tions. This does not include the thousands of other cases, assigned to other members of the
Court, in which I actively took part during their deliberations. In all honesty, I must admit
that I cannot with certainty recall the details of the facts and issues in each of these cases,
especially in their earlier ones. While it is true
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Presidential Commission on Good Government vs. Sandiganbayan
that over time memory does fade, the ravages of time have been mitigated with the invention
of the paper and pen and its modern offspring—the computer. It is not uncommon for law-
yers to resort to note taking in the course of handling legal matters.
Same; Same; Same; Same; Same; Same; Atty. Mendoza’s lack of participation in the deci-
sion of the Central Bank to liquidate GENBANK is to me not material—what is material is
his role in facilitating the liquidation of GENBANK through his legal expertise.—In his
ponencia, Justice Reynato S. Puno labels as insignificant the role of then Solicitor General
in the liquidation of General Bank and Trust Company (GENBANK), saying that “it is in-
dubitable from the facts that Atty. Mendoza had no iota of participation in the decision of
the Central Bank to liquidate GENBANK” and that his only involvement was “advising the
Central Bank on how to proceed with the said bank’s liquidation and even filing the petition
for its liquidation with the CFI of Manila.” Justice Puno observes that “the procedure of
liquidation is simple and is given in black and white in Republic Act No. 265, section 29.”
Atty. Mendoza’s lack of participation in the decision of the Central Bank to liquidate GEN-
BANK is to me not material. What is material is his role in facilitating the liquidation of
GENBANK through his legal expertise. In advising the Central Bank, Atty. Mendoza did
not just mechanically point to section 29 of Republic 265. As then Solicitor General, and as
a lawyer known for his keen legal acumen, Atty. Mendoza synthesized facts, which by rea-
son of his position he was privy to, and law with a view to successfully liquidate the bank.
Same; Same; Same; Same; Same; Same; While it is desirable to recruit competent lawyers
into government service, this does not justify the disturbance of our mores—I submit that
while financial considerations are important, they are not the sole factor affecting recruit-
ment of lawyers to the government sector.—Ultimately, Justice Puno advocates for a liberal
interpretation of Rule 6.03 since a strict interpretation would cause “a chilling effect on gov-
ernment recruitment of able legal talent.” With all due respect, I cannot subscribe to this
position which is grounded on the premise that this is “the only card that the government
may play to recruit lawyers.” Effectively, this is likely to result in the compromising of eth-
ical standards which this Court must never allow. While it is desirable to recruit competent
lawyers into government service, this does not justify the
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disturbance of our mores. The canons and rules of the Code of Professional Responsibility
must be strictly construed. Admittedly the salary for serving in government often pales in
comparison to that of the private sector. I submit, however, that while financial considera-
tions are important, they are not the sole factor affecting recruitment of lawyers to the gov-
ernment sector. I would like to think that serving in government is its own reward. One needs
only to look at all of us members of this Court to know that money is not everything. All of
us have, at one point in our legal careers, been tempted by the promise of financial success
that private practice usually brings. But in the end, we decided to take the road less traveled
and serve in government. And I would like to believe that each and everyone of us has made
a difference. There is more to this mortal coil than the pursuit of material wealth. As Winston
Churchill puts it: “What is the use of living if it be not to strive for noble causes and make
this muddled world a better place for those who will live in it after we are gone?”
CALLEJO, SR., J., Dissenting Opinion:
Attorneys; Legal Ethics; Code of Professional Responsibility; Conflict of Interest; I believe
that the present case behooves the Court to strictly apply the Code of Professional Respon-
sibility and provide an ethical compass to lawyers who, in the pursuit of the profession, often
find themselves in the unchartered sea of conflicting ideas and interests.—With due respect,
I dissent from the majority opinion. I believe that the present case behooves the Court to
strictly apply the Code of Professional Responsibility and provide an ethical compass to
lawyers who, in the pursuit of the profession, often find themselves in the unchartered sea
of conflicting ideas and interests. There is certainly, without exception, no profession in
which so many temptations beset the path to swerve from the line of strict integrity; in which
so many delicate and difficult questions of duty are continually arising. The Code of Profes-
sional Responsibility establishes the norms of conduct and ethical standards in the legal pro-
fession and the Court must not shirk from its duty to ensure that all lawyers live up to its
provisions. Moreover, the Court must not tolerate any departure from the “straight and nar-
row” path demanded by the ethics of the legal profession and enjoin all lawyers to be like
Caesar’s wife—to be pure and appear to be so.
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Same; Same; Same; Same; Disqualification of Counsel; Judgments; Denial of a motion to
disqualify a lawyer is an interlocutory order, hence not appealable.—In this case, the remedy
of appeal is not available to the PCGG because the denial of its motion to disqualify Atty.
Mendoza as counsel for respondents Tan, et al. is an interlocutory order; hence, not appeal-
able. The word “interlocutory” refers to “something intervening between the commencement
and the end of a suit which decides some point or matter, but is not a final decision of the
whole controversy.” An interlocutory order does not terminate nor does it finally dispose of
the case; it does not end the task of the court in adjudicating the parties’ contentions and
determining their rights and liabilities as against each other but leaves something yet to be
done by the court before the case is finally decided on the merits.
Judgments; The term “final” in the phrase judgments or final orders in Section 47, Rule 39
of the Revised Rules of Court has two accepted interpretations—in the first sense, it is an
order that one can no longer appeal because the period to do so has expired, or because the
order has been affirmed by the highest possible tribunal involved, and in the second sense
connotes that it is an order that leaves nothing else to be done, as distinguished from one that
is interlocutory.— The doctrine of res judicata comprehends two distinct concepts—(1) bar
by former judgment and (2) conclusiveness of judgment. Paragraph (b) embodies the doc-
trine of res judicata or res adjudicata or bar by prior judgment, while paragraph (c) estoppel
by judgment or conclusiveness of judgment. In Macahilig v. Heirs of Grace M. Magalit,
Justice Artemio Panganiban explained that the term “final” in the phrase judgments or final
orders in the above section has two accepted interpretations. In the first sense, it is an order
that one can no longer appeal because the period to do so has expired, or because the order
has been affirmed by the highest possible tribunal involved. The second sense connotes that
it is an order that leaves nothing else to be done, as distinguished from one that is interlocu-
tory. The phrase refers to a final determination as opposed to a judgment or an order that
settles only some incidental, subsidiary or collateral matter arising in an action; for example,
an order postponing a trial, denying a motion to dismiss or allowing intervention. Orders
that give rise to res judicata or conclusiveness of judgment apply only to those falling under
the second category.
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Presidential Commission on Good Government vs. Sandiganbayan
Same; Whether as a bar by prior judgment or in the concept of conclusiveness of judgment,
the doctrine of res judicata applies only when there is a judgment or final order which leaves
nothing else to be done.—For res judicata to serve as an absolute bar to a subsequent action,
the following elements must concur: (1) there is a final judgment or order; (2) the court
rendering it has jurisdiction over the subject matter and the parties; (3) the judgment is one
on the merits; and (4) there is, between the two cases, identity of parties, subject matter and
cause of action. When there is no identity of causes of action, but only an identity of issues,
there exists res judicata in the concept of conclusiveness of judgment. In any case, whether
as a bar by prior judgment or in the concept of conclusiveness of judgment, the doctrine of
res judicata applies only when there is a judgment or final order which, as earlier discussed,
leaves nothing else to be done. As explained by Justice Panganiban, a judgment or an order
on the merits is one rendered after a determination of which party is upheld, as distinguished
from an order rendered upon some preliminary or formal or merely technical point. To reit-
erate, the said judgment or order is not interlocutory and does not settle only some incidental,
subsidiary or collateral matter arising in an action.
Same; The 22 April 1991 Resolution of the Sandiganbayan (Second Division) in Civil Case
No. 0005 denying the PCGG’s motion to disqualify Atty. Mendoza as counsel for respond-
ents Tan, et al. therein was evidently an interlocutory order as it did not terminate or finally
dispose of the said case.—The Resolution dated April 22, 1991 of the Sandiganbayan (Sec-
ond Division) in Civil Case No. 0005 denying the PCGG’s similar motion to disqualify Atty.
Mendoza as counsel for respondents Tan, et al. therein was evidently an interlocutory order
as it did not terminate or finally dispose of the said case. It merely settled an incidental or
collateral matter arising therein. As such, it cannot operate to bar the filing of another motion
to disqualify Atty. Mendoza in the other cases because, strictly speaking, the doctrine of res
judicata, whether to serve as a bar by prior judgment or in the concept of conclusiveness of
judgment, does not apply to decisions or orders adjudicating interlocutory motions.
Public Officers; The restriction against a public official from using his public position as a
vehicle to promote or advance his private interests extends beyond his tenure on certain
matters in which he intervened as a public official.—Indeed, the restriction against a
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Presidential Commission on Good Government vs. Sandiganbayan
public official from using his public position as a vehicle to promote or advance his private
interests extends beyond his tenure on certain matters in which he intervened as a public
official. Rule 6.03 makes this restriction specifically applicable to lawyers who once held
public office. A plain reading of the rule shows that the interdiction (1) applies to a lawyer
who once served in the government, and (2) relates to his accepting “engagement or em-
ployment in connection with any matter in which he had intervened while in said service.”
Attorneys; Legal Ethics; Code of Professional Responsibility; Rule 6.03; Conflict of Inter-
est; The acts of Atty. Mendoza may be rightfully considered as falling within the contem-
plation of the term “matter” within the meaning of Rule 6.03—These acts were discrete,
isolatable as well as identifiable transactions or conduct involving a particular situation and
specific party, i.e., the procedure for the liquidation of GENBANK.—The majority opinion
downplays the role of Atty. Mendoza by stating that he “merely advised the Central Bank
on the legal procedure to liquidate GENBANK” which procedure is “given in black and
white in R.A. No. 265, section 29.” This procedural advice, according to the majority opin-
ion, “is not the matter contemplated by Rule 6.03 of the Code of Professional Responsibil-
ity.” On the contrary, the acts of Atty. Mendoza may be rightfully considered as falling
within the contemplation of the term “matter” within the meaning of Rule 6.03. Specifically,
Atty. Mendoza’s giving counsel to the Central Bank on the procedure to go about GEN-
BANK’s liquidation and the filing of the petition therefor in Special Proceedings No. 107812
did not merely involve the drafting, enforcing or interpreting government or agency proce-
dures, regulations or laws, or briefing abstract principles of law. These acts were discrete,
isolatable as well as identifiable transactions or conduct involving a particular situation and
specific party, i.e., the procedure for the liquidation of GENBANK. Consequently, the same
can be properly considered “matter” within the contemplation of Rule 6.03.
Same; Same; Same; Same; Same; Integrated Bar of the Philippines (IBP); The Comments
of the Integrated Bar of the Philippines (IBP) that drafted our Code of Professional Respon-
sibility explained that the restriction covers “engagement or employment, which means that
he cannot accept any work or employment, from anyone that will involve or relate to the
matter in which he intervened as a public
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Presidential Commission on Good Government vs. Sandiganbayan
official.”—Contrary to the contention of respondents Tan, et al., the interdiction in Rule 6.03
does not only apply if precisely the same legal issues are involved in each representation.
The Comments of the Integrated Bar of the Philippines (IBP) that drafted our Code of Pro-
fessional Responsibility explained that the restriction covers “engagement or employment,
which means that he cannot accept any work or employment from anyone that will involve
or relate to the matter in which he intervened as a public official.” The sequestration of the
shares of stock in Allied Banking Corp. in the names of respondents Tan, et al., which is
subject of Civil Case No. 0096, necessarily involves or relates to their acquisition of GEN-
BANK upon its liquidation, in which Atty. Mendoza had intervened as the Solicitor General.
It should be emphasized that Atty. Mendoza’s participation in GENBANK’s liquidation is
sufficient to place his present engagement as counsel for respondents Tan, et al. in Civil
Case No. 0096 within the ambit of Rule 6.03. His role was significant and substantial.
Same; Same; Same; Same; Same; That the decision to declare GENBANK insolvent was
made wholly by the Central Bank, without the participation of Atty. Mendoza, is not in
question—rather, it was his participation in the proceedings taken subsequent to such decla-
ration, i.e., his giving advise to the Central Bank on how to proceed with GENBANK’s
liquidation and his filing of the petition in Special Proceeding No. 107812 pursuant to Sec-
tion 29 of Rep. Act No. 265, that constitutes “intervention” as to place him within the con-
templation of Rule 6.03.—I disagree with the ponencia’s holding that Atty. Mendoza could
not be considered as having intervened as it describes the participation of Atty. Mendoza by
stating that he “had no iota of participation in the decision of the Central Bank to liquidate
GENBANK.” That the decision to declare GENBANK insolvent was made wholly by the
Central Bank, without the participation of Atty. Mendoza, is not in question. Rather, it was
his participation in the proceedings taken subsequent to such declaration, i.e., his giving
advise to the Central Bank on how to proceed with GENBANK’s liquidation and his filing
of the petition in Special Proceeding No. 107812 pursuant to Section 29 of Rep. Act No.
265, that constitutes “intervention” as to place him within the contemplation of Rule 6.03.
To intervene means—1: to enter or appear as an irrelevant or extraneous feature or circum-
stance; 2: to occur, fall or come between
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Presidential Commission on Good Government vs. Sandiganbayan
points of time or events; 3: to come in or between by way of hindrance or modification:
INTERPOSE; 4: to occur or lie between two things.
Same; Same; Same; Same; Same; By giving counsel to the Central Bank on how to proceed
with GENBANK’s liquidation and filing the necessary petition therefor with the court, Atty.
Mendoza “had intervened,” “had come in,” or “had interfered,” in the liquidation of GEN-
BANK and the subsequent acquisition by respondents Tan, et al. of the said banking institu-
tion.—With the foregoing definitions, it is not difficult to see that by giving counsel to the
Central Bank on how to proceed with GENBANK’s liquidation and filing the necessary
petition therefor with the court, Atty. Mendoza “had intervened,” “had come in,” or “had
interfered,” in the liquidation of GENBANK and the subsequent acquisition by respondents
Tan, et al. of the said banking institution. Moreover, his acts clearly affected the interests of
GENBANK as well as its stockholders.
Same; Same; Same; Same; Same; American Bar Association; Being undoubtedly of Amer-
ican origin, the interpretation adopted by the American courts and the ABA has persuasive
effect on the interpretation of Rule 6.03.—Being undoubtedly of American origin, the inter-
pretation adopted by the American courts and the ABA has persuasive effect on the inter-
pretation of Rule 6.03. Accordingly, I find the case of General Motors Corporation v. City
of New York, where the pertinent ethical precepts were applied by the United States Court
of Appeals (2nd Circuit), particularly instructive. The said US court disqualified the pri-
vately retained counsel of the City of New York in the antitrust case it filed against the
General Motors Corp. because the said counsel, a former lawyer of the US Department of
Justice, had not only participated in the latter’s case against General Motors Corp. but signed
the complaint in that action.
Same; Same; Same; Same; Same; “Congruent-Interest Representation Conflict,” Doctrine;
Words and Phrases; “Congruent-Interest Representation Conflict” Doctrine, Explained.—
The General Motors case is illustrative of the “congruent-interest representation conflict”
doctrine. It bears stressing that this doctrine applies uniquely to former government lawyers
and has been distinguished from the normal rule applicable for non-government lawyers in
this wise—To illustrate the normal rule for non-government lawyers, imagine that the lawyer
has represented passenger A and has recovered substantial damages in a suit against a driver.
No conflict of
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Presidential Commission on Good Government vs. Sandiganbayan
interest principle or rule restricts the lawyer from later representing passenger B against the
driver with respect to exactly the same accident. B may obtain the benefits of the lawyer’s
help regardless of the fact that the lawyer might be able to employ to B’s advantage infor-
mation and strategies developed in the representation of A. The critical element is that the
interest of A and B do not conflict. The analysis does not change if we move from an area
that is entirely private into one that is arguably more connected with the public interest.
Suppose a lawyer in private practice represents Small Soap Company in its suit for damages
under the federal antitrust laws against Giant Soap Company. The lawyer would not be dis-
qualified from representing Medium Soap Company against Giant Soap in a succeeding suit
for damages based on precisely the same conspiracy. The congruence of interests between
Small Soap and Medium Soap would almost certainly mean that the lawyer could represent
both clients. In the absence of a conflict—an opposing interest between the two clients—the
existence of a substantial relationship between the matters involved in both cases is irrele-
vant. Now, suppose the lawyer has filed suit in behalf of the government against Giant Soap
Company to force divestiture of an acquired company on a theory that, because of the ac-
quisition, Giant Soap has monopolized an industry in conflict with antitrust laws. May the
lawyer, after leaving government service and while in private practice, represent Medium
Soap Company against Giant Soap in a suit for damages based on the same antitrust con-
spiracy? Does the absence of opposing interests between Medium Soap and the lawyer’s
former government client similarly mean that there should be no disqualification? At this
point, the rules for the former government lawyer diverge sharply from the normal former-
client conflict rules: the lawyer is disqualified from representing the successive client in
private practice, despite the fact that the interests of the client and the lawyer’s former gov-
ernment client are apparently aligned. All that is required for disqualification is the relation-
ship between the former and the succeeding representations.
Same; Same; Same; Same; Same; Same; Rationale.—The rationale for the “congruent-in-
terest representation conflict” doctrine has been explained, thus: The rationale for disquali-
fication is rooted in a concern with the impact that any other rule would have upon the deci-
sions and actions taken by the government lawyer during the course of the earlier represen-
tation of the government. Both courts
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and commentators have expressed the fear that permitting a lawyer to take action in behalf
of a government client that later could be to the advantage of private practice client would
present grave dangers that a government lawyer’s largely discretionary actions would be
wrongly influenced by the temptation to secure private practice employment or to favor par-
ties who might later become private practice clients . . . The fear that government lawyers
will misuse government power in that way is not idle. Lawyers who represent the govern-
ment often exercise enormous discretion unchecked by an actual client who oversees the
lawyer’s work. For that reason a special rule is needed to remove the incentive for govern-
ment lawyers to take discretionary decisions with an eye cast toward advantages in future,
nongovernmental employment. The broad disqualification accomplishes that and, particu-
larly under rubrics that do not invariably require disqualification of the entire firm with
which the former government lawyer practices, does it without unnecessarily discouraging
lawyers from entering temporary public service.
Same; Same; Same; Same; Same; Same; A textual reading of Rule 6.03 of our Code of
Professional Responsibility reveals that no conflict of interests or adverse interests is re-
quired for the interdiction to apply.—The foregoing disquisition applies to the case of Atty.
Mendoza. Indeed, a textual reading of Rule 6.03 of our Code of Professional Responsibility
reveals that no conflict of interests or adverse interests is required for the interdiction to
apply. If it were so, or if conflict of interests were an element, then the general conflict of
interests rule (Rule 15.03) would apply. Rather, the interdiction in Rule 6.03 broadly covers
“engagement or employment in connection with any matter in which he had intervened while
in the said service.” To reiterate, the drafters of our Code of Professional Responsibility had
construed this to mean that a lawyer “cannot accept any work or employment from anyone
that will involve or relate to the matter in which he intervened as a public official, except on
behalf of the body or authority which he served during his public employment.” In Civil
Case No. 0096, Atty. Mendoza is certainly not representing the Central Bank but respond-
ents Tan, et al. Granting arguendo that the interests of his present private practice clients
(respondents Tan, et al.) and former government client (Central Bank) are apparently
aligned, the interdiction in Rule 6.03 applies.
556
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
Same; Same; Same; Same; Same; Prescription; Unless the Code of Professional Responsi-
bility itself provides, the Court cannot set a prescriptive period for any of the provisions
therein.—Unless the Code itself provides, the Court cannot set a prescriptive period for any
of the provisions therein. That Rule 6.03, in particular, contains no explicit temporal limita-
tion is deliberate. It recognizes that while passage of time is a factor to consider in determin-
ing its applicability, the peculiarities of each case have to be considered. For example, in
Control Data Corp. v. International Business Mach. Corp., the US District Court of Minne-
sota held that the lawyer who, 15 years earlier, while an employee of the Department of
Justice had been in charge of negotiations in antitrust case against a corporation, was not
disqualified from acting as counsel for the plaintiffs suing such corporation. On the other
hand, the lawyer whose conduct was the subject of the ABA Opinion No. 37, earlier cited,
was himself 10 years removed from the matter over which he had substantial responsibility
while in public employ at the time he accepted the private engagement relating to the same
matter. Clearly, it is the degree of involvement or participation in the matter while in gov-
ernment service, not the passage of time, which is the crucial element in Rule 6.03.
Same; Same; Same; Same; Same; Disqualification of Counsel; Words and Phrases; More
specifically and practically considered, legal ethics may be defined as that branch of moral
science which treats of the duties which the attorney-at-law owes to his clients, to the courts,
to the bar, and to the public; The Court has consistently characterized disciplinary proceed-
ings, including disqualification cases, against lawvers as sui generis, neither purely civil nor
purely criminal, and it is for this reason that the civil law concept of prescription of actions
finds no application in disqualification cases against lawyers.—The Code of Professional
Responsibility is a codification of legal ethics, that “body of principles by which the conduct
of members of the legal profession is controlled. More specifically and practically consid-
ered, legal ethics may be defined as that branch of moral science which treats of the duties
which the attorney-at-law owes to his clients, to the courts, to the bar, and to the public.” In
this connection, the Court has consistently characterized disciplinary proceedings, including
disqualification cases, against lawyers as sui generis, neither purely civil nor purely criminal,
thus: [D]isciplinary proceedings against lawyers are sui generis. Neither purely civil nor
557
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pure criminal, they do not involve a trial of an action or a suit, but are rather investigations
by the Court into the conduct of one of its officers. Not being intended to inflict punishment,
[they are] in no sense a criminal prosecution. Accordingly, there is neither a plaintiff nor a
prosecutor therein. [They] may be initiated by the Court motu propio. Public interest is
[their] primary objective, and the real question for determination is whether or not the attor-
ney is still a fit person be allowed the privileges as such. Hence, in the exercise of its disci-
plinary powers, the Court merely calls upon a member of the Bar to account for his actua-
tions as an officer of the Court with the end view of preserving the purity of the legal pro-
fession and the proper and honest administration of justice… For this reason, the civil law
concept of prescription of actions finds no application in disqualification cases against law-
yers.
Same; Same; Same; Same; Same; Same; Disqualification cases involving former govern-
ment lawyers will have to be resolved on the basis of peculiar circumstances attending each
case.—From the foregoing disquisition, it can be gleaned that disqualification cases involv-
ing former government lawyers will have to be resolved on the basis of peculiar circum-
stances attending each case. A balance between the two seemingly conflicting policy con-
siderations of maintaining high ethical standards for former Government employees, on the
one hand, and encouraging entry into Government service, on the other, must be struck based
on, inter alia, the relationship between the former and the succeeding representations of the
former government lawyer. Likewise, as already discussed, the degree of his involvement in
the matter while in Government employ is a crucial element in determining if his present
representation is within the purview of Rule 6.03.
TINGA, J., Separate Opinion:
Attorneys; Legal Ethics; Code of Professional Responsibility; I have qualms in holding any
member of the Bar liable for violating Section 6.03 of the Code of Professional Responsi-
bility, in connection with acts that they may have engaged in as government officials before
the enactment of the said Code.—I have qualms in holding any member of the Bar liable for
violating Section 6.03 of the Code of Professional Responsibility, in connection with acts
that they may have engaged in as government officials before the enactment of the said
Code. In this case, at the time Atty. Mendoza entered the gov-
558
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
ernment service he had no idea of the kind of inhibition proposed to be foisted on him cur-
rently. Indeed, he is being faulted for representing the respondents in Civil Case No. 0096
notwithstanding the fact that as Solicitor General and in the discharge of his official func-
tions, he had advised the Central Bank on the procedure to bring about the liquidation of
General Bank and Trust Company, which was subsequently acquired by the respondents.
However, whether it be at the time then Solicitor General Mendoza participated in the pro-
cess of the dissolution of General Bank in 1977, or at sometime in 1987 when he agreed to
represent the respondents, the Code of Professional Responsibility had not yet been prom-
ulgated. The Code of Professional Responsibility was promulgated by the Supreme Court
on 21 June 1988. Prior to its official adoption, there was no similar official body of rules or
guidelines enacted by the Supreme Court other than the provisions on Legal Ethics in the
Rules of Court.
Same; Same; Same; Statutes; It is settled that the presumption is that all laws operate pro-
spectively absent clear contrary language in the text, and that in every case of doubt, the
doubt will be resolved against the retroactive operation of laws.—I fear it would set a dan-
gerous precedent to hinge Atty. Mendoza’s culpability on the Code of Professional Respon-
sibility, as it would effectively imply that the Code of Professional Responsibility has appli-
cation even as to acts performed prior to its enactment. Our laws frown upon the prospec-
tivity of statutes. Article 4 of the Civil Code declares that “Laws shall have no retroactive
effect, unless the contrary is provided.” There is no declaration in the Code of Professional
Responsibility that gives retroactive effect to its canons and rules. It is settled that the pre-
sumption is that all laws operate prospectively absent clear contrary language in the text,
and that in every case of doubt, the doubt will be resolved against the retroactive operation
of laws.
Same; Same; Same; There is a greater demand to ward off the retroactive application of the
Code of Professional Responsibility for the Code is the source of penal liabilities against its
infringers.—I believe that there is a greater demand to ward off the retroactive application
of the Code of Professional Responsibility for the Code is the source of penal liabilities
against its infringers. It is well entrenched that generally, penal laws or those laws which
define offenses and prescribe penalties for their violation operate prospec-
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tively. The Constitution itself bars the enactment of ex-post facto laws. I do not think it
necessary to flirt with the constitutional issue whether the Code of Professional Responsi-
bility operates as a penal statute within the definition of an ex-post facto law, but I am satis-
fied with the general rules, affirmed by jurisprudence, that abhor the retroactivity of statutes
and regulations such as the Code of Professional Responsibility.
Same; Same; Same; Philippine Bar Association (PBA); There is no denying that the Philip-
pine Bar Association, a civic non-profit association, is a private entity of limited membership
within the Philippine bar; The rules or canons the PBA has adopted are per se binding only
on its members, and the penalties for violation of the same could affect only the status or
rights of the infringers as members of the association.—The Canons of Professional Ethics
originated from the American Bar Association. They were adopted by the Philippine Bar
Association as its own in 1917 and in 1946. There is no denying the high regard enjoyed by
the Philippine Bar Association in the legal community in its nearly one hundred years of
existence. However, there is also no denying that the Philippine Bar Association, a civic
non-profit association, is a private entity of limited membership within the Philippine bar.
The rules or canons it has adopted are per se binding only on its members, and the penalties
for violation of the same could affect only the status or rights of the infringers as members
of the association.
Same; Same; Same; Same; Canons of Professional Ethics; If provisions of the Canons of
Professional Ethics of the PBA have jurisprudentially been enforced, or acknowledged as
basis for legal liability by the Supreme Court, they may be recognized as a binding standard
imposable upon members of the bar, but not because said Canons or the PBA itself said so,
but because the Supreme Court said so.—Reference has been had by this Court to the Canons
of Professional Ethics in deciding administrative cases against lawyers, especially prior to
the adoption of the Code of Professional Ethics. Hence, the belief by some commentators
that the said Canons may serve as a source of legal ethics in this country. However, I think
it would be grave error to declare that the Canons of Professional Ethics, on their own, serves
as an indisputable source of obligations and basis of penalties imposable upon members of
the Philippine legal profession. This would violate the long-established constitutional prin-
ciple
560
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
that it is the Supreme Court which is tasked with the promulgation of rules governing the
admission to the practice of law, as well as the pleading, practice and procedure in all courts.
The task of formulating ethical rules governing the practice of law in the Philippines could
not have been delegated to the Philippine Bar Association by the Supreme Court. Neither
could such rules as adopted by the private body be binding on the Supreme Court or the
members of the bar. If provisions of the Canons of Professional Ethics of the Philippine Bar
Association have jurisprudentially been enforced, or acknowledged as basis for legal liabil-
ity by the Supreme Court, they may be recognized as a binding standard imposable upon
members of the bar, but not because said Canons or the Philippine Bar Association itself
said so, but because the Supreme Court said so. This is keeping in line with the entrenched
rule, as evinced by Article 8 of the Civil Code, which states that “judicial decisions applying
or interpreting the laws or the Constitution shall form a part of the legal system.”
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari and Prohibition.
The facts are stated in the opinion of the Court.
The Solicitor General for petitioner.
Estelito P. Mendoza and Orlando A. Santiago for respondents Lucio C. Tan, et al.
PUNO, J.:
This case is prima impressiones and it is weighted with significance for it concerns on one
hand, the efforts of the Bar to upgrade the ethics of lawyers in government service and on
the other, its effect on the right of government to recruit competent counsel to defend its
interests.
In 1976, General Bank and Trust Company (GENBANK) encountered financial difficulties.
GENBANK had extended considerable financial support to Filcapital Development Corpo-
ration causing it to incur daily overdrawings on its
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Presidential Commission on Good Government vs. Sandiganbayan
current account with the Central Bank.1 It was later found by the Central Bank that GEN-
BANK had approved various loans to directors, officers, stockholders and related interests
totaling P172.3 million, of which 59% was classified as doubtful and P0.505 million as un-
collectible.2 As a bailout, the Central Bank extended emergency loans to GENBANK which
reached a total of P310 million.3 Despite the mega loans, GENBANK failed to recover from
its financial woes. On March 25, 1977, the Central Bank issued a resolution declaring GEN-
BANK insolvent and unable to resume business with safety to its depositors, creditors and
the general public, and ordering its liquidation.4 A public bidding of GENBANK’s assets
was held from March 26 to 28, 1977, wherein the Lucio Tan group submitted the winning
bid.5 Subsequently, former Solicitor General Estelito P. Mendoza filed a petition with the
then Court of First Instance praying for the assistance and supervision of the court in GEN-
BANK’s liquidation as mandated by Section 29 of Republic Act No. 265.
In February 1986, the EDSA I revolution toppled the Marcos government. One of the first
acts of President Corazon C. Aquino was to establish the Presidential Commission on Good
Government (PCGG) to recover the alleged ill-gotten wealth of former President Ferdinand
Marcos, his family and his cronies. Pursuant to this mandate, the PCGG, on July 17, 1987,
filed with the Sandiganbayan a complaint for “reversion, reconveyance, restitution, account-
ing and damages” against respondents Lucio Tan, Carmen Khao Tan, Florencio T. Santos,
Natividad P. Santos, Domingo Chua, Tan Hui Nee, Mariano Tan Eng Lian, Estate of Benito
Tan Kee Hiong,
_______________
1 Rollo, p. 240; Filcapital Development Corporation was a related interest of the Yujuico
Family Group and the directors and officers of GENBANK.
2 Rollo, pp. 240, 242.
3 Rollo, p. 7.
4 Rollo, pp. 7, 108, 248.
5 Rollo, pp. 110-114, 248.
562
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
Florencio N. Santos, Jr., Harry C. Tan, Tan Eng Chan, Chung Poe Kee, Mariano Khoo,
Manuel Khoo, Miguel Khoo, Jaime Khoo, Elizabeth Khoo, Celso Ranola, William T. Wong,
Ernesto B. Lim, Benjamin T. Albacita, Willy Co, Allied Banking Corporation (Allied Bank),
Allied Leasing and Finance Corporation, Asia Brewery, Inc., Basic Holdings Corp., Fore-
most Farms, Inc., Fortune Tobacco Corporation, Grandspan Development Corp., Himmel
Industries, Iris Holdings and Development Corp., Jewel Holdings, Inc., Manufacturing Ser-
vices and Trade Corp., Maranaw Hotels and Resort Corp., Northern Tobacco Redrying
Plant, Progressive Farms, Inc., Shareholdings, Inc., Sipalay Trading Corp., Virgo Holdings
& Development Corp., (collectively referred to herein as respondents Tan, et al.), then Pres-
ident Ferdinand E. Marcos, Imelda R. Marcos, Panfilo O. Domingo, Cesar Zalamea, Don
Ferry and Gregorio Licaros. The case was docketed as Civil Case No. 0005 of the Second
Division of the Sandiganbayan.6 In connection therewith, the PCGG issued several writs of
sequestration on properties allegedly acquired by the above-named persons by taking ad-
vantage of their close relationship and influence with former President Marcos.
Respondents Tan, et al. repaired to this Court and filed petitions for certiorari, prohibition
and injunction to nullify, among others, the writs of sequestration issued by the PCGG.7
After the filing of the parties’ comments, this Court referred the cases to the Sandiganbayan
for proper disposition. These cases were docketed as Civil Case Nos. 0096-0099. In all these
cases, respondents Tan, et al. were represented by their counsel, former Solicitor General
Estelito P. Mendoza, who has then resumed his private practice of law.
On February 5, 1991, the PCGG filed motions to disqualify respondent Mendoza as counsel
for respondents Tan, et al. with the Second Division of the Sandiganbayan in Civil Case
_______________
6 Rollo, pp. 217-218.
7 Rollo, p. 143.
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Presidential Commission on Good Government vs. Sandiganbayan
Nos. 00058 and 0096-0099.9 The motions alleged that respondent Mendoza, as then Solici-
tor General10 and counsel to Central Bank, “actively intervened” in the liquidation of GEN-
BANK, which was subsequently acquired by respondents Tan, et al. and became Allied
Banking Corporation. Respondent Mendoza allegedly “intervened” in the acquisition of
GEN-BANK by respondents Tan, et al. when, in his capacity as then Solicitor General, he
advised the Central Bank’s officials on the procedure to bring about GENBANK’s liquida-
tion and appeared as counsel for the Central Bank in connection with its petition for assis-
tance in the liquidation of GENBANK which he filed with the Court of First Instance (now
Regional Trial Court) of Manila and was docketed as Special Proceeding No. 107812. The
motions to disqualify invoked Rule 6.03 of the Code of Professional Responsibility. Rule
6.03 prohibits former government lawyers from accepting “engagement or employment in
connection with any matter in which he had intervened while in said service.”
On April 22, 1991, the Second Division of the Sandiganbayan issued a resolution denying
PCGG’s motion to disqualify respondent Mendoza in Civil Case No. 0005.11 It found that
the PCGG failed to prove the existence of an inconsistency between respondent Mendoza’s
former function as Solicitor General and his present employment as counsel of the Lucio
Tan group. It noted that respondent Mendoza did not take a position adverse to that taken on
behalf of the Central Bank during his term as Solicitor General.12 It further ruled that re-
spondent Mendoza’s appearance as counsel for respondents Tan, et al. was beyond the one-
year prohibited period under Section 7(b) of Republic Act No. 6713 since he ceased to be
Solicitor General in the year 1986. The said section prohibits
_______________
8 Rollo, pp. 216-220.
9 Rollo, pp. 44, 221- 225.
10 Atty. Mendoza served as Solicitor General from 1972 to 1986.
11 Rollo, p. 63.
12 Rollo, p. 61.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
a former public official or employee from practicing his profession in connection with any
matter before the office he used to be with within one year from his resignation, retirement
or separation from public office.13 The PCGG did not seek any reconsideration of the rul-
ing.14
It appears that Civil Case Nos. 0096-0099 were transferred from the Sandiganbayan’s Sec-
ond Division to the Fifth Division.15 In its resolution dated July 11, 2001, the Fifth Division
of the Sandiganbayan denied the other PCGG’s motion to disqualify respondent Mendoza.16
It adopted the resolution of its Second Division dated April 22, 1991, and observed that the
arguments were the same in substance as the motion to disqualify filed in Civil Case No.
0005. The PCGG sought reconsideration of the ruling but its motion was denied in its reso-
lution dated December 5, 2001.17
Hence, the recourse to this Court by the PCGG assailing the resolutions dated July 11, 2001
and December 5, 2001 of the Fifth Division of the Sandiganbayan via a petition for certiorari
and prohibition under Rule 65 of the 1997 Rules of Civil Procedure.18 The PCGG alleged
that the Fifth Division acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in issuing the assailed resolutions contending that: 1) Rule 6.03 of the Code of
Professional Responsibility prohibits a former government lawyer from accepting employ-
ment in connection with any matter in which he intervened; 2) the prohibition in the Rule is
not time-bound; 3)
_______________
13 Rollo, pp. 57-63.
14 Rollo, p. 178.
15 Rollo, pp. 42, 44; The “Motion to disqualify Atty. Estelito P. Mendoza as counsel for
petitioners” in Civil Case Nos. 0096-0099 was filed with the Sandiganbayan’s Second Di-
vision. However, the motion was ultimately resolved by the Sandiganbayan’s Fifth Division
in its proceedings held on July 11, 2001.
16 Rollo, p. 42.
17 Rollo, p. 43.
18 Rollo, pp. 2-40.
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Presidential Commission on Good Government vs. Sandiganbayan
that Central Bank could not waive the objection to respondent Mendoza’s appearance on
behalf of the PCGG; and 4) the resolution in Civil Case No. 0005 was interlocutory, thus res
judicata does not apply.19
The petition at bar raises procedural and substantive issues of law. In view, however, of the
import and impact of Rule 6.03 of the Code of Professional Responsibility to the legal pro-
fession and the government, we shall cut our way and forthwith resolve the substantive issue.
