Angeles vs. Uy Jr.

330 SCRA 6, 17 (2000)

THIRD DIVISION
[A.C. No. 5019. April 6, 2000]
Judge ADORACION G. ANGELES, complainant, vs. Atty. THOMAS C. UY JR., respondent. Spped jo
DECISION
PANGANIBAN, J.:
Lawyers must promptly account for money or property they receive on behalf of their clients. Failure to do
so constitutes professional Misconduct and justifies the imposition of disciplinary sanctions.
The Case and the Facts
In a letter dated February 11, 1999 addressed to the Office of the Chief Justice, Judge Adoracion G.
Angeles of the Regional Trial Court of Caloocan City (Branch 121) charged Atty. Thomas C. Uy Jr. with
violation of Canon 16 of the Code of Professional Responsibility. Complainant states that respondent's
acts, which had earlier been held contemptible in her February 10, 1999 Order,[1] also rendered him
administratively liable. In the said Order, she narrated the following facts:
"When the case was called for the second time at 11 :25 o'clock in the morning, the
private prosecutor Atty. Thomas C. Uy, Jr. appeared. In open court, accused Norma
Trajano manifested that she had already settled in full the civil aspect in Crim. Case No.
C-54177 (98) in the total amount of [t]hirty [s]ix [t]housand [f]ive [h]undred (P36,500.00)
[p]esos. She further alleged that she paid P20,000.00 directly to the private complainant
and the balance of P16,500.00 was delivered to Atty. Thomas C. Uy, Jr., the lawyer of the
private complainant and accordingly produced in open court the receipt for such payment
signed by no less than the aforesaid lawyer. Indeed, the civil liability of the accused had
already been satisfied in full. Miso
"However, the private complainant, Primitiva Malansing [Del Rosario] manifested that she
did not receive the amount of [s]ixteen [t]housand [f]ive [h]undred (P16,500.00) [p]esos
which was paid to his lawyer Atty. Thomas C. Uy, Jr., thereby constraining this court to
direct Atty. Thomas C. Uy to turn over the money to the private complainant which he
received in trust for his client. Atty. Uy however argued that his client did not like to accept
the money but the assertion of the lawyer was belied by his own client, the herein private
complainant, who manifested in open court x x x her willingness to accept the money.
The Court again directed Atty. Uy to produce the money but the latter argued that he kept
it in his office. Consequently, the Court suspended the proceedings to enable Atty. Uy to
get the money from his law office which is located only at the second floor of the same
building where this court is located.
"Unfortunately, it is already 12: 15 o'clock past noon but Atty. Uy did not show up
anymore and not even his shadow appeared in Court.
"It cannot be denied that the act of Atty. Thomas Uy in deliberately failing to return to the
Court [the] proceedings [of which] were suspended just because of his representations,
mirrors not only an undisguised disobedience of a court order but also manifests his

propensity to mock the dignity of the Court. Disgustingly, he deliberately ignored his
solemn oath to conduct himself as befitting the status of an officer of the court.
"Indeed, this gross misbehavior of Atty. Uy cannot simply be ignored for it is a raw
challenge to the authority of the Court.
"It must also be pointedly emphasized that Atty. Thomas Uy committed a brazen
violation of the provisions of Canon 16 of the Code of Professional Responsibility, to
wit: Nex old
"x x x x x x x x x
"Obviously, Atty. Thomas Uy fell short of the duties expected from him as a member of
the bar."
In compliance with this Court's March 24, 1999 Resolution, Respondent Uy[2] filed his Comment on June
7, 1999. Denying that he violated Canon 16 of the Code of Professional Responsibility, he explained:
"1). In a criminal case, then pending before the Regional Trial Court, Branch 121 of
Kalookan City, Metro Manila, presided by the complainant Honorable Adoracion G.
Angeles, entitled 'People of the Philippines vs. Norma Trajano, et., al', Criminal Case No.
C-54176-77 (98), Atty. Thomas C. Uy Jr., herein referred to as [r]espondent, was
engaged as [p]rivate [p]rosecutor of the complainant therein, Mrs. Primitiva Malansin Del
Rosario. At the outset Norma Trajano, accused in said criminal case, expressed her
desire and offered to settle the civil aspect of the criminal case against her to which
Primitiva Del Rosario acceded. On separate hearings, Norma Trajano made installment
payments to Primitiva Del Rosario some of which payments were duly acknowledged by
the latter in the presence of [r]espondent;
"2). On a previously cancelled date of hearing of the aforesaid criminal case x x x on
December 14, 1998, Norma Trajano went to the office of the [r]espondent at about 8:45
o'clock in the morning, x x x and met Mr. Romeo C. Jamisola Jr., who is acting as
[r]espondent's personal secretary and at the same time the liason officer of the law firm
De Veyra, Uy and Associates x x x. Mr[.] Romeo Jamisola Jr., is the lone staff of the law
firm x x x. Respondent was at that time not in the office as he was attending a hearing
before the Regional Trial Court, Branch 122, Kalookan City, Metro Manila. x x xMani kx
"3). On the aforesaid date and time (December 14, 1998) at the office of the [r]espondent,
Norma Trajano told Mr. Romeo Jamisola Jr. that she will make another partial payment to
Primitiva M. Del Rosario because she cannot attend the hearing the following day (8[:]30
o'clock a.m. of December 15, 1999) before Judge Adoracion G. Angeles due to a conflict
of schedule with her [other] case in the Regional Trial Court, Branch 19, Malolos,
Bulacan, where she is likewise the accused for [e]stafa[.] Mr. Romeo Jamisola told
Norma Trajano to wait for a while as he will fetch [r]espondent at the ground floor in the
sala of the Honorable Remigio E. Zari. Respondent, upon being informed of the presence
of Norma Trajano in the office of the [r]espondent by Romeo Jamisola Jr. went to his
office and Norma Trajano immediately told [r]espondent that she knew that the setting for
that day (December 14, 1998) was previously cancelled and that she cannot attend the
hearing the following day (8[:]30 o'clock a.m. December 15, 1998) and further told the
[r]espondent that she (Norma Trajano) will make another partial payment to Primitiva M.
Del Rosario and that she will just leave her payment in the sum of [s]ixteen [t]housand

[five hundred] [p]esos (P16,500.00), Philippine [c]urrency, in the office of the

[r]espondent. Respondent then told Norma Trajano to inform Primitiva M. Del Rosario first
but Norma Trajano replied that she will just call Primitiva [Del Rosario]. Nonetheless,
[r]espondent told Romeo Jamisola Jr. to call Primitiva Del Rosario, using the office
phone, and let her talk with Norma Trajano, and, if Primitiva Del Rosario agreed
[r]espondent instructed Romeo Jamisola Jr., to just prepare a receipt. Respondent,
fearing that his case (People vs. Rommel Senadrin et al. above-stated) might have been
called in the calendar, immediately left the office and proceeded [at] the sala of the
Honorable Remigio E. Zari. Respondent, after the hearing x x x, returned to his office and
upon learning that his signature was affixed by Romeo Jamisola Jr. upon the insistence of
Norma Trajano scolded Romeo Jamisola Jr. and for his unsuccessful attempt to contact
first Primitiva Del Rosario before receiving the sum of money left by Norma
Trajano; Maniks
"4). The following day [o]n the morning of December 15, 1998 [r]espondent arrived at his
office and met Primitiva Del Rosario and her daughter Aurora Del Rosario and
immediately the trio appeared before the sala of Judge Adoracion G. Angeles in the
hearing of the Norma Trajano case. Returning [to] the office of the [r]espondent after the
hearing, Primitiva Del Rosario and Aurora Del Rosario, being earlier informed that on
December 14, 1998 Norma Trajano went [to] his office and made partial payment in the
sum of P16,500 thru Mr. Romeo Jamisola Jr., the [r]espondent told Mr. Romeo Jamisola
to get the money from the filing cabinet and while the money in the envelope [was] being
handed over to Primitiva Del Rosario, [the latter] and her daughter x x x, however, told
[r]espondent to just let the money in the sum of P16,500.00 be kept at the office of the
[r]espondent so that future payments of Norma Trajano will be save[d] in whole and for
them to avoid spending the same as what had happened to the past installment
payments of Norma Trajano. Respondent then acceded to the request of Primitiva Del
Rosario and her daughter and told them that they can get the money anytime they want
from the [r]espondent's office. Hence, the money was kept locked [in] the filing cabinet of
the [r]espondent where he used to keep all his personal file[s]. Manikan
"5). On December 23, 1998, early before noon, Primitiva Del Rosario and her daughter
Aurora Del Rosario, on a prior invitation, attended the Christmas Party of the office of
[r]espondent and undersigned counsel. x x x Respondent, after the x x x lunch, instructed
Mr. Romeo Jamisola Jr., to give the sum of money (P16,500.00) and for Primitiva Del
Rosario to receive the same for fear of a repetition of a burglary incident before, where
some cash and minor office appliances of undersigned were lost. Primitiva Del Rosario,
however, insisted that said sum of money be kept at the office of the [r]espondent to save
in whole the installment payments of Norma Trajano and that [was] the wish of her son
Fernando 'Bong' Del Rosario, who is a long time friend and a compadre of the
[r]espondent. Respondent, respecting the trust reposed upon him by Primitiva Del
Rosario, her daughter Aurora Del Rosario, and son Fernando Del Rosario, acceded to
hold in trust the said sum of [s]ixteen [t]housand [f]ive [h]undred (P16,500.00) [p]esos,
Philippine [c]urrency, which [was] locked and safely kept [in] the filing cabinet of the
[r]espondent until February 12, 1999; x x x;
"6). On February 10, 1999 [during] the hearing of the Norma Trajano case before the
Hon. Adoracion G. Angeles, [r]espondent appeared shortly before 10:30 o'clock in the
morning, pursuant to a 'Motion to Call Case at 10:30 o'clock in the Morning x x x.
"7). When the said Norma Trajano [case] x x x was called on second call at 11[:]25 a.m.,
[i]n said February 10, 1999 hearing, respondent was first scolded by the Honorable Court

(Judge Adoracion G. Angeles) x x x [for] giving more preference to the Metropolitan Trial
Court than her Court. Resp[o]ndent, however, beg[ged the] indulgence of the Honorable
Court (Judge Adoracion G. Angeles) and explained why [he] first attend[ed] the
Mandaluyong hearing of Manny Chua's case, to wit; x x x. Oldmis o
"8). That it was during the course of [the] litany of sermon, [i]n that hour, made by the
Honorable Court addressed to the [r]espondent that Norma Trajano x x x butted in and
informed the Honorable Court (Judge Adoracion G. Angeles) that she will be tendering
another partial payment; it was at that moment that Judge Adoracion G. Angeles asked
Norma Trajano how much had she paid Primitiva Del Rosario, and, Norma [T]rajano
answered that she had already paid P36,500.00 as full payment for one case, and that of
the P36,500, P20,000.00 was paid to Primitiva Del Rosario and HESITANTLY said that
the P16,500 was paid to the [r]espondent. Judge Angeles then took the receipt from
Norma Trajano and had it xeroxed by a personnel of the Court. The carbon duplicate
original of the Receipt, dated [D]ecember 14, 1998, showing the receipt by the office of
the [r]espondent, through Romeo Jamisola Jr., whose printed [name] was pre[ceded] by
the word 'By', indicating that he received the sum of money on behalf of or in
representation of the [r]espondent, is hereto [attached] and marked as ANNEX '5', to form
part hereof;
"9). That it was perhaps due to the belief [in] and the immediate impression of Judge
Adoracion G. Angeles [of the] answer of Norma Traiano that prompted Judge Angeles to
ask, instantaneously in a loud manner, Primitiva Del Rosario IN TAGALOG', the question,
'NATANGGAP MO BA KAY ATTY. UY ANG PERA NA P16,500.00?'. Primitiva Del
Rosario, a seventy-year-old, who was shocked by the tone and the manner she was
asked by Judge Angeles simply just answered 'HINDI PO, KASI GUSTO [KO] PO NA
MABUO ANG PERA'. Primitiva Del Rosario, however, tried to explain her answer 'HINDI
PO' and why she did not yet [receive] the money from the [r]espondent by raising her
hand but was prevented by Judge Adoracion G. Angeles from further answering by telling
Primitiva Del Rosario to stop. With that answer of Primitiva Del Rosario, [r]espondent
butted in to explain Primitiva Del Rosario's answer of 'HINDI PO' and her having not yet
received the sum of money, subject of the inquisition of Judge Angeles by manifesting to
wit; x x x that Primitiva Del Rosario did not get the money when x x x handed the same
on December 15, 1998 because she wanted [it] to be save[d] in whole together with the
future installment payments of Norma Trajano and to be kept in the office of the
[r]espondent as wished by her son Bong Del Rosario; and, that the said sum of money
[was] kept in the filing cabinet in the office of the [r]espondent. All explanation[s] of the
[r]espondent went to x x x naught as the [r]espondent was cut short by x x x Judge
Angeles, [who] in a loud and angry voice orally directed the [r]espondent to get the
money from [r]espondent's office and give the same to Primitiva Del Rosario. It was
already 11 :45 o'clock in the morning, more or less, an the [r]espondent was given fifteen
(15) minutes to comply; [r]espondent requested Judge Angeles to be accompanied by
Primitiva Del Rosario and her daughter Aurora Del Rosario but both were ordered to stay
in court by Judge Angeles; Ncm
"10). Respondent in compliance with the oral order of Judge Angeles immediately
proceeded [to] his office but only to find out that Romeo Jamisola Jr., who [held] the only
key [to r]esponddnt's filing cabinet, was on errand x x x that morning of February 10,
1999 [for] Atty. Angel B. De Veyra (the Undersigned Counsel) [who had sent him] to the
offices of the solicitor general in Makati City, and, the City Prosecutor's Office of Manila to
[furnish copies to] both offices; x x x;

