IX Digests

1. ANGELES vs UY JR. – SUSPENDED 1 MONTH Atty. Thomas Uy Jr. was the counsel of plaintiff in an estafa case filed against Norma Trajano. The disciplinary case against him was filed by Judge Angeles constituting misconduct and a violation of Canon 6 after Atty. Uy Jr. failed to deliver to his client, Primitiva Del Rosario, the amount of P 16, 500 as partial payment of the accused in the civil aspect of the criminal case filed against said accused. The relationship between a lawyer and a client is highly fiduciary; it requires a high degree of fidelity and good faith. It is designed "to remove all such temptation and to prevent everything of that kind from being done for the protection of the client." It is clear that respondent failed to promptly report and account for the P16,500 he had received from Norma Trajano on behalf of his client, Primitiva Del Rosario. Although the amount had been entrusted to respondent on December 14, 1998, his client revealed during the February 10, 1999 hearing that she had not yet received it. Worse, she did not even know where it was. If it were true that Mrs. Del Rosario was informed about the payment and that she entrusted it to respondent, she would have known its whereabouts. That she did not know it showed the falsity of his claim. Verily, the question is not necessarily whether the rights of the clients have been prejudiced, but whether the lawyer has adhered to the ethical standards of the bar. 2. NAKPIL vs VALDES – SUSPENDED 1 YEAR FACTS: Respondent was a CPA-lawyer and whose relationship with Jose Nakpil dated back during their school days in De La Salle and the Philippine Law School. Respondent acted as the accounted, legal counsel, and business consultant of Jose. Sometime later, Jose became interested in a property, a summer house, in Baguio City. Because he had no money to buy the same, he asked respondent to buy it for him and that Jose would pay him back. This, respondent did, and held the property in trust. When Jose Nakpil died, respondent offered his services to the former’s heirs for the settlement of Jose’s estate. Here now comes his widow, Imelda, alleging that respondent claimed absolute ownership over the summer house and transferred the same to his family corporation. Not only that, he still stated as part of the claims against said estate the value of the summer house. Imelda likewise pointed out respondent’s alleged conflict of interest because respondent’s law firm not only represented Jose’s estate, but also the creditors of the same. ISSUE: WON respondent can be held liable. HELD: YES. As a rule, a lawyer is not barred from dealing with his client but the business transaction must be characterized with utmost honesty and good faith. The measure of good faith which an attorney is required to exercise in his dealings with his client is a much higher standard than is required in business dealings where the parties trade at arm’s length. Business transactions between an attorney and his client are disfavoured and discouraged by the policy of the law. It ought to follow that respondents act of excluding Moran property from the estate which his law firm was representing evinces a lack of fidelity to the cause of his client. If respondent truly believed that the said property belonged to him, he should have at least informed complainant of his adverse claim. To make matters

