[G.R. No. 93707.  January 23, 2001]

ROSITA TAN, petitioner, vs., ATTY. JOSE L. LAPAK, respondent.

D E C I S I O N

MENDOZA, J.:

This is a complaint filed by Rosita Tan against Atty. Jose L. Lapak for misconduct, based on respondent’s failure to file with this Court a petition for review on certiorari of a resolution of the Court of Appeals dismissing complainant’s appeal.  Complainant alleged that despite the fact that this Court had granted respondent an extension of the time to file the petition for review on certiorari and she had paid respondent his fee, the latter nonetheless failed to file the petition in this Court.  Complainant’s letter, dated January 10, 1991, addressed to then Chief Justice Marcelo B. Fernan, stated:

Ako po ay sumusulat sa iyo upang ihingi ng tulong ang aking suliranin na may kaugnayan sa aking kaso, G.R. No. 93707 ROSITA TAN v. CA, et al. na dahilan sa kapabayaan ng aking abogado na si Atty. Jose Lapak ay hindi nakapagfile ng Certiorari nasa ngayon kanyang inihihinging palugit ay naibigay naman, at ako po ay nagbigay naman ng halagang P4,000.00 upang gawain lamang ang petition sa pagrerepaso ng Certiorari subalit inuulit pang hindi gawain.

Kgg. Na Chief Justice ako po’y pinaasa lamang ng aking abogado na wala man lamang nagawa kung ano ang nararapat.  Ako naman ay isang walang karanasan sa bagay na ito ay naniwala at naghintay. Nang makausap ko po siya ay aking tinapat kung ano na at walang nadating na resulta sa ginawa niya ang sagot sa aking maghintay na lamang daw ako.  Ngunit ng ako po ay pumunta sa Maynila at napadaan ako sa Korte Suprema saka ko pa lamang napag-alaman na ang aking abogado ay hindi nakapaggawa ng brief ng Certiorari at kaya napawalaan ng bisa ang aking apelasyon.

Akin pong naisip na idulog ang aking kaapihan sa Pangulo ng IBP ng Camarines Norte ang mga bagay na ito ang sagot po sa aking ay maari akong maghain ng demanda laban sa aking abogado na si Atty. Jose L. Lapak ngunit ako po ay mahirap lamang at isa pa wala akong matutustos sa aking abogado.  Isa pa po wala akong pera at sapat na pinag-aralan kaya po hindi ko alam kung sino ang aking dudulungan para tumulong sa mahihirap.  Kaya naisip ko pong sumulat sa opisina ninyo, para ihain ang aking karaingan.  Kung inyo pong mamarapatin ako ay humihingi ng tulong sa iyo bilang pinakamataas na hustisya ang aking kaapihan.

Respondent denied the allegations against him.  In his manifestation and comment, dated March 4, 1991, he contended:

a)  Ms. Rosita Tan was formerly represented by Atty. Juanito Subia in Civil Case No. 5295, Rosita Tan vs. Wilfredo Enriquez before the Regional Trial Court of Camarines Norte; said case was dismissed due to failure of Rosita Tan and his (sic) counsel to appear during the scheduled Pre-Trial of the case; . . .said Order of dismissal was however reconsidered;

b)  On November 11, 1986, Atty. Marciano C. Dating, Jr. entered his appearance for the said Rosita Tan as her original counsel, Atty. Juanito Subia, had withdrawn for reasons only known to her; . . .Atty. Marciano C. Dating, Jr. filed an Amended Complaint;

c)  That on September 20, 1988, the Court, through Hon. Luis Dictado, who heard the case, rendered a decision dismissing Rosita Tan’s complaint;

d)  That on October 13, 1988, Atty. Dating, Rosita Tan’s counsel, appealed from the adverse decision against her to the Court of Appeals;

e)  That Atty. Marciano Dating also withdrew later as Rosita Tan’s counsel and certain Leopoldo P. San Buenaventura entered his appearance as new counsel for the said Rosita Tan in the appealed case before the Court of Appeals which was docketed as C.A. G.R. CV No. 20669;

f)   On October 26, 1989, Atty. Leopoldo E. San Buenaventura filed a Motion for Extension of Time to File Brief for Rosita Tan;… however, for reasons only known to said lawyer, he failed to file his Appellant’s Brief; hence, on February 20, 1990, the Court of Appeals issued a Resolution dismissing the appeal for failure of Rosita Tan’s counsel to file Appellant’s Brief despite extension of time granted to him;

g)  That upon receipt by Ms. Rosita Tan of said Resolution dismissing her appeal due to the failure of her Manila lawyer to file Appellant’s Brief, she came to the law office of undersigned counsel in the company of her friend, Mrs. Gloria Gatan, to employ the latter’s services to seek reconsideration of the Order of dismissal and file Appellant’s Brief to enable her to pursue her appeal; Rosita employed the legal services of undersigned counsel not to file a Petition for Review but to seek reconsideration of the order of dismissal of her appeal; considering then that she does not have the papers to the case on appeal, Rosita Tan agreed to pay counsel P5,000.00 to go to Manila, study the records of the case in the Court of Appeals, file a Motion for Reconsideration and prepare Appellant’s Brief for her; she was able to pay P3,000.00 only instead of P5,000.00 promising to pay the balance later; consequently, the undersigned counsel filed an URGENT MOTION FOR RECONSIDERATION with the Court of Appeals….;

h)  Unfortunately, the Court of Appeals denied said Motion for Reconsideration in a Resolution promulgated on May 2, 1990 ….;

I)   That upon receipt by the undersigned counsel of said Resolution of the Court of Appeals denying the Motion for Reconsideration, the undersigned counsel summoned the appellant Rosita Tan and requested her to bring the balance of P2,000.00 so that a Petition for Review on Certiorari could be filed with the Supreme Court; however, the said appellant Rosita Tan upon knowing of the adverse Resolution of the Court of Appeals became apathetic and when she came to the law office of the undersigned she expressed her misgivings of bringing the case to the Supreme Court and told counsel that she has no more money; despite her indifference and lukewarm attitude, the undersigned counsel filed a Motion for Extension of Time to file a Petition for Review with the Supreme Court paying the docket fees therefore in behalf of said appellant; in the meantime the undersigned counsel went to Manila to make researches preparatory to the filing of the Petition for Review with the Supreme Court; …The undersigned counsel then requested the appellant Rosita Tan to pay him the balance of P2,000.00 as per agreement for him to be able to prepare the

Petition for review in Manila and file it with the Supreme Court; but said appellant hesitantly paid only P1,000.00 which was her only money available promising to pay the balance of P1,000.00 later; therafter, the undersigned counsel went to the Court of Appeals to get certified true copies of the Resolution denying the Motion for Reconsideration; he then learned that there was already an Entry of Judgment in the case as the Resolution dismissing the appeal had already become final; the undersigned then informed Rosita Tan  of her misfortune and informed her that he would study the propriety of filing an action for annulment of the decision because of his discovery of an anomaly which resulted in a mistrial; because of continuous setbacks she suffered from beginning to end; Rosita Tan said she had lost all hope and was unwilling to go any further; she then demanded the refund of P4,000.00 from the undersigned; when the undersigned gave back the P1,000.00 he received from her, she refused to receive the amount insisting that the whole amount of P4,000.00 be returned to her claiming that the undersigned counsel had not done anything for her anyway; hence the misunderstanding which culminated in her sending a letter complaint to the Honorable Chief Justice of the Supreme Court.

The case was referred to the Integrated Bar of the Philippines for investigation, report, and recommendation.  On July 29, 2000, the IBP passed a resolution aadopting the report and recommendation of its Investigating Commissioner Jaime M. Vibar that respondent be reprimanded and ordered to restitute to complainant the amount of P1,000.00.

In finding respondent guilty of betrayal of his client’s trust and confidence, the investigating commissioner said in his report:

Regardless of the agreement on the total amount of fees, it is clear that respondent committed to prepare and file a “petition with the Supreme Court” and for which he received P1,000.00 from the complainant (annex “B”, Sagot, dated May 31, 1991).  Despite such commitment, he failed to file the petition.

It is not explained why the payment of PHP1,000.00 was made by complainant for the “petition” on August 8, 1990.  At that time, the period to file the petition for review as contemplated by respondent and which was the subject of an extension motion, dated May 18, 1990, filed with and granted by the Hon. Supreme Court, had already expired.  It is to be noted that respondent’s motion sought an extension of “thirty (30) days from May 26, 1990 or up to June 25, 1990”.  It would appear that respondent received P1,000.00 on August 8, 1990 from complainant at a time when the remedy of a review of the dismissal order of the Court of Appeals was no longer available.  Yet, complainant was never informed or favored with an explanation that a petition for review was no longer possible, or perhaps that another remedy was still open to the complainant.  To aggravate his situation, respondent alleges in his comment to the complaint (at page 3) that after he received P1,000.00 from the complainant he immediately went to the Court of Appeals to get certified copies of the resolution denying his motion for reconsideration and that thereat he discovered that an “Entry of Judgment” had already been issued.  Respondent should have known that when he went to the Court of Appeals after reciept of P1,000.00, or after August 8, 1990.  The period he requested from the Hon. Supreme Court to institute the petition for review had long expired.

But the silence of respondent at the time of receipt of the amount of P1,000.00 on august 8, 1990 and the “petition with the Supreme Court” was no longer an available remedy smacks of a betrayal of a client’s cause and the trust and confidence reposed in him.  If indeed his client’s cause was no longer worth fighting for, the lawyer should not have demanded a fee…and made representations that there is merit in her case.  He should have dealt with his client with all candor and honesty by informing her that on August 8, 1990 the period to file the petition had already expired.

Complainant has been a victim of negligence on the part of the law firm of San Buenaventura, et al., or particularly Atty. Leopoldo San Buenaventura, for their failure to file the Appellant’s Brief in behalf of complainant within the period allowed.  The dismissal of the appeal gave complainant a slim chance, if not a futile remedy, with the Hon. Supreme Court.  Atty. Lapak would have been shackled in any disquisition for complainant’s cause considering that she alredy lost in the trial court and her appeal had been dismissed without any argument being advanced in her behalf.  Atty. Lapak should have been candid with complainant.  He should not have asked more at a time when nothing fruitful could be done anymore.

With respect to respondent’s offer to return the amount of P1,000.00 paid to him to file the petition for review on certiorari, the investigating commissioner stated:

…[T]his willingness to return P1,000.00 does not erase his breach of the Code of Professional Responsibility for lacking in honesty, diligence and fairness in dealing with his client as shown by the very fact that he received the amount at a time when he could no longer file the “petition with the Supreme Court”.  His client deserved the information that on such date the decision of the Court of Appeals was already final.  Respondent’s actuation of filing an extension motion with the Hon. Supreme Court and yet not filing an extension motion with the Hon. Supreme Court and yet not filing the pleading within the period requested and granted speaks well of respondent’s lack of candor, honesty and judicious conduct in dealing with his client or in the handling of his case.  This conduct violates Canon 17, & Rule 18.03, Rule 18.04 of Canon 18 of the Code of Professional Responsibility.

The investigating commissioner recommends that respondent only be reprimanded considering his old age and the negligent conduct of complainant’s previous counsel.  The commissioner reasoned that it was the negligent conduct of complainant’s previous counsel which caused the dismissal of the appeal and rendered inutile any further legal action before the Supreme Court.

The investigating commissioner’s findings are supported by the evidence.  However, we hold that the appropriate sanction should be reprimand and order respondent to return the amount of P4,000.00 which he received from complainant.

Respondent advances two reasons why he did not file a petition for review on certiorari in this Court, to wit: (1) because he found that the resolution of the Court of Appeals to be appealed to the Supreme Court had become final on May 27, 1990 and (2) because complainant failed to pay the balance of P1,000.00 of his fee.

First.  With respect to the first reason, Rule 18.03 thereof which provides that “A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable.”  Respondent alleges that upon receipt of the Court of Appeals resolution denying the motion for reconsideration which he had filed, he summoned complainant and told her that it was imperative that a petition for review on certiorari be filed with this Court.

At this point, it is important to note the material dates on record to determine if respondent’s justification for his failure to file a petition for review is tenable.  The resolution of the Court of Appeals dismissing complainant’s appeal for failure to file an appellant’s brief was promulgated on February 20, 1990.  Within the reglementary period for filing an appeal, respondent filed a motion for reconsideration which the Court of Appeals denied on May 2, 1990.  Respondent received a copy of this resolution (denying the motion for reconsideration) on May 11, 1990 so that respondent had 15 days from May 11, 1990, or until May 26, within which to file a petition for review on certiorari with the Supreme Court.  Respondent therafter asked for, and was granted by this Court, an extension of 30 days “counted from the reglementary period,” or until June 25, 1990, within which to file the petition.  As respondent failed to file the petition within the extended period, the Supreme Court issued a resolution on August 20, 1990 declaring the judgment sought to be reviewed to have become final and executory.

It is not true, therefore, that respondent failed to file a petition for review on certiorari because the judgment sought to be reviewed had become final on May 27, 1990.

When respondent summoned complainant and told her that in view of the denial of his motion for reconsideration it was imperative that a petition for review be filed with this Court, the resolution of the Court of Appeals was not yet final.  In fact, this Court granted respondent’s motion for extension of time to file the petition for review, because the resolution of the Court of Appeals denying the motion for reconsideration had not yet attained finality.  Despite having been granted an extension, however, respondent failed to file the petition within the reglementary period.  This constitutes a serious breach.  Rule 12.03 of the Code of Professional Responsibility provides that “A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse without submitting the same or offering an explanation for his failure to do so.”

The filing of a petition for review is similar to the filing of an appellant’s or appellee’s brief.  In Mariveles v. Mallari,[1] it was held that the lawyer’s failure to file an appellant’s brief despite numerous extensions of time to file the same constitutes a blatant violation of Rule 12.03 of the Code of Professional Responsibility.  As already noted, this Rule provides that after obtaining extensions of time to file pleadings, memoranda, or briefs, a lawyer should not let the period lapse without submitting the same or offering an explanation for his failure to do so.

In Re: Santiago F. Marcos,[2] the Court considered a lawyer’s failure to file a brief for his client as amounting to inexcusable negligence.  Said the Court:

An attorney is bound to protect his client’s interest to the best of his ability and with utmost diligence.  (Del Rosario v. CA, 114 SCRA 159).  A failure to file a brief for his client certainly constitutes inexcusable negligence on his part.  (People v. Villar, 46 SCRA 107) The respondent has indeed committed a serious lapse in the duty owed by him to his client as well as to the Court not to delay litigation and to aid in the speedy administration of justice.  (People v. Daban, 43 SCRA 185; People v. Estocada, 43 SCRA 515).

At any rate, even assuming that the resolution of the Court of Appeals expired on May 27, 1990, he should not have asked on August, 8, 1990 for the balance of P5,000.00 which complainant had agreed to pay since the resolution had already become final at that time.  As the investigating commissioner pointed out in his report:

To aggravate his situation, respondent alleges in his comment to the complaint (at page 3) that after he received P1,000.00 from the complainant he immediately went to the Court of Appeals to get certified copies of the resolution denying his motion for reconsideration and that thereat he discovered that an “Entry of Judgment” had already been issued.  Respondent should have known that when he went to the Court of Appeals after receipt of P1,000.00, or after August 8, 1990, (t)he period he requested from the Hon. Supreme Court to institute the petition for review had long expired.[3]

It would, therefore, appear that if an entry of judgment had been made in the Court of Appeals, it was precisely because respondent failed to file a petition for review with the Supreme Court within the extended period granted him.  He cannot, therefore, excuse his breach of the duty to his client by his own negligent act.