I Substantive Issue
The key issue is whether Rule 6.03 of the Code of Professional Responsibility applies to
respondent Mendoza. Again, the prohibition states: “A lawyer shall not, after leaving gov-
ernment service, accept engagement or employment in connection with any matter in which
he had intervened while in the said service.”
I.A. The history of Rule 6.03
A proper resolution of this case necessitates that we trace the historical lineage of Rule 6.03
of the Code of Professional Responsibility.
In the seventeenth and eighteenth centuries, ethical standards for lawyers were pervasive in
England and other parts of Europe. The early statements of standards did not resemble mod-
ern codes of conduct. They were not detailed or collected in one source but surprisingly were
comprehensive for their time. The principal thrust of the standards was directed towards the
litigation conduct of lawyers. It underscored the central duty of truth and fairness in litigation
as superior to any obligation to the client. The formulations of the litigation
_______________
19 Rollo, pp. 12-14.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
duties were at times intricate, including specific pleading standards, an obligation to inform
the court of falsehoods and a duty to explore settlement alternatives. Most of the lawyer’s
other basic duties—competency, diligence, loyalty, confidentiality, reasonable fees and ser-
vice to the poor—originated in the litigation context, but ultimately had broader application
to all aspects of a lawyer’s practice.
The forms of lawyer regulation in colonial and early postrevolutionary America did not dif-
fer markedly from those in England. The colonies and early states used oaths, statutes, judi-
cial oversight, and procedural rules to govern attorney behavior. The difference from Eng-
land was in the pervasiveness and continuity of such regulation. The standards set in England
varied over time, but the variation in early America was far greater. The American regulation
fluctuated within a single colony and differed from colony to colony. Many regulations had
the effect of setting some standards of conduct, but the regulation was sporadic, leaving gaps
in the substantive standards. Only three of the traditional core duties can be fairly character-
ized as pervasive in the formal, positive law of the colonial and post-revolutionary period:
the duties of litigation fairness, competency and reasonable fees.20
The nineteenth century has been termed the “dark ages” of legal ethics in the United States.
By mid-century, American legal reformers were filling the void in two ways. First, David
Dudley Field, the drafter of the highly influential New York “Field Code,” introduced a new
set of uniform standards of conduct for lawyers. This concise statement of eight statutory
duties became law in several states in the second half of the nineteenth century. At the same
time, legal educators, such as David Hoffman and George Sharswood, and many other law-
yers were working to flesh out the broad outline of a lawyer’s duties. These reformers wrote
about legal ethics in un-
_______________
20 Andrews, Standards of Conduct for Lawyers: An 800-Year Revolution, 57 SMU L. Rev.
1385 (2004).
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Presidential Commission on Good Government vs. Sandiganbayan
precedented detail and thus brought a new level of understanding to a lawyer’s duties. A
number of mid-nineteenth century laws and statutes, other than the Field Code, governed
lawyer behavior. A few forms of colonial regulations—e.g., the “do no falsehood” oath and
the deceit prohibitions—persisted in some states. Procedural law continued to directly, or
indirectly, limit an attorney’s litigation behavior. The developing law of agency recognized
basic duties of competence, loyalty and safeguarding of client property. Evidence law started
to recognize with less equivocation the attorney-client privilege and its underlying theory of
confidentiality. Thus, all of the core duties, with the likely exception of service to the poor,
had some basis in formal law. Yet, as in the colonial and early post-revolutionary periods,
these standards were isolated and did not provide a comprehensive statement of a lawyer’s
duties. The reformers, by contrast, were more comprehensive in their discussion of a law-
yer’s duties, and they actually ushered a new era in American legal ethics.21
Toward the end of the nineteenth century, a new form of ethical standards began to guide
lawyers in their practice—the bar association code of legal ethics. The bar codes were de-
tailed ethical standards formulated by lawyers for lawyers. They combined the two primary
sources of ethical guidance from the nineteenth century. Like the academic discourses, the
bar association codes gave detail to the statutory statements of duty and the oaths of office.
Unlike the academic lectures, however, the bar association codes retained some of the offi-
cial imprimatur of the statutes and oaths. Over time, the bar association codes became ex-
tremely popular that states adopted them as binding rules of law. Critical to the development
of the new codes was the re-emergence of bar associations themselves. Local bar associa-
tions formed sporadically during the colonial period, but they disbanded by the early nine-
teenth century. In the late nineteenth century, bar associations began to form again, picking
up where their
_______________
21 Ibid.
568
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
colonial predecessors had left off. Many of the new bar associations, most notably the Ala-
bama State Bar Association and the American Bar Association, assumed on the task of draft-
ing substantive standards of conduct for their members.22
In 1887, Alabama became the first state with a comprehensive bar association code of ethics.
The 1887 Alabama Code of Ethics was the model for several states’ codes, and it was the
foundation for the American Bar Association’s (ABA) 1908 Canons of Ethics.23
In 1917, the Philippine Bar found that the oath and duties of a lawyer were insufficient to
attain the full measure of public respect to which the legal profession was entitled. In that
year, the Philippine Bar Association adopted as its own, Canons 1 to 32 of the ABA Canons
of Professional Ethics.24
As early as 1924, some ABA members have questioned the form and function of the canons.
Among their concerns was the “revolving door” or “the process by which lawyers and others
temporarily enter government service from private life and then leave it for large fees in
private practice, where they can exploit information, contacts, and influence garnered in
government service.”25 These concerns were classified as “adverse-interest conflicts” and
“congruent-interest conflicts.” “Adverse-interest conflicts” exist where the matter in which
the former government lawyer represents a client in private practice is substantially related
to a matter that the lawyer dealt with while employed by the government and the interests of
the current and former are adverse.26 On the other hand, “congruent-interest representation
conflicts” are unique to government lawyers and apply primarily to former gov-
_______________
22 Ibid.
23 Ibid.
24 Agpalo, Legal and Judicial Ethics, pp. 24-25 (2002); In re Tagorda, 53 Phil. 37 (1927).
25 Wolfram, Modern Legal Ethics, p. 456 (1986).
26 Id., at p. 457.
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Presidential Commission on Good Government vs. Sandiganbayan
ernment lawyers.27 For several years, the ABA attempted to correct and update the canons
through new canons, individual amendments and interpretative opinions. In 1928, the ABA
amended one canon and added thirteen new canons.28 To deal with problems peculiar to
former government lawyers, Canon 36 was minted which disqualified them both for “ad-
verse-interest conflicts” and “congruent-interest representation conflicts.”29 The rationale
for disqualification is rooted in a concern that the government lawyer’s largely discretionary
actions would be influenced by the temptation to take action on behalf of the government
client that later could be to the advantage of parties who might later become private practice
clients.30 Canon 36 provides, viz.:
36. Retirement from judicial position or public employment
A lawyer should not accept employment as an advocate in any matter upon the merits of
which he has previously acted in a judicial capacity.
A lawyer, having once held public office or having been in the public employ should not,
after his retirement, accept employment in connection with any matter he has investigated
or passed upon while in such office or employ.
_______________
27 Ibid.; The use of the word “conflict” is a misnomer; “congruent-interest representation
conflicts” arguably do not involve conflicts at all, as it prohibits lawyers from representing
a private practice client even if the interests of the former government client and the new
client are entirely parallel.
28 Supra, note 20
29 ABA Canons of Professional Ethics, Canon 36 (1908); ABA Model Code of Professional
Responsibility (1963), DR 9-101(b); ABA Model Rules of Professional Responsibility, MR
1.11(a) and (b) (1983).
30 Supra, note 25 at p. 458.
570
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Presidential Commission on Good Government vs. Sandiganbayan
Over the next thirty years, the ABA continued to amend many of the canons and added
Canons 46 and 47 in 1933 and 1937, respectively.31
In 1946, the Philippine Bar Association again adopted as its own Canons 33 to 47 of the
ABA Canons of Professional Ethics.32
By the middle of the twentieth century, there was growing consensus that the ABA Canons
needed more meaningful revision. In 1964, the ABA President-elect Lewis Powell asked for
the creation of a committee to study the “adequacy and effectiveness” of the ABA Canons.
The committee recommended that the canons needed substantial revision, in part because
the ABA Canons failed to distinguish between “the inspirational and the proscriptive” and
were thus unsuccessful in enforcement. The legal profession in the United States likewise
observed that Canon 36 of the ABA Canons of Professional Ethics resulted in unnecessary
disqualification of lawyers for negligible participation in matters during their employment
with the government.
The unfairness of Canon 36 compelled ABA to replace it in the 1969 ABA Model Code of
Professional Responsibility.33 The basic ethical principles in the Code of Professional Re-
sponsibility were supplemented by Disciplinary Rules that defined minimum rules of con-
duct to which the lawyer must adhere.34
_______________
31 Supra, note 20.
32 Agpalo, Legal and Judicial Ethics, p. 25 (2002).
33 Canon 9 was adopted to replace Canon 36 because Canon 36 “proved to be too broadly
encompassing.” ABA Opinion No. 342 (1975); Canon 9 states: “A lawyer should avoid even
the appearance of professional impropriety.”
34 Model Code of Professional Responsibility, Preliminary Statement (1983); “The Disci-
plinary Rules . . . are mandatory in character. The Disciplinary Rules state the minimum
level of conduct below which no lawyer can fall without being subject to disciplinary ac-
tion.”
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In the case of Canon 9, DR 9-101(b)35 became the applicable supplementary norm. The
drafting committee reformulated the canons into the Model Code of Professional Responsi-
bility, and, in August of 1969, the ABA House of Delegates approved the Model Code.36
Despite these amendments, legal practitioners remained unsatisfied with the results and in-
definite standards set forth by DR 9-101(b) and the Model Code of Professional Responsi-
bility as a whole. Thus, in August 1983, the ABA adopted new Model Rules of Professional
Responsibility. The Model Rules used the “restatement format,” where the conduct stand-
ards were set-out in rules, with comments following each rule. The new format was intended
to give better guidance and clarity for enforcement “because the only enforceable standards
were the black letter Rules.” The Model Rules eliminated the broad canons altogether and
reduced the emphasis on narrative discussion, by placing comments after the rules and lim-
iting comment discussion to the content of the black letter rules. The Model Rules made a
number of substantive improvements particularly with regard to conflicts of interests.37 In
particular, the ABA did away with Canon 9, citing the hopeless dependence of the concept
of impropriety on the subjective views of anxious clients as well as the norm’s indefinite
nature.38
_______________
35 DR 9-101(b): A lawyer shall not accept private employment in a matter in which he had
substantial responsibility while he was a public employee.
36 Supra, note 20.
37 Ibid.
38 Model Rules of Professional Conduct, Rule 1.09 comment (1984): “The other rubric for-
merly used for dealing with disqualification is the appearance of impropriety proscribed in
Canon 9 of the ABA Model Code of Professional Responsibility. This rubric has a two-fold
problem. First, the appearance of impropriety can be taken to include any new client-lawyer
relationship that might make a former client feel anxious. If that meaning were adopted,
disqualification would become little more than a question of subjective judg-
572
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Presidential Commission on Good Government vs. Sandiganbayan
In cadence with these changes, the Integrated Bar of the Philippines (IBP) adopted a pro-
posed Code of Professional Responsibility in 1980 which it submitted to this Court for ap-
proval. The Code was drafted to reflect the local customs, traditions, and practices of the bar
and to conform with new realities. On June 21, 1988, this Court promulgated the Code of
Professional Responsibility.39 Rule 6.03 of the Code of Professional Responsibility deals
particularly with former government lawyers, and provides, viz.:
Rule 6.03—A lawyer shall not, after leaving government service, accept engagement or em-
ployment in connection with any matter in which he had intervened while in said service.
Rule 6.03 of the Code of Professional Responsibility retained the general structure of para-
graph 2, Canon 36 of the Canons of Professional Ethics but replaced the expansive phrase
“investigated and passed upon” with the word “intervened.” It is, therefore, properly appli-
cable to both “adverse-interest conflicts” and “congruent-interest conflicts.”
The case at bar does not involve the “adverse interest” aspect of Rule 6.03. Respondent
Mendoza, it is conceded, has no adverse interest problem when he acted as Solicitor General
in Sp. Proc. No. 107812 and later as counsel of respondents Tan, et al. in Civil Case No.
0005 and Civil Case Nos. 0096-0099 before the Sandiganbayan. Nonetheless, there remains
the issue of whether there exists a “congruent-interest conflict” sufficient to disqualify re-
spondent Mendoza from representing respondents Tan, et al.
_______________
ment by the former client. Second, since ‘impropriety’ is undefined, the term appearance of
impropriety is question-begging. It therefore has to be recognized that the problem of dis-
qualification cannot be properly resolved . . . by the very general concept of appearance of
impropriety.”
39 Supra, note 32.
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I.B. The “congruent interest” aspect of Rule 6.03

The key to unlock Rule 6.03 lies in comprehending first, the meaning of “matter” referred
to in the rule and, second, the metes and bounds of the “intervention” made by the former
government lawyer on the “matter.” The American Bar Association in its Formal Opinion
342, defined “matter” as any discrete, isolatable act as well as identifiable transaction or
conduct involving a particular situation and specific party, and not merely an act of drafting,
enforcing or interpreting government or agency procedures, regulations or laws, or briefing
abstract principles of law.
Firstly, it is critical that we pinpoint the “matter” which was the subject of intervention by
respondent Mendoza while he was the Solicitor General. The PCGG relates the following
acts of respondent Mendoza as constituting the “matter” where he intervened as a Solicitor
General, viz.:40
The PCGG’s Case for Atty. Mendoza’s Disqualification
The PCGG imputes grave abuse of discretion on the part of the Sandiganbayan (Fifth Divi-
sion) in issuing the assailed Resolutions dated July 11, 2001 and December 5, 2001 denying
the motion to disqualify Atty. Mendoza as counsel for respondents Tan, et al. The PCGG
insists that Atty. Mendoza, as then Solicitor General, actively intervened in the closure of
GENBANK by advising the Central Bank on how to proceed with the said bank’s liquidation
and even filing the petition for its liquidation with the CFI of Manila.
As proof thereof, the PCGG cites the Memorandum dated March 29, 1977 prepared by cer-
tain key officials of the Central Bank, namely, then Senior Deputy Governor Amado R.
Brinas, then Deputy Governor Jaime C. Laya, then Deputy Governor and General Counsel
Gabriel C. Singson, then Special Assistant to the Governor Carlota P. Valenzuela, then
Asistant to the Governor Arnulfo B. Aurellano and then Director of Department of Com-
mercial and Savings Bank Antonio T. Castro, Jr., where they averred that on March 28,
1977, they had a conference with the Solicitor General
_______________
40 See Dissent of J. Callejo, Sr., pp.19-20.
574
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Presidential Commission on Good Government vs. Sandiganbayan
(Atty. Mendoza), who advised them on how to proceed with the liquidation of GENBANK.
The pertinent portion of the said memorandum states:
Immediately after said meeting, we had a conference with the Solicitor General and he ad-
vised that the following procedure should be taken:
1) Management should submit a memorandum to the Monetary Board reporting that studies
and evaluation had been made since the last examination of the bank as of August 31, 1976
and it is believed that the bank can not be reorganized or placed in a condition so that it may
be permitted to resume business with safety to its depositors and creditors and the general
public.
2) If the said report is confirmed by the Monetary Board, it shall order the liquidation of the
bank and indicate the manner of its liquidation and approve a liquidation plan.
3) The Central Bank shall inform the principal stockholders of Genbank of the foregoing
decision to liquidate the bank and the liquidation plan approved by the Monetary Board.
4) The Solicitor General shall then file a petition in the Court of First Instance reciting the
proceedings which had been taken and praying the assistance of the Court in the liquidation
of Genbank.
The PCGG further cites the Minutes No. 13 dated March 29, 1977 of the Monetary Board
where it was shown that Atty. Mendoza was furnished copies of pertinent documents relating
to GENBANK in order to aid him in filing with the court the petition for assistance in the
bank’s liquidation. The pertinent portion of the said minutes reads:
The Board decided as follows:
...
E. To authorize Management to furnish the Solicitor General with a copy of the subject
memorandum of the Director, Department of Commercial and Savings Bank dated March
29, 1977, together with copies of:
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1. Memorandum of the Deputy Governor, Supervision and Examination Sector, to the Mon-
etary Board, dated March 25, 1977, containing a report on the current situation of Genbank;
2.Aide Memoire on the Antecedent Facts Re: General Bank and Trust Co., dated March 23,
1977;
3. Memorandum of the Director, Department of Commercial and Savings Bank, to the Mon-
etary Board, dated March 24, 1977, submitting, pursuant to Section 29 of R.A. No. 265, as
amended by P.D. No. 1007, a repot on the state of insolvency of Genbank, together with its
attachments; and
4. Such other documents as may be necessary or needed by the Solicitor General for his use
in then CFI-praying the assistance of the Court in the liquidation of Genbank.
Beyond doubt, therefore, the “matter” or the act of respondent Mendoza as Solicitor General
involved in the case at bar is “advising the Central Bank, on how to proceed with the said
bank’s liquidation and even filing the petition for its liquidation with the CFI of Manila.” In
fine, the Court should resolve whether his act of advising the Central Bank on the legal
procedure to liquidate GENBANK is included within the concept of “matter” under Rule
6.03. The procedure of liquidation is given in black and white in Republic Act No. 265,
section 29, viz.:
The provision reads in part:
SEC. 29. Proceedings upon insolvency.—Whenever, upon examination by the head of the
appropriate supervising or examining department or his examiners or agents into the condi-
tion of any bank or non-bank financial intermediary performing quasi-banking functions, it
shall be disclosed that the condition of the same is one of insolvency, or that its continuance
in business would involve probable loss to its depositors or creditors, it shall be the duty of
the department head concerned forthwith, in writing, to inform the Monetary Board of the
facts, and the Board may, upon finding the statements of the department head to be true,
forbid the institution
576
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Presidential Commission on Good Government vs. Sandiganbayan
to do business in the Philippines and shall designate an official of the Central Bank or a
person of recognized competence in banking or finance, as receiver to immediately take
charge of its assets and liabilities, as expeditiously as possible collect and gather all the assets
and administer the same for the benefit of its creditors, exercising all the powers necessary
for these purposes including, but not limited to, bringing suits and foreclosing mortgages in
the name of the bank or non-bank financial intermediary performing quasibanking functions.
...
If the Monetary Board shall determine and confirm within the said period that the bank or
non-bank financial intermediary performing quasi-banking functions is insolvent or cannot
resume business with safety to its depositors, creditors and the general public, it shall, if the
public interest requires, order its liquidation, indicate the manner of its liquidation and ap-
prove a liquidation plan. The Central Bank shall, by the Solicitor General, file a petition in
the Court of First Instance reciting the proceedings which have been taken and praying the
assistance of the court in the liquidation of such institution. The court shall have jurisdiction
in the same proceedings to adjudicate disputed claims against the bank or non-bank financial
intermediary performing quasi-banking functions and enforce individual liabilities of the
stockholders and do all that is necessary to preserve the assets of such institution and to
implement the liquidation plan approved by the Monetary Board. The Monetary Board shall
designate an official of the Central Bank, or a person of recognized competence in banking
or finance, as liquidator who shall take over the functions of the receiver previously ap-
pointed by the Monetary Board under this Section. The liquidator shall, with all convenient
speed, convert the assets of the banking institution or non-bank financial intermediary per-
forming quasi-banking functions to money or sell, assign or otherwise dispose of the same
to creditors and other parties for the purpose of paying the debts of such institution and he
may, in the name of the bank or non-bank financial intermediary performing quasi-banking
functions, institute such actions as may be necessary in the appropriate court to collect and
recover accounts and assets of such institution.
The provisions of any law to the contrary notwithstanding, the actions of the Monetary Board
under this Section and the second paragraph of Section 34 of this Act shall be final and
executory, and
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Presidential Commission on Good Government vs. Sandiganbayan
can be set aside by the court only if there is convincing proof that the action is plainly arbi-
trary and made in bad faith. No restraining order or injunction shall be issued by the court
enjoining the Central Bank from implementing its actions under this Section and the second
paragraph of Section 34 of this Act, unless there is convincing proof that the action of the
Monetary Board is plainly arbitrary and made in bad faith and the petitioner or plaintiff files
with the clerk or judge of the court in which the action is pending a bond executed in favor
of the Central Bank, in an amount to be fixed by the court. The restraining order or injunction
shall be refused or, if granted, shall be dissolved upon filing by the Central Bank of a bond,
which shall be in the form of cash or Central Bank cashier(s) check, in an amount twice the
amount of the bond of the petitioner or plaintiff conditioned that it will pay the damages
which the petitioner or plaintiff may suffer by the refusal or the dissolution of the injunction.
The provisions of Rule 58 of the New Rules of Court insofar as they are applicable and not
inconsistent with the provisions of this Section shall govern the issuance and dissolution of
the restraining order or injunction contemplated in this Section.
Insolvency, under this Act, shall be understood to mean the inability of a bank or non-bank
financial intermediary performing quasi-banking functions to pay its liabilities as they fall
due in the usual and ordinary course of business. Provided, however, That this shall not
include the inability to pay of an otherwise non-insolvent bank or non-bank financial inter-
mediary performing quasi-banking functions caused by extraordinary demands induced by
financial panic commonly evidenced by a run on the bank or non-bank financial intermedi-
ary performing quasi-banking functions in the banking or financial community.
The appointment of a conservator under Section 28-A of this Act or the appointment of a
receiver under this Section shall be vested exclusively with the Monetary Board, the provi-
sion of any law, general or special, to the contrary notwithstanding. (As amended by PD
Nos. 72, 1007, 1771 & 1827, Jan. 16, 1981)
We hold that this advice given by respondent Mendoza on the procedure to liquidate GEN-
BANK is not the “matter” contemplated by Rule 6.03 of the Code of Professional Respon-
sibility. ABA Formal Opinion No. 342 is clear as daylight in stressing that the “drafting,
enforcing or interpreting gov-
578
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Presidential Commission on Good Government vs. Sandiganbayan
ernment or agency procedures, regulations or laws, or briefing abstract principles of law”
are acts which do not fall within the scope of the term “matter” and cannot disqualify.
Secondly, it can even be conceded for the sake of argument that the above act of respondent
Mendoza falls within the definition of matter per ABA Formal Opinion No. 342. Be that as
it may, the said act of respondent Mendoza which is the “matter” involved in Sp. Proc. No.
107812 is entirely different from the “matter” involved in Civil Case No. 0096. Again, the
plain facts speak for themselves. It is given that respondent Mendoza had nothing to do with
the decision of the Central Bank to liquidate GENBANK. It is also given that he did not
participate in the sale of GENBANK to Allied Bank. The “matter” where he got himself
involved was in informing Central Bank on the procedure provided by law to liquidate GEN-
BANK thru the courts and in filing the necessary petition in Sp. Proc. No. 107812 in the
then Court of First Instance. The subject “matter” of Sp. Proc. No. 107812, therefore, is not
the same nor is related to but is different from the subject “matter” in Civil Case No. 0096.
Civil Case No. 0096 involves the sequestration of the stocks owned by respondents Tan, et
al., in Allied Bank on the alleged ground that they are ill-gotten. The case does not involve
the liquidation of GENBANK. Nor does it involve the sale of GENBANK to Allied Bank.
Whether the shares of stock of the reorganized Allied Bank are illgotten is far removed from
the issue of the dissolution and liquidation of GENBANK. GENBANK was liquidated by
the Central Bank due, among others, to the alleged banking malpractices of its owners and
officers. In other words, the legality of the liquidation of GENBANK is not an issue in the
sequestration cases. Indeed, the jurisdiction of the PCGG does not include the dissolution
and liquidation of banks. It goes without saying that Code 6.03 of the Code of Professional
Responsibility cannot apply to respondent Mendoza because his alleged intervention while
a Solicitor General in Sp. Proc. No. 107812 is an intervention on a matter different from the
matter involved in Civil Case No. 0096.
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Thirdly, we now slide to the metes and bounds of the “intervention” contemplated by Rule
6.03. “Intervene” means, viz.:
1: to enter or appear as an irrelevant or extraneous feature or circumstance . . . 2: to occur,
fall, or come in between points of time or events . . . 3: to come in or between by way of
hindrance or modification: INTERPOSE . . . 4: to occur or lie between two things (Paris,
where the same city lay on both sides of an intervening river . . .)41
On the other hand, “intervention” is defined as:
1: the act or fact of intervening: INTERPOSITION; 2: interference that may affect the inter-
ests of others.42
There are, therefore, two possible interpretations of the word “intervene.” Under the first
interpretation, “intervene” includes participation in a proceeding even if the intervention is
irrelevant or has no effect or little influence.43 Under the second interpretation, “intervene”
only includes an act of a person who has the power to influence the subject proceedings.44
We hold that this second meaning is more appropriate to give to the word “intervention”
under Rule 6.03 of the Code of Professional Responsibility in light of its history. The evils
sought to be remedied by the Rule do not exist where the government lawyer does an act
which can be considered as innocuous such as “x x x drafting, enforcing or interpreting
_______________
41 Webster’s Third New International Dictionary of the English Language Unabridged, p.
1183 (1993).
42 Id.
43 Id.; This may be inferred from the second definition of “intervene” which is “to occur,
fall, or come in between points of time or events.”
44 Id.; This may be inferred from the third definition of “intervene” which is “to come in or
between by way of hindrance or modifi-cation,” and the second definition of “intervention”
which is “inter-ference that may affect the interests of others.”
580
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
government or agency procedures, regulations or laws, or briefing abstract principles of
law.”
In fine, the intervention cannot be insubstantial and insignificant. Originally, Canon 36 pro-
vided that a former government lawyer “should not, after his retirement, accept employment
in connection with any matter which he has investigated or passed upon while in such office
or employ.” As aforediscussed, the broad sweep of the phrase “which he has investigated or
passed upon” resulted in unjust disqualification of former government lawyers. The 1969
Code restricted its latitude, hence, in DR 9-101(b), the prohibition extended only to a matter
in which the lawyer, while in the government service, had “substantial responsibility.” The
1983 Model Rules further constricted the reach of the rule. MR 1.11(a) provides that “a
lawyer shall not represent a private client in connection with a matter in which the lawyer
participated personally and substantially as a public officer or employee.”
It is, however, alleged that the intervention of respondent Mendoza in Sp. Proc. No. 107812
is significant and substantial. We disagree. For one, the petition in the special proceedings
is an initiatory pleading, hence, it has to be signed by respondent Mendoza as the then sitting
Solicitor General. For another, the record is arid as to the actual participation of respondent
Mendoza in the subsequent proceedings. Indeed, the case was in slumberville for a long
number of years. None of the parties pushed for its early termination. Moreover, we note
that the petition filed merely seeks the assistance of the court in the liquidation of GEN-
BANK. The principal role of the court in this type of proceedings is to assist the Central
Bank in determining claims of creditors against the GEN-BANK. The role of the court is not
strictly as a court of justice but as an agent to assist the Central Bank in determining the
claims of creditors. In such a proceeding, the participation of the Office of the Solicitor
General is not that of the usual court litigator protecting the interest of government.
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II Balancing Policy Considerations
To be sure, Rule 6.03 of our Code of Professional Responsibility represents a commendable
effort on the part of the IBP to upgrade the ethics of lawyers in the government service. As
aforestressed, it is a take-off from similar efforts especially by the ABA which have not been
without difficulties. To date, the legal profession in the United States is still fine tuning its
DR 9-101(b) rule.
In fathoming the depth and breadth of Rule 6.03 of our Code of Professional Responsibility,
the Court took account of various policy considerations to assure that its interpretation and
application to the case at bar will achieve its end without necessarily prejudicing other values
of equal importance. Thus, the rule was not interpreted to cause a chilling effect on govern-
ment recruitment of able legal talent. At present, it is already difficult for government to
match compensation offered by the private sector and it is unlikely that government will be
able to reverse that situation. The observation is not inaccurate that the only card that the
government may play to recruit lawyers is have them defer present income in return for the
experience and contacts that can later be exchanged for higher income in private practice.45
Rightly, Judge Kaufman warned that the sacrifice of entering government service would be
too great for most men to endure should ethical rules prevent them from engaging in the
practice of a technical specialty which they devoted years in acquiring and cause the firm
with which they become associated to be disquali-
_______________
45 Wolfram, Modern Legal Ethics, p. 461 (1986).
582
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
fied.46 Indeed, “to make government service more difficult to exit can only make it less
appealing to enter.”47
In interpreting Rule 6.03, the Court also cast a harsh eye on its use as a litigation tactic to
harass opposing counsel as well as deprive his client of competent legal representation. The
danger that the rule will be misused to bludgeon an opposing counsel is not a mere guess-
work. The Court of Appeals for the District of Columbia has noted “the tactical use of mo-
tions to disqualify counsel in order to delay proceedings, deprive the opposing party of coun-
sel of its choice, and harass and embarrass the opponent,” and observed that the tactic was
“so prevalent in large civil cases in recent years as to prompt frequent judicial and academic
commentary.”48 Even the United States Supreme Court found no quarrel with the Court of
Appeals’ description of disqualification motions as “a dangerous game.”49 In the case at
bar, the new attempt to disqualify respondent Mendoza is difficult to divine. The disqualifi-
cation of respondent Mendoza has long been a dead issue. It was resuscitated after the lapse
of many years and only after PCGG has lost many legal incidents in the hands of respondent
Mendoza. For a fact, the recycled motion for disqualification in the case at bar was filed
more than four years after the filing of the petitions for certiorari, prohibition and injunction
with the Supreme Court which were subsequently remanded to the Sandiganbayan and dock-
eted as Civil Case
_______________
46 Kaufman, The Former Government Attorney and Canons of Professional Ethics, 70 Harv.
L. Rev. 657 (1957).
47 Remarks of Federal Trade Commission Chairman Calvin Collier before Council on
Younger Lawyers, 1976 Annual Convention of the Federal Bar Association (September 16,
1976).
48 Koller v. Richardson-Merrell, Inc., 737 F.2d 1038, 1051 (D.C. Cir. 1984); Board of Ed-
ucation of New York City v. Nyquist, 590 F.2d 1241, 1246 (2d Cir. 1979); Williamsburg
Wax Museum v. Historic Figures, Inc., 501 F.Supp. 326, 331 (D.D.C. 1980).
49 Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 436 (1985).
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Nos. 0096-0099.50 At the very least, the circumstances under which the motion to disqualify
in the case at bar were re-filed put petitioner’s motive as highly suspect.
Similarly, the Court in interpreting Rule 6.03 was not unconcerned with the prejudice to the
client which will be caused by its misapplication. It cannot be doubted that granting a dis-
qualification motion causes the client to lose not only the law firm of choice, but probably
an individual lawyer in whom the client has confidence.51 The client with a disqualified
lawyer must start again often without the benefit of the work done by the latter.52 The effects
of this prejudice to the right to choose an effective counsel cannot be overstated for it can
result in denial of due process.
The Court has to consider also the possible adverse effect of a truncated reading of the rule
on the official independence of lawyers in the government service. According to Prof. Mor-
gan: “An individual who has the security of knowing he or she can find private employment
upon leaving the government is free to work vigorously, challenge official positions when
he or she believes them to be in error, and resist illegal demands by superiors. An employee
who lacks this assurance of private employment does not enjoy such freedom.”53 He adds:
“Any system that affects the right to take a new job affects the ability to quit the old job and
any limit on the ability to quit
_______________
50 Rollo, p. 143; The petitions for certiorari, prohibition and injunction were filed sometime
in August 1986. The motion for disqualification in Civil Case No. 0096-0099 was filed on
February 5, 1991.
51 United States v. Brothers, 856 F. Supp. 370, 375 (M.D. Tenn. 1992).
52 First Wis. Mortgage Trust v. First Wis. Corp., 584 F.2d 201 (7th Cir. 1978); EZ Paintr
Corp. v. Padco, Inc., 746 F.2d 1459, 1463 (Fed. Cir. 1984); Realco Serv. v. Holt, 479 F.
Supp. 867, 880 (E.D. Pa. 1979).
53 Morgan, Appropriate Limits on Participation by a Former Agency Official in Matters
Before an Agency, Duke L.J., Vol. 1980, February, No. 1, p. 54.
584
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
inhibits official independence.”54 The case at bar involves the position of Solicitor General,
the office once occupied by respondent Mendoza. It cannot be overly stressed that the posi-
tion of Solicitor General should be endowed with a great degree of independence. It is this
independence that allows the Solicitor General to recommend acquittal of the innocent; it is
this independence that gives him the right to refuse to defend officials who violate the trust
of their office. Any undue diminution of the independence of the Solicitor General will have
a corrosive effect on the rule of law.
No less significant a consideration is the deprivation of the former government lawyer of the
freedom to exercise his profession. Given the current state of our law, the disqualification of
a former government lawyer may extend to all members of his law firm.55 Former govern-
ment lawyers stand in danger of becoming the lepers of the legal profession.
It is, however, proffered that the mischief sought to be remedied by Rule 6.03 of the Code
of Professional Responsibility is the possible appearance of impropriety and loss of public
confidence in government. But as well observed, the accuracy of gauging public perceptions
is a highly speculative exercise at best56 which can lead to untoward results.57 No less than
Judge Kaufman doubts that the lessening of restrictions as to former government attorneys
will have any detrimental effect on that free flow of information between the government-
client and its attorneys which the canons seek to protect.58 Notably, the appearance of im-
propriety theory has been rejected in the 1983 ABA Model Rules of Professional Conduct59
_______________
54 Ibid.
55 Agpalo, Legal and Judicial Ethics, pp. 292-293; Hilado v. David, 84 Phil. 569 (1949).
56 Wolfram, Modern Legal Ethics, p. 320 (1986).
57 Id., at p. 321.
58 Kaufman, The Former Government Attorney and Canons of Professional Ethics, 70 Harv.
L. Rev. 657 (1957).
59 Supra, note 38.
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Presidential Commission on Good Government vs. Sandiganbayan
and some courts have abandoned per se disqualification based on Canons 4 and 9 when an
actual conflict of interest exists, and demand an evaluation of the interests of the defendant,
government, the witnesses in the case, and the public.60
It is also submitted that the Court should apply Rule 6.03 in all its strictness for it correctly
disfavors lawyers who “switch sides.” It is claimed that “switching sides” carries the danger
that former government employee may compromise confidential official information in the
process. But this concern does not cast a shadow in the case at bar. As afore-discussed, the
act of respondent Mendoza in informing the Central Bank on the procedure how to liquidate
GENBANK is a different matter from the subject matter of Civil Case No. 0005 which is
about the sequestration of the shares of respondents Tan, et al., in Allied Bank. Conse-
quently, the danger that confidential official information might be divulged is nil, if not in-
existent. To be sure, there are no inconsistent “sides” to be bothered about in the case at bar.
For there is no question that in lawyering for respondents Tan, et al., respondent Mendoza
is not working against the interest of Central Bank. On the contrary, he is indirectly defend-
ing the validity of the action of Central Bank in liquidating GEN-BANK and selling it later
to Allied Bank. Their interests coincide instead of colliding. It is for this reason that Central
Bank offered no objection to the lawyering of respondent Mendoza in Civil Case No. 0005
in defense of respondents Tan, et al. There is no switching of sides for no two sides are
involved.
It is also urged that the Court should consider that Rule 6.03 is intended to avoid conflict of
loyalties, i.e., that a government employee might be subject to a conflict of loyalties while
still in government service.61 The example given by the proponents of this argument is that
a lawyer who plans to
_______________
60 United States v. O’Malley, 786 F.2d 786, 789 (7th Cir. 1985); United States v. James,
708 F.2d 40, 44 (2d Cir. 1983).
61 Supra, note 53 at p. 44.
586
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
work for the company that he or she is currently charged with prosecuting might be tempted
to prosecute less vigorously.62 In the cautionary words of the Association of the Bar Com-
mittee in 1960: “The greatest public risks arising from post employment conduct may well
occur during the period of employment through the dampening of aggressive administration
of government policies.”63 Prof. Morgan, however, considers this concern as “probably ex-
cessive.”64 He opines “x x x it is hard to imagine that a private firm would feel secure hiding
someone who had just been disloyal to his or her last client—the government. Interviews
with lawyers consistently confirm that law firms want the ‘best’ government lawyers—the
ones who were hardest to beat—not the least qualified or least vigorous advocates.”65 But
again, this particular concern is a non factor in the case at bar. There is no charge against
respondent Mendoza that he advised Central Bank on how to liquidate GENBANK with an
eye in later defending respondents Tan, et al. of Allied Bank. Indeed, he continues defending
both the interests of Central Bank and respondents Tan, et al. in the above cases.