"11). Respondent, expecting that Romeo Jamisola Jr. would [arrive] before 12[:]00 noon,
x x x waited for Romeo Jamisola Jr. while at the same time called up [his] wife to
immediately [come] to his office to spare the sum of P16,500.00 as Romeo Ja[mi]sola
may not [arrive] [within] the time allotted by Judge Angeles. The wife of respondent,
however, arrived at about 12:25 P .M., more or less, ahead of Romeo Jamisola Jr. and
spared [r]espondent the sum of P16,500.00 and [r]espondent immediately went [to] the
fourth floor, where the sala of Judge Angeles [was] located but unfortunately the session
was already adjourned. Respondent then talked to 'Armand', one 'of the court personnel
and is known as the door keeper of the chamber of Judge Angeles, and [requested that
he be allowed to go inside the chamber to show [his] compliance, though late.
Respondent, however, was told by 'Armand' that Judge Angeles was on her lunch break
an that it [was] better for [r]espondent to take his lunch too and return a little
later; Ncmmis
"12). At about 1:30 o'clock in the afternoon of that day (February 10, 1999) [r]espondent
returned [to] the sala of Judge Angeles together with Primitiva Del Rosario and her
daughter Aurora Del Rosario, who likewise returned to the court, to seek an audience in
[the] chamber [of] Judge Angeles. Said audience with Judge Angeles was desired by
Primitiva Del Rosario to let Judge Angeles [witness] the giving of the money to Primitiva
Del Rosario. But request[s] for the same, through 'Armand', were twice denied by Judge
Angeles because at that time Judge Angeles was being interviewed by several media
personnel of some TV stations. The Del [Rosarios], however, left earlier upon knowing
that Judge Angeles denied their request for an audience. [They] told [r]espondent that
they will be back the following day. It was only when Romeo Jamisola arrived at about
3:00 o'clock, more or less, in the afternoon and went at the fourth floor at the premises of
the sala of Judge Angeles and informed the [r]espondent that he carried with him the key
to [r]espondent's cabinet and the presence of some [squatter] families of Batasan Hills,
Quezon City at the office of the [r]espondent, who has an appointment with the
[r]espondent, that the [r]espondent left the premises of the sala of Judge Angeles. [sic]
Respondent, at his office ordered Romeo Jamisola Jr. to open the filing cabinet and
returned to the premises of the sala of Judge Angeles alone at about 4:00 o'clock P .M.
after his meeting with the squatter families. But again, his request to 'Armand' to talk with
Judge Angeles, after the media interview, was denied. At about 5:30 o'clock in the
afternoon, 'Armand', the court personnel, served the Order, of said date, February 10,
1999 at the office of the [r]espondent;
"13). In the early afternoon of the following day, February 11, 1999, [r]espondent together
with Primitiva Del Rosario and her daughter Aurora Del Rosario went again [to] the sala
of Judge Angeles x x x to seek an audience with Judge Angeles. Their request x x x w[as]
likewise in vain. Primitiva Del Rosario, after the last attempt to seek audience with Judge
Angeles and already tired of going [to] and [from] the sala of Judge Angeles, decided on
February 12, 1999, to receive the sum of money in the amount of P16,500.00 from the
office of the [r]espondent, through, Romeo Jamisola Jr. and executed a Sinumpaang
Salaysay. x x x;
"14). The Sinumpaang Salaysay of Primitiva Del Rosario, dated February 16, 1999 as
well as the Acknowledgment Receipt, dated February 12, 199[9] was attached to a
Manifestation caused to be filed by the [r]espondent on March 3, 1999 when the
respondent was confined in Fatima Hospital in Valenzuela City, Metro Manila on March 2,
1999; Scnc m

"15). Learning of the instant administrative case against the [r]espondent, Bong Del
Rosario, the son of Primitiva Del Rosario, upon whose wish the subject sum of money
was kept at the office of the [r]espondent to save the same in whole as well as the future
in[s]tallment payments of Norma Trajano executed a Sinumpaang Salaysay, attesting [to]
and confirming the statement of [his] mother Primitiva Del Rosario. x x x" [3]
Stripped of unnecessary verbiage, the Comment contends that the respondent kept the money in his
office because that was the alleged wish of both his client and her son. He allegedly informed them of
such money and tried to give it to them, but they insisted that he retain it. He further maintained that it was
only after Judge Angeles issue the February 10, 1999 Order that his client relented and accepted the
money on February 12, 1999.
After the judge filed her Reply on June 30, 1999, this Court referred the case to the Office of the Bar
Confidant for report and recommendation. The Court dispensed with the normal referral to the Integrated
Bar of the Philippines because the records were complete and the question raised was simple. No further
factual investigation was necessary in the premises.
Bar Confidant's Report and Recommendation
Recommending that Atty. Thomas C. Uy Jr .be suspended from the practice of law for one month, the
Office of the Bar Confidant in its Report and Recommendation dated December 15, 1999 said: Sdaa miso
"x x x [I]t is clear that it is the sworn duty of a member of the bar to be accountable, at all
times, for anything which he receives for and in behalf of his client.
"In the case at bar, this Office is more inclined to believe the story of the complainant.
"First, it cannot be disputed that the transcript of stenographic notes is the most reliable
record of what indeed transpired (and what words were uttered by the parties involved)
on February 10, 1999 at the hearing of Crim. Case No. C-54176-77 (98). Records clearly
show that the private complainant in the criminal case, when asked by Judge Angeles as
to the whereabouts of the P16,500.00, spontaneously replied that she had no knowledge
of the same; in effect saying that Atty. Uy has not given her the subject 16,500.00. If,
indeed, Primitiva Del Rosario requested Atty. Uy to keep the money as far back as
December 1998, then she should have told the same to Judge Angeles.
"Atty. Uy's allegation that Judge Angeles prevented Primitiva Del Rosario from saying in
open court the words 'HINDI PO KASI GUSTO KO PO NA MABUO ANG PERA' does not
have any proof as nothing of that sort appears in the transcript of stenographic notes.
Atty. Uy has not even bothered to refute the truth of the contents of the stenographic
notes, all the more bolstering this Office's opinion that the said notes are accurate and
truthful. Sdaad
"Second, the affidavits executed by Primitiva Del Rosario and her son, Fernando Del
Rosario, dated February 16, 1999 and June 7, 1999, respectively, attesting to Atty. Uy's
averment that his act of personally keeping the subject P16,500.00 was with and at their
request cannot be given much credence to outweigh the arguments of Judge Angeles.
The said affidavits, both executed after February 10, 1999, are suspect. Caught by
surprise when Judge Angeles inquired of the whereabouts of his client's money, Atty. Uy x
x x resorted to seeking the help of his client to corroborate his defense. Being the clients

of Atty. Uy, Primitiva Del Rosario and her son could have been persuaded to help
extricate their counsel from the latter's predicament.
"In the absence of any contradicting evidence to dispute the allegation that Atty. Uy failed
to immediately remit to his client the money due the latter, it is safe to conclude that Atty.
Uy has violated his sworn duty to uphold, at all times, the trust and confidence reposed in
him by his client(s).
xxxxxxxxx
"In the instant case, Atty. Uy, upon receipt of the P16,500.00 from the accused in the
criminal case, should have promptly remitted the same to his client, Primitiva Del
Rosario. Had Judge Angeles not inquired of the whereabouts of the money, the same
would have remained with Atty. Uy, to the prejudice of the latter's client." [4]
This Court's Ruling
We agree with the findings and the recommendation of the Office of the Bar Confidant. Scs daad
Administrative Liability of Respondent
The relationship between a lawyer and a client is highly fiduciary; it requires a high degree of fidelity and
good faith. It is designed "to remove all such temptation and to prevent everything of that kind from being
done for the protection of the client."[5]
Thus, Canon 16 of the Code of Professional Responsibility provides that "a lawyer shall hold in trust all
moneys and properties of his client that may come into his possession." Furthermore, Rule 16.01 of the
Code also states that "a lawyer shall account for all money or property collected or received for or from
the client." The Canons of Professional Ethics is even more explicit:
"The lawyer should refrain from any action whereby for his personal benefit or gain he
abuses or takes advantage of the confidence reposed in him by his client. Sup rema
"Money of the client collected for the client or other trust property coming into the
possession of the lawyer should be reported and accounted for promptly and should not
under any circumstances be commingled with his own or be used by him." [6]
In the present case, it is clear that respondent failed to promptly report and account for the P16,500 he
had received from Norma Trajano on behalf of his client, Primitiva Del Rosario. Although the amount had
been entrusted to respondent on December 14, 1998, his client revealed during the February 10, 1999
hearing that she had not yet received it. Worse, she did not even know where it was.
Respondent maintains that on December 15, 1998 he informed Mrs. Del Rosario about the payment. He
further avers that he kept the money up n her instruction, as she had allegedly wanted "future payments x
x [to] be saved in whole and for them to avoid spending the same as what had happened to the past
installment payments x x x."[7] This assertion allegedly finds support in her answer to the question of
Judge Angeles, who had asked her whether she had received the disputed payment: "Hindi po, kasi
gusto [ko] po na mabuo ang pera."

The Court is not persuaded. Respondent's assertions are contradicted by the following transcript of
stenographic notes:
"Court: This P16,500, did you turn it over to the private complainant?
Atty. Uy: No your Honor, because she wanted the full amount of the settlement.
Court: Private complainant, is it true that you did not want to accept the money?
Mrs. Del Rosario: Hindi po, sila po ang nagbigayan. Juris
Court: Hindi po ibinibigay sa inyo ni Atty. Uy?
Mrs. Del Rosario: Hindi po.
xxxxxxxxx
Court: Nasaan iyong P16,500? Huwag kayong matakot.
Mrs. Del Rosario: Aywan ko po sa kanilang dalawa."[8]
If it were true that Mrs. Del Rosario was informed about the payment and that she entrusted it to
respondent, she would have known its whereabouts. That she did not know it showed the falsity of his
claim.
It is noteworthy that respondent did not dispute the foregoing transcript although it belied his allegation
that Mrs. Del Rosario's express wish was to have the payments in full. Sc juris
Neither are we convinced by the affidavits of Mrs. Del Rosario and her son, both of whom affirmed their
intention to have their money in the safekeeping of respondent. It should be stressed that he was her
counsel and the compadre of her son. Moreover, the affidavits were executed after the filing of this
Complaint. As the Office of the Bar Confidant observed, these considerations militate against the
credibility of the affiants. In any event, their affidavits fail to explain adequately why Mrs. Del Rosario,
during the hearing on February 10, 1999, did not know where her money was.
The records do not clearly show whether Attorney Uy had in fact appropriated the said amount; in fact,
Mrs, Del Rosario acknowledge that she had received it on February 12, 1999. They do show, however,
that respondent failed to promptly report that amount to her. This is clearly a violation of his professional
responsibility. Indeed, in Aya v. Bigornia,[9]the Court ruled that money collected by a lawyer in favor of his
clients must be immediately turned over to them. In Daroy v. Legaspi,[10] the Court held that "lawyers are
bound to promptly account for money or property received by them on behalf of their clients and failure to
do so constitutes professional misconduct."
Verily, the question is not necessarily whether the rights of the clients have been prejudiced, but whether
the lawyer has adhered to the ethical standards of the bar.[11] In this case, respondent has not done so.
Indeed, we agree with the following observation of the Office of the Bar Confidant:
"Keeping the money in his possession without his client's knowledge only provided Atty.
Uy the tempting opportunity to appropriate for himself the money belonging to his client.
This situation should, at all times, be avoided by members of the bar. Like judges,

lawyers must not only be clean; they must also appear clean. This way, the people's faith
in the justice system would remain undisturbed." [12]Juris sc
In this light, the Court must stress that it has the duty to look into dealings between attorneys and their
clients and to guard the latter from any undue consequences resulting from a situation in which they may
stand unequal.[13] The present situation calls for the exercise of this duty.
For misappropriating and failing to promptly report and deliver money they received on behalf of their
clients, some lawyers have been disbarred[14] and others have been suspended for six months.[15] In the
present case, the records merely show that respondent did not promptly report that he received money on
behalf of his client. There is no clear evidence of misappropriation. Under the circumstances, we rule that
he should be suspended for one month.
WHEREFORE, Atty. Thomas C. Uy Jr .is hereby SUSPENDED for one month. He is warned that a
repetition of the same or similar acts will be dealt with more severely.
Let copies of this Decision be served on Atty. Thomas C. Uy Jr. at his given address or any other known
one. Copies of this Decision shall also be entered in his record as attorney and served on the IBP, as well
as the Court Administrator who shall circulate them to all the courts in the country for their information and
guidance.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur. Misj uris

Nakpil vs. Valdes 186 SCRA 758 (1998)

[A.C. No. 2040. March 4, 1998]
IMELDA A. NAKPIL, complainant, vs. ATTY. CARLOS J. VALDES, respondent.
DECISION
PUNO, J.:
The friendship of JOSE NAKPIL and respondent CARLOS J. VALDES dates back to the 50s during
their schooldays in De La Salle and the Philippine Law School. Their closeness extended to their families
and respondent became the business consultant, lawyer and accountant of the Nakpils.
In 1965, Jose Nakpil became interested in purchasing a summer residence in Moran Street, Baguio
City.[1] For lack of funds, he requested respondent to purchase the Moran property for him. They agreed
that respondent would keep the property in thrust for the Nakpils until the latter could buy it back.
Pursuant to their agreement, respondent obtained two (2) loans from a bank (in the amounts
of P65,000.00 and P75,000.00) which he used to purchase and renovate the property. Title was then
issued in respondents name.
It was the Nakpils who occupied the Moran summer house. When Jose Nakpil died on July 8, 1973,
respondent acted as the legal counsel and accountant of his widow, complainant IMELDA NAKPIL. On
March 9, 1976, respondents law firm, Carlos J. Valdes & Associates, handled the proceeding for the
settlement of Joses estate. Complainant was appointed as administratix of the estate.