Second.  Respondent asserts that complainant only engaged his services to pursue her appeal in the Court of Appeals which was dismissed due to the failure of complainant’s former counsel, Atty. Leopoldo E. San Buenaventura, to file the appellant’s brief.  Whether or not he was engaged to represent complainant only in the Court of Appeals and not also in the Supreme Court is immaterial.  For the fact is that respondent already commenced the representation of complainant in the Supreme Court by filing a motion for extension of the time to file a petition for review.  In fact, according to respondent, upon receipt of the Court of Appeals resolution denying reconsideration of the dismissal of complainant’s appeal, respondent summoned complainant to

his office precisely to tell her that it was imperative that a petition for review be filed with the Supreme Court.  Once he took the cudgels of his client’s case and assured her that he would represent her in the Supreme Court, respondent owed it to his client to do his utmost to ensure that every remedy allowed by law was availed of.  As this Court has held:

It is axiomatic that no lawyer is obliged to act either as adviser or advocate for every person who may wish to become his client.  He has the right to decline employment, subject, however, to Canon 14 of the Code of Professional Responsibility.  Once he agrees to take up the cause of a client, the lawyer owes fidelity to such cause and must always be mindful of the trust and confidence reposed in him.  He must serve the client with competence and diligence, and champion the latter’s cause with wholehearted fidelity, care and devotion.  Elsewise stated, he owes entire devotion to the interest of his client, warm zeal in the maintenance and defense of his client’s rights, and the exertion of his utmost learning and ability to the end that nothing be taken or withheld from his client, saved by the rules of law legally applied. This simply means that his cleint is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land and he may expect his lawyer to assert every such remedy or defense.[4]

Third.  Nor can respondent excuse himself for his failure to file the petition for review on certiorari on the ground that complainant failed to pay what she promised to pay.  Complainant agreed to pay P5,000.00.  Of this amount, she paid respondent P3,000.00 and later P1,000.00, leaving only a balance of P1,000.00.  Even if this balance had not been paid, this fact was not sufficient to justify the failure of respondent to comply with his professional obligation which does not depend for compliance on the payment of a lawyer’s fees.

As respondent utterly failed to comply with his professional commitment to complainant, it is, therefore, not just for him to keep the legal fee of P4,000.00 which complainant paid him.  He has not rightfully earned that fee and should return it to complainant.

WHEREFORE, Atty. Jose L. Lapak is REPRIMANDED and ORDERED to refund to complainant Rosita Tan the amount of P4,000.00.  He is admonished henceforth to exercise greater care and diligence in the performance of his duties towards his clients and the courts and warned that repetition of the same or similar offense will be more severely dealt with.

SO ORDERED.

G.R. No. L-30543 July 15, 1975

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.RODRIGO CAWILI, defendant-appellant.

Office of the Solicitor General Felix Q. Antonio, Assistant Solicitor General Hector C. Fule and Solicitor Vicente A. Torres for plaintiff-appellee.

Juan T. Aquino (as Counsel de Oficio) for defendant-appellant.

 

FERNANDO, J.:

The difficulty that faces appellant Rodrigo Cawili, prosecuted and convicted for the crime of rape in the lower court, arises from the coherent and straight-forward story narrated by the offended party, a thirteen-year old girl, who, while asleep in her house was taken by surprise by the accused and thus fell victim to his carnal desires. Nonetheless, there is in the brief submitted by counsel a sustained effort to seek a reversal predicated on the ground that an appraisal of the testimony offered by the prosecution would reveal that the constitutional presumption of innocence had not been overcome. 1 A careful study of the records, however, discloses that the lower court did consider carefully and meticulously the evidence of both the complainant and the accused. It was his conclusion that there was enough proof to satisfy the requirement that guilt be shown beyond reasonable doubt. We are not justified in viewing the matter differently. We affirm.

The victim of rape in this case is Elizabeth de Jesus, who, at the time of the commission of the offense, was thirteen years of age. She was in the sixth grade. She began by stating that she was asleep in her house at Barrio Almacen, Hermosa, Bataan, at about 10:00 in the evening of February 11, 1968. Then she continued: "I was awakened by a certain weight upon my body and when I was awakened, accused Rodrigo Cawili was on top of me and [I] felt pain in my private parts." 2 She then pushed and kicked him and shouted at the top of her voice "Inang" (Mother). 3 Asked why she had felt such pain, she answered that his genital organ was inserted in hers. 4 Obviously alarmed by her shout, Rodrigo Cawili released her and ran downstairs; her mother, awakened by the shout, went to the kitchen and came back with a bolo to chase Cawili but she did not catch up with him. 5 On cross-examination, Elizabeth de Jesus admitted that when she went to bed she had her panties on, but that when she woke up, she noticed that not only was appellant on top of her but also that she was divested of such garment. 6 The trial court itself did not merely accept her story. It pursued the matter further. 7 She explained that the previous night, a Saturday, she had attended a party in Barrio Pulo, Hermosa, Bataan, one that lasted until almost morning. All day the next day, she pressed clothes. Thus it was that on the night of February 11, 1968, she went to bed tired and drowsy. She slept soundly. It was not unexpected then for appellant to be able to remove such garment and for him to place himself on top of her, without her immediately noticing it. 8 When the incident happened, on February 11, 1968, the young girl's father was not at home. When he came back from work from Subic, Zambales, on February 17, 1968, his daughter was so ashamed of what had happened to her that she did not even tell him specifically that appellant had succeeded in having carnal knowledge of her. It was only after she was brought to a doctor on February 19, 1968, and it was discovered that she had a swollen

vulva, a swollen urethral orifice and a ruptured hymen with two healed lacerations, 9 that she admitted to her father that appellant succeeded in his designs. Rodrigo Cawili, a neighbor and a "compadre" of the young victim's mother, was readily recognized by Elizabeth de Jesus because "the house was bright inside, it being lighted by a lamp, second, there was a light on the post just opposite our house, and third, it was a moonlit night." 10 The facts narrated above gave rise to the charge of rape against Rodrigo Cawili.

After trial duly had, he was convicted and sentenced to suffer the penalty of reclusion perpetua, to indemnify the offended party and to recognize and support the offspring, if any. The case is before us now on appeal. As noted at the outset, the principal ground relied upon as the basis for reversal is that the constitutional presumption of innocence had not been overcome by proof beyond reasonable doubt. While there is a recognition that the appraisal of the lower court of the evidence offered is accorded deference and respect, it is submitted that such finding cannot prevail in the absence of a showing that suffices to overturn what is so clearly expressed in the fundamental law that guilt is not to be presumed. 11 As a statement of juridical norm, that is correct. This Court has repeatedly stressed that accusation cannot be considered as synonymous with culpability, and the evidence offered by the prosecution must meet the required standard. Only then is a conviction warranted. 12 It is on that basis that in several recent decisions, a person accused of and sentenced for rape succeeded in obtaining a reversal. 13 This is not, however, as already mentioned, one such case.

1. In appellant's brief, the principal authority cited in support of the plea that the constitutional presumption of innocence had not been overcome is an excerpt from Justice Laurel's opinion in People v. Manoji. 14 What was conveniently left out was the opening phrase of the citation which certainly casts a different light on the matter. Accuracy demands that this particular sentence relied upon he quoted in full: "In the light of the facts and circumstances of record, we feel that it is better to acquit a man on reasonable doubt, even though he may in reality be guilty, than to confine in the penitentiary for the rest of his natural life a person who may be innocent. ..." 15 As a matter of fact, the opening sentence of that particular paragraph starts with this phrase: "Upon the other hand, there are certain facts which if taken together are sufficient to raise in the mind of the court a grave doubt as to the guilt of the defendant-appellant, ..." 16 In this case, on the contrary, the testimony of the offended party, so firm and so categorical, does not give rise to any such misgivings. When put on the stand by her counsel, she was able to narrate clearly and concisely the untoward event that befell her in the evening on question. Afterwards, she was cross-examined intensively and exhaustively for two days. 17 Questions searching in character but unavoidable considering the nature of the offense, quite embarassing for a young girl of tender years, came not only from the defense but also from the judge, desirous of ascertaining the truth and conscious of the dire penalty that goes with conviction for this heinous crime. At one stage, her counsel had to ask the court for a recess of five minutes as she was evidently under strain and she was feeling dizzy. 18 The court granted a suspension of the session not for five minutes sought but for ten minutes. Moreover, right afterwards, it was adjourned. 19 The grueling ordeal to which she was subjected continued all throughout the next day when the hearing was resumed. Her version of what transpired came under the most rigorous scrutiny, again from both the defense and the court itself. No contradiction was elicited although it was quite obvious that she would rather not remember the details of that unfortunate incident. Twice the session had to be suspended because she was in tears. 20 The second time, the court itself was moved to declare: "The witness is still crying. Let us have a recess." 21

2. This notwithstanding, counsel for appellant would have the temerity to assert that the testimony of complainant was "evasive." 22 He would seek to impress on us that there was not enough evidence to warrant conviction for the offense of rape and would imply that perhaps only trespass to dwelling was committed. Such a contention is devoid of merit. As was stressed in People v. Baylon: 23 "The other point raised in the brief for appellant that the crime of rape was not shown to have been committed defies rationality, let alone commonsense. Time and time again, this Court had correctly observed that no woman, especially one of tender age, would willingly expose herself to the embarrassment of a public trial wherein she would have not only to admit but also to narrate the violation of her person, if such indeed were not the case. Far

better it is in not a few cases to spare herself the humiliation if there be some other way of bringing the offender to justice. Here, there was such a testimony coming from the offended party, firm, categorical, straightforward. ... It is quite a strain on one's credulity to believe that under such circumstances, the young girl's honor remained unsullied, the nefarious design unfulfilled. To repeat, appellant had not made out a case for a reversal." 24 The succeeding paragraph in the opinion therein rendered likewise deserves mention: "Nor is this all. As was noted in a recent case, People vs. Molina, it is manifest in the decisions of this Court that where the offended parties are young and immature girls like the victim in this case, there is a marked receptivity on its part to lend credence to their version of what transpired. It is not to be wondered at. The state, as parens patriae, is under the obligation to minimize the risk of harm to those, who, because of their minority, are as yet unable to take care of themselves fully. Those of tender years deserve its utmost protection. Moreover, the injury in cases of rape is not inflicted on the unfortunate victim alone. The consternation it causes her family must also be taken into account. It may reflect a failure to abide by the announced concern in the fundamental law for such institution. There is all the more reason then for the rigorous application of the penal law with its severe penalty for this offense, whenever warranted." 25

3. There is one other matter equally deserving of attention. Counsel for appellant did not even mention the defense offered by his client. It is understandable why. In the statement of the accused taken before Corporal Cipriano Vistan 26 and subscribed before the Municipal Judge Bernabe T. Peñaflor of Hermosa, Bataan, he admitted having entered the house of complainant with the explanation that he made a mistake due to his being in a state of intoxication, but denied having done anything reprehensible. At the trial, he had another version. He would rely on alibi. This is how the lower court disposed of the matter: "The defense interposed by the accused is alibi. His testimony is to the effect that starting from 9:00 o'clock in the evening of February 11, 1968, he was in his house at Almacen, Hermosa, Bataan, asleep with his wife and child. He asserts that the filing of the instant criminal charge against him was ill-motivated, because his wife and the spouses Dominador de Jesus and Rufina Santos had a misunderstanding; that the spouses used to buy goods on credit from their store and failed to pay their account; that prior to February 11, 1968, the spouses tried to get some more goods on credit which he refused, because the old debt was not paid; that because of the incident, the spouses went to the extent of approaching Nicanor Sioson, the owner of the lot where his store is erected for the purpose of having him ejected from Sioson's lot. The accused further testified that he was forced to give his statement, Exhibit C, and had to sign it because he was mauled. He showed a scar on the upper left eyebrow; and [said] that he signed his statement not before the subscribing officer, Municipal Judge Peñaflor, but in jail. The defense deserves no serious consideration. The accused could not produce any one of the persons he mentioned ... to corroborate his testimony. His claim that his sworn statement, Exhibit C, was forcibly taken out of him as evidenced by his swollen left eyebrow, was belied both by Pat. Conrado Alvaro of the Hermosa Police Force, who fetched the accused from his house to the Municipal Building for investigation, and by P.C. Sgt. Cipriano Vistan. Pat. Alvaro testified that when he made a preliminary inquiry, the accused admitted to him having entered the house of Dominador de Jesus on the night in question because he was drunk. Pat. Alvaro denied having mauled the accused. Likewise Sgt. Vistan declared that in the course of his investigation, the accused revealed to him that he (accused) was boxed by Dominador de Jesus, father of the complainant, [thus explaining] the swollen face and cut on the upper left eyebrow." 27 What had been stated earlier as to the ordeal undergone by the offended party when she was placed on the stand to give her credible and competent testimony with a clear identification of the accused would serve to bolster further the characterization of his defense as undeserving of serious consideration. Moreover, there is this excerpt from the recent decision of People v. Cudalina: 28 "It suffices to state that this Court when confronted with the defense of alibi in rape cases has invariably found it unconvincing and unsatisfactory." 29

WHEREFORE, the appealed decision of March 31, 1969 by the then Judge Tito V. Tizon of the Court of First Instance of Bataan is affirmed. Costs against appellant.

[G.R. No. L-30543. August 31, 1970.]

THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. RODRIGO CAWILI, Defendant-Appellant.

R E S O L U T I O N

FERNANDO, J.:

The question before us is whether or not Hospicio O. Zapata, a member of the Philippine Bar, is to be subjected to disciplinary action. He was, under our resolution of August 3, 1970, 1 given a period of ten days after receipt thereof to explain why no such action should be taken against him in view of his failure to submit the brief as counsel de parte within the reglementary period. He filed an explanation in a memorandum submitted to us on August 22, 1970, admitting that he was remiss in his obligation to file said brief, but seeking to minimize such failure on his part with the allegation that the accused, Rodrigo Cawili, was in a state of indigence resulting not being paid but also in his partly assuming the expenses entailed in such defense. After invoking such circumstances as the expenses incident on the printing of the brief being beyond the power of the wife of the accused to bear and that he was not called upon to continue spending on behalf of such client, he would have us overlook his failure to file the brief as in his opinion "the mere review of the record of the case will readily show that the decision is contrary to law and the evidence adduced during the trial, . . ." 2 He did tender his apology, coupled with a promise that an incident of such character will not be repeated in the future.

It cannot be denied that the failure of counsel to submit the brief within the reglementary period is an offense that entails disciplinary action. The recital of the circumstances on which counsel would seek to reduce its gravity do not call for exculpation. He could have sought the permission to file a mimeographed brief, or, at the very least, he could have informed us of the difficulties attendant on defending his client. For him to blithely assume that a mere reading of the record would suffice to discharge an obligation not only to his client but to this Court is to betray a degree of irresponsibility. It is not in keeping, even, with the minimal standards expected of membership in the bar to be so lacking in elementary courtesy that this Court was not even informed of his inability to comply with what was incumbent on him. His conduct was therefore inexcusable, although the explanation he tendered and the difficulties under which he worked would, to a certain degree, invite less than full punishment.

WHEREFORE, respondent Hospicio O. Zapata is hereby reprimanded for his failure to submit his brief within the reglementary period, and admonished to be much more careful in the fulfillment of his obligations to his client and to this honorable Tribunal.

FIRST DIVISION 

 FELICITAS S. QUIAMBAO,                  Adm. Case No. 6708

Compla inan t ,                                               (CBD Case No. 01-874)

                                                                                                 Present:                                                                                                          DAVIDE, JR., C.J.,                                                                                                                   (Chairman),                           - versus -                                                            QUISUMBING,                                                                                                         SANTIAGO,                                                                                                         CARPIO, and                                                                                                         AZCUNA,  JJ.             

ATTY. NESTOR A. BAMBA ,                    Promulgated:                        Respondent.

