Canon 9

[G.R. No. 139281. September 29, 1999.]

SPOUSES ROMUALDO and NORA SUAREZ, Petitioners, v. ARSENIO SALAZAR, Et

Al., Respondents. chanrobles.com:cralaw:red

RESOLUTION

Considering respondents’ "Motion to Expunge All Pleadings Filed by Atty.

Filemon A. Manangan with Motion to Hold Him in Contempt of Court and to
Dismiss the Petition" and said Atty. Manangan’s admission at the hearing this
morning, September 29, 1999, that he is not a lawyer entitled to practice law
in the Philippines, and that he is the same "Filemon A. Manangan" who was
found by this Court in G.R. No. 82760 (Filemon Manangan v. Court of First
Instance of Nueva Vizcaya, Branch 28) decided on August 30, 1990, to be in
reality Andres Culanag who is not a member of the Philippine Bar, but despite
these facts he has continued to misrepresent himself to be an attorney-at-law
and has appeared as counsel for petitioners in this case, "Atty. Filemon A.
Manangan, who is in reality Andres Culanag, is hereby declared guilty of
indirect contempt of this Court. Wherefore, he is hereby sentenced to three (3)
months imprisonment to be served at the Headquarters of the National Bureau
of Investigation, Taft Avenue, Manila, until further orders from this Court. chanroblesvirtual|awlibrary

SO ORDERED. chanrobles virtual lawlibrary

Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.

[Bar Matter No. 1036. June 10, 2003.]

DONNA MARIE S. AGUIRRE, Complainant, v. EDWIN L. RANA, Respondent.

DECISION

CARPIO, J.:

The Case

Before one is admitted to the Philippine Bar, he must possess the requisite moral
integrity for membership in the legal profession. Possession of moral integrity is of
greater importance than possession of legal learning. The practice of law is a privilege
bestowed only on the morally fit. A bar candidate who is morally unfit cannot practice
law even if he passes the bar examinations. chanrob1es virtua1 1aw 1ibrary

The Facts

Respondent Edwin L. Rana ("respondent") was among those who passed the 2000 Bar
Examinations.

On 21 May 2001, one day before the scheduled mass oath-taking of successful bar
examinees as members of the Philippine Bar, complainant Donna Marie Aguirre
("complainant") filed against respondent a Petition for Denial of Admission to the Bar.
Complainant charged respondent with unauthorized practice of law, grave misconduct,
violation of law, and grave misrepresentation.

The Court allowed respondent to take his oath as a member of the Bar during the
scheduled oath-taking on 22 May 2001 at the Philippine International Convention
Center. However, the Court ruled that respondent could not sign the Roll of Attorneys
pending the resolution of the charge against him. Thus, respondent took the lawyer’s
oath on the scheduled date but has not signed the Roll of Attorneys up to now.

Complainant charges respondent for unauthorized practice of law and grave

misconduct. Complainant alleges that respondent, while not yet a lawyer, appeared as
counsel for a candidate in the May 2001 elections before the Municipal Board of Election
Canvassers ("MBEC") of Mandaon, Masbate. Complainant further alleges that
respondent filed with the MBEC a pleading dated 19 May 2001 entitled Formal Objection
to the Inclusion in the Canvassing of Votes in Some Precincts for the Office of Vice-
Mayor. In this pleading, respondent represented himself as "counsel for and in behalf of
Vice Mayoralty Candidate, George Bunan," and signed the pleading as counsel for
George Bunan ("Bunan").

On the charge of violation of law, complainant claims that respondent is a municipal

government employee, being a secretary of the Sangguniang Bayan of Mandaon,
Masbate. As such, respondent is not allowed by law to act as counsel for a client in any
court or administrative body.

On the charge of grave misconduct and misrepresentation, complainant accuses

respondent of acting as counsel for vice mayoralty candidate George Bunan ("Bunan")
without the latter engaging respondent’s services. Complainant claims that respondent
filed the pleading as a ploy to prevent the proclamation of the winning vice mayoralty
candidate.

On 22 May 2001, the Court issued a resolution allowing respondent to take the lawyer’s
oath but disallowed him from signing the Roll of Attorneys until he is cleared of the
charges against him. In the same resolution, the Court required respondent to
comment on the complaint against him.

In his Comment, respondent admits that Bunan sought his "specific assistance" to
represent him before the MBEC. Respondent claims that "he decided to assist and
advice Bunan, not as a lawyer but as a person who knows the law." Respondent admits
signing the 19 May 2001 pleading that objected to the inclusion of certain votes in the
canvassing. He explains, however, that he did not sign the pleading as a lawyer or
represented himself as an "attorney" in the pleading.

On his employment as secretary of the Sangguniang Bayan, respondent claims that he

submitted his resignation on 11 May 2001 which was allegedly accepted on the same
date. He submitted a copy of the Certification of Receipt of Revocable Resignation dated
28 May 2001 signed by Vice-Mayor Napoleon Relox. Respondent further claims that the
complaint is politically motivated considering that complainant is the daughter of
Silvestre Aguirre, the losing candidate for mayor of Mandaon, Masbate. Respondent
prays that the complaint be dismissed for lack of merit and that he be allowed to sign
the Roll of Attorneys.

On 22 June 2001, complainant filed her Reply to respondent’s Comment and refuted
the claim of respondent that his appearance before the MBEC was only to extend
specific assistance to Bunan. Complainant alleges that on 19 May 2001 Emily Estipona-
Hao ("Estipona-Hao") filed a petition for proclamation as the winning candidate for
mayor. Respondent signed as counsel for Estipona-Hao in this petition. When
respondent appeared as counsel before the MBEC, complainant questioned his
appearance on two grounds: (1) respondent had not taken his oath as a lawyer; and
(2) he was an employee of the government.

Respondent filed a Reply (Re: Reply to Respondent’s Comment) reiterating his claim
that the instant administrative case is "motivated mainly by political vendetta."
cralaw virtua1aw library

On 17 July 2001, the Court referred the case to the Office of the Bar Confidant ("OBC")
for evaluation, report and recommendation. chanrob1es virtua1 1aw 1ibrary

OBC’s Report and Recommendation

The OBC found that respondent indeed appeared before the MBEC as counsel for Bunan
in the May 2001 elections. The minutes of the MBEC proceedings show that respondent
actively participated in the proceedings. The OBC likewise found that respondent
appeared in the MBEC proceedings even before he took the lawyer’s oath on 22 May
2001. The OBC believes that respondent’s misconduct casts a serious doubt on his
moral fitness to be a member of the Bar. The OBC also believes that respondent’s
unauthorized practice of law is a ground to deny his admission to the practice of law.
The OBC therefore recommends that respondent be denied admission to the Philippine
Bar.

On the other charges, OBC stated that complainant failed to cite a law which
respondent allegedly violated when he appeared as counsel for Bunan while he was a
government employee. Respondent resigned as secretary and his resignation was
accepted. Likewise, respondent was authorized by Bunan to represent him before the
MBEC.

The Court’s Ruling

We agree with the findings and conclusions of the OBC that respondent engaged in the
unauthorized practice of law and thus does not deserve admission to the Philippine Bar.

Respondent took his oath as lawyer on 22 May 2001. However, the records show that
respondent appeared as counsel for Bunan prior to 22 May 2001, before respondent
took the lawyer’s oath. In the pleading entitled Formal Objection to the Inclusion in the
Canvassing of Votes in Some Precincts for the Office of Vice-Mayor dated 19 May 2001,
respondent signed as "counsel for George Bunan." In the first paragraph of the same
pleading respondent stated that he was the" (U)ndersigned Counsel for, and in behalf of
Vice Mayoralty Candidate, GEORGE T. BUNAN." Bunan himself wrote the MBEC on 14
May 2001 that he had "authorized Atty. Edwin L. Rana as his counsel to represent him"
before the MBEC and similar bodies.

On 14 May 2001, mayoralty candidate Emily Estipona-Hao also "retained" respondent

as her counsel. On the same date, 14 May 2001, Erly D. Hao informed the MBEC that
"Atty. Edwin L. Rana has been authorized by REFORMA LM-PPC as the legal counsel of
the party and the candidate of the said party." Respondent himself wrote the MBEC on
14 May 2001 that he was entering his "appearance as counsel for Mayoralty Candidate
Emily Estipona-Hao and for the REFORMA LM-PPC." On 19 May 2001, respondent
signed as counsel for Estipona-Hao in the petition filed before the MBEC praying for the
proclamation of Estipona-Hao as the winning candidate for mayor of Mandaon, Masbate.

All these happened even before respondent took the lawyer’s oath. Clearly, respondent
engaged in the practice of law without being a member of the Philippine Bar.

In Philippine Lawyers Association v. Agrava, 1 the Court elucidated that: chanrob1es virtual 1aw library

The practice of law is not limited to the conduct of cases or litigation in court; it
embraces the preparation of pleadings and other papers incident to actions and special
proceedings, the management of such actions and proceedings on behalf of clients
before judges and courts, and in addition, conveyancing. In general, all advice to
clients, and all action taken for them in matters connected with the law, incorporation
services, assessment and condemnation services contemplating an appearance before a
judicial body, the foreclosure of a mortgage, enforcement of a creditor’s claim in
bankruptcy and insolvency proceedings, and conducting proceedings in attachment, and
in matters of estate and guardianship have been held to constitute law practice, as do
the preparation and drafting of legal instruments, where the work done involves the
determination by the trained legal mind of the legal effect of facts and conditions. (5
Am. Jur. p. 262, 263). (Italics supplied) . . .