The ownership of the Moran property became an issue in the intestate proceedings. It appears that
respondent excluded the Moran property from the inventory of Joses estate. On February 13, 1978,
respondent transferred his title to the Moran property to his company, the Caval Realty Corporation.
On March 29, 1979, complainant sought to recover the Moran property by filing with the then Court
of First Instance (CFI) of Baguio City an action for reconveyance with damages against respondent and
his corporation. In defense, respondent claimed absolute ownership over the property and denied that a
trust was created over it.
During the pendency of the action for reconveyance, complainant filed this administrative case to
disbar the respondent. She charged that respondent violated professional ethics when he:
I. Assigned to his family corporation the Moran property (Pulong Maulap) which belonged to
the estate he was settling as its lawyer and auditor.
II. Excluded the Moran property from the inventory of real estate properties he prepared for a
client-estate and, at the same time, charged the loan secured to purchase the said
excluded property as a liability of the estate, all for the purpose of transferring the
title to the said property to his family corporation.
III. Prepared and defended monetary claims against the estate that retained him as its
counsel and auditor.[2]
On the first charge, complainant alleged that she accepted respondents offer to serve as lawyer and
auditor to settle her husbands estate. Respondents law firm then filed a petition for settlement of the
estate of the deceased Nakpil but did not include the Moran property in the estates inventory. Instead,
respondent transferred the property to his corporation, Caval Realty Corporation, and title was issued in
its name. Complainant accused respondent of maliciously appropriating the property in trust knowing that
it did not belong to him. She claimed that respondent has expressly acknowledged that the said property
belonged to the late Nakpil in his correspondences[3] with the Baguio City Treasurer and the complainant.
On the second charge, complainant alleged that respondents auditing firm (C. J. Valdes and Co.,
CPAs) excluded the Moran property from the inventory of her husbands estate, yet included in the claims
against the estate the amounts of P65,000.00 and P75,000.00, which respondent represented as her
husbands loans applied probably for the purchase of a house and lot in Moran Street, Baguio City.
As to the third charge, complainant alleged that respondents law firm (Carlos J. Valdes and
Associates) filed the petition for the settlement of her husbands estate in court, while respondents
auditing firm (C. J. Valdes & Co., CPAs) acted as accountant of both the estate and two of its creditors.
She claimed that respondent represented conflicting interests when his accounting firm prepared the list
of claims of creditors Angel Nakpil and ENORN, Inc. against her husbands estate which was represented
by respondents law firm. Complainant averred that there is no distinction between respondents law and
auditing firms as respondent is the senior and controlling partner of both firms which are housed in the
same building.
We required respondent to answer the charges against him. In hisANSWER, [4] respondent initially
asserted that the resolution of the first and second charges against him depended on the result of the
pending action in the CFI for reconveyance which involved the issue of ownership of the Moran property.
On the merit of the first charge, respondent reiterated his defense in the reconveyance case that he
did not hold the Moran property in trust for the Nakpils as he is its absolute owner. Respondent explained

that the Nakpils never bought back the Moran property from him, hence, the property remained to be his
and was rightly excluded from the inventory of Nakpils estate.
As to the second charge, respondent denied preparing the list of claims against the estate which
included his loans of P65,000.00 and P75,000.00 for the purchase and renovation of the Moran property.
In charging his loans against the estate, he stressed that the list drawn up by his accounting firm merely
stated that the loans in respondents name were applied probably for the purchase of the house and lot in
Moran Street, Baguio City. Respondent insisted that this was not an admission that the Nakpils owned the
property as the phrase probably for the purchase did not imply a consummated transaction but a
projected acquisition.
Respondent also disclaimed knowledge or privity in the preparation of a letter (Exhibit H) of his
accounting firm to the Baguio City treasurer remitting the real estate taxes for the Moran property on
behalf of the Nakpils. He contended that the letter could be a mere error or oversight.
Respondent averred that it was complainant who acknowledged that they did not own the Moran
property for: (1) complainants February 1979 Statement of Assets and Liabilities did not include the said
property, and; (2) complainant, as administratrix, signed the Balance Sheet of the Estate where the Moran
property was not mentioned.
Respondent admitted that complainant retained the services of his law and accounting firms in the
settlement of her husbands estate.[5] However, he pointed out that he has resigned from his law and
accounting firms as early as 1974. He alleged that it was Atty. Percival Cendaa (from the law firm Carlos
Valdes & Associates) who filed the inestate proceedings in court in 1976.
As to the third charge, respondent denied there was a conflict of interest when his law firm
represented the estate in the inestate proceedings while his accounting firm (C. J. Valdes & Co., CPAs)
served as accountant of the estate and prepared the claims of creditors Angel Nakpil and ENORN, Inc.
against the estate. He proffered the following reasons for his thesis: First, the two claimants were closely
related to the late Nakpil. Claimant ENORN, Inc. is a family corporation of the Nakpils of which the late
Nakpil was the President. Claimant Angel Nakpil is a brother of the late Nakpil who, upon the latters
death, became the President of ENORN, Inc. These two claimants had been clients of his law and
accounting firms even during the lifetime of Jose Nakpil. Second, his alleged representation of conflicting
interests was with the knowledge and consent of complainant as administratrix. Third, there was no
conflict of interests between the estate and the claimants for they had forged a modus vivendi, i.e., that
the subject claims would be satisfied only after full payment of the principal bank creditors. Complainant,
as administratrix, did not controvert the claims of Angel Nakpil and ENORN, Inc. Complainant has started
paying off the claims of Angel Nakpil and ENORN, Inc. after satisfying the banks claims. Complainant did
not assert that their claims caused prejudice to the estate. Fourth, the work of Carlos J. Valdes and Co. as
common auditor redounded to the benefit of the estate for the firm prepared a true and accurate amount
of the claim. Fifth, respondent resigned from his law and accounting firms as early as August 15, 1974.
[6]
He rejoined his accounting firm several years later. He submitted as proof the SECs certification of the
filing of his accounting firm of an Amended Articles of Partnership. Thus, it was not he but Atty. Percival
Cendaa, from the firm Carlos J. Valdes and Associates, who filed the intestate proceedings in court. On
the other hand, the claimants were represented by their own counsel Atty. Enrique O. Chan. Sixth,
respondent alleged that in the remote possibility that he committed a breach of professional ethics, he
committed such misconduct not as a lawyer but as an accountant who acted as common auditor of the
estate and its creditors. Hence, he should be held accountable in another forum.
On November 12, 1979, complainant submitted her REPLY.[7] She maintained that the pendency of
the reconveyance case is not prejudicial to the investigation of her disbarment complaint against

respondent for the issue in the latter is not the ownership of the Moran property but the ethics and
morality of respondents conduct as a CPA-lawyer.
Complainant alleged that respondents Annexes to his Reply (such as the Statement of Assets &
Liability of the Nakpils and the Balance Sheet of the Estate) which showed that complainant did not claim
ownership of the Moran property were all prepared by C. J. Valdes and Co. as accountant of the estate of
Jose Nakpil and filed with the intestate court by C. J. Valdes and Associates as counsel for the estate.
She averred that these Annexes were not proofs that respondent owned the Moran property but were part
of respondents scheme to remove the property from the estate and transfer it to his family corporation.
Complainant alleged that she signed the documents because of the professional counsel of respondent
and his firm that her signature thereon was required. Complainant charged respondent with greed for
coveting the Moran property on the basis of defects in the documents he himself prepared.
Complainant urged that respondent cannot disown unfavorable documents (the list of claims against
the estate and the letter regarding Nakpils payments of realty tax on the Moran property) which were
prepared by his law and accounting firms and invoke other documents prepared by the same firms which
are favorable to him. She averred that respondent must accept responsibility not just for some, but for all
the representations and communications of his firms.
Complainant refuted respondents claim that he resigned from his firms from March 9, 1976 to
several years later. She alleged that none of the documents submitted as evidence referred to his
resignation from his law firm. The documents merely substantiated his resignation from his accounting
firm.
In his REJOINDER,[8] respondent insisted that complainant cannot hold him liable for representing
the interests of both the estate and the claimants without showing that his action prejudiced the estate. He
urged that it is not per se anomalous for respondents accounting firm to act as accountant for the estate
and its creditors. He reiterated that he is not subject to the jurisdiction of this Court for he acted not as
lawyer, but as accountant for both the estate and its claimants.
He alleged that his accounting firm merely prepared the list of claims of the creditors Angel Nakpil
and ENORN, Inc. Their claims were not defended by his accounting or law firm but by Atty. Enrique Chan.
He averred that his law firm did not oppose these claims as they were legitimate and not because they
were prepared by his accounting firm. He emphasized that there was no allegation that the claims were
fraudulent or excessive and that the failure of respondents law firm to object to these claims damaged the
estate.
In our January 21, 1980 Resolution, [9] we deferred further action on the disbarment case until after
resolution of the action for reconveyance between the parties involving the issue of ownership by the then
CFI of Baguio. Complainant moved for reconsideration on the ground that the issue of ownership pending
with the CFI was not prejudicial to her complaint which involved an entirely different issue, i.e., the
unethical acts of respondent as a CPA-lawyer. We granted her motion and referred the administrative
case to the Office of the Solicitor General (OSG) for investigation, report and recommendation. [10]
In 1983, the CFI of Baguio dismissed the action for reconveyance. The trial court ruled that
respondent held the Moran property in trust for the Nakpils but found that complainant waived her right
over it.
On appeal, the Court of Appeals reversed the trial court. The appellate court held that respondent
was the absolute owner of the Moran property. The Decision was elevated to this Court.

On February 18, 1986, during the pendency of complainants appeal to this Court, the OSG
submitted its Report[11] on the disbarment complaint. The OSG relied heavily on the decision of the Court
of Appeals then pending review by this Court. The OSG found that respondent was not put on notice of
complainants claim over the property. It opined that there was no trust agreement created over the
property and that respondent was the absolute owner thereof. Thus, it upheld respondents right to
transfer title to his family corporation. It also found no conflict of interests as the claimants were related to
the late Jose Nakpil. The OSG recommended the dismissal of the administrative case.
Prefatorily, we note that the case at bar presents a novel situation as it involves the disbarment of a
CPA-lawyer for his demeanor in his accounting profession and law practice in connection with the
property of his client.
As a rule, a lawyer is not barred from dealing with his client but the business transaction must be
characterized with utmost honesty and good faith. [12] The measure of good faith which an attorney is
required to exercise in his dealings with his client is a much higher standard than is required in business
dealings where the parties trade at arms length. [13] Business transactions between an attorney and his
client are disfavored and discouraged by the policy of the law. Hence, courts carefully watch these
transactions to assure that no advantage is taken by a lawyer over his client. This rule is founded on
public policy for, by virtue of his office, an attorney is in an easy position to take advantage of the credulity
and ignorance of his client. Thus, no presumption of innocence or improbability of wrongdoing is
considered in an attorneys favor. [14]
In the case at bar, we cannot subscribe to the findings of the OSG in its Report. These findings were
based mainly on the decision of the Court of Appeals in the action for reconveyance which was reversed
by this Court in 1993.[15]
As to the first two charges, we are bound by the factual findings of this Court in the aforementioned
reconveyance case.[16] It is well-established that respondent offered to the complainant the services of his
law and accounting firms by reason of their close relationship dating as far back as the 50s. She reposed
her complete trust in respondent who was the lawyer, accountant and business consultant of her late
husband. Respondent and the late Nakpil agreed that the former would purchase the Moran property and
keep it in trust for the latter. In violation of the trust agreement, respondent claimed absolute ownership
over the property and refused to sell the property to complainant after the death of Jose Nakpil. To place
the property beyond the reach of complainant and the intestate court, respondent later transferred it to his
corporation.
Contrary to the findings of the OSG, respondent initially acknowledged and respected the trust
nature of the Moran property. Respondents bad faith in transferring the property to his family corporation
is well discussed in this Courts Decision,[17] thus:
x x x Valdes (herein respondent) never repudiated the trust during the lifetime of the late
Jose Nakpil. On the contrary, he expressly recognized it. x x x (H)e repudiated the trust
when (he) excluded Pulong Maulap from the list of properties of the late Jose Nakpil submitted
to the intestate court in 1973. x x x
xxx
The fact that there was no transfer of ownership intended by the parties x x x can be bolstered
by Exh. I-2, an annex to the claim filed against the estate proceedings of the late Jose Nakpil by
his brother, Angel Nakpil, which was prepared by Carlos J. Valdes & Co., the accounting firm of
herein respondent. Exhibit I-2, which is a list of the application of the proceeds