Likewise, the Court is nudged to consider the need to curtail what is perceived as the “ex-
cessive influence of former officials” or their “clout.”66 Prof. Morgan again warns against
extending this concern too far. He explains the rationale for his warning, viz.: “Much of what
appears to be an employee’s influence may actually be the power or authority of his or her
position, power that evaporates quickly upon departure from government x x x.”67 More,
he contends that the concern can be demeaning to those sitting in government. To quote him
further: “x x x The idea that, present officials make signifi-
_______________
62 Ibid.
63 Ibid., see footnote 207 of article.
64 Ibid.
65 Id., at p. 45.
66 Id., at p. 42.
67 Id., at pp. 42-43.
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Presidential Commission on Good Government vs. Sandiganbayan
cant decisions based on friendship rather than on the merit says more about the present offi-
cials than about their former co-worker friends. It implies a lack of will or talent, or both, in
federal officials that does not seem justified or intended, and it ignores the possibility that
the officials will tend to disfavor their friends in order to avoid even the appearance of fa-
voritism.”68
III The question of fairness
Mr. Justices Panganiban and Carpio are of the view, among others, that the congruent inter-
est prong of Rule 6.03 of the Code of Professional Responsibility should be subject to a
prescriptive period. Mr. Justice Tinga opines that the rule cannot apply retroactively to re-
spondent Mendoza. Obviously, and rightly so, they are disquieted by the fact that (1) when
respondent Mendoza was the Solicitor General, Rule 6.03 has not yet adopted by the IBP
and approved by this Court, and (2) the bid to disqualify respondent Mendoza was made
after the lapse of time whose length cannot, by any standard, qualify as reasonable. At bot-
tom, the point they make relates to the unfairness of the rule if applied without any prescrip-
tive period and retroactively, at that. Their concern is legitimate and deserves to be initially
addressed by the IBP and our Committee on Revision of the Rules of Court.
IN VIEW WHEREOF, the petition assailing the resolutions dated July 11, 2001 and Decem-
ber 5, 2001 of the Fifth Division of the Sandiganbayan in Civil Case Nos. 0096-0099 is
denied.
No cost.
_______________
68 Id., at p. 43.
588
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
SO ORDERED.
Davide, Jr. (C.J.), Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona and
Garcia, JJ., concur.
Panganiban, J., Please see Separate Opinion.
Sandoval-Gutierrez, J., Please see Concurring Opinion.
Carpio-Morales, J., Please see Dissenting Opinion.
Callejo, Sr., J., Please see my Dissenting Opinion.
Azcuna, J., No part. I was former PCGG Chairman.
Tinga, J., Please see Separate Opinion.
Chico-Nazario, J., No part.
SEPARATE OPINION
PANGANIBAN, J.:
The Petition in this case should be DISMISSED on two grounds: (1) res judicata, specifi-
cally, conclusiveness of judgment; and (2) prescription.
In his Dissent, the esteemed Justice Romeo J. Callejo, Sr. argues that Atty. Estelito P. Men-
doza violated Rule 6.03 of the Code of Professional Responsibility,1 because after leaving
his post as solicitor general, he appeared as counsel in a “matter in which he had intervened
while he was in said service” (as solicitor general). He postulates that the Code of Profes-
sional Responsibility should be a beacon to assist good lawyers “in navigating an ethical
course through the sometimes murky waters of professional conduct,” in order “to avoid any
appearance of impropriety.” He adds that the Code should be strictly construed and strin-
gently enforced.
_______________
1 “Rule 6.03—A lawyer shall not, after leaving government service, accept engagement or
employment in connection with any matter in which he had intervened while in said service.”
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On the other hand, the distinguished Justice Reynato S. Puno contends in his ponencia that
Rule 6.03 of the Code has been incorrectly applied by Justice Callejo, because the “proce-
dural advice” given by Atty. Mendoza is not the “matter” contemplated by the said Rule.
The ponencia explains that an “ultra restrictive reading of the Rule” would have “ill-effects
in our jurisdiction.”
With due respect to both Justices Puno and Callejo, I respectfully submit that there is no
need to delve into the question of whether Rule 6.03 has been transgressed; there is no need
to discuss the merits of the questioned Sandiganbayan Resolutions allowing Atty. Mendoza
to represent private respondents in Civil Case Nos. 0096-0099. After all, a Resolution issued
by the same court resolving the very same issue on the “disqualification” of Atty. Mendoza
in a case involving the same parties and the same subject matter has already become final
and immutable. It can no longer be altered or changed.
I believe that the material issue in the present controversy is whether Atty. Mendoza may
still be barred from representing these respondents despite (1) a final Order in another case
resolving the very same ground for disqualification involving the same parties and the same
subject matter as the present case; and (2) the passage of a sufficient period of time from the
date he ceased to be solicitor general to the date when the supposed disqualification (for
violation of the Code) was raised.
Conclusiveness of Judgment
The doctrine of res judicata is set forth in Section 47 of Rule 39 of the Rules of Court, the
relevant part of which I quote as follows:
“Sec. 47. Effect of judgments or final orders.
—The effect of a judgment or final order rendered by a court of the Philippines, having
jurisdiction to pronounce the judgment or final order, may be as follows:
590
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Presidential Commission on Good Government vs. Sandiganbayan
xxx xxx xxx
“(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged
or as to any other matter that could have been raised in relation thereto, conclusive between
the parties and their successors in interest by title subsequent to the commencement of the
action or special proceeding, litigating for the same thing and under the same title and in the
same capacity; and
“(c) In any other litigation between the same parties or their successors in interest, that only
is deemed to have been adjudged in a former judgment or final order which appears upon its
face to have been so adjudged, or which was actually and necessarily included therein or
necessary thereto.”
The above provision comprehends two distinct concepts of res judicata: (1) bar by former
judgment and (2) conclusiveness of judgment. Under the first concept, res judicata serves as
an absolute proscription of a subsequent action when the following requisites concur: (1) the
former judgment or order was final; (2) it adjudged the pertinent issue or issues on their
merits; (3) it was rendered by a court that had jurisdiction over the subject matter and the
parties; and (4) between the first and the second actions, there was identity of parties, of
subject matter, and of causes of action.2
In regard to the fourth requirement, if there is no identity of causes of action but only an
identity of issues, res judicata exists under the second concept; that is, under conclusiveness
of judgment. In the latter concept, the rule bars the relitigation of particular facts or issues
involving the same parties but on different claims or causes of action.3 Such rule, however,
does not have the same effect as a bar by former judgment, which prohibits the prosecution
of a second action upon the same claim, demand or cause of action.
_______________
2 Sta. Lucia Realty and Development v. Cabrigas, 358 SCRA 715, June 19, 2001.
3 Ibid.
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In other words, conclusiveness of judgment finds application when a fact or question has
been squarely put in issue, judicially passed upon, and adjudged in a former suit by a court
of competent jurisdiction; it has thus been conclusively settled by a judgment or final order
issued therein. Insofar as the parties to that action (and persons in privity with them) are
concerned, and while the judgment or order remains un-reversed or un-vacated by a proper
authority upon a timely motion or petition, such conclusively settled fact or question cannot
again be litigated in any future or other action between the same parties or their privies, in
the same or in any other court of concurrent jurisdiction, either for the same or for a different
cause of action. Thus, the only identities required for the operation of the principle of con-
clusiveness of judgment is that between parties and issues.4
While it does not have the same effect as a bar by former judgment, which proscribes sub-
sequent actions, conclusiveness of judgment nonetheless operates as an estoppel to issues or
points controverted, on which the determination of the earlier finding or judgment has been
anchored.5 The dictum laid down in such a finding or judgment becomes conclusive and
continues to be binding between the same parties, as long as the facts on which that judgment
was predicated continue to be the facts of the case or incident before the court. The binding
effect and enforceability of that dictum can no longer be re-litigated, since the said issue or
matter has already been resolved and finally laid to rest in the earlier case.6
_______________
4 Nabus v. Court of Appeals, 193 SCRA 732, February 7, 1991 (reiterated in Calalang v.
Register of Deeds, 231 SCRA 88, March 11, 1994; and in Intestate Estate of San Pedro v.
Court of Appeals, 265 SCRA 733, December 18, 1996).
5 Camara v. Court of Appeals, 310 SCRA 608, July 20, 1999.
6 Miranda v. Court of Appeals, 141 SCRA 302, February 11, 1986; Vda. de Sta. Romana v.
Philippine Commercial and Industrial Bank, 118 SCRA 330, November 15, 1982.
592
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
Relevant Antecedents
Showing the Application of the
Conclusiveness Doctrine
Let me now discuss some relevant antecedents to show the application to this case of res
judicata, specifically the principle of conclusiveness of judgment.
Pursuant to Executive Order No. 1 of then President Corazon C. Aquino, the Presidential
Commission on Good Government (PCGG) issued sometime in June to August 1986 several
Writs of Sequestration over certain properties of Respondents Lucio Tan, et al., properties
they had supposedly acquired by taking advantage of their close relationship with former
President Ferdinand E. Marcos.
On August 17, 1987, the PCGG instituted before the Sandiganbayan a Complaint against the
same respondents for “reversion, reconveyance, restitution, accounting and damages” vis-à-
vis their sequestered properties. The Complaint was docketed as Civil Case No. 0005 and
raffled to the Second Division of the Sandiganbayan (SBN).
Meanwhile, in separate Petitions before this Court, the validity of the sequestration Writs
was questioned by herein respondents, but said Petitions were referred by the Court to the
Sandiganbayan for proper disposition. These cases were raffled to the SBN Fifth Division
and docketed as Civil Case Nos. 0096, 0097, 0098 and 0099. Civil Case No. 0096, in par-
ticular, involved the validity of the Writ of Sequestration issued by the PCGG over herein
private respondents’ shares of stock in Allied Banking Corporation (formerly General Bank
and Trust Company or “GenBank”).
In all the above-mentioned cases, Atty. Estelito P. Mendoza was the counsel of Tan, et al.
On February 5, 1991, the PCGG filed in Civil Case No. 0005 a Motion7 to disqualify Atty.
Mendoza as counsel for
_______________
7 Rollo, pp. 216-220.
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Presidential Commission on Good Government vs. Sandiganbayan
therein Respondents Tan, et al. In a Resolution8 dated April 22, 1991, the Sandiganbayan
(Second Division) denied that Motion. The anti-graft court likewise denied the Motion for
Reconsideration filed by the PCGG.9 Because the latter did not appeal the denial, the Reso-
lution became final and executory.
Similarly, in Civil Case Nos. 0096-0099, PCGG filed a Motion10 to disqualify Atty. Men-
doza as counsel for Respondents Lucio Tan, et al. According to respondent court, “the mo-
tion is exactly the same in substance as that motion filed in Civil Case No. 0005”; in fact,
both incidents were taken up jointly by the Second and the Fifth Divisions of the Sandi-
ganbayan.11 Indeed, a perusal of both Motions reveals that, except as to their respective
captions, the contents of the Motions are identically worded. Both Motions were anchored
essentially on the same ground: that by virtue of Rule 6.03 of the Code of Professional Re-
sponsibility, Atty. Mendoza was prohibited from acting as counsel of Tan, et al. in the pend-
ing cases. During his tenure as solicitor general, Atty. Mendoza had allegedly “intervened”
in the dissolution of GenBank, Allied Bank’s predecessor.
Thus, in its herein assailed July 11, 2001 Resolution, respondent court resolved to reiterate
and adopt “the Resolution dated April 22, 1991 in Civil Case No. 0005 of the Second Divi-
sion x x x denying the motion.”
_______________
8 Penned by Justice Romeo M. Escareal (chairman) and concurred in by Justices Jose S.
Balajadia and Nathanael M. Grospe (members); Rollo, pp. 57-63.
9 Resolution dated July 24, 1991; Rollo, pp. 233-237.
10 Rollo, pp. 221-225.
11 Resolution dated July 11, 2001 of the Sandiganbayan (Fifth Division), referring to the
Record of Civil Case No. 0096, Vol. I, pp. 134-135; Rollo, p. 42. This unsigned Resolution
was unanimously approved by Justices Minita V. Chico-Nazario (Division chairperson, now
a member of this Court), Rodolfo G. Palattao and Ma. Cristina Cortez-Estrada (members).
594
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
Resolution in Civil Case
No. 0005 a Final Order
As distinguished from an interlocutory order, a final judgment or order decisively puts an
end to (or disposes of) a case or a disputed issue; in respect thereto, nothing else—except its
execution—is left for the court to do. Once that judgment or order is rendered, the adjudica-
tive task of the court on the particular matter involved is likewise ended.12 Such an order
may refer to the entire controversy or to some defined and separate branch thereof.13 On the
other hand, an order is interlocutory if its effects are merely provisional in character and still
leave substantial proceedings to be further conducted by the issuing court in order to put the
issue or controversy to rest.14
_______________
12 Santo Tomas University Hospital v. Surla, 355 Phil. 804; 294 SCRA 382, August 17,
1998 (citing Investments, Inc. v. Court of Appeals, 147 SCRA 334, January 27, 1987; and
Denso [Phils.], Inc. v. Intermediate Appellate Court, 148 SCRA 280, February 27, 1987). In
this case, the Court held:
“The order of the trial court dismissing petitioner’s counterclaim was a final order since the
dismissal, although based on a technicality, would require nothing else to be done by the
court with respect to that specific subject except only to await the possible filing during the
reglementary period of a motion for reconsideration or the taking of an appeal therefrom.”
The Court further said that errors of judgment, as well as procedure, that do not relate to the
jurisdiction of the court or involve grave abuse of discretion are reviewable by timely appeal,
not by a special civil action for certiorari, unless for valid and compelling reasons.
13 Tambaoan v. Court of Appeals, 417 Phil. 683; 365 SCRA 359, September 17, 2001 (cit-
ing Republic v. Tacloban City Ice Plant, 258 SCRA 145, July 5, 1996; and Dela Cruz v.
Paras, 69 SCRA 556, February 27, 1976).
14 Santo Tomas University Hospital v. Surla, supra (citing Bairan v. Tan Siu Lay, 18 SCRA
1235, December 28, 1966).
595
VOL. 455, APRIL 12, 2005
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Presidential Commission on Good Government vs. Sandiganbayan
I have no quarrel with the general test—expounded, with acknowledged authorities, in the
Dissenting Opinions of Justices Conchita Carpio-Morales and Callejo—for determining
whether an order is interlocutory. Such test, however, applies to orders that dispose of inci-
dents or issues that are intimately related to the very cause of action or merits of the case.
The exception lies when the order refers to a “definite and separate branch” of the main
controversy, as held by the Court in Republic v. Tacloban City Ice Plant.15
Under the present factual milieu, the matter of disqualification of Atty. Mendoza as counsel
for respondents is a “defined and separate branch” of the main case for “reversion, recon-
veyance, and restitution” of the sequestered properties. This matter has no direct bearing on
the adjudication of the substantive issues in the principal controversy. The final judgment
resolving the main case does not depend on the determination of the particular question
raised in the Motion. The April 22, 1991 Resolution of the Sandiganbayan (Second Division)
in Civil Case No. 0005 had finally and definitively determined the issue of Atty. Mendoza’s
disqualification to act as counsel for Tan, et al. Since that Resolution was not appealed, it
became final and executory. It became a conclusive judgment insofar as that particular ques-
tion was concerned.
Applying the Doctrine of
Conclusiveness of Judgment
There is no question as regards the identity of the parties involved in Civil Case Nos. 0005
and 0096. Neither has the jurisdiction of the Second and the Fifth Divisions of the Sandi-
ganbayan been placed at issue. Clearly, the matter raised in the two Motions to Disqualify,
though separately filed at different times in those two cases, are likewise the same or iden-
tical. Also undisputed is the fact that no appeal or certiorari petition was taken from the April
22, 1991 Reso-
_______________
15 Supra, p. 155.
596
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
lution of the Second Division in Civil Case No. 0005, which had denied PCGG’s Motion.
To counter the application of res judicata, Justices Morales and Callejo opine that the said
April 22, 1991 Resolution was merely interlocutory. It “merely settled an incidental or col-
lateral matter x x x; it cannot operate to bar the filing of another motion to disqualify Atty.
Mendoza in the other cases x x x,” Justice Callejo explains. I beg to disagree.
True, there is, as yet, no final adjudication of the merits of the main issues of “reversion,
reconveyance and restitution.” However, I submit that the question with respect to the dis-
qualification of Atty. Mendoza had nonetheless been conclusively settled. Indeed, the April
22, 1991 SBN Resolution had definitively disposed of the Motion to Disqualify on its merits.
Since no appeal was taken therefrom, it became final and executory after the lapse of the
reglementary period.16
While it merely disposed of a question that was collateral to the main controversy, the Res-
olution should be differentiated from an ordinary interlocutory order that resolves an inci-
dent arising from the very subject matter or cause of action, or one that is related to the
disposition of the main substantive issues of the case itself. Such an order is not appealable,
but may still be modified or rescinded upon sufficient grounds adduced before final judg-
ment. Verily, res judicata would not apply therein.17
But, as illustrated earlier, the issue of the disqualification of Atty. Mendoza is separate from
and independent of the substantive issues in the main case for “reversion, reconvey-
_______________
16 Pascual v. Court of Appeals, 300 SCRA 214, December 16, 1998; Navarro v. National
Labor Relations Commission, 327 SCRA 22, March 1, 2000; Testate Estate of Manuel v.
Biascan, 347 SCRA 621, December 11, 2000; People v. Alay-ay, 363 SCRA 603, August
23, 2001; Vda. de Sta. Romana v. Philippine Commercial & Industrial Bank, supra.
17 Manila Electric Co. v. Arciaga, 50 Phil. 144, March 18, 1927 (citing Reilly v. Perkins,
56 Pac 734).
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VOL. 455, APRIL 12, 2005
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Presidential Commission on Good Government vs. Sandiganbayan
ance and restitution.” This particular question, in relation to Rule 6.03 of the Code of Pro-
fessional Responsibility, was finally settled in the Resolution of April 22, 1991, issued by
the SBN Second Division. In fact, I submit that this question had to be squarely resolved
before trial proceeded, so as not to prejudice the movant in case its arguments were found to
be meritorious. Otherwise, the Motion would be rendered naught.
In 2001, ten years after its filing, the identical Motion to Disqualify Atty. Mendoza in Civil
Case Nos. 0096-0099 finally came up for deliberation before the Fifth Division of the San-
diganbayan. The Fifth Division correctly noted that the pending Motion was “exactly the
same in substance as that Motion filed in Civil Case No. 0005.” Thus, it resolved to reiterate
and adopt the Second Division’s April 22, 1991 Resolution denying the Motion. Interest-
ingly and understandably, the Fifth Division of the anti-graft court no longer separately re-
viewed the merits of the Motion before it, because the Second Division’s Resolution dispos-
ing of exactly the same Motion and involving the same parties and subject matter had long
attained finality. That Resolution became a conclusive judgment between the parties with
respect to the subject matter involved therein.
Exception to Application of
Conclusiveness of Judgment
Justice Morales further cites Kilosbayan v. Morato,18 in which the Court19 said that “the
rule on conclusiveness of judgment or preclusion of issues or collateral estoppel does not
apply to issues of law, at least when substantially unrelated claims are involved.” Explaining
further, the Court cited therein the “authoritative formulation” of the exception in Restate-
ment of the Law 2d, on Judgments, thus:
_______________
18 246 SCRA 540, 561, July 17, 1995, per Mendoza, J.
19 Voting here was close (5 justices fully concurred in the ponencia, 2 wrote separate con-
curring opinions, while 5 dissented).
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
Ҥ28. Although an issue is actually litigated and determined by a valid and final judgment,
and the determination is essential to the judgment, relitigation of the issue in a subsequent
action between the parties is not precluded in the following circumstances:
xxx xxx xxx
(2) The issue is one of law and (a) the two actions involve claims that are substantially un-
related, or (b) a new determination is warranted in order to take account or an intervening
change in the applicable legal context or otherwise to avoid inequitable administration of the
laws; x x x. [Emphasis and omissions in the original.]”
In accordance with the above exception to the rule, Justice Morales believes that the doctrine
of conclusiveness of judgment does not apply to this case, because the issue at bar—disqual-
ification of counsel—“is undoubtedly a legal question” and “Civil Case No. 005 and Civil
Case No. 0096 involve two different substantially unrelated claims.”
I respectfully disagree with respect to her second point, which actually qualifies the excep-
tion. I believe that the two cases involve substantially related claims. Civil Case No. 0005
seeks to recover alleged ill-gotten shares of stock of respondents Tan, et al. in Allied Bank.
Civil Case No. 0096 questions the validity of the Sequestration Writ over the same shares of
stock involved in Civil Case No. 0005. In the ultimate analysis, both cases refer to the de-
termination of who has a valid ownership claim over said stockholdings.
In any event and as earlier discussed, in our jurisdiction, the only identities required for the
principle of conclusiveness of judgment to operate as an estoppel are those of parties and
issues.20
Similar Motions in Other PCGG Cases
Parenthetically, it is worth mentioning that in their Memorandum,21 Respondents Tan et al.
aver that similar Motions to
_______________
20 Nabus v. Court of Appeals, supra.
21 Rollo, pp. 391-471.
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Presidential Commission on Good Government vs. Sandiganbayan
Disqualify Atty. Mendoza were likewise filed in Sandiganbayan Civil Case Nos. 0095 and
0100. The former case, Sipalay Trading v. PCGG, involved shares of stock of Lucio Tan in
Maranaw Hotels and Resort Corporation; the latter case, Allied Banking Corporation v.
PCGG, sought the invalidation of an Order for the search and seizure of certain documents
of Allied Bank.
In both cases, the Sandiganbayan denied the separate Motions to Disqualify, as well as the
Motions for Reconsideration. No further actions were taken by the PCGG on such denials,
which thus became executory. Consequently, Atty. Mendoza was allowed to represent Lucio
Tan in those cases.
On the merits of the said cases, which were consolidated, the Sandiganbayan granted both
Petitions on August 23, 1993, by nullifying the Writ of Sequestration questioned in Civil
Case No. 0095, as well as the Search and Seizure Order assailed in Civil Case No. 0100. On
March 29, 1996, the Supreme Court affirmed the SBN’s Decision in the aforementioned
consolidated cases.22 Consequently, now deemed res judicata are all issues raised in Civil
Case Nos. 0095 and 0100—principal, incidental and corollary issues, including the matter
of the alleged disqualification of Atty. Mendoza.
Presence of Identities of
Parties and Issues
As earlier discussed, the only identities required for the principle of conclusiveness of judg-
ment to operate as an estoppel are those of parties and issues. In the case before us, both
identities are clearly present. Hence, the principle of conclusiveness of judgment applies and
bars the present Petition.
From the foregoing, I submit that this Petition should be dismissed on the ground of conclu-
siveness of judgment. Parenthetically, the proper recourse to assail the July 11, 2001
_______________
22 G.R. Nos. 112708-09, 255 SCRA 438, March 29, 1996.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
and the December 5, 2001 Resolutions of the Sandiganbayan (Fifth Division) should have
been a Petition for Review under Rule 45 of the Rules of Court. The certiorari proceeding
before this Court is apparently a substitute for a lost appeal, deserving only of outright dis-
missal.23 In any event, contrary to the allegations of petitioner, respondent court did not
commit grave abuse of discretion amounting to lack or excess of jurisdiction when it issued
the assailed Resolutions.
Proscription
Time-Barred
True, Rule 6.03 of the Code of Professional Responsibility does not expressly specify the
period of its applicability or enforceability. However, I submit that one cannot infer that,
ergo, the prohibition is absolute, perpetual and permanent.
All civil actions have a prescriptive period.24 Unless a law makes an action imprescriptible
or lays down no other period, the action is subject to a bar by prescription five (5) years after
the right of action accrued.25 Criminal offenses—even the most heinous ones—as well as
the penalties therefor, likewise prescribe.26 Relatedly, even so-called perpetual penal-
_______________
23 Spouses Morales v. Court of Appeals, 285 SCRA 337`, January 28, 1998; Cabellan v.
Court of Appeals, 304 SCRA 119, March 3, 1999; Republic v. Court of Appeals, 322 SCRA
81, January 18, 2000.
24 See Arts. 1140-1149, Civil Code.
25 Tolentino v. Court of Appeals, 162 SCRA 66, June 10, 1988.
26 Arts. 90 & 92 of the Revised Penal Code provide as follows:
“Art. 90. Prescription of crime.—Crimes punishable by death, reclusion perpetua or reclu-
sion temporal shall prescribe in twenty years.
Crimes punishable by other afflictive penalties shall prescribe in fifteen years.
Those punishable by a correctional penalty shall prescribe in ten years; with the exception
of those punishable by arresto mayor, which shall prescribe in five years.
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Presidential Commission on Good Government vs. Sandiganbayan
ties and multiple sentences have maximum periods.27
Relevantly, it is worth pointing out that Republic Act No. 6713 prohibits public officers and
employees from practicing their profession for only one year after their resignation, retire-
ment or separation from public office, in connection with any matter before their former
office.28
_______________
The crime of libel or other similar offenses shall prescribe in one year.
The crime of oral defamation and slander by deed shall prescribe in six months.
Light offenses prescribe in two months.”
“Art. 92. When and how penalties prescribe.—The penalties imposed by final sentence pre-
scribe as follows:
1. Death and reclusion perpetua, in twenty years;
2. Other afflictive penalties, in fifteen years;
3. Correctional penalties, in ten years; with the exception of the penalty of arresto mayor,
which prescribes in five years;
4. Light penalties, in one year.”
See also Act No. 3326, as amended.
27 Art. 70 [Revised Penal Code]. x x x.
“Notwithstanding the provisions of the rule next preceding, the maximum duration of the
convict’s sentence shall not be more than three-fold the length of time corresponding to the
most severe of the penalties imposed upon him. No other penalty to which he may be liable
shall be inflicted after the sum total of those imposed equals the same maximum period.
“Such maximum period shall in no case exceed forty years.
“In applying the provisions of this rule the duration of perpetual penalties (pena perpetua)
shall be computed at thirty years.”
28 “Sec. 7. Prohibited Acts and Transactions. x x x.
“These prohibitions shall continue to apply for a period of one (1) year after resignation,
retirement, or separation from public office, except in the case of subparagraph (b); (2)
above,
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Prescription is intended to suppress stale and fraudulent claims arising from transactions or
facts that have been obscured by defective memory or the lapse of time.29 It was designed
to promote justice by preventing surprises through the revival of claims that have been al-
lowed to slumber until relevant proofs are lost, memories faded, and witnesses no longer
available.30 Consistent with law and jurisprudence and the purpose of statutes of limitations,
the prohibition on former government attorneys from involvement in matters in which they
took part long ago, pursuant to their official functions while in public service, should like-
wise have an expiry or duration.
In the present case, the liquidation of GenBank, in which Atty. Mendoza purportedly partic-
ipated as then solicitor general, took place in 1977 or more than a quarter of a century ago.
Since early 1986, he has ceased to be solicitor general and has since engaged in the private
practice of law. In 1987, he became counsel for Respondents Tan et al. in Civil Case No.
0005 and, since 1990, in Civil Case Nos. 0095 to 0100.31 At the time, at least ten (10) years
had passed since his alleged involvement in the GenBank liquidation. Moreover, in 1991
when the separate Motions to Disqualify were filed by PCGG in these aforementioned cases,
he had been outside government service for about five (5) years, and fifteen years had gone
by since the said liquidation.
_______________
but the professional concerned cannot practice his profession in connection with any matter
before the office he used to be with, in which case the one-year prohibition shall likewise
apply.”
29 Ochagabia v. Court of Appeals, 364 Phil. 233; 304 SCRA 587, March 11, 1999; Peñales
v. Intermediate Appellate Court, 229 Phil. 245; 145 SCRA 223, October 27, 1986.
30 Order of R. Telegraphers v. Railway Express Agency, Inc., 321 US 342 (1944); Alcorn
v. City of Baton Rouge, 2004 WL 3016015, December 30, 2004.
31 Memorandum for Respondents, pp. 9-10; Rollo, pp. 399-400.
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Now it is already 2005. If we go by the rationale behind prescription, the extent of the indi-
vidual participation of government officials in the GenBank liquidation may indeed “have
become so obscure from the lapse of time,” if not from “defective memory.”
It is undeniable that government lawyers usually handle a multitude of cases simultaneously
or within overlapping periods of time. This is in fact a common remonstration, especially
among prosecutors, public attorneys, solicitors, government corporate counsels, labor arbi-
ters, even trial and appellate judges. Yet, as dutiful public servants, they cannot reject or
shrink from assignments even if they are already overloaded with work. Similarly, lawyers
in private practice, whether by themselves or employed in law firms, are in a comparative
plight.
It would not be strange or uncommon that, in a period of five years, an attorney in govern-
ment service would have handled or interfered in hundreds of legal matters involving varied
parties.32 Thousands of attorneys who have chosen to dedicate their service to the govern-
ment for some years are in such a situation. Hence, to perpetually and absolutely ban them
from taking part in all cases involving some matter in which they have taken part in some
distant past, pursuant to their official functions then, would be unduly harsh, unreasonable
and unfair. It would be tantamount to an unwarranted deprivation of the exercise of their
profession. Be it remembered that a profession, trade or calling partakes of the
_______________
32 Modesty aside, in my nearly ten (10) years in this Court, I have disposed of about a
thousand cases in full-length ponencias and countless cases by way of unsigned minute or
extended Resolutions. This does not include the thousands of other cases, assigned to other
members of the Court, in which I actively took part during their deliberations. In all honesty,
I must admit that I cannot with certainty recall the details of the facts and issues in each of
these cases, especially in the earlier ones.
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Presidential Commission on Good Government vs. Sandiganbayan
nature of a property right within the meaning of our constitutional guarantees.33
Moreover, to attribute to a former government lawyer a violation of some ethical rule be-
cause of participation in a matter that has been forgotten in good faith due to the lapse of a
long period of time and does not involve interest adverse to the government would likewise
be harsh, unreasonable and unfair.
Similarly, there are many competent private practitioners who, at some point in their long
careers, would wish to serve the government. Would their fine and wide-ranging practice
and experience, which would otherwise be beneficial to the government, likewise forever
bar them from getting involved in matters that concern a party with whom they have had
dealings several years ago and whose interests are not adversely affected? In the case of
acknowledged experts in specific fields of law, of what use would their needed expertise be
to the government if they have to inhibit themselves from every case involving a party they
have served in the distant past, considering the limited number of parties that may actually
be involved in a specific field (for instance, intellectual property or bioethics law)?
I submit that the restraint on the exercise of one’s profession, or right of employment includ-
ing that of attorneys formerly in government service, must survive the test of fairness and
reasonableness. The restriction should not be as pervasive and longer than is necessary to
afford a fair and reasonable protection to the interests of the government. After all, the dis-
qualification of government attorneys is a drastic measure, and courts should hesitate to im-
pose it except when necessary.34
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33 JMM Promotion and Management, Inc. v. Court of Appeals, 329 Phil. 87; 260 SCRA
319, August 5, 1996.
34 Bullock v. Carver, 910 F. Supp 551, 1995.
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Thus, I submit that the restriction on government lawyers—specifically with respect to sub-
sequent engagement or employment in connection with matters falling under the “congruent-
interest representation conflict”—should be allowed to expire after a reasonable period when
no further prejudice to the public may be contemplated. The duration of this prohibition
should be no more than five (5) years from retirement or separation from government ser-
vice. Five years is the prescriptive period for suits for which no period is prescribed by
law.35
It would be reasonable to assume that five years after separation from the service, one would
most likely have lost the loyalty of one’s former personal contacts, if not the loyal associates
themselves, who may be able to facilitate the acquisition of important information from the
former office. In all probability, the lapse of the said period would also naturally obscure to
a reasonable extent a lawyer’s memory of details of a specific case despite active participa-
tion in the proceedings therein. This principle holds if, in the interval, one has handled count-
less other legal matters as is so common among lawyers in government offices.
Consequently, after the said period, former government attorneys should be allowed to take
up cases involving matters that were brought before them during their incumbency in public
office, so long as such matters do not come within the “adverse-interest conflict” doctrine
and the conflict-of-interest rule36 applicable to all lawyers in general.
_______________
35 Art. 1149, Civil Code.
36 Rule 15.03, Code of Professional Responsibility:
“A lawyer shall not represent conflicting interests except by written consent of all concerned
given after a full disclosure of the facts.”
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Presidential Commission on Good Government vs. Sandiganbayan
For the same reasons, the disqualification of members of the judiciary under Section 5(b)
and (d)37 of Canon 3 of the New Code of Judicial Conduct38 should also prescribe in five
(5) years from the time they assumed their judicial position; or from the time they retire from
or otherwise end their government service.
I realize that the application of Rule 6.03 of the Code of Professional Responsibility and
Section 5 of Canon 3 of the New Code of Judicial Conduct is quite important to many mem-
bers of the bar who have served, or who aspire to serve, the government.
On the one hand, our rules of discipline should protect the interest of the public by discour-
aging attorneys in government from so shaping their practice as to give unfair advantage to
their future private clients, or from jeopardizing confidential information learned while in
government service. On the other hand, government service should not be discouraged
_______________
37 “Sec. 5. Judges shall disqualify themselves from participating in any proceedings in
which they are unable to decide the matter impartially or in which it may appear to a reason-
able observer that they are unable to decide the matter impartially. Such proceedings include,
but are not limited to, instances where
xxx xxx xxx
(b) The judge previously served as lawyer or was a material witness in the matter in contro-
versy;
xxx xxx xxx
(d) The judge served as executor, administrator, guardian, trustee or lawyer in the case or
matter in controversy, or a former associate of the judge served as counsel during their as-
sociation, or the judge or lawyer was a material witness therein;
xxx xxx x x x”
[Rule 3.12 of Canon 3 of the old Code of Judicial Conduct.]
38 A.M. No. 03-05-01-SC, promulgated on April 27, 2004 and effective June 1, 2004.
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by overly strict ethical rules that perpetually prohibit government lawyers from later making
reasonable and appropriate use in private practice of the expertise or experience they have
gained.39
The reality is that the best lawyers will want to join the more lucrative private sector sooner
or later, and the government will hardly be able to attract them if they would later be unrea-
sonably restricted from putting their government experience to some use.40 After all, gov-
ernment service should afford lawyers the opportunity to improve their subsequent private
employment. The nature of the job brings such lawyers into inevitable contact with clients
interested in their fields of expertise. Because the practice of law is becoming increasingly
specialized, the likely consequence of a wholesale approach to disqualification would be
encouragement of a two-track professional structure: government lawyer, private lawyer.
The suspicion, and the reality, of ethical improprieties unrelated to particular government
cases would be eliminated—but at the cost of creating an insular, static legal bureaucracy.41
Such a pervasive, perpetual ban would deter too many competent attorneys from entering
government service, to the detriment of the public.42 The Court must strike a balance. I
believe that the adoption of the aforementioned period of limitation would achieve the pur-
pose behind Rule 6.03 of the Code of Professional Responsibility, as well as Section 5 of
Canon 3 of the New Code of Judicial Conduct.
To summarize, the present Petition is barred by the principle of conclusiveness of judgment,
because the April 22, 1991 Resolution of the SBN Second Division in Civil Case No.
_______________
39 In re Sofaer, 728 A2d 625, April 22, 1999.
40 Brown v. District of Columbia Board of Zoning Adjustment, 486 A2d 37, December 21,
1984.
41 Ibid. (citing Developments in the Law: Conflicts of Interest, 94 Harv. L. Rev. 1244, 1428-
30 [1981]).
42 Ibid.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
0005—which resolved on the merits the very same ground for the disqualification of Atty.
Mendoza, and which involved essentially the same parties and the same subject matter as
the present case—constituted a final and executory order, no timely appeal having been
taken therefrom.
Furthermore, the disqualification of former government lawyers from congruent-interest
representation under Rule 6.03 of the Code of Professional Responsibility should be effec-
tive only for a period of five (5) years from the retirement or the separation from government
service of the official concerned. The purpose of such prescriptive period is to prevent undue
restraint on former government lawyers from the private practice of their profession, espe-
cially in the field of expertise that they may have gained while in public office. Similarly,
the disqualification of members of the judiciary, under Section 5 (b) and (d) of Canon 3 of
the New Code of Judicial Conduct should end five (5) years after they assumed their judicial
position.
Implications of the
Dissenting Opinions
Endless re-litigations of the same question, as well as forum shopping, are invited by the
opinion of the dissenters that the April 22, 1991 Resolution of the Sandiganbayan’s Second
Division in Civil Case No. 0005 does not bar the filing of another motion to disqualify Atty.
Mendoza from other cases between the same parties. Such a holding would effectively allow
herein petitioner to file exactly the same Motion in each of other and future cases involving
the same parties or their privies and the same subject matters, even after the first Motion
involving the same question or issue will have already been finally resolved in one of like
cases.
Further, it would also allow petitioner to let a contrary resolution of the incident in one case
become final through petitioner’s withholding recourse to a higher court in order to await a
possible favorable ruling in one of the other cases. As
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Presidential Commission on Good Government vs. Sandiganbayan
it is, absurdity already surrounds the handling of Civil Case No. 0005 and No. 0096, both of
which involve the same parties and the same subject matter.
