p

SPECIAL SECOND DIVISION

[A.C. No. 8158 : July 21, 2010]

ELMER C. SOLIDON, COMPLAINANT VS. ATTY. RAMIL E. MACALALAD, RESPONDENT.

Sirs/Mesdames:Please take notice that the Court, Second Division, issued a Resolution dated 21 July 2010 which reads as follows:

A.C. No. 8158 - ELMER C. SOLIDON, complainant -versus- ATTY. RAMIL E. MACALALAD,respondent.

For resolution is the Motion for Reconsideration filed by Atty. Ramil E. Macalalad of our February 24, 2010 Decision, the decretal portion of which reads:WHEREFORE, premises considered, we hereby AFFIRM WITH MODIFICATIONResolution No. XVIII-2008-336 dated July 17, 2008 of the Board of Governors of the IBP Commission on Bar Discipline. We impose on Atty. Ramil E. Macalalad the penalty of SIX (6) MONTHS SUSPENSION from the practice of law for violations of Rule 16.03 and Rule 18.03 of the Code of Professional Responsibility, effective upon finality of this Decision. Atty. Macalalad is STERNLY WARNED that a repetition of the same or similar acts will be dealt with more severely.

Atty. Macalalad is also ORDERED to RETURN to Atty. Elmer C. Solidon the amount of Fifty Thousand Pesos (P 50,000.00) with interest of twelve percent (12%) per annumfrom the date of promulgation of this Decision until the full amount is returned.

Let copies of this Decision be furnished the Office of the Bar Confidant and noted in Atty. Macalalad's record as a member of the Bar.

SO ORDERED.While Atty. Macalalad admits the breach he committed in handling his client's case, he moves for the mitigation of the penalty we imposed, arguing that: first, Resolution No. XVIII-2008-336 dated July 17, 2008 of the Board of Governors of the IBP Commission on Bar Discipline was already final and executory per Resolution, dated March 25, 2009, of this Court; and second, the penalty of six (6) months suspension was too harsh considering the contributory neglectful acts of his clients and the fact that he never intended to commit the lapses in handling the case.

We find that Atty. Macalalad's arguments lack merit.

Our action in our Resolution of March 25, 2009 was merely to note Resolution No. XVIII-2008-336 (dated July 17, 2008) of the Board of Governors of the IBP Commission on Bar Discipline. The term "noted" simply means that the Court took cognizance of the resolution without passing upon its merits;[1] "noting" does not imply agreement or approval of the recommended action.[2]

The Board of Governors of the IBP Commission on Bar Discipline exercises only recommendatory powers in issuing its findings and recommended penalties, as the final authority and action on the admission to the practice of law, including the discipline and imposition of penalties on members of the Bar, belong to the Court; this was the authority we exercised in issuing the assailed Decision.[3] Thus, there was no IBP Board of Governors' action on the present case that became final; the authority to rule on the case and to impose the penalty all along rested with this Court. Necessarily, this means that the time to serve the penalty imposed does not depend on Atty. Macalalad's belief or choice. The penalty can only be, and must be, served after the finality of the ruling on the case.

We have duly considered the contributory fault of Atty. Macalalad's clients in arriving at our Decision. We find no compelling reason under the circumstances to deviate from our earlier conclusion.

Lastly, we also find no sufficient reason to reduce the penalty imposed on Atty. Macalalad who has failed to show any justifiable grounds to warrant a mitigation of the penalty. We reiterate that the penalty imposed is just and reasonable under the circumstances, and is fully in accord with existing jurisprudence.

ACCORDINGLY, premises considered, we DENY the Motion for Reconsideration of the Decision, dated February 24, 2010, for lack of merit.

SO ORDERED.

Very truly yours,

(Sgd.) MA. LUISA L. LAUREAClerk of Court

Endnotes:

[1] Cojuangco, Jr. v. Palma, A.C. No. 2474, June 30, 2005, 462 SCRA 310, 321.

[2] Ibid.

[3] Section 12(b), Rule 139-B of the Rules of Court; Cojuangco, Jr. v. Palma, supra note 1, at 321; Northwestern University, Inc. v. Arquillo, A.C. No. 6632, August 2, 2005, 465 SCRA 513, 516; Santos v. Llamas, A.C. No. 4749, January 20, 2000, 322 SCRA 529, 534.

Disbarment?SPECIAL THIRD DIVISION

ROSA YAP-PARAS, Petitioner,

- versus - ATTY. JUSTO PARAS,

Respondent.

A.C. No. 4947 Present: SANDOVAL-GUTIERREZ, J., Chairperson, CORONA, CARPIO MORALES, CHICO-NAZARIO, and GARCIA, JJ. Promulgated: June 7, 2007

x------------------------------------------------------------------------------------------x

R E S O L U T I O N

GARCIA, J.:

For resolution is this Motion for Contempt and/or Disbarment [1] dated April 11, 2005, filed by herein petitioner-movant Rosa Yap Paras against respondent Atty. Justo Paras, for the latter’s alleged violation of a suspension order earlier meted upon him by the Court. The motion alleges:

4. That the respondent in this case admits that he has continued his practice

of law and in fact filed pleadings in court after the receipt of suspension on the ground that the alleged filing of his motion for reconsideration suspends or interrupt (sic) the running of the period to appeal,

and prays that for his violation of the suspension order, the respondent be declared in contempt of court and be disbarred.

Briefly, the facts may be stated as follows: On September 9, 1998, herein petitioner-movant filed a verified Petition[2] praying for the disbarment of her estranged husband respondent Atty. Justo J. Paras alleging acts of deceit, malpractice, grave misconduct, grossly immoral conduct and violation of oath as a lawyer committed by the latter. On February 14, 2005, the Court issued a Resolution[3] finding Atty. Paras guilty of committing a falsehood in violation of his lawyer’s oath and of the Code of Professional Responsibility. Thus, the Court resolved to suspend Atty. Paras from the practice of law for a period of one (1) year, with a warning that commission of the same or similar offense in the future will result in the imposition of a more severe penalty. Per records, the aforesaid Resolution was received by Atty. Paras on March 18, 2005. Thereafter, he filed a Motion for Reconsideration dated March 28, 2005.[4] During the pendency of Atty. Paras’ motion for reconsideration, complainant-movant filed with the Court the instant Motion for Contempt and/or Disbarment, alleging thereunder, inter alia, that Atty. Paras violated the suspension order earlier issued by the Court with his continued practice of law. In time, the Court issued a Resolution dated July 18, 2005,[5] denying for lack of merit Atty. Paras’ motion for reconsideration, to wit:

Administrative Case No. 4947 (Rosa Yap Paras vs. Atty. Justo Paras) –

Acting on the respondent’s motion for reconsideration dated March 28, 2005 of the resolution of February 14, 2005 which suspended him from the practice of law for a period of one (1) year, the Court Resolves to DENY the motion for lack of merit.

The Court further Resolves to NOTE:

(a) the complainant’s opposition dated April 11, 2005 to the said motion for reconsideration with leave of Court;

(b) the respondent’s motion dated May 6, 2005 for immediate resolution of the motion for reconsideration; and

(c) the complainant’s motion for contempt and/or

disbarment dated April 11, 2005, praying that respondent be declared in contempt of court and ordered disbarred and toREQUIRE the respondent to COMMENT thereon, within ten (10) days from notice.

In the same resolution, the Court required Atty. Paras to comment on petitioner-movant’s Motion for Contempt and/or Disbarment. After more than a year, or on September 12, 2006 Atty. Paras filed with the Court a Manifestation[6], stating that he had completely and faithfully served his one (1) year suspension from the practice of law from August 25, 2005, the day after he received the denial resolution on his motion for reconsideration, to August 24, 2006. It appearing that Atty. Paras failed to file a comment on the Motion for Contempt and/or Disbarment, the Court issued another Resolution dated November 27, 2006requiring Atty. Paras to show cause why he should not be held in contempt of court for such failure and to comply with the said resolution within ten (10) days from receipt. Consequently, a Comment on Motion for Contempt and Explanation on Failure to Timely File Required Comment[7] was filed by Atty. Paras denying all the allegations in petitioner-movant’s Motion for Contempt and/or Disbarment. He likewise claimed that he had never done nor made any conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice, nor undermine or put to naught or violate any of the pertinent causes enumerated in Section 3, Rule 71 of the Revised Rules of Court.