worse, respondent, through his accounting firm, charged the two loans of P65, 000.00 and P75, 000.00 as liability of the estate, after said loans were obtained by respondent for the purchase and renovation of the property which he claimed for himself. In the case at bar, there is no question that the interests of the estate and that of it creditors are adverse to each other. Respondents accounting firm prepared the list of assets and liabilities of the estate and, at the same time, computed the claims of two creditors of the estate. There is clearly a conflict between the interest of the estate which stands as the debtor, and that of the two claimants who are creditors of the estate. 3. LIWAG vs NERI - REPRIMANDED Complainant engaged the services of respondent for the recovery of the sum of P 2, 951.35 against the Pinedas after the latter failed to reimburse complainant for the amount he paid to NARIC as complainant acted as a counter-indemnitor in their favour. The complainant delivered to respondent P 30 as filing fee for the complaint. The respondent did not actually file any complaint, for the alleged reason that the Pinedas, respondent’s neighbours, had given the assurance to pay, although he informed the complainant that he had already done so. Respondent has committed a breach of professional ethics when, contrary to the fact, he made the complainant believe that the Pinedas had already been sued in court and did not return the amount intended for the filing fee. 4. DIAZ vs KAPUNAN – REPRIMANDED Diaz and Mendezona formed a business partnership but it did not prosper. Upon liquidation, Mendoza recognised a debt in favour of Diaz in the sum of P80K and an additional sum of P10K owing to Diaz, laid upon hacienda Mapuyo. When Mendezona failed to pay, Diaz instituted a foreclosure and sale proceedings which resulted in the hacienda being offered for sale at public auction. At the auction, Atty. Kapunan told the deputy sheriff that he was ready to bid in order to assist the Mendezona family. However, Diaz and respondent later executed a document wherein for a premium of P1k, Atty. Kapunan would desist from bidding at the auction. It is evident that the Mendezona family was led to believe that the P500, the sum initially given by Diaz as part of the P1k, would shortly be sent to them. The more serious charge against respondent was him having intervened in the manner in which he did in the sale of the property of his client. The attorney-general is of the opinion on this point that the facts constitute a flagrant violation of the provisions of article 1459 of the Civil Code and article 542 of the Penal Code. The more puzzling question relates to the alleged violation by Attorney Kapunan of article 542 of the Penal Code. This article punishes "any person who shall solicit any gift or promise as a consideration for agreeing to refrain from taking part in any public auction." The crime is consummated by the mere act of soliciting a gift or promise for the purpose of abstaining from taking part in the auction. Not permitting our minds to be confused by the varied explanations of Diaz and Kapunan, the document formulated by them and hereinbefore quoted, demonstrates that Kapunan, on the promise of Diaz to pay P1,000, refrained from further participation in the sale of the property of Mendezona, which is exactly the situation covered by article 542 of the Penal Code. 5. CANLAS vs CA Respondent was the registered owner of eight ( six, according to petitioner) parcels of land which he obtained through various loans from the L & R Corporation. Upon his failure to pay, the mortgage on the lands were foreclosed and sold at a public auction where said corporation emerged as the highest bidder. Petitioner herein assisted the respondent in redeeming his properties for a P100K consideration.

Thereafter, respondent and petitioner entered into an agreement wherein petitioner would redeem the properties for respondent and to register the same in his name. Respondent then alleges that he subsequently filed a loan application with the Family Savings Bank to finance a wet market project upon the subject premises to find that the properties were already registered in the name of the petitioner. He likewise contends that the deed of sale and transfer of rights of redemption had been falsified. and certainly, do not speak well of his fealty to his oath to "delay no man for money." 36 It is true that lawyers are entitled to make a living, in spite of the fact that the practice of law is not a commercial enterprise; but that does not furnish an excuse for plain lust for material wealth, more so at the expense of another. Law advocacy, we reiterate, is not capital that yields profits. The returns it births are simple rewards for a job done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater deal of freedom from government interference, is impressed with a public interest, for which it is subject to State regulation. We do not find the petitioner's claim of attorney's fees in the sum of P100,000.00 reasonable. We do not believe that it satisfies the standards set forth by the Rules. The extent of the services he had rendered in Civil Case No. 30679, and as far as the records will yield, is not impressive to justify payment of such a gargantuan amount. The case itself moreover did not involve complex questions of fact or law that would have required substantial effort as to research or leg work for the petitioner to warrant his demands. The fact that the properties subject thereof commanded quite handsome prices in the market should not be a measure of the importance or non-importance of the case. We are not likewise persuaded that the petitioner's stature warrants the sum claimed. All things considered, we reduce the petitioner's fees, on a quantum meruit basis, to P20,000.00. 6. CAPULONG vs ALIÑO - DISBARRED Respondent was employed by the complainants to represent their cause in a civil case which they elevated to the CA. Complainants gave respondent the sum of P298 for the payment of docket fees, printing, appeal bond, and appellant’s brief. However, the appeal was dismissed because of respondent's failure to pay the docket fee and to deposit the estimated cost of printing of the record on appeal. Respondent argued that the complainants gave him the discretion to judge on whether or not to continue with the prosecution and that if he decides not to prosecute, the amount he received will be applied as his professional fees. After all, the foregoing acts and omissions of respondent herein dovetail with his subsequent behaviour. Thus, when, prior to the commencement of these administrative proceedings, complainants' counsel contacted respondent and advised him to settle the matter with them, respondent said he would do so, but actually did nothing about it. Hence, the complaint herein was filed. So too, in view of the allegation in respondent's answer, to the complaint filed by the Solicitor General, to the effect that he (respondent) had "the intention of introducing additional evidence" before this Court, the same designated its Legal Officer for the reception of said evidence. Yet, after securing four (4) postponements of the date set by said officer for this purpose, respondent did not introduce any additional evidence in his favour. Similarly, when the present case was set for oral argument before this Court, respondent moved for the postponement of the date set therefor. And, having been given ten (10) days to submit a memorandum in lieu of oral argument, respondent filed no memorandum in his favour.