In Civil Case No. 0005, which seeks to recover allegedly unlawfully acquired properties
consisting of shares of stock of Respondent Tan et al. in Allied Bank, Atty. Mendoza is
allowed to serve as their counsel. However, in Civil Case No. 0096, which merely questions
the validity of the Writ of Sequestration issued against the shares of stock in Allied Bank of
the same respondents, he is prohibited, per the dissenters, from acting as their counsel. This
is preposterous.
Moreover, treating the first Resolution as not yet final and executory, even if no appeal or
certiorari has timely been taken therefrom, would allow the questioned counsel to act as such
throughout the trial period until final judgment by the court a quo. Thereafter, on appeal, his
alleged “disqualification” may still be raised by the other party as an issue. If the appeals
court or this Tribunal ultimately finds that the said counsel is indeed disqualified on the
ground of conflict of interest or “congruent-interest representation conflict” and thus re-
verses the trial court’s ruling, the case would necessarily be remanded for new trial. As a
result, the entire proceedings would become naught and thereby unnecessarily waste the
precious time, effort and resources of the courts as well as the parties. Worse, the evidence
(or defense) adduced by the “disqualified” counsel through his prior connections with the
government (or the adverse party) could have already created bias in the court or in the
public mind.
These are precisely the procedural absurdities abhorred by the doctrine of res judicata, the
fundamental principle of due process and of the rule proscribing forum shopping.
Having already shown that Atty. Mendoza can no longer be disqualified at this point for his
alleged violation of Rule 6.03 of the Code of Professional Responsibility, due to res judicata
and prescription, I submit that there is no more need to discuss on the merits whether indeed
there was in fact such
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Presidential Commission on Good Government vs. Sandiganbayan
violation. Such discussion would be merely academic and moot.
May I close this Opinion with this oft-quoted ruling of former Chief Justice Pedro L. Yap,
who was himself a former PCGG commissioner, on the soundness of upholding final judg-
ments even “at the risk of occasional errors”:
“It is a general rule common to all civilized system of jurisprudence, that the solemn and
deliberate sentence of the law, pronounced by its appointed organs, upon a disputed fact or
a state of facts, should be regarded as a final and conclusive determination of the question
litigated, and should forever set the controversy at rest. Indeed, it has been well said that this
maxim is more than a mere rule of law, more than an important principle of public policy:
and that it is not too much to say that it is a fundamental concept in the organization of the
jural sytem. Public policy and sound practice demand that, at the risk of occasional errors,
judgments of courts should become final at some definite date fixed by law. The very object
for which courts were constituted was to put an end to controversies.”43
WHEREFORE, I vote to DISMISS the Petition.
CONCURRING OPINION
SANDOVAL-GUTIERREZ, J.:
I join Mr. Justice Reynato S. Puno in his ponencia. Motions to disqualify counsel from rep-
resenting their clients must be viewed with jaundiced eyes, for oftentimes they pose the very
threat to the integrity of the judicial process.1 Such motions are filed to harass a particular
counsel, to delay the litigation, to intimidate adversary, or for other strategic purposes. It
_______________
43 Legarda v. Savellano, 158 SCRA 194, February 26, 1988, per Yap, J. (later C.J.).
1 Gregori v. Bank of America, 207 Cal. App. 3d 291 (1989); McPhearson v. Michaels Co.,
No. CO34390, March 4, 2002.
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Presidential Commission on Good Government vs. Sandiganbayan
therefore behooves the courts to always look for the parties’ inner motivations in filing such
motions.
This case illustrates the sad reality that the filing of motions for disqualification may be
motivated, not by a fine sense of ethics or sincere desire to remove from litigation an uneth-
ical practitioner, but to achieve a tactical advantage.
The facts are undisputed.
Subsequent to the downfall of President Ferdinand E. Marcos in 1986, came the first edict2
of President Corazon C. Aquino creating the Presidential Commission on Good Government
(PCGG) to recover the ill-gotten wealth of the Marcoses, their subordinates, and associates.
PCGG’s initial target was Lucio Tan and the above-named private respondents (Tan, et al.,
for brevity). It issued several writs of sequestration on their properties and business enter-
prises. To nullify such writs, Tan, et al. filed with this Court petitions for certiorari, prohibi-
tion and injunction. On February 15, 1990, after comments thereon were submitted, this
Court referred the cases to the Sandiganbayan for proper disposition. These cases were raf-
fled to it Fifth Division, docketed as follows:
(a)Civil Case No. 0095—Sipalay Trading Corp. vs. PCGG, which seeks to nullify the
PCGG’s Order dated July 24, 1986 sequestering Lucio Tan’s shares of stocks in Maranaw
Hotels and Resort Corporation (Century Park Sheraton Hotel);
(b)Civil Case No. 0096—Lucio Tan, Mariano Tanenglian, Allied Banking Corp., Iris Hold-
ing and Development Corp., Virgo Holdings Development Corp. and Jewel Holdings, Inc.
v. PCGG, which seeks to nullify the PCGG’s Order dated June 19, 1986 sequestering the
shares of stocks in Allied Banking Corporation held by and/or in the name of respondents
Lucio Tan, Mariano Tanenglian, Iris Holding and Development Corp., Virgo Holdings De-
velopment Corp. and Jewel Holdings, Inc.;
_______________
2 Executive order No. 1, issued on February 28, 1986.
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Presidential Commission on Good Government vs. Sandiganbayan
(c)Civil Case No. 0097—Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Natividad San-
tos, Florencio N. Santos, Jr. and Foremost Farms, Inc. v. PCGG, which seeks to nullify the
PCGG’s Order dated August 12, 1986 sequestering the shares of stocks in Foremost Farms,
Inc. held by and/or in the name of Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Na-
tividad Santos and Florencio N. Santos, Jr.;
(d)Civil Case No. 0098—Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T.
Santos, Natividad Santos, Florencio N. Santos, Jr., Shareholdings, Inc. and Fortune Tabacco
Corp. v. PCGG, which seeks to nullify the PCGG’s Order dated July 24, 1986 sequestering
the shares of stocks in Fortune Tobacco Corp. held by and/or in the name of Lucio Tan,
Carmen Khao Tan, Mariano Tanenglian, Florencio T. Santos, Natividad Santos, Floren-cio
N. Santos, Jr., Shareholdings, Inc.; and
(e)Civil Case No. 0099—Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T.
Santos, Natividad Santos and Shareholdings, Inc. v. PCGG, which seeks to nullify the
PCGG’s Order dated July 24, 1986 sequestering the shares of stocks in Shareholdings, Inc.
held by and/or in the name of Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio
T. Santos and Natividad Santos.
(f)Civil Case No. 0100—Allied Banking Corp. vs. PCGG, which seeks to nullify the
PCGG’s Search and Seizure Order dated August 13, 1986, issued on bank documents of
Allied Banking Corp.3
Civil Cases Nos. 0096 and 0100 involve Tan, et al.’s shares of stocks in the Allied Banking
Corporation (Allied Bank).
Meanwhile, on July 17, 1987, the PCGG and the Office of the Solicitor General (OSG) filed
with the Sandiganbayan a complaint for “reversion, reconveyance, restitution, accounting
and damages” against Tan, et al. This time, the case was raffled to the Second Division,
docketed therein as Civil Case No. 0005. Among the properties sought to be reconveyed
were Tan, et al.’s shares of stocks in the Allied Bank.
_______________
3 Resolution, at pp. 3-4. See also Memorandum for Respondents, Rollo, at pp. 397-398.
613
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Presidential Commission on Good Government vs. Sandiganbayan
Since 1987, Atty. Estelito P. Mendoza has been the counsel for Tan et al. in all the above
cases. But it was not until February 5, 1991, or after four years, that the PCGG filed three
(3) identical motions to disqualify Atty. Mendoza. In Civil Cases Nos. 0096-0099, PCGG
filed a motion to disqualify him. It filed another similar motion in Civil Case No. 0100. The
last motion was filed in Civil Case No. 0005. His disqualification was sought under Rule
6.03 of the Code of Professional Responsibility which reads:
Rule 6.03.—A lawyer shall not, after leaving government service, accept engagement or
employment in connection with any matter in which he had intervened while in said service.
In each motion, PCGG alleged that Atty. Mendoza, then Solicitor General of the Marcos
Administration, “actively intervened” in the liquidation of General Bank and Trust Company
(GENBANK), subsequently acquired by Tan, et al. and became Allied Bank. PCGG’s alle-
gations are similar in every aspect, thus:
“(1) He was the former Solicitor General of the Republic of the Philippines for almost 14
years appearing on behalf of the Republic in multitudes of cases.
(2) The records show that, as then Solicitor General, Atty. Estelito P. Mendoza appeared as
counsel for the Central Bank of the Philippines in Special Proceedings No. 107812, pending
before the Regional Trial Court of Manila, in connection with the Central Bank’s Petition
for assistance in the Liquidation of General Bank and Trust Company (herein called “Gen-
bank,” for brevity). The records also show that Defendant Lucio Tan and his group were the
same persons who acquired Genbank’s assets, liabilities and interest.
(3) Consequently, Atty. Mendoza’s appearance as counsel for the Defendant herein runs
counter to the long-cherished ethical canon of the legal profession which prohibits a counsel
to appear in litigation adverse to the interests of
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
his former client. Interpreting this sanction, jurisprudence has held, that:
‘The lawyer’s obligation to represent the client with undivided fidelity and to keep his con-
fidences, also forbid the lawyer from accepting retainers or employment from others in mat-
ters adversely affecting any interest of the client with respect to which confidence has been
reposed in him. (Canon of Professional Ethics, 6). The prohibition stands even if the adverse
interest is very slight; neither is it material that the intention and motive of the attorney may
have been honest. (5 Am. Jur. 296).’
(4) The reason for the prohibition is obvious. Apart from the obligation to keep inviolate the
prior relationship between counsel and his former client, such counsel obtains material in-
formation in confidence. Consequently, he should not be allowed to represent a party with
adverse interest to his former client, arising out of the very transaction subject of the former
relationship.
(5) In the case at bar, it should be stressed that Defendant Lucio Tan and his group acquired
the assets and liabilities of Genbank. This manner of acquisition has been alleged to have
been fraudulent, arbitrary and a product of collusion between them and the Central Bank
officials. (Refer to Criminal Case No. 005 pending before this Honorable Court.) Atty. Men-
doza’s appearance as counsel for Defendants, clearly violates the Code of Professional Re-
sponsibility, which provides that:
‘A lawyer shall not after leaving the government service accept engagement or employment
in connection with any matter in which he had intervened while in said service. (Code of
Professional Responsibility, Canon 6, Rule 6.03)’
(6) In the liquidation of Genbank and its eventual acquisition by Lucio Tan and his group,
Atty. Mendoza, as Solicitor–General, personally advised the Central Bank officials on the
procedure to bring about Genbank’s liquidation. In the Memorandum for the Governor of
the Central Bank
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Presidential Commission on Good Government vs. Sandiganbayan
dated March 29, 1977 (signed by the following subordinates of then CB Governor Gregorio
Licaros, namely: Senior Deputy Governor Amado R. Brinas (deceased), Deputy Governor
Jaime C. Laya, Deputy Governor & General Counsel Gabriel C. Singson, Special Asst. to
the Governor Carlota P. Valenzuela, Asst. to the Governor Arnulfo B. Aurellano and Direc-
tor Antonio T. Castro, Jr.), the following portion disclosed Atty. Mendoza’s participation:
‘Immediately after said meeting, we had a conference with the Solicitor General (Atty. Men-
doza) and he advised that the following procedure should be taken:
‘(1) Management should submit a memorandum to the Monetary Board reporting that stud-
ies and evaluation had been made since the last examination of the bank as of August 31,
1976 and it is believed that the bank cannot be reorganized or placed in a condition so that
it may be permitted to resume business with safety to its depositors and creditors and the
general public.
‘(2) If the said report is confirmed by the Monetary Board, it shall order the liquidation of
the bank and indicate the manner of its liquidation and approve a liquidation plan.
(3) The Central Bank shall inform the principal stockholders of Genbank of the foregoing
decision to liquidate the bank and the liquidation plan approved by the Monetary Board.
(4) The Solicitor General shall then file a petition in the Court of First Instance reciting the
proceedings which had been taken and praying the assistance of the Court in the liquidation
of Genbank.”
Plainly stated, it was Atty. Mendoza who was the legal author of the closure of Genbank and
the eventual sale to Mr. Lucio Tan and his Group. Clearly, Atty. Mendoza should be dis-
qualified in this case.”
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Presidential Commission on Good Government vs. Sandiganbayan
On April 22, 1991, the Sandiganbayan issued a Resolution4 in Civil Case No. 0005 denying
PCGG’s motion to disqualify Atty. Mendoza.
On May 7, 1991, the Sandiganbayan issued a Resolution5 in Civil Case No. 0100 also deny-
ing PCGG’s similar motion.
Motions for reconsideration were filed but to no avail. The PCGG took no further action.
These Resolutions, therefore, became final and executory.
Subsequently, in a Decision dated August 23, 1996, the Sandiganbayan jointly granted Tan,
et al.’s petitions in Civil Cases Nos. 0095 and 0100. On March 29, 1996, this Court, in G.R.
Nos. 112708-096 affirmed the said Decision. The PCGG neither assigned as error nor men-
tioned the Sandiganbayan’s denial of its motion to disqualify Atty. Mendoza in Civil Case
No. 0100.
In the interim, the PCGG’s motion to disqualify Atty. Mendoza in Civil Cases Nos. 0096-
0099 remained pending with the Sandiganbayan. It was only on July 11, 2001, or after ten
(10) years, that it denied the PCGG’s motion by merely adopting its Resolution dated April
22, 1991 in Civil Case No. 0005 denying a similar motion, thus:
“Acting on the PCGG’s “MOTION TO DISQUALIFY ATTY. ESTELITO P. MENDOZA
AS COUNSEL FOR PETITIONER” dated February 5, 1991 which appears not to have been
resolved by
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4 Attachment “F” of the Petition, Rollo, at pp. 57-63. Civil Case No. 0005 involved the
PCGG’s and the OSG’s complaint for “reversion, reconveyance, restitution, accounting and
damages” against Tan et al.’s shares of stock in Allied Bank.
5 Comment on the Petition, Rollo, at p. 148. Civil Case No. 0100 involved Allied Bank’s
petition seeking to nullify PCGG’s Search and Seizure Order against Tan, et al.’s shares of
stock.
6 Entitled Republic of the Philippines, represented by Presidential Commission on Good
Government, petitioner, vs. Sandiganbayan, Sipalay Trading Corporation and Allied Bank-
ing Corporation, respondents, 255 SCRA 438, March 29,1996.
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Presidential Commission on Good Government vs. Sandiganbayan
then Second Division of this Court, and it appearing that (1) the motion is exactly the same
in substance as that motion filed in Civil Case No. 0005 as in fact, Atty. Mendoza in his
‘OPPOSITION’ dated March 5, 1991 manifested that he was just adopting his opposition to
the same motion filed by PCGG in Civil Case No. 0005 and (2) in the Court’s Order dated
March 7,1991, the herein incident was taken-up jointly with the said same incident in Civil
Case No. 0005 (pp.134-135,Vol. I, Record of Civil Case No. 0096), this Division hereby
reiterates and adopts the Resolution dated April 22, 1991 in Civil Case No. 0005 of the
Second Division (pp.1418-1424, Vol. III, Record of Civil Case No. 0005) denying the said
motion as its Resolution in the case at bar.”7
The PCGG moved for the reconsideration of the foregoing Resolution, but was denied. In
the Resolution dated December 5, 2001, the Sandiganbayan ruled:
“Acting on respondent PCGG’s ‘MOTION FOR RECONSIDERATION’ dated August 1,
2001 praying for the reconsideration of the Court’s Resolution dated July 12, 2001 denying
its motion to disqualify Atty. Estelito P. Mendoza as counsel for petitioners, to which peti-
tioners have filed an ‘OPPOSITION TO MOTION FOR RECONSIDERATION DATED
AUGUST 1, 2001’ dated August 29, 2001, as well as the respondent’s ‘REPLY (To Oppo-
sition to Motion for Reconsideration)’ dated November 16, 2001, it appearing that the main
motion to disqualify Atty. Mendoza as counsel in these cases was exactly the same in sub-
stance as that motion to disqualify Atty. Mendoza filed by the PCGG in Civil Case No. 0005
(re: Republic vs. Lucio Tan, et al.) and the resolutions of this Court (Second Division) in
Civil Case No. 0005 denying the main motion as well as of the motion for reconsideration
thereof had become final and executory when PCGG failed to elevate the said resolutions to
the Supreme Court, the instant motion is hereby DENIED.”8
Hence, the PCGG’s present petition for certiorari and prohibition alleging that the Sandi-
ganbayan committed grave
_______________
7 Attachment “A” of the Petition, Rollo, at p. 42.
8 Attachment “A-1” of the Petition, Rollo, at p. 43.
618
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
abuse of discretion in denying its motion to disqualify Atty. Mendoza in Civil Cases Nos.
0096-0099.
Mr. Justice Romeo J. Callejo, Sr., in his Dissent, granted the petition. On the procedural
issues, he ruled that the assailed Resolutions dated July 11 and December 5, 2001 denying
PCGG’s motion to disqualify Atty. Mendoza are interlocutory orders, hence, in challenging
such Resolutions, certiorari is the proper remedy, not appeal, as invoked by Tan, et al. Based
on the same premise, he likewise rejected Tan, et al.’s claim that the Resolution dated April
22, 1991 in Civil Case No. 0005 constitutes a bar to similar motions to disqualify Atty.
Mendoza under the doctrine of res judicata.
On the substantive aspect, Mr. Justice Callejo’s Dissent states that Atty. Mendoza violated
Rule 6.03 of the Code of Professional Responsibility. According to him, Atty. Mendoza’s
acts of (a) advising the Central Bank on how to proceed with the liquidation of GENBANK,
and (b) filing Special Proceedings No. 107812, a petition by the Central Bank for assistance
in the liquidation of GENBANK, with the then Court of First Instance (CFI) of Manila,
constitute “intervention.” And that while it may be true that his posture in Civil Cases Nos.
0096-0099 is not adverse to the interest of the Central Bank, still, he violated the proscription
under the “congruent-interest representation conflict” doctrine.
Crucial to the resolution of the present controversy are the following queries:
(1) Is certiorari the proper remedy to assail the Sandiganbayan Resolutions dated July 11
and December 5, 2001 denying the PCGG’s motion to disqualify Atty. Mendoza in Civil
Cases Nos. 0096-0099?
(2) May Sandiganbayan Resolution dated April 22, 1991 in Civil Case No. 0005 be consid-
ered a bar to similar motions to disqualify Atty. Mendoza under the doctrine of res judicata?
(3) Does Atty. Mendoza’s participation in the liquidation of GENBANK constitute interven-
tion?
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There are some important points I wish to stress at this incipient stage. I believe they should
be considered if we are to arrive at a fair resolution of this case. The scattershot manner in
which the PCGG filed the various motions to disqualify Atty. Mendoza shows its intent to
harass him and Tan et al. It may be recalled that the PCGG filed three (3) identical motions,
one in Civil Cases Nos. 0096-0099, another in Civil Case No. 0100 and the last one in Civil
Case No. 0005. Of these cases, only Civil Cases Nos. 0096, 0100 and 0005 actually involve
Tan et al.’s shares of stocks in the Allied Bank. Civil Cases Nos. 0097, 0098 and 0099 have
entirely different subject matter. Thus, insofar as these cases are concerned, the motions to
disqualify lack substantive merit. Why then would the PCGG file identical motions to dis-
qualify Atty. Mendoza in these unrelated cases? Its intention is suspect. To subject Tan et
al. to numerous and baseless motions to disqualify their lawyer is, no doubt, a form of har-
assment.
As this juncture, it is important to emphasize that in evaluating motions to disqualify a law-
yer, our minds are not bound by stringent rules. There is room for consideration of the com-
bined effect of a party’s right to counsel of his own choice, an attorney’s interest in repre-
senting a client, the financial burden on a client of replacing disqualified counsel, and any
tactical abuse underlying a disqualification proceeding.9
I. Whether the PCGG’s proper remedy to assail the Sandiganbayan Resolutions dated July
11 and December 5, 2001 is appeal, not certiorari.
The bottom line of this issue lies on how we categorize an order denying a motion to dis-
qualify an opposing party’s counsel. Is it interlocutory or final?
_______________
9 7 Am. Jur. 2d §197 citing Higdon v. Superior Court (5th Dist), 227 Cal. App. 3d 1667,278
Cal. Rptr. 588, 91 CDOS 1622, 91 Daily Journal DAR 2595.
620
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
An order is deemed final when it finally disposes of the pending action so that nothing more
can be done with it in the lower court.10 On the other hand, an interlocutory order is one
made during the pendency of an action, which does not dispose of the case, but leaves it for
further action by the trial court in order to settle and determine the entire controversy.11
In Antonio vs. Samonte,12 this Court defined a final judgment, order or decree as “one that
finally disposes of, adjudicates, or determines the rights, or some rights or rights of the par-
ties, either on the entire controversy or on some definite and separate branch, thereof and
which concludes them until it is reversed or set aside x x x.” In De la Cruz v. Paras,13 it was
held that a court order is final in character if “it puts an end to the particular matter resolved
or settles definitely the matter therein disposed of,” such that no further questions can come
before the court except the execution of the order. In Day v. Regional Trial Court of Zam-
boanga City,14 this Court ruled that an order which decides an issue or issues in a complaint
is final and appealable, although the other issue or issues have not been resolved, if the latter
issues are distinct and separate from others.
With the foregoing disquisition as basis, it is my view that an order denying a motion to
disqualify counsel is final and, therefore, appealable. The issue of whether or not Atty. Men-
doza should be disqualified from representing Tan, et al. is separable from, independent of
and collateral to the main issues in Civil Cases Nos. 0096-0099. In short, it is separable from
the merits. Clearly, the present petition for certiorari, to my mind, is dismissible.
_______________
10 Mejia v. Alimorong, 4 Phil. 573, 1905, Insular Government v. Bishop of Nueva Segovia,
17 Phil. 487, (1910); People v. Makaraig, 54 Phil. 904, 1930.
11 Tambaoan v. Court of Appeals, 365 SCRA 359 (2001); Halili v. Court of Industrial Re-
lations, 22 SCRA 785 (1968).
12 111 Phil. 699; 1 SCRA 1072 (1961).
13 69 SCRA 556, G.R. No. L-41053. February 27, 1976.
14 191 SCRA 610, G.R. No. 79119. November 22, 1990.
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II. Whether the Resolution dated April 22, 1991 in Civil Case No. 0005 constitutes a bar to
similar motions to disqualify Atty. Mendoza under the doctrine of res judicata.
I am convinced that the factual circumstances of this case justify the application of res judi-
cata.
The ponente refuses to apply res judicata on the ground that the Sandiganbayan Resolution
dated April 22, 1991 in Civil Case No. 0005 is just an interlocutory order.
Assuming arguendo that an order denying a motion to disqualify Atty. Mendoza is indeed
an intelocutory order, still, I believe that res judicata applies.
It will be recalled that on August 23, 1996, the Sandigan-bayan rendered a Decision granting
Tan et al.’s petitions in Civil Cases Nos. 0095 and 0100. Such Decision reached this Court
in G.R. Nos. 112708-09.15 On March 29, 1996, we affirmed it. The PCGG could have as-
signed or raised as error in G.R. Nos. 112708-09 the Sandiganbayan Resolution dated May
7, 1991 in Civil Case No. 0100 denying its motion to disqualify Atty. Mendoza but it did
not. The fact that a final Decision therein has been promulgated by this Court renders the
Resolution dated May 7, 1991 beyond review. The PCGG may not relitigate such issue of
disqualification as it was actually litigated and finally decided in G.R. Nos. 112707-09.16
To rule otherwise is to encourage the risk of inconsistent judicial rulings on the basis of the
same set of facts. This should not be countenanced. Public policy, judicial orderliness, econ-
omy of judicial time and the interest of litigants, as well as the peace and order of society,
all require that stability should be accorded judicial rulings and that controversies
_______________
15 Entitled Republic of the Philippines, represented by Presidential Commission on Good
Government, vs. Sandiganbayan, Sipalay Trading Corporation and Allied Banking Corpo-
ration, 255 SCRA 438, March 29, 1996.
16 46 Am. Jur. 2d § 516.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
once decided shall remain in repose, and that there be an end to litigation.17
III. Whether Atty. Mendoza’s participation in the liquidation of GENBANK constitutes in-
tervention.
As stated earlier, Atty. Mendoza is sought to be disqualified under Rule 6.03 of the Code of
Professional Responsibility which states:
Rule 6.03—A lawyer shall not, after leaving government service, accept engagement or em-
ployment in connection with any matter in which he had intervened while in said service.
In determining whether Atty. Mendoza committed a breach of this Rule, certain factual pred-
icates should be established, thus: (a) in connection with what “matter” has Atty. Mendoza
accepted an engagement or employment after leaving the government service?; (b) in con-
nection with what “matter” did he intervene while in government service?; and (c) what acts
did he particularly perform in “intervening” in connection with such “matter”?
The PCGG insists that Atty. Mendoza, as Solicitor General, “actively intervened” in the
closure and liquidation of GEN-BANK. As primary evidence of such intervention, it cited
his act of filing Special Proceedings No. 107812 with the then Court of First Instance (CFI)
of Manila; and the Memorandum dated March 29, 1977 of certain key officials of the Central
Bank stating that he (Atty. Mendoza) advised them of the procedure to be taken in the liqui-
dation of GENBANK and that he was furnished copies of pertinent documents relating to
such liquidation.
Tan, et al. denied Atty. Mendoza’s alleged “intervention,” claiming that when he filed Spe-
cial Proceedings No. 107812
_______________
17 46 Am. Jur. 2d § 515.
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with the CFI of Manila, the decision to prohibit GENBANK from doing business had already
been made by the Central Bank Monetary Board. Also, Atty. Mendoza, in appearing as their
counsel in Civil Cases Nos. 0096-0099, does not take a position adverse to his former client,
the Central Bank.
The first concern in assessing the applicability of the Rule is the definition of “matter.” The
American Bar Association Committee on Ethics and Professional Responsibility stated in
its Formal Opinion 342 that:
“Although a precise definition of “matter” as used in the Disciplinary Rule is difficult to
formulate, the term seems to contemplate a discrete and isolatable transaction or set of trans-
actions between identifiable parties. Perhaps the scope of the term “matter” may be indicated
by examples. The same lawsuit or litigation is the same matter. The same issue of fact in-
volving the same parties and the same situation or conduct is the same matter. By contrast,
work as a government employee in drafting, enforcing or interpreting government or agency
procedures, regulations, or laws, or in briefing abstract principles of law, does not disqualify
the lawyer under DR 9-101 (B) from subsequent private employment involving the same
regulations, procedures, or points of law; the same “matter” is not involved because there is
lacking the discrete, identifiable transaction or conduct involving a particular situation and
specific parties.”
In the case at bar, the Court’s task is to determine whether Special Proceedings No. 107812
falls within the concept of “matter.” This must be analyzed in relation with Civil Case No.
0096. Anent Civil Cases Nos. 0097, 0098 and 0099, there is no doubt that they do not involve
the shares of stocks of Tan, et al. in Allied Bank. Thus, only Special Proceedings No. 107812
and Civil Case No. 0096 must be considered.
Special Proceedings No. 107812 is a “petition by the Central Bank for Assistance in the
Liquidation of General Bank and Trust Company” filed by Atty. Mendoza as Solicitor Gen-
624
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
eral. The parties therein are the Central Bank of the Philippines and Arnulfo B. Aurellano,
on the one hand, and the Worldwide Insurance & Surety Company, Midland Insurance Cor-
poration, Standard Insurance Co., Inc and General Bank & Trust Company, on the other.
The issues, among others, are whether or not the Central Bank acted in good faith in ordering
the liquidation of GENBANK; and, whether the bidding for GENBANK is a sham.
Civil Case No. 0096 is for the annulment of various sequestration orders issued by the PCGG
over Tan, et al.’s properties. The parties therein are Lucio Tan, Mariano Tanenglian, Allied
Banking Corporation, Iris Holdings & Development Corp., Virgo Holdings & Development
Corp., and Jewel Holdings, Inc., as petitioners, and the PCGG, as respondent. The issues
here are “whether the Sequestration Order issued by the PCGG on June 19, 1986 over the
shares of stocks in Allied Bank of Lucio C. Tan and his co-petitioners in Civil Case No.
0096 was issued without notice, hearing and evidence.”
A careful perusal of the above distinctions shows that the two cases are different in all as-
pects, such as the parties, issues, facts and relief sought. Special Proceedings No. 107812
cannot therefore be considered a “matter” in connection with which Atty. Mendoza accepted
his engagement as counsel in Civil Case No. 0096. The connection between the two cases,
if there be, is very minimal as to give rise to the application of the proscription.
As aptly stated by Justice Puno:
“But more important, the ‘matter’ involved in Sp. Proc. No. 107812 is entirely different from
the ‘matter’ involved in Civil Case No. 0096. Again the bald facts speak for themselves. It
is given that Atty. Mendoza had nothing to do with the decision of the Central Bank to
liquidate GENBANK. It is also given that he did not participate in the sale of GENBANK
to Allied Bank. The ‘matter’ where he got himself involved was in informing Central Bank
on the procedure provided by law to liquidate GENBANK through the courts and in filing
the necessary petition in Sp. Proc. No. 107812 in
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Presidential Commission on Good Government vs. Sandiganbayan
the then Court of First Instance. The subject ‘matter’ Sp. Proc. No. 107812, however, is not
the same nor related to but different from the subject ‘matter’ in Civil Case No. 0096. Civil
Case No. 0096 involves the sequestration of the stocks owned by Tan, et al., in Allied Bank
on the alleged ground that they are illgotten. The case does not involve the liquidation of
GENBANK. Nor does it involve the sale of GENBANK to Allied Bank. Whether the shares
of stocks of the reorganized Allied Bank are ill-gotten is far removed from the issue of the
dissolution and liquidation of GEN-BANK. GENBANK was liquidated by the Central Bank
due, among others, to the banking malpractices of its owners and officers. In other words,
the legality of the liquidation of GENBANK is not an issue in the sequestration cases. In-
deed, the jurisdiction of the PCGG does not include the dissolution and liquidation of banks.
It goes without saying that Code 6.03 of the Code of Professional Responsibility cannot
apply to Atty. Mendoza because his alleged intervention while a Solicitor General in Sp.
Proc. No. 107812 is an intervention on a matter different from the matter involved in Civil
Case No. 0096.”
As Solicitor General, Atty. Mendoza represented the Republic of the Philippines in every
case where it was involved. As a matter of practice and procedure, he signed every pleading
prepared by his Associates. Taking this into consideration, will it be just to disqualify him
in all the cases containing pleadings bearing his signature? The answer must be in the nega-
tive. His disqualification might be too harsh a penalty for one who had served the govern-
ment during the best years of his life and with all his legal expertise.
Webster Dictionary18 defines “intervene” as “to come or happen between two points of time
or events;” “to come or be in between as something unnecessary or irrelevant”; or “to come
between as an influencing force. The ponencia defines “to intervene” as “to enter or appear
as an irrelevant or extraneous feature or circumstance.” “Intervention” is interference that
may affect the interest of others. Corollarily, the coun-
_______________
18 Second Edition, New Twentieth Century Dictionary, Unabridged, 183.
626
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
terpart of Rule 6.03 is the Disciplinary Rule (DR) 9-101 (B) of the American Bar Association
(ABA), thus:
A lawyer shall not accept private employment in a manner in which he had “substantial
responsibility” while he was a public employee.
Substantial responsibility envisages a lawyer having such a heavy responsibility for the mat-
ter in question that it is likely he becomes personally and substantially involve in the inves-
tigative or deliberative processes regarding the matter.19 Since the word “intervene” has two
connotations, one affecting interest of others and one done merely in influencing others,
Rule 6.03 should be read in the context of the former. To interpret it otherwise is to enlarge
the coverage of Rule 6.03. Surely, this could not have been the intention of the drafters of
our Code of Professional Responsibility.
Further, that Atty. Mendoza was furnished copies of pertinent papers relative to the liquida-
tion of GENBANK is not sufficient to disqualify him in Civil Case No. 0096. In Laker Air-
way Limited v. Pan American World Airways,20 it was held that:
“Like the case law, policy considerations do not support the disqualification of a government
attorney merely because during his government service he had access to information about
a corporation which subsequently turned out to become an opponent in a private lawsuit. If
the law were otherwise, the limiting language of the Disciplinary Rule could be bypassed
altogether by the simple claim that an attorney may have viewed confidential information
while employed by the government, and government lawyers would face perpetual disqual-
ification in their subsequent practices.”
In fine, I fully concur in Justice Puno’s Dissent that “Rule 6.03 of the Code of Professional
Responsibility cannot apply to
_______________
19 ABA Formal Opinion 342 (November 24, 1975).
20 103 F.R.D. 22; 1984 U.S. Dist. LEXIS 15513, June 26, 1984.
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Presidential Commission on Good Government vs. Sandiganbayan
Atty. Mendoza because his alleged intervention while a Solicitor General in Special Pro-
ceedings No. 107812 is an intervention in a matter different from the matter involved in
Civil Case No. 0096.
WHEREFORE, I vote to dismiss the instant petition for certiorari.
DISSENTING OPINION
CARPIO-MORALES, J.:
While I concur in the scholarly and ably-written dissent of Justice Romeo J. Callejo, Sr., I
feel compelled to write a separate dissenting opinion to reflect the additional reasons behind
my position.
Justices Artemio V. Panganiban and Angelina Sandoval-Gutierrez are of the opinion that the
petition can be dismissed on procedural grounds, they contending that the Presidential Com-
mission on Government (PCGG) is precluded from filing a motion to disqualify Atty. Es-
telito P. Mendoza as counsel in Civil Case Nos. 0096 since the Sandiganbayan (Second Di-
vision) had already denied PCGG’s motion to disqualify Atty. Mendoza as counsel in Civil
Case No. 0005. In short, they are invoking the doctrines of conclusiveness of judgment and
law of the case.
I believe Kilosbayan, Incorporated v. Morato 1 penned by the distinguished Justice Vicente
V. Mendoza is instructive.
To recall, Kilosbayan, Incorporated (Kilosbayan, Inc.), et al. filed on January 28, 1994 a
petition with this Court challenging the validity of the Contract of Lease between the Phil-
ippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corpo-
ration (PGMC) on the ground that the same was made in violation of the charter of the
_______________
1 246 SCRA 540 (1995).
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
PCSO. This Court in Kilosbayan, Incorporated v. Guingona, Jr.2 invalidated the contract.
One of the issues raised before this Court in Kilosbayan, Incorporated v. Guingona, Jr. was
the standing of petitioners to maintain the suit. On that score, this Court held through Asso-
ciate Justice (now Chief Justice) Hilario G. Davide, Jr. that petitioners had standing to sue.
As a result of the decision in Kilosbayan, Incorporated v. Guingona, Jr., PCSO and PGMC
entered into negotiations for a new agreement which would conform to the Court’s decision.
On January 25, 1995, PCSO and PGMC signed an Equipment Lease Agreement (ELA).
On February 21, 1995, Kilosbayan, Inc, et al. filed a petition against then PCSO Chair Ma-
nuel Morato seeking to declare the ELA invalid on the ground that it was substantially the
same as the Contract of Lease nullified in Kilosbayan, Incorporated v. Guingona, Jr.
Its ruling in Kilosbayan, Incorporated v. Guingona, Jr. notwithstanding, this Court in Ki-
losbayan, Incorporated v. Morato ruled that the therein petitioners did not have standing to
sue.
It explained that the doctrines of law of the case and conclusiveness of judgment do not pose
a barrier to the determination of petitioners’ right to maintain the suit:
Petitioners argue that inquiry into their right to bring this suit is barred by the doctrine of
“law of the case.” We do not think this doctrine is applicable considering the fact that while
this case is a sequel to G.R. No. 113375, it is not its continuation: The doctrine applies only
when a case is before a court a second time after a ruling by an appellate court. Thus in
People v. Pinuila, 103 Phil. 992 999 (1958), it was stated:
_______________
2 232 SCRA 110 (1994).
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“ ‘Law of the case’ has been defined as the opinion delivered on a former appeal. More
specifically, it means that whatever is once irrevocably established as the controlling legal
rule of decision between the same parties in the same case continues to be the law of these
case, whether correct on general principles or not, so long as the facts on which such decision
was predicated continue to be facts of the case before the court.” (21 C.J.S. 330)
“It may be stated as a rule of general application that, where the evidence on a second or
succeeding appeal is substantially the same as that on the first or preceding appeal, all mat-
ters, questions, points, or issues adjudicated on the prior appeal are the law of the case on all
subsequent appeals and will not be considered or re-adjudicated therein. (5 C.J.S. 1267)
“In accordance with the general rule stated in Section 1821, where after a definite determi-
nation, the court has remanded the cause for further action below, it will refuse to examine
question other than those arising subsequently to such determination and remand, or other
than the propriety of the compliance with its mandate; and if the court below has proceeded
in substantial conformity to the directions of the appellate court, its action will not be ques-
tioned on a second appeal . . . .