                                    August 25, 2005                                               X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X 

RESOLUTION  DAVIDE, JR., C.J.: 

We are aware o f the hap less fac t tha t the re a re no t enough lawyers to se rve an exp lod ing popu la t ion .   Th is un fo r tuna te s ta te o f a f fa i rs , however , w i l l no t se ize th is Cour t f rom exerc is ing i t s d isc ip l ina ry power over lawyers cu lpab le o f se r ious ind isc re t ions .   The inc idence o f pub l i c fo rce mus t be dep loyed to bear upon the commun i ty to even tua l l y fo rge a lega l p ro fess ion tha t p rov ides qua l i t y , e th ica l , access ib le , and cos t -e f fec t i ve lega l se rv ice to our peop le and whose members a re w i l l i ng and ab le to answer the ca l l to pub l i c se rv ice .

 In th is admin is t ra t i ve case fo r d isbarment , compla inan t Fe l i c i tas S .

Qu iambao charges respondent A t ty . Nes to r A . Bamba w i th v io la t ion o f the Code o f P ro fess iona l Respons ib i l i t y fo r represen t ing con f l i c t ing in te res ts when the la t te r f i l ed a case aga ins t her wh i le he was a t tha t t ime represen t ing her in ano ther case , and fo r commi t t ing o ther ac ts o f d is loya l t y and doub le -dea l ing .  

 F rom June 2000 to January 2001 , the compla inan t was the

p res iden t and manag ing d i rec to r o f A l l i ed Inves t iga t ion Bureau , Inc . (A IB) , a fami l y -owned corpora t ion engaged in p rov id ing secur i t y and inves t iga t ion serv ices .   She avers tha t she p rocured the lega l se rv ices o f the respondent no t on ly fo r the corpora te a f fa i rs o f A IB bu t a lso fo r her persona l case .   Par t i cu la r l y , the respondent ac ted as her counse l o f record in an e jec tment case aga ins t Spouses Sant iago and F lo r i ta Tor roba f i l ed by her on 29 December 2000 be fo re the Met ropo l i tan Tr ia l Cour t (MeTC) o f Parañaque C i ty , wh ich was docke ted as C iv i l Case No. 11928 .   She pa id a t to rney ’s fees fo r respondent ’ s lega l se rv ices in tha t case . [ 1 ]    Abou t s i x months a f te r she res igned as A IB p res iden t , o r on 14 June 2001 , the respondent f i l ed on

beha l f o f A IB a compla in t fo r rep lev in and damages aga ins t her be fo re the MeTC o f Quezon C i ty fo r the purpose o f recover ing f rom her the car o f A IB ass igned to her as a serv ice veh ic le .   Th is he d id w i thou t w i thdraw ing as counse l o f record in the e jec tment case , wh ich was then s t i l l pend ing . [ 2 ]  

 Apar t f rom the fo rego ing l i t i ga t ion mat te r , the compla inan t , i n her

Pos i t ion Paper , charges the respondent w i th ac ts o f d is loya l t y and doub le -dea l ing .   She avers tha t the respondent p roposed to her tha t she o rgan ize her own secur i t y agency and tha t he wou ld ass is t her in i t s o rgan iza t ion , caus ing her to res ign as p res iden t o f A IB .   The respondent indeed ass is ted her in December 2000 in the fo rmat ion o f ano ther secur i t y agency , Qu iambao R isk Management Spec ia l i s ts , Inc . , (QRMSI ) , wh ich was la te r reg is te red under compla inan t ’ s name, w i th the respondent as a “s i len t par tner ” represen ted by h is assoc ia te A t ty . Gerardo P . Hernandez .   The respondent was pa id a t to rney ’s fees fo r h is lega l se rv ices in o rgan iz ing and incorpora t ing QRMSI .   He a lso p lanned to “s tea l ” o r “p i ra te ” some o f the more impor tan t c l ien ts o f A IB .   Wh i le se rv ing as lega l counse l fo r A IB and a “s i len t par tner ” o f QRMSI , he conv inced compla inan t ’ s b ro ther Leodegar io Qu iambao to o rgan ize ano ther secur i t y agency , San Es teban Secur i t y Serv ices , Inc . (SESSI ) where he ( the respondent ) se rved as i t s incorpora to r , d i rec to r , and p res iden t .   The respondent and Leodegar io then i l l ega l l y d ive r ted the funds o f A IB to fund the incorpora t ion o f SESSI , and l i kew ise p lanned to even tua l l y c lose down the opera t ions o f A IB and t rans fe r the bus iness to SESSI . [ 3 ]

 For h is par t , the respondent admi ts tha t he represen ted the

compla inan t in the a fo rement ioned e jec tment case and la te r represen ted A IB in the rep lev in case aga ins t her .   He , however , den ies tha t he was the “persona l lawyer ” o f the compla inan t , and avers tha t he was made to be l ieve tha t i t was par t o f h is func t ion as counse l fo r A IB to hand le even the “persona l cases” o f i t s o f f i ce rs .   Even assuming tha t the compla inan t con f ided to h im pr i v i l eged in fo rmat ion abou t her lega l in te res ts , the e jec tment case and the rep lev in case a re unre la ted cases invo lv ing d i f fe ren t i ssues and par t ies and , there fo re , the p r i v i l eged in fo rmat ion wh ich migh t have been ga thered f rom one case wou ld have no use in the o ther .   A t any ra te , i t was the compla inan t herse l f who ins is ted tha t he s tay as her counse l desp i te the perce ived d i f fe rences among her , her b ro ther , and A IB over the moto r veh ic le sub jec t o f the rep lev in case .   The compla inan t even asked h im to ass is t her in her moneta ry c la ims aga ins t A IB . [ 4 ]

 The respondent a lso den ies the charge ra ised by the compla inan t in

her pos i t ion paper tha t he agreed to be a “s i len t par tner ” o f QRMSI th rough h is nominee , A t ty . Gerardo P . Hernandez , who was h is fo rmer law par tner .   He dec l ined compla inan t ’ s o f fe r to assume tha t ro le and sugges ted A t ty . Hernandez in h is p lace ; thus , 375 shares o f s tock were reg is te red in A t ty . Hernandez ’s name as cons idera t ion o f h is (A t ty . Hernandez ’s ) lega l se rv ices as corpora te secre ta ry and lega l counse l o f QRMSI .   The respondent a lso den ies tha t he conv inced compla inan t ’ s b ro ther Leodegar io to o rgan ize ano ther secur i t y agency and tha t the funds o f A IB were un lawfu l l y d ive r ted to SESSI .   I t was to complement the bus iness o f A IB , wh ich was then in danger o f co l lapse , tha t SESSI was es tab l i shed .   Leodegar io ’s w i fe and her son have the e f fec t i ve con t ro l over SESSI .   Respondent ’ s subscr ibed shareho ld ings in SESSI compr ise on ly 800 shares ou t o f 12 ,500 subscr ibed shares .   He serves A IB and SESSI in d i f fe ren t capac i t ies : as lega l counse l o f the fo rmer and as p res iden t o f the la t te r . [ 5 ]  

 

I n h is Repor t and Recommendat ion [ 6 ]   da ted 31 Augus t 2004 , the inves t iga t ing commiss ioner o f the IBP found the respondent gu i l t y o f represen t ing con f l i c t ing in te res ts based on the fo l low ing und ispu ted fac ts : f i r s t , the respondent was s t i l l comp la inan t ’ s counse l o f record in the e jec tment case when he f i l ed , as lega l counse l o f A IB , the rep lev in case aga ins t her ; and second , the respondent was s t i l l t he lega l counse l o f A IB when he adv ised the compla inan t on the incorpora t ion o f ano ther secur i t y agency , QRMSI , and recommended h is fo rmer law par tner , A t t y . Gerardo Hernandez , to be i t s co rpora te secre ta ry and lega l counse l and a lso when he con fe r red w i th Leodegar io to o rgan ize ano ther secur i t y agency , SESSI , where the respondent became an incorpora to r , s tockho lder , and p res iden t .   Thus , the inves t iga t ing commiss ioner recommended tha t the respondent be suspended f rom the p rac t i ce o f law fo r one year .  

 The IBP Board o f Governors adop ted and approved the

inves t iga t ing commiss ioner ’s repor t and recommendat ion , bu t reduced the pena l t y f rom one year to a s te rn repr imand. [ 7 ]

 The i ssue in th is case i s whether the respondent i s gu i l t y o f

m isconduc t fo r represen t ing con f l i c t ing in te res ts in con t raven t ion o f the bas ic tene ts o f the lega l p ro fess ion .                   Ru le 15 .03 , Canon 5 o f the Code o f P ro fess iona l Respons ib i l i t y p rov ides : “A lawyer sha l l no t represen t con f l i c t ing in te res ts excep t by wr i t ten consen t o f a l l concerned g iven a f te r a fu l l d i sc losure o f the fac ts . ”   Th is p roh ib i t i on i s founded on p r inc ip les o f pub l i c po l i cy and good tas te . [ 8 ]   I n the course o f a lawyer -c l ien t re la t ionsh ip , the lawyer lea rns a l l the fac ts connec ted w i th the c l ien t ’ s case , inc lud ing the weak and s t rong po in ts o f the case . The na tu re o f tha t re la t ionsh ip i s , the re fo re , one o f t rus t and con f idence o f the h ighes t degree . [ 9 ]   I t behooves lawyers no t on ly to keep inv io la te the c l ien t ’ s con f idence , bu t a lso to avo id the appearance o f t reachery and doub le -dea l ing fo r on ly then can l i t i gan ts be encouraged to en t rus t the i r sec re ts to the i r l awyers , wh ich i s o f paramount impor tance in the admin is t ra t ion o f jus t i ce . [ 1 0 ]

                      I n b road te rms, lawyers a re deemed to represen t con f l i c t ing in te res ts when, in beha l f o f one c l ien t , i t i s the i r du ty to con tend fo r tha t wh ich du ty to ano ther c l ien t requ i res them to oppose . [ 1 1 ]   Deve lopments in ju r i sp rudence have par t i cu la r i zed var ious tes ts to de te rmine whether a lawyer ’s conduc t l i es w i th in th is p rosc r ip t ion .   One tes t i s whe ther a lawyer i s du ty -bound to f igh t fo r an i ssue o r c la im in beha l f o f one c l ien t and , a t the same t ime, to oppose tha t c la im fo r the o ther c l ien t . [ 1 2 ]   Thus , i f a lawyer ’s a rgument fo r one c l ien t has to be opposed by tha t same lawyer in a rgu ing fo r the o ther c l ien t , the re i s a v io la t ion o f the ru le .  

 Ano ther tes t o f i ncons is tency o f in te res ts i s whe ther the accep tance

o f a new re la t ion wou ld p reven t the fu l l d i scharge o f the lawyer ’s du ty o f und iv ided f ide l i t y and loya l t y to the c l ien t o r inv i te susp ic ion o f un fa i th fu lness o r doub le -dea l ing in the per fo rmance o f tha t du ty . [ 1 3 ]  S t i l l ano ther tes t i s whe ther the lawyer wou ld be ca l led upon in the new re la t ion to use aga ins t a fo rmer c l ien t any con f iden t ia l i n fo rmat ion acqu i red th rough the i r connec t ion o r p rev ious emp loyment . [ 1 4 ]  

 The p roscr ip t ion aga ins t represen ta t ion o f con f l i c t ing in te res ts

app l ies to a s i tua t ion where the oppos ing par t ies a re p resen t c l ien ts in the same ac t ion o r in an unre la ted ac t ion .   I t i s o f no moment tha t the lawyer wou ld no t be ca l led upon to con tend fo r one c l ien t tha t wh ich the lawyer

has to oppose fo r the o ther c l ien t , o r tha t the re wou ld be no occas ion to use the con f iden t ia l i n fo rmat ion acqu i red f rom one to the d isadvan tage o f the o ther as the two ac t ions a re who l l y unre la ted .   I t i s enough tha t the oppos ing par t ies in one case , one o f whom wou ld lose the su i t , a re p resen t c l ien ts and the na tu re o r cond i t ions o f the lawyer ’s respec t i ve re ta iners w i th each o f them wou ld a f fec t the per fo rmance o f the du ty o f und iv ided f ide l i t y to bo th c l ien ts . [ 1 5 ]

 I n th is case , i t i s und ispu ted tha t a t the t ime the respondent f i l ed

the rep lev in case on beha l f o f A IB he was s t i l l t he counse l o f record o f the compla inan t in the pend ing e jec tment case . We do no t sus ta in respondent ’ s theory tha t s ince the e jec tment case and the rep lev in case a re unre la ted cases f raugh t w i th d i f fe ren t i ssues , par t ies , and sub jec t mat te rs , the p roh ib i t i on i s inapp l i cab le .   H is represen ta t ion o f oppos ing c l ien ts in bo th cases , though unre la ted , obv ious ly cons t i tu tes con f l i c t o f i n te res t o r , a t the leas t , i nv i tes susp ic ion o f doub le -dea l ing .   Wh i le the respondent may asser t tha t the compla inan t express ly consen ted to h is con t inued represen ta t ion in the e jec tment case , the respondent fa i led to show tha t he fu l l y d isc losed the fac ts to bo th h is c l ien ts and he fa i led to p resen t any wr i t ten consen t o f the compla inan t and A IB as requ i red under Ru le 15 .03 , Canon 15 o f the Code o f P ro fess iona l Respons ib i l i t y .  

                   Ne i ther can we accep t respondent ’ s p lea tha t he was du ty -bound to hand le a l l the cases re fe r red to h im by A IB , inc lud ing the persona l cases o f i t s o f f i ce rs wh ich had no connec t ion to i t s co rpora te a f fa i rs .   Tha t the represen ta t ion o f con f l i c t ing in te res t i s in good fa i th and w i th hones t in ten t ion on the par t o f the lawyer does no t make the p roh ib i t i on inopera t i ve . [ 1 6 ]   Moreover , l awyers a re no t ob l iged to ac t e i the r as an adv iser o r advoca te fo r every person who may w ish to become the i r c l i en t .   They have the r igh t to dec l ine such employment , sub jec t , however , to Canon 14 o f the Code o f P ro fess iona l Respons ib i l i t y . [ 1 7 ]   A l though there a re ins tances where lawyers canno t dec l ine represen ta t ion , [ 1 8 ]   t hey canno t be made to labor under con f l i c t o f i n te res t be tween a p resen t c l ien t and a p rospec t i ve one . [ 1 9 ]  

             Add i t iona l l y , i n h is pos i t ion paper , the respondent a l leges tha t when the compla inan t inv i ted the respondent to jo in QRMSI , he “vehement ly re fused to jo in them due to h is percep t ion o f  conf l ic t ing in terest   as he was then (and s t i l l i s a t p resen t ) the Lega l Counse l ” o f A IB , wh ich i s a lso a secur i t y agency . [ 2 0 ]  To bo ls te r h is a l lega t ion , he invoked the a f f idav i t s o f compla inan t ’ s w i tnesses wh ich con ta ined s ta tements o f h is apprehens ion o f con f l i c t o f i n te res t shou ld he jo in QRMSI . [ 2 1 ]                       Surp r i s ing ly , desp i te h is apprehens ion o r awareness o f a poss ib le con f l i c t o f i n te res t shou ld he jo in QRMSI , the respondent la te r a l lowed h imse l f to become an incorpora to r , s tockho lder , and p res iden t o f SESSI , wh ich i s a lso a secur i t y agency .   He jus t i f i ed h is ac t by c la im ing tha t tha t wh i le bo th A IB and SESSI a re engaged in secur i t y agency bus iness , he i s se rv ing in d i f fe ren t capac i t ies .   As the in -house lega l counse l o f A IB , he “se rves i t s lega l in te res t the parameter o f wh ich evo lves a round lega l mat te rs ” such as p ro tec t ing the lega l r igh ts and in te res t o f the corpora t ion ; conduc t ing an inves t iga t ion o r a hear ing on v io la t ions o f company ru les and regu la t ions o f the i r o f f i ce emp loyees and secur i t y guards ; send ing demand le t te rs in co l lec t ion cases ; and represen t ing the corpora t ion in any l i t i ga t ion fo r o r aga ins t i t .   And as p res iden t o f SESSI , he serves the opera t iona l aspec ts o f the bus iness such as “how does i t opera te [ ] , how much do they p r i ce the i r se rv ices , wha t k ind o r how do they t ra in [ ] the i r secur i t y guards , how they so l i c i t c l i en ts . ”   Thus , con f l i c t o f i n te res t i s fa r -

f e tched .  Moreover , the respondent a rgues tha t the compla inan t , no t be ing a s tockho lder o f A IB and SESSI , has no r igh t to ques t ion h is a l leged con f l i c t o f i n te res t in se rv ing the two secur i t y agenc ies . [ 2 2 ]