Apart from suggesting a misappropriation of funds held by him in trust for his clients and a breach of such trust, the foregoing acts and omissions indicate the high degree of irresponsibility of respondent herein and his unworthiness to continue as a member of the legal profession.

7. CELAJE vs SORIANO – SUSPENDED 2 YEARS Andrea Balce Celaje (complainant) alleged that respondent asked for money to be put up as an injunction bond, which complainant found out later, however, to be unnecessary as the application for the writ was denied by the trial court. Respondent also asked for money on several occasions allegedly to spend for or to be given to the judge handling their case, Judge Milagros Quijano, of the Regional Trial Court, Iriga City, Branch 36. When complainant approached Judge Quijano and asked whether what respondent was saying was true, Judge Quijano out rightly denied the allegations and advised her to file an administrative case against respondent. 1 In his Answer, respondent denied the charges against him and averred that the same were merely concocted by complainant to destroy his character. He also contended that it was complainant who boasted that she is a professional fixer in administrative agencies as well as in the judiciary; and that complainant promised to pay him large amounts of attorney's fees which complainant however did not keep. During the hearing conducted, Complainant reiterated her accusations against the Respondent and expressed that she has been aggrieved and misled by Respondent. According to Complainant, this was made possible because she was not aware of or knowledgeable on legal matters and practices. Respondent has only offered denials to the charges. However, the circumstances give credibility to herein Complainant in the absence of any evil motive on her part. The Code of Professional Responsibility (CPR), particularly Canon 16 thereof, mandates that a lawyer shall hold in trust all moneys and properties of his client that may come into his possession. He shall account for all money or property collected or received from his client and shall deliver the funds and property of his client when due or upon demand. Respondent's failure to return the money to complainant upon demand gave rise to the presumption that he misappropriated it for his own use to the prejudice of, and in violation of the trust reposed in him by his client. It is a gross violation of general morality and of professional ethics and impairs public confidence in the legal profession which deserves punishment. As the Court has pronounced, when a lawyer receives money from the client for a particular purpose, the lawyer is bound to render an accounting to the client showing that the money was spent for a particular purpose. And if he does not use the money for the intended purpose, the lawyer must immediately return the money to his client. 8. PENTECOSTES vs IBAEZ – REPRIMANDED