In Cayetano v. Monsod, 2 the Court held that "practice of law" means any activity, in or
out of court, which requires the application of law, legal procedure, knowledge, training
and experience. To engage in the practice of law is to perform acts which are usually
performed by members of the legal profession. Generally, to practice law is to render
any kind of service which requires the use of legal knowledge or skill.
chanrob1es virtua1 1aw 1ibrary

Verily, respondent was engaged in the practice of law when he appeared in the
proceedings before the MBEC and filed various pleadings, without license to do so.
Evidence clearly supports the charge of unauthorized practice of law. Respondent called
himself "counsel" knowing fully well that he was not a member of the Bar. Having held
himself out as "counsel" knowing that he had no authority to practice law, respondent
has shown moral unfitness to be a member of the Philippine Bar. 3

The right to practice law is not a natural or constitutional right but is a privilege. It is
limited to persons of good moral character with special qualifications duly ascertained
and certified. The exercise of this privilege presupposes possession of integrity, legal
knowledge, educational attainment, and even public trust 4 since a lawyer is an officer
of the court. A bar candidate does not acquire the right to practice law simply by
passing the bar examinations. The practice of law is a privilege that can be withheld
even from one who has passed the bar examinations, if the person seeking admission
had practiced law without a license. 5

The regulation of the practice of law is unquestionably strict. In Beltran, Jr. v. Abad, 6 a
candidate passed the bar examinations but had not taken his oath and signed the Roll
of Attorneys. He was held in contempt of court for practicing law even before his
admission to the Bar. Under Section 3 (e) of Rule 71 of the Rules of Court, a person
who engages in the unauthorized practice of law is liable for indirect contempt of court.
7

True, respondent here passed the 2000 Bar Examinations and took the lawyer’s oath.
However, it is the signing in the Roll of Attorneys that finally makes one a full-fledged
lawyer. The fact that respondent passed the bar examinations is immaterial. Passing
the bar is not the only qualification to become an attorney-at-law. 8 Respondent should
know that two essential requisites for becoming a lawyer still had to be performed,
namely: his lawyer’s oath to be administered by this Court and his signature in the Roll
of Attorneys. 9

On the charge of violation of law, complainant contends that the law does not allow
respondent to act as counsel for a private client in any court or administrative body
since respondent is the secretary of the Sangguniang Bayan.

Respondent tendered his resignation as secretary of the Sangguniang Bayan prior to

the acts complained of as constituting unauthorized practice of law. In his letter dated
11 May 2001 addressed to Napoleon Relox, vice mayor and presiding officer of the
Sangguniang Bayan, respondent stated that he was resigning "effective upon your
acceptance." 10 Vice-Mayor Relox accepted respondent’s resignation effective 11 May
2001. 11 Thus, the evidence does not support the charge that respondent acted as
counsel for a client while serving as secretary of the Sangguniang Bayan.

On the charge of grave misconduct and misrepresentation, evidence shows that Bunan
indeed authorized respondent to represent him as his counsel before the MBEC and
similar bodies. While there was no misrepresentation, respondent nonetheless had no
authority to practice law.

WHEREFORE, respondent Edwin L. Rana is DENIED admission to the Philippine Bar. chanrob1es virtua1 1aw 1ibrary

SO ORDERED.
SOPHIA ALAWI, Complainant, vs. ASHARY M. ALAUYA, Clerk
of Court VI, Shari'a District Court, Marawi City, Respondent.

DECISION

NARVASA, C.J.:

Sophia Alawi was (and presumably still is) a sales representative (or
coordinator) of E. B. Villarosa & Partners Co., Ltd. of Davao City, a
real estate and housing company. Ashari M. Alauya is the incumbent
executive clerk of court of the 4th Judicial Shari'a District in Marawi
City. They were classmates, and used to be friends.

It appears that through Alawi's agency, a contract was executed for

the purchase on installments by Alauya of one of the housing units
belonging to the above mentioned firm (hereafter, simply Villarosa
& Co.); and in connection therewith, a housing loan was also
granted to Alauya by the National Home Mortgage Finance
Corporation (NHMFC).

Not long afterwards, or more precisely on December 15, 1995,

Alauya addressed a letter to the President of Villarosa & Co.
advising of the termination of his contract with the company. He
wrote:

" ** I am formally and officially withdrawing from and notifying you

of my intent to terminate the Contract/Agreement entered into
between me and your company, as represented by your Sales
Agent/Coordinator, SOPHIA ALAWI, of your company's branch office
here in Cagayan de Oro City, on the grounds that my consent was
vitiated by gross misrepresentation, deceit, fraud, dishonesty and
abuse of confidence by the aforesaid sales agent which made said
contract void ab initio. Said sales agent acting in bad faith
perpetrated such illegal and unauthorized acts which made said
contract an Onerous Contract prejudicial to my rights and interests."

He then proceeded to expound in considerable detail and quite

acerbic language on the "grounds which could evidence the bad
faith, deceit, fraud, misrepresentation, dishonesty and abuse of
confidence by the unscrupulous sales agent ** ;" and closed with
the plea that Villarosa & Co. "agree for the mutual rescission of our
contract, even as I inform you that I categorically state on record
that I am terminating the contract **. I hope I do not have to
resort to any legal action before said onerous and manipulated
contract against my interest be annulled. I was actually fooled by
your sales agent, hence the need to annul the controversial
contract."

Alauya sent a copy of the letter to the Vice-President of Villarosa &

Co. at San Pedro, Gusa, Cagayan de Oro City. The envelope
containing it, and which actually went through the post, bore no
stamps. Instead at the right hand corner above the description of
the addressee, the words, "Free Postage PD 26," had been typed.

On the same date, December 15, 1995, Alauya also wrote to Mr.
Fermin T. Arzaga, Vice-President, Credit & Collection Group of the
National Home Mortgage Finance Corporation (NHMFC) at Salcedo
Village, Makati City, repudiating as fraudulent and void his contract
with Villarosa & Co.; and asking for cancellation of his housing loan
in connection therewith, which was payable from salary deductions
at the rate of P4,338.00 a month. Among other things, he said:

" ** (T)hrough this written notice, I am terminating, as I hereby

annul, cancel, rescind and voided, the 'manipulated contract'
entered into between me and the E.B. Villarosa & Partner Co., Ltd.,
as represented by its sales agent/coordinator, SOPHIA ALAWI, who
maliciously and fraudulently manipulated said contract and
unlawfully secured and pursued the housing loan without my
authority and against my will. Thus, the contract itself is deemed to
be void ab initio in view of the attending circumstances, that my
consent was vitiated by misrepresentation, fraud, deceit,
dishonesty, and abuse of confidence; and that there was no meeting
of the minds between me and the swindling sales agent who
concealed the real facts from me."

And, as in his letter to Villarosa & Co., he narrated in some detail

what he took to be the anomalous actuations of Sophia Alawi.

Alauya wrote three other letters to Mr. Arzaga of the NHMFC, dated
February 21, 1996, April 15, 1996, and May 3, 1996, in all of which,
for the same reasons already cited, he insisted on the cancellation
of his housing loan and discontinuance of deductions from his salary
on account thereof.a He also wrote on January 18, 1996 to Ms.
Corazon M. Ordoez, Head of the Fiscal Management & Budget
Office, and to the Chief, Finance Division, both of this Court, to stop
deductions from his salary in relation to the loan in question, again
asserting the anomalous manner by which he was allegedly duped
into entering into the contracts by "the scheming sales agent."b

The upshot was that in May, 1996, the NHMFC wrote to the
Supreme Court requesting it to stop deductions on Alauya's UHLP
loan "effective May 1996," and began negotiating with Villarosa &
Co. "for the buy-back of ** (Alauya's) mortgage, and ** the refund
of ** (his) payments."c

On learning of Alauya's letter to Villarosa & Co. of December 15,

1995, Sophia Alawi filed with this Court a verified complaint dated
January 25, 1996 -- to which she appended a copy of the letter, and
of the above mentioned envelope bearing the typewritten words,
"Free Postage PD 26."1 In that complaint, she accused Alauya of:

1. "Imputation of malicious and libelous charges with no solid

grounds through manifest ignorance and evident bad faith;"

2. "Causing undue injury to, and blemishing her honor and

established reputation;"

3. "Unauthorized enjoyment of the privilege of free postage **;"

and

4. Usurpation of the title of "attorney," which only regular members

of the Philippine Bar may properly use.

She deplored Alauya's references to her as "unscrupulous, swindler,

forger, manipulator, etc." without "even a bit of evidence to cloth
(sic) his allegations with the essence of truth," denouncing his
imputations as irresponsible, "all concoctions, lies, baseless and
coupled with manifest ignorance and evident bad faith," and
asserting that all her dealings with Alauya had been regular and
completely transparent. She closed with the plea that Alauya "be
dismissed from the service, or be appropriately disciplined (sic) ** "

The Court resolved to order Alauya to comment on the complaint.

Conformably with established usage that notices of resolutions
emanate from the corresponding Office of the Clerk of Court, the
notice of resolution in this case was signed by Atty. Alfredo P.
Marasigan, Assistant Division Clerk of Court.2chanroblesvirtuallawlibrary

Alauya first submitted a "Preliminary Comment"3 in which he

questioned the authority of Atty. Marasigan to require an
explanation of him, this power pertaining, according to him, not to
"a mere Asst. Div. Clerk of Court investigating an Executive Clerk of
Court." but only to the District Judge, the Court Administrator or the
Chief Justice, and voiced the suspicion that the Resolution was the
result of a "strong link" between Ms. Alawi and Atty. Marasigan's
office. He also averred that the complaint had no factual basis;
Alawi was envious of him for being not only "the Executive Clerk of
court and ex-officio Provincial Sheriff and District Registrar," but
also "a scion of a Royal Family **."4

In a subsequent letter to Atty. Marasigan, but this time in much less

aggressive, even obsequious tones,5 Alauya requested the former to
give him a copy of the complaint in order that he might comment
thereon.6 He stated that his acts as clerk of court were done in good
faith and within the confines of the law; and that Sophia Alawi as
sales agent of Villarosa & Co. had, by falsifying his signature,
fraudulently bound him to a housing loan contract entailing monthly
deductions of P4,333.10 from his salary.

And in his comment thereafter submitted under date of June 5,

1996, Alauya contended that it was he who had suffered "undue
injury, mental anguish, sleepless nights, wounded feelings and
untold financial suffering," considering that in six months, a total
of P26,028.60 had been deducted from his salary.7 He declared that
there was no basis for the complaint; in communicating with
Villarosa & Co. he had merely acted in defense of his rights. He
denied any abuse of the franking privilege, saying that he
gave P20.00 plus transportation fare to a subordinate whom he
entrusted with the mailing of certain letters; that the words: "Free
Postage PD 26," were typewritten on the envelope by some other
person, an averment corroborated by the affidavit of Absamen C.
Domocao, Clerk IV (subscribed and sworn to before respondent
himself, and attached to the comment as Annex J);8 and as far as
he knew, his subordinate mailed the letters with the use of the
money he had given for postage, and if those letters were indeed
mixed with the official mail of the court, this had occurred
inadvertently and because of an honest mistake.9 chanroblesvirtuallawlibrary

Alauya justified his use of the title, "attorney," by the assertion that
it is "lexically synonymous" with "Counsellors-at-law," a title to
which Shari'a lawyers have a rightful claim, adding that he prefers
the title of "attorney" because "counsellor" is often mistaken for
"councilor," "konsehal or the Maranao term "consial," connoting a
local legislator beholden to the mayor. Withal, he does not consider
himself a lawyer.