                   Wh i le the compla inan t lacks persona l i t y to ques t ion the a l leged con f l i c t o f i n te res ts on the par t o f the respondent in se rv ing bo th secur i t y agenc ies , we canno t jus t tu rn a b l ind eye to respondent ’ s ac t .   I t mus t be no ted tha t the p roscr ip t ion aga ins t represen ta t ion o f con f l i c t ing in te res ts f i nds app l i ca t ion where the con f l i c t ing in te res ts a r i se w i th respec t to the same genera l mat te r however s l igh t the adverse in te res t may be .   I t app l ies even i f the con f l i c t pe r ta ins to the lawyer ’s p r i va te ac t i v i t y o r in the per fo rmance o f a func t ion in a non-pro fess iona l capac i t y . [ 2 3 ]     I n the p rocess o f de te rmin ing whether there i s a con f l i c t o f i n te res t , an impor tan t c r i te r ion i s p robab i l i t y , no t ce r ta in ty , o f con f l i c t .                       S ince the respondent has f inanc ia l o r pecun ia ry in te res t in SESSI , wh ich i s engaged in a bus iness compet ing w i th h is c l ien t ’ s , and , more impor tan t l y , he occup ies the h ighes t pos i t i on in SESSI , one canno t he lp en te r ta in ing a doub t on h is loya l t y to h is c l ien t A IB .   Th is k ind o f s i tua t ion passes the second tes t o f con f l i c t o f i n te res t , wh ich i s whether the accep tance o f a new re la t ionsh ip wou ld p reven t the fu l l d i scharge o f the lawyer ’s du ty o f und iv ided f ide l i t y and loya l t y to the c l ien t o r inv i te susp ic ion o f un fa i th fu lness o r doub le -dea l ing in the per fo rmance o f tha t du ty .   The c lose re la t ionsh ip o f the ma jo r i t y s tockho lders o f bo th compan ies does no t nega te the con f l i c t o f i n te res t .   Ne i ther does h is p ro tes ta t ion tha t h is shareho ld ing in SESSI i s “a mere pebb le among the sands . ” 

In v iew o f a l l o f the fo rego ing , we f ind the respondent gu i l t y o f se r ious misconduc t fo r represen t ing con f l i c t ing in te res ts .                                                             

Fur thermore , i t mus t be no ted tha t Repub l i c Ac t No . 5487 , o therw ise known as the  Pr iva te Secur i t y Agency Law , p roh ib i t s a person f rom organ iz ing o r hav ing an in te res t in more than one secur i t y agency .   F rom respondent ’ s pos i t ion paper , i t can be cu l led tha t Leodegar io Qu iambao i s the p res iden t and manag ing d i rec to r o f A IB , ho ld ing 60% o f the ou ts tand ing shares ; wh i le h is four o ther s ib l ings who a re permanent res iden ts in the Un i ted S ta tes own the rema in ing 40%. [ 2 4 ]  Th is p roh ib i t i on no tw i ths tand ing , the respondent o rgan ized SESSI , w i th Leodegar io ’s w i fe and son as ma jo r i t y s tockho lders ho ld ing abou t 70% o f the ou ts tand ing shares and w i th h im ( the respondent ) , as we l l as the res t o f the s tockho lders , ho ld ing min ima l shares . [ 2 5 ]       I n do ing so , the respondent v i r tua l l y a l lowed Leodegar io and the la t te r ’ s w i fe to v io la te o r c i r cumvent the law by hav ing an in te res t in more than one secur i t y agency .   I t mus t be no ted tha t in the a f f idav i t [ 2 6 ]   o f Leodegar io ’s w i fe , she ment ioned o f the i r   con juga l p roper ty .   In the absence o f ev idence to the con t ra ry , the p roper ty re la t ion o f Leodegar io and h is w i fe can be p resumed to be tha t o f con juga l par tnersh ip o f ga ins ; hence , the ma jo r i t y shares in A IB and SESSI a re the con juga l p roper ty o f Leodegar io and h is w i fe , the reby p lac ing themse lves in possess ion o f an in te res t in more than one secur i t y agency in con t raven t ion o f   R .A . No . 5487 .     Thus , in o rgan iz ing SESSI , the respondent v io la ted Ru le 1 .02 , Canon 1 o f the Code o f P ro fess iona l Respons ib i l i t y , wh ich mandates lawyers to p romote respec t fo r the law and re f ra in f rom counse l ing o r abe t t ing ac t i v i t i es a imed a t de f iance o f the law.  

                 As to the recommendat ion tha t the pena l t y be reduced f rom a

suspens ion o f one year to a s te rn warn ing , we f ind the same to be w i thou t bas is .   We are d is tu rbed by the reduc t ion made by the IBP Board o f Governors o f the pena l t y recommended by the inves t iga t ing commiss ioner

w i thou t c lear l y and d is t inc t l y s ta t ing the fac ts and reasons on wh ich tha t reduc t ion i s based .  

 Sec t ion 12(a ) ,  Ru le 139-B o f the Ru les o f Cour t reads in

par t as fo l lows : 

SEC. 12 .  Rev iew and dec is ion by the Board o f Governors . –     (a ) Every case heard by an inves t iga to r sha l l be

rev iewed by the IBP Board o f Governors upon the record and ev idence t ransmi t ted to i t by the Inves t iga to r w i th h is repor t . The dec is ion o f the Board upon such rev iew sha l l be in wr i t i ng and sha l l  c lear l y and d is t inc t l y s ta te the fac ts and the reasons on wh ich i t i s based .

  We may cons ider the reso lu t ion o f the IBP Board o f Governors as a

memorandum dec is ion adop t ing by re fe rence the repor t o f the inves t iga t ing commiss ioner .   However , we look w i th d is favor the change in the recommended pena l t y w i thou t any exp lana t ion there fo r .   Aga in , we remind the IBP Board o f Governors o f the impor tance o f the requ i rement to announce in p la in te rms i t s lega l reason ing , s ince the requ i rement tha t i t s dec is ion in d isc ip l ina ry p roceed ings mus t s ta te the fac ts and the reasons on wh ich i t s dec is ion i s based i s ak in to what i s requ i red o f the dec is ions o f cour ts o f record . [ 2 7 ]   The reasons fo r hand ing down a pena l t y occupy no lesser s ta t ion than any o ther por t ion o f the   ra t io .  

 I n s im i la r cases where the respondent was found gu i l t y o f

represen t ing con f l i c t ing in te res ts a pena l t y rang ing f rom one to th ree years ’ suspens ion was imposed . [ 2 8 ]   I n th is case , we f ind tha t a suspens ion f rom the p rac t i ce o f law fo r one year i s war ran ted . 

WHEREFORE , respondent A t ty . Nes to r A . Bamba is hereby he ld  GUILTY   o f v io la t ion o f Ru le 15 .03 o f Canon 15 and Ru le 1 .02 o f Canon 1 o f the Code o f P ro fess iona l Respons ib i l i t y .   He i s  SUSPENDED   f rom the p rac t i ce o f law fo r a per iod o f  ONE  (1 ) YEAR   e f fec t i ve f rom rece ip t o f th i s Reso lu t ion , w i th a warn ing tha t a s im i la r in f rac t ion in the fu tu re sha l l be dea l t w i th more severe ly .

 Le t cop ies o f th i s Reso lu t ion be fu rn ished to the Of f i ce o f the Bar

Conf idan t and the In tegra ted Bar o f the Ph i l i pp ines .

           SO ORDERED.

A.C. No. 378             March 30, 1962

JOSE G. MEJIA and EMILIA N. ABRERA, complainants, vs.FRANCISCO S. REYES, respondent.

PADILLA, J.:

This is a disbarment proceedings against attorney Francisco S. Reyes for malpractice.

On 27 September 1947, Francisco S. Reyes, a practicing lawyer, was appointed bank attorney and notary public for the Baguio Branch of the Philippine National Bank (Exhibit H), as follows:

Atty. Francisco S. Reyes Baguio City, Mt. Province (Thru: The Manager, Phil. National Bank Baguio Branch) .

S i r :

Please be advised that you are hereby appointed as Bank Attorney and Notary Public of our Baguio Branch, effective September 19, 1947, and as such you are to perform the following: .

1) To ratify documents covering bank transactions;

2) To represent the Bank in cases filed in the local courts when, in the opinion of the Government Corporation Counsel, there is a necessity for an attorney for the purpose; and

3) To give legal advise on ordinary routinary matters to our Branch Manager thereat and sign collection letters when so requested by the latter.

It is understood that you shall receive no regular compensation from the Bank but that you will be allowed to collect fees authorized by the Notarial Law when ratifying documents and 5% of the amount of judgment in cases where your appearance for the Bank is requested, if and when actually collected, which fees, however, may be changed as circumstances may warrant. Furthermore, it is also understood that under this appoinment,you are not entitled to any other form of compensation or privileges accorded to regularly appointed employees of this Bank.

Yours very truly, .

(Sgd.) V. CARMONA President

I AGREE: (Sgd.) FRANCISCO S. REYES

In June 1955 while still holding such position his professional services were engaged by Jose G. Mejia and Emilia N. Abrera, residents of Baguio City, to bring an action in court against the Philippine National Bank and the Rehabilitation Finance Corporation (now the Development Bank of the Philippines) as successor-in-interest of the defunct Agricultural and Industrial Bank for the cancellation of a mortgage on a parcel of land situated in Baguio City recorded on their certificate of title No. 2499 (civil No. 532). On 28 June 1955 a complaint, signed by Attorney Francisco S. Reyes for the law firm of Reyes and Cabato, was filed in the Court of First Instance of Baguio against the two banks, praying that the sum in Japanese war notes of P2,693.53 paid on 27 October 1944 by Jose G. Mejia and Emilia N. Abrera to the Agricultural and Industrial Bank and received by the Philippines National Bank, Baguio Branch, to pay the balance of real estate mortgage loan, be credited by the Rehabilitation Finance Corporation as successor-in-interest of the defunct Agricultural and Industrial Bank and that the mortgage annotated on transfer certificate of title No. 2499 be cancelled (Exhibit A). After trial, on 4 August 1956 the Court rendered judgment declaring valid the payment in Japanese war notes of P2,693.53 on 27 October 1944 but crediting only the sum of P67.34, Philippine currency, the equivalent value of P2,693.53 under the Ballantyne Schedule (Exhibit 8). On 31 August 1956 the Reyes and Cabato law firm filed a motion for reconsideration (Exhibit 9) and the Philippine National Bank on 5 September 1956 (Exhibit 10), to which on 15 September 1956 the former filed a written objection (Exhibit 11). On 15 September 1956 the Court denied both motion for reconsideration (Exhibit 12). No appeal was taken by either party.

In this administrative proceedings, the complainants Jose G. Mejia and Emilia N. Abrera allege that they had desired to take an appeal from the judgment rendered by the Court of First Instance of Baguio but did not, upon the respondent's advice; that thereafter for the first time they learned that the respondent was counsel and notary public of the Baguio Branch of the Philippine National Bank; that his representing them against the Philippine National Bank, in whose Baguio Branch he was bank attorney and notary public, without revealing to them such connection with the Bank, constitutes malpractice; and pray this Court to disbar him.

In his answer filed on 2 March 1959 respondent Francisco S. Reyes avers that after a conference among the complainants, attorney Federico L. Cabato and himself, they agreed not to appeal the judgment rendered by the Court and, instead, to take advantage of the provisions of Republic Act No. 1286 that condoned interests accruing on debts to the Government provided that the principal was paid on or before 31 December 1956; that all the time he was handling their case the complainants knew his professional connection with the Baguio Branch of the Philippine National Bank; that he worked hard with attorney Cabato on their case, for which he was paid by them a meager sum of P90 as attorney fees; that he is not guilty of malpractice, because he was not a retainer lawyer of the Philippine National Bank but represented it only in collection cases where he was paid 5% of any amount collected; that the malpractice charge is just to harrass, embarrass and force him to pay the complainants' debt to the Rehabilitation Finance Corporation; and praysthat the complaint be dismissed..

On 4 March 1959 the Court referred the administrative case to the City Attorney of Baguio for investigation, report and recommendation. After conducting the investigation during which the parties presented their evidence, on 23 March 1960, Sixto A. Domondo, City Attorney of Baguio, rendered a report finding the respondent guilty of malpractice and recommending reprimand..1äwphï1.ñët

Lawyers are prohibited from representing conflicting interests in a case (Cantorne vs. Ducusin, 57 Phil. 23 and In re: De la Rosa, 27 Phil. 258). The respondent's act of appearing and acting as counsel for the complainantsJose G. Mejia and Emilia N. Abrera in the civil case against the Philippine National Bank, that had appointed him bank attorney and notary public, constitutes malpractice. However, it does not appear satisfactorily proventhat during the pendency of their case the complaints did not know of the respondents connection with the bank as attorney and notary public. On the other hand, it appears that notwithstanding the letter dated 21 July 1955 written by Mr. L.D. Herrera, manager of the BaguioBranch, quoting a part of a previous letter sent to him (Herrera) by attorney Ramon B. de los Reyes, chief legal counsel of the Philippine National Bank, stating that —

We note that the complaint is signed by our Bank Attorney and Notary Public, Atty. Francisco S. Reyes, in behalf of the Law Office of Reyes and Cabato. Needless to say, it is unethical for Atty. Reyes, who is presently the attorney of the Bank, to represent the plaintiffs here whose interest are diametrically opposed to those of the Bank. As this is certainly embarrassing both for Atty. Reyes and for the Bank, it is requested that you please take this matter with Atty. Reyes with the end in view of advising him to desist from representing the plaintiffs in this case, otherwise, we will be compelled, much to our regret, to recommend severance of his official connection with this Bank,.

which shows that the Philippine National Bank knew that the respondent was appearing as counsel for the complainants, yet it did not revoke or cancel his appointment as bank attorney and notary public; that in the civil case the respondent did not appear as counsel for the Bank which was represented by attorneys Ramon B. de los Reyes and Nemesio P. Libunao; that no appeal was taken from the judgment rendered by the Court of First Instance of Baguio, because the complainants had chosen to pay the principal of their loan on or before 31 December 1956 in order that the interests thereon be condoned as provided for in Republic Act No. 1286 (Exhibits 13 to 17); and that the respondent was deeply devoted to his duties as counsel for the complainants and collected a very small attorney's fees of P90, the malpractice committed by the respondent is not so serious. He is just admonished and warned not to repeat it.

[G.R. No. 105938.  September 20, 1996]

TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ, JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR P. LAZATIN, and EDUARDO U. ESCUETA, petitioners, vs. THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, and RAUL S. ROCO, respondents.

[G.R. No. 108113.  September 20, 1996]

PARAJA G. HAYUDINI, petitioner, vs. THE SANDIGANBAYAN and THE REPUBLIC OF THE PHILIPPINES, respondents.

D E C I S I O N

KAPUNAN, J.:

These cases touch the very cornerstone of every State's judicial system, upon which the workings of the contentious and adversarial system in the Philippine legal process are based - the sanctity of fiduciary duty in the client-lawyer relationship.  The fiduciary duty of a counsel and advocate is also what makes the law profession a unique position of trust and confidence, which distinguishes it from any other calling.  In this instance, we have no recourse but to uphold and strengthen the mantle of protection accorded to the confidentiality that proceeds from the performance of the lawyer's duty to his client.