Respondent was the prosecutor who handled the preliminary investigation of a complaint filed against Encarnacion Pascual, the sister-in-law of complainant, for non-remittance of SSS payments. During the said investigation, Encarnacion gave respondent the amount of P 1804 as payment of her SSS contributions in arrears. However, they found out later that respondent did not remit said sum to the SSS as certified by the latter. In his defense, respondent claimed that his act of accommodating Encarnacion Pascuals request to make payment to the SSS did not amount to professional misconduct but was rather an act of Christian charity. Furthermore, he claimed that the action was moot and academic, the amount of P1, 804.00 having already been paid by him to the SSS. Lastly, he disclaimed liability on the ground that the acts complained were not done by him in his capacity as a practicing lawyer but on account of his office as a prosecutor. It is glaringly clear that respondent’s non-remittance for over one year of the funds coming from Encarnacion Pascual constitutes conduct in gross violation of the above canon. The belated payment of the same to the SSS does not excuse his misconduct. While Pascual may not strictly be considered a client of respondent, the rules relating to a lawyer’s handling of funds of a client is applicable. In Daroy v. Legaspi, this court held that (t)he relation between an attorney and his client is highly fiduciary in nature...[thus] lawyers are bound to promptly account for money or property received by them on behalf of their clients and failure to do so constitutes professional misconduct. The failure of respondent to immediately remit the amount to the SSS gives rise to the presumption that he has misappropriated it for his own use. This is a gross violation of general morality as well as professional ethics; it impairs public confidence in the legal profession and deserves punishment. Respondents claim that he may not be held liable because he committed such acts, not in his capacity as a private lawyer, but as a prosecutor is unavailing. Canon 6 of the Code of Professional Responsibility provides: These canons shall apply to lawyers in government service in the discharge of their official tasks. 9. DAROY vs LEGASPI – DISBARRED 10. SOTTO vs SAMSON Petitioner in this case was the counsel of appellee in filing for a petition in court to allow her to sell paraphernal property without the consent of her estranged husband. Her husband opposed the petition to which a writ of injunction was issued to prohibit appellee from selling the properties. However, despite the injunction, she executed a deed of sale in favour of her counsel, herein petitioner. Thereafter, appellee filed a complaint to annul the sale she made to Atty. Sotto alleging that Sotto had taken advantage of her financial difficulties and mental weakness and of the confidence she had reposed in him. Indeed, because of their client-attorney relationship Sotto probably unduly influences Samson, not only to sell the lot to him but also to accept terms less favourable to her. The undeniable core of the matter is the conveyance of a litigant's property made during the existence of attorney-and-client relationship; and the statute prohibiting such sales which is designed to curtail any undue influence of the lawyer upon his client on account of their confidential association. In this connection, in examining the phase on prescription — from 1926 to 1941 as claimed by Sotto — and impressed by Samson's argument about an attorney's "bad faith, disregard of conscience, court orders, laws and legal ethics", but reluctant to adopt the appellate court's ruling that prescription could not run because the contract was void ab initio, the thought struck us — in the light of some remarks of Samson's counsel — that

perhaps it may be desirable, in situations like this, to apply a rule that the period of prescription should be counted only from the severance of the attorney-and-client bonds; because it is only then that the controlling influence of the attorney has ceased.5 However, no pronouncement on this subject is needed, since this client's right may be sufficiently protected thru the line of approach we have already indicated. 11. LAIG vs CA Petre Galero owned a parcel of land which he was able to redeem through the help of Atty. Benito Laig. After some time, Galero sold the same property to Atty. Laig. They executed the contract in the house of Carmen Verzo. However, they weren’t able to get a TCT because they failed to solicit the approval of the Sec. of Agriculture as required by the Public Land Act. In the meantime, Galero, with the help of Atty. Lapak, son of respondent Register of Deeds, Baldomero Lapak, sought in court the issuance of a second owner’s duplicate copy of the TCT of the subject property and claimed that his first duplicate of said OCT was lost during WWII. When he was able to acquire the second TCT, he sold the same to respondent Carmen Verzo. Carmen was able to register the property in her name and had it declared under her name for taxation purposes. We find that both Baldomero Lapak and his son Atty. Jose Lapak are likewise civilly liable for failure to observe honesty and good faith in the performance of their duties as public officer and as a member of the Bar (Art. 19, New Civil Code) or for wilfully or negligently causing damage to another (Art. 20, New Civil Code), or for wilfully causing loss or injury to another in a manner that is contrary to morals, good customs and/or public policy (Art. 21, New Civil Code).

12. GO BELTRAN vs FERNANDEZ – SUSPENDED 6 MONTHS Respondent was the counsel of complainant’s opponents in a series of civil suits instituted between said complainant and Honorio Pajaron wherein the both of them could not come into terms as to the identity of the land that complainant was selling to Pajaron, specifically, whether or not lot C of the property is included in the sale. While the case was pending in court, herein respondent purchased from Natividad Ypan, the spouse of Pajaron lot C. Respondent has accordingly violated article 1459 of the Civil Code, in breach of professional conduct. In accordance with the exemplary punishment we have set forth in Hernandez vs. Villanueva (40 Phil., 775), which involved a like breach of professional ethics, respondent herein is hereby ordered suspended from the practice of law for a period of six months effective as of the date this judgment becomes final.