“As a general rule a decision on a prior appeal of the same is held to be the law of the case
whether that decision is right or wrong, the remedy of the party deeming himself aggrieved
to seek a rehearing. (5 C.J.S. 1276-77)
“Questions necessarily involved in the decision on a former appeal will be regarded as the
law of the case on a subsequent appeal, although the questions are not expressly treated in
the opinion of the court, as the presumption is that all the facts in the case bearing on the
point decided have received due consideration whether all or none of them are mentioned in
the opinion. (5 C.J.S. 1286-87)”
As this Court explained in another case. “The law of the case, as applied to a former decision
of an appellate court, merely expresses the practice of the courts in refusing to reopen what
has been decided. It differs from res judicata in that the conclusive of the first judgment is
not dependent upon its finality. The first judgment is generally, if not universally, not final,
It relates entirely to questions of law, and is confined in its questions of law, and is confined
in its operation to subsequent proceedings in the same case . . . .” (Municipality of Daet v.
Court of Appeals, 93 SCRA 503, 521 [1979])
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
It follows that since the present case is not the same one litigated by the parties before in
G.R. No. 113375, the ruling there cannot in any sense be regarded as “the law of this case.”
The parties are the same but the cases are not.
Nor is inquiry into petitioners; right to maintain this suit foreclosed by the related doctrine
of “conclusiveness of judgment.”3 According to the doctrine, an issue actually and directly
passed upon and determined in a former suit cannot again be drawn in question in any future
action between the same parties involving a different of action. (Peñalosa v. Tuason, 22 Phil.
303, 313 [1912]; Heirs of Roxas v. Galido, 108. 582 [1960])
It has been held that the rule on conclusiveness of judgment or preclusion of issues or col-
lateral estoppel does not apply to issues of law, at least when substantially unrelated claims
are involved. (Montana v. United States, 440 U.S. 147, 162, 59 L. Ed. 2d 210 , 222 (1979);
BATOR, MELTZER, MISH-KIN AND SHAPIRO, THE FEDERAL COURTS AND THE
FEDERAL SYSTEM 1058, n. 2 [3rd Ed., 1988]) Following this ruling it was held in Com-
missioner v. Sunnen, 333 U.S. 591, 92 L. Ed. 898 (1947) that where a taxpayer assigned to
his wife interest in a patent in 1928 and in a suit it was determined that the money paid to
his wife for the years 1929-1931 under the 1928 assignment was not part of his taxable
income, this determination is not preclusive in a second action for collection of taxes on
amounts to his wife under another deed of assignment for other years (1937 to 1941). For
income tax purposes what is decided with respect to one contract is not conclusive as to any
other contract which was not then in issue, however similar or identical it may be. The rule
on collateral estoppel it was held, “must be confined to situations where the matter raised in
the second suit is identical in all respects with that decided in the first preceding and where
the controlling facts and applicable legal rules remain unchanged.” (333 U.S. at 599-600, 92
L. Ed. at 907) Consequently, “if the relevant facts in the two cases are sepa-
_______________
3 The doctrine of “conclusiveness of judgment” is also called “collateral estoppel” or “pre-
clusion of issues,” as distinguished from “preclusion of claims” or res judicata. In the Rules
of Court, the first (conclusiveness of judgment, collateral estoppel or preclusion of issues)
is governed by Rule 39, §49 (c) while the second ( res judicata or preclusion of claims) is
found in Rule 39, §49 (b).
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Presidential Commission on Good Government vs. Sandiganbayan
rate even though they may be similar or identical, collateral estoppel does not govern the
legal issues which occur in the second case. Thus the second proceeding may involve an
instrument or transaction identical with but in a form separable form, the one dealt with in
the first proceeding. In that situation a court is free in the second proceeding to make an
independent examination of the legal matters at issue. . . .” (333 U.S. at 601, 92 L. Ed. at
908)
This exception to the General Rule of the Issue Preclusion is authoritatively formulated in
Restatement of the Law 2d, on Judgments, as follows:
§28. Although an issue is actually litigated and determined by a valid and final judgment,
and the determination is essential to the judgment, relitigation of the issue in a subsequent
action between the parties is not precluded in the following circumstances:
....
(2) The issue is one of law and (a) the two actions involve claims that are substantially un-
related, or (b) a new determination is warranted in order to take account of an intervening
change in the applicable legal context or otherwise to avoid inequitable administration of the
laws; . . .
Illustration:
....
2. A brings an action against the municipality of B for tortious injury. The court sustain B’s
defense of sovereign immunity and dismisses the action. Several years later A brings the
second action against B for an unrelated tortious injury occurring after the dismissal. The
judgment in the first action is not conclusive on the question whether the defense immunity
is available to B. Note: The doctrine of stare decisis may lead the court to refuse to reconsider
the question of sovereign immunity. See §29, Comment i.
The question whether the petitioners have standing to question the Equipment or ELA is a
legal question. As will presently be shown, the ELA, which the petitioners seek to declare
invalid in this proceeding, is essentially different from the 1993 Contract of lease entered
into by the PCSO with the PGMC. Hence the determination in the prior case (G.R. No.
113375) that the petitioner had standing to challenge the validity of the 1993 Contract of
Lease of the parties
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does not preclude determination of their standing in the present suit. (Emphasis and italics
supplied; italics in the original)
The doctrine of law of the case does not, I believe, apply to the present case for this is the
first time that the issue to disqualify Atty. Mendoza has been elevated before this Court. It
is the decision in this case which will be the law of the case. A reading of Republic v. San-
diganbayan 4 cited by Justice Sandoval-Gutierrez shows that the issue currently before this
Court was not passed upon. Thus, this Court in Republic v. Sandiganbayan stated:
The key issues, in query form, are:
(1) Was the SANDIGANBAYAN’s denial of the PCGG’s motion to dismiss proper?
(2) Should the SANDIGANBAYAN have disposed first such motion to dismiss rather than
resolving it as part of the judgment?
(3) Was the nullification of the sequestration order issued against SIPALAY and of the
search and seizure order issued against ALLIED correct?
(4) Were the sequestration and search and seizure orders deemed automatically lifted for
failure to bring an action in court against SIPALAY and ALLIED within the constitutionally
prescribed period?5
I also believe that the doctrine of conclusiveness of judgment does not apply since in the
case at bar, the question of whether the motion to disqualify Atty. Mendoza should be
granted is undoubtedly a legal question. Moreover, Civil Case No. 005 and Civil Case No.
0096 involve two different substantially unrelated claims.
Justices Panganiban and Sandoval-Gutierrez further opine that the order of the Sandi-
ganbayan in Civil Case No. 0005 denying PCGG’s motion to disqualify Atty. Mendoza is
not an
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4 255 SCRA 438 (1996).
5 Id., at pp. 448-449.
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interlocutory order but a final order, and that as a result, the principle of res judicata applies.
With all due respect, I believe that we cannot characterize the denial of PCGG’s motion to
disqualify Atty. Mendoza as a final order. Black’s Law Dictionary defines interlocutory in
the following manner:
Provisional; interim; temporary; not final. Something intervening between the commence-
ment and the end of a suit which decides some point or matter, but is not a final decision of
the whole controversy. An interlocutory order or decree is one which does not finally deter-
mine a cause of action but only decides some intervening matter pertaining to the cause, and
which requires further steps to be taken in order to enable the court to adjudicate the cause
on the merits.6 (Emphasis and italics supplied)
Justice Oscar M. Herrera, an authority in remedial law, distinguishes between a final judg-
ment and interlocutory order in this wise:
The concept of final judgment, as distinguished from one which has become final or execu-
tory as of right (final and executory), is definite and settled. A final judgment or order is one
that finally disposes of a case, leaving nothing more to be done by the Court in respect
thereto, e.g., an adjudication on the merits which, on the basis of the evidence presented at
the trial, declares categorically what the rights and obligations of the parties are and which
party is in the right; or a judgment or order that dismisses an action on the ground, for in-
stance, of res judicata or prescription. Once rendered, the task of the Court is ended, as far
as deciding the controversy or determining the rights and liabilities of the litigants is con-
cerned. Nothing more remains to be done by the Court except to await the parties’ next move
(which among others, may consist of the filing of a motion for new trial or reconsideration,
or the taking of an appeal) and ultimately, of course, to cause the execution of the judg-
_______________
6 Black’s Law Dictionary 815 (1991), 6th ed.
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Presidential Commission on Good Government vs. Sandiganbayan
ment once it becomes final, or to use the established and more distinctive term, final and
executory. (Investment, Inc. v. Court of Appeals cited in Denso [Phils.], Inc. v. Intermediate
Appellate Court, 148 SCRA 280; see also Bank of America NT & SA, G.R. No. 78017, June
8, 1990 186 SCRA 417)
An interlocutory order refers to something between the commencement and end of the suit
which decides some point or matter but it is not the final decision of the whole controversy.7
(Bitong v. Court of Appeals, G.R. No. 123553, July 13, 1998, 96 SCAD 205; 292 SCRA
503) (Emphasis and italics supplied)
Justice Florenz D. Regalado is of the same view:
An order is considered interlocutory if it does not dispose of the case but leaves something
else to be done by the trial court on the merits of the case. An order is final, for purposes of
appeal, if it disposes of the entire case.
Where the order is interlocutory, the movant has to wait for the judgment and then appeal
from the judgment, in the course of which appeal he can assign as error the said interlocutory
order. The interlocutory order cannot be appealed from separately from the judgment. The
general rule is that where the interlocutory order was rendered without or in excess of juris-
diction or with grave abuse of discretion, the remedy is certiorari, prohibition or mandamus
depending on the facts of the case.
Where the order appealed from is interlocutory, the appellate court can dismiss the appeal
even if no objection thereto was filed by the appellee in either the trial or appellate court.8
(Emphasis and italics supplied)
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7 II O. Herrera, Remedial Law 528 (2000).
8 I F. Regalado, Remedial Law Compendium 492 (1997), 6th ed.
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Another respected scholar of remedial law, Justice Jose Y. Feria, has formulated this guide-
line in determining whether an order is final or interlocutory:
The test to ascertain whether or not an order or a judgment is interlocutory or final: Does it
leave something to be done in the trial court with respect to the merits of the case? If it does,
it is interlocutory; if it does not, it is final. The key test to what is interlocutory is when there
is something more to be done on the merits of the case.9 (Emphasis and italics)
In fact, this same test was used in Tambaoan v. Court of Appeals,10 cited by Justice Pan-
ganiban to determine whether the trial court’s order was interlocutory or final:
In this particular instance, the test to determine whether the order of 06 January 1995 is
interlocutory or final would be: Does it leave something else to be done by the trial court on
the case? If it does, it is interlocutory, if it does not, it is final. Evidently, the trial court would
still have to hear the parties on the merits of the case…
xxx
Indeed, the word “interlocutory” refers to “something intervening between the commence-
ment and the end of a suit which decides some point or matter, but is not a final decision of
the whole controversy.” An interlocutory order does not terminate nor does it finally dispose
of the is (sic) case; it does not end the task of the court in adjudicating the parties’ contentions
and determining their rights and liabilities as against each other but leaves something yet to
be done by the court before the case is finally decided on its merits. (Emphasis and italics
supplied)
Applying the foregoing test, it is clear that the order denying PCGG’s motion to disqualify
Atty. Mendoza is interlocutory because it does not finally dispose of the case.
_______________
9 2 J. Feria & M. Noche, Civil Procedure Annotated 152 (2000).
10 365 SCRA 359 (2001).
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Interestingly enough, the U.S. Supreme Court is in agreement with Justice Callejo’s conclu-
sion that the Sandiganbayan’s denial of PCGG’s motion to disqualify Atty. Mendoza is an
interlocutory order. In Firestone Tire & Rubber Company v. Risjord,11 the American Court
ruled that an order denying motions to disqualify the opposing party’s counsel in a civil case
are not appealable prior to final judgment in underlying litigation since such an order does
not fall within the collateral order exception of Cohen v. Beneficial Industrial Loan Corpo-
ration,12 which is cited by Justice Sandoval-Gutierrez.
Under § 1291, the courts of appeals are vested with “jurisdiction of appeals from all final
decisions of the district courts . . . except where a direct review may be had in the Supreme
Court.” We have consistently interpreted this language as indicating that a party may not
take an appeal under this section until there has been “a decision by the District Court that
‘ends the litigation on the merits and leaves nothing for the court to do but execute the judg-
ment.’ ” Coopers s & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S. Ct. 2454, 2457, 57 L.
Ed. 2d 351 (1978), quoting Catlin v. United States, 324 U.S. 229, 233, 65 S. Ct. 631, 633,
89 L. Ed. 911 (1945). This rule, that a party must ordinarily raise all claims of error in a
single appeal following final judgment on the merits, serves a number of important purposes.
It emphasizes the deference that appellate courts owe to the trial judge as the individual
initially called upon to decide the many questions of law and fact that occur in the course of
a trial. Permitting piecemeal appeals would undermine the independence of the district
judge, as well as the special role that individual plays in our judicial system. In addition, the
rule is in accordance with the sensible policy of “avoid[ing] the obstruction to just claims
that would come from permitting the harassment and cost of a succession of separate appeals
from the various rulings to which a litigation may give rise, from its initiation to entry of
judgment.” Cobbledick v. United States, 309 U.S. 323, 325, 60 S. Ct. 540, 541, 84 L. Ed.
783 (1940). See DiBella v. United States, 369 U.S. 121, 124, 82 S. Ct. 654, 656, 7 L. Ed. 2d
614 (1962). The rule also serves the important purpose of promoting efficient judicial ad-
ministration. Eisen v. Carlisle
_______________
11 449 U.S. 368 (1981).
12 337 U.S. 541 (1949).
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Presidential Commission on Good Government vs. Sandiganbayan
& Jacquelin, 417 U.S. 156, 170, 94 S. Ct. 2140, 2149, 40 L. Ed.2d 732 (1974).
Our decisions have recognized, however, a narrow exception to the requirement that all ap-
peals under § 1291 await final judgment on the merits. In Cohen v. Beneficial Industrial
Loan Corp., supra, we held that a “small class” of orders that did not end the main litigation
were nevertheless final and appealable pursuant to § 1291. Cohen was a shareholder’s de-
rivative action in which the Federal District Court refused to apply a state statute requiring
a plaintiff in such a suit to post security for costs. The defendant appealed the ruling without
awaiting final judgment on the merits, and the Court of Appeals ordered the trial court to
require that costs be posted. We held that the Court of Appeals properly assumed jurisdiction
of the appeal pursuant to §1291 because the District Court’s order constituted a final deter-
mination of a claim “separable from, and collateral to,” the merits of the main proceeding,
because it was “too important to be denied review,” and because it was “too independent of
the cause itself to require that appellate consideration be deferred until the whole case is
adjudicated.” Id., at 546, 69 S. Ct. at 1225. Cohen did not establish new law; rather, it con-
tinued a tradition of giving § 1291 a “practical rather than a technical construction.” Ibid.
See, e.g., United States v. River Rouge Improvement Co., 269 U.S. 411, 413-414, 46 S. Ct.
144, 70 L. Ed. 339 (1926); Bronson v. LaCrosse & Milwaukee R. Co., 67 U.S. 524-531, 2
Black 524, 530-531, 17 L. Ed. 347 (1863); Forgay v. Conrad, 47 U.S. 201, 203, 6 How. 201,
203, 12 L.Ed.2d 404 (1848); Whiting v. Bank of the United States, 38 U.S. 6, 15, 13 Pet. 6,
15, 10 L. Ed. 33 (1839). We have recently defined this limited class of final “collateral
orders” in these terms: “[T]he order must conclusively determine the disputed question, re-
solve an important issue completely separate from the merits of the action, and be effectively
unreviewable on appeal from a final judgment.” Coopers & Lybrand v. Livesay, supra, 437
U.S. at 468, 98 S. Ct. at 2457 (footnote omitted). See Abney v. United States, 431 U.S. 651,
658, 97 S. Ct. 2034, 2039, 52 L. Ed.2d 651 (1977).
[1] Because the litigation from which the instant petition arises had not reached final judg-
ment at the time the notice of appeal was filed, [FN11] the order denying petitioner’s motion
to disqualify respondent is appealable under § 1291 only if it falls within the Cohen doctrine.
The Court of Appeals held that it does not, and 5 of the other 10 Circuits have also reached
the conclusion that denials of disqualification motions are
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
not immediately appealable “collateral orders.” [FN12] We agree with these courts that un-
der Cohen such an order is not subject to appeal prior to resolution of the merits.
FN11. Counsel for respondent represented at oral argument in this Court that the case was,
at that time, in the discovery stage. Tr. of Oral Arg. 35-36.
FN12. See n. 10, supra.
An order denying a disqualification motion meets the first part of the “collateral order” test.
It “conclusively determine[s] the disputed question,” because the only issue is whether chal-
lenged counsel will be permitted to continue his representation. In addition, we will assume,
although we do not decide, that the disqualification question “resolve[s] an important issue
completely separate from the merits of the action,” the second part of the test. Nevertheless,
petitioner is unable to demonstrate that an order denying disqualification is “effectively un-
reviewable on appeal from a final judgment” within the meaning of our cases.
In attempting to show why the challenged order will be effectively unreviewable on final
appeal, petitioner alleges that denying immediate review will cause it irreparable harm. It is
true that the finality requirement should “be construed so as not to cause crucial collateral
claims to be lost and potentially irreparable injuries to be suffered,” Mathews v. Eldridge,
424 U.S. 319, 331, n. 11, 96 S. Ct. 893, 901, n. 11, 47 L. Ed. 2d 18 (1976). In support of its
assertion that it will be irreparably harmed, petitioner hints at “the possibility that the course
of the proceedings may be indelibly stamped or shaped with the fruits of a breach of confi-
dence or by acts or omissions prompted by a divided loyalty,” Brief for Petitioner 15, and at
“the effect of such a tainted proceeding in frustrating public policy,” Id., at 16. But petitioner
fails to supply a single concrete example of the indelible stamp or taint of which it warns.
The only ground that petitioner urged in the District Court was that respondent might shape
the products-liability plaintiffs’ claims for relief in such a way as to increase the burden on
petitioner. Our cases, however, require much more before a ruling may be considered “ef-
fectively unreviewable” absent immediate appeal
[2] To be appealable as a final collateral order, the challenged order must constitute “a com-
plete, formal and, in the trial court, final rejection,” Abney v. United States, supra, 431 U.S.
at 659, 97 S. Ct. at 2040, of a claimed right “where de-
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nial of immediate review would render impossible any review whatsoever,” United States
v. Ryan, 402 U.S. 530, 533, 91 S. Ct. 1580, 1582, 29 L. Ed. 2d 85 (1971). Thus we have
permitted appeals prior to criminal trials when a defendant has claimed that he is about to be
subjected to forbidden double jeopardy, Abney v. United States, supra, or a violation of his
constitutional right to bail, Stack v. Boyle, 342 U.S. 1, 72 S. Ct. 1, 96 L. Ed. 3 (1951) because
those situations, like the posting of security for costs involved in Cohen, “each involved an
asserted right the legal and practical value of which would be destroyed if it were not vindi-
cated before trial.” United States v. MacDonald, 435 U.S. 850, 860, 98 S. Ct. 1547, 1552,
56 L. Ed. 2d 18 (1978). By way of contrast, we have generally denied review of pretrial
discovery orders, see, e.g., United States v. Ryan, supra; Cobbledick v. United States, supra.
Our rationale has been that in the rare case when appeal after final judgment will not cure
an erroneous discovery order, a party may defy the order, permit a contempt citation to be
entered against him, and challenge the order on direct appeal of the contempt ruling. See
Cobbledick v. United States, supra, at 327, 60 S. Ct. at 542. We have also rejected immediate
appealability under § 1291 of claims that “may fairly be assessed” only after trial, United
States v. MacDonald, supra, at 860, and those involving “considerations that are ‘enmeshed
in the factual and legal issues comprising the plaintiff’s cause of action.’ ” Coopers &
Lybrand v. Livesay, 437 U.S., at 469, 98 S. Ct., at 2458, quoting Mercantile National Bank
v. Langdeau, 371 U.S. 555, 558, 83 S. Ct. 520, 522, 9 L. Ed. 2d 523 (1963).
An order refusing to disqualify counsel plainly falls within the large class of orders that are
indeed reviewable on appeal after final judgment, and not within the much smaller class of
those that are not. The propriety of the district court’s denial of a disqualification motion
will often be difficult to assess until its impact on the underlying litigation may be evaluated,
which is normally only after final judgment. The decision whether to disqualify an attorney
ordinarily turns on the peculiar factual situation of the case then at hand, and the order em-
bodying such a decision will rarely, if ever, represent a final rejection of a claim of funda-
mental right that cannot effectively be reviewed following judgment on the merits. In the
case before us, petitioner has made no showing that its opportunity for meaningful review
will perish unless immediate appeal is permitted. On the contrary, should the Court of Ap-
peals conclude after the trial has ended that permitting continuing
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
representation was prejudicial error, it would retain its usual authority to vacate the judgment
appealed from and order a new trial. That remedy seems plainly adequate should petitioner’s
concerns of possible injury ultimately prove well founded. As the Second Circuit has re-
cently observed, the potential harm that might be caused by requiring that a party await final
judgment before it may appeal even when the denial of its disqualification motion was erro-
neous does not “diffe[r] in any significant way from the harm resulting from other interloc-
utory orders that may be erroneous, such as orders requiring discovery over a work-product
objection or orders denying motions for recusal of the trial judge.” Armstrong v. McAlpin,
625 F.2d 433, 438 (1980), cert. pending, No. 80-431. But inter-locutory orders are not ap-
pealable “on the mere ground that they may be erroneous.” Will v. United States, 389 U.S.
90, 98, n. 6, 88 S. Ct. 269, 275, n. 6, 19 L.Ed.2d 305 (1967). Permitting wholesale appeals
on that ground not only would constitute an unjustified waste of scarce judicial resources,
but also would transform the limited exception carved out in Cohen into a license for broad
disregard of the finality rule imposed by Congress in § 1291. This we decline to do. [FN13]
FN13. Although there may be situations in which a party will be irreparably damaged if
forced to wait until final resolution of the underlying litigation before securing review of an
order denying its motion to disqualify opposing counsel, it is not necessary, in order to re-
solve those situations, to create a general rule permitting the appeal of all such orders. In the
proper circumstances, the moving party may seek sanctions short of disqualification, such
as a protective order limiting counsel’s ability to disclose or to act on purportedly confiden-
tial information. If additional facts in support of the motion develop in the course of the
litigation, the moving party might ask the trial court to reconsider its decision. Ultimately, if
dissatisfied with the result in the District Court and absolutely determined that it will be
harmed irreparably, a party may seek to have the question certified for interlocutory appel-
late review pursuant to 28 U.S.C. § 1292(b), see n. 7, supra, and, in the exceptional circum-
stances for which it was designed, a writ of mandamus from the court of appeals might be
available. See In re Continental Investment Corp., supra, 637 F.2d, at 7; Community Broad-
casting of Boston, Inc. v. FCC, 178 U.S. App. D.C., at 262, 546 F.2d, at 1028. See generally
Comment, The Appealability of Orders Denying Motions for Disqualification of Counsel in
the Federal Courts, 45 U. Chi.
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Presidential Commission on Good Government vs. Sandiganbayan
L. Rev. 450, 468-480 (1978). We need not be concerned with the availability of such ex-
traordinary procedures in the case before us, because petitioner has made no colorable claim
that the harm it might suffer if forced to await the final outcome of the litigation before
appealing the denial of its disqualification motion is any greater than the harm suffered by
any litigant forced to wait until the termination of the trial before challenging interlocutory
orders it considers erroneous.
III
[3][4][5] We hold that a district court’s order denying a motion to disqualify counsel is not
appealable under § 1291 prior to final judgment in the underlying litigation. [FN14]
FN14. The United States in its brief amicus curiae, has challenged petitioner’s standing to
attack the order permitting respondent to continue his representation of the plaintiffs. In light
of our conclusion that the Eighth Circuit was without jurisdiction to hear petitioner’s appeal,
we have no occasion to address the standing issue.13 (Emphasis and underscoring supplied;
italics in the original)
The ruling in Firestone was subsequently reiterated in Flanagan v. United States14 and Rich-
ardson-Merrell, Inc. v. Koller.15
Justice Panganiban further suggests that the prohibition in Rule 6.03 of the Code of Profes-
sional Responsibility is not perpetual but merely lasts for five years primarily relying on the
Civil Code provisions on prescription and the doctrine that the right to practice law is a
property right protected by the Constitution.
I do not agree with this framework of analysis. Carried to its logical conclusion, Justice
Panganiban’s proposal would mean that after five years from the termination of the attorney-
client relationship, all lawyers would be able to represent an interest in conflict with that of
the former client and that
_______________
13 449 U.S. 368, 373-380 (1981).
14 465 U.S. 259 (1984).
15 472 U.S. 424 (1985).
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they would no longer be bound by the rule on privileged communication.
It bears emphasis that the law is not trade nor a craft but a profession, a noble profession at
that.
The practice of law is a profession, a form of public trust, the performance of which is en-
trusted only to those who are qualified and who possess good moral character. If the respect
of the people in the honor and integrity of the legal profession is to be retained, both lawyers
and laymen must recognize and realize that the legal profession is a profession and not a
trade, and that the basic ideal of that profession is to render public service and secure justice
for those who seek its aid. It is not a business, using bargain counter methods to reap large
profits for those who conduct it. From the professional standpoint, it is expressive of three
ideals—organization, learning and public service. The gaining of a livelihood is not a pro-
fessional but a secondary consideration. The professional spirit—the spirit of public ser-
vice—constantly curbs the urge of that instinct.
The law as a profession proceeds from the basic premise that membership in the bar is a
privilege burdened with conditions and carries with it the responsibility to live up to its ex-
acting standards and honored traditions. A person enrolled in its ranks is called upon to aid
in the performance of one of the basic purposes of the state—the administration of justice.
That the practice of law is a profession explains why lawyers repute and of eminence wel-
come their designation as counsel de oficio, as an opportunity to manifest fidelity to the
concept that law is a profession.
The law must be thought of as ignoring commercial standards of success. The lawyer’s con-
duct is to be measured not by the standards of trade and counting house but by those of his
profession. The Code of Professional Responsibility, particularly the ethical rule against ad-
vertising or solicitation of professional employment, rests on the fundamental postulate that
the practice of law is a profession.
In the matter of fixing his fees, an attorney should never forget that “the profession is a
branch of the administration of justice and not a mere money-making trade” and that his
standing as a member of the bar “is not enhanced by quibbling relative to just fees, equivalent
to the bargaining between a prospective purchaser and a merchant in the market before a
sale is made.” Law advocacy is not capital that yields profits. The returns are simple rewards
for a job
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done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater
deal of freedom from government interference, is impressed with public interest, for which
it is subject to State regulation. However, while the practice of law is a profession and an
attorney is primarily an officer of the court, he is as much entitled to protection from the
against any attempt by his client to escape payment of his just fees, as the client against
exaction by his counsel of excessive fees.
To summarize, the primary characteristics which distinguish the legal profession from busi-
ness are: (a) “a duty of public service, of which emolument is a by-product, and in which
one may attain the highest eminence without making much money;” (b) “a relation as officer
of the court to the administration of justice involving thorough sincerity, integrity, and reli-
ability;” (c) “a relation to client in the highest degree fiduciary;” and (d) “a relation to col-
leagues at the bar characterized by candor, fairness, and unwillingness to resort to current
business methods of advertising and encroachment on their practice, or dealing directly with
their clients.
These characteristics make the law a noble profession, and the privilege to practice it is
bestowed only upon individuals who are competent intellectually, academically and morally.
Its basic ideal is to render service and to secure justice for those who seek its aid. If it has to
remain a noble and honorable profession and attain its ideal, those enrolled in its ranks
should not only master its tenets and principles but should also, by their lives, accord con-
tinuing fidelity to them. And because they are the vanguards of the law and the legal systems,
lawyers must at all times conduct themselves in their professional and private dealings with
honesty and integrity in a manner beyond reproach.16
Moreover, the relation of attorney and client is, however, one of trust and confidence of the
highest order. It is highly fiduciary in nature and demands utmost fidelity and good faith.
. . . A lawyer becomes familiar with all the facts connected with his client’s case. He learns
from his client the weak points of
_______________
16 R. Agpalo, Comments on the Code of Professional Responsibility and the Code of Judi-
cial Conduct 3-5 (2004).
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the action as well as the strong ones. Such knowledge must be considered sacred and guarded
with care. No opportunity must be given him to take advantage of the client’s secrets.
The rule is a rigid one designed not alone to prevent the dishonest practitioner from fraudu-
lent conduct but as well to preclude the honest practitioner from putting himself in a position
where he may be required to choose between conflicting duties, and to protect him from
unfounded suspicion of professional misconduct. The question is not necessarily one of right
of the parties but of adhere to proper professional standards. An attorney should not only
keep inviolate his client’s confidence but should likewise avoid the appearance of treachery
and double-dealing.17 (Emphasis and underscoring supplied; citations omitted)
Thus, in Nakpil v. Valdes,18 this Court through Justice Reynato S. Puno held that the test to
determine whether there is a conflict of interest in the representation is probability, not cer-
tainty of conflict.19
Justice Panganiban justifies his theory on the ground that in 5 years time, the lawyer will
develop a mild case of amnesia such that “in all probability, the lapse of the said period
would also naturally obscure to a reasonable extent a lawyer’s memory of details of a spe-
cific case despite active participation in the proceedings therein.” He thus cites his own per-
sonal experience as a member of this Court:
Modesty aside, in my nearly ten (10) years in this Court, I have disposed of about a thousand
cases in full-length ponencias and countless cases by way of unsigned minute or extended
Resolutions. This does not include the thousands of other cases, assigned to other members
of the Court, in which I actively took part during their deliberations. In all honesty, I must
admit that I cannot with certainty recall the details of the facts and issues in each of these
cases, especially in their earlier ones.
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17 Id., at p. 165.
18 286 SCRA 758 (1998).
19 Id., at p. 773.
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While it is true that over time memory does fade, the ravages of time have been mitigated
with the invention of the paper and pen and its modern offspring—the computer. It is not
uncommon for lawyers to resort to note taking in the course of handling legal matters.
The proposition that “a profession, trade or calling is a property right within the meaning of
our constitutional guarantees” is not unqualified. In JMM Promotion and Management, Inc.
v. Court of Appeals 20 which Justice Panganiban relies on, this Court held:
A profession, trade or calling is a property within the meaning of our constitutional guaran-
tees. One cannot be deprived of the right to work and the right to make a living because these
rights are property rights, the arbitrary and unwarranted deprivation of which normally con-
stitutes an actionable wrong.
Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business
or trade has always been upheld as a legitimate subject of a valid exercise of the police power
by the state particularly when their conduct affects either the execution of legitimate gov-
ernmental functions, the preservation of the State, the public health and welfare and public
morals. According to the maxim, sic utere tuo ut alienum non laedas, it must of course be
within the legitimate range of legislative action to define the mode and manner in which
every one may so use his own property so as not to pose injury to himself or others.
In any case, where the liberty curtailed affects at most the rights of property, the permissible
scope of regulatory measures is certainly much wider. (Emphasis and italics supplied; italics
in the original; citations omitted)
Under the foregoing, the perpetual application of Rule 6.03 is clearly a valid and proper
regulation.
In his ponencia, Justice Reynato S. Puno labels as insignificant the role of then Solicitor
General in the liquidation of
_______________
20 260 SCRA 319 (1996).
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Presidential Commission on Good Government vs. Sandiganbayan
General Bank and Trust Company (GENBANK), saying that “it is indubitable from the facts
that Atty. Mendoza had no iota of participation in the decision of the Central Bank to liqui-
date GENBANK” and that his only involvement was “advising the Central Bank on how to
proceed with the said bank’s liquidation and even filing the petition for its liquidation with
the CFI of Manila.” Justice Puno observes that “the procedure of liquidation is simple and
is given in black and white in Republic Act No. 265, section 29.”
Atty. Mendoza’s lack of participation in the decision of the Central Bank to liquidate GEN-
BANK is to me not material. What is material is his role in facilitating the liquidation of
GENBANK through his legal expertise. In advising the Central Bank, Atty. Mendoza did
not just mechanically point to section 29 of Republic 265. As then Solicitor General, and as
a lawyer known for his keen legal acumen, Atty. Mendoza synthesized facts, which by rea-
son of his position he was privy to, and law with a view to successfully liquidate the bank.
Ultimately, Justice Puno advocates for a liberal interpretation of Rule 6.03 since a strict
interpretation would cause “a chilling effect on government recruitment of able legal talent.”
With all due respect, I cannot subscribe to this position which is grounded on the premise
that this is “the only card that the government may play to recruit lawyers.” Effectively, this
is likely to result in the compromising of ethical standards which this Court must never al-
low. While it is desirable to recruit competent lawyers into government service, this does
not justify the disturbance of our mores.
The canons and rules of the Code of Professional Responsibility must be strictly construed.
Admittedly the salary for serving in government often pales in comparison to that of the
private sector. I submit, however, that while financial considerations are important, they are
not the sole factor affecting recruitment of lawyers to the government sector. I would like to
think that serving in government is its own reward. One needs only to look at all of us mem-
bers of this Court to know
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that money is not everything. All of us have, at one point in our legal careers, been tempted
by the promise of financial success that private practice usually brings. But in the end, we
decided to take the road less traveled and serve in government. And I would like to believe
that each and everyone of us has made a difference. There is more to this mortal coil than
the pursuit of material wealth. As Winston Churchill puts it: “What is the use of living if it
be not to strive for noble causes and make this muddled world a better place for those who
will live in it after we are gone?”
ACCORDINGLY, concurring in the dissenting opinion of Justice Romeo J. Callejo, Sr., I
vote to grant the petition insofar as Civil Case No. 0096 is concerned, thus granting the
motion to disqualify Atty. Estelito P. Mendoza in the said case.
DISSENTING OPINION
CALLEJO, SR., J.:
The Code of Professional Responsibility is not designed for Holmes’ proverbial “bad man”
who wants to know just how many corners he may cut, how close to the line he may play,
without running into trouble with the law. Rather, it is drawn for the “good man” as a beacon
to assist him in navigating an ethical course through the sometimes murky waters of profes-
sional conduct.1
With due respect, I dissent from the majority opinion. I believe that the present case be-
hooves the Court to strictly apply the Code of Professional Responsibility and provide an
ethical compass to lawyers who, in the pursuit of the profession, often find themselves in the
unchartered sea of conflicting ideas and interests. There is certainly, without exception, no
profession in which so many temptations beset the path to swerve from the line of strict
integrity; in which so many
_______________
1 General Motors Corp. v. City of New York, 501 F.2d 639 (1974).
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
delicate and difficult questions of duty are continually arising.2 The Code of Professional
Responsibility establishes the norms of conduct and ethical standards in the legal profession
and the Court must not shirk from its duty to ensure that all lawyers live up to its provisions.
Moreover, the Court must not tolerate any departure from the “straight and narrow” path
demanded by the ethics of the legal profession and enjoin all lawyers to be like Caesar’s
wife—to be pure and appear to be so.3
Factual and Procedural Antecedents
On July 17, 1987, pursuant to its mandate under Executive Order No. 14 of then President
Corazon C. Aquino, the PCGG, on behalf of the Republic of the Philippines, filed with the
Sandiganbayan a complaint for “reversion, reconveyance, restitution, accounting and dam-
ages” against respondents Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Natividad P.
Santos, Domingo Chua, Tan Hui Nee, Mariano Tanenglian,5 Estate of Benito Tan Kee
Hiong (represented by Tarciana C. Tan), Florencio N. Santos, Jr., Harry C. Tan, Tan Eng
Chan, Chung Poe Kee, Mariano Khoo, Manuel Khoo, Miguel Khoo, Jaime Khoo, Elizabeth
Khoo, Celso Ranola, William T. Wong, Ernesto B. Lim, Benjamin T. Albacita, Willy Co,
Allied Banking Corporation, Allied Leasing and Finance Corporation, Asia Brewery, Inc.,
Basic Holdings Corp., Foremost Farms, Inc., Fortune Tobacco Corporation, Grandspan De-
velopment Corp., Himmel Industries, Iris Holdings and Development Corp., Jewel Hold-
ings, Inc., Manufac-
_______________
2 Foreword of Chief Justice Manuel V. Moran in Malcolm, Legal and Judicial Ethics.
3 Abragan v. Rodriguez, 380 SCRA 93 (2001).
4 EO No. 1, promulgated on February 29, 1986, created the PCGG which was primarily
tasked to recover all ill-gotten wealth of former President Ferdinand E. Marcos, his imme-
diate family, relatives, subordinates and close associates.