of various FUB loans contracted as of 31 December 1973 by the late Jose Nakpil, x x
x contains the two (2) loans contracted in the name of respondent. If ownership
of Pulong Maulap was already transferred or ceded to Valdes, these loans should not
have been included in the list.
Indeed, as we view it, what the parties merely agreed to under the arrangement outlined in
Exh. J was that respondent Valdes would x x x take over the total loan of P140,000.00 and
pay all of the interests due on the notes while the heirs of the late Jose Nakpil would
continue to live in the disputed property for five (5) years without remuneration save for
regular maintenance expenses. This does not mean, however, that if at the end of the
five-year period petitioner (Nakpil) failed to reimburse Valdes for his advances, x x x
Valdes could already automatically assume ownership of Pulong Maulap. Instead, the
remedy of respondents Carlos J. Valdes and Caval Realty Corporation was to proceed
against the estate of the late Jose M. Nakpil and/or the property itself. (emphasis supplied)
In the said reconveyance case, we further ruled that complainants documentary evidence (Exhibits
H, J and L), which she also adduced in this administrative case, should estop respondent from claiming
that he bought the Moran property for himself, and not merely in trust for Jose Nakpil. [18]
It ought to follow that respondents act of excluding Moran property from the estate which his law firm
was representing evinces a lack of fidelity to the cause of his client. If respondent truly believed that the
said property belonged to him, he should have at least informed complainant of his adverse claim. If they
could not agree on its ownership, respondent should have formally presented his claim in the intestate
proceedings instead of transferring the property to his own corporation and concealing it from complainant
and the judge in the estate proceedings. Respondents misuse of his legal expertise to deprive his client of
the Moran property is clearly unethical.
To make matters worse, respondent, through his accounting firm, charged the two loans
of P65,000.00 and P75,000.00 as liability of the estate, after said loans were obtained by respondent for
the purchase and renovation of the property which he claimed for himself. Respondent seeks to exculpate
himself from this charge by disclaiming knowledge or privity in the preparation of the list of the estates
liabilities. He theorizes that the inclusion of the loans must have been a mere error or oversight of his
accounting firm. It is clear that the information as to how these two loans should be treated could have
only come from respondent himself as the said loans were in his name. Hence, the supposed error of the
accounting firm in charging respondents loans against the estate could not have been committed without
respondents participation. Respondent wanted to have his cake and eat it too and subordinated the
interest of his client to his own pecuniary gain. Respondent violated Canon 17 of the Code of Professional
Responsibility which provides that a lawyer owes fidelity to his clients cause and enjoins him to be mindful
of the trust and confidence reposed on him.
As regards the third charge, we hold that respondent is guilty of representing conflicting interests. It
is generally the rule, based on sound public policy, that an attorney cannot represent adverse interests. It
is highly improper to represent both sides of an issue. [19] The proscription against representation of
conflicting interests finds application where the conflicting interests arise with respect to the same general
matter[20] and is applicable however slight such adverse interest may be. It applies although the attorneys
intentions and motives were honest and he acted in good faith. [21] However, representation of conflicting
interests may be allowed where the parties consent to the representation, after full disclosure of facts.
Disclosure alone is not enough for the clients must give their informed consent to such representation.
The lawyer must explain to his clients the nature and extent of conflict and the possible adverse effect
must be thoroughly understood by his clients.[22]

In the case at bar, there is no question that the interests of the estate and that of it creditors are
adverse to each other. Respondents accounting firm prepared the list of assets and liabilities of the estate
and, at the same time, computed the claims of two creditors of the estate. There is clearly a conflict
between the interest of the estate which stands as the debtor, and that of the two claimants who are
creditors of the estate. In fact, at one instance, respondents law firm questioned the claims of creditor
Angel Nakpil against the estate.
To exculpate himself, respondent denies that he represented complainant in the intestate
proceedings. He points out that it was one Atty. Percival Cendaa, from his law firm Carlos J. Valdes &
Associates, who filed the intestate case in court. However, the fact that he did not personally file the case
and appear in court is beside the point. As established in the records of this case and in the reconveyance
case, [23] respondent acted as counsel and accountant of complainant after the death of Jose Nakpil.
Respondents defense that he resigned from his law and accounting firms as early as 1974 (or two years
before the filing of the intestate case) is unworthy of merit. Respondents claim of resignation from his law
firm is not supported by any documentary proof. The documents on record [24] only show respondents
resignation from his accounting firm in 1972 and 1974. Even these documents reveal that respondent
returned to his accounting firm on July 1, 1976 and as of 1978, the intestate proceedings for the
settlement of Joses estate had not yet been terminated. It does not escape us that when respondent
transferred the Moran property to his corporation on February 13, 1978, the intestate proceedings was
still pending in court. Thus, the succession of events shows that respondent could not have been totally
ignorant of the proceedings in the intestate case.
Respondent claims that complainant knew that his law firm Carlos J. Valdes & Associates was the
legal counsel of the estate [25] and his accounting firm, C.J. Valdes & Co., CPAs, was the auditor of both
the estate and the two claimants against it. [26] The fact, however, that complainant, as administratrix, did
not object to the set-up cannot be taken against her as there is nothing in the records to show that
respondent or his law firm explained the legal situation and its consequences to complainant. Thus, her
silence regarding the arrangement does not amount to an acquiescence based on an informed consent.
We also hold that the relationship of the claimants to the late Nakpil does not negate the conflict of
interest. When a creditor files a claim against an estate, his interest is per se adverse to the estate. As
correctly pointed out by complainant, if she had a claim against her husbands estate, her claim is still
adverse and must be filed in the intestate proceedings.
Prescinding from these premises, respondent undoubtedly placed his law firm in a position where his
loyalty to his client could be doubted. In the estate proceedings, the duty of respondents law firm was to
contest the claims of these two creditors but which claims were prepared by respondents accounting firm.
Even if the claims were valid and did not prejudice the estate, the set-up is still undesirable. The test to
determine whether there is a conflict of interest in the representation is probability, not certainty of conflict.
It was respondents duty to inhibit either of his firms from said proceedings to avoid the probability of
conflict of interest.
Respondent advances the defense that assuming there was conflict of interest, he could not be
charged before this Court as his alleged misconduct pertains to his accounting practice.
We do not agree. Respondent is a CPA-lawyer who is actively practicing both professions. He is the
senior partner of his law and accounting firms which carry his name. In the case at bar, complainant is not
charging respondent with breach of ethics for being the common accountant of the estate and the two
creditors. He is charged for allowing his accounting firm to represent two creditors of the estate and, at
the same time, allowing his law firm to represent the estate in the proceedings where these claims were
presented. The act is a breach of professional ethics and undesirable as it placed respondents and his

law firms loyalty under a cloud of doubt. Even granting that respondents misconduct refers to his
accountancy practice, it would not prevent this Court from disciplining him as a member of the Bar. The
rule is settled that a lawyer may be suspended or disbarred for ANY misconduct, even if it pertains to his
private activities, as long as it shows him to be wanting in moral character, honesty, probity or good
demeanor. [27] Possession of good moral character is not only a prerequisite to admission to the bar but
also a continuing requirement to the practice of law.
Public confidence in law and lawyers may be eroded by the irresponsible and improper conduct of a
member of the bar. Thus, a lawyer should determine his conduct by acting in a manner that would
promote public confidence in the integrity of the legal profession. Members of the bar are expected to
always live up to the standards embodied in the Code of Professional Responsibility as the relationship
between an attorney and his client is highly fiduciary in nature and demands utmost fidelity and good
faith. [28] In the case at bar, respondent exhibited less than full fidelity to his duty to observe candor,
fairness and loyalty in his dealings and transactions with his clients. [29]
IN VIEW WHEREOF, the Court finds respondent ATTY. CARLOS J. VALDES guilty of misconduct.
He is suspended from the practice of law for a period of one (1) year effective from receipt of this
Decision, with a warning that a similar infraction shall be dealt with more severely in the future.
Let copies of this Decision be furnished all courts, as well as the Integrated Bar of the Philippines
and the Office of the Bar Confidant.
SO ORDERED.
Regalado (Chairman), Mendoza and Martinez, JJ., concur.
Melo, J., no part. Previous associate with respondent.

Liwag vs. Neri 107 Phil. 852 (1960)

EN BANC
[Adm. Case No. 275. April 29, 1960.]
GERVACIO L. LIWAG, Complainant, v. ATTY. GILBERTO NERI, Respondent.
Assistant Solicitor General Esmeralda Umali and Solicitor Antonio M. Consing for the
complainant.
Gilberto Neri in his own behalf.

SYLLABUS

1. CRIMINAL PROCEDURE; CIVIL LIABILITY IN RAPE; NOT DETERMINABLE IN CRIMINAL ACTION ONLY.
Contrary to the provisions of Article 135 of the Civil Code of Spain, to the effect that in cases of rape the
provisions of the Penal Code regarding the acknowledgment of the issue is to be observed, Article 283 of the
Civil Code of the Philippines, does not make the civil liability of the offender in a case of rape determinable in
a criminal action only. Article 30 of the same code also implies the right of an offended party to bring a
separate civil action for the criminal act without instituting the criminal proceedings for the prosecution of
the offense.
2. ID.; ID.; INSTITUTION OF CRIMINAL ACTION UNNECESSARY; RULE 107 OF THE RULES OF COURT
REPEALED. The provisions of Rule 107 of the Rules of Court are no longer in force because a civil action

may now be instituted and prosecuted to final judgment without waiting the institution and termination of a
criminal action (Arts. 30 and 283 of the Civil Code of the Philippines). These new provisions are inconsistent
with the provisions of Rule 107 of the Rules of Court and the latter must give way thereto. In consequence,
it is not now necessary that a criminal prosecution for rape be first instituted and presented to final
judgment before a civil action based on said offense in favor of the offended woman and recognition of the
offspring can be instituted and presented to final judgment. The provisions of Rule 107 of the present Rules
promulgated in 1940, are, therefore, considered repealed or modified pro tanto by Articles 30 and 283 of the
Civil Code of the Philippines.

DECISION

PARAS, J.:

The complainant, Gervacio L. Liwag, seeks to disbar the respondent, Atty. Gilberto Neri.
Prior to October 21, 1952, the spouses Enrique and Ursula Pineda requested the complainant to act as
counter-indemnitor with the Manila Surety & Fidelity Company in a bond posted for said spouses in favor of
the National Rice and Corn Corporation (NARIC). When the Pinedas had failed to liquidate their obligation,
the NARIC enforced the bond against the Manila Surety and Fidelity Company and the latter in turn collected
from the complainant the sum of P2,951.35. Having failed to recover extra-judicially said amount from the
Pinedas, the complainant engaged the services of the respondent who agreed to handle the matter on a
contingent fee of forty per cent.
As they were his neighbors, the respondent, acting slowly, tried to talk to the Pinedas, who admitted their
indebtedness and pleaded for time to pay the same. On or about July 17, 1956, when no payment had been
made, the respondent wrote a letter of demand, threatening to take judicial action if the Pinedas would still
not meet their obligation. On the same date, the complainant delivered to the respondent the amount of
P30.00 as the filing fee for the necessary complaint. The respondent did not actually file any complaint, for
the alleged reason that debtor spouses had given assurances to pay, although he informed the complainant
that he had already done so. It did not take long before the truth was discovered and before the
complainant was provoked into commencing this administrative case.
It is an established fact that the respondent had received from the complainant P30.00 as filing fee. The
respondent argues that his services were not engaged solely "for the purpose of filing the corresponding
collection complaint", but to collect from the Pinedas the amount owed; or, in other words, that the
respondent was given full discretion as to the means for accomplishing the assignment. Assuming that this
was so, the respondent has committed a breach of professional ethics when, contrary to the fact, he made
the complainant believe that the Pineda spouses had already been sued in court and did not return the
amount intended for the filing fee.
Considering however, that the respondent has not yet received anything for his services and that the
complainant has subsequently been paid, disbarment or even suspension of the respondent from the
practice of his profession would be too harsh and unkind. We only hereby reprimand him for the offense,
with the warning that a repetition of similar misconduct or, for that matter, any violation of his oath will be
dealt with more drastically.
So ordered.
Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcin, Endencia, Barrera and Gutierrez David, JJ.,
concur.

Diaz vs. Kapunan 45 Phil. 848 (1923)

December 8, 1923

VICENTE DIAZ, complainant,

vs.
RUPERTO KAPUNAN, respondent.
Attorney-General Villa-Real for the Government.
Perfecto Gabriel and Rafael Palma for respondent.