Here, we are called upon to impose on Atty. Paras the highest punishment to an erring lawyer – disbarment – or to hold him in contempt for his failure to comply with this Court’s resolutions.

In a number of cases,[8] we have repeatedly explained and stressed that the purpose of disbarment is not meant as a punishment to deprive an attorney of a means of livelihood but is rather intended to protect the courts and the public from members of the bar who have become unfit and unworthy to be part of the esteemed and noble profession. Likewise, the purpose of the exercise of the power to cite for contempt is to safeguard the functions of the court to assure respect for court orders by attorneys who, as much as judges, are responsible for the orderly administration of justice.

We find no sufficient basis to support petitioner-movant’s allegation that Atty. Paras violated the Court’s suspension order, what with the fact that Atty. Paras himself took the initiative to inform the lower courts of his one- year suspension from law practice.[9]

It is clear, however, that all lawyers are expected to recognize the authority of the Supreme Court and obey its lawful processes and orders. Despite errors which one may impute on the orders of the Court, these must be respected, especially by the bar or the lawyers who are themselves officers of the courts. It is well to emphasize again that a resolution of the Supreme Court is not be construed as a mere request, nor should it be complied with partially, inadequately or selectively.[10] Court orders are to be respected not because the justices or judges who issue them should be respected, but because of the respect and consideration that should be extended to the judicial branch of the government. This is absolutely essential if our government is to be a government of laws and not of men.[11]

Here, Atty. Paras admitted that he had been less than prudent, and indeed fell short, of his obligation to follow, obey and comply with the specific Order of the Honorable Supreme Court contained in Its Resolution dated July 18, 2005 due to his deteriorating health condition which required him to undergo a coronary angiogram and bypass graft[12]. He likewise expressed his profound and immeasurable sorrowness amidst regrets for his delayed compliance with the Court’s order.

Given the above, the Court takes this opportunity to remind the parties in the instant case, as well petitioner-movant’s counsels, to avoid further squabbles and unnecessary filing of administrative cases against each other. An examination of

the records reveals a pervasive atmosphere of animosity between Atty. Paras and petitioner’s counsels as evidenced by the number of administrative cases between them. It is well to stress that mutual bickerings and unjustified recriminations between attorneys detract from the dignity of the legal profession and will not receive sympathy from this Court.[13] Lawyers should treat each other with courtesy, fairness, candor and civility.[14]

All told, the Court deems a reprimand with warning as a sufficient sanction for Atty Paras’ failure to promptly comply with its directives. The imposition of this sanction in the present case would be more consistent with the avowed purpose of a disciplinary case, which is not so much to punish the individual attorney as to protect the dispensation of justice by sheltering the judiciary and the public from the misconduct or inefficiency of officers of the court.[15]

ACCORDINGLY, the Motion for Contempt and/or Disbarment is DENIED. However, Atty. Justo Paras is hereby REPRIMANDED for his failure to observe the respect due the Court in not promptly complying with this Court’s resolution, with WARNING that a more drastic punishment will be imposed upon him for a repetition of the same act.

SO ORDERED.

CANCIO C. GARCIAAssociate Justice

WE CONCUR:

ANGELINA SANDOVAL-GUTIERREZAssociate Justice

Chairperson

RENATO C. CORONA

Associate JusticeCONCHITA CARPIO MORALES

Associate Justice

MINITA V. CHICO-NAZARIOAssociate Justice

[1] Rollo, pp. 1062-1065.[2] Rollo, Vol. I at pp. 3-9.[3] Id. at pp. 1000-1009.[4] Id. at pp. 1021-1028.[5] Id. at p. 1132.[6] Id. at pp. 1139-1141.[7] Id. at pp. 1165-1173.[8] Geeslin v. Navarro, Adm. Case No. 2033 and 2148, May 9, 1990, 185 SCRA 230; citing Diaz v. Gerong,

Adm. Case No. 2439, January 16, 1986, 141 SCRA 46 and Daroy, et al. v. Legaspi, Adm. Case No. 936, July 25, 1975, 65 SCRA 304 andMariano Y. Siy v. National Labor Relations Commission and Elena Embang, G.R. No. 158971, August 25, 2005, 468 SCRA 154.

[9] Rollo, p. 1136.[10] Ong v. Grijaldo, Adm. Case No. 4724, April 30, 2003, 402 SCRA 1 and Guerrero v. Deray, A.M. No.

MTJ-02-1466, December 10, 2002, 393 SCRA 591.[11] Luis N. De Leon v. Joey Y. Torres, 99 Phil 462.[12] Rollo, p. 1166.[13] Asa vs. Castillo, Adm. Case No. 6501, August 31, 2006, 500 SCRA 309.[14] Canon 8, Code of Professional Responsibility.[15] Gamilla v. Marino, Jr., Adm.Case No. 4763, March 20, 2003, 399 SCRA 308.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

A.C. No. 2285 August 12, 1991

MARIA TIANIA complainant, vs.ATTY. AMADO OCAMPO, respondent.

A.C. No. 2302 August 12, 1991

FELICIDAD LLANOS ANGEL and ALFONSO ANGEL, complainants, vs.ATTY. AMADO OCAMPO, respondent.

PER CURIAM:p

These disbarment proceedings against Attorney Amado Ocampo were filed by Maria Tiania, docketed as Administrative Case No. 2285, and by Spouses Felicidad Angel and Alfonso Angel (hereinafter referred to as the Angel Spouses), docketed as Administrative Case No. 2302.

Both cases were consolidated upon the instance of Atty. Amado Ocampo who, in his answer, denied the imputations.

The complaints in Adm. Case No. 2285 and Adm. Case No. 2302 were filed on July 14, 1981 and August 10, 1981, respectively.

On January 27, 1982, after Atty. Ocampo filed his comment, the Court referred the case to the Solicitor General for investigation, report, and recommendation as provided, then, by Section 27, Rule 138 of the Rules of Court. 1

It was only on April 25, 1990, more than eight years later, that the Office of the Solicitor General returned the entire records of Adm. Cases Nos. 2285 and 2302 with the accompanying complaint for disbarment.

Hence, the administrative complaint for disbarment in both cases was filed.

ADMINISTRATIVE CASE NO. 2285

Maria Tiania claims in her verified complaint that respondent Amado Ocampo who has been her "retaining (sic) counsel" in all her legal problems and court cases as early as 1966, has always had her unqualified faith and confidence.

In 1972, one Mrs. Concepcion Blaylock sued Tiania for ejectment 2 from a parcel of land described as "Lot 4131, TS-308." Ocampo appeared for Tiania and also for Blaylock. Tiania confronted Ocampo about this but the latter reassured Tiania that he will take care of everything and that there was no need for Tiania to hire a new lawyer since he is still Tiania's lawyer. Ocampo prepared the answer in the said ejectment case, which Tiania signed. Then Ocampo made Tiania sign a Compromise Agreement 3 which the latter signed without reading.

Two years from the submission of the Compromise Agreement, Tiania was shocked when she received an order to vacate 4 the property in question. To hold off her ejectment for another two years, Ocampo advised Tiania to pay him a certain amount for the sheriff. 5

Ocampo denied the charges in detail. Although he handled some legal problems and executed some notarial deeds for Tiania from 1966-1971, Tiania had also engaged the services of various counsel to represent her in several criminal and civil cases, involving violations of municipal ordinances and estafa. Thus, he could not be the complainant's "retaining counsel" in all her legal problems and court cases.

Ocampo then insisted that he appeared on behalf of Mrs. Blaylock, and not as counsel of Tiania, in Civil Case No. 1104-0. He never saw or talked to Tiania from the time the said civil case was filed up to the pre-trial and as such could not have discussed with her the complaint, the hiring of another lawyer, and more so the preparation of the answer in the said case. He admitted that during the pre-trial of the said case, Tiania showed to him a document which supported her claim, over the property in question. Ocampo, after going over the document, expressed his doubts about it authenticity. This convinced Tiania to sign a Compromise Agreement and to pay the acquisition cost to Blaylock over a period of six (6) months. 6

But Tiania never fulfilled any of her obligations. She moreover made the situation worse by selling the contested property to a third party even after an alias writ of execution had ordered the transfer of the possession of the disputed property to Blaylock. 7

Significantly, the petition was filed five years after Tiania allegedly suffered "terrible shock" upon receiving the Notice to Vacate.