The facts of the case are undisputed.

The matters raised herein are an offshoot of the institution of the Complaint on July 31, 1987 before the Sandiganbayan by the Republic of the Philippines, through the Presidential Commission on Good Government against Eduardo M. Cojuangco, Jr., as one of the principal defendants, for the recovery of alleged ill-gotten wealth, which includes shares of stocks in the named corporations in PCGG Case No. 33 (Civil Case No. 0033), entitled "Republic of the Philippines versus Eduardo Cojuangco, et al."[1]

Among the defendants named in the case are herein petitioners Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini, and herein private respondent Raul S. Roco, who all were then partners of the law firm Angara, Abello, Concepcion, Regala and Cruz Law Offices (hereinafter referred to as the ACCRA Law Firm).  ACCRA Law Firm performed  legal services for its clients, which  included, among others, the organization and acquisition of business associations and/or organizations, with the correlative and incidental services where its members acted as incorporators, or simply, as stockholders.  More specifically, in the performance of these services, the members of the law firm delivered to its client documents which substantiate the client's equity holdings, i.e., stock certificates endorsed in blank representing the shares registered in the client's name, and a blank deed of trust or assignment covering said shares.  In the course of their dealings with their clients, the members of the law firm acquire information relative to the assets of clients as well as their personal and business circumstances.  As members of the ACCRA Law Firm, petitioners and private respondent Raul Roco admit that they assisted in the organization and acquisition of the companies included in Civil Case No. 0033, and in keeping with the office practice, ACCRA lawyers acted as nominees-stockholders of the said corporations involved in sequestration proceedings.[2]

On August 20, 1991, respondent Presidential Commission on Good Government (hereinafter referred to as respondent PCGG) filed a "Motion to Admit Third Amended Complaint" and "Third Amended Complaint" which excluded  private respondent Raul S. Roco  from  the  complaint in PCGG Case No. 33 as party-defendant.[3] Respondent PCGG based its exclusion of private respondent Roco as party-defendant on his undertaking that he will reveal the identity of the principal/s for whom he acted as nominee/stockholder in the companies involved in PCGG Case No. 33.[4]

Petitioners were included in the Third Amended Complaint on the strength of the following allegations:

14.            Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion, Teodoro Regala, Avelino V. Cruz, Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and Raul Roco of the Angara Concepcion Cruz Regala and Abello law offices (ACCRA) plotted, devised, schemed.  conspired and confederated with each other in setting up, through the use of the coconut levy funds, the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM, COCOLIFE, COCOMARK, CIC, and more than twenty other coconut levy funded corporations, including the acquisition of San Miguel Corporation shares and its institutionalization through presidential directives of the coconut monopoly.  Through insidious means and machinations, ACCRA, being the wholly-owned investment arm, ACCRA Investments Corporation, became the holder of approximately fifteen million shares representing roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987.  This ranks ACCRA Investments Corporation number 44

among the top 100 biggest stockholders of UCPB which has approximately 1,400,000 shareholders.  On the other hand, corporate books show the name Edgardo J. Angara as holding approximately 3,744 shares as of February, 1984.[5]

In their answer to the Expanded Amended Complaint, petitioners ACCRA lawyers alleged that:

4.4.  Defendants-ACCRA lawyers’ participation in the acts with which their co-defendants are charged, was in furtherance of legitimate lawyering.

4.4.1.  In the course of rendering professional and legal services to clients, defendants-ACCRA lawyers, Jose C. Concepcion, Teodoro D. Regala, Rogelio A. Vinluan and Eduardo U. Escueta, became holders of shares of stock in the corporations listed under their respective names in Annex ‘A’ of the expanded Amended Complaint as incorporating or acquiring stockholders only and, as such, they do not claim any proprietary interest in the said shares of stock.

4.5.  Defendant ACCRA-lawyer Avelino V. Cruz was one of the incorporators in 1976 of Mermaid Marketing Corporation, which was organized for legitimate business purposes not related to the allegations of the expanded Amended Complaint.  However, he has long ago transferred any material interest therein and therefore denies that the ‘shares’ appearing in his name in Annex ‘A’ of the expanded Amended Complaint are his assets.[6]

Petitioner Paraja Hayudini, who had separated from ACCRA law firm, filed a separate answer denying the allegations in the complaint implicating him in the alleged ill-gotten wealth.[7]

Petitioners ACCRA lawyers subsequently filed their "COMMENT AND/OR OPPOSITION" dated October 8, 1991 with Counter-Motion that respondent PCGG similarly grant the same treatment to them (exclusion as parties-defendants) as accorded private respondent Roco. [8] The Counter-Motion for dropping petitioners from the complaint was duly set for hearing on October 18, 1991 in accordance with the requirements of Rule 15 of the Rules of Court.

In its "Comment," respondent PCGG set the following conditions precedent for the exclusion of petitioners, namely:  (a) the disclosure of the identity of its clients; (b) submission of documents substantiating the lawyer-client relationship; and (c) the submission of the deeds of assignments petitioners executed in favor of its clients covering their respective shareholdings.[9]

Consequently, respondent PCGG presented supposed proof to substantiate compliance by private respondent Roco of the conditions precedent to warrant the latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a) Letter to respondent PCGG of the counsel of respondent Roco dated May 24, 1989 reiterating a previous request for reinvestigation by the PCGG  in PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by private respondent Roco as Attachment to the letter aforestated in (a); and (c) Letter of the Roco, Bunag, and Kapunan Law Offices dated September 21, 1988 to the respondent PCGG in behalf of private respondent Roco originally requesting the reinvestigation and/or re-examination of the evidence of the PCGG against Roco in its  Complaint in PCGG Case No. 33.[10]

It is noteworthy that during said proceedings, private respondent Roco did not refute petitioners' contention that he did actually not reveal the identity of the client involved in PCGG Case No. 33, nor had he undertaken to reveal the identity of the client for whom he acted as nominee-stockholder.[11]

On March 18, 1992, respondent Sandiganbayan promulgated the Resolution, herein questioned, denying the exclusion of petitioners in PCGG Case No. 33, for their refusal to comply with the conditions required by respondent PCGG.  It held:

x x x.

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e. their principal, and that will be their choice.  But until they do identify their clients, considerations of whether or not the privilege  claimed  by  the  ACCRA  lawyers  exists cannot even begin to be debated.  The ACCRA lawyers cannot excuse themselves from the  consequences  of their acts until they have begun to establish the basis for recognizing the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein.

5.  The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified his principal, which revelation could show the lack of cause  against him.  This in turn has allowed the PCGG to exercise its power both under the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of by Roco; full disclosure in exchange for exclusion from these proceedings (par. 7, PCGG's COMMENT dated November 4, 1991).  The ACCRA lawyers have preferred not to make the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as party defendants.  In the same vein, they cannot compel the PCGG to be accorded the same treatment accorded to Roco.

Neither can this Court.

WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for the same treatment by the PCGG as accorded to Raul S. Roco is DENIED for lack of merit.[12]

ACCRA lawyers moved for a reconsideration of the above resolution but the same was denied by the respondent Sandiganbayan.  Hence, the ACCRA lawyers filed the petition forcertiorari, docketed as G.R. No. 105938, invoking the following grounds:

I

The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners ACCRA lawyers who undisputably acted as lawyers in serving as nominee-stockholders, to the strict application of the law of agency.

II

The Honorable Sandiganbayan committed grave abuse of discretion  in not considering petitioners ACCRA lawyers and Mr. Roco as similarly situated and, therefore, deserving of equal treatment.

1.  There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to reveal, the identities of the client(s) for whom he acted as nominee-stockholder.

2.  Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities of the client(s), the disclosure does not constitute a substantial

distinction as would make the classification reasonable under the equal protection clause.

3.  Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of Mr. Roco in violation of the equal protection clause.

III

The Honorable Sandiganbayan committed grave abuse of discretion in not holding that, under the facts of this case, the attorney-client privilege prohibits petitioners ACCRA lawyers from revealing the identity of their client(s) and the other information requested by the PCGG.

1.  Under the peculiar facts of this case, the attorney-client privilege includes the identity of the client(s).

2.  The factual disclosures required by the PCGG are not limited to the identity of petitioners ACCRA lawyers' alleged client(s) but extend to other privileged matters.

IV

The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that the dropping of party-defendants by the PCGG must be based on reasonable and just grounds and with due consideration to the constitutional right of petitioners ACCRA lawyers to the equal protection of the law.

Petitioner Paraja G. Hayudini, likewise, filed his own motion for reconsideration of the March 18, 1991 resolution which was denied by respondent Sandiganbayan.  Thus, he filed a separate petition for certiorari, docketed as G.R. No. 108113, assailing respondent Sandiganbayan's resolution on essentially the same grounds averred by petitioners in G.R. No. 105938.

Petitioners contend that the exclusion of respondent Roco as party-defendant in PCGG Case No. 33 grants him a favorable treatment, on the pretext of his alleged undertaking to divulge the identity of his client, giving him an advantage over them who are in the same footing as partners in the ACCRA law firm.  Petitioners further argue that even granting that such an undertaking has been assumed by private respondent Roco, they are prohibited from revealing the identity of their principal under their sworn mandate and fiduciary duty as lawyers to uphold at all times the confidentiality of information obtained during such lawyer-client relationship.

Respondent PCGG, through its counsel, refutes petitioners' contention, alleging that the revelation of the identity of the client is not within the ambit of the lawyer-client confidentiality privilege, nor are the documents it required (deeds of assignment) protected, because they are evidence of nominee status.[13]

In his comment, respondent Roco asseverates that respondent PCGG acted correctly in excluding him as party-defendant because he "(Roco) has not filed an Answer.     PCGG had therefore the right to dismiss Civil Case No. 0033 as to Roco `without an order of court by filing a notice of dismissal,'"[14] and he has undertaken to identify his principal.[15]

Petitioners' contentions are impressed with merit.

I

It is quite apparent that petitioners were impleaded by the PCGG as co-defendants to force them to disclose the identity of their clients.  Clearly, respondent PCGG is not after petitioners but the “bigger fish” as they say in street parlance.  This ploy is quite clear from the PCGG’s willingness to cut a deal with petitioners -- the names of their clients in exchange for

exclusion from the complaint.  The statement of the Sandiganbayan in its questioned resolution dated March 18, 1992 is explicit:

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e., their principal, and that will be their choice.  But until they do identify their clients, considerations of whether or not the privilege claimed by the ACCRA lawyers exists cannot even begin to be debated.  The ACCRA lawyers cannot excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein.  (Underscoring ours)

In a closely related case, Civil Case No. 0110 of the Sandiganbayan, Third Division, entitled “Primavera Farms, Inc., et al. vs. Presidential Commission on Good Government” respondent PCGG, through counsel Mario Ongkiko, manifested at the hearing on December 5, 1991 that the PCGG wanted to establish through the ACCRA that their “so called client is Mr. Eduardo Cojuangco”; that “it was Mr. Eduardo Cojuangco who furnished all the monies to those subscription payments in corporations included in Annex “A” of the Third Amended Complaint; that the ACCRA lawyers executed deeds of trust and deeds of assignment, some in the name of particular persons, some in blank.

We quote Atty. Ongkiko:

ATTY. ONGKIKO:

With the permission of this Hon. Court.  I propose to establish through these ACCRA lawyers that, one, their so-called client is Mr. Eduardo Cojuangco.  Second, it was Mr. Eduardo Cojuangco who furnished all the monies to these subscription payments of these corporations who are now the petitioners in this case. Third, that these lawyers executed deeds of trust, some in the name of a particular person, some in blank. Now, these blank deeds are important to our claim that some of the shares are actually being held by the nominees for the late President Marcos.  Fourth, they also executed deeds of assignment and some of these assignments have also blank assignees.  Again, this is important to our claim that some of the shares are for Mr. Cojuangco and some are for Mr. Marcos.  Fifth, that most of these corporations are really just paper corporations.  Why do we say that?  One:  There are no really fixed sets of officers, no fixed sets of directors at the time of incorporation and even up to 1986, which is the crucial year.  And not only that, they have no permits from the municipal authorities in Makati.  Next, actually all their addresses now are care of Villareal Law Office.  They really have no address on records.  These are some of the principal things that we would ask of these nominees stockholders, as they called themselves.[16]

It would seem that petitioners are merely standing in for their clients as defendants in the complaint.  Petitioners are being prosecuted solely on the basis of activities and services performed in the course of their duties as lawyers.  Quite obviously, petitioners’ inclusion as co-defendants in the complaint is merely being used as leverage to compel them to name their clients and consequently to enable the PCGG to nail these clients.  Such being the case, respondent PCGG has no valid cause of action as against petitioners and should exclude them from the Third Amended Complaint.

II

The nature of lawyer-client relationship is premised on the Roman Law concepts of locatio conductio operarum (contract of lease of services) where one person lets his services and another hires them without reference to the object of which the services are to be performed, wherein lawyers' services may be compensated by honorarium or for hire,

[17] and mandato(contract of agency) wherein a friend on whom reliance could be placed makes a contract in his name, but gives up all that he gained by the contract to the person who requested him.[18] But the lawyer-client relationship is more than that of the principal-agent and lessor-lessee.

In modern day perception of the lawyer-client relationship, an attorney is more than a mere agent or servant, because he possesses special powers of trust and confidence reposed on him by his client.[19] A lawyer is also as independent as the judge of the court, thus his powers are entirely different from and superior to those of an ordinary agent. [20] Moreover, an attorney also occupies what may be considered as a "quasi-judicial office" since he is in fact an officer of the Court[21] and exercises his judgment in the choice of courses of action to be taken favorable to his client.

Thus, in the creation of lawyer-client relationship, there are rules, ethical conduct and duties that breathe life into it, among those, the fiduciary duty to his client which is of a very delicate, exacting and confidential character, requiring a very high degree of fidelity and good faith,[22] that is required by reason of necessity and public interest [23] based on the hypothesis that abstinence from seeking legal advice in a good cause is an evil which is fatal to the administration of justice.[24]

It is also the strict sense of fidelity of a lawyer to his client that distinguishes him from any other professional in society.  This conception is entrenched and embodies centuries of established and stable tradition.[25] In Stockton v. Ford,[26] the U.S. Supreme Court held:

There are few of the business relations of life involving a higher trust and confidence than that of attorney and client, or generally speaking, one more honorably and faithfully discharged; few more anxiously guarded by the law, or governed by the sterner principles of morality and justice; and it is the duty of the court to administer them in a corresponding spirit, and to be watchful and industrious, to see that confidence thus reposed shall not be used to the detriment or prejudice of the rights of the party bestowing it.[27]

In our jurisdiction, this privilege takes off from the old Code of Civil Procedure enacted by the Philippine Commission on August 7, 1901.  Section 383 of the Code specifically “forbids counsel, without authority of his client to reveal any communication made by the client to him or his advice given thereon in the course of professional employment.” [28] Passed on into various provisions of the Rules of Court, the attorney-client privilege, as currently worded provides:

Sec. 24.  Disqualification by reason of privileged communication. - The following persons cannot testify as to matters learned in confidence in the following cases:

x x x

An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of, or with a view to, professional employment, can an attorney’s secretary, stenographer, or clerk be examined, without the consent of the client and his employer, concerning any fact the knowledge of which has been acquired in such capacity.[29]

Further, Rule 138 of the Rules of Court states:

Sec. 20.  It is the duty of an attorney:

(e) to maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client, and to accept no compensation in connection with his client’s business except from him or with his knowledge and approval.

This duty is explicitly mandated in Canon 17 of the Code of Professional Responsibility which provides that:

Canon 17.  A lawyer owes fidelity to the cause of his client  and he shall be mindful of the trust and confidence reposed in him.