MALCOLM, J.:
This action for malpractice brought by Vicente Diaz against Attorney Ruperto Kapunan, has to do with the
conduct of Attorney Kapunan during the legal proceedings which followed the business troubles of
Vicente Diaz and Secundino de Mendezona, and particularly relates to the conduct of Attorney Kapunan
in civil case No. 2098 of the Court of First Instance of Leyte. The ultimate question on which we would
concentrate attention concerns the agreement between Diaz and Kapunan at the time of the sale of the
property of Mendoza, whereby Kapunan, on the promise of Diaz to pay him P1,000, agreed to desist from
further participation in the sale, all in alleged violation of article 1459 of the Civil Code and article 542 of
the Penal Code.
Omitting the irrelevant matter interjected into this case, the principal facts of record are the following:
In 1917, Vicente Diaz and Secundino de Mendezona formed a partnership and entered into extensive
business transactions in the Province of Leyte. The capital of the partnership was P380,000.
Unfortunately, however, the business failed to prosper, with the result that on liquidation, it was found to
have suffered a loss of P67,000. When Diaz and Mendezona came to settle up their affairs, they
eventually formulated a document of sale and mortgage in which Mendezona recognized a debt in favor
of Diaz in the sum of P80,000 and an additional sum of P10,000 owing to Diaz, laid upon
the hacienda "Mapuyo," and to be paid within the term of one year. When the year had expired
Mendezona was not to be found and his family was unable to meet the payment. There followed the usual
proceedings for foreclosure and sale, which, after considerable delay, resulted in the hacienda's being
offered for sale at public auction.
At the time fixed for the sale, December 23, 1922, there appeared Vicente Diaz, accompanied by his
lawyer Emilio Benitez, and Attorney Ruperto Kapunan. Luis Velarde, the deputy sheriff of Leyte, is
authority for the statement that Kapunan told him that he, Kapunan, was ready to bid on the property up
to P16,000 in order to assist the Mendezona family which was in financial straits. At any rate, the bidding
was opened by Kapunan offering P12,000 for the property and with Diaz and Kapunan raising the bids
until finally Diaz offered P12,500. There the bids stopped on account of Diaz and Kapunan entering into
the agreement, of decisive importance, which we next quote in full:
We, Vicente Diaz and Ruperto Kapunan, both being the bidders at the auction held for the sale of
the properties of Secundino Mendezona, do hereby agreed that Don Ruperto Kapunan should
withdraw his bid and refrain from bidding at the said auction as he does hereby withdraw his bid,
and in consideration thereof, the said Mr. Diaz offers him a premium of one thousand pesos
(P1,000) which, out of consideration to said Don Vicente Diaz, Mr. Kapunan accepts and has, for
this reason, refrained from bidding in competition with said Mr. Diaz.lawphi1.net
Tacloban, Leyte, December 23, 1922.
(Sgd.) "V. DIAZ.

(Sgd.) RUPERTO KAPUNAN."

Following the termination of the sheriff's sale, Diaz on December 26, 1922, gave Kapunan P500 of the
P1,000 mentioned in the above quoted document. Diaz further followed the usual procedure to take over
the property of Mendezona pursuant to his bid of P12,500, which covered the amount of the mortgage
with its accumulated interest and with the judicial expenses.
Although it was on December 23, 1922, that Diaz and Kapunan entered into the agreement, Diaz could
only wait until January 4, 1923, following, to lay before this court charges against Attorney Kapunan for
alleged unprofessional conduct. Undoubtedly, before Kapunan had knowledge of the disbarment
proceedings, on January 10, 1923, he presented a motion in the Court of First Instance of Leyte asking
that he be permitted to retain the P500 in question, in part payment of his professional fees. Later, on
February 4, 1923, when Kapunan must have had knowledge of the disbarment proceedings, he filed
another motion, withdrawing his former motion and asking the court to permit him to turn over the P500 to
Diaz, which Judge Causing refused to do on the ground that it was a personal matter. Nevertheless, on
July 10, 1923, the clerk of the Court of First Instance of Leyte handed the P500 to Diaz who, in turn,
receipted for that amount. lawphil.net
From correspondence, it further is evident that the family of Mendezona was led to believe that the P500
would shortly be sent them. Without doubt, the Mendezona family would have been gratified to receive
even the P500 pittance out of the business wreck in Leyte of the senior Mendezona.
During much of the time here mentioned, Kapunan was the attorney of Mendezona. Kapunan was given
extensive authority by the letter of Mendezona of April 12, 1919. When Kapunan took part in the sale, it
must be assumed that he was bidding in representation of his client and for the benefit of the client.
It remains to be said that following the presentation of the charges against Attorney Kapunan in this court,
he was given an opportunity to answer, and the usual investigation of his professional conduct was made
by the provincial fiscal of Leyte acting under the supervision of the Attorney-General. From the report of
the fiscal, indorsed by the Attorney-General, three charges seem to have been considered. The first two,
relating to Kapunan's attempt to represent both the parties in the case, and to molest and disturb Diaz by
frivolous motions, the law officer of the Government finds not substantiated; and with this conclusion we
fully agree. The third charge is more serious and has to do with Kapunan having intervened in the manner
in which he did in the sale of the property of his client Mendezona. The Attorney-General is of the opinion
on this point that the facts constitute a flagrant violation of the provisions of article 1459 of the Civil Code
and article 542 of the Penal Code. "In view thereof, it is recommended that corrective measures
commensurate with the irregularity committed by Attorney Kapunan, be taken against him."
Article 1459 of the Civil Code was held in force in the case of Hernandez vs. Villanueva ([1920], 40 Phil.,
775). It provides that the following persons, naming them, "cannot take by purchase, even at a public or
judicial auction, either in person or through the mediation of another." The provision contained in the last
paragraph of said article is made to include lawyers, with respect to any property or rights involved in any
litigation in which they may take party by virtue of their profession and office. We do not believe this article
has been infringed by the respondent because he has not purchased property at a public or judicial
auction and because his participation in the auction was in representation of his client. It has been held
that an execution sale to the attorney of the defendant is not unlawful if made in good faith, with the
consent of the client, and without any purpose of defrauding the latter's creditors. (2 R. C. L., 1011; 1
Thornton on Attorneys at Law, pp. 298, 299; Smith vs. Smith [1848], 1 Iowa, 307.)
The more puzzling question relates to the alleged violation by Attorney Kapunan of article 542 of the
Penal Code. This article punishes "any person who shall solicit any gift or promise as a consideration for
agreeing to refrain from taking part in any public auction." The crime is consummated by the mere act of
soliciting a gift or promise for the purpose of abstaining from taking part in the auction. Not permitting our

minds to be confused by the varied explanations of Diaz and Kapunan, the document formulated by them
and hereinbefore quoted, demonstrates that Kapunan, on the promise of Diaz to pay P1,000, refrained
from further participation in the sale of the property of Mendezona, which is exactly the situation covered
by article 542 of the Penal Code.
Public policy discountenances combinations or agreements on the part of bidders at execution sales, the
objects and effects of which are to stifle competition. The courts will consider an agreement between a
judgment creditor and one claiming an interest in the thing about to be sold under an execution, that
neither shall bid against the other, as void, unless all parties concerned know of the arrangement and
consent thereto. Execution sales should be open to free and full competition, in order to secure the
maximum benefit for the debtor. Article 542 of the Penal Code is, therefore, a wise provision even though
rarely invoked, and should be used to discourage the stifling of bids at judicial sales. (23 C.J., 647;
Packard vs. Bird and Chapman [1870], 40 Cal., 378; 3 Viada, Codigo Penal, 594.)
We conclude that Attorney Kapunan has been guilty of a technical violation of article 542 of the Penal
Code. But we cannot adopt the vigorous recommendation of the Attorney-General, for we consider
present certain mitigating circumstances which exert an influence in favor of the respondent. In the first
place, as disclosed by the judicial records, no reported prosecution under article 542 has been attempted,
which is eloquent proof of the practical disuse of this article; and the Spanish jurisprudence, while
indicative of the meaning of the article, relies principally on the decisions of the French Court of
Cassation. (See Code of Napoleon, arts. 222, 223; decisions of the French Court of Cassation of October
16, 1844, May 15, 1857, and January 8, 1863.) In the next place, the complainant Diaz is equally guilty
with the respondent Kapunan. And lastly, Kapunan appears to have been acting in good faith for his
client, although adopting an irregular procedure, and although attempting to make tardy restitution of the
money received by him.
Our judgment is that Attorney Ruperto Kapunan shall stand reprimanded and that the complainant,
Vicente Diaz, shall immediately return to the clerk of the Court of First Instance of Leyte the P500
received by Diaz from the clerk and receipted for by Diaz, and the clerk of court shall transmit the P500 to
Secundino de Mendezona or, in case of his absence, to Miss Carmen de Mendezona. Costs shall be
taxed in accordance with the provisions of the Code of Civil Procedure. So ordered.
Johnson, Avancea, Villamor, Ostrand and Johns, JJ., concur.
Romualdez, J., took no part.

Canlas vs. CA 164 SCRA 160 (1988)

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-77691 August 8,1988
PATERNO R. CANLAS, petitioner,
vs.
HON. COURT OF APPEALS, and FRANCISCO HERRERA, respondents.
Paterno R. Canlas Law Offices for petitioner.

Abalos, Gatdula & Bermejo for private respondent.

SARMIENTO, J.:
The case dramatizes the unpleasant spectacle of a lawyer tangling with his own client, more often than
not, in the matter of fees. The lawyer, the petitioner himself, would have his petition decided on pure
questions of procedure, yet, the Court cannot let pass unnoticed the murkier face of the controversy,
wherein the law is corrupted to promote a lawyer's selfseeking ends, and the law profession, debased into
a simple business dealing. Accordingly, we resolve it on the basis not only of the questions raised by the
petitioner pertaining to procedure, but considering its serious ethical implications, on its merits as well.
We turn to the facts.
The private respondent was the registered owner of eight (six, according to the petitioner) parcels of land
located in Quezon City. 1 Between 1977 and 1978, 2 he obtained various loans from the L & R
Corporation, a financing institution, in various sums totalling P420,000.00 As security therefor, he
executed deeds of mortgage in favor of the corporation over the parcels aforesaid. On August 28,1979,
and upon the maturing of said loans, the firm caused an extrajudicial foreclosure of mortgage following his
failure to pay, as a consequence of which, the said eight (six, according to the petitioner) parcels of land
were disposed of at public auction, and in which L & R Corporation was itself the highest bidder.
Pending redemption, the private respondent filed a complaint for injunction against L & R Corporation, to
enjoin consolidation of title in its name, in which he succeeded in obtaining preliminary injunctive relief. He
was represented by the petitioner. Two years later, and with no imminent end to the litigation in sight, the
parties entered into a compromise agreement whereby L & R Corporation accorded the private
respondent another year to redeem the foreclosed properties subject to payment of P600,000.00, with
interest thereon at one per cent per month. They likewise stipulated that the petitioner shall be entitled to
attorney's fees of P100,000.00. On November 19, 1982, the court 3 approved the compromise.
The private respondent, however, remained in dire financial straits a fact the petitioner himself
concede 4 for which reason he failed to acquire the finding to repay the loans in question, let alone the
sum of P100,000.00 in attorney's fees demanded by the petitioner. That notwithstanding, the petitioner
moved for execution insofar as his fees were concemed. The court granted execution, although it does
not appear that the sum was actually collected. 5
Sometime thereafter, the petitioner and the private respondent met to discuss relief for the latter with
respect to his liability to L & R Corporation on the one hand, and his obligation to the petitioner on the
other. The petitioner contends that the private respondent "earnestly implored" 6 him to redeem the said
properties; the private respondent maintains that it was the petitioner himself who 'offered to advance the
money," 7 provided that he, the private respondent, executed a "transfer of mortgage" 8 over the properties
in his favor. Who implored whom is a bone of contention, but as we shall see shortly, we are inclined to
agree with the private respondent's version, considering primarily the petitioner's moral ascendancy over
his client and the private respondent's increasing desperation.
The records further show that the parties, pursuant to their agreement, executed a "Deed of Sale and
Transfer of Rights of Redemption and/or to Redeem," a document that enabled the petitioner, first, to
redeem the parcels in question, and secondly, to register the same in his name. The private respondent
alleges that he subsequently filed loan applications with the Family Savings Bank to finance a wet market
project upon the subject premises to find, according to him, and to his dismay, the properties already