Citing Arboleda v. Gatchalian, 8 Ocampo said that the overdue filing of a complaint against a lawyer should already create a suspicion about the motives of the complainant or the merit of the complaint.

ADMINISTRATIVE CASE NO. 2302

The Angel spouses, complainants in A.C. No. 2302, allege that sometime in 1972, they sold their house in favor of Blaylock (the same Mrs. Concepcion Blaylock in A.C. No. 2285) for the amount of seventy thousand pesos, (P70,000.00). Ocampo (the same respondent Atty. Amado Ocampo), acted as their counsel and prepared the Deed of Sale of a Residential House and Waiver of Rights Over a Lot.

With the money paid by Blaylock, the Angel spouses bought another parcel of land. Again, Ocampo prepared the Deed of Sale which was signed by the vendor, a certain Laura Dalanan, and the Angel spouses, as the vendees. In addition, Ocampo allegedly made the Angel spouses sign two (2) more documents which, accordingly, were made parts of the sale transaction.

Those two (2) documents later turned out to be a Real Estate Mortgage of the same property purchased from Laura Dalanan and a Promissory Note, 9 both in favor of Blaylock.

The Angel spouses never realized the nature of the said documents until they received a complaint naming them as defendants in a collection suit 10 filed by Ocampo on behalf of the plaintiff, Commercial Corporation of Olongapo, a firm headed by Blaylock.

The Angel spouses added that Ocampo reassured them that there was no need for them to engage the services of a new lawyer since he will take care of everything. Ocampo even appeared as counsel for the Angel spouses in a civil case 11 they filed sometime in 1976. However, in 1978, a Notice to Vacate, 12 on the basis of the two (2) documents they signed in 1972, was served on them.

These acts, the complainants charge, violate the ethics of the legal profession. They lost their property as a result of the respondent's fraudulent manipulation, taking advantage of his expertise in law against his own unsuspecting and trusting clients.

As in the first case, Ocampo presented an elaborate explanation.

Ocampo alleged that it was his client, Mrs. Concepcion Blaylock, who introduced to him the Angel spouses in 1972. Blaylock wanted Ocampo to check the background of the Angel spouses in connection with the loan they were seeking from Blaylock.

In his interview with Mrs. Angel, Ocampo learned that the amount of twenty thousand pesos (P20,000.00) to be loaned to the Angel spouses from Blaylock would be used to repurchase the property at 39 Fendler Street, Olongapo City, which the Angel spouses had originally owned. In turn, the Angel spouses should sell the same to Blaylock.

Ocampo himself facilitated the transfer by delivering to the complainants the P20,000.00 for the repurchase of the Fendler property. This in turn was sold toBlaylock. 13

Since the sale of the Fendler property would render the Angel spouses homeless, they suggested to Blaylock that they would need an additional loan of forty thousand pesos (P40,000.00) to purchase from Laura Dalanan another property located at #66 Kessing Street, Olongapo City, which was mortgaged in favor of a certain Salud Jimenez.

To expedite the transfer of the Kessing property from Dalanan to the Angel spouses, Ocampo himself delivered to Salud Jimenez twenty two thousand (P22,000.00) pesos from Blaylock in payment of the mortgage debt of Dalanan. The balance of eighteen thousand (P18,000.00) pesos was then delivered to Mrs. Angel upon the execution of the final documents between the Angel spouses and Dalanan. 14

Ocampo explained that simultaneously he executed a Real Estate Mortgage over the Kessing property and a Promissory Note for the Angel spouses in favor of Blaylock for the amount of seventy-four thousand seventy five (P74,075.00) pesos. Although only forty thousand (P40,000.00) was received by Mrs. Angel and Dalanan, the difference between seventy-four thousand seventy five pesos and forty thousand pesos represented the interests in advance over a period of five years in which the loan would be paid.

When the monthly amortizations became due, the Angel spouses never paid any of it despite repeated demands from Blaylock. Blaylock assigned the promissory note to the Commercial Credit Corporation which later on filed a civil case against the Angel spouses.

The Angel spouses never filed an answer and were declared in default. Upon execution, the Kessing property was levied on and sold at public auction followed by a Notice to Vacate.

Ocampo admits appearing for the Angel spouses in Civil Case No. 1458, filed July 26, 1976, but only because he had his client Blaylock's interest foremost in his mind.

Blaylock, through Ocampo, had sued one Benedicto Hermogeno a lessee of Blaylock's property, in an ejectment case. But before the institution of the ejectment case, Hermogeno leased out the same premises to Mrs. Angel on June 14, 1976. Four days later, Hermogeno without the knowledge and consent of Mrs. Angel, regained possession of the leased premises. Thus, Ocampo, in filing a complaint against Hermogeno on behalf of Blaylock, was also doing so for Mrs. Angel.

These explanations notwithstanding, the Solicitor General charged the respondent Atty. Amado Ocampo with malpractice and gross misconduct punishable under Section 27 of Rule 138 of the Rules of Court of the Philippines and violation of his oath of office as an attorney for the following acts:

a) Administrative Case No. 2285

At the pre-trial of Civil Case No. 11 04-0, the respondent appeared as counsel for the plaintiff and while appearing for the same, gave advice and warnings to the defendant which paved the way for an amicable settlement and which may have prejudiced the defendant's rights.

b) Administrative Case No. 2302

(1) Respondent while acting as counsel for Mrs. Concepcion Blaylock and her Commercial Credit Corporation; also acted as counsel of the complainant Mrs. Angel when he prepared the Deed of Sale of a Residential House and Waiver of Rights Over a Lot for Mrs. Angel in favor of Zenaida Blaylock, daughter of Concepcion Blaylock.

(2) Respondent, while acting as counsel for Mrs. Concepcion Blaylock and her Commercial Credit Corporation, also acted as counsel of Mrs. Angel when he proceeded to Cavite and paid Salud Jimenez the sum of twenty two thousand pesos (P22,000.00) for Dalanan's Kessing Property.

(3) Respondent was representing conflicting interests when he simultaneously prepared the Deed of Sale of the Kessing property in favor of Mrs. Angel and the Real Estate Mortgage for the same property to be signed by Mrs. Angel in favor of Mrs. Blaylock and her Commercial Credit Corporation.

(4) Respondent used Mrs. Angel by pretending to protect her interest as his client in Civil Case No. 2020-0, when admittedly he was only "forced to help and assist Mrs. Angel in said case to protect the property of Mrs. Blaylock."

Was the respondent guilty of representing conflicting interests?

The specific law applicable in both administrative cases is Rule 15.03 of the Code of Professional Responsibility which provides:

A lawyer shall not represent conflicting interest except by written consent of all concerned given after a full disclosure of the facts.

We prohibit the representation of conflicting interests not only because the relation of attorney and client is one of trust and confidence of the highest degree, but also because of the principles of public policy and good taste. An attorney has the duty to deserve the fullest confidence of his client and represent him with undivided loyalty. Once this confidence is abused, the entire profession suffers. 15

The test of the conflict of interest in disciplinary cases against a lawyer is whether or not the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double-dealing in the performance thereof. 16 Considering this criterion and applying it to the present administrative cases, we find no cogent reason to disturb the findings of the Solicitor General upholding the complaints against the respondent. Indeed, the aforementioned acts of the respondent in representing Blaylock, and at the same time advising Tiania, the opposing party, as in the first administrative case, and once again representing Blaylock and her interest while handling the legal documents of another opposing party as in the second case, whether the said actions were related or totally unrelated, constitute serious misconduct. They are improper to the respondent's office as attorney.

However, taking into consideration the advanced age of the respondent, who would have reached seventy three (73) years, as of this date, the Court, while uncompromisingly firm in its stand against erring lawyers, nonetheless appreciates the advance years of the respondent in his favor.

WHEREFORE, finding the respondent Atty. Amado Ocampo guilty of malpractice and gross misconduct in violation of the Code of Professional Responsibility, we hereby SUSPEND him from the practice of law for a period of one (1) year.

Let this Decision be spread upon the personal records of the respondent and copies thereof furnished to all courts and to the Integrated Bar of the Philippines.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

Footnotes

1 Report and Recommendation of the Office of the Solicitor General, March 27,1990,18.

2 "Concepcion F. Blaylock v. Maria Tiania, et al.," CFI (Olongapo, Zambales), Civil Case No. 1104-0 filed on November 6, 1972.