He pleads for the Court's compassion, alleging that what he did "is
expected of any man unduly prejudiced and injured."10 He claims he
was manipulated into reposing his trust in Alawi, a classmate and
friend.11 He was induced to sign a blank contract on Alawi's
assurance that she would show the completed document to him
later for correction, but she had since avoided him; despite
"numerous letters and follow-ups" he still does not know where the
property -- subject of his supposed agreement with Alawi's
principal, Villarosa & Co. -- is situated;12 He says Alawi somehow
got his GSIS policy from his wife, and although she promised to
return it the next day, she did not do so until after several months.
He also claims that in connection with his contract with Villarosa &
Co., Alawi forged his signature on such pertinent documents as
those regarding the down payment, clearance, lay-out, receipt of
the key of the house, salary deduction, none of which he ever
saw.13chanroblesvirtuallawlibrary

Averring in fine that his acts in question were done without malice,
Alauya prays for the dismissal of the complaint for lack of merit, it
consisting of "fallacious, malicious and baseless allegations," and
complainant Alawi having come to the Court with unclean hands,
her complicity in the fraudulent housing loan being apparent and
demonstrable.

It may be mentioned that in contrast to his two (2) letters to

Assistant Clerk of Court Marasigan (dated April 19, 1996 and April
22, 1996), and his two (2) earlier letters both dated December 15,
1996 -- all of which he signed as "Atty. Ashary M. Alauya" -- in his
Comment of June 5, 1996, he does not use the title but refers to
himself as "DATU ASHARY M. ALAUYA."

The Court referred the case to the Office of the Court Administrator
for evaluation, report and recommendation.14 chanroblesvirtuallawlibrary

The first accusation against Alauya is that in his aforesaid letters, he

made "malicious and libelous charges (against Alawi) with no solid
grounds through manifest ignorance and evident bad faith,"
resulting in "undue injury to (her) and blemishing her honor and
established reputation." In those letters, Alauya had written inter
alia that:

1) Alawi obtained his consent to the contracts in question "by gross

misrepresentation, deceit, fraud, dishonesty and abuse of
confidence;"

2) Alawi acted in bad faith and perpetrated ** illegal and

unauthorized acts ** ** prejudicial to ** (his) rights and interests;"

3) Alawi was an "unscrupulous (and "swindling") sales agent" who

had fooled him by "deceit, fraud, misrepresentation, dishonesty and
abuse of confidence;" and

4) Alawi had maliciously and fraudulently manipulated the contract

with Villarosa & Co., and unlawfully secured and pursued the
housing loan without ** (his) authority and against ** (his) will,"
and "concealed the real facts **."

Alauya's defense essentially is that in making these statements, he

was merely acting in defense of his rights, and doing only what "is
expected of any man unduly prejudiced and injured," who had
suffered "mental anguish, sleepless nights, wounded feelings and
untold financial suffering," considering that in six months, a total
of P26,028.60 had been deducted from his salary.15 chanroblesvirtuallawlibrary

The Code of Conduct and Ethical Standards for Public Officials and
Employees (RA 6713) inter alia enunciates the State policy of
promoting a high standard of ethics and utmost responsibility in the
public service.16 Section 4 of the Code commands that "(p)ublic
officials and employees ** at all times respect the rights of others,
and ** refrain from doing acts contrary to law, good morals, good
customs, public policy, public order, public safety and public
interest."17 More than once has this Court emphasized that "the
conduct and behavior of every official and employee of an agency
involved in the administration of justice, from the presiding judge to
the most junior clerk, should be circumscribed with the heavy
burden of responsibility. Their conduct must at all times be
characterized by, among others, strict propriety and decorum so as
to earn and keep the respect of the public for the judiciary."18

Now, it does not appear to the Court consistent with good morals,
good customs or public policy, or respect for the rights of others, to
couch denunciations of acts believed -- however sincerely -- to be
deceitful, fraudulent or malicious, in excessively intemperate.
insulting or virulent language. Alauya is evidently convinced that he
has a right of action against Sophia Alawi. The law requires that he
exercise that right with propriety, without malice or vindictiveness,
or undue harm to anyone; in a manner consistent with good morals,
good customs, public policy, public order, supra; or otherwise
stated, that he "act with justice, give everyone his due, and observe
honesty and good faith."19 Righteous indignation, or vindication of
right cannot justify resort to vituperative language, or downright
name-calling. As a member of the Shari'a Bar and an officer of a
Court, Alawi is subject to a standard of conduct more stringent than
for most other government workers. As a man of the law, he may
not use language which is abusive, offensive, scandalous, menacing,
or otherwise improper.20 As a judicial employee, it is expected that
he accord respect for the person and the rights of others at all
times, and that his every act and word should be characterized by
prudence, restraint, courtesy, dignity. His radical deviation from
these salutary norms might perhaps be mitigated, but cannot be
excused, by his strongly held conviction that he had been grievously
wronged.

As regards Alauya's use of the title of "Attorney," this Court has

already had occasion to declare that persons who pass the Shari'a
Bar are not full-fledged members of the Philippine Bar, hence may
only practice law before Shari'a courts.21 While one who has been
admitted to the Shari'a Bar, and one who has been admitted to the
Philippine Bar, may both be considered "counsellors," in the sense
that they give counsel or advice in a professional capacity, only the
latter is an "attorney." The title of "attorney" is reserved to those
who, having obtained the necessary degree in the study of law and
successfully taken the Bar Examinations, have been admitted to the
Integrated Bar of the Philippines and remain members thereof in
good standing; and it is they only who are authorized to practice
law in this jurisdiction.

Alauya says he does not wish to use the title, "counsellor" or

"counsellor-at-law," because in his region, there are pejorative
connotations to the term, or it is confusingly similar to that given to
local legislators. The ratiocination, valid or not, is of no moment. His
disinclination to use the title of "counsellor" does not warrant his
use of the title of attorney.

Finally, respecting Alauya's alleged unauthorized use of the franking

privilege, the record contains no evidence adequately establishing
the accusation.

WHEREFORE, respondent Ashari M. Alauya is hereby

REPRIMANDED for the use of excessively intemperate, insulting or
virulent language, i.e., language unbecoming a judicial officer, and
for usurping the title of attorney; and he is warned that any similar
or other impropriety or misconduct in the future will be dealt with
more severely.

SO ORDERED.

Exception: Law student practice rukle

Rule 9.01
Rule 9.02

G.R. No. L-24864 April 30, l985

FORTUNATO HALILI, doing business under the name and style HALILI TRANSIT (substituted
by EMILIA DE VERA DE HALILI), petitioner
vs.
COURT OF INDUSTRIAL RELATIONS and HALILI BUS DRIVERS and CONDUCTORS UNION
(PTGWO), respondents.

G.R. No. L-27773 April 30, l985

EMILIA DE VERA VDA. DE HALILI, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS and HALILI BUS DRIVERS AND CONDUCTORS UNION
(PTGWO), respondents.

G.R. No. L-38655 April 30, l985

FELICIDAD M. TOLENTINO, et al., petitioners,

vs.
COURT OF INDUSTRIAL RELATIONS, et al., respondents.

G.R. No. L-30110 April 30, l985

EMILIA DE VERA VDA. DE HALILI petitioner,

vs.
HALILI BUS DRIVERS AND CONDUCTORS UNION-PTGWO and COURT OF INDUSTRIAL
RELATIONS, respondents.

RESOLUTION

MAKASIAR, J.:

Before Us for resolution is the urgent motion to cite Atty. Benjamin C. Pineda, Ricardo Capuno and
Manila Bank (Cubao Branch) in contempt for the alleged continued failure of aforenamed parties to
comply with the temporary mandatory restraining order issued by this Court on September 1, 1983
and with the resolution dated September 13, 1983 which again directed Atty. Pineda and union
administrator Capuno to comply with the aforesaid mandatory restraining order and which ordered
the Manila Bank to transfer the funds allocated for the workers to the NLRC (p. 376, L-24864, rec.; p.
301, L027773 rec.).

The issuance of the temporary mandatory restraining order stemmed from the questioned orders of
September 23, 1982 and February 9, 1983 issued by Labor Arbiter Raymundo Valenzuela in Case
No. 1099-V before the NLRC which orders respectively allowed the sale of the property awarded to
satisfy or answer for the claims of the union members in these four cases and authorized the
distribution of the proceeds of the purchase.

For a better appreciation of the aforesaid motion for contempt, We must recall certain prefatory facts
which the Solicitor General has so aptly summed up. Thus:

The above-entitled cases involve disputes regarding claims for overtime of more than
five hundred bus drivers and conductors of Halili Transit. Litigation initially
commenced with the filing of a complaint for overtime with the defunct Court of
Industrial Relations on August 20, 1958 docketed as CIR Case No. 1099-V. The
disputes were eventually settled when the contending parties reached an Agreement
on December 23, 1974, the pertinent portions of which are as follows:

WHEREAS, in the face of this strong urging on the part of the Supreme Court
Justices upon the parties to put an immediate end to this case by amicable
settlement, the parties repeatedly came to conference, conscientiously explored all
avenues of settlement, and finally arrived at the tentative agreement (tentative
because of the condition that the same be sanctioned by the court in the estate case)
whereby the Administratrix would transfer to the employees title to that tract of land,
covered by TCT No. 36389, containing an area of approximately 33,952 square
meters, situated in the Barrio of San Bartolome, Municipality of Caloocan, Province
of Rizal, and pay in addition the cash amount of P25,000.00 in full and final
satisfaction of all the claims and causes of action of all of the employees against the
estate of Fortunato F. Halili subject of CIR Case No. 1099-V.

xxx xxx xxx

NOW, THEREFORE, for and in consideration of the foregoing and of the covenants,
stipulations and undertakings hereinafter contained, the parties have agreed as
follows:

l. The UNION, its officers and members-claimants relative to CIR Case No. 1099-V,
shall withdraw and dismiss with prejudice Case No. 1099-V filed by the UNION in
behalf of its members-claimants before the Court of Industrial Relations and all its
incidents thereto.