registered in the name of the petitioner. He likewise contends that the "Deed of Sale and Transfer of
Rights of Redemption and/or to Redeem" on file with the Register of Deeds (for Quezon City) had been
falsified as follows:
WHEREFORE, for and in full settlement of the attorney's fees of TRANSFEREE in the
amount of ONE HUNDRED THOUSAND PESOS (Pl00,000.00) I, FRANCISCO
HERRERA, hereby transfer, assign and convey unto TRANSFEREE, Atty. Paterno R.
Canlas, any and all my rights of the real properties and/or to redeem from the Mortgagee,
L & R Corporation my mortgaged properties foreclosed and sold at public auction by the
Sheriff of Quezon City and subject matter of the above Compromise Agreement in Civil
Case No. Q30679 ... 9
whereas it originally reads:
WHEREFORE, for and in full settlement of the attorney's fees of TRANSFEREE in the
amount of ONE HUNDRED THOUSAND PESOS (P100,000.00), I, FRANCISCO
HERRERA, hereby transfer, assign and convey unto TRANSFEREE, Atty. Paterno R.
Canlas, any and all my rights of equity of redemption and/or to redeem from the
Mortgagee, L & R Corporation my mortgaged properties foreclosed and sold at public
auction by the Sheriff of Quezon City and subject matter of the above Compromise
Agreement in Civil Case No. Q30679. . . 10
As a consequence, the private respondent caused the annotation of an adverse claim upon the respective
certificates of title embracing the properties. Upon learning of the same, the petitioner moved for the
cancellation of the adverse claim and for the issuance of a writ of possession. The court granted both
motions. The private respondent countered with a motion for a temporary restraining order and later, a
motion to recall the writ of possession. He likewise alleges that he commenced disbarment proceedings
before this Court against the petitioner 11 as well as various criminal complaints for estafa, falsification,
and "betrayal of trust" 12 with the Department of Justice. On December 1, 1983, finally, he instituted an
action for reconveyance and reformation of document, 13 praying that the certificates of title issued in the
name of the petitioner be cancelled and that "the Deed of Sale and Transfer of Rights of Equity of
Redemption and/or to Redeem dated May 3, 1983 ... be reformed to reflect the true agreement of
Francisco Herrera and Paterno R. Canlas, of a mortgage." 14 He vehemently maintains that the
petitioner's "agreement with [him] was that the latter would lend the money to the former for a year, so
that [petitioner] would have time to look for a loan for the wet market which [the petitioner] intended to put
up on said property." 15 Predictably, the petitioner moved for dismissal.
The trial court, however, denied the private respondent's petition. It held that the alteration complained of
did not change the meaning of the contract since it was "well within [the petitioner's] rights" 16 "to protect
and insure his interest of P654,000.00 which is the redemption price he has paid;" 17 secondly, that the
petitioner himself had acquired an interest in the properties subject of reconveyance based on the
compromise agreement approved by Judge Castro in the injunction case, pursuant to Section 29(b), of
Rule 39, of the Rules of Court, that had, consequently, made him a judgment creditor in his own right;
thirdly, that the private respondent had lost all rights over the same arising from his failure to redeem them
from L & R Corporation within the extended period; and finally, that the petitioner cannot be said to have
violated the ban against sales of properties in custodia legis to lawyers by their clients pendente lite, since
the sale in question took place after judgment in the injunction case abovesaid had attained finality. The
complaint was consequently dismissed, a dismissal that eventually attained a character of finality.
Undaunted, the private respondent, on December 6, 1985, filed a suit for "Annulment Of Judgment 18 in
the respondent Court of Appeals, 19 praying that the orders of Judge Castro: (1). granting execution over

the portion of the compromise agreement obliging the private respondent to pay the petitioner
P100,000.00 as attorney's fees; (2) denying the private respondent's prayer for a restraining order
directed against the execution: and (3) denying the motion to recall writ of possession, all be set aside.
The petitioner filed a comment on the petition, but followed it up with a motion to dismiss. On December
8, 1986, the respondent Court of Appeals promulgated the first of its challenged resolutions, denying the
motion to dismiss. On March 3, 1987, the Appellate Court denied reconsideration. 20
Hence the instant petition.
As we stated, the petitioner assails these twin resolutions on grounds of improper procedure. Specifically,
he assigns the following errors:
I.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION IN NOT DISMISSING AC G.R.
NO. 07860 ON THE GROUND THAT IT IS IN REALITY A PETITION FOR CERTIORARI FILED OUT OF
TIME AND SHOULD NOT BE GIVEN DUE COURSE.
II.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION IN NOT DISMISSING AC G.R.
NO. 07860 ON THE GROUND OF RES JUDICATA
III.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION IN NOT CONSIDERING AC G.
R. 07860 AS MOOT AND ACADEMIC SINCE PETITIONER HAD DISPOSED OF THE SUBJECT
PROPERTIES LONG BEFORE THE FILING OF THIS SUIT.
IV
THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION IN NOT DENYING PETITIONER'S
MOTION TO DISMISS SOLELY ON THE GROUND THAT THE ARGUMENT RAISED THEREIN ARE
BUT REHASH OF THE ARGUMENTS IN HIS COMMENT TO THE PETITION. 21
The petitioner argues that the petition pending with the respondent court "is actually a petition for
certiorari," 22disguised as a pleading for annulment of judgment and that in such a case, it faces alleged
legal impediments (1) It had been filed out of time, allegedly two years from the issuance of the assailed
orders, and (2) It was not preceded by a motion for reconsideration. He adds that assuming annulment of
judgment were proper, no judgment allegedly exists for annulment, the aforesaid two orders being in the
nature of interlocutory issuances.
On purely technical grounds, the petitioner's arguments are impressive. Annulment of judgment, we have
had occasion to rule, rests on a single ground: extrinsic fraud. What "extrinsic fraud" means is explained
inMacabingkil v. People's Homesite and Housing Corporation : 23
xxx xxx xxx

It is only extrinsic or collateral fraud, as distinguished from intrinsic fraud, however, that
can serve as a basis for the annulment of judgment. Fraud has been regarded as
extrinsic or collateral, within the meaning of the rule, "where it is one the effect of which
prevents a party from having a trial, or real contest, or from presenting all of his case to
the court, or where it operates upon matters pertaining, not to the judgment itself, but of
the manner in which it was procured so that there is not a fair submission of the
controversy." In other words, extrinsic fraud refers to any fraudulent act of the prevailing
party in the litigation which is committed outside of the trial of the case, whereby the
defeated party has been prevented from exhibiting fully his side of the case, by fraud or
deception practiced on him by his opponent. 24
A perusal of the petition of therein private respondent Herrera pending before the respondent Court
reveals no cause of action for annulment of judgment. In the first place, and as herein petitioner Canlas
correctly points out, the judgment itself is not assailed, but rather, the orders merely implementing it.
Secondly, there is no showing that extrinsic fraud, as Makabingkil defines it, indeed vitiated the
proceedings presided over by Judge Castro. On the contrary, Herrera's petition in the respondent court
will show that he was privy to the incidents he complains of, and in fact, had entered timely oppositions
and motions to defeat Atty. Canlas' claims under the compromise agreement.
What he objects to is his suspected collusion between Atty. Canlas and His Honor to expedite the former's
collection of his fees. He alleges that his counsel had deliberately, and with malevolent designs,
postponed execution to force him (Herrera) to agree to sell the properties in controversy to him (Atty.
Canlas) subject to redemption. ("...[I]t was understandable that respondent Atty. Paterno R. Canlas did not
implement the writ of execution, instead he contacted petitioner in order that petitioner would sign the
questioned documents. This was the clincher of the plan of respondent Atty, Paterno R. Canlas to divest
petitioner of his properties. For this purpose, it is obvious that respondent Atty. Paterno R. Canlas had to
conspire with the respondent court judge to achieve his plan." 25) Aside from being plain speculation, it is
no argument to justify annulment. Clearly, it does not amount to extrinsic fraud as the term is defined in
law.
Neither is it proper for the extraordinary remedy of certiorari. Certiorari presupposes the absence of an
appeal 26and while there is no appeal from execution of judgment, appeal lies in case of irregular
implementation of the writ. 27 In the case at bar, there is no irregular execution to speak of As a rule,
"irregular execution" means the failure of the writ to conform to the decree of the decision executed. 28 In
the instant case, respondent Herrera's charges, to wit, that Judge Castro had erred in denying his
motions for temporary restraining order and to recall writ of possession, or that His Honor had acted
hastily (". . . that respondent court/judge took only one [1) day to resolve petitioner's motion for issuance
of [a] [restraining] order. . ." 29) in denying his twofold motions, do not make out a case for irregular
execution. The orders impugned are conformable to the letter of the judgment approving the
parties'compromise agreement.
The lengths the private respondent, Francisco Herrera, would go to in a last-ditch bid to hold on to his
lands and constraints of economic privation have not been lost on us. It is obvious that he is uneasy about
the judgment on compromise itself, as well as the subsequent contract between him and his lawyer. In
such a case, Article 2038 of the Civil Code applies:
Art. 2038. A compromise in which there is mistake, fraud, violence intimidation, undue
influence, or falsity of documents, is subject to the provisions of article 1330 of this
Code ...
in relation to Article 1330 thereof:

Art. 1330. A contract where consent is given through mistake, violence, intimidation,
undue influence, or fraud is voidable.
in relation to its provisions on avoidance of'contracts. 30 The court notes that he had, for this purpose,
gone to the Regional Trial Court, a vain effort as we stated, and in which the decision had become final.
We, however, sustain Atty. Canlas' position-on matters of procedure for the enlightenment solely of the
bench and the bar. It does not mean that we find merit in his petition. As we have intimated, we cannot
overlook the unseemlier side of the proceeding, in which a member of the bar would exploit his mastery of
procedural law to score a "technical knockout" over his own client, of all people. Procedural rules, after all,
have for their object assistance unto parties "in obtaining just, speedy, and inexpensive determination of
every action and proceeding."31 If procedure were to be an impediment to such an objective, "it deserts its
proper office as an aid to justice and becomes its great hindrance and chief enemy." 32 It was almost eight
decades ago that the Court held:
... A litigation is not a game of technicalities in which one, more deeply schooled and
skilled in the subtle art of movement and position, entraps and destroys the other. It is,
rather, a contest in which each contending party fully and fairly lays before the court the
facts in issue and then, brushing aside as wholly trivial and indecisive all imperfections of
form and technicalities of procedure, asks that justice be done upon the merits. Lawsuits,
unlike duels, are not to be won by the a rapier's thrust ... 33
It is a ruling that almost eight decades after it was rendered, holds true as ever.
By Atty. Canlas' own account, "due to lack of paying capacity of respondent Herrera, no financing entity
was willing to extend him any loan with which to pay the redemption price of his mortgaged properties and
petitioner's P100,000.00 attorney's fees awarded in the Compromise Judgment," 34 a development that
should have tempered his demand for his fees. For obvious reasons, he placed his interests over and
above those of his client, in opposition to his oath to "conduct himself as a lawyer ... with all good
fidelity ... to [his] clients." 35 The Court finds the occasion fit to stress that lawyering is not a moneymaking
venture and lawyers are not merchants, a fundamental standard that has, as a matter of judicial notice,
eluded not a few law advocates. The petitioner's efforts partaking of a shakedown" of his own client are
not becoming of a lawyer and certainly, do not speak well of his fealty to his oath to "delay no man for
money." 36
It is true that lawyers are entitled to make a living, in spite of the fact that the practice of law is not a
commercial enterprise; but that does not furnish an excuse for plain lust for material wealth, more so at
the expense of another. Law advocacy, we reiterate, is not capital that yields profits. The returns it births
are simple rewards for a job done or service rendered. It is a calling that, unlike mercantile pursuits which
enjoy a greater deal of freedom from government interference, is impressed with a public interest, for
which it is subject to State regulation. 37Anent attomey's fees, section 24, of Rule 138, of the Rules,
provides in part as follows:
SEC. 24. Compensation of attorneys, agreement as to fees. An attorney shall be
entitled to have and recover from his client no more than a reasonable compensation for
his services, with a view to the importance of the subject matter of the controversy, the
extent of the services rendered, and the professional standing of the attorney... A written
contract for services shall control the amount to be paid therefor unless found by the
court to be unconscionable or unreasonable.
So also it is decreed by Article 2208 of the Civil Code, reproduced in part, as follows:

Art. 2208 ...