5 Mariano Tan Eng Lian in some pleadings.
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turing Services and Trade Corp., Maranaw Hotels and Resort Corp., Northern Tobacco Re-
drying Plant, Progressive Farms, Inc., Shareholdings, Inc., Sipalay Trading Corp., Virgo
Holdings and Development Corp. (collectively referred to herein as respondents Tan, et al.,
for brevity), then President Ferdinand E. Marcos and Imelda R. Marcos, Panfilo O. Do-
mingo, Cesar Zalamea, Don Ferry and Gregorio Licaros. The case was docketed as Civil
Case No. 0005 of the Sandiganbayan (Second Division). In connection therewith, the PCGG
issued several writs of sequestration on properties allegedly acquired by the above-named
persons by means of taking advantage of their close relationship and influence with former
President Marcos.
Shortly thereafter, respondents Tan, et al. filed with this Court petitions for certiorari, pro-
hibition and injunction seeking to, among others, nullify the writs of sequestration issued by
the PCGG. After the filing of the comments thereon, this Court referred the cases to the
Sandiganbayan (Fifth Division) for proper disposition, docketed therein as follows:
a.Civil Case No. 0096—Lucio Tan, Mariano Tanenglian, Allied Banking Corp., Iris Holding
and Development Corp., Virgo Holdings Development Corp. and Jewel Holdings, Inc. v.
PCGG, which seeks to nullify the PCGG’s Order dated June 19, 1986 sequestering the shares
of stock in Allied Banking Corporation held by and/or in the name of respondents Lucio
Tan, Mariano Tanenglian, Iris Holding and Development Corp., Virgo Holdings Develop-
ment Corp. and Jewel Holdings, Inc.;
b.Civil Case No. 0097—Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Natividad San-
tos, Florencio N. Santos, Jr., and Foremost Farms, Inc. v. PCGG, which seeks to nullify the
PCGG’s Order dated August 12, 1986 sequestering the shares of stock in Foremost Farms,
Inc. held by and/or in the name of Lucio Tan, Carmen Khao Tan, Florencio T. Santos, Na-
tividad Santos and Florencio N. Santos, Jr.;
c.Civil Case No. 0098—Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T.
Santos, Natividad Santos, Florencio N. Santos, Jr., Shareholdings, Inc. and Fortune Tobacco
Corp. v.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
PCGG, which seeks to nullify the PCGG’s Order dated July 24, 1986 sequestering the shares
of stock in Fortune Tobacco Corp. held by and/or in the name of Lucio Tan, Carmen Khao
Tan, Mariano Tanenglian, Florencio T. Santos, Natividad Santos, Florencio N. Santos, Jr.,
Shareholdings, Inc.; and
d.Civil Case No. 0099—Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio T.
Santos, Natividad Santos and Shareholdings, Inc. v. PCGG, which seeks to nullify the
PCGG’s Order dated July 24, 1986 sequestering the shares of stock in Shareholdings, Inc.
held by and/or in the name of Lucio Tan, Carmen Khao Tan, Mariano Tanenglian, Florencio
T. Santos and Natividad Santos.
In all these cases, respondents Tan, et al. are represented by their counsel Atty. Estelito P.
Mendoza, who served as the Solicitor General from 1972 to 1986 during the administration
of former President Marcos.
The PCGG filed with the Sandiganbayan (Fifth Division) a motion to disqualify Atty. Men-
doza as counsel for respondents Tan, et al. The PCGG alleged that Atty. Mendoza, as then
Solicitor General and counsel to the Central Bank, “actively intervened” in the liquidation
of General Bank and Trust Company (GENBANK), which was subsequently acquired by
respondents Tan, et al. and became Allied Banking Corporation. As shown above, among
the litigated properties are the sequestered shares of stocks in Allied Banking Corp. (Civil
Case No. 0096).
The acquisition of GENBANK by respondents Tan, et al. is outlined by the PCGG as fol-
lows:
1. In 1976, General Bank and Trust Company (GENBANK) got into financial difficulties.
The Central Bank then extended an emergency loan to GENBANK reaching a total of P310
million. In extending this loan, the Central Bank, however, took control of GENBANK with
the execution of an irrevocable proxy by 2/3 of GENBANK’s outstanding shares in favor of
the Central Bank and the election of seven (7) Central Bank nominees to the 11-member
Board of Directors of GENBANK. Subsequently, on March 25, 1977, the Monetary Board
of the Central Bank issued a Resolution declar-
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Presidential Commission on Good Government vs. Sandiganbayan
ing GENBANK insolvent, forbidding it to do business and placing it under receivership.
2. In the meantime, a public bidding for the sale of GEN-BANK assets and liabilities was
scheduled at 7:00 P.M. on March 28, 1977. Among the conditions for the bidding were: (a)
submission by the bidder of a letter of credit issued by a bank acceptable to Central Bank to
guaranty payment or as collateral of the Central Bank emergency loan; and (b) a 2-year
period to repay the said Central Bank emergency loan. On March 29, 1977, the Central Bank,
through a Monetary Board Resolution, approved the bid of the group of respondents Lucio
Tan and Willy Co. This bid, among other things, offered to pay only P500,000.00 for GEN-
BANK assets estimated at P688,201,301.45; Capital Accounts of P103,984,477.55; Cash of
P25,698,473.00; and the takeover of the GENBANK Head Office and branch offices. The
required letter of credit was also not attached to the bid. What was attached to the bid was a
letter of Panfilo O. Domingo, as PNB President, promising to open an irrevocable letter of
credit to secure the advances of the Central Bank in the amount of P310 million. Without
this letter of commitment, the Lucio Tan bid would not have been approved. But such letter
of commitment was a fraud because it was not meant to be fulfilled. Ferdinand E. Marcos,
Gregorio Licaros and Panfilo O. Domingo conspired together in giving the Lucio Tan group
undue favors such as the doing away with the required irrevocable letter of credit, the exten-
sion of the term of payment from two years to five years, the approval of second mortgage
as collateral for the Central Bank advances which was deficient by more than P90 Million,
and many other concessions to the great prejudice of the government and of the GENBANK
stockholders.
3. GENBANK eventually became the Allied Banking Corporation in April 1977. Respond-
ents Lucio Tan, Willy S. Co and Florencio T. Santos are not only incorporators and directors
but they are also the major shareholders of this new bank.6
Atty. Mendoza allegedly “intervened” in the acquisition of GENBANK by respondents Tan,
et al. since Atty. Mendoza, in his capacity as the Solicitor General, advised the Central
Bank’s officials on the procedure to bring about GENBANK’s
_______________
6 Memorandum of the PCGG, pp. 7-9.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
liquidation. Further, he appeared as counsel for the Central Bank in connection with its pe-
tition for assistance in the liquidation of GENBANK. He filed the said petition with the
Court of First Instance (now Regional Trial Court) of Manila and docketed therein as Special
Proceeding No. 107812.7
The PCGG opined that Atty. Mendoza’s present appearance as counsel for respondents Tan,
et al. in the case involving the sequestered shares of stock in Allied Banking Corp. runs afoul
of Rule 6.03 of the Code of Professional Responsibility proscribing former government law-
yers from accepting “engagement or employment in connection with any matter in which he
had intervened while in said service.”
Acting on the said motion, the Sandiganbayan (Fifth Division) issued the assailed Resolution
dated July 11, 2001 stating:
Acting on the PCGG’s “MOTION TO DISQUALIFY ATTY. ESTELITO P. MENDOZA
AS COUNSEL FOR PETITIONER” dated February 5, 1991 which appears not to have been
resolved by then Second Division of this Court, and it appearing that (1) the motion is exactly
the same in substance as that motion filed in Civil Case No. 0005 as in fact, Atty. Mendoza
in his “OPPOSITION” dated March 5, 1991 manifested that he was just adopting his oppo-
sition to the same motion filed by PCGG in Civil Case No. 0005 and (2) in the Court’s Order
dated March 7, 1991, the herein incident was taken-up jointly with the said same incident in
Civil Case No. 0005 (pp. 134-135, Vol. I, Record of Civil Case No. 0096), this Division
hereby reiterates and adopts the Resolution dated April 22, 1991 in Civil Case No. 0005 of
the Second Division (pp. 1418-1424, Vol. III, Record of Civil Case No. 0005) denying the
said motion as its Resolution in the case at bar.8
_______________
7 The case is now pending with this Court docketed as G.R. No. 152551.
8 Rollo, p. 42.
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Presidential Commission on Good Government vs. Sandiganbayan
The PCGG sought the reconsideration thereof but its motion was denied in the assailed Res-
olution dated December 5, 2001, which reads:
Acting on respondent PCGG’s “MOTION FOR RECONSIDERATION” dated August 1,
2001 praying for the reconsideration of the Court’s Resolution dated July 12, 2001 denying
its motion to disqualify Atty. Estelito P. Mendoza as counsel for petitioners, to which peti-
tioners have filed an “OPPOSITION TO MOTION FOR RECONSIDERATION DATED
AUGUST 1, 2001” dated August 29, 2001, as well as the respondent’s “REPLY (To Oppo-
sition to Motion for Reconsideration) dated November 16, 2001, it appearing that the main
motion to disqualify Atty. Mendoza as counsel in these cases was exactly the same in sub-
stance as that motion to disqualify Atty. Mendoza filed by the PCGG in Civil Case No. 0005
(re: Republic vs. Lucio Tan, et al.) and the resolutions of this Court (Second Division) in
Civil Case No. 0005 denying the main motion as well as of the motion for reconsideration
thereof had become final and executory when PCGG failed to elevate the said resolutions to
the Supreme Court, the instant motion is hereby DENIED.9
The Resolution10 dated April 22, 1991 of the Sandiganbayan (Second Division) in Civil
Case No. 0005, which was adopted by the Fifth Division in Civil Cases Nos. 0096-0099,
denied the similar motion to disqualify Atty. Mendoza as counsel for respondents Tan, et al.
holding, in essence, that the PCGG “has failed to prove that there exists an inconsistency
between Atty. Mendoza’s former function as Solicitor General and his present employment
as counsel of the Lucio Tan group.”11 The Sandiganbayan (Second Division) explained,
thus:
. . . It has been said that the test of inconsistency in cases of the character under consideration
is not whether the attorney has
_______________
9 Id., at p. 43.
10 Penned by Associate Justice Romeo M. Escareal (retired), with Associate Justices Jose
S. Balajadia and Nathanael M. Grospe, concurring; Id., at p. 57.
11 Rollo, p. 61.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
ever appeared for the party against whom he proposes to appear, but whether his accepting
the new retainer will require him, in forwarding the interests of his new client, to do anything
which will injuriously affect his former client in any matter in which he formerly represented
against him, and whether he will be called upon, in his new relation, to use against his former
client any knowledge or information acquired through their former connection. Nor does the
rule imposing disability on the attorney mean that he, having once been employed by a client,
shall never thereafter appear in any matter against him but merely forbids the attorney’s
appearance or acting against the client where the attorney can use, to the detriment of such
client, the information and confidences acquired during the existence of their relation as
attorney and client (7 C.J.S., Pp. 828-829, cited in Primavera Farms, Inc., et al. vs. PCGG,
supra). Significantly, PCGG’s “Reply” does not controvert Atty. Mendoza’s claim that in
appearing in the instant case, he does not take a position adverse to that he had taken in
behalf of the Central Bank of the Philippines in SP No. 107812. Neither did it challenge
Atty. Mendoza’s claim that the position he took as Solicitor General in behalf of the Central
Bank in 1977 when he filed the said case (SP No. 107812) has been maintained by his suc-
cessors in office. In fact, even incumbent Central Bank Governor Jose Cuisia had interposed
no objection to Atty. Mendoza’s appearance as counsel for the Lucio Tan group for as long
as he maintains the same position he has taken on behalf of the Central Bank of the Philip-
pines as Solicitor General, which position refers to the various resolutions of the Monetary
Board and actions of the Central Bank in regard General Bank and Trust Co. as being regular
and in accordance with law (Annex “A,” Rejoinder, Records, Pp. 1404-1405).12
The Sandiganbayan (Second Division) further observed that Atty. Mendoza’s appearance as
counsel for respondents Tan, et al. was well beyond the one-year prohibited period under
Section 7(b) of Republic Act No. 6713 since he ceased to be the Solicitor General in the year
1986. The said provision prohibits a former public official or employee from practicing his
profession in connection with any matter before the office
_______________
12 Id., at pp. 61-62.
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Presidential Commission on Good Government vs. Sandiganbayan
he used to be with within one year from his resignation, retirement or separation from public
office.
As earlier stated, the April 22, 1991 Resolution of the Sandiganbayan (Second Division) was
adopted by the Fifth Division in the resolutions now being assailed by the PCGG. Hence,
the recourse to this Court by the PCGG.
Procedural Issues
The following procedural issues are raised by respondents Tan, et al.: (1) whether the as-
sailed Sandiganbayan (Fifth Division) Resolutions dated July 11, 2001 and December 5,
2001 are final and executory; hence, the PCGG should have filed a petition for review on
certiorari under Rule 45 of the Rules of Court and not the instant petition for certiorari under
Rule 65 thereof; and (2) whether the instant petition is already barred by the Sandiganbayan
(Second Division) Resolution dated April 22, 1991 under the doctrine of res judicata.
In contending that the PCGG availed itself of the wrong remedy in filing the instant petition
for certiorari, respondents Tan, et al. rely on Section 1, Rule 45 of the Rules of Court which
reads:
Section 1. Filing of petition with Supreme Court.—A party desiring to appeal by certiorari
from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other courts whenever authorized by law, may file with the Supreme
Court a verified petition for review on certiorari. The petition shall raise only questions of
law which must be distinctly set forth.
Section 7 of Presidential Decree No. 1606, as amended by Section 3 of Rep. Act No. 7975,
likewise, states:
Sec. 7. Form, Finality and Enforcement of Decisions.—
...
Decisions and final orders of the Sandiganbayan shall be appealable to the Supreme Court.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
I am not persuaded by the arguments proffered by respondents Tan, et al. The above-men-
tioned rules do not preclude the resort to this Court by way of a petition for certiorari under
Rule 65 of the Rules of Court of orders or resolutions of the Sandiganbayan. The special
civil action of certiorari may be availed of where there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law.13
In this case, the remedy of appeal is not available to the PCGG because the denial of its
motion to disqualify Atty. Mendoza as counsel for respondents Tan, et al. is an interlocutory
order; hence, not appealable. The word “interlocutory” refers to “something intervening be-
tween the commencement and the end of a suit which decides some point or matter, but is
not a final decision of the whole controversy.”14 An interlocutory order does not terminate
nor does it finally dispose of the case; it does not end the task of the court in adjudicating
the parties’ contentions and determining their rights and liabilities as against each other but
leaves something yet to be done by the court before the case is finally decided on the mer-
its.15
Accordingly, this Court, in not a few cases, had taken cognizance of petitions for certiorari
of resolutions of the Sandiganbayan which were in the nature of interlocutory orders. For
example, in Serapio v. Sandiganbayan,16 we took cognizance of, albeit dismissed, the peti-
tion for certiorari which assailed the resolutions of the Sandiganbayan denying the petition
for bail, motion for a reinvestigation and motion to quash filed by accused Edward Serapio.
Also, in San Miguel Corporation v. Sandiganbayan,17 we took cognizance of, albeit
_______________
13 People v. Sandiganbayan, 408 SCRA 672 (2003).
14 Tambaoan v. Court of Appeals, 365 SCRA 359 (2001); Halili v. Court of Industrial Re-
lations, 22 SCRA 785 (1968) citing BOUVIER’S LAW DICTIONARY, 3rd Revision, Vol.
I, p. 1651.
15 Ibid.
16 396 SCRA 443 (2003).
17 340 SCRA 289 (2000).
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Presidential Commission on Good Government vs. Sandiganbayan
dismissed, the petitions for certiorari of several resolutions of the Sandiganbayan involving
the sequestered shares of stock in the San Miguel Corp.
To my mind, the PCGG properly filed the instant petition for certiorari under Rule 65 to
assail the resolutions of the Sandiganbayan (Fifth Division) denying its motion to disqualify
Atty. Mendoza as counsel for respondents Tan, et al. in Civil Cases Nos. 0096-0099.
With respect to the second procedural issue raised by respondents Tan, et al., i.e., the instant
petition is already barred by the Sandiganbayan (Second Division) Resolution dated April
22, 1991 in Civil Case No. 0005 under the doctrine of res judicata, I submit that the doctrine
of res judicata finds no application in this case.
Section 47, Rule 39 of the Revised Rules of Court reads in part:
Sec. 47. Effect of judgments or final orders.—The effect of a judgment or final order ren-
dered by a court of the Philippines, having jurisdiction to pronounce the judgment or final
order, may be as follows:
...
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged
or as to any other matter that could have been raised in relation thereto, conclusive between
the parties and their successors-in-interest by title subsequent to the commencement of the
action or special proceeding, litigating for the same thing and under the same title and in the
same capacity; and
(c) In any other litigation between the same parties or their successors-in-interest, that only
is deemed to have been adjudged in a former judgment or final order which appears upon its
face to have been so adjudged, or which was actually and necessarily included therein or
necessary thereto.
The doctrine of res judicata comprehends two distinct concepts—(1) bar by former judgment
and (2) conclusiveness of
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
judgment.18 Paragraph (b) embodies the doctrine of res judicata or res adjudicata or bar by
prior judgment, while paragraph (c) estoppel by judgment or conclusiveness of judg-ment.19
In Macahilig v. Heirs of Grace M. Magalit,20 Justice Artemio Panganiban explained that
the term “final” in the phrase judgments or final orders in the above section has two accepted
interpretations. In the first sense, it is an order that one can no longer appeal because the
period to do so has expired, or because the order has been affirmed by the highest possible
tribunal involved.21 The second sense connotes that it is an order that leaves nothing else to
be done, as distinguished from one that is interlocutory.22 The phrase refers to a final deter-
mination as opposed to a judgment or an order that settles only some incidental, subsidiary
or collateral matter arising in an action; for example, an order postponing a trial, denying a
motion to dismiss or allowing intervention. Orders that give rise to res judicata or conclu-
siveness of judgment apply only to those falling under the second category.23
For res judicata to serve as an absolute bar to a subsequent action, the following elements
must concur: (1) there is a final judgment or order; (2) the court rendering it has jurisdiction
over the subject matter and the parties; (3) the judgment is one on the merits; and (4) there
is, between the two cases, identity of parties, subject matter and cause of action.24 When
there is no identity of causes of action, but only an identity of issues, there exists res judicata
in the concept of conclusiveness of judgment.25
_______________
18 Sta. Lucia Realty and Development, Inc. v. Cabrigas, 358 SCRA 715 (2000).
19 FERIA, II CIVIL PROCEDURE ANNOTATED, 2001 ed., p. 123.
20 344 SCRA 838 (2000).
21 Ibid.
22 Id.
23 Id.
24 Id.
25 Sta. Lucia Realty and Development, Inc. v. Cabrigas, supra.
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In any case, whether as a bar by prior judgment or in the concept of conclusiveness of judg-
ment, the doctrine of res judicata applies only when there is a judgment or final order which,
as earlier discussed, leaves nothing else to be done. As explained by Justice Panganiban, a
judgment or an order on the merits is one rendered after a determination of which party is
upheld, as distinguished from an order rendered upon some preliminary or formal or merely
technical point.26 To reiterate, the said judgment or order is not interlocutory and does not
settle only some incidental, subsidiary or collateral matter arising in an action.
The Resolution dated April 22, 1991 of the Sandiganbayan (Second Division) in Civil Case
No. 0005 denying the PCGG’s similar motion to disqualify Atty. Mendoza as counsel for
respondents Tan, et al. therein was evidently an interlocutory order as it did not terminate or
finally dispose of the said case. It merely settled an incidental or collateral matter arising
therein. As such, it cannot operate to bar the filing of another motion to disqualify Atty.
Mendoza in the other cases because, strictly speaking, the doctrine of res judicata, whether
to serve as a bar by prior judgment or in the concept of conclusiveness of judgment, does
not apply to decisions or orders adjudicating interlocutory motions.27
Substantive Issue
The substantive issue in this case is whether the present engagement of Atty. Mendoza as
counsel for respondents Tan, et al. in Civil Cases Nos. 0096-0099 violates the interdiction
embodied in Rule 6.03 of the Code of Professional Responsibility.
Canon 6 of our Code of Professional Responsibility reads:
_______________
26 Macahilig v. Heirs of Grace M. Magalit, supra.
27 Id.
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
CANON 6—THESE CANONS SHALL APPLY TO LAWYERS IN GOVERNMENT
SERVICE IN THE DISCHARGE OF THEIR OFFICIAL DUTIES.
Rule 6.01—The primary duty of a lawyer in public prosecution is not to convict but to see
that justice is done. The suppression of facts or the concealment of witnesses capable of
establishing the innocence of the accused is highly reprehensible and is cause for disciplinary
action.
Rule 6.02—A lawyer in government service shall not use his public position to promote or
advance his private interests, nor allow the latter to interfere with his public duties.
Rule 6.03—A lawyer shall not, after leaving government service, accept engagement or em-
ployment in connection with any matter in which he had intervened while in said service.
A good number of the Canons in our present Code of Professional Responsibility were
adopted from the Canons of Professional Ethics of the American Bar Association (ABA).28
Rule 6.03, in particular, is a restatement of Canon 36 of the Canons of Professional Ethics
which provided:
36. RETIREMENT FROM JUDICIAL POSITION OR PUBLIC EMPLOYMENT.
A lawyer should not accept employment as an advocate in any matter upon the merits of
which he has previously acted in a judicial capacity.
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28 The ABA first adopted the Canons of Professional Ethics on August 27, 1908. Canons 1
to 32 thereof were adopted by the Philippine Bar Association (PBA) in 1917. In 1946, the
PBA again adopted as its own Canons 33 to 47 of the ABA’s Canons of Professional Ethics.
The ABA’s Canons of Professional Ethics were superseded by the Code of Professional
Responsibility on January 1, 1970. In 1980, the Integrated Bar of the Philippines (IBP)
adopted a proposed Code of Professional Responsibility, which it later submitted to the Su-
preme Court for approval. On June 21, 1988, the Supreme Court promulgated the present
Code of Professional Responsibility. (AG-PALO, infra.)
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A lawyer, having once held public office or having been in the public employ, should not
after his retirement accept employment in connection with any matter which he has investi-
gated or passed upon while in such office or employ.
Indeed, the restriction against a public official from using his public position as a vehicle to
promote or advance his private interests extends beyond his tenure on certain matters in
which he intervened as a public official.29 Rule 6.03 makes this restriction specifically ap-
plicable to lawyers who once held public office. A plain reading of the rule shows that the
interdiction (1) applies to a lawyer who once served in the government, and (2) relates to his
accepting “engagement or employment in connection with any matter in which he had inter-
vened while in said service.”
In the United States, an area of concern involving ethical considerations applicable to former
government lawyers is called the “revolving door”—the process by which lawyers tempo-
rarily enter government service from private life then leave it for large fees in private prac-
tice, where they can exploit information, contacts, and influence garnered in government
service.30 To address this, the disqualification of a former government lawyer who has en-
tered private practice may be sought based either on “adverse-interest conflict” or “congru-
ent-interest representation conflict.”
In the “adverse-interest conflict,” a former government lawyer is enjoined from representing
a client in private practice if the matter is substantially related to a matter that the lawyer
dealt with while employed by the government and if the interests of the current and former
clients are adverse.31 It must be observed that the “adverse-interest conflict” applies to all
lawyers in that they are generally disqualified from
_______________
29 AGPALO, COMMENTS ON THE CODE OF PROFESSIONAL RESPONSIBILITY
AND JUDICIAL CONDUCT, 2001 ed., p. 52.
30 WOLFRAM, MODERN LEGAL ETHICS (1986), p. 456.
31 Ibid.
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accepting employment in a subsequent representation if the interests of the former client and
the present client are adverse and the matters involved are the same or substantially re-
lated.32 On the other hand, in “congruent-interest representation conflict,” the disqualifica-
tion does not really involve a conflict at all, because it prohibits the lawyer from representing
a private practice client even if the interests of the former government client and the new
client are entirely parallel.33 The “congruent-interest representation conflict,” unlike the
“adverse-interest conflict,” is unique to former government lawyers.
I believe that Atty. Mendoza’s present engagement as counsel for respondents Tan, et al. in
Civil Case No. 0096, which involves the sequestered shares of stocks in Allied Banking
Corp., violates the ethical precept embodied in Rule 6.03 of our Code of Professional Re-
sponsibility, which is akin to the doctrine of “congruent-interest representation conflict.”
Contrary to the majority opinion, the subject
matter in Civil Case No. 0096 is connected with
or related to a “matter,” i.e. the liquidation
of GENBANK, in which Atty. Mendoza had
intervened as the Solicitor General
The qualifying words or phrases that define the prohibition in Rule 6.03 are (1) “any matter”
and (2) “he had intervened” thereon while he was in the government service.34
The United States’ ABA Formal Opinion No. 324 recognized that it is difficult to formulate
a precise definition of
_______________
32 This prohibition is restated in Rule 15.03 of our Code of Professional Responsibility,
thus:
A lawyer shall not represent conflicting interests except by written consent of all concerned
given after a full disclosure of the facts.
33 WOLFRAM, supra.
34 AGPALO, supra.
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“matter” as used in their Disciplinary Rule (DR), nonetheless, it suggested that the term
“contemplates a discrete and isolatable transaction or set of transaction between identifiable
parties.”35
There is no dispute that Atty. Mendoza, as the Solicitor General, advised the Central Bank
on the procedure to bring about the liquidation of GENBANK. It is, likewise, admitted by
respondents Tan, et al. that Atty. Mendoza filed with the then CFI of Manila, the petition for
assistance in the liquidation of GENBANK (Special Proceeding No. 107812).36 GEN-
BANK was subsequently acquired by respondents Tan, et al. and became Allied Banking
Corp., whose shares of stocks have been sequestered by the PCGG and presently subject of
Civil Case No. 0096.
The majority opinion downplays the role of Atty. Mendoza by stating that he “merely ad-
vised the Central Bank on the legal procedure to liquidate GENBANK” which procedure is
“given in black and white in R.A. No. 265, section 29.” This procedural advice, according
to the majority opinion, “is not the matter contemplated by Rule 6.03 of the Code of Profes-
sional Responsibility.”
On the contrary, the acts of Atty. Mendoza may be rightfully considered as falling within
the contemplation of the term “matter” within the meaning of Rule 6.03. Specifically, Atty.
Mendoza’s giving counsel to the Central Bank on the procedure to go about GENBANK’s
liquidation and the filing of the petition therefor in Special Proceedings No. 107812 did not
merely involve the drafting, enforcing or interpreting government or agency procedures,
regulations or laws, or briefing abstract principles of law.37 These acts were discrete,
_______________
35 WOLFRAM, supra.
36 MEMORANDUM for Respondents Tan, et al., p. 56; Rollo, p. 446.
37 According to the ABA Formal Opinion No. 342, these acts do not fall within the scope
of the term “matter” and do not disqualify a lawyer under DR 9-101(B) from subsequent
private employment
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isolatable as well as identifiable transactions or conduct involving a particular situation and
specific party, i.e., the procedure for the liquidation of GENBANK. Consequently, the same
can be properly considered “matter” within the contemplation of Rule 6.03.
Moreover, contrary to the contention of respondents Tan, et al., the interdiction in Rule 6.03
does not only apply if precisely the same legal issues are involved in each representation.38
The Comments of the Integrated Bar of the Philippines (IBP) that drafted our Code of Pro-
fessional Responsibility explained that the restriction covers “engagement or employment,
which means that he cannot accept any work or employment from anyone that will involve
or relate to the matter in which he intervened as a public official.”39 The sequestration of
the shares of stock in Allied Banking Corp. in the names of respondents Tan, et al., which is
subject of Civil Case No. 0096, necessarily involves or relates to their acquisition of GEN-
BANK upon its liquidation, in which Atty. Mendoza had intervened as the Solicitor General.
It should be emphasized that Atty. Mendoza’s participation in GENBANK’s liquidation is
sufficient to place his present engagement as counsel for respondents Tan, et al. in Civil
Case No. 0096 within the ambit of Rule 6.03. His role was
_______________
involving the same regulations, procedures or points of law. WOLF-RAM, supra.
38 In United States v. Trafficante (328 F.2d 117 [1964]), the United States Court of Appeals
(Fifth Circuit) held that, under Canon 36, the attorney who was formerly employed in the
office of the Regional Counsel of the Internal Revenue Service and who handled the tax
claims against Trafficante which resulted in stipulated settlement in the tax court was dis-
qualified from representing the latter in subsequent suits for foreclosure of liens for balance
due on those income taxes and for other federal taxes. The court therein rejected the lawyer’s
claim that disqualification should be ordered only if precisely the same issues were involved
in each representation.
39 AGPALO, supra.
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significant and substantial. The Memorandum dated March 29, 1977 prepared by certain key
officials40 of the Central Bank, is revealing:
Immediately after said meeting, we had a conference with the Solicitor General and he ad-
vised that the following procedure should be taken:
1) Management should submit a memorandum to the Monetary Board reporting that studies
and evaluation had been made since the last examination of the bank as of August 31, 1976
and it is believed that the bank can not be reorganized or placed in a condition so that it may
be permitted to resume business with safety to its depositors and creditors and the general
public.
2) If the said report is confirmed by the Monetary Board, it shall order the liquidation of the
bank and indicate the manner of its liquidation and approve a liquidation plan.
3) The Central Bank shall inform the principal stockholders of Genbank of the foregoing
decision to liquidate the bank and the liquidation plan approved by the Monetary Board.
4) The Solicitor General shall then file a petition in the Court of First Instance reciting the
proceedings which had been taken and praying the assistance of the Court in the liquidation
of Genbank.41
The Minutes No. 13 dated March 29, 1977 of the Monetary Board likewise shows that Atty.
Mendoza was furnished copies of pertinent documents relating to GENBANK in order to
aid him in filing with the court the petition for assistance in
_______________
40 Then Senior Deputy Governor Amado R. Brinas, then Deputy Governor Jaime C. Laya,
then Deputy Governor and General Counsel Gabriel C. Singson, then Special Assistant to
the Governor Carlota P. Valenzuela, then Assistant to the Governor Arnulfo B. Aurellano
and then Director of the Department of Commercial and Savings Bank Antonio T. Castro,
Jr.
41 Rollo, p. 109.
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the bank’s liquidation. The pertinent portion of the said minutes reads:
The Board decided as follows:
...
E. To authorize Management to furnish the Solicitor General with a copy of the subject
memorandum of the Director, Department of Commercial and Savings Bank dated March
29, 1977, together with copies of:
1. Memorandum of the Deputy Governor, Supervision and Examination Sector, to the Mon-
etary Board, dated March 25, 1977, containing a report on the current situation of Gen-bank;
2.Aide Memoire on the Antecedent Facts Re: General Bank and Trust Co., dated March 23,
1977;
3. Memorandum of the Director, Department of Commercial and Savings Bank, to the Mon-
etary Board, dated March 24, 1977, submitting, pursuant to Section 29 of R.A. No. 265, as
amended by P.D. No. 1007, a report on the state of insolvency of Genbank, together with its
attachments; and
4.Such other documents as may be necessary or needed by the Solicitor General.
for his use in filing a petition in the Court of First Instance praying the assistance of the
Court in the liquidation of Genbank.”42
By advising the Central Bank on the procedure to bring about the liquidation of GENBANK
and, more significantly, by filing the petition for assistance in its liquidation, Atty. Mendoza
had clearly intervened in the liquidation of GEN-BANK and its subsequent acquisition by
respondents Tan, et al.
I disagree with the ponencia’s holding that Atty. Mendoza could not be considered as having
intervened as it describes the participation of Atty. Mendoza by stating that he “had no
_______________
42 Id., at p. 113. (Emphasis supplied.)
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iota of participation in the decision of the Central Bank to liquidate GENBANK.”
That the decision to declare GENBANK insolvent was made wholly by the Central Bank,
without the participation of Atty. Mendoza, is not in question. Rather, it was his participation
in the proceedings taken subsequent to such declaration, i.e., his giving advise to the Central
Bank on how to proceed with GENBANK’s liquidation and his filing of the petition in Spe-
cial Proceeding No. 107812 pursuant to Section 2943 of Rep. Act No. 265, that constitutes
“intervention” as to
_______________
43 The provision reads in part:
SEC. 29. Proceedings upon insolvency.—Whenever, upon examination by the head of the
appropriate supervising or examining department or his examiners or agents into the condi-
tion of any bank or non-bank financial intermediary performing quasi-banking functions, it
shall be disclosed that the condition of the same is one of insolvency, or that its continuance
in business would involve probable loss to its depositors or creditors, it shall be the duty of
the department head concerned forthwith, in writing, to inform the Monetary Board of the
facts, and the Board may, upon finding the statements of the department head to be true,
forbid the institution to do business in the Philippines and shall designate an official of the
Central Bank or a person of recognized competence in banking or finance, as receiver to
immediately take charge of its assets and liabilities, as expeditiously as possible collect and
gather all the assets and administer the same for the benefit of its creditors, exercising all the
powers necessary for these purposes including, but not limited to, bringing suits and fore-
closing mortgages in the name of the bank or non-bank financial intermediary performing
quasi-banking functions.
...
If the Monetary Board shall determine and confirm within the said period that the bank or
non-bank financial intermediary performing quasi-banking functions is insolvent or cannot
resume business with safety to its depositors, creditors and the general public, it shall, if the
public interest requires, orders its liquidation, indicate the manner of its liquidation
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Presidential Commission on Good Government vs. Sandiganbayan
place him within the contemplation of Rule 6.03. To intervene means—
1: to enter or appear as an irrelevant or extraneous feature or circumstance; 2: to occur, fall
or come between points of time or
_______________
and approve a liquidation plan. The Central Bank shall, by the Solicitor General, file a peti-
tion in the Court of First Instance reciting the proceedings which have been taken and pray-
ing the assistance of the court in the liquidation of such institution. The court shall have
jurisdiction in the same proceedings to adjudicate disputed claims against the bank or non-
bank financial intermediary performing quasi-banking functions and enforce individual lia-
bilities of the stockholders and do all that is necessary to preserve the assets of such institu-
tion and to implement the liquidation plan approved by the Monetary Board. The Monetary
Board shall designate an official of the Central Bank, or a person of recognized competence
in banking or finance, as liquidator who shall take over the functions of the receiver previ-
ously appointed by the Monetary Board under this Section. The liquidator shall, with all
convenient speed, convert the assets of the banking institution or non-bank financial inter-
mediary performing quasi-banking functions to money or sell, assign or otherwise dispose
of the same to creditors and other parties for the purpose of paying the debts of such institu-
tion and he may, in the name of the bank or non-bank financial intermediary performing
quasi-banking functions, institute such actions as may be necessary in the appropriate court
to collect and recover accounts and assets of such institution.
The provisions of any law to the contrary notwithstanding, the actions of the Monetary Board
under this Section and the second paragraph of Section 34 of this Act shall be final and
executory, and can be set aside by the court only if there is convincing proof that the action
is plainly arbitrary and made in bad faith. No restraining order or injunction shall be issued
by the court enjoining the Central Bank from implementing its actions under this Section
and the second paragraph of Section 34 of this Act, unless there is convincing proof that the
action of the Monetary Board is plainly arbitrary and made in bad
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events; 3: to come in or between by way of hindrance or modification: INTERPOSE; 4: to
occur or lie between two things . . .44
Further, “intervention” is defined as—
_______________
faith and the petitioner or plaintiff files with the clerk or judge of the court in which the
action is pending a bond executed in favor of the Central Bank, in an amount to be fixed by
the court. The restraining order or injunction shall be refused or, if granted, shall be dissolved
upon filing by the Central Bank of a bond, which shall be in the form of cash or Central
Bank cashier(s) check, in an amount twice the amount of the bond of the petitioner or plain-
tiff conditioned that it will pay the damages which the petitioner or plaintiff may suffer by
the refusal or the dissolution of the injunction. The provisions of Rule 58 of the New Rules
of Court insofar as they are applicable and not inconsistent with the provisions of this Section
shall govern the issuance and dissolution of the restraining order or injunction contemplated
in this Section.
Insolvency, under this Act, shall be understood to mean the inability of a bank or non-bank
financial intermediary performing quasi-banking functions to pay its liabilities as they fall
due in the usual and ordinary course of business: Provided, however, That this shall not
include the inability to pay of an otherwise non-insolvent bank or non-bank financial inter-
mediary performing quasi-banking functions caused by extraordinary demands induced by
financial panic commonly evidenced by a run on the bank or non-bank financial intermedi-
ary performing quasi-banking functions in the banking or financial community.
The appointment of a conservator under Section 28-A of this Act or the appointment of a
receiver under this Section shall be vested exclusively with the Monetary Board, the provi-
sion of any law, general or special, to the contrary notwithstanding. (As amended by PD
Nos. 72, 1007, 1771 & PD No. 1827, Jan. 16, 1981).