2. The ESTATE shall deliver or cause to be delivered, to the UNION the following:

(a) Deed of Transfer of a parcel of land situated in Barrio San Bartolome, Caloocan
City, containing an area of THIRTY-THREE THOUSAND NINE HUNDRED FIFTY-
TWO (33,952) Square Meters, more or less, and covered by Transfer Certificate of
Title No. 35389 of the Registry of Deeds of Rizal, to be made, upon authority and
approval granted by the Court of First of Rizal, Branch IV, at Quezon City, in Proc.
No. Q-10852 in the name of the Halili Bus Drivers & Conductors Union (PTGWO),
free from any and all liens encumbrances, and any and all claims whatsoever.

(b) Negotiable Check for TWENTY-FIVE THOUSAND (P25,000.00) PESOS in the

name of Domingo D. Cabading, President of the UNION.
3. The transfer of the above-described parcel of land and receipt of the amount of
P25,000.00 constitute the full and final satisfaction of the claims and award in said
CIR Case No. 1099-V, as well as any and all attorney's liens in said case, for and in
consideration of which the UNION members-claimants in CIR Case No. 1099-V by
these present now and forever release and quitclaim Halili Enterprises, Halili Transit,
Fortunato F. Halili his estate, heirs and successors by reason of CIR Case No. 1099-
V, it being their intention that they be absolutely, completely and finally absolved and
released from any and all liability in said case, including attorneys' liens the transfer
of the property and payment of the amount hereinabove stated constituting for all
intents and purposes a full, final and complete settlement and satisfaction of the
award in CIR Case No. 1099-V and all incidents thereto.

4. The UNION and its undersigned officers hereby warrant that the UNION is a duly
registered labor organization and that in a special meeting called for the purpose
they were duly authorized on December 22, 1974, by all the members- claimants in
CIR Case No. 1099-V to sign this Memorandum of Agreement with Release and
Quitclaim which was unanimously approved and ratified by said members-claimants
as evidenced by a Resolution dated December 22, 1974, a copy of which is attached
hereto and made a part hereof as Annex "B", and hereby jointly and severally hold
the estate and heirs of Fortunato F. Halili free and harness from, and undertake to
indemnify them for, any and all liability for any claims by members of the UNION,
their heirs, assigns and agents relating to CIR Case No. 1099-V or attorneys' liens in
connection therewith (69 SCRA 509-510).

On January 6, 1975, pursuant to the Agreement, the administratrix of the estate of

Fortunato F, Halili executed a Deed of Conveyance of Real Property, transferring the
aforementioned parcel of land to the Halili Bus and Conductors Union (PTGWO) in
trust for the members of the union claimants. The parcel of land was eventually
registered in the name of the Union on February 14, 1975. Hence, on February 10,
1976, the contending parties moved for the dismissal of G.R. No. L-30110 and G.R.
No. L-38655, which this Honorable Court granted on February 27, 1976 (69 SCRA
505). The two other cases, G.R. No. L-24864 and G.R. No. L- 27773, were
previously disposed of on February 26, 1968 and December 28, 1970, respectively
(22 SCRA 785. and 36 SCRA 522).

On August 9, 1982, the Union, through Atty. Benjamin C. Pineda, filed an urgent
motion with the Ministry of Labor and Employment (MOLE) requesting for authority to
sell and dispose of the property. The motion was granted in an order dated
September 23, 1982. A prospective buyer, the Manila Memorial Park Cemetery, inc.
expressed its misgivings on the authority of the Union to sell the property in view of
sec. 66 of PD 1529 which requires no less than an order from a court of competent
jurisdiction as authority to sell property in trust. So, Atty. Pineda filed a motion with
the Supreme Court on December 1, 1982 requesting for authority to sell the property,
This Honorable Court, however, merely noted the motion in a resolution dated
December 8, 1982.

Nevertheless, Atty. Pineda, without authority from the Supreme Court but relying on
the earlier authority given him by the Ministry of Labor, filed another urgent motion
with the latter, praying that the Union be authorized to sell the lot to the Manila
Memorial Park Cemetery, Inc. and to make arrangements with it such that payment
will be advanced for the real estate taxes inclusive of penalties, attorney's lien which
is equivalent to a thirty-five percent (35%) of the total purchase price, and home
 developer's fee of P69,000.00. Apparently, the prospective purchaser had decided to
withdraw its objection regarding the Union's authority to sell. In an Order dated
February 9, 1983, Labor Arbiter Raymundo R. Valenzuela granted the motion. So,
the sale was finally consummated on June 7, 1983, resulting in the execution of an
escrow agreement on June 8, 1983 wherein the purchase price was deposited under
escrow with the Manila Bank-Cubao Branch. The Bank then released the amounts
due the claimants in accordance with the escrow agreement" (pp. 352- 356, L-24864
rec.).

The dispositive portion in L-24864 is re-stated hereunder:

WHEREFORE, the appealed order and resolution en banc are hereby affirmed and
the Court of Industrial Relations is hereby enjoined to make a judicial determination
of the union membership of the claimants, while the Examining Division of said court
shall proceed with its computation of the compensable hours of work rendered by,
and the corresponding compensation payable to, the drivers and conductors
admitted by both parties to be union members since October 1, 1956 and those
contended by the union to be such members but disputed by the employer. No costs.
So ordered (p. 186, L-24864 rec.).

When Atty. Jose C. Espinas (herein movant and alleged original counsel for the Union) learned of
the sale and apportionment of the proceeds from past Union president Amado Lopez, he requested
Labor Arbiter Raymundo Valenzuela to allow him to look into the records of Case No. 1099-V. The
latter, however, told him that the records of the aforecited case were missing. Thereupon, Atty.
Espinas requested Director Pascual Reyes of the NLRC to locate the records (p. 356, L24864 rec.).

Hence, Atty. Espinas filed the urgent motion with prayer for a temporary mandatory restraining order
on August 26, 1983 and the supplement thereto on August 29, 1983 (pp. 215, 227, L-24864 rec.).

On August 30, 1983, the records of Case No. 1099-V were finally found and Atty. Espinas was dully
informed of the development,

The above two motions question the legality of the orders dated September 23, 1982 and February
9, 1983 issued by Labor Arbiter Raymundo Valenzuela in Case No. 1099-V before the NLRC which
authorized the sale of the awarded property and the distribution of the proceeds from such purchase.

Movants Union and counsel Espinas upon filing of the motions urgently pray of thisourt to:

1. Require Atty. Benjamin C. Pineda to deposit with the NLRC the amount of P712,992.00 paid to
him or deposited to his account at Manila Bank, Cubao Branch,allegedly representing 35%
attorney's fees on the sale of 33,952 square meters of the lot registered in the name of the Union;

2. Require the Halili Drivers and Conductors Union through Domingo Cabading or any of his
representatives to deposit with the NIRC the 6% alleged union expenses paid to them or similarly
deposited to their account;

3. Implead with leave of court this Manila Bank Cubao Branch to require the said bank to prevent
further withdrawals of amount deposited in the name of Atty. Pineda and/or the Halili Drivers and
Conductors Union or any of its officers and to turn over any remaining deposits to the NLRC for
proper disposition;
4. Should Atty. Pineda and the Union officers have already withdrawn the deposits or parts thereof,
require them to post a bond in the equivalent amounts of 35% (attorney's fee), 6% (union expenses),
and 5% (broker's fee) respectively of the total proceeds of the sale of the property, solidarity (p. 219,
L-24864 rec.; p. 160, L-27773 rec.).

Likewise, and after due consideration of the merits, movants prayed that—

1. the order of Arbiter Valenzuela dated February 9, 983 be nullified insofar as it allows Atty. Pineda
35% attorney's fees;

2. the NLRC be directed to locate the records of Case No. 1099-V or reconstitute the same and
thereafter to equitably dispose 20% as fees to all lawyers who participated in the proceedings and
any excess amounts to be again distributed to the workers; and

3. these cases be remanded to the NLRC with instructions as above-stated and that the proper
penalty be imposed on those involved and who have acted fraudulently and illegally (p. 220, L-24864
rec.; p. 165, L-27773 rec.).

The succeeding pleadings and developments which are common to all these cases are now
presented chronologically.

On August 29, 1983, Atty. Espinas, for himself and members of the respondent Union, filed a
supplement to urgent motion stating that the prayers in the urgent motion of August 26, 1983 are
reiterated and praying for the nullification of Arbiter Valenzuela's order not only on the award of
attorney's fees but also on the allowance of payment of "union obligations" not previously authorized
nor approved by the NLRC (p. 227, L-24864, rec.; p. 176, L-27773 rec.).

In its resolution dated September 1, 1983, this Court impleaded the Manila Bank, Cubao Branch as
party respondent and directed the issuance of a temporary mandatory restraining order (p. 234, L-
24864 rec. & p. 187, L-27773 rec.). This Court correspondingly issued a temporary mandatory
restraining order on the same date which enjoined Atty. Benjamin C. Pineda or his agents or any
person acting in his stead to deposit with the NLRC the amount of P712,992.00 paid to him or
deposited in his account at Manila Bank, Cubao Branch allegedly representing 35% attorney's fees
on the sale of 33,952 square meters of the lot registered in the name of Halili Drivers and
Conductors Union; directed the Union thru Domingo Cabading or his agents to deposit with the
NLRC 6% alleged union expenses paid to the Union or similarly deposited to its account; and
ordered the NLRC and Manila Bank, Cubao Branch, or their agents or persons in their stead not to
allow withdrawals of amounts deposited in the name of Atty. Benjamin C. Pineda and/or the Union or
any of its officers (P. 235, L-24864; p. 188, L-27773 rec.).