3 Civil Case No. 1104-0, Compromise Agreement, signed by Maria Tiania, on her own behalf and on behalf of her husband as defendants, and by Atty. Amado Ocampo, as attorney-in-fact and counsel of Mrs. Concepcion Blaylock, plaintiff, April 2, 1973.

4 Civil Case No. 1104-0, Notice to Vacate, August 20, 1975.

5 Report and Recommendation of the Solicitor General, March 27, 1990, 4-5.

6 Handwritten letter addressed to Atty. Ocampo from Maria Tiania August 1, 1975; Promise to pay the obligation, August 4, 1975; Last Promise, September 1, 1975; Definite Last Promise September 9, 1975.

7 Alias Writ of Execution, issued February 24, 1975; Deed of Absolute Sale, executed June 8, 1974.

8 Administrative Case No. 1034, July 23, 1974, 58 SCRA 64.

9 Both the Real Estate Mortgage and the Promissory Note are dated October 17, 1972.

10 Civil Case No. 1332-0, filed on October 23, 1973.

11 Civil Case No. 2020-0, filed on July 30, 1976.

12 Civil Case No. 1332-0, Notice to Vacate, March 15, 1978.

13 Deed of Sale of a Residential House and Waiver of Rights over a lot was executed by the Angel Spouses in favor of Zenaida Blaylock, on September 20, 1972.

14 Deed of Sale of a House and Waiver of Rights over a Lot signed by Dalanan as vendor and Felicidad Angel as vendee, October 17, 1972.

15 Hilado v. David, 84 Phil. 576-579; US v. Laranja, 21 Phil. 510.

16 In re Dela Rosa, 27 Phil. 265-266.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 79184 May 6, 1992

ERLINDA L. PONCE, petitioner, vs.VALENTINO L. LEGASPI and THE HON. COURT OF APPEALS, respondents.

F.S. Farolan & Associates Law Offices for petitioner.

GUTIERREZ, JR., J.:

This controversy calls for the balancing of two conflicting interests: the petitioner's right to litigate versus the respondent's right to be protected from malicious prosecution.

The present case stemmed from the filing before the Supreme Court on October 3, 1977 of a complaint for disbarment against respondent Atty. Valentino Legaspi by petitioner Erlinda Ponce.

At the time of the filing of the disbarment proceedings, petitioner Ponce, together with her husband Manuel, owned forty three percent (43%) of the stockholdings of L'NOR Marine Services, Inc. (L'NOR). She was then Treasurer and director of the Board of Directors of L'NOR while her husband was a director. Forty eight percent (48%) of L'NOR's stocks was owned by the spouses Edward and Norma Porter who were then serving as President/General Manager and Secretary respectively.

The pertinent portions of the complaint are reproduced below:

xxx xxx xxx

10. During the time or period while respondent is the legal counsel of the aforecited corporation, there occurred certain fraudulent manipulations, anomalous management and prejudicial operations by certain officers of said corporation, namely: Edward J. Porter, President/General Manager; Norma Y. Porter, Secretary; and Zenaida T. Manaloto, Director, who caused great damage and prejudice which will be related hereunder;

xxx xxx xxx

14. About July, 1976, said spouses Edward J. Porter and Norma Y. Porter, together with Zenaida T. Manaloto, facilitated, assisted and aided by herein respondent Legaspi (Annexes "B" and "B-1" herewith), incorporated the Yrasport Drydocks, Inc., hereinafter designated YRASPORT, which they control with the following stockholdings:

Edward J. Porter 180 sharesNorma Y. Porter 180 sharesEriberto F. Yrastorza 16 sharesZenaida T. Manaloto 8 sharesRoman M. Maceda 8 sharesAndres A. Nombrado 8 shares

and whose line of business is in direct competition with L'NOR;

15. YRASPORT, like Yrasport Enterprises, was launched without the knowledge of the minority stockholders owning 43% of L'NOR, and was really designed to compete, if not eliminate, L'NOR as a competitor;

16. That as a matter of fact attempts were made to secure one of L'NOR jobs in favor of YRASPORT, which fraudulent scheme was however frustrated only by the timely opposition of herein complainant;

17. YRASPORT likewise availed of and used the office space, equipment, personnel, funds, other physical facilities, and goodwill of L'NOR while competing at the same time against and causing the latter great damage and irreparable injury;

xxx xxx xxx

21. Edward J. Porter, President-General Manager of L'NOR, purchased from ISECOR (Industrial Supply Corporation) on November 3, 1974 one skaagit winch with its cables for P10,000.00; that on November 18, 1974 said Edward J. Porter assigned the purchase of said skaagit winch with its cables in favor of L'NOR at the price of P10,000.00; and that the latter corporation then assumed the agreed obligation covering the P10,000.00 purchase price in favor of ISECOR;

22. Subsequently, on or about October 18, 1975, said President-General Manager Edward J. Porter misrepresented facts regarding the acquisition cost of said skaagit winch with its cables to the effect that the same was sold by ISECOR at the cost of P20,000.00; that he collected the sum from L'NOR for direct payment to ISECOR allegedly to liquidate in full the obligation of P20,000.00 in favor of ISECOR, when, in truth and in fact, the obligation is only P10,000.00 and not more;

23. On account of the aforecited flagrant fraud, a charge of Estafa was filed against Edward J. Porter and the office of the City Fiscal handed down a resolution to prosecute him in court, copy of pertinent exhibits herewith marked as Annexes "C", "C-1", "C-2", "C-3", "C-4" and "C-5";

24. In view of the aforesaid illegal manipulations, illicit schemes, palpable frauds and estafa committed by said President-General Manager Edward J. Porter, in confabulation and conspiracy with the other officers of the corporation, namely: his wife Norma Y. Porter and Zenaida T. Manaloto, herein complainant requested respondent Valentino Legaspi to take and pursue appropriate local steps and seasonable actions in order to protect the paramount interest of L'NOR of which he is the legal counsel by retainer, but the latter, without any valid excuse whatsoever, refused to do so, although he is still collecting his monthly retainer;

25. On account of the refusal of said corporate attorney of L'NOR, respondent Legaspi, complainant was forced to retain the services of another counsel to prosecute the appropriate derivative suit in the Court of First Instance of Cebu, copy herewith marked Annex "D"; and that, in opposition to the

same, respondent Legaspi appeared as legal counsel and attorney of Edward J. Porter and his confederates, copy of exhibits marked Annex "D-1" herewith;

26. In the Criminal Case filed against Edward J. Porter for Estafa (Annex "C" supra), respondent Legaspi likewise appeared as counsel for respondent Porter despite the fact that he is the legal counsel of L'NOR which is the prejudiced party and for whose benefit the criminal case was really being prosecuted, copy of letter of respondent, marked as Annex "C-6" herewith;

27. Up to the present time respondent is still collecting his monthly retainer, and for his appearance for Edward J. Porter, et. als. in the derivative suit, he collected the sum of P2,000.00 from L'NOR as payment for his illicit legal services in defending the Porters and Manaloto against the very interest of the corporation paying him monthly retainer;

28. Said Edward J. Porter and his confederates, in their respective capacity as such officers of L'NOR, continue and persist in perpetrating malicious acts, anomalous management and fraudulent operations against the interest of L'NOR, and that respondent Legaspi was duly adviced verbally and also in writing by complainant to take the necessary action in his capacity as legal counsel of L'NOR to protect zealously the interest of the latter, but respondent Legaspi has done absolutely nothing, and grossly neglected and flagrantly violated his duties as legal counsel up to the present time, pertinent exhibits herewith marked as Annexes "E", "E-1", "E-2", "E-4", "E-5", "E-6";

29. That, on the contrary, respondent Legaspi in his dual capacity as legal counsel of L'NOR and YRASPORT, and at the same time acting in his capacity as corporate secretary of YRASPORT, facilitated, assisted, aided or otherwise abetted the illegal manipulations, illicit schemes, fraudulent operations and grave frauds committed by said Edward J. Porter and his confederates who are officers of L'NOR against the interest of the latter and to further the malicious competitive sabotage of YRASPORT alleged heretofore; and

30. That, upon the foregoing, we most respectfully prefer against respondent Valentino Legaspi the following charges:

First Specification:

That respondent Valentino Legaspi has committed gross misconduct in office as a practicing lawyer and member of the Philippine Bar, because, as legal counsel, he violated his duty to and the trust of his client, L'NOR Marine Services, Inc., whom he is professionally duty bound to represent with entire devotion faithfully as such attorney, and whose paramount interest he should protect in all good faith with absolute fidelity, but that, in truth and in fact, he did not do so.