Canon 15 of the Canons of Professional Ethics also demands a lawyer's fidelity to client:

The lawyer owes "entire devotion to the interest of the client, warm zeal in the maintenance and defense of his rights and the exertion of his utmost learning and ability," to the end that nothing be taken or be withheld from him, save by the rules of law, legally applied.  No fear of judicial disfavor or public popularity should restrain him from the full discharge of his duty.  In the judicial forum the client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land, and he may expect his lawyer to assert every such remedy or defense.  But it is steadfastly to be borne in mind that the great trust of the lawyer is to be performed within and not without the bounds of the law.  The office of attorney does not permit, much less does it demand of him for any client, violation of law or any manner of fraud or chicanery.  He must obey his own conscience and not that of his client.

Considerations favoring confidentiality in lawyer-client relationships are many and serve several constitutional and policy concerns.  In the constitutional sphere, the privilege gives flesh to one of the most sacrosanct rights available to the accused, the right to counsel.  If a client were made to choose between legal representation without effective communication and disclosure and legal representation with all his secrets revealed then he might be compelled, in some instances, to either opt to stay away from the judicial system or to lose the right to counsel.  If the price of disclosure is too high, or if it amounts to self incrimination, then the flow of information would be curtailed thereby rendering the right practically nugatory.  The threat this represents against another sacrosanct individual right, the right to be presumed innocent is at once self-evident.

Encouraging full disclosure to a lawyer by one seeking legal services opens the door to a whole spectrum of legal options which would otherwise be circumscribed by limited information engendered by a fear of disclosure.  An effective lawyer-client relationship is largely dependent upon the degree of confidence which exists between lawyer and client which in turn requires a situation which encourages a dynamic and fruitful exchange and flow of information.  It necessarily follows that in order to attain effective representation, the lawyer must invoke the privilege not as a matter of option but as a matter of duty and professional responsibility.

The question now arises whether or not this duty may be asserted in refusing to disclose the name of petitioners' client(s) in the case at bar.  Under the facts and circumstances obtaining in the instant case, the answer must be in the affirmative.

As a matter of public policy, a client’s identity should not be shrouded in mystery. [30] Under this premise, the general rule in our jurisdiction as well as in the United States is that a lawyer may not invoke the privilege and refuse to divulge the name or identity of his client.[31]

The reasons advanced for the general rule are well established.

First, the court has a right to know that the client whose privileged information is sought to be protected is flesh and blood.

Second, the privilege begins to exist only after the attorney-client relationship has been established.  The attorney-client privilege does not attach until there is a client.

Third, the privilege generally pertains to the subject matter of the relationship.

Finally, due process considerations require that the opposing party should, as a general rule, know his adversary.  “A party suing or sued is entitled to know who his opponent is.” [32] He cannot be obliged to grope in the dark against unknown forces.[33]

Notwithstanding these considerations, the general rule is however qualified by some important exceptions.

1)  Client identity is privileged where a strong probability exists that revealing the client’s name would implicate that client in the very activity for which he sought the lawyer’s advice.

In Ex-Parte Enzor,[34] a state supreme court reversed a lower court order requiring a lawyer to divulge the name of her client on the ground that the subject matter of the relationship was so closely related to the issue of the client’s identity that the privilege actually attached to both.    InEnzor, the unidentified client, an election official, informed his attorney in confidence that he had been offered a bribe to violate election laws or that he had accepted a bribe to that end.  In her testimony, the attorney revealed that she had advised her client to count the votes correctly, but averred that she could not remember whether her client had been, in fact, bribed.  The lawyer was cited for contempt for her refusal to reveal his client’s identity before a grand jury.  Reversing the lower court’s contempt orders, the state supreme court held that under the circumstances of the case, and under the exceptions described above, even the name of the client was privileged.

U.S. v. Hodge and Zweig,[35] involved the same exception, i.e. that client identity is privileged in those instances where a strong probability exists that the disclosure of the client's identity would implicate the client in the very criminal activity for which the lawyer’s legal advice was obtained.

The Hodge case involved federal grand jury proceedings inquiring into the activities of the “Sandino Gang,” a gang involved in the illegal importation of drugs in the United States.  The respondents, law partners, represented key witnesses and suspects including the leader of the gang, Joe Sandino.

In  connection with a tax investigation in November of 1973, the IRS issued summons to Hodge and Zweig, requiring them to produce documents and information regarding payment received by Sandino on behalf of any other person, and vice versa.  The lawyers refused to divulge the names.  The Ninth Circuit of the United States Court of Appeals, upholding non-disclosure under the facts and circumstances of the case,  held:

A client’s identity and the nature of that client’s fee arrangements may be privileged where the person invoking the privilege can show that a strong probability exists that disclosure of such information would implicate that client in the very criminal activity for which legal advice was sought Baird v. Koerner, 279 F.2d at 680.  While in Baird Owe enunciated this rule as a matter of California law, the rule also reflects federal law.  Appellants contend that the Baird exception applies to this case.

The Baird exception is entirely consonant with the principal policy behind the attorney-client privilege.  “In order to promote freedom of consultation of legal advisors by clients, the apprehension of compelled disclosure from the legal advisors must be removed; hence, the law must prohibit such disclosure except on the client’s consent.”  8 J. Wigmore, supra  sec. 2291, at 545.  In furtherance of this policy, the client’s identity and the nature of his fee arrangements are, in exceptional cases, protected as confidential communications.[36]

2) Where disclosure would open the client to civil liability, his identity is privileged.  For instance, the peculiar facts and circumstances of Neugass v. Terminal Cab Corporation,[37] prompted the New York Supreme Court to  allow a  lawyer’s  claim  to  the  effect  that he could not reveal the name of his client because this would expose the latter to civil litigation.

In the said case, Neugass, the plaintiff, suffered injury when the taxicab she was riding, owned by respondent corporation, collided with a second taxicab, whose owner was unknown. Plaintiff brought action both against defendant corporation and the owner of the second cab, identified in the information only as John Doe.  It turned out that when the attorney of defendant corporation appeared on preliminary examination, the fact was somehow revealed that the lawyer came to know the name of the owner of the second cab when a man, a client of the insurance company, prior to the institution of legal action, came to him and reported that he was involved in a car accident.  It was apparent under the circumstances that the man was the owner of the second cab.  The state supreme court held that the reports were clearly made to the lawyer in his professional capacity.  The court said:

That his employment came about through the fact that the insurance company had hired him to defend its policyholders seems immaterial.  The attorney in such cases is clearly the attorney for the policyholder when the policyholder goes to him to report an occurrence contemplating that it would be used in an action or claim against him.[38]

x x x                                       xxx                                  xxx.

All communications made by a client to his counsel, for the purpose of professional advice or assistance, are privileged, whether they relate to a suit pending or contemplated, or to any other matter proper for such advice or aid; x x x And whenever the communication made, relates to a matter so connected with the employment as attorney or counsel as to afford presumption that it was the ground of the address by the client, then it is privileged from disclosure.  xxx.

It appears... that the name and address of the owner of the second cab came to the attorney in this case as a confidential communication.  His client is not seeking to use the courts, and his address cannot be disclosed on that theory, nor is the present action pending against him as service of the summons on him has not been effected.  The objections on which the court reserved decision are sustained.[39]

In the case of Matter of Shawmut Mining Company,[40] the lawyer involved was required by a lower court to disclose whether he represented certain clients in a certain transaction.  The purpose of the court’s request was to determine whether the unnamed persons as interested parties were connected with the purchase of properties involved in the action.  The lawyer refused and brought the question to the State Supreme Court.  Upholding the lawyer’s refusal to divulge the names of his clients the court held:

If it can compel the witness to state, as directed by the order appealed from, that he represented certain persons in the purchase or sale of these mines, it has made progress in establishing by such evidence their version of the litigation.  As already suggested, such testimony by the witness would compel him to disclose not only that he was attorney for certain people, but that, as the result of communications made to him in the course of such employment as such attorney, he knew that they were interested in certain transactions.  We feel sure that under such conditions no case has ever gone to the length of compelling an attorney, at the instance of a hostile litigant, to disclose not only his retainer, but the nature of the transactions to which it related, when such information could be made the basis of a suit against his client.[41]

3) Where the government’s lawyers have no case against an attorney’s client unless, by revealing the client’s name, the said name would furnish the only link that would form the chain of testimony necessary to convict an individual of a crime, the client’s name is privileged.

In Baird vs Korner,[42] a lawyer was consulted by the accountants and the lawyer of certain undisclosed taxpayers regarding steps to be taken to place the undisclosed taxpayers in a favorable position in case criminal charges were brought against them by the U.S. Internal Revenue Service (IRS).

It appeared that the taxpayers’ returns of previous years were probably incorrect and the taxes understated.  The clients themselves were unsure about whether or not they violated tax laws and sought advice from Baird on the hypothetical possibility that they had.   No investigation was then being undertaken by the IRS of the taxpayers.  Subsequently, the attorney of the

taxpayers delivered to Baird the sum of $12,706.85, which had been previously assessed as the tax due, and another amount of money representing his fee for the advice given.  Baird then sent a check for $12,706.85 to the IRS in Baltimore, Maryland, with a note explaining the payment, but without naming his clients.  The IRS demanded that Baird identify the lawyers, accountants, and other clients involved.  Baird refused on the ground that he did not know their names, and declined to name the attorney and accountants because this constituted privileged communication.  A petition was filed for the enforcement of the IRS summons.  For Baird’s repeated refusal to name his clients he was found guilty of civil contempt.  The Ninth Circuit Court of Appeals held that, a lawyer could not be forced to reveal the names of clients who employed him to pay sums of money to the government voluntarily in settlement of undetermined income taxes, unsued on, and with no government audit or investigation into that client’s income tax liability pending.  The court emphasized the exception that a client’s name is privileged when so much has been revealed concerning the legal services rendered that the disclosure of the client’s identity exposes him to possible investigation and sanction by government agencies.  The Court held:

The facts of the instant case bring it squarely within that exception to the general rule.  Here  money  was received by the government, paid by persons who  thereby admitted they had not paid a sufficient amount in income taxes some one  or more years in the past.  The names of the clients are useful to the government for but one purpose - to ascertain which taxpayers think they were delinquent, so that it may check the records for that one year or several years.  The voluntary nature of the payment indicates a belief by the taxpayers that more taxes or interest or penalties are due than the sum previously paid, if any.  It indicates a feeling of guilt for nonpayment of taxes, though whether it is criminal guilt is undisclosed.  But it may well be the link that could form the chain of testimony necessary to convict an individual of a federal crime.  Certainly the payment and  the feeling of guilt are the reasons the attorney here involved was employed - to advise his clients what, under the circumstances, should be done.[43]

Apart from these principal exceptions, there exist other situations which could qualify as exceptions to the general rule.

For example, the content of any client communication to a lawyer lies within the privilege if it is relevant to the subject matter of the legal problem on which the client seeks legal assistance.[44]Moreover, where the nature of the attorney-client relationship has been previously disclosed and it is the identity which is intended to be confidential, the identity of the client has been held to be privileged, since such revelation would otherwise result in disclosure of the entire transaction.[45]

Summarizing these exceptions, information relating to the identity of a client may fall within the ambit of the privilege when the client’s name itself has an independent significance, such that disclosure would then reveal client confidences.[46]

The circumstances involving the engagement of lawyers in the case at bench, therefore, clearly reveal that the instant case falls under at least two exceptions to the general rule.  First, disclosure of the alleged client's name would lead to establish said client's connection with the very fact in issue of the case, which is privileged information, because the privilege, as stated earlier, protects the subject matter or the substance (without which there would be no attorney-client relationship).

The link between the alleged criminal offense and the legal advice or legal service sought was duly established in the case at bar, by no less than the PCGG itself.  The key lies in the three specific conditions laid down by the PCGG which constitutes petitioners’ ticket to non-prosecution should they accede thereto:

(a)  the disclosure of the identity of its clients;

(b)  submission of documents substantiating the lawyer-client relationship; and

(c)  the submission of the deeds of assignment petitioners executed in favor of their clients covering their respective shareholdings.

From these conditions, particularly the third, we can readily deduce that the clients indeed consulted the petitioners, in their capacity as lawyers, regarding the financial and corporate structure, framework and set-up of the corporations in question.  In turn, petitioners gave their professional advice in the form of, among others, the aforementioned deeds of assignment covering their clients’ shareholdings.

There is no question that the preparation of the aforestated documents was part and parcel of petitioners’ legal service to their clients.  More important, it constituted an integral part of their duties as lawyers.  Petitioners, therefore, have a legitimate fear that identifying their clients would implicate them in the very activity for which legal advice had been sought, i.e., the alleged accumulation of ill-gotten wealth in the aforementioned corporations.

Furthermore, under the third main exception, revelation of the client's name would obviously provide the necessary link for the prosecution to build its case, where none otherwise exists.  It is the link, in the words of Baird, “that would inevitably form the chain of testimony necessary to convict the (client) of a... crime."[47]

An important distinction must be made between a case where a client takes on the services of an attorney for illicit purposes, seeking advice about how to go around the law for the purpose of committing illegal activities and a case where a client thinks he might have previously committed something illegal and consults his attorney about it.  The first case clearly does not fall within the privilege because the same cannot be invoked for purposes illegal.  The second case falls within the exception because whether or not the act for which the advice turns out to be illegal, his name cannot be used or disclosed if the disclosure leads to evidence, not yet in the hands of the prosecution, which might lead to possible  action against him.

These cases may be readily distinguished, because the privilege cannot be invoked or used as a shield for an illegal act, as in the first example; while the prosecution may not have a case against the client in the second example and cannot use the attorney client relationship to build up a case against the latter.  The reason for the first rule is that it is not within the professional character of a lawyer to give advice on the commission of a crime.[48] The reason for the second has been stated in the cases above discussed and are founded on the same policy grounds for which the attorney-client privilege, in general, exists.

In Matter of Shawmut Mining Co., supra, the appellate court therein stated that "under such conditions no case has ever yet gone to the length of compelling an attorney, at the instance of a hostile litigant, to disclose not only his retainer, but the nature of the transactions to which it related, when such information could be made the basis of a suit against his client.”[49]"Communications made to an attorney in the course of any personal employment, relating to the subject thereof, and which may be supposed to be drawn out in consequence of the relation in which the parties stand to each other, are under the seal of confidence and entitled to protection as privileged communications."[50] Where the communicated information, which clearly falls within the privilege, would suggest possible criminal activity but there would be not much in the information known to the prosecution which would sustain a charge except that revealing the name of the client would open up other privileged information which would substantiate the prosecution’s suspicions, then the client’s identity is so inextricably linked to the subject matter itself that it falls within the protection.  The Baird exception, applicable to the instant case, is consonant with the principal policy behind the privilege, i.e., that for the purpose of promoting freedom of consultation of legal advisors by clients, apprehension of compelled disclosure from attorneys must be eliminated.  This exception has likewise been sustained in In re Grand Jury Proceedings[51] and Tillotson v. Boughner.[52] What these cases unanimously seek to avoid is the exploitation of the general rule in what may amount to a fishing expedition by the prosecution.

There are, after all, alternative sources of information available to the prosecutor which do not depend on utilizing a defendant's counsel as a convenient and readily available source of

information in the building of a case against the latter.  Compelling disclosure of the client's name in circumstances such as the one which exists in the case at bench amounts to sanctioning fishing expeditions by lazy prosecutors and litigants which we cannot and will not countenance. When the nature of the transaction would be revealed by disclosure of an attorney's retainer, such retainer is obviously protected by the privilege. [53] It follows that petitioner attorneys in the instant case owe their client(s) a duty and an obligation not to disclose the latter's identity which in turn requires them to invoke the privilege.

In fine, the crux of petitioners' objections ultimately hinges on their expectation that if the prosecution has a case against their clients, the latter's case should be built upon evidence painstakingly gathered by them from their own sources and not from compelled testimony requiring them to reveal the name of their clients, information which unavoidably reveals much about the nature of the transaction which may or may not be illegal.  The logical nexus between name and nature of transaction is so intimate in this case that it would be difficult to simply dissociate one from the other.  In this sense, the name is as much "communication" as information revealed directly about the transaction in question itself, a communication which is clearly and distinctly privileged.  A lawyer cannot reveal such communication without exposing himself to charges of violating a principle which forms the bulwark of the entire attorney-client relationship.