On September 6, 1983, respondent Union, thru Atty. Pineda, filed its comment, in compliance with
the resolution of September 1, 1983, on the urgent motion and the supplement thereto both filed by
counsel Espinas, alleging therein that the subject matter sought to be enjoined or mandated by the
restraining order ceased to exist rendering the same moot and academic, and thus praying for the
dismissal of the said motion and the supplement thereto (p. 237, L-24864 rec.; p. 191, L-27773 rec.).

On September 7, 1983, Atty. Pedro Lopez, an original associate of Atty. Espinas, filed his motion for
leave to intervene, with the submission that the lawyers involved should only divide 20% fees as per
the workers' contract and the rest refunded by Atty. Pineda and the alleged "union officers" for
redistribution to the members (p. 265, L-24864, rec.; p. 219. L-27773 rec.).
Atty. Espinas, in behalf of the workers, filed a manifestation and motion to require Atty, Pineda and
the union to comply with the temporary mandatory restraining order on September 9, 1983, with
prayer that the Manila Bank be ordered to transfer the funds allocated for the workers to the NLRC,
which should be instructed to pay the workers upon proper Identification (without prejudice to
additional shares) or to mail such amounts by money order or manager's check to the workers'
addresses as furnished to the NLRC (p. 274, L-24864, rec.; p. 231, L-27773 rec.).

On September 12, 1983, petitioner filed a manifestation in compliance with the resolution of
September 2, 1983 stating, among other things, that its liability had been completely extinguished
with the approval of the Memorandum of Agreement with Release and Quitclaim in L-38655 and L-
30110; that said agreement operated as an absolute and complete release of petitioner from any
liability to the Union; and that petitioner had not been given any notice of any proceedings respecting
cases subsequent to the promulgation of the decisions aforestated (p. 281, L-24864, rec.; p. 237, L-
27773 rec.).

Counsel Espinas (for the workers involved) filed his reply to comments of respondent Union on
September 14, 1983 praying for this Court to:

1. nullify the order of February 9, 1983 issued by Arbiter Raymundo Valenzuela in CIR Case No.
1099-V and others connected therewith regarding the distribution of proceeds of the sale of the land
belonging to the members-claimants for lack of due process and for being contrary to law;

2. nullify the 35% attorney's fees of Atty. Benjamin Pineda as illegal and unconscionable and in
disregard of other lawyers in the case;

3. require reimbursement to the members-from the Union P101,856.00 allocated without their
consent as Union expenses; P101,856 unreceipted brokers' fees less P4,020.40 expenses for the
transfer of title; to refund the 1 % of the net proceeds, P9,596.18, for named claimants; and to
secure a refund of P308,000.00 from the P712,992.00 fees of Atty. Pineda (the excess of 20% fees
for all lawyers);

4. subject the balance of P404,992.00 of the remainder of Atty. Pineda's 35% fees for distribution
among the three lawyers as may be determined by the NLRC; and

5. should this Court so decides, fix the fees (p. 285, L- 24864 rec.; p. 240, L-27773 rec.).

On September 13, 1983, the Solicitor General filed his comment on the urgent motion and the
supplement thereto dated August 25, 1983 and August 29, 1983, respectively with the
recommendations that (1) the orders of Arbiter Valenzuela dated September 23, 1982 and February
9, 1983 be nullified for having been issued without due process; (2) the case must be remanded to
the NLRC for further proceedings; and (3) the temporary restraining order issued by this Court on
September 1, 1983 be maintained, pending final resolution by the NLRC (p. 351, L-24864 rec.).

The Solicitor General, on October 6, 1983, filed his manifestation and motion in lieu of comment on
the motion of Atty. Pedro Lopez for leave to intervene in L-24864 and L-27773 (p. 360, L-24864 rec.;
p. 289, L-27773 rec.).

On October 6, 1983, counsel Espinas filed his comment on the intervention of Atty. Pedro Lopez
wherein he offers no objection to the latter's intervention and states that said counsel is also entitled
to attorney's fees in accordance with his participation (p. 364, L-24864 rec.; p. 292, L-27773 rec.).
Atty. Pineda filed his comment and manifestation on October 7, 1983, in compliance with the
resolution of September 13, 1983, alleging therein that as per Retainer's Contract dated January 1,
1967, he handled Case No. 1099-V before the Court of Industrial Relations alone. On the mandatory
restraining order, Atty. Pineda claims that as of October 4, 1983, he had a balance of P2,022.70 in
his account with the Manila Bank (p. 370, L-24864 rec.; p. 295, L-27773 rec.).

In its resolution dated October 18, 1983, this Court (1) set, aside as null and void the orders of
September 23, 1982 and February 9, 1983 of Arbiter Raymundo R. Valenzuela; (2) allowed the
intervention of Atty. Pedro Lopez; (3) directed the Manila Bank (Cubao Branch), Atty. Benjamin
Pineda, and the Halili Drivers and Conductors Union through Domingo Cabading or any of his
representatives, to comply with the temporary mandatory restraining order issued on September 1,
1983 and the resolution dated September 13, 1983, within ten [10] days from receipt thereof; and (4)
remanded these cases to the NLRC for further proceedings (p. 374, L-24864 rec.; p. 299, L-27773
rec.).

The day before or on October 17, 1983, Sergio de Pedro, as representative of the workers and
assisted by Atty. Espinas, thus fided the urgent motion to cite Atty. Pineda, Ricardo Capuilo and
Manila Bank (Cubao Branch) in contempt, alleging therein that after two letters dated October 6 and
October l4, l983 to the NLRC which inquired as to whether or not compliant, with the restraining
order had been made, the Commission certified that as of October 14, 1983, no deposits had been
effected by the parties so (directed (p. 376, L-24864 rec.; p. 301, L-27773 rec.).

In its manifestation and motion filed on November 2, 1983, respondent Manila Banking Corporation
(Rustan-Cubao Branch), in compliance with this Court's resolution of September 13, 1983, stated
that it transmitted or paid to the NLRC the amount of P417,380.64 under Cashier's Check No.
34084190 for the account of the Union and P2,022.70 under Cashier's Check No. 34084191 for the
account of Atty. Pineda and thus prayed therein that the aforesaid transmittals be deemed as
sufficient compliance with the aforecited resolution and that the urgent motion to cite respondents in
contempt dated October 17, 1983 be considered moot and academic (p. 390, L-24864 rec.).

On November 8, 1983, respondent Atty. Pineda filed his manifestation and motion in lieu of
comment in compliance with this Court's resolution of October 20, 1983, stating that he and
respondent Union thereby adopt the aforecited manifestation and motion of respondent Manila
Banking Corporation and thus prayed that since they have complied with this Court's resolution of
September 13, 1983, the urgent motion to cite them for contempt be considered moot and academic
(p. 394, L-24864 rec.; p. 310, L-27773 rec.).

On November 10, 1983, respondent Manila Banking Corporation filed another manifestation and
motion in lieu of commence, by way of compliance with the Court's resolution of October 20, 1983
with prayer that its previous manifestation and motion dated October 28, 1983 and filed on
November 2, 1983 be considered as sufficient compliance with the resolution of September 13, 1983
which would render the urgent motion to cite respondents in contempt moot and academic (p. 396,
L-24864 rec. p. 312, L-27773 rec.).

On the foregoing manifestations and motions, representative Sergio de Pedro, with the assistance of
Atty. Espinas, filed a comment on November 16,1983 wherein he alleged that out of the
P2,037,120.00 purchase price, only Pl,940,127.29 was deposited with the Manila Bank; that Atty.
Pineda has yet to return the balance of P710,969,30; and that the Union has still to account for
P111,452.18 (p. 399, L- 24864 rec.; p. 315, L-27773 rec.).

December 14, 1983, respondent Union filed its reply to Mr. de Pedro's above unsigned comment
therein stating among other things that the alleged missing amount of P96.992.71 was used for the
payment of outstanding real estate taxes on real property of said Union covered by TCT No. 205755
and that the amount of P2,022.70 only was remitted by Manila Bank to the NLRC for the account of
Atty. Pineda (p. 323, L-27773 rec.)

On December 20, 1983, Mr. de Pedro and Atty. Espinas, for the workers involved, filed their
rejoinder to the comment of Atty. Pineda and Mr. Capuno reiterating therein their plea to declare
Atty. Pineda and Mr. Capuno in contempt of court and to mete out the proper penalty (p. 328, L-
27773 rec.).

The Manila Banking Corporation filed its compliance with the Court resolution of November 22, 1983
on February 3, 1984, praying that its report to the NLRC on the amount of withdrawals be
considered as sufficient compliance with the said resolution (p. 343, L-27773 rec.).

Atty. Espinas filed his comment and motion on March 15, 1984, stating among other things that as
per report of the Manila Bank to the NLRC, Atty. Pineda has not yet complied with the said order. He
thus moved that Atty. Pineda be required to post a bond on the undeposited balance in the amounts
of P710,969.30 and that Mr. Capuno be also required to post a bond before the NLRC on the
undeposited balance of P52,236.04 during the pendency of the motion for contempt (p. 373, L-
27773 rec.).

On April 4, 1984, Mr. Sergio de Pedro filed his reply to the aforesaid comment of the Union
administrator and Atty. Pineda stating therein that there are still questions to be resolved on the
merits before the NLRC and hence, prays that Arbiter Antonio Tirona be required to continue hearing
the merits of the case pending in the said Commission (p. 377, L-27773 rec.).

Before We resolve the motion for contempt, certain crucial facts which have surfaced and which
precipitated Our issuance of the resolution of October 18, 1983 declaring the two questioned orders
of Arbiter Valenzuela as null and void, must be retraced.

Then Union President Amado Lopez, in a letter dated August 21, 1958, informed J.C. Espinas and
Associates that the general membership of the said Union had authorized a 20% contingent fee for
the law firm based on whatever amount would be awarded the Union (p. 267, L-24864 rec.).

Atty. Jose C. Espinas, the original counsel, established the award of 897 workers' claim in the main
cases before the defunct CIR and the Supreme Court. In L-24864, the Notice of Judgment of this
Court dated February 26, 1968 was served on Messrs. J.C. Espinas & Associates (p. 188, L-24864
rec.). In L-27773, the Notice of Judgment dated December 29, 1970 was sent to Atty. B.C. Pineda &
Associates under same address-716 Puyat Bldg., Suit 404 at Escolta, Manila (p. 147, L-27773 rec.)
Note that this is the same address of Atty. J.C. Espinas & Associates.