Second Specification:

That respondent Valentino Legaspi, while acting as legal counsel of L'NOR under continuing monthly retainer, has acted at the same time as lawyer of Edward J. Porter, et. als., who have committed anomalous acts, prejudicial manipulations and grave frauds against his client L'NOR Marine services, Inc., that he therefore represented professionally conflicting interest; and that he committed grave malpractice that is in flagrant violation of the recognized canons of legal ethics.

Third Specification:

That respondent Valentino Legaspi committed grossly corrupt or dishonest conduct while under retainer and acting as attorney of L'NOR Marine Services, Inc., when he facilitated, assisted, aided

or otherwise abetted the organization, registration and operation of another competing entity, Yrasport Drydocks, Inc., in which he is also the lawyer and corporate Secretary, at the expense of and to which the business and transactions of L'NOR are being diverted or otherwise appropriated, including the pirating of skilled personnel and also facilities, and that respondent committed the same with evident bad faith and absolute lack of fidelity to his client L'NOR, thereby degrading the good esteem, integrity and honor of the profession. (Records, Administrative Case No. 1819, pp. 4-13)

In his comment, Atty. Legaspi denied the allegations in paragraphs 10, 21, 22, 23, 24, 28, 29 and 30. He qualifiedly admitted the allegations in paragraphs 14 and 15, stating that Yrasport was not organized to compete directly with L'NOR. He averred that L'NOR could not cope up with the business and Yrasport was formed for the purpose of complementing L'NOR's business. He added that there is nothing in the law nor contract which prohibits a stockholder from competing with the business of the corporation.

Atty. Legaspi admitted the allegations in paragraphs 26 and 27 that he appeared for Edward Porter in the estafa case filet against the latter, reasoning that his appearances were direct orders of management and that it was not improper for counsel to represent both the corporate officers when they are being sued at the same time.

As to the allegations in paragraphs 16 and 17, Atty. Legaspi declared that he has no sufficient knowledge to form a belief as to the truth or falsity of the statements contained therein.

On January 23, 1978, the Court issued a resolution dismissing the disbarment complaint against Legaspi. The resolution is quoted hereunder:

Administrative Case No. 1819 (Erlinda L. Ponce v. Valentino L. Legaspi). –– Considering the complaint for disbarment against Atty. Valentino L. Legaspi as well as said respondent's comment thereon, the Court Resolved to DISMISS the complaint for lack of merit. (Records, Administrative Case No. 1819 p. 91)

The petitioner filed a motion for reconsideration which was denied by the Court on March 31, 1978.

On February 10, 1978, Atty. Legaspi filed before the Court of First Instance (now Regional Trial Court of Cebu) a complaint for damages against the petitioner.

The petitioner filed a motion to dismiss which was denied by the trial court.

On July 18, 1983, the lower court rendered judgment the dispositive portion of which reads as follows:

WHEREFORE, this court being satisfied that the material allegations of the complaint have been proved and remained uncontradicted with the testimonial and documentary evidence introduced and admitted by the court, judgment is hereby rendered in favor of the plaintiff and against the defendant Erlinda L. Ponce ordering the defendant to pay Valentino L. Legaspi, plaintiff herein, the amount of P1,000.00 as actual damages, P50,000.00 as moral damages and P25,000.00 as exemplary damages and to pay the costs. (Rollo, p. 115)

The petitioner appealed to the Court of Appeals. On May 26, 1987, the Court of Appeals affirmed the lower court's judgment. In affirming the appealed decision, the Court of Appeals reasoned:

Defendant-appellant contends that plaintiff-appellee's action for damages is purely retaliatory in character and stems from an alleged feeling of wounded pride or amor proprio; that granting without admitting that the appellee has suffered certain adverse effects in his reputation because of the disbarment case, it does not constitute malicious prosecution as would otherwise perhaps render the appellant liable for damages; that the facts on record indubitably show that the appellant was merely exercising her right of access to courts for redress of legitimate grievances when she filed the disbarment case believing then as she still does, that appellee committed a breach of his professional duties as a lawyer. In refutation, appellee alleges that appellant belittles this action for damages as "purely retaliatory in character and stems from an alleged feeling of wounded pride or amor proprio"; that by such statement, appellant has unmasked herself as to how little regard she has for the feelings of others and how she clings to the law if only to secure her purpose; that what is being sought by appellee is compensation for appellee's malice, falsehoods and deceit in trying to destroy the professional standing of a humble practitioner just because he did better than the other.

While free access to the courts is guaranteed under Section 9, Article IV of the 1973 Constitution (now Section 11, Article III of the 1986 Constitution), it does not give unbridled license to file any case, whatever the motives are. Whoever files a case shall be responsible for the consequences thereof whenever his act of filing infringes upon the rights of others. In the same way that although freedom of speech is guaranteed, one cannot claim to be protected under such freedom when he is being held liable for the libel he commits.

The case at bar cannot be considered as one for recovery of damages arising from malicious prosecution, for a disbarment proceeding is not a criminal action. (De Jesus-Paras v. Vailoces, 111 Phil. 569; 1 SCRA 954, 957). However, we should not lose sight of the fact that utterances made in the course of judicial proceedings, including all kinds of pleadings, petitions and motions, belong to the class of communications that are absolutely privileged. (Sison v. David, 110 Phil. 662; 1 SCRA 60, 71 citing authorities) and no civil action for libel or slander may arise therefrom unless the contents of the petition are irrelevant to the subject matter thereof. (1 SCRA 71). It has also been held that a privileged communication should not be subjected to microscopic examination to discover grounds of malice or falsity. Such excessive scrutiny would defeat the protection which the law throws over privileged communications. The ultimate test is that of bona fides. (Deles v. Aragona, Jr., 27 SCRA 633, 642). The privileged character of her complaint filed with the Supreme Court must have been what defendant had in mind when she invokes her right to free access to the courts. However, defendant's actuations before and after the filing of administrative complaint with the Supreme Court disprove her bona fides. On this issue, the trial court found:

Yet, the uncontroverted evidence before the court belie these allegations because there are antecedent incidents between plaintiff and defendant that speak otherwise; that she filed this disbarment complaint against plaintiff with malice aforethought. This conclusion is founded on the fact that defendant was embittered against him for failing to obtain a compromise against Eduardo Coronel before the military due to plaintiff's defense of his client; that she wanted to dissolve the L'Nor Corporation in order to repossess the premises leased to the former upon the corporation's dissolution and Porter's ouster which was thwarted by plaintiff's advice as counsel for L'Nor; plaintiff's letter (Exhibit "H") that she was not authorized to use the title of Chairman of the Board; not counter-signing plaintiff's check (Exhibits I, I-1, and I-2); her insistence to have the surplus profits declared as cash dividend which likewise failed due to plaintiff's advice; her letter (Exh. J) asking plaintiff to desist from defending the corporation and its officers; plaintiff's refusal to give her advice without authority from the Board of Directors; numerous cases filed with the Security and Exchange Commission which were all dismissed and with the Court of First Instance and Circuit Criminal Court which plaintiff ably defended causing their eventual dismissal and other acts against plaintiff which demonstrated palpably defendant's

hatred for the plaintiff acts clearly evidencing malice contrary to her averments in the Answer.

To top it all, notwithstanding her evident support and advice by counsel, she cleverly hid the identity of said counsel prosecuting all her acts of vilification and harassment in her own name. Furthermore, the testimony of plaintiff that she distributed copies of her complaint for disbarment against plaintiff to his clients remain uncontradicted. Finally, instead of coming to court in good faith she instead moved from her residence at Seaview Heights, Lawaan, Talisay, Cebu without informing the court nor her counsel and has not been heard from. From the foregoing, malice is evident.

Appellant claims that the finding of the lower court that appellant disseminated information regarding the filing of her complaint for disbarment and caused a copy of the same to be furnished appellee's clients is totally unsupported by any evidence on record. The contention is untenable. Plaintiff declared that he came to know of the complaint against him even before the Supreme Court required him to comment because two or three of his clients told him that they had a copy given to them. (p. 8, t.s.n., June 3, 1983).