In all cases, the attorney's fees and expenses of litigation must be reasonable.
We do not find the petitioner's claim of attorney's fees in the sum of P100,000.00 reasonable. We do not
believe that it satisfies the standards set forth by the Rules. The extent of the services he had rendered in
Civil Case No. 30679, and as far as the records will yield, is not impressive to justify payment of such a
gargantuan amount. The case itself moreover did not involve complex questions of fact or law that would
have required substantial effort as to research or leg work for the petitioner to warrant his demands. The
fact that the properties subject thereof commanded quite handsome prices in the market should not be a
measure of the importance or non-importance of the case. We are not likewise persuaded that the
petitioner's stature warrants the sum claimed.
All things considered, we reduce the petitioner's fees, on a quantum meruit basis, to P20,000.00.
It is futile to invoke the rule granting attorneys a lien upon the things won in litigation similar to that vested
upon redemptioners. 38 To begin with, the rule refers to realty sold as a result of execution in satisfaction
of judgment. In this case, however, redemption was decreed by agreement (on compromise) between the
mortgagor and mortgagee. It did not give the petitioner any right to the properties themselves, much less
the right of redemption, although provisions for his compensation were purportedly provided. It did not
make him a redemptioner for the plain reason that he was not named one in the amicable settlement. To
this extent, we reverse Judge Pedro Santiago's ruling in Civil Case No. 40066, recognizing Atty. Canlas'
"legal right, independent of the questioned deed of sale and transfer which was executed subsequently
on May 3, 1983, to redeem the subject realty from the L & R Corporation pursuant to Sec. 29 (b), Rule 39
of the Rules of Court." 39Whatever right he had, it was, arguably with respect alone to his renumeration. It
did not extend to the lands.
Secondly, and assuming that such a right exists, it must be in proportion to the "just fees and
disbursements" 40due him. It is still subject to the tempering hand of this Court.
The Court notes a hidden agenda in the petitioner's haste to execute the compromise agreement and
subsequently, to force the transfer of the properties to himself. As we have observed, in spite of the
issuance of the writ of execution, it does not appear that the petitioner took pains to implement it. We find
this perplexing given his passionate and persistent pleas that he was entitled to the proceeds. There can
indeed be no plausible explanation other than to enable him to keep an "ace" against the private
respondent that led finally, to the conveyance of the properties in his favor. To be sure, he would have us
beheve that by redeeming the same from the mortgagee and by in fact parting with his own money he
had actually done the private respondent a favor, but this is to assume that he did not get anything out of
the transaction. Indeed, he himself admits that "[t]itles to the properties have been issued to the new
owners long before the filing of private respondents [sic] petition for annulment." 41 To say that he did not
profit therefrom is to take either this Court or the petitioner for naive, a proposition this Court is not
prepared to accept under the circumstances.
We are likewise convinced that it was the petitioner who succeeded in having the private respondent sign
the "Deed of Sale and Transfer of Rights of Equity of Redemption and/or to Redeem," a pre-prepared
document apparently, that allowed him (the petitioner) to exercise the right of redemption over the
properties and to all intents and purposes, acquire ownership thereof. As we have earlier averred, the
private respondent, by reason of bankruptcy, had become an easy quarry to his counsel's moral influence
and ascendancy. We are hard put to believe that it was the private respondent who "earnestly
implored" 42 him to undertake the redemption amid the former's obstinate attempts to keep his lands that
have indeed led to the multiple suits the petitioner now complains of, apart from the fact that the latter

himself had something to gain from the transaction, as alluded to above. We are of the opinion that in
ceding his right of redemption, the private respondent had intended merely to forestall the total loss of the
parcels to the mortgagee upon the understanding that his counsel shall acquire the same and keep them
therefore within reach, subject to redemption by his client under easier terms and conditions. Surely, the
petitioner himself would maintain that he agreed to make the redemption"in order that [he] may already be
paid the P100,000.00 attorney's fees awarded him in the Compromise Agreement," 43 and if his sole
concern was his fees, there was no point in keeping the properties in their entirety.
The Court simply cannot fag for the petitioner's pretensions that he acquired the properties as a gesture
of magnanimity and altruism He denies, of course, having made money from it, but what he cannot
dispute is the fact that he did resell the properties. 44
But if he did not entertain intents of making any profit, why was it necessary to reword the conveyance
document executed by the private respondent? It shall be recalled that the deed, as originally drafted,
provided for conveyance of the private respondent's "rights of equity of redemption and/or redeem" 45 the
properties in his favor, whereas the instrument registered with the Register of Deeds purported to transfer
"any and all my rights of the real properties and/or to redeem," 46 in his favor. He admits having entered
the intercalations in question but argues that he did so "to facilitate the registration of the questioned deed
with the Register of Deeds" 47 and that it did not change the meaning of the paper, for which Judge
Santiago acquitted him of any falsification charges. 48 To start with, the Court is at a loss how such an
alteration could "facilitate" registration. Moreover, if it did not change the tenor of the deed, why was it
necessary then? And why did he not inform his client? At any rate, the agreement is clearly a contract of
adhesion. Its provisions should be read against the party who prepared it.
But while we cannot hold the petitioner liable for falsification this is not the proper occasion for it we
condemn him nonetheless for infidelity to his oath "to do no falsehood" 49
This brings us to the final question: Whether or not the conveyance in favor of the petitioner is subject to
the ban on acquisition by attorneys of things in litigation. The pertinent provisions of the Civil Code state
as follows:
Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial
action, either in person or through the mediation of another:
(1) The guardian, the property of the person or persons who may be under his
guardianship;
(2) Agents, the property whose administration or sale may have been intrusted to them,
unless the consent of the principal have been given;
(3) Executors and administrators, the property of the estate under administration;
(4) Public officers and employees, the property of the State or of any subdivision thereof,
or of any government owned or controlled corporation, or institution, the administration of
which has been instrusted to them; this provision shall apply to judges and government
experts who, in any manner whatsoever, take part in the sale;
(5) Justice judges prosecuting attorneys clerks of superior and inferior courts, and other
officers and employees connected with the administration of justice, the property and
rights in litigation or levied upon an execution before the court within whose jurisdiction or
territory they exercise their respective functions; this prohibition includes the act of

acquiring by assignment and shall apply to lawyers, with respect to the property and
rights which may be the object of any litigation in which they may take part by virtue of
their profession.
(6) Any others specially disqualified by law.**
In Rubias v. Batiller, 50 we declared such contracts to be void by force of Article 1409, paragraph (7), of
the Civil Code, defining inexistent contracts. In Director of Lands v. Ababa 51 however, we said that the
prohibition does not apply to contingent contracts, in which the conveyance takes place after judgment, so
that the property can no longer be said to be "subject of litigation."
In the instant case, the Court observes that the "Deed of Sale and Transfer of Rights of Equity of
Redemption and/or to Redeem" was executed following the finality of the decision approving the
compromise agreement. It is actually a new contract not one in pursuance of what had been agreed
upon on compromise in which, as we said, the petitioner purportedly assumed redemption rights over
the disputed properties (but in reality, acquired absolute ownership thereof). By virtue of such a
subsequent agreement, the lands had ceased to be properties which are "the object of any litigation."
Parenthetically, the Court states that a writ of possession is improper to eject another from possession
unless sought in connection with: (1) a land registration proceeding; (2) an extrajudicial foreclosure of
mortgage of real property; (3) in a judicial foreclosure of property provided that the mortgagor has
possession and no third party has intervened; and (4) in execution sales. 52 It is noteworthy that in this
case, the petitioner moved for the issuance of the writ pursuant to the deed of sale between him and the
private respondent and not the judgment on compromise. (He was, as we said, issued a writ of execution
on the compromise agreement but as we likewise observed, he did not have the same enforced. The sale
agreement between the parties, it should be noted, superseded the compromise.) The writ does not lie in
such a case. His remedy is specific performance.
At any rate, the transfer, so we hold, is not subject to the injunction of Article 1491 of the Civil Code. But
like all voidable contracts, it is open to annulment on the ground of mistake, fraud, or undue
influence, 53 which is in turn subject to the right of innocent purchasers for value. 54
For this reason, we invalidate the transfer in question specifically for undue influence as earlier detailed.
While the respondent Herrera has not specifically prayed for invalidation, this is the clear tenor of his
petition for annulment in the Appellate Court. It appearing, however, that the properties have been
conveyed to third persons whom we presume to be innocent purchasers for value, the petitioner, Atty.
Paterno Canlas, must be held liable, by way of actual damages, for such a loss of properties.
We are not, however, condoning the private respondent's own shortcomings. In condemning Atty. Canlas
monetarily, we cannot overlook the fact that the private respondent has not settled his hability for payment
of the properties. To hold Atty. Canlas alone liable for damages is to enrich said respondent at the
expense of his lawyer. The parties must then set off their obligations against the other. To obviate debate
as the actual amounts owing by one to the other, we hold Francisco Herrera, the private respondent,
liable to Atty. Paterno Canlas, the petitioner, in the sum of P654,000.00 representing the redemption price
of the properties, 55 in addition to the sum of P20,000. 00 as and for attomey's fees. We order Atty.
Canlas, in turn, to pay the respondent Herrera the amount of P1,000,000.00, the sum he earned from the
resale thereof, 56 such that he shall, after proper adjustments, be indebted to his client in the sum of
P326,000.00 as and for damages.
Needless to say, we sustain the action of the respondent Court of Appeals in taking cognizance of the
petition below. But as we have stated, we are compelled, as the final arbiter of justiciable cases and in the

highest interests ofjustice, to write finis to the controversy that has taxed considerably the dockets of the
inferior courts.
Let the Court further say that while its business is to settle actual controversies and as a matter of general
policy, to leave alone moot ones, its mission is, first and foremost, to dispense justice. At the outset, we
have made clear that from a technical vantage point, certiorari, arguably lies, but as we have likewise
stated, the resolution of the case rests not only on the mandate of technical rules, but if the decision is to
have any real meaning, on the merits too. This is not the first time we would have done so; in many cases
we have eschewed the rigidity of the Rules of Court if it would establish a barrier upon the administration
ofjustice. It is especially so in the case at bar, in which no end to suit and counter-suit appears imminent
and for which it is high time that we have the final say. We likewise cannot, as the overseer of good
conduct in both the bench and the bar, let go unpunished what convinces us as serious indiscretions on
the part of a lawyer.
WHEREFORE, judgment is hereby rendered.
1. ORDERING the petitioner, Atty. Patemo Canlas, to pay to the private respondent, Francisco Herrera,
the sum of P326,000.00, as and for damages;
2. ORDERING the petitioner to SHOW CAUSE why no disciplinary action may be imposed on him for
violation of his oath, as a lawyer, within ten (10) days from notice, after which the same will be
consolidated with AC No. 2625;
3. DISMISSING this petition and REMANDING the case to the respondent Court of Appeals for execution;
and
4. ORDERING the petitioner to pay costs.
SO ORDERED.
Melencio-Herrera (Chairperson) and Medialdea, ** JJ., concur.
Paras and Padilla, JJ., took no part.

Capulong vs. Alino 22 SCRA 491 (1968)

A.M. No. 381

February 10, 1968

EMILIO CAPULONG and CIRILA CAPULONG, petitioners,

vs.
MANUEL G. ALIO, respondent.
CONCEPCION, C.J.:
Respondent Manuel G. Alio a member of the bar, is charged by his former clients, the spouses
Emilio and Cirila Capulong, with alleged "gross negligence tantamount to malpractice and betrayal of his
clients' trust and confidence."
This allegation is based upon the admitted fact that, on August 21, 1957, respondent received from
the complainants, as their counsel in Civil Case No. 2248 of the Court of First Instance of Nueva Ecija
the decision in which, adverse to said complainants, had been appealed by them to the Court of Appeals

 the sum of P298.00, for the specific purpose of applying the same to the payment of the "appellate"
docket fees (P24), appeal bond (P15), (printing of) the record on appeal (P150) and appellants' brief
(P100), and that said appeal was dismissed because of respondent's failure to pay the docket fee and to
deposit the estimated cost of printing of the record on appeal.
In his answer, respondent alleged that complainants had authorized him to exercise his judgment
and discretion in determining whether or not he should prosecute the appeal, and to regard said sum of
P298.00 as compensation for his services in connection with said case, should he consider it advisable to
desist from said appeal.
After due hearing, the Provincial Fiscal of Nueva Ecija who, having been deputized therefor by
the Solicitor General, received the evidence for both parties considered respondent's uncorroborated
testimony, in support of his answer, unworthy of credence and found the charge against him duly proven,
and, accordingly, recommended disciplinary action against respondent. Concurring in this finding and
recommendation, the Solicitor General filed the corresponding complaint charging respondent with
"deceit, malpractice or gross misconduct in office as a lawyer," in that, owing to his "negligence and gross
bad faith . . . in unduly and knowingly failing to remit to the Court of Appeals the docket fee and the
estimated cost of printing the record on appeal," said Court dismissed the aforementioned appeal.
In his answer to this charge respondent reiterated substantially his aforementioned defense and
expressed "his intention of introducing additional evidence." Accordingly, this Court referred the matter to
its Legal Officer for reception of said evidence, but, eventually respondent introduced one.
The evidence on record fully confirms the finding of guilt made by the Provincial Fiscal of Nueva
Ecija and the Solicitor General and their conclusion to the effect that respondent's uncorroborated
testimony is unworthy of credence. Indeed, had complainants authorized him to decide whether or not to
prosecute their appeal or desist therefrom, and, in the latter alternative, to keep the P298.00 in question
as his fees, respondent would have retrieved the receipt issued by him for said sum, stating specifically
that it would be used for docket fees, the record on appeal, the appeal bond and the (printing) of their
brief. Moreover, if his failure to pay said docket fees and to deposit the estimated cost of printing of the
record on appeal was due to his decision pursuant to the aforementioned authority he had allegedly
been given to desist from prosecuting the appeal and to apply the money to the payment of his
professional fees, why is it that he filed a motion for reconsideration of the resolution of the Court of
Appeals dismissing the appeal in consequence of said failure, thereby securing, in effect, an extension of
over five (5) months, to make said payment and deposit, which, eventually, he did not make?
After all, the foregoing acts and omissions of respondent herein dovetail with his subsequent
behaviour. Thus, when, prior to the commencement of this administrative proceedings, complainants'
counsel contacted respondent and advised him to settle the matter with them, respondent said he would
do so, but actually did nothing about it. Hence, the complaint herein was filed. So too, in view of the
allegation in respondent's answer, to the complaint filed by the Solicitor General, to the effect that he
(respondent) had "the intention of introducing additional evidence" before this Court, the same designated
its Legal Officer for the reception of said evidence. Yet, after securing four (4) postponements of the date
set by said officer for this purpose, respondent did not introduce any additional evidence in his favor.
Similarly, when the present case was set for oral argument before this Court, respondent moved for the
postponement of the date set therefor. And, having been given ten (10) days to submit a memorandum in
lieu of oral argument, respondent filed no memorandum in his favor.
Apart from suggesting a misappropriation of funds held by him in trust for his clients and a breach
of such trust, the foregoing acts and omissions indicate the high degree of irresponsibility of respondent
herein and his unworthiness to continue as a member of the legal profession.