When Atty. 'Pineda appeared for the Union in these cases, still an associate of the law firm, his
appearance carried the firm name B.C. Pineda and Associates," giving the impression that he was
the principal lawyer in these cases.

Atty. Pineda joined the law firm of Atty. Espinas in 1965 when these cases were pending resolution.
He always held office in the firm's place at Puyat Building, Escolta until 1974, except in 1966 to 1967
when he transferred to the Lakas ng Manggagawa Offices. During this one-year stint at the latter
office, Atty. Pineda continued handling the case with the arrangement that he would report the
developments to the Espinas firm. When he rejoined the law firm in 1968, he continued working on
these cases and using the Puyat Building office as his address in the pleadings.
When Atty. Pineda rejoined the Espinas firm in 1968, he did not reveal to his partners (he was made
the most senior partner) that he had a retainer's contract entered into on January 1, 1967 which
allegedly took effect in 1966. He stayed with the law firm until 1974 and still did not divulge the 1967
retainer's contract. Only the officers of the Union knew of the contract.

The alleged retainer's contract between Atty. Pineda and the Union appears anomalous and even
illegal as well as unethical considering that-

1. The contract was executed only between Atty. Pineda and the officers of the Union chosen by
about 125 members only. It was not a contract with the general membership, Only 14% of the total
membership of 897 was represented. This violates Article 242 (d) of the Labor Code which provides:

The members shall determine by secret ballot, after due deliberation, any question of
major policy affecting the entire membership of the organization, unless the nature of
the organization or force majeure renders such secret ballot impractical, in which
case the board of directors of the organization may make the decision in behalf of the
general membership (emphasis supplied).

2. The contingent fee of 30% for those who were still working with Halili Transit and the 45% fee for
those who were no longer working worked to the prejudice of the latter group who should and were
entitled to more benefits. Thus, too, when the alleged retainer's contract was executed in 1967, the
Halili Transit had already stopped operations in Metro Manila. By then, Atty. Pineda knew that all the
workers would be out of work which would mean that the 45% contingent fee would apply to all.

3. The contract which retroactively took effect on January 1, 1966, was executed when Atty. Espinas
was still handling the appeal of Halili Transit in the main case before the Supreme Court. Atty.
Pineda would have but did not substitute himself in place of Atty. Espinas or the law firm on the
basis of such contract.

4. When Atty. Pineda filed his motion for approval of his attorney's lien with Arbiter Valenzuela on
February 8, 1983, he did not attach the retainer's contract.

5. The retainer's contract was not even notarized (p. 248, L-24864 rec.).

The Manila Memorial Park Cemetery, Inc., as the prospective buyer, initially expresses its misgivings
over the authority of the Union to sell subject property conformably with Section 66 of P.D. No. 1529,
which requires an order from a court of competent jurisdiction authorizing the sale of a property in
trust. The pertinent portion of Section 66 provides:

No instruments which transfers or mortgages or in any way deals with registered land
in trust shall be registered, unless the enabling power thereto is expressly conferred
in the trust instrument, or unless a final judgment or order of a court of competent
jurisdiction has construed the instrument in favor of the power, in which case a
certified copy of such judgment or order may be registered.

The decision of aforenamed purchaser to stop questioning the Union's authority to sell and the
expeditious manner by which Arbiter Valenzuela granted Atty. Pineda's motion for such authority to
sell the property make the entire transaction dubious and irregular.

Thus, without notice to the other lawyers and parties, Atty. Pineda commenced the proceeds before
the NLRC with the filing of a motion and manifestation on August 9, 1982 with Arbiter Valenzuela of
the NLRC Office of the Labor Ministry wherein he asked for authority to sell the property. On
September 23, 1983 or just over a month, Arbiter Valenzuela approved the motion per order of the
same date. Notably, only Atty. Pineda and the lawyers of the purchaser were informed of such order.

On February 4, 1983, again without notice to Atty. Espinas and Atty. Lopez, Atty. Pineda filed a
motion with Arbiter Valenzuela wherein he asked for authority to distribute the proceeds of the sale
of the property. This distribution would include his attorney's fee which was allegedly the subject of a
retainer contract entered into between him and the alleged Union officers, On February 9, 1983, or
barely five days from the day the motion was filed, Arbiter Valenzuela, without informing the other
lawyers and relying exclusively on the unverified motion of Atty. Pineda (the records of the case
were not on hand), approved the said motion which authorized the appointment.

This Court, as earlier stated, nullified said orders dated September 23, 1982 and February 9, 1983 of
Labor Arbiter Valenzuela as violative of the due process clause. It is a settled rule that in
administrative proceedings, or cases coming before administrative tribunals exercising quasi-judicial
powers, due process requires not only notice and hearing, but also the consideration by the
administrative tribunal of the evidence presented; the existence of evidence to support the decision;
its substantiality a decision based thereon or at least contained in the record and disclosed to the
parties; such decision by the administrative tribunal resting on its own independent consideration of
the law and facts of the controversy; and such decision acquainting the parties with the various
issued involved and the reasons therefore (Ang Tibay vs. Court, 69 Phil. 635, cited on p. 84,
Philippine Constitutional Law, Fernando, 1984 ed.)

Significantly Atty. Pineda's act of filing a motion with this Court on December 1, 1982 praying for
authority to sell was by itself an admission on his part that he did not possess the authority to sell the
property and that this Court was the proper body which had the power to grant such authority. He
could not and did not even wait for such valid authority but instead previously obtained the same
from the labor arbiter whom he knew was not empowered to so authorize. Under Article 224 (a) of
the Labor Code, only final decisions or awards of the NLRC, the Labor Arbiter, or compulsory or
voluntary arbitrators may be implemented or may be the subject of implementing orders by
aforenamed body or officers.

When Atty. Espinas discovered the sale of the property, he went to Arbiter Valenzuela to look into
the transaction who told him that the records of CIR Case No. 1099-V were missing. It took director
Pascual Reyes of the NLRC to locate the records.

The 45% attorney's lien on the award of those union members who were no longer working and the
30% lien on the benefits of those who were still working as provided for in the alleged retainer's
contract are very exorbitant and unconscionable in view of Section 11, Rule VIII of Book III which
explicitly provides:

Sec. 11. Attorney's fees—Attorney's fees on any judicial or administrative

proceedings for the recovery of wages shall not exceed 10% of the amount awarded.
The fees may be deducted from the total amount due the winning party.

The amount of P101,856.00 which Atty. Pineda donated to the Union and which actually
corresponds to 5% of the total 35% attorney's fees taken from the proceeds (p. 263, L-24864, rec.)
appears improper since it amounts to a rebate or commission. This amount was subsequently
treated as union miscellaneous operating expenses without the consent of the general membership.

Thus, in the case of Amalgamated Laborers' Association vs. Court of Industrial Relations (L-23467,
22 SCRA 1267 [March 27, 1968]), We declared:
 We strike down the alleged oral agreement that the union president should share in
the attorney's fees. Canon 34 of Legal Ethics condemns this arrangement in terms
clear and explicit. It says: 'No division of fees for legal services is proper, except with
another lawyer, based upon a division of service or responsibility.' The union
president is not the attorney for the laborers. He may seek compensation only as
such president. An agreement whereby a union president is allowed to share in
attorney's fees is immoral. Such a contract we emphatically reject. It cannot be
justified.

A contingent fee contract specifying the percentage of recovery an attorney is to

receive in a suit 'should be reasonable under all the circumstances of the case,
including the risk and uncertainty of the compensation, but should always be subject
to the supervision of a court, as to its reasonableness. (emphasis supplied).

A deeper scrutiny of the pleadings in L-24864 notably indicates a fraudulent or deceitful pattern in
the actuations of Atty. Pineda. Thus, in his motion for execution of judgment filed on September 18,
1965 in this case, he signed for and in behalf of "J.C. Espinas & Associates" (p. 323, rec.). In his
manifestation dated December 10, 1968, he signed as "B.C. Pineda," lone counsel for petitioner (p.
327, rec.); and yet, he carried the address of Espinas & Associates at 716 G. Puyat Building,
Escolta.

However, in the October 29, 1968 resolution of this Court, a copy thereof was served on "Messrs.
J.C. Espinas, B.C Pineda, J.J. dela Rosa & Associates" at Puyat Building, Escolta (p. 324, rec.). In
the notice of judgment dated December 29, 1970, this Court addressed the said pleading to "Attys.
B.C. Pineda & Associates with the same Puyat Building address (p. 325, rec.). Notably also, then
Union President Amado Lopez addressed his letter dated August 21, 1958 to J.C. Espinas &
Associates" wherein he informed the latter that the general membership of the Union had authorized
them a 20%, contingent fee on whatever award would be given the workers (p. 267, rec.).

The Manila Banking Corporation (Cubao Branch) has manifested that it turned over to the NLRC the
amount of P417,380.64 for the Union's account, which appears to be the balance of P950,021.76
corresponding to the net proceeds for distribution to the workers after deducting P525,480.40, the
total payments to claimants. The amount of P417,380.64 appears lacking, since accurately
computed, the balance should be P424,541,36.

However, the Union has yet to account for P101,856.00, the 5% donation or share from Atty.
Pineda's attorney's fee of 35%.

For the account of Atty. Pineda, the Manila Banking Corporation has remitted to the NLRC the
amount of P2,022.70 only. This means that Atty. Pineda is still accountable for the amount of
P710,969.30. He is directed to return the amount of P712,992.00 representing the 35% attorney's
fees he unlawfully received.