The foregoing acts committed by the defendant violate the conduct that she should have observed in her relation to plaintiff, as provided in the following provisions of the Civil Code of the Philippines, to wit:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same.

Art. 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief;

(1) Prying into the privacy of another's residence;

(2) Meddling with or disturbing the private life or family relations of another;

(3) Intriguing to cause another to be alienated from his friends;

(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical defect, or other personal condition. (Rollo, pp. 45-48)

The petitioner's motion for reconsideration was denied by the respondent Court in its resolution dated July 7, 1987. Hence, this petition.

The petitioner assigns the following errors:

I

THE RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE REGIONAL TRIAL COURT OF CEBU, BRANCH XXI, WHICH FOUND THE HEREIN PETITIONER

GUILTY OF BAD FAITH IN INSTITUTING A COMPLAINT FOR DISBARMENT AGAINST THE PRIVATE RESPONDENT.

II

THE RESPONDENT COURT OF APPEALS ERRED IN ORDERING THE PETITIONER TO PAY THE PRIVATE RESPONDENT ACTUAL, MORAL AND EXEMPLARY DAMAGES TO PAY THE COSTS. (Rollo, p. 21)

Before proceeding with the merits of the case, the scope of an action for damages arising from malicious prosecution needs to be clarified. Both the Court of Appeals and the petitioner are of the belief that the suit for damages filed by Atty. Legaspi is not one arising from malicious prosecution because "a disbarment proceeding is not a criminal action. (De Jesus-Paras v. Vailoces, 1 SCRA 954 [1961])." The obvious inference is that only an unsuccessful criminal action may subsequently give rise to a claim for damages based on malicious prosecution. This is not correct. While generally, malicious prosecution refers to unfounded criminal actions and has been expanded to include unfounded civil suits just to vex and humiliate the defendant despite the absence of a cause of action or probable cause (Equitable Banking Corporation v. Intermediate Appellate Court, 133 SCRA 138 [1984]) the foundation of an action for malicious prosecution is an original proceeding, judicial in character. (Lorber v. Storrow, 70 P. 2d 513 [1937]; Shigeru Hayashida v. Tsunehachi Kakimoto, 23 P. 2d 311 [1933]; Graves v. Rudman, 257 N.Y.S. 212 [1932]). A disbarment proceeding is, without doubt, judicial in character and therefore may be the basis for a subsequent action for malicious prosecution.

A perusal of the allegations in Atty. Legaspi's complaint for damages, particularly paragraphs 10, 11, 12 and 15 thereof (Rollo, pp. 56-59) shows that his main cause of action was predicated on injury resulting from the institution of the disbarment case against him. This being the case, we find that the suit filed by the respondent lawyer makes out a case of damages for malicious prosecution.

An action for damages arising from malicious prosecution is anchored on the provisions of Article 21, 2217 and 2219 [8] of the New Civil Code. Under these Articles:

Art. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages.

Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission.

Art. 2219. Moral damages may be recovered in the following and analogous cases:

xxx xxx xxx

(8) Malicious prosecution.

In order, however, for the malicious prosecution suit to prosper, the plaintiff must prove: (1) the fact of the prosecution and the further fact that the defendant was himself the prosecutor, and that the action finally terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause; and (3) that the prosecutor was actuated or impelled by legal malice, that is by

improper or sinister motive. (Lao v. Court of Appeals, 199 SCRA 58 [1991]; Rehabilitation Finance Corporation v. Kohl, 4 SCRA 535 [1962]; Buchanan v. Viuda de Esteban, 32 Phil. 363 [1915]).

The foregoing requisites are necessary safeguards to preserve a person's right to litigate which may otherwise be emasculated by the undue filing of malicious prosecution cases. Thus, as further held in the aforecited case ofBuchanan v. Viuda. de Esteban, supra: "Malice is essential to the maintenance of an action for malicious prosecution and not merely to the recovery of exemplary damages. But malice alone does not make one liable for malicious prosecution, where probable cause is shown, even where it appears that the suit was brought for the mere purpose of vexing, harassing and injuring his adversary. In other words, malice and want of probable causemust both exist in order to justify the action." (Emphasis supplied; see also Rehabilitation Finance Corp. v. Koh,supra)

Probable cause is the existence of such facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime (or in this case, the wrongdoing) for which he was prosecuted. (See Buchanan v. Viuda de Esteban, supra)

The general rule is well settled that one cannot be held liable in damages for maliciously instituting a prosecution where he acted with probable cause. In other words, a suit will lie only in cases where a legal prosecution has been carried on without probable cause. (Id.; emphasis supplied)

The petitioner, at the time of her filing of the administrative complaint against the respondent, held substantial stockholdings in L'NOR. She believed that L'NOR was defrauded by its President/General Manager, Edward Porter, and filed a complaint for estafa against the latter. Porter was convicted by the trial court but, upon appeal, was acquitted by the appellate court.

Respondent did not deny that he represented Porter during the preliminary investigation and trial of the criminal case. In his comment in the disbarment complaint against him, he justified his action by saying that they were "direct orders of management" and that there is "nothing improper for counsel to represent both the corporation and corporate officers at the same time they are being sued." (Records, Administrative Case No. 1819, p. 64)

It is of no moment now that Porter was acquitted of the estafa charge. Apparently, at that time, petitioner Ponce saw a conflict of interest situation. To her mind, the act of the respondent in appearing as counsel for Porter, who had allegedly swindled L'NOR, the interest of which he was duty bound to protect by virtue of the retainer contract, constituted grave misconduct and gross malpractice.

Atty. Legaspi did not deny that he aided the Porters in facilitating the incorporation of YRASPORT and that he himself was its corporate secretary. He emphasized, though, that due to L'NOR'S limited capitalization, YRASPORT was organized to complement L'NOR'S business and not to compete with the latter's undertakings.

Since the petitioner, however, was of the honest perception that YRASPORT was actually organized to appropriate for itself some of L'NOR's business, then we find that she had probable cause to file the disbarment suit.

We take exception to the respondent's comment that, assuming the petitioner's accusation to be true, "there is nothing in Philippine law which considers as unethical the formation of competitive corporations and neither can it be considered with evident bad faith and absolute lack of fidelity." (Records, Administrative Case No. 1819, p. 69)

The circumstances of the case do not depict a simple case of formation of competitive corporations. What the petitioner objects to is the fact that both the respondent lawyer and Porter are fiduciaries of L'NOr and are at the same time fiduciaries of YRASPORT, both of which are engaged in the same line of business.

True, at that time, the Corporation Law did not prohibit a director or any other person occupying a fiduciary position in the corporate hierarchy from engaging in a venture which competed with that of the corporation. But as a lawyer, Atty. Legaspi should have known that while some acts may appear to be permitted through sheer lack of statutory prohibition, these acts are nevertheless circumscribed upon ethical and moral considerations. And had Atty. Legaspi turned to American jurisprudence which then, as now, wielded a persuasive influence on our law on corporations, he would have known that it was unfair for him or for Porter, acting as fiduciary, to take advantage of an opportunity when the interest of the corporation justly calls for protection. (See Ballantine, Corporations, 204, Callaghan & Co., N. Y. [1946])

Parenthetically, this lapse in the old Corporation Law is now cured by sections 31 and 34 of the Corporation Code which provide:

Sec. 31. Liability of directors, trustees or officers. — Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall he liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.

When a director, trustee or officer attempts to acquire or acquires, in violation of his duty, any interest adverse to the corporation in respect of any matter which has been reposed in him in confidence, as to which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a trustee for the corporation and must account for the profits which otherwise have accrued to the corporation.

Sec. 34. Disloyalty of a director. — Where a director, by virtue of his office, acquires for himself a business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of such corporation, he must account to the latter for all such profits by refunding the same, unless his act has been ratified by a vote of the stockholders owning or representing at least two-thirds (2/3) of the outstanding capital stock. This provision shall be applicable, notwithstanding the fact that the director risked his own funds in the venture.