The uberrimei fidei relationship between a lawyer and his client therefore imposes a strict liability for negligence on the former.  The ethical duties owing to the client, including confidentiality, loyalty, competence, diligence as well as the responsibility to keep clients informed and protect their rights to make decisions have been zealously sustained.  In Milbank, Tweed, Hadley and McCloy v. Boon,[54] the US Second District Court rejected the plea of the petitioner law firm that it breached its fiduciary duty to its client by helping the latter's former agent in closing a deal for the agent's benefit only after its client hesitated in proceeding with the transaction, thus causing no harm to its client.  The Court instead ruled that breaches of a fiduciary relationship in any context comprise a special breed of cases that often loosen normally stringent requirements of causation and damages, and found in favor of the client.

To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart, and Shipley P.A. v. Scheller[55] requiring strict obligation of lawyers vis-a-vis clients.  In this case, a contingent fee lawyer was fired shortly before the end of completion of his work, and sought payment quantum meruit of work done.  The court, however, found that the lawyer was fired for cause after he sought to pressure his client into signing a new fee agreement while settlement negotiations were at a critical stage.  While the client found a new lawyer during the interregnum, events forced the client to settle for less than what was originally offered.   Reiterating the principle  of fiduciary duty of lawyers to clients in Meinhard v. Salmon[56] famously attributed to Justice Benjamin Cardozo that "Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior," the US Court found that the lawyer involved was fired for cause, thus deserved no attorney's fees at all.

The utmost zeal given by Courts to the protection of the lawyer-client confidentiality privilege and lawyer's loyalty to his client is evident in the duration of the protection, which exists not only during the relationship, but extends even after the termination of the relationship.[57]

Such are the unrelenting duties required of lawyers vis-a-vis their clients because the law, which the lawyers are sworn to uphold, in the words of Oliver Wendell Holmes,[58] "xxx is an exacting goddess, demanding of her votaries in intellectual and moral discipline."  The Court, no less, is not prepared to accept respondents’ position without denigrating the noble profession that is lawyering, so extolled by Justice Holmes in this wise:

Every calling is great when greatly pursued.  But what other gives such scope to realize the spontaneous energy of one's soul?  In what other does one plunge so deep in the stream of life - so share its passions its battles, its despair, its triumphs, both as witness and actor?  x x x  But that is not all.  What a subject is this in which we are united - this abstraction called the Law, wherein as in a magic mirror, we see reflected, not only in our lives, but the lives of all men that have been.  When I think on this majestic theme my eyes dazzle.  If we are to speak of the law

as our mistress, we who are here know that she is a mistress only to be won with sustained and lonely passion - only to be won by straining all the faculties by which man is likened to God.

We have no choice but to uphold petitioners' right not to reveal the identity of their clients under pain of the breach of fiduciary duty owing to their clients, because the facts of the instant case clearly fall within recognized exceptions to the rule that the client’s name is not privileged information.

If we were to sustain respondent PCGG that the lawyer-client confidential privilege under the circumstances obtaining here does not cover the identity of the client, then it would expose the lawyers themselves to possible litigation by their clients in view of the strict fiduciary responsibility imposed on them in the exercise of their duties.

The complaint in Civil Case No. 0033 alleged that the defendants therein, including herein petitioners and Eduardo Cojuangco, Jr. conspired with each other in setting up through the use of coconut levy funds the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM and others and that through insidious means and machinations, ACCRA, using its wholly-owned investment arm, ACCRA Investments Corporation, became the holder of approximately fifteen million shares representing roughly 3.3% of the total capital stock of UCPB as of 31 March 1987.  The PCGG wanted to establish through the ACCRA lawyers that Mr. Cojuangco is their client and it was Cojuangco who furnished all the monies to the subscription payment; hence, petitioners acted as dummies, nominees and/or agents by allowing themselves, among others, to be used as instrument in accumulating ill-gotten wealth through government concessions, etc., which acts constitute gross abuse of official position and authority, flagrant breach of public trust, unjust enrichment, violation of the Constitution and laws of  the Republic of the Philippines.

By compelling petitioners, not only to reveal the identity of their clients, but worse, to submit to the PCGG documents substantiating the client-lawyer relationship, as well as deeds of assignment petitioners executed in favor of its clients covering their respective shareholdings, the PCGG would exact from petitioners a link “that would inevitably form the chain of testimony necessary to convict the (client) of a crime.”

III

In response to petitioners' last assignment of error, respondents allege that the private respondent was dropped as party defendant not only because of his admission that he acted merely as a nominee but also because of his undertaking to testify to such facts and circumstances "as the interest of truth may require, which includes... the identity of the principal."[59]

First, as to the bare statement that private respondent merely acted as a lawyer and nominee, a statement made in his out-of-court settlement with the PCGG, it is sufficient to state that petitioners have likewise made the same claim not merely out-of- court but also in their Answer to plaintiff's Expanded Amended Complaint, signed by counsel, claiming that their acts were made in furtherance of "legitimate lawyering.”[60] Being "similarly situated" in this regard, public respondents must show that there exist other conditions and circumstances which would warrant their treating the private respondent differently from petitioners in the case at bench in order to evade a violation of the equal protection clause of the Constitution.

To this end, public respondents contend that the primary consideration behind their decision to sustain the PCGG's dropping of private respondent as a defendant was his promise to disclose the identities of the clients in question.  However, respondents failed to show - and absolutely nothing exists in the records of the case at bar - that private respondent actually revealed the identity of his client(s) to the PCGG.  Since the undertaking happens to be the leitmotif of the entire arrangement between Mr. Roco and the PCGG, an undertaking which is so material as to have justified PCGG's special treatment exempting the private respondent from prosecution, respondent Sandiganbayan should have required proof of the undertaking more substantial than a "bare assertion" that private respondent did indeed comply with the

undertaking.  Instead, as manifested by the PCGG, only three documents were submitted for the purpose, two of which were mere requests for re-investigation and one simply disclosed certain clients which petitioners (ACCRA lawyers) were themselves willing to reveal.  These were clients to whom both petitioners and private respondent rendered legal services while all of them were partners at ACCRA, and were not the clients which the PCGG wanted disclosed for the alleged questioned transactions.[61]

To justify the dropping of the private respondent from the case or the filing of the suit in the respondent court without him, therefore, the PCGG should conclusively show that Mr. Roco was treated as a species apart from the rest of the ACCRA lawyers on the basis of a classification which made substantial distinctions based on real differences.  No such substantial distinctions exist from the records of the case at bench, in violation of the equal protection clause.

The equal protection clause is a guarantee which provides a wall of protection against uneven application of statutes and regulations.  In the broader sense, the guarantee operates against uneven application of legal norms so that all persons under similar circumstances would be accorded the same treatment.[62] Those who fall within a particular class ought to be treated alike not only as to privileges granted but also as to the liabilities imposed.

x x x.  What is required under this constitutional guarantee is the uniform operation of legal norms so that all persons under similar circumstances would be accorded the same treatment both in the privileges conferred and the liabilities imposed.  As was noted in a recent decision:  ‘Favoritism and undue preference cannot be allowed.  For the principle is that equal protection and security shall be given to every person under circumstances, which if not identical are analogous.  If law be looked upon in terms of burden or charges, those that  fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding the rest.[63]

We find that the condition precedent required by the respondent PCGG of the petitioners for their exclusion as parties-defendants in PCGG Case No. 33 violates the lawyer-client confidentiality privilege.  The condition also constitutes a transgression by respondents Sandiganbayan and PCGG of the equal protection clause of the Constitution. [64] It is grossly unfair to exempt one similarly situated litigant from prosecution without allowing the same exemption to the others.  Moreover, the PCGG’s demand not only touches upon the question of the identity of their clients but also on documents related to the suspected transactions, not only in violation of the attorney-client privilege but also of the constitutional right against self-incrimination. Whichever way one looks at it, this is a fishing expedition, a free ride at the expense of such rights.

An argument is advanced that the invocation by petitioners of the privilege of attorney-client confidentiality at this stage of the proceedings is premature and that they should wait until they are called to testify and examine as witnesses as to matters learned in confidence before they can raise their objections.  But petitioners are not mere witnesses.  They are co-principals in the case for recovery of alleged ill-gotten wealth.  They have made their position clear from the very beginning that they are not willing to testify and they cannot be compelled to testify in view of their constitutional right against self-incrimination and of their fundamental legal right to maintain inviolate the privilege of attorney-client confidentiality.

It is clear then that the case against petitioners should never be allowed to take its full course in the Sandiganbayan.  Petitioners should not be made to suffer the effects of further litigation when it is obvious that their inclusion in the complaint arose from a privileged attorney-client relationship and as a means of coercing them to disclose the identities of their clients.  To allow the case to continue with respect to them when this Court could nip the problem in the bud at this early opportunity would be to sanction an unjust situation which we should not here countenance. The case hangs as a real and palpable threat, a proverbial Sword of Damocles over petitioners' heads.  It should not be allowed to continue a day longer.

While we are aware of respondent PCGG’s legal mandate to recover ill-gotten wealth, we will not sanction acts which violate the equal protection guarantee and the right against self-incrimination and subvert the lawyer-client confidentiality privilege.

WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions of respondent Sandiganbayan (First Division) promulgated on March 18, 1992 and May 21, 1992 are hereby ANNULLED and SET ASIDE.  Respondent Sandiganbayan is further ordered to exclude petitioners Teodoro D. Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion,*Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayuduni as parties-defendants in SB Civil Case No. 0033 entitled "Republic of the Philippines v. Eduardo Cojuangco, Jr., et al.".

SO ORDERED.

[Adm. Case No. 5831.  January 13, 2003]

CESAR A. ESPIRITU, complainant, vs. ATTY. JUAN CABREDO IV, respondent.

D E C I S I O N

MENDOZA, J.:

This is an administrative complaint filed with the Integrated Bar of the Philippines (IBP) on May 8, 2001 by complainant Cesar A. Espiritu against Atty. Juan Cabredo IV for failure to fulfill a fiduciary obligation to a client.

The complaint alleges the following facts:

On November 5, 1999, the BPI Family Savings Bank Inc. (BPI-FSB) filed two complaints for replevin and damages against Esphar Medical Center, (Esphar) Inc. and its president Cesar Espiritu and a certain John Doe.  In the first complaint, the BPI-FSB alleged that, on July 14, 1997, Esphar, Cesar Espiritu, and a certain John Doe executed in favor of Gencars, Inc. (Gencars) a promissory note in which they obligated themselves jointly and severally to pay the latter P511,956.00 in monthly installments pursuant to a schedule they had agreed upon.  It was provided that failure on the part of the makers to pay any installment when due shall make subsequent installments and the balance of the obligation immediately due and demandable.  The promissory note was secured by a chattel mortgage on an Isuzu “Close Van” (1997 model) and registered with the Register of Deeds and the Land Transportation Commission. On July 14, 1997, Gencars executed a deed of assignment in favor of the BPI-FSB, assigning to the latter all of its rights, title and interest in the promissory note secured by the chattel mortgage.  In 1999, Esphar, Espiritu and John Doe failed to pay installments for three consecutive months, for which reason demands were made on the three to pay the entire balance of P186,806.28, with accrued interest at the rate of 36% per annum or to give to BPI-FSB the possession of the Isuzu van in order to foreclose the mortgage.  As the three failed to comply with the demands, the BPI-FSB brought suit for replevin and damages against them.[1]

The second complaint alleged similar facts involving Citimotors, Inc. as the payee of another promissory note in which Esphar, Espiritu and John Doe, as makers, obligated themselves solidarily to pay the former P674,640.00 in monthly installments.  The promissory note was secured by a chattel mortgage on a Mitsubishi L-300 “Exceed Montone Van” (1997 model), which BPI-FSB, as holder of the said promissory note, sought to foreclose due to the makers’ failure to comply with its terms and conditions.[2]

On December 10, 1999, Espiritu engaged the services of Atty. Juan Cabredo IV, herein respondent, to represent him in the two civil cases.  On same day, Cabredo’s secretary, Rose Tria, picked up copies of the complaints from Espiritu’s office and, on December 14, 1999, his representative Reynaldo Nuñez received from Esphar P16,000.00 for use as filing and acceptance fees.  While the cases were pending in court, Atty. Cabredo advised Esphar to remit money and update payments to BPI-FSB through the trial court.  Accordingly, on December 28, 1999 and again January 28, 2000, Esphar’s representative, Maritess Alejandrino, delivered a total of P51,161.00 to Atty. Cabredo’s office.  Later on, when Atty. Cabredo failed to appear at a hearing of the civil cases, the management of Esphar found out that he did not deliver the sum ofP51,161.00 to the court or BPI-FSB.  The management of Esphar then agreed to settle the cases amicably.  For this reason, a joint motion to dismiss was filed by the parties, and the cases were dismissed on May 15, 2000.  Thereafter, on May 8, 2001, Espiritu filed a complaint against Atty. Cabredo for fraud.[3]

In his answer dated June 6, 2001, respondent Cabredo admitted that his secretary, Rose Tria, had indeed received P51,161.00 from Esphar, but claimed that Tria failed to inform him about it.  It was only when he read Esphar’s first demand letter dated March 21, 2000 that he learned for the first time about the receipt of the money.  Respondent claimed that he failed to get complainant’s demand letters of March 24, 2000 and January 5, 2001 because of lapses on the part of his staff.  He thus shifted the blame on his staff.

7.  It is quite unfortunate that this incident happened all thru the fault of the law firm personnel.  In spite of respondent’s candid, honest and sincere desire to faithfully and religiously serve good clients, [his efforts have been] rendered inutile by lapses of his staff;

8.  Respondent believes that complainant Cesar A. Espiritu would not have resorted to this present action had the firm personnel been vigilant enough to inform respondent of this matter.  

Respondent said he was willing to reimburse complainant to show his good faith and “to erase the suspicion that respondent intentionally spent the amount for his own use and benefit.”[4]

Acting on the complaint, the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline scheduled a hearing on September 24, 2001.  However, the hearing had to be rescheduled three times - on November 14, 2001, December 14, 2001, and January 18, 2002 -because of respondent’s failure to appear despite due notice to him.  In orders dated November 14, 2001[5] and December 14, 2001,[6] respondent was warned that the investigator would proceed with the case if he failed to appear again in subsequent hearings.  Finally, in the order dated January 18, 2002, Investigating Commissioner Wilfredo Reyes ordered:

Considering that this is the fifth (5th) time that the respondent has failed to appear despite notice, the undersigned Commissioner has no option but to decide the case on the basis of the pleadings submitted.  It must be noted that despite receipt of the Orders of the Commission, the respondent Atty. Juan Cabredo IV has failed to appear before the Commission on Bar Discipline.

This case is deemed submitted for resolution based on the pleadings submitted by the parties.[7]

On February 13, 2002, Commissioner Reyes submitted his report and recommendation.  He found respondent guilty of violation of the Code of Professional Responsibility and recommended that the latter be suspended from the practice of law for three months and ordered to return the amount of P51,161.00 to Esphar.[8] In a resolution dated August 3, 2002, the IBP Board of Governors adopted and approved the recommendation of the investigating commissioner.[9]

Except for the penalty, we find the recommendation is well taken.

The Code of Professional Responsibility provides:

CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.

Rule 16.01 -  A lawyer shall account for all money or property collected or received for or from the client.

Rule 16.02 -  A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.

Rule 16.03 -  A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client.  He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court.