44 WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (1993), p. 1183.
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Presidential Commission on Good Government vs. Sandiganbayan
1: the act or fact of intervening: INTERPOSITION; 2: interference that may affect the inter-
ests of others . . .45
With the foregoing definitions, it is not difficult to see that by giving counsel to the Central
Bank on how to proceed with GENBANK’s liquidation and filing the necessary petition
therefor with the court, Atty. Mendoza “had intervened,” “had come in,” or “had interfered,”
in the liquidation of GENBANK and the subsequent acquisition by respondents Tan, et al.
of the said banking institution. Moreover, his acts clearly affected the interests of GEN-
BANK as well as its stockholders.
Contrary to the majority opinion, Rule 6.03 applies
even if Atty. Mendoza did not “switch sides” or did not
take inconsistent sides. Rule 6.03 applies even if
no conflict of interest exists between Atty. Mendoza’s
former government client (Central Bank) and
his present private practice clients (respondents Tan, et al.)
As earlier intimated, Rule 6.03 is a restatement of Canon 36 of the ABA’s Canons of Pro-
fessional Ethics, now superseded by the ABA’s Code of Professional Responsibility. In lieu
of the old Canon 36, Canon 9 of the ABA’s Code of Professional Responsibility mandates
that:
A lawyer should avoid even the appearance of professional impropriety.
Providing specificity to this general caveat, Disciplinary Rule (DR) 9–101(B) commands,
thus:
A lawyer shall not accept private employment in a matter in which he had substantial re-
sponsibility while he was a public employee.
The purpose of the interdiction, as stated in the ABA Committee on Professional Ethics,
Opinion No. 37, is—
_______________
45 Ibid.
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“[to avoid] the manifest possibility that . . . [a former Government lawyer’s] action as a
public legal official might be influenced (or open to the charge that it had been influenced)
by the hope of later being employed privately to uphold or upset what he had done.46
The old Canon 36, as well as the present Canon 9 and DR9-101(B), rest on the policy con-
sideration that an attorney must seek to avoid even the appearance of evil.47
Being undoubtedly of American origin, the interpretation adopted by the American courts
and the ABA has persuasive effect on the interpretation of Rule 6.03.48 Accordingly, I find
the case of General Motors Corporation v. City of New York,49 where the pertinent ethical
precepts were applied by the United States Court of Appeals (2nd Circuit), particularly in-
structive. The said US court disqualified the privately retained counsel of the City of New
York in the antitrust case it filed against the General Motors Corp. because the said counsel,
a former lawyer of the US Department of Justice, had not only participated in the latter’s
case against General Motors Corp. but signed the complaint in that action.
George D. Reycraft, the counsel whose disqualification was sought in that case, served as a
trial attorney assigned at the General Litigation Services of the Antitrust Division of the US
Department of Justice from 1952 to 1962. Sometime in 1954, he participated in the investi-
gation of the alleged monopolization by General Motors Corp. of the city and intercity bus
business. The investigation culminated with the filing of the antitrust complaint against Gen-
eral Motors Corp. in 1956. Reycraft signed the said complaint but alleged that after 1958
through the time that he left the Department of
_______________
46 General Motors Corp. v. City of New York, supra.
47 Kaufman, The Former Government Attorney and the Canons of Professional Ethics, 70
Harv. L. Rev. 657 (1957).
48 See Bañas, Jr. v. Court of Appeals, 325 SCRA 259 (2000).
49 Supra.
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Justice in 1962, he no longer had any participation in that case.
In disqualifying Reycraft, the US Court gave short shrift to the argument that Reycraft “has
not changed sides”—i.e. “there is nothing antithetical in the postures of the two governments
in question,” stating that, per Opinion No. 37 of the ABA Commission on Professional Eth-
ics, the ethical precepts of Canon 9 and DR9-101(B) apply irrespective of the side chosen in
private practice. The said court believed that it “is as it should be for there lurks great poten-
tial for lucrative returns in following into private practice the course already charted with
the aid of government resources.”50
The US Court stressed that Reycraft not only participated in the investigation, but he signed
the complaint in that action and admittedly had “substantial responsibility” in its investiga-
tory and preparatory stages. It thus concluded that “where the overlap of issues is so plain
and the involvement while in Government employ is so direct, the appearance of impropriety
must be avoided through disqualification.”51
The General Motors case is illustrative of the “congruent-interest representation conflict”
doctrine. It bears stressing that this doctrine applies uniquely to former government lawyers
and has been distinguished from the normal rule applicable for non-government lawyers in
this wise—
To illustrate the normal rule for non-government lawyers, imagine that the lawyer has rep-
resented passenger A and has recovered substantial damages in a suit against a driver. No
conflict of interest principle or rule restricts the lawyer from later representing passenger B
against the driver with respect to exactly the same accident. B may obtain the benefits of the
lawyer’s help regardless of the fact that the lawyer might be able to employ to B’s advantage
information and strategies developed in the representation of A. The critical element is that
the interest of A and B do not conflict.
_______________
50 Id., at p. 650.
51 Id., at p. 652.
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The analysis does not change if we move from an area that is entirely private into one that
is arguably more connected with the public interest. Suppose a lawyer in private practice
represents Small Soap Company in its suit for damages under the federal antitrust laws
against Giant Soap Company. The lawyer would not be disqualified from representing Me-
dium Soap Company against Giant Soap in a succeeding suit for damages based on precisely
the same conspiracy. The congruence of interests between Small Soap and Medium Soap
would almost certainly mean that the lawyer could represent both clients. In the absence of
a conflict—an opposing interest between the two clients—the existence of a substantial re-
lationship between the matters involved in both cases is irrelevant.
Now, suppose the lawyer has filed suit in behalf of the government against Giant Soap Com-
pany to force divestiture of an acquired company on a theory that, because of the acquisition,
Giant Soap has monopolized an industry in conflict with antitrust laws. May the lawyer,
after leaving government service and while in private practice, represent Medium Soap
Company against Giant Soap in a suit for damages based on the same antitrust conspiracy?
Does the absence of opposing interests between Medium Soap and the lawyer’s former gov-
ernment client similarly mean that there should be no disqualification?
At this point, the rules for the former government lawyer diverge sharply from the normal
former-client conflict rules: the lawyer is disqualified from representing the successive client
in private practice, despite the fact that the interests of the client and the lawyer’s former
government client are apparently aligned. All that is required for disqualification is the rela-
tionship between the former and the succeeding representations.52
The rationale for the “congruent-interest representation conflict” doctrine has been ex-
plained, thus:
The rationale for disqualification is rooted in a concern with the impact that any other rule
would have upon the decisions and actions taken by the government lawyer during the course
of the earlier representation of the government. Both courts and commen-
_______________
52 WOLFRAM, supra.
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tators have expressed the fear that permitting a lawyer to take action in behalf of a govern-
ment client that later could be to the advantage of private practice client would present grave
dangers that a government lawyer’s largely discretionary actions would be wrongly influ-
enced by the temptation to secure private practice employment or to favor parties who might
later become private practice clients . . .
The fear that government lawyers will misuse government power in that way is not idle.
Lawyers who represent the government often exercise enormous discretion unchecked by
an actual client who oversees the lawyer’s work. For that reason a special rule is needed to
remove the incentive for government lawyers to take discretionary decisions with an eye
cast toward advantages in future, nongovernmental employment. The broad disqualification
accomplishes that and, particularly under rubrics that do not invariably require disqualifica-
tion of the entire firm with which the former government lawyer practices, does it without
unnecessarily discouraging lawyers from entering temporary public service.53
The foregoing disquisition applies to the case of Atty. Mendoza. Indeed, a textual reading
of Rule 6.03 of our Code of Professional Responsibility reveals that no conflict of interests
or adverse interests is required for the interdiction to apply. If it were so, or if conflict of
interests were an element, then the general conflict of interests rule (Rule 15.03)54 would
apply. Rather, the interdiction in Rule 6.03 broadly covers “engagement or employment in
connection with any matter in which he had intervened while in the said service.” To reiter-
ate, the drafters of our Code of Professional Responsibility had construed this to mean that
a lawyer “cannot accept any work or employment from anyone that will involve or relate to
the matter in which he intervened as a public official, except on behalf of the body or au-
thority which he served during his public employment.”55
_______________
53 Ibid.
54 See note 32.
55 See note 39.
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In Civil Case No. 0096, Atty. Mendoza is certainly not representing the Central Bank but
respondents Tan, et al. Granting arguendo that the interests of his present private practice
clients (respondents Tan, et al.) and former government client (Central Bank) are apparently
aligned, the interdiction in Rule 6.03 applies.
Rule 6.03 purposely does not contain an explicit
temporal limitation because cases have to be
resolved based on their peculiar circumstances
Unless the Code itself provides, the Court cannot set a prescriptive period for any of the
provisions therein. That Rule 6.03, in particular, contains no explicit temporal limitation is
deliberate. It recognizes that while passage of time is a factor to consider in determining its
applicability, the peculiarities of each case have to be considered. For example, in Control
Data Corp. v. International Business Mach. Corp.,56 the US District Court of Minnesota
held that the lawyer who, 15 years earlier, while an employee of the Department of Justice
had been in charge of negotiations in antitrust case against a corporation, was not disquali-
fied from acting as counsel for the plaintiffs suing such corporation. On the other hand, the
lawyer whose conduct was the subject of the ABA Opinion No. 37, earlier cited, was himself
10 years removed from the matter over which he had substantial responsibility while in pub-
lic employ at the time he accepted the private engagement relating to the same matter.57
Clearly, it is the degree of involvement or participation in the matter while in government
service, not the passage of time, which is the crucial element in Rule 6.03.
The Code of Professional Responsibility is a codification of legal ethics, that “body of prin-
ciples by which the conduct of members of the legal profession is controlled. More specifi-
_______________
56 318 F. Supp. 145 (D.Minn. 1970).
57 General Motors Corp. v. City of New York, supra.
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cally and practically considered, legal ethics may be defined as that branch of moral science
which treats of the duties which the attorney-at-law owes to his clients, to the courts, to the
bar, and to the public.”58 In this connection, the Court has consistently characterized disci-
plinary proceedings, including disqualification cases, against lawyers as sui generis, neither
purely civil nor purely criminal, thus:
[D]isciplinary proceedings against lawyers are sui generis. Neither purely civil nor pure
criminal, they do not involve a trial of an action or a suit, but are rather investigations by the
Court into the conduct of one of its officers. Not being intended to inflict punishment, [they
are] in no sense a criminal prosecution. Accordingly, there is neither a plaintiff nor a prose-
cutor therein. [They] may be initiated by the Court motu proprio. Public interest is [their]
primary objective, and the real question for determination is whether or not the attorney is
still a fit person be allowed the privileges as such. Hence, in the exercise of its disciplinary
powers, the Court merely calls upon a member of the Bar to account for his actuations as an
officer of the Court with the end view of preserving the purity of the legal profession and
the proper and honest administration of justice. . .59
For this reason, the civil law concept of prescription of actions finds no application in dis-
qualification cases against lawyers.
In this case, while the liquidation of GENBANK took place in 1977, the period that had
lapsed is not sufficient to consider it far removed from the present engagement of Atty.
Mendoza as counsel for respondents Tan, et al. in Civil Case No. 0096. In fact, the validity
of the said liquidation is still pending with the Court.60 The validity of the sequestration of
the shares in Allied Banking Corp., which is the subject mat-
_______________
58 MALCOLM, LEGAL AND JUDICIAL ETHICS ADAPTED FOR THE REPUBLIC OF
THE PHILIPPINES (1949 ed.), p. 8.
59 Heck v. Santos, 423 SCRA 329 (2004) citing In Re Almacen, 31 SCRA 562 (1970).
60 See note 7.
677
VOL. 455, APRIL 12, 2005
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Presidential Commission on Good Government vs. Sandiganbayan
ter of Civil Case No. 0096, is necessarily intertwined with Special Proceeding No. 107812
involving the liquidation of GENBANK and the acquisition thereof by respondents Tan, et
al. The issues presented in the two proceedings are so overlapping and the involvement of
Atty. Mendoza while in government employ is so plain, direct and substantial, his disquali-
fication as counsel for respondents Tan, et al. in Civil Case No. 0095 is warranted under
Rule 6.03.
Contrary to the majority opinion, the peculiar
circumstances of this case justify the strict application
of Rule 6.03
The ponencia cautions against the strict application of Rule 6.03 because it would have a
“chilling effect on the right of government to recruit competent counsel to defend its inter-
ests.” This concern is similar to that raised by the City of New York in the General Motors
case where it argued that if Reycraft was disqualified, the US court would “chill the ardor
for Government service by rendering worthless the experience gained in Government em-
ploy.”61 It appeared that the City of New York relied on the pronouncement in the earlier
case of United States v. Standard Oil Co.,62 known as the Esso Export Case, thus:
If the government service will tend to sterilize an attorney in too large an area of law for too
long a time, or will prevent him from engaging in the practice of a technical specialty which
he has devoted years in acquiring, and if that sterilization will spread to the firm which he
becomes associated, the sacrifice of entering government service will be too great for most
men to make.63
_______________
61 General Motors Corp. v. City of New York, supra at 651.
62 136 F. Supp. 345 (S.D.N.Y.1955).
63 Quoted in General Motors Corp. v. City of New York, supra at 651.
678
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
Addressing this argument in General Motors, the same US court, through Justice Irving F.
Kaufman, also the ponente of the Esso Export Case, distinguished the two cases. It noted
that the said court denied the motion to disqualify the former government lawyer in Esso
Export Case because the lawyer therein “never investigated or passed upon the subject mat-
ter of the pending case . . . never rendered or had any specific duty to render any legal advice
in relation to the regulations involved in the litigation.”64 Hence, the accommodation be-
tween maintaining high ethical standards for former Government employees, on the one
hand, and encouraging entry into Government service, on the other, was struck under far
different circumstances of the Esso Export Case.
In General Motors, the admonition voiced by Justice Kaufman in his article The Former
Government Attorney and the Canons of Professional Ethics65 was considered more to the
point:
If there was a likelihood that information pertaining to the pending matter reached the attor-
ney, although he did not “investigate” or “pass upon” it, . . ., there would undoubtedly be an
appearance of evil if he were not disqualified.66
Thus, it was concluded that the Esso Export Case unquestionably presented a case for the
cautious application of the “appearance-of-evil doctrine” because the former Government
lawyer’s connection with the matter at issue was the tenuous one of mere employment in the
same Government agency.
In contrast, in General Motors, Reycraft, not only participated in the investigatory and pre-
paratory stages, but also signed the complaint in the action. Thus, according to the US court,
where the overlap of issues is so plain, and the involvement while in Government employ
so direct, the result-
_______________
64 Id.
65 See note 42.
66 General Motors Corp. v. City of New York, supra.
679
VOL. 455, APRIL 12, 2005
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Presidential Commission on Good Government vs. Sandiganbayan
ing appearance of impropriety must be avoided through disqualification.
From the foregoing disquisition, it can be gleaned that disqualification cases involving for-
mer government lawyers will have to be resolved on the basis of peculiar circumstances
attending each case. A balance between the two seemingly conflicting policy considerations
of maintaining high ethical standards for former Government employees, on the one hand,
and encouraging entry into Government service, on the other, must be struck based on, inter
alia, the relationship between the former and the succeeding representations of the former
government lawyer. Likewise, as already discussed, the degree of his involvement in the
matter while in Government employ is a crucial element in determining if his present repre-
sentation is within the purview of Rule 6.03.
In this case, not unlike in General Motors, the involvement of Atty. Mendoza in the liquida-
tion of GENBANK while he was the Solicitor General is so direct that the appearance of
impropriety must be avoided through disqualification.
Conclusion
Let me just clarify that the record is free from any intimation that Atty. Mendoza was im-
properly influenced while in government service or that he is guilty of any impropriety in
agreeing to represent respondents Tan, et al. However, I am constrained to vote for his dis-
qualification in Civil Case No. 0096 in order to avoid any appearance of impropriety lest it
taint both the public and private segments of the legal profession.
ACCORDINGLY, I vote to PARTIALLY GRANT the petition. The Motion to Disqualify
Atty. Estelito P. Mendoza is GRANTED insofar as Civil Case No. 0096 is concerned.
680
680
SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
SEPARATE OPINION
TINGA, J.:
My vote to grant the petition hinges on the reasons stated hereunder. They pertain to a sig-
nificant and material dimension to this case which deserves greater illumination.
To sustain the view that Atty. Estelito Mendoza (Atty. Mendoza) should be disqualified as
counsel in Civil Case No. 0096, as the dissenters are wont to hold, there should be a clear
legal basis that would mandate such disqualification. The dissenters would hold Atty. Men-
doza liable for violating Section 6.03 of the Code of Professional Responsibility, while the
ponencia disputes the assertion that the provision was indeed transgressed. I maintain that
Section 6.03 cannot be made applicable in the present case to Atty. Mendoza, as to do so
would be violative of his right to due process.
I have qualms in holding any member of the Bar liable for violating Section 6.03 of the Code
of Professional Responsibility, in connection with acts that they may have engaged in as
government officials before the enactment of the said Code. In this case, at the time Atty.
Mendoza entered the government service he had no idea of the kind of inhibition proposed
to be foisted on him currently. Indeed, he is being faulted for representing the respondents
in Civil Case No. 0096 notwithstanding the fact that as Solicitor General and in the discharge
of his official functions, he had advised the Central Bank on the procedure to bring about
the liquidation of General Bank and Trust Company, which was subsequently acquired by
the respondents. However, whether it be at the time then Solicitor General Mendoza partic-
ipated in the process of the dissolution of General Bank in 1977, or at sometime in 1987
when he agreed to represent the respondents, the Code of Professional Responsibility had
not yet been promulgated.
681
VOL. 455, APRIL 12, 2005
681
Presidential Commission on Good Government vs. Sandiganbayan
The Code of Professional Responsibility was promulgated by the Supreme Court on 21 June
1988.1 Prior to its official adoption, there was no similar official body of rules or guidelines
enacted by the Supreme Court other than the provisions on Legal Ethics in the Rules of
Court.
I fear it would set a dangerous precedent to hinge Atty. Mendoza’s culpability on the Code
of Professional Responsibility, as it would effectively imply that the Code of Professional
Responsibility has application even as to acts performed prior to its enactment. Our laws
frown upon the prospectivity of statutes. Article 4 of the Civil Code declares that “Laws
shall have no retroactive effect, unless the contrary is provided.” There is no declaration in
the Code of Professional Responsibility that gives retroactive effect to its canons and rules.
It is settled that the presumption is that all laws operate prospectively absent clear contrary
language in the text,2 and that in every case of doubt, the doubt will be resolved against the
retroactive operation of laws.3
The Court in Co v. Court of Appeals provided an exhaustive disquisition on the scope of the
rule on the prospective application of statutes:
The principle of prospectivity of statutes, original or amendatory, has been applied in many
cases. These include: Buyco v. PNB, 961) 2 SCRA 682 (June 30, 1961), holding that Re-
public Act No. 1576 which divested the Philippine National Bank of authority to accept back
pay certificates in payment of loans, does not apply to an
_______________
1 R. Agpalo, The Code of Professional Responsibility for Lawyers (1st ed., 1991), at 369.
2 R. Agpalo, Statutory Construction (5th ed., 2003), at p. 355; citing Iburan v. Labes, 87
Phil. 234 (1950); People v. Zeta, 98 Phil. 143 (1955); Castro v. Collector of Internal Reve-
nue, G.R. No. 12174, 28 December 1962, 6 SCRA 886; Commissioner v. Lingayen Gulf
Electric Power Co., Inc., 164 SCRA 27 (1988).
3 Id., citing Montilla v. Agustina Corp., 24 Phil. 220 (1913); Cebu Portland Cement Co. v.
Collector of Internal Revenue, G.R. No. 20563, 29 October 1968, 25 SCRA 789 (1968).
682
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SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
offer of payment made before effectivity of the act; Largado v. Masaganda, et al., 5 SCRA
522 (June 30, 1962), ruling that RA 2613, as amended by RA 3090 on June, 1961, granting
to inferior courts jurisdiction over guardianship cases, could not be given retroactive effect,
in the absence of a saving clause; Larga v. Ranada, Jr., 64 SCRA 18, to the effect that Sec-
tions 9 and 10 of Executive Order No. 90, amending Section 4 of PD 1752, could have no
retroactive application; People v. Que Po Lay, 94 Phil. 640, holding that a person cannot be
convicted of violating Circular No. 20 of the Central Bank, when the alleged violation oc-
curred before publication of the Circular in the Official Gazette; Baltazar v. C.A., 104 SCRA
619, denying retroactive application to P.D. No. 27 decreeing the emancipation of tenants
from the bondage of the soil, and P.D. No. 316 prohibiting ejectment of tenants from rice
and corn farmholdings, pending the promulgation of rules and regulations implementing
P.D. No. 27; Nilo v. Court of Appeals, 128 SCRA 519, adjudging that RA 6389 which re-
moved “personal cultivation” as a ground for the ejectment of a tenant cannot be given ret-
roactive effect in the absence of a statutory statement for retroactivity; Tac-An v. CA, 129
SCRA 319, ruling that the repeal of the old Administrative Code by RA 4252 could not be
accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA 500, holding that RA 6389
should have only prospective application; (See also Bonifacio v. Dizon, 177 SCRA 294 and
Balatbat v. CA, 205 SCRA 419).
The prospectivity principle has also been made to apply to administrative rulings and circu-
lars, to wit: ABS-CBN Broadcasting Corporation v. CTA, Oct. 12, 1981, 108 SCRA 142,
holding that a circular or ruling of the Commissioner of Internal Revenue may not be given
retroactive effect adversely to a taxpayer; Sanchez v. COMELEC, 193 SCRA 317, ruling
that Resolution No. 90-0590 of the Commission on Elections, which directed the holding of
recall proceedings, had no retroactive application; Romualdez v. CSC, 197 SCRA 168,
where it was ruled that CSC Memorandum Circular No. 29, s. 1989 cannot be given retro-
spective effect so as to entitle to permanent appointment an employee whose temporary ap-
pointment had expired before the Circular was issued.
The principle of prospectivity has also been applied to judicial decisions which, “although
in themselves not laws, are nevertheless evidence of what the laws mean, . . . (this being)
the reason why under Article 8 of the New Civil Code, ‘Judicial decisions applying or
683
VOL. 455, APRIL 12, 2005
683
Presidential Commission on Good Government vs. Sandiganbayan
interpreting the laws or the Constitution shall form a part of the legal system . . .’ ”4
I believe that there is a greater demand to ward off the retroactive application of the Code of
Professional Responsibility for the Code is the source of penal liabilities against its infring-
ers. It is well entrenched that generally, penal laws or those laws which define offenses and
prescribe penalties for their violation operate prospectively.5 The Constitution itself bars the
enactment of ex-post facto laws.6 I do not think it necessary to flirt with the constitutional
issue whether the Code of Professional Responsibility operates as a penal statute within the
definition of an ex-post facto law, but I am satisfied with the general rules, affirmed by
jurisprudence, that abhor the retroactivity of statutes and regulations such as the Code of
Professional Responsibility.
Hence, to impute culpability on the part of Atty. Mendoza, it would be necessary to ascertain
whether his accession to represent the respondents violated any binding law or regulation at
the time of the engagement. It is but proper to frame the question in such manner, for only
then could it be ascertained whether Atty. Mendoza knew or should have known that his
professional representation of the respondents was illegal. It would also be unfair to ascribe
liability to any lawyer whom, at the time he/she was in government service, was not guided
by any definitive rule prescribing the possible subsequent restrictions on the lawyer’s pro-
fessional activity as a consequence of the exercise of public office.
Ostensibly, Atty. Mendoza’s actions violated Canon 36 of the Canons of Professional Ethics,
which some authorities
_______________
4 Co v. Court of Appeals, G.R. No. 100776, October 28, 1993, 227 SCRA 444.
5 Agpalo, supra note 2, at p. 357; citing People v. Moran, 44 Phil. 387 (1923).
6 See Article III, Sec. 22, Constitution.
684
684
SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
deemed as a source of legal ethics prior to the Code of Professional Responsibility.7 Canon
36 states:
36. Retirement from judicial position or public employment
A lawyer should not accept employment as an advocate in any matter upon the merits of
which he has previously acted in a judicial capacity.
A lawyer, having once held public office or having been in the public employ should not,
after his retirement, accept employment in connection with any matter he has investigated
or passed upon while in such office or employ.
Canon 36 would apparently cover the allegations imputed to Atty. Mendoza. However, a
thorough review should first be examined on whether Canon 36 of the Canons of Profes-
sional Ethics may be used as legal basis in resolving this case.
The Canons of Professional Ethics originated from the American Bar Association.8 They
were adopted by the Philippine Bar Association as its own in 1917 and in 1946.9 There is
no denying the high regard enjoyed by the Philippine Bar Association in the legal commu-
nity in its nearly one hundred years of existence. However, there is also no denying that the
Philippine Bar Association, a civic non-profit association,10 is a private entity of limited
membership within the Philippine bar. The rules or canons it has adopted are per se binding
only on its members, and the penalties for violation of the same could affect only the status
or rights of the infringers as members of the association.
At the same time, reference has been had by this Court to the Canons of Professional Ethics
in deciding administrative
_______________
7 See, e.g., G. Malcolm, Legal and Judicial Ethics (1949), at p. 9.
8 Agpalo, supra note 1, at p. 381.
9 Ibid.
10 See Juan F. Nakpil & Sons v. Court of Appeals, 228 Phil. 564, 572; 144 SCRA 596, 600
(1986).
685
VOL. 455, APRIL 12, 2005
685
Presidential Commission on Good Government vs. Sandiganbayan
cases against lawyers, especially prior to the adoption of the Code of Professional Ethics.
Hence, the belief by some commentators that the said Canons may serve as a source of legal
ethics in this country. However, I think it would be grave error to declare that the Canons of
Professional Ethics, on their own, serves as an indisputable source of obligations and basis
of penalties imposable upon members of the Philippine legal profession. This would violate
the long-established constitutional principle that it is the Supreme Court which is tasked with
the promulgation of rules governing the admission to the practice of law, as well as the
pleading, practice and procedure in all courts.11 The task of formulating ethical rules gov-
erning the practice of law in the Philippines could not have been delegated to the Philippine
Bar Association by the Supreme Court. Neither could such rules as adopted by the private
body be binding on the Supreme Court or the members of the bar.
If provisions of the Canons of Professional Ethics of the Philippine Bar Association have
jurisprudentially been enforced, or acknowledged as basis for legal liability by the Supreme
Court, they may be recognized as a binding standard imposable upon members of the bar,
but not because said Canons or the Philippine Bar Association itself said so, but because the
Supreme Court said so. This is keeping in line with the entrenched rule, as evinced by Article
8 of the Civil Code, which states that “judicial decisions applying or interpreting the laws or
the Constitution shall form a part of the legal system.”
Thus, I would be willing to consider Canon 36 as binding on Atty. Mendoza when he deigned
to represent the respondents if at such time, this Court had expressly acknowledged Canon
36 as a rule or standard which deserves obeisance by members of the bar. After all, it would
only be through such
_______________
11 See Section 5(5), Article VIII, Constitution. See also Section 5(5), Article X, 1973 Con-
stitution and Section 13, Article VIII, 1935 Constitution.
686
686
SUPREME COURT REPORTS ANNOTATED
Presidential Commission on Good Government vs. Sandiganbayan
process of judicial recognition that these guidelines adopted by a private entity could be
considered as a normative rule compulsory on all practitioners. Unfortunately, no such case
exists in Philippine jurisprudence.
It might be possible to concede that this principle embodied under Canon 36 or even as stated
in American case law, subsisted within that penumbra of ethical standards from which the
Court could have derived a jurisprudential rule had one been called for by a particular case.
However, it remains that none such was pronounced by this Court in jurisprudence, and
indeed the prohibition under Canon 36 was not prescribed by this Court or by statute as a
norm until the enactment of the Code of Professional Responsibility in 21 June 1988. Ac-
cordingly, when Atty. Mendoza agreed to represent the respondents, there was no definitive
binding rule proscribing him from such engagement or penalizing him for such representa-
tion.
I am mindful that what the Court is called upon to decide is whether the Sandiganbayan
committed grave abuse of discretion, and not just mere error in fact or law, in denying the
motion to disqualify Atty. Mendoza. The absence of a definitive disqualificatory rule that
would have guided Atty. Mendoza when he undertook the questioned acts sufficiently justi-
fies the Sandiganbayan’s denial of the motion.
We should not render insensate the concerns raised by the minority, arising as they do from
an understandable concern that the line dividing the professional activities and the govern-
ment services rendered by lawyers should remain distinct. Yet the majority likewise demon-
strates that there is no unanimity on prevalent legal thought on the matter, and a healthy
debate on the issue will result in no harm. Still, the due process dimension, as highlighted
by the absence of a definitive rule for which Atty. Mendoza could have been held account-
able, proves determinative to my mind. The Court is the enforcer of the constitutional guar- Promulgated:
antees of due process to all persons, and my vote is but a consequence of this primordial 25 MAR 2019
duty. x---------------------------------------------------------------------~~~---------x
687 DECISION
PERLAS-BERNABE, J.:
VOL. 455, APRIL 12, 2005 Before the Court is an administrative complaint1 filed on November
687 14, 2014 by complainant Larry C. Sevilla (complainant), before the Office
Valdez vs. China Banking Corporation of the Bar Confidant, 2 against respondent Atty. Marcelo C. Millo
Petition partially granted. Motion to disqualify Atty. Estelito P. Mendoza in Civil Case No. (respondent), charging the latter of harassment, misconduct, obstruction of
0096 likewise granted. justice and ignorance of the law.
Notes.—A lawyer transgresses Canon 21 of the Code of Professional Responsibility, which The Facts
requires a lawyer to preserve the confidences and secrets of his client even after the attorney- Complainant alleged that he is the publisher of Pampango Footprints
client relation ceases, when he agrees to appear as counsel for a party his client has previ- (Pampango), a provincial newspaper circulated in Tarlac Province. 3
ously contended with in a case similarly involving said parties. (Salonga vs. Hildawa, 312 Dated November 12, 2014. Rollo, pp. 2-4.
SCRA 279 [1999]) Initially, the same complaint was filed before the Office of the Court Administrator on Oc-
Where a lawyer was retained by a person to form a corporation and appeared as counsel in tober 24,
behalf of said person but said lawyer was subsequently shown to be in collusion with the 2014, which was forwarded to and received by the Office of the Bar Confidant on October
board of directors of the corporation against the said client, there is a clear case of conflict 28, 2014
of interest. (De Guzman vs. De Dios, 350 SCRA 320 [2001]) (see id. at 7-9).
——o0o—— See id. at 1-2.
~
© Copyright 2020 Central Book Supply, Inc. All rights reserved. Presidential Commission y
on Good Government vs. Sandiganbayan, 455 SCRA 526, G.R. Nos. 151809-12 April 12, Decision 2 A.C. No. 10697
2005 Sometime in April 2014, he issued a statement of account4 in the amount of
P33,120.00 to Spouses Avelino and Melendrina Manalo (Sps. Manalo) as
l\epublic of tbe llbtlipptne~ fee for the publication of the notice of auction sale relative to Sps. Manalo's
~upreme <!Court petition for foreclosure of mortgage, which was published in three (3)
;!ffilanila consecutive issues of Pampango. 5 Claiming that the publication fee was
SECOND DIVISION "exorbitant and shocking," respondent, as Sps. Manalo's counsel, refused to
LARRY C. SEVILLA, settle the account, threatened complainant that he would petition for the
Complainant, disqualification of Pampango, and thereafter, wrote an undated letter6 to the
A.C. No. 10697 Executive Judge of the Regional Trial Court of Tarlac City in furtherance of
Present: such threat.7 Consequently, complainant filed this administrative complaint
- versus - against respondent.
TIME: . .,.,.v During the pendency of this complaint, Sps. Manalo negotiated for a
ATTY. MARCELO C. MILLO, discount of fifty percent (50%), to which complainant agreed. Yet,
Respondent. respondent intervened and forbade his clients to pay. For this reason,
CARPIO, J, Chairperson, complainant called respondent, but instead of explaining his side, respondent
PERLAS-BERNABE, shouted, "I am busy I don't want to talk to you!" and banged his cellphone. 8
CAGUIOA, For his part,9 respondent denied administrative liability, averring that
J. REYES, JR., and he merely acted on behalf of his clients, who found the fee "exorbitant and •
LAZARO-JAVIER, JJ shocking." 10 He also claimed that after the Executive Judge advised them to
just settle the matter with complainant, he withdrew as Sps. Manalo's
counsel to give way to the said settlement. 11 Finally, he maintained that
complainant's non-issuance of an affidavit of publication and nonsubmission of copies of
the issues where the notice of auction sale was
printed caused the non-completion of the foreclosure proceedings. 12
In a Resolution 13 dated July 4, 2016, the Court referred the
administrative case to the Integrated Bar of the Philippines (IBP) for
investigation, report, and recommendation.
The IBP's Report and Recommendation
In a Report 14 dated May 4, 2017, the Investigating Commissioner
found respondent administratively liable for violation of Rule 1.04,15 Canon
Id. at 28.
See id. at 3 and 64.
6 Id. at 5.
See id. at 2-3 and 64.
Id. at 64. See also complainant's Verified Position Paper dated April 5, 2017; id. at 48-49.
See respondent's comment dated May 27, 2015 (id. at 15-18); and Position Paper for the
Respondent
dated March 6, 2017 (id at 45-47).
10 See id. at 16 and 45.
11 See id. at 17 and 45.
12 See id. at 17.
13 Id. at 36. Signed by the Division Clerk of Court (now Clerk of Court En Banc) Edgar 0.
Aricheta.
14 Id. at 64-66. Signed by Commissioner Narciso A. Tadeo.
15 Rule 1.04 - A lawyer shall encourage his clients to avoid, end or settle a controversy if it
will
admit of a fair settlement.
r Decision 4 A.C. No. 10697
Decision 3 A.C. No. 10697
1 of the Code of Professional Responsibility (CPR), and accordingly,
recommended the penalty of reprimand or one (1)-month suspension. 16
The Investigating Commissioner found that the matter simply
involves a misunderstanding in the collection of publication fee which could
have easily been settled if respondent did not prevent the settlement. In this
relation, the Investigating Commissioner pointed out that Sps. Manalo had
already successfully negotiated for a settlement, but the same did not push
through because of respondent. 17 Further, the Investigating Commissioner
noted that the respondent's claim of withdrawal as Sps. Manalo's counsel
was belied by complainant's allegation that respondent intervened and
forbade his clients to pay, which respondent did not deny. 18
In a Resolution 19 dated February 22, 2018, the IBP Board of
Governors adopted the Investigating Commissioner's Report, with
modification lowering the recommended penalty of suspension from the
practice of law for a period of one (1) month to mere reprimand.
The Issue Before the Court
The essential issue for the Court's resolution is whether or not
respondent should be administratively sanctioned for the acts complained of.
The Court's Ruling
The Court concurs and affirms the findings of the IBP Board of
Governors with modification as to the penalty.
It is well to stress that lawyers owe fidelity to the cause of their clients
and are expected to serve the latter with competence and diligence.
Consequently, lawyers are entitled to employ every honorable means to
defend the cause of their clients and secure what is due them. 20 However,
professional rules set limits on a lawyer's zeal and hedge it with necessary
restrictions and qualifications.21 In this regard, Canon 1 of the CPR provides
that lawyers "shall uphold the Constitution, obey the laws of the land and
promote respect for law and of legal processes." In furtherance thereto, Rule
1.04 of the CPR mandates lawyers to "encourage [their] clients to avoid,
end, or settle a controversy if it will admit of a fair settlement."
16 Rollo, p. 66.
17 See id. at 65.
18 Se id.
19 See Notice of Resolution in CBD Case No. 16-5191 issued by Assistant National Secre-
tary Doroteo B.
Aguila; id. at 70-71.
20 See Avida Land Corporation v. Argosino, 793 Phil 210, 222 (2016).
21 Id.
y
Guided by the foregoing, the Court agrees with the findings of the
Investigating Commissioner, as· affirmed by the IBP Board of Governors,
that respondent indeed fell short of what is expected of him, despite his
avowed duties as officer of the court. Records reveal that respondent did not
endeavor to initiate the settlement of the publication fee being charged by •
complainant. Disagreeing with the statement of account, respondent chose
not to pay and immediately referred the matter to the Executive Judge,
instead of negotiating and discussing the matter with complainant.
Remarkably, respondent's obstinate refusal to settle culminated in
forbidding his clients, Sps. Manalo, to pay the reduced publication fee,
which the latter secured for themselves. He even shouted at and ignored
complainant when the latter called him up in an effort to finally settle.