The Court finds it unnecessary to discuss all the other charges imputed to the respondent lawyer in the disbarment complaint. From the foregoing discussion, we have sufficient basis to declare that the petitioner had probable cause in filing the administrative case against Atty. Legaspi. Facts and circumstances existed which excited belief in Mrs. Ponce's mind that the respondent indeed committed unethical acts which warranted the imposition of administrative sanctions. Whether or not the petitioner's perception of these facts and circumstances is actually correct is irrelevant to our inquiry, the only issue being whether or not the petitioner had probable cause in filing the complaint.

The above discussion should not be construed as a re-opening of the disbarment proceeding against Atty. Legaspi. References to the complaint for disbarment and the respondent's comment thereto are made only for the purpose of determining the existence of probable cause.

Since we adjudge that petitioner Ponce was moved by probable cause, we need not anymore ascertain whether or not the petitioner acted with malice in filing the complaint. The existence of

probable cause alone, regardless of considerations of malice, is sufficient to defeat the charge of malicious prosecution.

The respondent court treated Atty. Legaspi's complaint as one for damages arising from libel and applied the test of bona fides, citing the case of Deles v. Aragona (27 SCRA 633 [1969]). This is incorrect.

In the first place, allegations and averments in pleadings are absolutely privileged as long as they are relevant or pertinent to the issues (See Montenegro v. Medina, 73 Phil. 602 [1942]). The test of good faith applies only to a qualified privileged communication. Had the respondent court studied the Deles case more closely, it would have traced the "bona fides" test to the case of U.S. v. Bustos, (37 Phil. 731 [1918]). In the latter case, the Court was referring to a qualified privileged communication when it formulated the "bona fides" test.

Moreover, the test to break through the protective barrier of an absolutely privileged communication is not "bona fides" but relevance. In the present case, Atty. Legaspi's complaint nowhere alleged that the statements made by the petitioner were irrelevant. Thus, we find that the petitioner's complaint for disbarment is still covered by the privilege and may not be the basis of a damage suit arising from libel.

We disagree with the findings of the two lower courts that it was the petitioner who distributed copies of the complaint for disbarment to Atty. Legaspi's clients. It should be noted that Atty. Legaspi did not even present these alleged clients in court to testify to the source of these copies. Considering that a complaint for disbarment becomes of public record once it is filed with the Court, then the petitioner may not be pinpointed as the sole and indisputable source of the copies received by the respondent's clients.

Atty. Legaspi may have suffered injury as a consequence of the disbarment proceedings. But the adverse result of an action does not per se make the action wrongful and subject the actor to make payment of damages for the law could not have meant to impose a penalty on the right to litigate (Saba v. Court of Appeals, 189 SCRA 50 [1990], citing Rubio v. Court of Appeals, 141 SCRA 488 [1986]; see also Salao v. Salao, 70 SCRA 65 [1976] and Ramos v. Ramos, 61 SCRA 284 [1974], citing Barreto v. Arevalo, 99 Phil. 771 [1956]). One who exercises his rights does no injury. (Saba v. Court of Appeals, supra, citing Auyong Hian v. Court of Tax Appeals, 59 SCRA 110 [1974]). If damage results from a person's exercising his legal rights, it is damnum absque injuria. [Id.]

WHEREFORE, the petition is hereby GRANTED. The decision of the respondent Court of Appeals is SET ASIDE and REVERSED.

SO ORDERED.

Feliciano, Bidin and Romero, JJ., concur.

Davide, Jr., J., took no part.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSupreme Court

Manila

SECOND DIVISION

EMILIA R. HERNANDEZ,

Complainant,

- versus -

ATTY. VENANCIO B. PADILLA,

A.C. No. 9387 (Formerly CBD Case No. 05-1562)

Present:

CARPIO, J., Chairperson,

BRION,

PEREZ,

SERENO, and

REYES, JJ.

Promulgated:

June 20, 2012

Respondent.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

R E S O L U T I O N

SERENO, J.:

This is a disbarment case filed by Emilia Hernandez (complainant) against her lawyer, Atty. Venancio B. Padilla (respondent) of Padilla Padilla Bautista Law Offices, for his alleged negligence in the handling of her case.

The records disclose that complainant and her husband were the respondents in an ejectment case filed against them with the Regional Trial Court of Manila (RTC).

In a Decision[1] dated 28 June 2002, penned by Judge Rosmari D. Carandang (Judge Carandang), the RTC ordered that the Deed of Sale executed in favor of complainant be cancelled; and that the latter pay the complainant therein, Elisa Duigan (Duigan), attorney’s fees and moral damages.

Complainant and her husband filed their Notice of Appeal with the RTC. Thereafter, the Court of Appeals (CA) ordered them to file their Appellants’ Brief. They chose respondent to represent them in the case. On their behalf, he filed a Memorandum on Appeal instead of an Appellants’ Brief. Thus, Duigan filed a Motion to Dismiss the Appeal. The CA granted the Motion in a Resolution[2] dated 16 December 2003.

No Motion for Reconsideration (MR) of the Resolution dismissing the appeal was filed by the couple. Complainant claims that because respondent ignored the Resolution, he acted with “deceit, unfaithfulness amounting to malpractice of law.”[3] Complainant and her husband failed to file an appeal, because respondent

http://sc.judiciary.gov.ph/jurisprudence/2012/june2012/9387.htm#_ftn3



never informed them of the adverse decision. Complainant further claims that she asked respondent “several times” about the status of the appeal, but “despite inquiries he deliberately withheld response [sic],” to the damage and prejudice of the spouses.[4]

The Resolution became final and executory on 8 January 2004. Complainant was informed of the Resolution sometime in July 2005, when the Sheriff of the RTC came to her house and informed her of the Resolution.

On 9 September 2005, complainant filed an Affidavit of Complaint[5] with the Committee on Bar Discipline of the Integrated Bar of the Philippines (IBP), seeking the disbarment of respondent on the following grounds: deceit, malpractice, and grave misconduct. Complainant prays for moral damages in the amount of ₱350,000.

Through an Order[6] dated 12 September 2005, Director of Bar Discipline Rogelio A. Vinluan ordered respondent to submit an answer to the Complaint. In his Counter-Affidavit/Answer,[7] respondent prayed for the outright dismissal of the Complaint.

Respondent explained that he was not the lawyer of complainant. He averred that prior to the mandatory conference set by the IBP on 13 December 2005, he had never met complainant, because it was her husband who had personally transacted with him. According to respondent, the husband “despondently pleaded to me to prepare a Memorandum on Appeal because according to him the period given by the CA was to lapse within two or three days.”[8] Thus, respondent claims that he filed a Memorandum on Appeal because he honestly believed that “it is this pleading which was required.”[9]

Before filing the Memorandum, respondent advised complainant’s husband to settle the case. The latter allegedly “gestured approval of the advice.”[10]

After the husband of complainant picked up the Memorandum for filing, respondent never saw or heard from him again and thus assumed that the husband heeded his advice and settled the case. When respondent received an Order from the CA requiring him to file a comment on the Motion to Dismiss filed








by Duigan, he “instructed his office staff to contact Mr. Hernandez thru available means of communication, but to no avail.”[11] Thus, when complainant’s husband went to the office of respondent to tell the latter that the Sheriff of the RTC had informed complainant of the CA’s Resolution dismissing the case, respondent was just as surprised. The lawyer exclaimed, “KALA KO BA NAKIPAG AREGLO NA KAYO.”[12]

In his 5 January 2009 Report,[13] IBP Investigating Commissioner Leland R. Villadolid, Jr. found that respondent violated Canons 5, 17, and 18 of the Code of Professional Responsibility (the Code). He recommended that respondent be suspended from practicing law from 3 to 6 months.

The board of governors of the IBP issued Resolution No. XIX-2010-452 on 28 August 2010. Therein, they resolved to adopt and approve the Report and Recommendation of the Investigating Commissioner. Respondent was suspended from the practice of law for six months.

Respondent filed a Motion for Reconsideration.[14] He prayed for the relaxation of the application of the Canons of the Code. On 14 January 2012, the IBP board of governors passed Resolution No. XX-2012-17[15] partly granting his Motion and reducing the penalty imposed to one-month suspension from the practice of law.

Pursuant to Rule 139-B of the Rules of Court, acting Director for Bar Discipline Dennis A.B. Funa, through a letter[16] addressed to then Chief Justice Renato C. Corona, transmitted the documents pertaining to the disbarment Complaint against respondent.