The relationship between a lawyer and a client is highly fiduciary; it requires a high degree of fidelity and good faith.[10]  Hence, in dealing with trust property, a lawyer should be very scrupulous.  Money or other trust property of the client coming into the possession of the lawyer should be reported by the latter and accounted for promptly and should not, under any circumstances, be commingled with his own or be used by him.[11]

In this case, respondent claims that he did not know about the receipt by his secretary on the amount of P51,161.00 received from Esphar until he read the first demand letter of the company, which stated:

March 21, 2000

JUDGE JUAN CABREDO

Cubao, Quezon City

Dear Judge Cabredo:

Due to your failure to make an interbank deposit as what we have agreed upon yesterday, March 20, 2000, we are sending bearer, MRS. MARITESS ALEJANDRINO, to collect the amount of P51,161.00 representing payment intended for BPI FAMILY BANK which was coursed through your office per your instruction.

We are hoping that you will not fail to return the money through bearer hereof.  Her specimen signature is shown below for identification purposes.

Thank you.

Very truly yours,

ESPHAR MEDICAL CENTER, INC.

(signed)

AUTHORIZED SIGNATURE

Specimen Signature of:

(signed)

MARITESS ALEJANDRINO

However, even after receiving this notice and two other demand letters, respondent never returned the money of complainant nor paid it to the bank.  Indeed, it is improbable that respondent’s secretary failed to inform complainant about the receipt of such a substantial sum of money.  In failing to account for the money of his client, respondent violated not only the Code of Professional Responsibility but also his oath to conduct himself with all good fidelity to his clients.[12] Like judges, lawyers must not only be proper but they must also appear to be so.   This way, the people’s faith in the justice system would remain unshaken.[13]

It appears that respondent, while now a practicing lawyer, was a former judge. [14] Thus, he should have known the ethical precepts guiding lawyers who handle money given to them in trust by their clients and the necessary consequences for violation thereof.  Rule 138 of the Rules of Court provides,

Sec. 27.  Disbarment or suspension of attorneys by Supreme Court; grounds therefore.— A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a wilful disobedience of any lawful order of a superior court, or for corruptly or wilfully appearing as an attorney for a party to a case without authority so to do.  The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice.  [emphasis supplied]

From the evidence presented by complainant, which respondent failed to rebut, it is clear that the breach of trust committed by respondent amounted to deceit, as well as a violation of his oath, for which he should be penalized with either disbarment or suspension.  While we agree with the findings of the investigating commissioner, we find the recommended penalty of suspension for three months to be too light.  In Reyes v. Maglaya[15] a lawyer was suspended for one year for failing to return P1,500.00 belonging to his client despite numerous demands.  In Castillo v. Taguines,[16] a lawyer failed to deliver to his client P500.00, representing the monetary settlement of a civil suit despite demands.  To make matters worse, he fooled the client by issuing a bouncing check.  He was suspended for one year.

For his failure to account for P51, 161.00 received from his client and to restitute it without any reason, respondent should be suspended for one year.

WHEREFORE, Atty. Juan Cabredo IV is hereby SUSPENDED for one (1) year and ORDERED to immediately return to Esphar Medical Center, Inc. the sum of  P51,161.00, with WARNING that a repetition of the same or similar acts will be dealt with more severely.  Let

copies of the Decision be entered in his record as an attorney and be furnished the Integrated Bar of the Philippines (IBP) and all the courts in the country for their information and guidance. 

SO ORDERED.

[A.C. No. 5020.  December 18, 2001]

ROSARIO JUNIO, complainant, vs. ATTY. SALVADOR M. GRUPO, respondent.

D E C I S I O N

MENDOZA, J.:

This is a complaint for disbarment filed against Atty. Salvador M. Grupo for malpractice and gross misconduct.

Complainant Rosario N. Junio alleged that  ¾

3.  Sometime in 1995, [she] engaged the services of [respondent], then a private practitioner, for the redemption of a parcel of land covered by Transfer Certificate of Title No. 20394 registered in the name of her parents, spouses Rogelio and Rufina Nietes, and located at Concepcion, Loay, Bohol.

4.  On 21 August 1995, [complainant] entrusted to [respondent] the amount of P25,000.00 in cash to be used in the redemption of the aforesaid property.  Respondent received the said amount as evidenced by an acknowledgment receipt, a copy of which is being hereto attached as Annex “A”.

5.  Notwithstanding the foregoing and for no valid reason, respondent did not redeem the property; as a result of which the right of redemption was lost and the property was eventually forfeited.

6.  Because of respondent’s failure to redeem the property, complainant had demanded [the] return of the money which she entrusted to the former for the above-stated purpose.

7.  Despite repeated demands made by the complainant and without justifiable cause, respondent has continuously refused to refund the money entrusted to him.[1]

In his Answer, petitioner admitted receiving the amount in question for the purpose for which it was given.  However, he alleged that¾

6.  The subject land for which the money of complainant was initially intended to be applied could really not be redeemed anymore . . ;

7.  Complainant knew the mortgage agreement between her parents and the mortgage-owner had already expired, and what respondent was trying to do was a sort of [a] desperate, last-ditch attempt to persuade the said mortgagee to relent and give back the land to the mortgagors with the tender of redemption; but at this point, the mortgagee simply would not budge anymore.  For one reason or another, he would no longer accept the sum offered;

8.  By the time that complainant was to return to Manila, it was already a foregone matter that respondent’s efforts did not succeed.  And so, when transaction failed, respondent requested the complainant that he be allowed, in the meantime, to avail of the money because he had an urgent need for some money himself to help defray his children’s educational expenses.  It was really a personal request, a private matter between respondent and complainant, thus, respondent executed a promissory note for the amount, a copy of which is probably still in the possession of the complainant.

9. . . . [T]he family of the complainant and that of the respondent were very close and intimate with each other.  Complainant, as well as two of her sisters, had served respondent’s family as household helpers for many years when they were still in Manila, and during all those times they were treated with respect, affection, and equality.  They were considered practically part of respondent’s own family.

That is why, when complainant requested . . . assistance regarding the problem of the mortgaged property which complainant wanted to redeem, respondent had no second-thoughts in extending a lending hand . . . .

Respondent did not ask for any fee.  His services were purely gratuitous; his acts [were] on his own and by his own.  It was more than pro bono; it was not even for charity; it was simply an act of a friend for a friend.  It was just lamentably unfortunate that his efforts failed.

. . . .

Of course, respondent accepts his fault, because, indeed, there were occasions when complainant’s sisters came to respondent to ask for the payment in behalf of complainant, and he could not produce the money because the circumstances somehow, did not allow it.  [I]t does not mean that respondent will not pay, or that he is that morally depraved as to wilfully and deliberately re[nege] in his obligation towards the complainant.[2]

Complainant filed a reply denying that respondent informed her of his failure to redeem the property and that respondent requested her to instead lend  the money to him.[3]

The case was thereafter referred to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation.  However, while two hearings were set for this purpose, both were postponed at the instance of respondent.  For this reason, on August 28, 2000, complainant asked the Investigating Commissioner[4] to consider the case submitted for decision on the basis of the pleadings theretofore filed.  Respondent was required to comment on complainant’s motion, but he failed to do so. Consequently, the case was considered submitted for resolution.

In his report, dated January 5, 2001, the Investigating Commissioner found respondent liable for violation of Rule 16.04 of the Code of Professional Responsibility which forbids lawyers from borrowing money from their clients unless the latter’s interests are “protected by the nature of the case or by independent advice.” The Investigating Commissioner found that respondent

failed to pay his client’s money.  However, in view of  respondent’s admission of liability and “plea for magnanimity,” the Investigating Commissioner recommended that respondent be simply reprimanded and ordered to pay the amount of P25,000.00 loan plus interest at the legal rate.

In its Resolution No. XIV-2001-183, dated April 29, 2001, the IBP Board of Governors adopted and approved the Investigating Commissioner’s  findings.  However, it ordered ¾

[R]espondent .  .  . suspended indefinitely from the practice of law for the commission of an act which falls short of the standard of the norm of conduct required of every attorney and .  .  . ordered [him] to return to the complainant the amount of P25,000.00 plus interest at the legal rate from the time the said amount was misappropriated, until full payment; provided that the total suspension shall be at least one (1) year from the date of said full payment.

On July 4, 2001, respondent filed a motion for reconsideration alleging that ¾

(a) there was no actual hearing of the case wherein respondent could have fully ventilated and defended his position;

(b) the subject Resolution gravely modified the Report and Recommendation of the Trial Commissioner, Hon. Pedro Magpayo, Jr., . . . such that the resultant sanctions that are ordered imposed are too leonine, unjust and cruel;

(c) that the factual circumstances attending the matter which gave rise to the complaint were not rightly or fairly appreciated.[5]

He argues that the Court should adopt the report and recommendation of  the IBP Investigating Commissioner.

In its resolution of August 15, 2001, the Court resolved to treat respondent’s motion for reconsideration as a petition for review of IBP Resolution No. XIV 2001-183 and required complainant to comment on the petition.

In her comment, complainant states that her primary interest is to recover the amount of P25,000.00 with interest and that she is leaving it to the Court to decide whether respondent deserves the penalty recommended by the IBP.[6]

The Court resolves to partially grant the petition.  In his report and recommendation, Investigating Commissioner Magpayo, Jr. made the following findings:

In his Answer, the respondent ADMITS all the allegations in paragraph 4 of the complaint which avers:

4. On 21 August 1995, complainant entrusted to respondent the amount of P25,000.00 in cash to be used in the redemption of the aforesaid property (parcel of land covered by TCT No. 20394 registered in the name of complainant’s parents located at Concepcion, Loay, Bohol).  Respondent received the said amount as evidenced by an acknowledgment receipt (Annex A).

By way of confession and avoidance, the respondent, . . . however, contended that when the mortgagee refused to accept the sum tendered as the period of redemption had already expired, he requested the complainant to allow him in the meantime to use the money for his children’s educational expenses[,] to which request the complainant allegedly acceded and respondent even executed a promissory note (please see 4th par. of Annex “B” of complaint).

Respondent takes further refuge in the intimate and close relationship existing between himself and the complainant’s family on the basis of which his legal services were purely gratuitous or

“simply an act of a friend for a friend” with “no consideration involved.” Unfortunately, his efforts to redeem the foreclosed property, as already stated, did not produce the desired result because the mortgagee “would not budge anymore” and “would not accept the sum offered.”

Thus, the respondent concluded that there was, strictly speaking, no attorney-client [relationship] existing between them.  Rather, right from the start[,] everything was sort of personal, he added.

Granting to the respondent the benefit of the doubt, we shall assume that there was in reality a loan in the amount of P25,000.00.  This is likewise confirmed by the execution of a promissory note on 12 December 1996 by the respondent who “undertook to pay Mrs. Junio on or before January 1997” (Annex B of complaint).  Moreover, the demand letter of 12 March 1998 (Annex B) mentions of “reimbursement of the sum received” and interest of “24% per annum until fully paid” giving the impression that the funds previously intended to be used for the repurchase of a certain property (Annex A of complaint) was converted into a loan with the consent of the complainant who gave way to the request of the respondent “to help defray his children’s educational expenses” (par. 8 of Answer).

Be that as it may, the duty and obligation to repay the loan remains unshaken.  Having utilized the sum to fulfill his “urgent need for some money,” it is but just and proper that he return the amount borrowed together with interest.

Five (5) years had already passed since respondent retained the cash for his own personal use.  But notwithstanding the same and his firm promise “to pay Mrs. Junio on or before January 1997” he has not demonstrated any volition to settle his obligation to his creditor[,] although admittedly “there w[ere] occasions when complainant’s sister came to respondent to ask for the payment in behalf of complainant,” worse, “the passage of time made respondent somehow forgot about the obligation.”

A lawyer shall not borrow money from his client unless the client’s interests are fully protected by the nature of the case or by independent advice (Rule 16.04, Code of Professional Responsibility).  This rule is intended to prevent the lawyer from taking advantage of his influence over the client.

This rule is especially significant in the instant case where the respondent enjoys an immense ascendancy over the complainant who, “as well as two of his sisters, had served respondent’s family as household helpers for many years.”

Having gained dominance over the complainant by virtue of such long relation of master and servant, the respondent took advantage of his influence by not returning the money entrusted to him.  Instead, he imposed his will on the complainant and borrowed her funds without giving adequate security therefor and mindless of the interest of the complainant.

In the light of the foregoing, . . . respondent has committed an act which falls short of the standard of the norm of conduct required of every attorney.  If an ordinary borrower of money is required by the law to repay the loan failing which he may be subjected to court action, it is more so in the case of a lawyer whose conduct serves as an example.[7]

It would indeed appear from the records of the case that respondent was allowed to borrow the money previously entrusted to him by complainant for the purpose of securing the redemption of the property belonging to complainant’s parents.  Respondent, however, did not give adequate security for the loan and subsequently failed to settle his obligation.  Although complainant denied having loaned the money to respondent, the fact is that complainant accepted the promissory note given her by respondent on December 12, 1996.  In  effect, complainant consented to and ratified respondent’s use of the money. It is noteworthy that

complainant did not attach this promissory note to her complaint nor explain the circumstances surrounding its execution.  She only mentioned it in her demand letter of March 12, 1998 (Annex B), in which she referred to respondent’s undertaking to pay her the P25,000.00 on or before January 1997.  Under the circumstances and in view of complainant’s failure to deny the promissory note, the Court is constrained to give credence to respondent’s claims that the money previously entrusted to him by complainant was later converted into a loan.

Respondent’s liability is thus not for misappropriation or embezzlement but for violation of Rule 16.04 of the Code of Professional Responsibility which forbids lawyers from borrowing money from their clients unless the latter’s interests are protected by the nature of the case or by independent advice. In this case, respondent’s liability is compounded by the fact that not only did he not give any security for the payment of the amount  loaned to him but that he has also refused to pay the said amount.   His claim that he could not pay the loan “because circumstances . . . did not allow it” and that, because of the passage of time, “he somehow forgot about his obligation” only underscores his blatant disregard of his obligation which reflects on his honesty and candor.  A lawyer is bound to observe candor, fairness, and loyalty in all his dealings and transactions with his client.[8]

Respondent claims that complainant is a close personal friend and that in helping redeem the property of complainant’s parents, he did not act as a lawyer but as a friend, hence there is no client-attorney relationship between them.  This contention has no merit.   As explained in Hilado v. David,[9]

To constitute professional employment it is not essential that the client should have employed the attorney professionally on any previous occasion . . . It is not necessary that any retainer should have been paid, promised, or charged for; neither is it material that the attorney consulted did not afterward undertake the case about which the consultation was had.  If a person, in respect to his business affairs or troubles of any kind, consults with his attorney in his professional capacity with the view to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces in such consultation, then the professional employment must be regarded as established . . . .

Considering the foregoing, the Investigating Commissioner’s recommendation to impose on respondent the penalty of reprimand and restitution of the amount loaned by him is clearly inadequate. On the other hand, the penalty of indefinite suspension with restitution imposed by the IBP Board of Governors is too harsh in view of respondent’s apparent lack of intent to defraud complainant and of the fact that this appears to be his first administrative transgression.  It is the penalty imposed in Igual v. Javier[10] which applies to this case.  In that case, this Court ordered the respondent suspended for one month from the practice of law and directed him to pay the amount given him by his clients within 30 days from notice for his failure to return the money in question notwithstanding his admission that he did not use the money for the filing of the appellee’s brief, as agreed by them, because of an alleged quarrel with his clients.

Anent petitioner’s allegation regarding the lack of hearing during the IBP investigation, suffice it to say that he waived such right when he failed to comment on petitioner’s motion to submit the case for resolution on the basis of the pleadings theretofore filed despite due notice to him, not to mention the fact that it was he who had requested the postponement of the two hearings scheduled by the Investigating Commissioner.

WHEREFORE, the Court finds petitioner guilty of violation of Rule 16.04 of the Code of Professional Responsibility and orders him suspended from the practice of law for a period of one (1) month and to pay to respondent, within 30 days from notice, the amount of P25,000.00 with interest at the legal rate, computed from December 12, 1996.

SO ORDERED.