In view of Our resolution of October 18, 1983, which set aside as null and void the questioned orders
dated September 23, 1982 and February 9, 1983 issued by Arbiter Raymundo Valenzuela, the sale
of the Union property and the distribution of the proceeds therefrom had been effected without
authority and, therefore, illegal Consequently. Atty. Pineda and Arbiter Valenzuela become liable for
their unauthorized acts,

Atty. Pineda should be cited for indirect contempt under paragraphs (b), (c) and (d) of Section 3,
Rule 71 of the Revised Rules of Court, The said paragraphs read thus:
 Sec. 3. indirect contempts to be punished after charge and hearing.—

xxx xxx xxx

(b) Disobedience of or resistance to a lawful writ, process, order, judgment, or

company court, or injunction granted by a court or judge, including the act of a
person who, after being dispossessed or ejected from any real property by the
judgment or process of any court of competent jurisdiction, enters or attempts or
induces another to enter into or upon such real property, for the purpose of executing
acts of ownership or possession, or in any manner disturbs the possession given to
the person adjudged to be entitled thereto;

(c) Any abuse of or any interference with the process or proceedings of a court not
constituting direct contempt under section 1 of this rule;

(d) Any improper conduct tending, directly or indirectly to impede, obstruct, or

degrade the administration of justice.

Contempt of court is a defiance of the authority, justice or dignity of the court; such conduct as tends
to bring the authority and administration of the law into disrespect or to interfere with or prejudice
parties litigant or their witnesses during litigation (12 Am. jur. 389, cited in 14 SCRA 813).

Contempt of court is defined as a disobedience to the court by acting in opposition to its authority,
justice and dignity. It signifies not only a willful disregard or disobedience of the court's orders, but
such conduct as tends to bring the authority of 'the court and the administration of law into disrepute
or in some manner to impede the due administration of justice (17 C.J.S. 4).

This Court has thus repeatedly declared that the power to punish for contempt is inherent in all
courts and is essential to the preservation of order in judicial proceedings and to the enforcement of
judgments, orders, and mandates of the court, and consequently, to the due administration of justice
(Slade Perkins vs. Director of Prisons, 58 Phil. 271; In re Kelly, 35 Phil. 944; Commissioner of
Immigration vs. Cloribel, 20 SCRA 1241; Montalban vs. Canonoy, 38 SCRA 1).

In the matter of exercising the power to punish contempts, this Court enunciated in the Slade
Perkins case that "the exercise of the power to punish contempts has a twofold aspect, namely (1)
the proper punishment of the guilty party for his disrespect to the court or its order; and (2) to compel
his performance of some act or duty required of him by the court which he refuses to perform. Due to
this twofold aspect of the exercise of the power to punish them, contempts are classified as civil or
criminal. A civil contempt is the failure to do something ordered to be done by a court or a judge for
the benefit of the opposing party therein; and a criminal contempt, is conduct directed against the
authority and dignity of a court or of a judge, as in unlawfully assailing or discrediting the authority or
dignity of the court or judge, or in doing a duly forbidden act. Where the punishment imposed,
whether against a party to a suit or a stranger, is wholly or primarily to protect or vindicate the dignity
and power of the court, either by fine payable to the government or by imprisonment, or both, it is
deemed a judgment in a criminal case. Where the punishment is by fine directed to be paid to a
party in the nature of damages for the wrong inflicted, or by imprisonment as a coercive measure to
enforce the performance of some act for the benefit of the party or in aid of the final judgment or
decree rendered in his behalf, the contempt judgment will, if made before final decree, be treated as
in the nature of an interlocutory order, or, if made after final decree, as remedial in nature, and may
be reviewed only on appeal from the final decree, or in such other mode as is appropriate to the
review of judgments in civil cases. ... The question of whether the contempt committed is civil or
criminal, does not affect the jurisdiction or the power of a court to punish the same. ... (58 Phil. 271,
272).

For civil contempt, Section 7, Rule 71 of the Revised Rules of Court explicitly provides:

Sec. 7, Rule 71. Imprisonment until order obeyed. When the contempt consists in the
omission to do an act which is yet in the power of the accused to perform, he may be
imprisoned by order of a superior court until he performs it.

Thus, in the case of Harden vs. Director of Prisons (L-2349, 81 Phil. 741 [Oct. 22, 1948]), where
petitioner was confined in prison for contempt of court, this Court, in denying the petition and
resolving the question of petitioner's indefinite confinement, had the occasion to apply and clarify the
aforequoted provision in the following tenor:

The penalty complained of is neither cruel unjust nor excessive. In Ex-parte Kemmler
136 U.S. 436, the United States Supreme Court said that 'punishments are cruel
when they involve torture or a lingering death, but the punishment of death is not
cruel, within the meaning of that word as used in the constitution. It implies there
something inhuman and barbarous, something more than the extinguishment of life.

The punishment meted out to the petitioner is not excessive. It is suitable and
adapted to its objective; and it accords with section 7, Rule 64 of the Rules of Court
which provides that "when the contempt consists in the omission to do an act which
is yet in the power of the accused to perform, he may be imprisoned by order of a
superior court until he performs it."

If the term of imprisonment in this case is indefinite and might last through the natural
life of the petitioner, yet by the terms of the sentence the way is left open for him to
avoid serving any part of it by complying with the orders of the court, and in this
manner put an end to his incarceration. In these circumstances, the judgment cannot
be said to be excessive or unjust. (Davis vs. Murphy [1947], 188 P., 229- 231.) As
stated in a more recent case (De Wees [1948], 210 S.W., 2d, 145-147), 'to order that
one be imprisoned for an indefinite period in a civil contempt is purely a remedial
measure. Its purpose is to coerce the contemner to do an act within his or her power
to perform. He must have the means by which he may purge himself of the
contempt . The latter decision cites Staley vs. South Jersey Realty Co., 83 N.J. Eq.,
300, 90 A., 1042, 1043, in which the theory is expressed in this language:

In a "civil contempt" the proceeding is remedial, it is a step in the

case the object of which is to coerce one party for the benefit of the
other party to do or to refrain from doing some act specified in the
order of the court. Hence, if imprisonment be ordered, it is remedial in
purpose and coercive in character, and to that end must relate to
something to be done by the defendant by the doing of which he may
discharge himself. As quaintly expressed, the imprisoned man carries
the keys to his prison in his own pocket (pp. 747-748).

Likewise. American courts had long enunciated these rulings:

The commitment of one found in contempt of a court order only until the contemnor
shall have purged himself of such contempt by complying with the order is a decisive
 characteristic of civil contempt. Maggio v. Zeitz, 333 US 56, 92 L. ed. 476, 68 S Ct
401.

Civil or quasi-criminal contempt is contemplated by a statute providing that if any

person refused to obey or perform any rule, order, or judgment of court, such court
shall have power to fine and imprison such person until the rule, order, or judgment
shall be complied with. Evans v. Evans, 193 Miss 468, 9 So 2d. 641. (17 Am. Jur.
2d.)

The reason for the inherent power of courts to punish for contempt is that respect of the courts
guarantees the stability of the judicial institution. Without such guarantee said institution would be
resting on a very shaky foundation (Salcedo vs. Hernandez, 61 Phil. 724; Cornejo vs. Tan, 85 Phil.
722),

Likewise, Atty. Pineda should be subject to disbarment proceedings under Section 27 of Rule 138 of
the Revised Rules of Court which provides:

Sec. 27. Attorneys removed or suspended by Supreme Court on what grounds.—A

member of the bar may be removed or suspended from his office as attorney by the
Supreme Court for any deceit, malpractice, or other gross misconduct in such office,
grossly immoral conduct, or by reason of his conviction of a crime involving moral
turpitude, or for any violation of the oath which he is required to take before
admission to practice, or for a willful disobedience of any lawful order of a superior
court, or for corrupt 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.

The Court may suspend or disbar a lawyer for any conduct on his part showing his unfitness for the
confidence and trust which characterize the attorney and client relations, and the practice of law
before the courts, or showing such a lack of personal honesty or of good moral character as to
render him unworthy of public confidence (7 C.J.S. 733).

It is a well-settled rule that the statutory grounds for disbarment or suspension are not to be taken as
a limitation on the general power of the courts in this respect. The inherent powers of the court over
its officers cannot be restricted (In re Pelaez, 44 Phil. 567).

Finally, Atty. Pineda could be prosecuted for betrayal of trust by an attorney under Article 209 of the
Revised Penal Code. Said article provides:

Art. 209. Betrayal of must by an attorney or solicitor. Revelation of secrets.—In

addition of the proper administrative action , the penalty of prision correccional in its
minimum period, or a fine ranging from 200 to 1,000 pesos, or both shall be imposed
upon any attorney-at-law or solicitor (procurador judicial) who, by any malicious
breach of professional duty or inexcusable negligence or ignorance, shall prejudice
his client, or reveal any of the secrets of the latter learned by him in his professional
capacity (emphasis supplied).

The aforequoted criminal sanction for unprofessional conduct of an attorney is without prejudice to
proper administrative action, such as disbarment or suspension of attorneys (p. 503, Criminal Law
Annotated, Padilla, 1972 Ed.).
Labor Arbiter Raymundo Valenzuela should be made to answer for having acted without or beyond
his authority in proper administrative charges. He could also be prosecuted before the Tanodbayan
under the provisions of the Anti-Graft Law. Independently of his liabilities as a government officer, he
could be the subject of disbarment proceedings under Section 27, Rule 138 of the Revised Rules of
Court.

Atty. Benjamin Pineda could also be held liable under Section 4(b) of R.A. No. 3019 (Anti-Graft and
Corrupt Practices Act) which makes it unlawful for any person knowingly to induce or cause any
public official to commit any of the offenses defined in Section 3 of said act. Section 3 enumerates
the corrupt practices which public officers may be prosecuted for. Atty. Pineda knowingly induced or
caused Labor Arbiter Valenzuela to issue the questioned orders without or beyond the latter's
authority and to which orders the former was not entitled, considering that he was not the sole and
proper representative.

The Manila Banking Corporation (Cubao Branch) per manifestation and motion dated October 28,
1983 and reiterated on November 10, 1983, had transmitted to the NLRC the remaining balance of
P417,380.64 and P2,022.70 for the account of the Union and Atty. Pineda, respectively. This
turnover of the aforecited amounts is a sufficient compliance with Our restraining order and
resolution of September 13, 1983 and hence, the Manila Banking Corporation can no longer be
liable for contempt of court.

Very recently, on August 23, 1984, respondent Union, thru Acting Administrator Ricardo Capuno,
filed its motion to drop Halili Bus Drivers and Conductors Union from the contempt charge in view of
these reasons:

1. The Manila Bank has already turned over to the NLRC the amount of P59,716.14 which
represents the remaining balance of 5% earmarked for Union expenses incurred in the case aside
from the amounts deposited in escrow for the workers. The amount of P42,140.00 was spent
legitimately by the Union for administration purposes relative to the subject property. The Union
asserts that it is ready and willing to account for all expenses and withdrawals from the bank before
the NLRC.