Ultimately, respondent's acts, which are violative of Rule 1.04, Canon 1 of
the CPR, prejudiced his clients as they resulted in the non-completion of the WE CONCUR:
foreclosure proceedings, since complainant did not issue the affidavit of JJ[), ~
publication nor provide copies of the issues where the notice of auction sale ESTELA M. PtRLAS-BERNABE
was actually printed. Associate Justice
Anent the proper penalty to be imposed on respondent, under the Senior Associate Justice
circumstances and considering that this is his first offense, the Court finds it Chairperson
appropriate to impose on respondent the penalty of suspension from the AMY &z-/o:;;.vI~R
practice of law for a period of one (1) month. This is in line with the Court's Associate Justice
ruling in Caspe v. Mejica, 22 where respondent therein was suspended for I
violating Rule 1.04, Canon 1 of the CPR, among others. Similarly, the Court I
has held that suspension is appropriate when a lawyer knows that he is SE~~~.
violating a court order or rule, and there is injury or potential injury to a © Copyright 2020 Central Book Supply, Inc. All rights reserved. Larry C. Sevilla Vs. Atty.
client or a party, or interference or potential interference with a legal Marcelo C. Millo, A.C. No. 10697, March 25, 2019
proceeding,23 as in this case.
As a final note, it must be emphasized that membership in the legal ~epnblic of tbe itlJilippines
profession is a privilege burdened with conditions. A lawyer is required to ~upretne ([ourt
observe the law and be mindful of his or her actions whether acting in a jijlnnila
public or private capacity. Any transgression of this duty on his part would SECOND DIVISION
not only diminish his reputation as a lawyer but would also erode the SUPREME COURT OF THE PHlUP?"~C:S
public's faith in the legal profession as a whole. 24 As such, the Court will Pl;BL:C INfORMl\TIOl·J OF!'iC\:
not hesitate to impose the necessary penalty to a lawyer whose conduct falls '\N !> \\ 1-r-1 .. ,f\1'if::rr0 1r.rl ;,"'
short of the exacting standards expected of him as a member of the Bar.25 1:1JJ I•' I1. ;'•I I'I 1'·1. UN nu 4L!..l~.LL,. 2019 .P.~I! '. ii "'!''. ·\ \1I; 1·•
WHEREFORE, respondent Atty. Marcelo C. Millo (respondent) is I .\ .' . ,
hereby SUSPENDED from the practice of law for a period of one (1) j . \,_, ', • '11:(r~~-- -.~ - .
month, with a STERN WARNING that a repetition of the same or similar ~ ..· ----- ----LI-~\£.- f'm
act will be dealt with more severely. i ''
22 See755Phil.312(2015). ROLANDO T. KO, A.C. No. 11584
23 See Avida Land Corporation v. Argosino, supra note 20, at 225-226. Complainant, (Formerly CBD Case No. 12-3604)
24 See Nulada v. Paulma, 784 Phil. 309, 317 (2016). - versus -
25 See id. at 317-318. Present:
ti CARPIO, J., f;hairperson,
Decision 5 A.C. No. 10697 PERLAS-BERNABE,*
The suspension in the practice of law shall take effect immediately CAGUIOA,
upon receipt of this Decision by respondent. He is DIRECTED to J. REYES, JR, and
immediately file a Manifestation to the Court that his suspension has started, HERNANDO,** JJ.
copy furnished all courts and quasi-judicial bodies where he has entered his Promulgated:
appearance as counsel. DECISION
Let copies of this Decision be furnished the Office of the Bar CAGUIOA, J.:
Confidant to be appended to respondent's personal record as an attorney; the Before the Court is an administrative complaint1 for disbarment filed
Integrated Bar of the Philippines for its information and guidance; and the by Rolando T. Ko (complainant) against Atty. Alma Uy-Lampasa
Office of the Court Administrator for circulation to all courts in the country. (respondent) with the Commission on Bar Discipline (CBD), Integrated Bar
SO ORDERED. ofthe Philippines (IBP).2
Complaint
In his Complaint dated October 2, 2012, complainant alleged that
respondent violated the Code of Professional Responsibility for Lawyers
(CPR). First, he claimed that respondent notarized two purported deeds of sale
between Jerry Uy (Jerry) and the Sultan siblings (heirs of a certain Pablo
Sultan) over a parcel of land despite knowing that the two deeds of sale were
spurious. From the records, it appears that the Sultan siblings are: Pablito,
On wellness leave.
•• Designated Additional Member per Special Order No. 2630 dated December 18, 2018.
Rollo, pp. 2-9.
CBD Case No. 12-3604, id. at 2.
p ,ti
Decision 2 A.C. No. 11584
(Formerly CBD Case No. 12-3604)
Anicieto, Cristita, Juanito, Felix, Leonardo, Crispen, 3 Lilia, Victoriano and
Lucita. 4
The Deeds of Absolute Sale dated October 12, 2011 5 and October 19,
2011,6 are similar in the following respects: the vendee, the property covered,
and the consideration. However, the two deeds differ as regards the name of the
vendors. For the Deed dated October 12, the vendors named were Juanito,
Felix, Leonardo, Crispen, Lilia, Pablito, Victoriano and Lucita, but only
Leonardo, Lilia and Victoriano signed the deed. For the Deed dated October
12., Victoriano and Lucita were not included in the vendors and among those
named, i.e., Juanito, Felix, Leonardo, Crispen, Pablito, and Lilia, Pablito did
not sign the deed. It is noted that only eight of the ten Sultan siblings are
involved, as Anicieto and Cristita do not appear in either ofthe deeds.
In this regard, complainant claimed that an Extra-judicial Settlement
of Estate with Absolute Sale7 (Extra-judicial Settlement) covering the same
property was executed on October 20, 2011 between his son, Jason U. Ko
(Jason), and all ten of the Sultan siblings. Complainant calls the attention of
the Court to the fact that in contrast with the deeds of sale notarized by
respondent, this Extra-judicial Settlement contains the signatures and
thumbmarks of all the Sultan siblings.
Second, complainant also claimed that respondent, as counsel for
Jerry (the vendee in the abovementioned Deeds of Sale), filed a malicious
case of Esta/a against his son Jason and the Sultan siblings, grounded on the
allegation that the Extra-judicial Settlement was not published when in fact,
it was published as evidenced by an Affidavit of Publication. 8
Lastly, complainant averred that respondent also committed perjury
and has filed pleadings in court without the necessary Mandatory Continuing
Legal Education (MCLE) compliance number, attaching to his complaint
several pleadings and manifestations in support of such. 9
Answer
In her Answer 10 dated November 10, 2012, respondent countered that
she has not violated any provision of the CPR, arguing that: (1) the matter of
whether the deeds of sale were spurious is now the subject of separate cases
pending in court and with the City Prosecutor's Office of Catbalogan City,
Western Samar; (2) the determination of whether the estafa case is malicious
is within the jurisdiction of the City Prosecutor's Office conducting the
preliminary investigation; and (3) she was exempted from MCLE
requirements for the first up to the third compliance period because she was
Spelled as "Crispin" in some parts of the rollo.
Rollo, pp. 40 and 44.
Id. at 12-14.
Id.atl5-17.
Id. at 44-46.
Id. at 55.
Id. at 5-6.
10 Id. at 78-83.
Decision 3 A.C. No. 11584
(Formerly CBD Case No. 12-3604)
a former judge, and that she is currently in the process of complying with the
requirement for the latest compliance period. 11
Subsequently, the parties submitted their Reply 12 and Rejoinders 13
before the CBD in support of their arguments and counter-arguments. A
mandatory conference was held on September 19, 2013 and upon its
termination, both parties submitted their respective position papers. 14
Report and Recommendation ofthe Investigating Commissioner
On December 18, 2013, the Investigating Commissioner of the CBD
issued a Report and Recommendation, 15 the pertinent portions of which are
reproduced below:
x x x Stripped of the non-essentials, a scrutiny of the records
would show that respondent has, indeed, notarized two (2) documents of
sale involving the same parties but containing different dates of
notarization. Respondent has never denied notarizing the subject
documents in her verified answer and in her subsequent pleadings filed
before the CBD. Very clearly, this alone is a violation of the notarial law.
Moreover, there is sufficient evidence to prove that respondent failed to
indicate her MCLE Compliance Certificate Number in various pleadings
filed before the courts and the Prosecutors Office of Catbalogan City,
Western Samar. Her argument that she was on the process of obtaining her
MCLE certificate for the latest compliance period does not, in any way,
exempt her from the mandate of the circular. Prudence dictates that
respondent should have refrained from signing pleadings while her MCLE
certificate is being processed. Unfortunately, however, she failed to do so.
WHEREFORE, PREMISES CONSIDERED, it is
recommended that respondent shall be suspended as a Notary Public for
a period of SIX (6) MONTHS with a stern warning that a repetition of
the same shall be dealt with more severely. 16 (Emphasis and underscoring
supplied)
Resolution ofthe IBP Board a/Governors
In a Resolution17 dated October 11, 2014, the IBP Board of Governors
(IBP Board) adopted and approved the Report and Recommendation of the
Investigating Commissioner, finding the same to be fully supported by the
evidence on record and applicable laws. The IBP Board found that
respondent indeed violated the 2004 Rules on Notarial Practice and Bar
Matter No. (B.M) 850. However, the IBP Board modified the
recommendation of the Investigating Commissioner and imposed on
respondent the penalty of immediate revocation of her notarial
commission and disqualification for re-appointment as notary public for
11 Id. at 78-82, 194.
12 Id. at 91-97.
13 Id. at 109-112, 121-129.
14 Id. at 303.
15 Id. at 194-195.
16 Id. at 195.
17 Id. at 193-193-a.
Decision 4 A.C. No. 11584
(Formerly CBD Case No. 12-3604)
two (2) years, not six months as recommended by the Investigating
Commissioner. In addition, the IBP Board also suspended respondent
from the practice of law for a period of six (6) months.
Respondent filed a Motion for Reconsideration 18 (MR), which was
denied by the IBP Board in a Resolution 19 dated February 25, 2016.
The Court notes that in respondent's MR before the IBP Board, she
argued that the latter merely adopted the Report and Recommendation of the
Investigating Commissioner, which was likewise not exhaustive enough in
its findings and conclusions. Moreover, respondent claimed that the IBP
Board failed to cite any specific violation of the Notarial and MCLE Rules.
Lastly, respondent argued that the IBP Board increased the penalty imposed
on her without citing any additional fact or basis.
Indeed, despite the numerous submissions of the parties, the Report
and Recommendation of the Investigating Commissioner as well as the
Resolutions of the IBP Board leave much to be desired. Thus, the Court shall
expound on respondent's administrative liability.
Non-compliance with the
MCLE Requirements
Ruling ofthe Court
On the issue of compliance with the MCLE, the Court disagrees with
the Investigating Commissioner and the IBP Board.
B.M. 850 requires members of the IBP to undergo continuing legal
education "to ensure that throughout their career, they keep abreast with law
and jurisprudence, maintain the ethics of the profession and enhance the
standards of the practice of law."20 The First Compliance Period for the
MCLE requirement was from 15 April 2001 to 14 April 2004; the Second
Compliance Period was from 15 April 2004 to 14 April 2007; and the Third
Compliance Period was from 15 April 2007 to 14 April 201 O; and the
Fourth Compliance Period was from 15 April 2010 to 14 April 2013. 21
Here, complainant alleged that in several pleadings filed by
respondent, the latter did not indicate her MCLE compliance number. He
cited five pleadings filed by respondent which were dated December 7,
2011, 22 February 25, 2012, 23 March 8, 2012, 24 and two pleadings dated
March 27, 2012,25 thus falling under the Fourth Compliance Period.
18 Id. at 196-210.
19 Id. at 298-299.
20 B.M. 850, Rule I, Sec. I.
21 Arnado v. Atty. Adaza, 767 Phil. 696, 704 (2015).
22 Rollo, p. 43.
23 Id. at 66.
24 Id. at 58.
25 Id. at 65 and 68.
Decision 5 A.C. No. 11584
(Formerly CBD Case No. 12-3604)
For her part, respondent explained that she was exempted from MCLE
compliance for the First, Second, and Third Compliance Periods, until she
resigned as a judge on March 2010. After which, she endeavored to comply
with the Fourth Compliance Period while also in the process of requesting
copies of her certificate of exemption. 26
The Court notes that respondent eventually completed the required
units on May 19, 2012, which is still within the Fourth Compliance Period.
Likewise, she was also issued Certificates of Exemption27 on September 4,
2012 for the First, Second, and Third Compliance Periods.28
Moreover, respondent manifested that the presiding judge of the Regional
Trial Court (RTC) where the cases involved were pending required her to
submit her Certificates of Compliance. When respondent received said
certificates, she immediately submitted the same to the trial court.29
In finding respondent administratively liable, the IBP Board merely
stated that she violated B.M. 850. The relevant provisions thereof are Rules
12 and 13, which provide:
RULE 12
Non-Compliance Procedures
xx xx
SECTION 2. Non-compliance Notice and 60-day Period to Attain
Compliance. - Members failing to comply will receive a Noncompliance Notice stating the
specific deficiency and will be given sixty
(60) days from the date of notification to file a response clarifying the
deficiency or otherwise showing compliance with the requirements. x x
x Despite the foregoing, the Court agrees with the IBP Board that
xx xx
Members given sixty (60) days to respond to a NonCompliance Notice may use this period
to attain the
adequate number of credit units for compliance. x x x
RULE13
Consequences ofNon-Compliance
SECTION 1. Non-compliance Fee. - A member who, for whatever
reason, is in non-compliance at the end of the compliance period shall pay a
non-compliance fee.
SECTION 2. Listing as Delinquent Member. - A member who fails
to comply with the requirements after the sixty (60) day period for
compliance has expired, shall be listed as a delinquent member of the
IBP upon the recommendation of the MCLE Committee. The
investigation of a member for non-compliance shall be conducted by the
26 Id. at 80.
27 Id.at212-214.
28 Id. at 80, 212-215.
29 Id. at 203.
Decision 6 A.C. No. 11584
(Formerly CBD Case No. 12-3604)
IBP's Commission on Bar Discipline as a fact-finding arm of the MCLE
Committee. (Emphasis and underscoring supplied)
Based on the rules, an IBP member shall only be declared delinquent
for failure to comply with the education requirements "after the sixty (60)
day period for compliance has expired." This 60-day period shall commence
from the time such member received a notice of non-compliance. Without
the notice of compliance, a member who believes that the units he or she had
taken already amounts to full compliance may be declared delinquent
without being made aware of such lack of units and with no chance to rectify
the same. 30
In the instant case, there is no showing that respondent had ever been
issued a Notice of Non-Compliance. On the contrary, the records show that
for the first to third compliance periods, she was exempted for being a
member of the judiciary, and that she was able to complete the requirements
for the fourth compliance period. The Court also notes that when
complainant filed the disbarment case on October 12, 2012, respondent still
had until April 14, 2013 to comply with the fourth compliance period. She
eventually completed the required units on May 19, 2012. Thus, there is no
reason for respondent to be held liable and declared delinquent under B.M.
850.
Violation ofthe Notarial Rules
respondent can be held liable for violation of the Rules on Notarial Practice.
The act of notarization is impressed with public interest. As such, a
notary public must observe the highest degree of care in complying with the
basic requirements in the performance of his or her duties in order to
preserve the confidence of the public in the integrity of the notarial system. 31
In this case, respondent failed to faithfully comply with her duties as a
notary public.
It appears that respondent notarized two Deeds of Absolute Sale
covering the same property and involving substantially the same parties. In
the October 12, 2011 Deed of Absolute Sale, the Acknowledgement reads in
part:
BEFORE ME, a Notary Public for and in the Province of Samar,
personally appeared JUANITO A. SULTAN, FELIX A. SULTAN,
LEONARDO A. SULTAN, CRISPEN A. SULTAN, LILIA A. SULTAN,
PABLITO A. SULTAN, VICTORIANO A. SULTAN, LUCITA S. UY
and JERRY I. UY, exhibiting to me their Community Tax Certificate
numbers, known to me to be the same persons who executed the
10 See Strongbuilt Property Holdings, Inc. v. Be/mi, A.C. No. 11014, February 15, 2016,
pp. 2-3
(Unsigned Resolution).
31 Atty. Bartolome v. Atty. Basilio, 771 Phil. I, 5 (2015).
Decision 7 A.C. No. 11584
(Formerly CBD Case No. 12-3604)
foregoing instrument, which they acknowledged to me as their free and
voluntary act and deed. 32 (Emphasis supplied)
However, among the vendors, only Leonardo, Lilia, and Victoriano
actually signed the deed. Details of the Community Tax Certificate (CTC) of
Juanito, Felix, and Crispen were provided, but they did not sign the deed. As
for Pablito and Lucita, the space for the signature and identification details
was left blank.
Likewise, in the October 19, 2011 Deed of Absolute Sale, the
Acknowledgement reads in part:
BEFORE ME, a Notary Public for and in the Province of Samar,
personally appeared JUANITO A. SULTAN, FELIX A. SULTAN,
LEONARDO A. SULTAN, CRISPEN A. SULTAN, LILIA A. SULTAN,
PABLITO A. SULTAN, and JERRY I. UY, exhibiting to me their
Community Tax Certificate numbers, known to me to be the same
persons who executed the foregoing instrument, which they
acknowledged to me as their free and voluntary act and deed. 33
(Emphasis supplied)
As compared with the earlier deed, this latter deed .qo longer contains
the names of Victoriano and Lucita as vendors. Also, while Juanito, Felix,
Leonardo, Crispen, and Lilia appear to have signed, there was no signature
for Pablito even though he was listed as a vendor.
In this regard, the Court notes that complainant submitted a copy of
another deed of sale involving the same property, specifically the Extrajudicial Settlement
between his son Jason and all the Sultan siblings. In
contrast with the Deeds of Sale notarized by respondent, this Extra-judicial
Settlement contains the names of all the Sultan siblings, along with their
signatures and thumbprints affixed on all pages of the said document.
Nonetheless, the issue on the genuineness of these deeds is subject of a
pending civil case; hence, the Court will not rule on the matter. The instant
resolution will focus on respondent's administrative liability.
Section 6 of Rule IV of the 2004 Rules on Notarial Practice states:
SEC. 6. Improper Instruments or Documents.-A notary public
shall not notarize:
(a)
(b) a blank or incomplete instrument or document; or
an instrument or document without appropriate notarial
certification.
Here, respondent clearly violated this provision when she notarized
the deeds of absolute sale despite the incomplete signature and identification
details of the vendors. Moreover, when the identification details were indeed
provided in the deeds, the proof of identity indicated for all of them was the
32 Rollo, p. 14.
33 Id. at 17. ~
Decision 8 A.C. No. 11584
(Formerly CBD Case No. 12-3604)
CTC Number. Jurisprudence34 already holds that a CTC is not considered as
competent evidence of identity as it does not bear a photograph and a
signature of the individual concerned, as required in Rule II, Section 12 of
the Notarial Rules. 35
Worse, while there are some signatures that do appear on the
instruments, the vendors therein claimed that they did not actually sign the
deeds. In support of this, complainant attached in his Complaint the counteraffidavits of
some of the Sultan siblings in the estafa case filed by Jerry (the
vendee in the assailed deeds of sale), with respondent as counsel. The
pertinent portions of the counter-affidavits are reproduced below:
In Victoriano Sultan's Counter-Affidavit,36 he stated that:
18. Later[,] I was surprised unpleasantly that the deed [of absolute
sale] had already been signed by my other siblings, by the witnesses[,] and
subscribed to before the notary public, which, on my part, I did not
appear before her, x x x37 (Emphasis supplied).
Similarly, Crispin Sultan stated in his Counter-Affidavit38 the following:
15. Later[,] I was surprised to know that I supposedly appeared,
signed and acknowledged the deed before a notary public on 19 October
2011, the truth of the matter being that on such date I was in Bacolod City
discharging my duties as security guard[.] 39 (Emphasis supplied).
Also, in Felix Sultan's Counter-Affidavit,40 he stipulated that:
19. It is noteworthy that I did not appear before a notary public in
Catbalogan City supposedly to execute and sign any deed of conveyance
in the month of October 2011; and specifically[,] I did not receive the
amount of P500,000.00 from complainant[.]41 (Emphasis supplied)
Lastly, Juanito Sultan made a similar statement as Felix's in his
Counter-Affidavit: 42
22. It is noteworthy that I did not appear before a notary public in
Catbalogan City supposedly to execute and sign any deed of conveyance
in the month of October 2011; and specifically[,] I did not receive the
amount of PS00,000.00 from complainant[.]43 (Emphasis supplied)
This is also in clear violation of the Rules on Notarial Practice, Rule
IV, Section 2 of which provides:
34 Baylon v. Alma, 578 Phil 238 (2008).
35 SEC. 12. Competent Evidence of Identity.-The phrase "competent evidence of identity"
refers to
the identification of an individual based on: (a) at least one current identification document
issued by
an official agency bearing the photograph and signature of the individual xx x.
36 Rollo, p. 18-21.
17 Id. at 20. .
38 Id. at 22-25.
39 Id. at 24.
40 Id. at 29-3 I.
41 Id. at 3 I.
42 Id. at 34-36.
43 Id. at 36.
Decision
SEC. 2. Prohibitions.-x xx 45 Baysac v. Atty. Aceron-Papa, 792 Phil. 635, 646-647 (2016).
xx xx 46 Ferguson v. Ramos, supra note 44, at 67, citing Ocampo-Jngcoco v. Atty. Yrreverre, Jr.,
9 A.C. No. 11584 458 Phil. 803,
(Formerly CBD Case No. 12-3604) 814 (2003).
(b) A person shall not perform a notarial act if the person Decision 10 A.C. No. 11584
involved as signatory to the instrument or document - (Formerly CBD Case No. 12-3604)
(1) is not in the notary's presence personally at the WHEREFORE, finding Atty. Alma Uy-Lampasa GUILTY of
time of the notarization; and violating the Rules on Notarial Practice and Rule 1.01 and Canon 1 of the
(2) is not personally known to the notary public or Code of Professional Responsibility, the Court hereby SUSPENDS her from
otherwise identified by the notary public through the practice of law for six (6) months; REVOKES her notarial commission,
competent evidence of identity as defined by these effective immediately; and PROHIBITS her from being commissioned as a
Rules. (Emphasis and underscoring supplied) notary public for two (2) years. She is further WARNED that a repetition of
The Notarial Rules clearly mandate that before notarizing a document, the same or similar offense shall be dealt with more severely.
the notary public should require the presence of the very person who Let copies of this Decision be furnished to the Office of the Bar
executed the same. Thus, he or she certifies that it was the same person who Confidant, to be appended to the respondent's personal record as attorney.
executed and personally appeared before him to attest to the contents and Likewise, copies shall be furnished to the Integrated Bar of the Philippines
truth of what were stated therein. The presence of the parties to the deed is and all courts in the country for their information and guidance.
necessary to enable the notary public to verify the genuineness of the SO ORDERED.
signature.44 WE CONCUR:
When respondent affixed her signature and notarial seal on the deeds ANTONIO T. CARPIO
of sale, she led the public to believe that the parties personally appeared Associate Justice
before her and attested to the truth and veracity of the contents thereof when Chairperson
in fact, they deny doing so. Respondent's conduct is laden with dangerous (On wellness leave) (· ~~
possibilities, bearing in mind the conclusiveness accorded to the due ESTELA M. PERLAS-BERNABE
execution of a document. Her conduct did not only jeopardize the rights of Associate Justice
the parties to the instrument; it also undermined the integrity of a notary SE C. R(YES, JR.
public and degraded the function of notarization. Thus, respondent should be Associate Justice
liable for such act, not only as a notary public but also as a lawyer. RAMON~ERNANDO
For having violated the Notarial Rules, respondent also failed to Associate Justice
adhere to Canon 1 of the CPR, which requires every lawyer to uphold the © Copyright 2020 Central Book Supply, Inc. All rights reserved. Rolando T. Ko Vs. Atty.
Constitution, obey the laws of the land, and promote respect for the law and Alma Uy-Lampasa, A.C. No. 11584, March 6, 2019
legal processes. She also violated Rule 1.01 of the CPR which proscribes a
lawyer from engaging in any unlawful, dishonest, immoral, and deceitful ~epublic of tbe !)bilipptnes
conduct. $upreme <teourt
Based on recent jurisprudence, a lawyer commissioned as a notary ;ffllanila
public who fails to discharge his or her duties as such is penalized with SECOND DIVISION
revocation of his or her notarial commission and disqualification from being NORBERTO S. COLLANTES,
commissioned as a notary public for a period of two (2) years. 45 In addition, Complainant,
he or she may also be suspended from the practice of law for a period of six - versus -
(6) months for notarizing a document without the appearance of the parties.46 ATTY. ANSELMO B. MABUTI,
Thus, the Court affinns the penalty imposed by the IBP Board. Respondent.
44 Ferguson v. Ramos, A.C. No. 9209, April 18, 2017, 823 SCRA 59, 65. x-----------------------------------------------------
A.C. No. 9917
Present:
CARPIO, J., Chairperson,
PERLAS-BERNABE,
CAGUIOA,
J. REYES, JR., and
HERNANDO,* JJ.
Promulgated:
----~~-~--~~-~~~----------x
RESOLUTION
PERLAS-BERNABE, J.:
This administrative case stemmed from a complaint affidavit, 1
executed on May 10, 2013, filed by complainant Norberto S. Collantes
(complainant) before the Office of the Bar Confidant, Supreme Court,
against respondent Atty. Anselmo B. Mabuti (respondent) for violation of
the 2004 Rules on Notarial Practice (Notarial Rules)2 and of his duties as a
lawyer.3
The Facts
Complainant alleged that on October 10, 2009, respondent notarized a
document entitled "Memorandum of Agreement"4 in the City of Manila.
Upon verification, however, he discovered that respondent was not
Designated Additional Member per Special Order Nos. 2629 and 2630 dated December 18,
2018.
Rollo, pp. 1-4. Docketed as CBD Case No. 16-5078.
2 A.M. No. 02-8-13-SC, July 6, 2004.
See rollo, p. 2.
4 Id. at 5-6.
fftl
J 11 See Notice of Resolution in Resolution No. XX-2013-369 signed by then IBP National
Resolution 2 A.C. No. 9917
commissioned as a notary public in the City of Manila for the years 2008-
2009. In support thereof, complainant attached a Certification 5 dated
February 27, 2012 issued by the Notarial Section of the Office of the Clerk
of Court and Ex-Officio Sheriff of the Regional Trial Comi of Manila
attesting to the same.
In his Comment 6 dated January 15, 2014, respondent denied the
allegations and claimed that the signature in the "Memorandum of
Agreement" is not his. Respondent questioned complainant's motives for
filing the present case against him, claiming that the latter has pending cases
for Esta/a filed against him. 7 Finally, he prayed for the dismissal of the
complaint on the ground of double jeopardy.8 In this regard, he pointed out
that the present case is based on the same cause of action subject of an
earlier complaint, filed by a certain Mina S. Bertillo before the Integrated
Bar of the Philippines (IBP), docketed as CBD Case No. 11-3036, for which
he was disqualified from being commissioned as a notary public for two (2)
years. 9 In support thereof, he attached a copy of the Commissioner's
Report 10 dated August 3, 2012 and the IBP Board of Governor's
Resolution11 dated March 21, 2013 in CBD Case No. 11-3036.
The complaint was thereafter referred to the IBP for investigation,
report, and recommendation. 12
The IBP's Report and Recommendation
In a Report and Recommendation13 dated December 7, 2016, the IBP
Investigating Commissioner (IBP-IC) found respondent administratively
liable for failure to comply with the Notarial Rules, and accordingly,
recommended that he be suspended from the practice of law for a period of
two (2) years.
The IBP-IC found the evidence convincing that respondent was
indeed not commissioned as a notary public at the time the subject
"Memorandum of Agreement" was notarized. 14 Corollary thereto, the IBPIC
brushed aside respondent's claim of double jeopardy, pointing out that
the present administrative action concerns an act that is entirely different
6
8
9
Id. at 8. Signed by Assistant Clerk of Court Clemente M. Clemente.
See Comment/ Answer/ Motion to Dismiss; id. at 25-26.
See id. at 25.
See id. at 26.
Id. at 25.
10 Id. at 29-31. Penned by Commissioner Jose I. De La Rama, Jr.
Secretary
Nasser A. Marohomsalic; id. at 27.
12 See Court's Resolution dated June 13, 2016; id. at 37.
13 Id. at 46-47. Penned by Commissioner Eduardo R. Robles.
14 Id. at 46.
~
Resolution 3 A.C. No. 9917
from the act for which he was found guilty of violation of the Notarial Rules
in CBD Case No. 11-3036, i.e., for notarizing a letter dated December 28,
2010 when he was likewise not commissioned as a notary public.
In a Resolution15 dated August 31, 2017, the IBP Board of Governors
adopted the above findings and recommendation with modification,
increasing the recommended penalty to: (a) perpetual disqualification from
being_ commissioned as a Notary Public since this is respondent's second
offense; ( b) revocation of his notarial commission, if subsisting; and ( c)
suspension for two (2) years from the practice of law.
The Issue Before the Court
The issue for the Court's resolution is whether or not the IBP correctly
found respondent liable for violation of the 2004 Notarial Rules.
The Court's Ruling
The Court affirms the findings and adopts with modification the
recommendations of the IBP Board of Governors.
The Court has emphatically stressed that notarization is not an empty,
meaningless, routinary act. Notarization by a notary public converts a
private document into a public document making it admissible in evidence
without further proof of its authenticity. 16 A notarial document is, by law,
entitled to full faith and credit, 17 and as such, notaries public are obligated to
observe with utmost care the basic requirements in the performance of their
duties. 18
For these reasons, notarization is invested with
substantive public interest, such that only those who are qualified or
authorized may act as notaries public. 19 As a corollary to the protection of
that interest, those not qualified or authorized to act must be prevented from
imposing upon the public, the courts, and the administrative offices in
general. 20 The requirements for the issuance of a commission as a
15 See Notice of Resolution in Resolution No. XXIII-2017-034 signed by Assistant National
Secretary
Doroteo B. Aguila; id. at 44-45.
16 See Mariano v. Echanez, A.C. No. 10373, May 31, 2016, 791 SCRA 509, 514; Spouses
Gacuya v.
Solbita, A.C. No. 8840, March 8, 2016, 785 SCRA 590, 595; and Gaddi v. Velasco, A.C.
No. 8637,
September 15, 2014, 735 SCRA 74, 79.
17 See Mariano v. Echanez, id.; Spouses Gacuya v. Solbita, id.; and Gaddi v. Velasco, id.
18 See Mariano v. Echanez, id.; Spouses Gacuya v. Solbita, id.; and Uy v. Sano, 586 Phil.
383, 388
(2008).
19 See Villajlores-Puza v. Arellano, A.C. No. 11480, June 20, 2017, 827 SCRA 515, 517-
518, citing
Mariano v. Echanez, id. See also Spouses Gacuya v. Solbita, id.
20 See Maniquiz v. Emelo, A.C. No. 8968, September 26, 2017; and Saquing v. Mora, 535
Phil. I, 7
(2006), citing Nunga v. Viray, 366 Phil. 155, 161 (l 991 ).
v 24 See Maniquiz v. Emelo, id.; and Saquing v. Mora, id., citing Nunga v. Viray, id.
Resolution 4 A.C. No. 9917
notary public must not be treated as a mere casual formality. 21 Where
the notarization of a document is done by a member of the Philippine Bar at
a time when he has no authorization or commission to do so, an act which
the Court has characterized as reprehensible, constituting as it does, not only
malpractice, but also the crime of falsification of public documents, the
offender may be subjected to disciplinary action.22 Jurisprudence provides
that without a commission, a lawyer is unauthorized to perform any of the
notarial acts. 23 A lawyer who performs a notarial act without such
commission violates the lawyer's oath to obey the laws, more specifically,
the Notarial Rules.24
In this case, the IBP found that respondent notarized the subject
document, "Memorandum of Agreement," without being commissioned as a
notary public at the time of notarization. This fact has been duly certified to
by none other than the Notarial Section of the Office of the Clerk of Court
and Ex-Officio Sheriff of the Regional Trial Court of Manila.25 Thus, by
knowingly performing notarial acts at the time when he was not authorized
to do so, respondent clearly violated the Notarial Rules and in consequence,
should be held administratively liable.
It should be emphasized that respondent's transgressions of the
Notarial Rules also have a bearing on his standing as a lawyer.26 In Virtusio
v. Virtusio, 27 the Court observed that "[a] lawyer who notarizes a document
without a proper commission violates his lawyer's oath to obey the law. He
makes it appear that he is commissioned when he is not. He thus indulges in
deliberate falsehood that the lawyer's oath forbids. This violation falls
squarely under Rule 1.01 of Canon 1 of the Code of Professional
Responsibility and Canon 7 as well,"28 to wit:
CANON 1 - A lawyer shall uphold the constitution, obey the laws
of the land and promote respect for law and legal processes.
Rule 1.01 - A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
CANON 7 - A lawyer shall at all times uphold the integrity and
dignity of the legal profession and support the activities of the integrated
bar.
21 See Uy v. Saffo, supra note 18, at 388 (2008).
22 See Maniquiz v. Emelo, supra note 20; Saquing v. Mora, supra note 20, at 7, citing Nunga
v. Viray,
supra note 20, at 161. See also Spouses Gacuya v. Solbita, supra note 16, at 596; and Uy v.
Sano, id. at
389.
23 See Miranda, Jr. v. Alvarez, Sr., A.C. No. 12196, September 3, 2018.
25 Rollo, p. 8.
26 Miranda, Jr. v. Alvarez, Sr., A.C. No. 12196, September 3, 2018. 30 See Torres v. Dalangin, A.C. No. 10758, December 5, 2017, citing Vasco-Tamaray v.
27 694 Phil. 148 (2012). Daquis, A.C.
28 Id. at 157. No. 10868, January 26, 2016, 782 SCRA 44, 65.
\j 31 See id.
Resolution 5 A.C. No. 9917 32 See id.
Notably, while the Court agrees with the IBP's findings as regards 33 See Virtusio v. Virtusio, supra note 27, 158.
respondent's administrative liability, the Court, however, cannot adopt the ~
recommendation of the IBP Board of Governors to increase the penalty Resolution 6 A.C. No. 9917
against respondent to "[p]erpetual [dJisqualification from being The suspension in the practice of law, revocation of notarial
commissioned as [a] [n]otary [p]ublic" 29 in view of an alleged earlier commission, and disqualification from being commissioned as a notary
infraction for which he was found guilty of violating the Notarial Rules by public shall take effect immediately upon receipt of this Resolution by
the IBP in CBD Case No. 11-3036. After an examination of respondent's respondent. He is DIRECTED to immediately file a Manifestation to the
personal record as a member of the Bar, it has been ascertained that the Court that his suspension has started, copy furnished all courts and quasijudicial
resolution of the IBP in the said case has yet to be forwarded to the Court for bodies where he has entered his appearance as counsel.
its approval. As case law explains, the "[f]actual findings and Let copies of this Resolution be furnished the Office of the Bar
recommendations of the [IBP] Commission on Bar Discipline and the Board Confidant to be appended to respondent's personal record as an attorney; the
of Governors xx x are recommendatory, subject to review by the Court."30 Integrated Bar of the Philippines for its information and guidance; and the
In Torres v. Dalangin:31 Office of the Court Administrator for circulation to all courts in the country.
It is the Supreme Court, not the IBP, which has the constitutionally AL
mandated duty to discipline lawyers. The factual findings of the IBP can SO ORDERED.
only be recommendatory. Its recommended penalties are also, by their WE CONCUR:
nature, recommendatory. 32 AIJ),~
Thus, pending approval by the Court, the findings and resolution in ESTELA M. PltRLAS-BERNABE
CBD Case No. 11-3036 are only recommendatory, and hence (1) fail to Associate Justice
establish the fact that respondent has already been held liable for a prior Senior Associate Justice
offense, and (2) cannot consequently serve to aggravate the penalty in this Chairperson
case. E~.
In fine, consistent with prevailing jurisprudence, 33 respondent is \ Q-+-'-RAMoWPAULL:
meted with the following: (a) suspension from the practice of law for one (1) HERNANDO
year; (b) immediate revocation of his notarial commission, if any; and (c) Associate Justice
disqualification from being commissioned as a notary public for a period of © Copyright 2020 Central Book Supply, Inc. All rights reserved. NORBERTO S. COL-
one (1) year only. LANTES vs. ATTY. ANSELMO B. MABUTI, A.C. No. 9917, January 14, 2019
WHEREFORE, the Court hereby finds respondent Atty. Anselmo B.
Mabuti (respondent) GUILTY of violation of the 2004 Rules on Notarial
Practice and of Rule 1.01, Canon 1 and Canon 7 of the Code of Professional
Responsibility. Accordingly, effective immediately, the Court: SUSPENDS
him from the practice of law for one ( 1) year; REVOKES his incumbent
commission as a notary public, if any; and PROHIBITS him from being
commissioned as a notary public for one (1) year. He is WARNED that a
repetition of the same offense or similar acts in the future shall be dealt with
more severely.
29 Id. at 44.