Respondent Manuel G. Alio is, accordingly, disbarred. His name is ordered stricken from the Roll
of Attorneys and his certificate of Membership of the Philippine Bar, which he is directed to surrender to
the Clerk of Court, within ten (10) days after this judgment has become final, hereby revoked. It is so
ordered.
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ.,
concur

Celaje vs. Soriano A.C. 7418 October 9, 2007

A.C. No. 7418

October 9, 2007

ANDREA BALCE CELAJE, complainant,

vs.
ATTY. SANTIAGO C. SORIANO, respondent.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
Before this Court is a disbarment case filed against Atty. Santiago C. Soriano (respondent) for gross
misconduct.
In the Complaint dated June 1, 2005 filed before the Integrated Bar of the Philippines (IBP), Andrea Balce
Celaje (complainant) alleged that respondent asked for money to be put up as an injunction bond, which
complainant found out later, however, to be unnecessary as the application for the writ was denied by the
trial court. Respondent also asked for money on several occasions allegedly to spend for or to be given to
the judge handling their case, Judge Milagros Quijano, of the Regional Trial Court, Iriga City, Branch 36.
When complainant approached Judge Quijano and asked whether what respondent was saying was true,
Judge Quijano outrightly denied the allegations and advised her to file an administrative case against
respondent.1
In his Answer, respondent denied the charges against him and averred that the same were merely
concocted by complainant to destroy his character. He also contended that it was complainant who
boasted that she is a professional fixer in administrative agencies as well as in the judiciary; and that
complainant promised to pay him large amounts of attorney's fees which complainant however did not
keep.2
Both parties appeared in the Mandatory Conference and Hearing on January 18, 2006. Thereafter, the
case was submitted for decision.3
In the Report and Recommendation dated January 24, 2006, IBP-Commission on Bar Discipline
Commissioner Dennis A.B. Funa found respondent guilty of Gross Misconduct in his relations with his
client and recommended that respondent be suspended for three years from the practice of law. 4
In the Report, Commissioner Funa found that:
During the hearing conducted, Complainant alleged that she has remitted to Respondent, on
various dates, amounts of money totaling to more or less P270,000.00.

According to Complainant the amounts given in several instances were all undocumented and not
acknowledged in writing.
However, for the alleged amount of P14,000.00 intended for an injunction bond, some
documents in writing were made.
xxxx
While the amounts remitted by Complainant to Respondent were never acknowledged in writing
and were not documented, due credence must be given to Complainant's allegations especially
over the amount ofP14,800.00 intended for the injunction. Indeed, there is no ill-motive at all on
the part of Complainant to fabricate charges against Respondent. Unfortunately, none of
the P270,000.00 given by Complainant to Respondent was ever documented and therefore
accuracy of the amounts could not be established and substantiated.
What has been documented only pertains to the unpaid P5,800.00 intended for the injunction
bond. However, it has been established that indeed an accumulated amount of P9,000.00 has
been remitted by Respondent to Valentina Ramos and only the unpaid P5,800.00 remains
unaccounted for by the Respondent.
During the hearing conducted, Complainant reiterated her accusations against the Respondent
and expressed that she has been aggrieved and misled by Respondent. According to
Complainant, this was made possible because she was not aware of or knowledgeable on
legal matters and practices. Respondent has only offered denials to the charges. However, the
circumstances gives credibility to herein Complainant in the absence of any evil motive on her
part.
Accordingly, Respondent is clearly guilty of misappropriating his client's funds in the amount
of P5,800.00.While other amounts may have been misappropriated, Complainant
alleges P270,000.00, the exactness of the amounts could not be established.
Respondent is also guilty of deceiving his client and abusing his client's confidence in
requesting for several amounts of money on the pretense that he had to spend for and pay
the trial judge.
Respondent is hereby ORDERED to immediately deliver the unaccounted for amount of Five
Thousand Eight Hundred Pesos (P5,800.00) to Complainant, submitting a Compliance Report
thereon.5
On September 8, 2006, the Board of Governors of the IBP passed a Resolution thus:
RESOLVED to ADOPT and Approve, as it is hereby ADOPTED and APPROVED, with
modification, the Report and Recommendation of the Investigating Commissioner of the aboveentitled case, herein made part of this Resolution as Annex "A-; and, finding the recommendation
fully supported by the evidence on record and the applicable laws and rules, and considering that
Respondent is guilty of gross misconduct for misappropriating his client's funds, Atty. Santiago C.
Soriano is hereby SUSPENDED from the practice of law for two (2) years and likewise Ordered
to immediately deliver that unaccounted amount of P5,800.00 to complainant.6
The IBP transmitted the Notice of Resolution issued by the IBP Board of Governors as well as the records
of the case, pursuant to Rule 139-B.7 Then in compliance with the Court's Resolution dated February 20,

2007, the IBP through Director for Discipline Rogelio Vinluan informed the Court that per records of the
IBP, no Motion for Reconsideration was filed by either party.
The Court agrees with the IBP Resolution.
The Code of Professional Responsibility (CPR), particularly Canon 16 thereof, mandates that a lawyer
shall hold in trust all moneys and properties of his client that may come into his possession. He shall
account for all money or property collected or received from his client 8 and shall deliver the funds and
property of his client when due or upon demand.9
As found by Commissioner Funa, it was established that respondent could not account for P5,800.00
which was part of the sum given by complainant to him for the purpose of filing an injunctive bond.
Respondent admitted having received from complainant P17,800.00 on April 19, 2002 for the preliminary
injunction10 and admitted to having a balance of P9,000.00 in his promissory note to the Manila Insurance
Co., Inc. dated April 23, 2002, which was reduced to P5,800.00 by reason of an additional payment
of P4,000.00,11 leaving an amount ofP5,800.00 unaccounted for. The affidavit of the insurance agent,
Valentina Ramos, dated December 8, 2005 also states that even up to said date, respondent had not yet
paid the balance of P5,800.00.12
Respondent's failure to return the money to complainant upon demand gave rise to the presumption that
he misappropriated it for his own use to the prejudice of, and in violation of the trust reposed in him by his
client.13 It is a gross violation of general morality and of professional ethics and impairs public confidence
in the legal profession which deserves punishment.14
As the Court has pronounced, when a lawyer receives money from the client for a particular purpose, the
lawyer is bound to render an accounting to the client showing that the money was spent for a particular
purpose. And if he does not use the money for the intended purpose, the lawyer must immediately return
the money to his client.15
The Court has been exacting in its demand for integrity and good moral character of members of the Bar
who are expected at all times to uphold the integrity and dignity of the legal profession and refrain from
any act or omission which might lessen the trust and confidence reposed by the public in the fidelity,
honesty, and integrity of the legal profession. Indeed, membership in the legal profession is a
privilege.16 The attorney-client relationship is highly fiduciary in nature. As such, it requires utmost good
faith, loyalty, fidelity and disinterestedness on the part of the lawyer.17
In Small v. Banares18 the respondent was suspended for two years for violating Canon 16 of the CPR,
particularly for failing to file a case for which the amount of P80,000.00 was given him by his client, and
for failing to return the said amount upon demand. Considering that similar circumstances are attendant in
this case, the Court finds the Resolution of the IBP imposing on respondent a two-year suspension to be
in order.
WHEREFORE, respondent Atty. Santiago C. Soriano is found GUILTY of violating Canon 16 of the Code
of Professional Responsibility and is hereby SUSPENDED from the practice of law for a period of two (2)
years from notice, with a STERN WARNING that a repetition of the same or similar acts shall be dealt
with more severely.
Respondent is further ordered to restitute to his clients through Andrea Balce Celaje, within 30 days from
notice, the amount of P5,800.00. Respondent is directed to submit to the Court proof of payment within
fifteen days from payment of the full amount.

Let copies of this Resolution be furnished all courts of the land, the Integrated Bar of the Philippines, as
well as the Office of the Bar Confidant for their information and guidance, and let it be entered in
respondent's record in this Court.
SO ORDERED.
Puno, (Chief Justice), Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Corona, CarpioMorales, Azcuna, Tinga, Chico-Nazario, Garcia, Velasco, Jr., Nachura, Reyes, JJ., concur.

Penticostes vs. Ibanez 304 SCRA 281 (1999)

EN BANC
[A.C. CBD No. 167. March 9, 1999]
ATTY. PRUDENCIO S. PENTICOSTES, complainant, vs. PROSECUTOR DIOSDADO S.
IBAEZ, respondent.
RESOLUTION
ROMERO, J.:
Sometime in 1989, Encarnacion Pascual, the sister-in-law of Atty. Prudencio S.
Penticostes (herein complainant) was sued for non-remittance of SSS payments. The
complaint was docketed as I.S. 89-353 and assigned to Prosecutor Diosdado S. Ibaez (herein
respondent) for preliminary investigation. In the course of the investigation, Encarnacion
Pascual gaveP1,804.00 to respondent as payment of her Social Security System (SSS)
contribution in arrears. Respondent, however, did not remit the amount to the system. The
fact of non-payment was certified to by the SSS on October 2, 1989.
On November 16, 1990 or over a year later, complainant filed with the Regional Trial
Court of Tarlac a complaint for professional misconduct against Ibaez due to the latters
failure to remit the SSS contributions of his sister-in-law. The complaint alleged that
respondents misappropriation of Encarnacion Pascuals SSS contributions amounted to a
violation of his oath as a lawyer. Seven days later, or on November 23, 1990, respondent
paid P1,804.00 to the SSS on behalf of Encarnacion Pascual.
In the meantime, the case was referred to the Integrated Bar of the Philippines-Tarlac
Chapter, the court observing that it had no competence to receive evidence on the
matter. Upon receipt of the case, the Tarlac Chapter forwarded the same to IBPs Commission
on Bar Discipline.
In his defense, respondent claimed that his act of accommodating Encarnacion Pascuals
request to make payment to the SSS did not amount to professional misconduct but was
rather an act of Christian charity. Furthermore, he claimed that the action was moot and
academic, the amount of P1,804.00 having already been paid by him to the SSS. Lastly, he

disclaimed liability on the ground that the acts complained were not done by him in his
capacity as a practicing lawyer but on account of his office as a prosecutor.
On September 3, 1998, the Commission recommended that the respondent be
reprimanded, with a warning that the commission of the same or similar offense would be
dealt with more severely in the future. On November 5, 1998, the Board of Governors of the
Integrated Bar of the Philippines adopted and approved its Commissions recommendation.
This Court adopts the recommendation of the IBP and finds respondent guilty of
professional misconduct. While there is no doubt that payment of the contested amount had
been effected to the SSS on November 23, 1990, it is clear however, that the same was
made only after a complaint had been filed against respondent. Furthermore, the duties of a
provincial prosecutor do not include receiving money from persons with official transactions
with his office.
This Court has repeatedly admonished lawyers that a high sense of morality, honesty
and fair dealing is expected and required of a member of the bar. Rule 1.01 of the Code of
Professional Responsibility provides that [a] lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
It is glaringly clear that respondents non-remittance for over one year of the funds
coming from Encarnacion Pascual constitutes conduct in gross violation of the above
canon. The belated payment of the same to the SSS does not excuse his misconduct. While
Pascual may not strictly be considered a client of respondent, the rules relating to a lawyers
handling of funds of a client is applicable. In Daroy v. Legaspi,[1] this court held that (t)he
relation between an attorney and his client is highly fiduciary in nature...[thus] lawyers are
bound to promptly account for money or property received by them on behalf of their clients
and failure to do so constitutes professional misconduct. The failure of respondent to
immediately remit the amount to the SSS gives rise to the presumption that he has
misappropriated it for his own use. This is a gross violation of general morality as well as
professional ethics; it impairs public confidence in the legal profession and deserves
punishment.[2]
Respondents claim that he may not be held liable because he committed such acts, not
in his capacity as a private lawyer, but as a prosecutor is unavailing. Canon 6 of the Code of
Professional Responsibility provides:
These canons shall apply to lawyers in government service in the discharge of their official
tasks.
As stated by the IBP Committee that drafted the Code, a lawyer does not shed his
professional obligations upon assuming public office. In fact, his public office should make
him more sensitive to his professional obligations because a lawyers disreputable conduct is
more likely to be magnified in the publics eye. [3] Want of moral integrity is to be more
severely condemned in a lawyer who holds a responsible public office. [4]
ACCORDINGLY, this Court REPRIMANDS respondent with a STERN WARNING that a
commission of the similar offense will be dealt with more severely in the future.

LET copies of this decision be spread in his records and copies be furnished the
Department of Justice and the Office of the Bar Confidant.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing,
Purisima, Pardo, Buena, and Gonzaga-Reyes, JJ., concur.