2. The alleged 5% donation of Atty. Pineda to the Union taken from the 35% attorneys' fees was
given to and received by then President Domingo Cabading alone, who thereafter left for the United
States.

3. The 1% allocated for unknown claimants or those not previously listed in the amount of P9,596.18
can easily be accounted for by the Union before the NLRC.

In the same motion, Mr. Capuno clarifies that with regard to attorneys' fees, Atty. Pineda made the
Union officers believe that he would be the one to pay the fees of Attys. Espinas and Lopez for
which reason, the 35% increased fees was approved by the Union's board in good faith. The Union
likewise confirms that Atty. Pineda came into the picture only when he was assigned by Atty.
Espinas in, 1965 to execute the CIR decision which, thru Atty. Espinas handling, was upheld by this
Court in L-24864 in 1968. The Union officers were aware that Atty. Espinas was the principal
counsel even after Atty. Pineda's assignment. They also knew of the original contract for 20%
attorney's fees which was increased to 35% by Atty. Pineda upon the arrangement that with the
increase, he would answer for the payment of Attys. Espinas and Lopez' fees and for necessary
representation expenses (p. 450, L-24864 rec.).

Acting on the aforesaid motion, this Court in its resolution of August 28, 1964, dropped the Union
and its officers from the within contempt charge (p. 455, L-24864 rec.).
WHEREFORE, ATTY. BENJAMIN PINEDA IS HEREBY FOUND GUILTY OF INDIRECT
CONTEMPT OF COURT FOR WHICH HE IS HEREBY SENTENCED TO IMPRISONMENT IN THE
MANILA CITY JAIL UNTIL THE ORDERS OF THIS COURT DATED SEPTEMBER 1 AND
SEPTEMBER 13, 1983 ARE COMPLIED WITH.

ATTY. BENJAMIN PINEDA IS ALSO DIRECTED TO SHOW CAUSE WHY HE SHOULD NOT BE
DISBARRED UNDER RULE 138 OF THE REVISED RULES OF COURT.

LET COPIES OF THIS RESOLUTION AND THE RESOLUTION OF OCTOBER 18, 1983 BE
FURNISHED THE MINISTRY OF LABOR AND THE TANODBAYAN FOR APPROPRIATE ACTION.

SO ORDERED.

A.C. No. 6317 August 31, 2006

LUZVIMINDA C. LIJAUCO, Complainant,
vs.
ATTY. ROGELIO P. TERRADO, Respondent.

DECISION

YNARES-SANTIAGO, J.:

On February 13, 2004, an administrative complaint 1 was filed by complainant Luzviminda C. Lijauco
against respondent Atty. Rogelio P. Terrado for gross misconduct, malpractice and conduct
unbecoming of an officer of the court when he neglected a legal matter entrusted to him despite
receipt of payment representing attorney’s fees.

According to the complainant, she engaged the services of respondent sometime in January 2001
for P70,000.00 to assist in recovering her deposit with Planters Development Bank, Buendia, Makati
branch in the amount of P180,000.00 and the release of her foreclosed house and lot located in
Calamba, Laguna. The property identified as Lot No. 408-C-2 and registered as TCT No. T-402119
in the name of said bank is the subject of a petition for the issuance of a writ of possession then
pending before the Regional Trial Court of Binan, Laguna, Branch 24 docketed as LRC Case No. B-
2610.

Complainant alleged that respondent failed to appear before the trial court in the hearing for the
issuance of the Writ of Possession and did not protect her interests in the Compromise Agreement
which she subsequently entered into to end LRC Case No. B-2610. 2

Respondent denied the accusations against him. He averred that the P70,000.00 he received from
complainant was payment for legal services for the recovery of the deposit with Planters
Development Bank and did not include LRC Case No. B-2610 pending before the Regional Trial
Court of Biñan, Laguna.
The complaint was referred3 to the Integrated Bar of the Philippines (IBP) for investigation, report
and recommendation. On September 21, 2005, the Investigating Commissioner submitted his report
finding respondent guilty of violating Rules 1.01 and 9.02 of the Code of Professional Responsibility
which provide:

Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

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 latter’s death,
money shall be paid over a reasonable period of time to his estate or to the 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 arrangement.

In finding the respondent guilty of violating Rules 1.01 and 9.02 of the Code of Professional
Responsibility, the Investigating Commissioner opined that:

In disbarment proceedings, the burden of proof rests upon the complainant. To be made the
suspension or disbarment of a lawyer, the charge against him must be established by convincing
proof. The record must disclose as free from doubt a case which compels the exercise by the
Supreme Court of its disciplinary powers. The dubious character of the act done as well as of the
motivation thereof must be clearly demonstrated. x x x.

In the instant scenario, despite the strong protestation of respondent that the Php70,000.00 legal
fees is purely and solely for the recovery of the Php180,000.00 savings account of complainant
subsequent acts and events say otherwise, to wit:

1.) The Php70,000.00 legal fees for the recovery of a Php180,000.00 savings deposit is too high;

2.) Respondent actively acted as complainant’s lawyer to effectuate the compromise agreement.

By openly admitting he divided the Php70,000.00 to other individuals as commission/referral fees

respondent violated Rule 9.02, Canon 9 of the Code of Professional Responsibility which provides
that a lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed
to practice law. Worst, by luring complainant to participate in a compromise agreement with a false
and misleading assurance that complainant can still recover after Three (3) years her foreclosed
property respondent violated Rule 1.01, Canon 1 of the Code of Professional Responsibility which
says a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. 4

The Investigating Commissioner thus recommended:

WHEREFORE, finding respondent responsible for aforestated violations to protect the public and the
legal profession from his kind, it is recommended that he be suspended for Six (6) months with a
stern warning that similar acts in the future will be severely dealt with. 5

The IBP Board of Governors adopted the recommendation of the investigating commissioner. 6
We agree with the findings of the IBP.

The practice of law is a privilege bestowed on those who show that they possessed and continue to
possess the legal qualifications for it. Indeed, lawyers are expected to maintain at all times a high
standard of legal proficiency and morality, including honesty, integrity and fair dealing. They must
perform their fourfold duty to society, the legal profession, the courts and their clients, in accordance
with the values and norms of the legal profession as embodied in the Code of Professional
Responsibility.7

Lawyers are prohibited from engaging in unlawful, dishonest, immoral or deceitful conduct 8 and are
mandated to serve their clients with competence and diligence. 9 They shall not neglect a legal matter
entrusted to them, and this negligence in connection therewith shall render them liable. 10

Respondent’s claim that the attorney’s fee pertains only to the recovery of complainant’s savings
deposit from Planter’s Development Bank cannot be sustained. Records show that he acted as
complainant’s counsel in the drafting of the compromise agreement between the latter and the bank
relative to LRC Case No. B-2610. Respondent admitted that he explained the contents of the
agreement to complainant before the latter affixed her signature. Moreover, the Investigating
Commissioner observed that the fee of P70,000.00 for legal assistance in the recovery of the deposit
amounting to P180,000.00 is unreasonable. A lawyer shall charge only fair and reasonable fees. 11

Respondent’s disregard for his client’s interests is evident in the iniquitous stipulations in the
compromise agreement where the complainant conceded the validity of the foreclosure of her
property; that the redemption period has already expired thus consolidating ownership in the bank,
and that she releases her claims against it.12 As found by the Investigating Commissioner,
complainant agreed to these concessions because respondent misled her to believe that she could
still redeem the property after three years from the foreclosure. The duty of a lawyer to safeguard his
client’s interests commences from his retainer until his discharge from the case or the final
disposition of the subject matter of litigation. Acceptance of money from a client establishes an
attorney-client relationship and gives rise to the duty of fidelity to the client’s cause. The canons of
the legal profession require that once an attorney agrees to handle a case, he should undertake the
task with zeal, care and utmost devotion.13

Respondent’s admission14 that he divided the legal fees with two other people as a referral fee does
not release him from liability. A lawyer shall not divide or stipulate to divide a fee for legal services
with persons not licensed to practice law, except in certain cases.15

Under Section 27, Rule 138 of the Rules of Court, a member of the Bar may be disbarred or
suspended on 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 to any lawful order of a superior court; and 7) willfully appearing
as an attorney for a party without authority.

In Santos v. Lazaro16 and Dalisay v. Mauricio, Jr.,17 we held that Rule 18.03 of the Code of
Professional Responsibility is a basic postulate in legal ethics. When a lawyer takes a client’s cause,
he covenants that he will exercise due diligence in protecting his rights. The failure to exercise that
degree of vigilance and attention makes such lawyer unworthy of the trust reposed in him by his
client and makes him answerable not just to his client but also to the legal profession, the courts and
society.

A lawyer should give adequate attention, care and time to his client’s case. Once he agrees to
handle a case, he should undertake the task with dedication and care. If he fails in this duty, he is
not true to his oath as a lawyer. Thus, a lawyer should accept only as much cases as he can
efficiently handle in order to sufficiently protect his clients’ interests. It is not enough that a lawyer
possesses the qualification to handle the legal matter; he must also give adequate attention to his
legal work. Utmost fidelity is demanded once counsel agrees to take the cudgels for his client’s
cause.18

In view of the foregoing, we find that suspension from the practice of law for six months is warranted.
In addition, he is directed to return to complainant the amount he received by way of legal fees
pursuant to existing jurisprudence. 19

WHEREFORE, Atty. Rogelio P. Terrado is found GUILTY of violating Rules 1.01, 9.02, 18.02 and
20.01 of the Code of Professional Responsibility. He is SUSPENDED from the practice of law for six
(6) months effective from notice, and STERNLY WARNED that any similar infraction will be dealt
with more severely. He is further ordered to RETURN, within thirty (30) days from notice, the sum of
P70,000.00 to complainant Luzviminda C. Lijauco and to submit to this Court proof of his compliance
within three (3) days therefrom.

Let copies of this Decision be entered in the record of respondent and served on the IBP, as well as
on the Court Administrator who shall circulate it to all courts for their information and guidance.

SO ORDERED.