We adopt the factual findings of the board of governors of the IBP. This Court, however, disagrees with its Decision to reduce the penalty to one-month suspension. We thus affirm the six-month suspension the Board originally imposed in its 28 August 2010 Resolution.

Respondent insists that he had never met complainant prior to the mandatory conference set for the disbarment Complaint she filed against him. However, a perusal of the Memorandum of Appeal filed in the appellate court







revealed that he had signed as counsel for the defendant-appellants therein, including complainant and her husband.[17] The pleading starts with the following sentence: “DEFENDANT[S]-APPELLANTS, by counsel, unto this Honorable Court submit the Memorandum and further allege that: x x x.”[18]Nowhere does the document say that it was filed only on behalf of complainant’s husband.

It is further claimed by respondent that the relation created between him and complainant’s husband cannot be treated as a “client-lawyer” relationship, viz:

It is no more than a client needing a legal document and had it prepared by a lawyer for a fee. Under the factual milieu and circumstances, it could not be said that a client entrusted to a lawyer handling and prosecution of his case that calls for the strict

application of the Code; x x x[19]

As proof that none of them ever intended to enter into a lawyer-client relationship, he also alleges that complainant’s husband never contacted him after the filing of the Memorandum of Appeal. According to respondent, this behavior was “very unusual if he really believed that he engaged” the former’s services.[20]

Complainant pointed out in her Reply[21] that respondent was her lawyer, because he accepted her case and an acceptance fee in the amount of ₱7,000.

According to respondent, however, “[C]ontrary to the complainant’s claim that he charged ₱7,000 as acceptance fee,” “the fee was only for the preparation of the pleading which is even low for a Memorandum of Appeal: x x x.”[22]

Acceptance of money from a client establishes an attorney-client relationship and gives rise to the duty of fidelity to the client’s cause.[23] Once a lawyer agrees to handle a case, it is that lawyer’s duty to serve the client with competence and diligence.[24] Respondent has failed to fulfill this duty.

According to respondent, he merely drafted the pleading that complainant’s husband asked from him. Respondent also claims that he filed a Memorandum of









Appeal, because he “honestly believed” that this was the pleading required, based on what complainant’s husband said.

The IBP Investigating Commissioner’s observation on this matter, in the 5 January 2009 Report, is correct. Regardless of the particular pleading his client may have believed to be necessary, it was respondent’s duty to know the proper pleading to be filed in appeals from RTC decisions, viz:

Having seen the Decision dated 18 June 2002 of the trial court, respondent should have known that the mode of appeal to the Court of Appeals for said Decision is by ordinary appeal under Section 2(a) Rule 41 of the1997 Revised Rules of Civil Procedure. In all such cases, Rule 44 of the said Rules applies.[25]

When the RTC ruled against complainant and her husband, they filed a Notice of Appeal. Consequently, what should apply is the rule on ordinary appealed cases or Rule 44 of the Rules on Civil Procedure. Rule 44 requires that the appellant’s brief be filed after the records of the case have been elevated to the CA. Respondent, as a litigator, was expected to know this procedure. Canon 5 of the Code reads:

CANON 5 — A lawyer shall keep abreast of legal developments, participate in continuing legal education programs, support efforts to achieve high standards in law schools as well as in the practical training of law students and assist in disseminating information regarding the law and jurisprudence.

The obligations of lawyers as a consequence of their Canon 5 duty have been expounded in Dulalia, Jr. v. Cruz,[26] to wit:

It must be emphasized that the primary duty of lawyers is to obey the laws of the land and promote respect for the law and legal processes. They are expected to be in the forefront in the observance and maintenance of the rule of law. This duty carries with it the obligation to be well-informed of the existing laws and to keep abreast with legal developments, recent enactments and jurisprudence. It is imperative that they be conversant with basic legal principles. Unless they faithfully comply with such duty, they may not be able to discharge competently and diligently their obligations as members of

the bar. Worse, they may become susceptible to committing mistakes.



In his MR, respondent begged for the consideration of the IBP, claiming that the reason for his failure to file the proper pleading was that he “did not have enough time to acquaint himself thoroughly with the factual milieu of the case.” The IBP reconsidered and thereafter significantly reduced the penalty originally imposed.

Respondent’s plea for leniency should not have been granted.

The supposed lack of time given to respondent to acquaint him with the facts of the case does not excuse his negligence.

Rule 18.02 of the Code provides that a lawyer shall not handle any legal matter without adequate preparation. While it is true that respondent was not complainant’s lawyer from the trial to the appellate court stage, this fact did not excuse him from his duty to diligently study a case he had agreed to handle. If he felt he did not have enough time to study the pertinent matters involved, as he was approached by complainant’s husband only two days before the expiration of the period for filing the Appellant’s Brief, respondent should have filed a motion for extension of time to file the proper pleading instead of whatever pleading he could come up with, just to “beat the deadline set by the Court of Appeals.”[27]

Moreover, respondent does not deny that he was given notice of the fact that he filed the wrong pleading. However, instead of explaining his side by filing a comment, as ordered by the appellate court, he chose to ignore the CA’s Order. He claims that he was under the presumption that complainant and her husband had already settled the case, because he had not heard from the husband since the filing of the latter’s Memorandum of Appeal.

This explanation does not excuse respondent’s actions.

First of all, there were several remedies that respondent could have availed himself of, from the moment he received the Notice from the CA to the moment he received the disbarment Complaint filed against him. But because of his negligence, he chose to sit on the case and do nothing.


Second, respondent, as counsel, had the duty to inform his clients of the status of their case. His failure to do so amounted to a violation of Rule 18.04 of the Code, which reads:

18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the client’s request for information.

If it were true that all attempts to contact his client proved futile, the least respondent could have done was to inform the CA by filing a Notice of Withdrawal of Appearance as counsel. He could have thus explained why he was no longer the counsel of complainant and her husband in the case and informed the court that he could no longer contact them.[28] His failure to take this measure proves his negligence.

Lastly, the failure of respondent to file the proper pleading and a comment on Duigan’s Motion to Dismiss is negligence on his part. Under 18.03 of the Code, a lawyer is liable for negligence in handling the client’s case, viz:

Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable.

Lawyers should not neglect legal matters entrusted to them, otherwise their negligence in fulfilling their duty would render them liable for disciplinary action.[29]

Respondent has failed to live up to his duties as a lawyer. When a lawyer violates his duties to his client, he engages in unethical and unprofessional conduct for which he should be held accountable.[30]

WHEREFORE, respondent Atty. Venancio Padilla is found guilty of violating Rules 18.02, 18.03, 18.04, as well as Canon 5 of the Code of Professional Responsibility. Hence, he is SUSPENDED from the practice of law for SIX (6) MONTHS and STERNLY WARNED that a repetition of the same or a similar offense will be dealt with more severely.




Let copies of this Resolution be entered into the personal records of respondent as a member of the bar and furnished to the Bar Confidant, the Integrated Bar of the Philippines, and the Court Administrator for circulation to all courts of the country for their information and guidance.

No costs.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIOAssociate Justice

Chairperson

ARTURO D. BRION JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

BIENVENIDO L. REYES

Associate Justice

[1] Rollo, Vol. I, pp. 14-24.[2] Id. at 43-44.[3] Id. at 1.[4] Id.[5] Id. at 1-2.[6] Id. at 45.[7] Id. at 52-56.[8] Id at 53.[9] Id at 54.[10] Id.[11] Id.[12] Id.[13] Rollo, Vol. II, pp. 2-15.[14] Id. at 16-20.[15] Rollo, Vol. II (page not indicated).[16] Id. at.[17] See rollo, Vol. I, p. 39.

http://sc.judiciary.gov.ph/jurisprudence/2012/june2012/9387.htm#_ftnref17

















[18] Id. at 25.[19] Rollo, Vol. II, p. 18.[20] Id at 19.[21] Rollo, Vol. I, pp. 76-77.[22] Rollo, Vol. II, p. 18. [23] Fernandez v. Atty. Cabrera, 463 Phil. 352 (2003).[24] CODE OF PROFESSIONAL RESPONSIBILITY, Canon 18.[25] Rollo, Vol. II, pp. 9-10[26] A.C. No. 6854, 27 April 2007, 522 SCRA 244, 255 citing Santiago v. Rafanan, A.C. No. 6252, 483 Phil. 94, 105(2004).[27] Rollo, Vol. II, p. 18.[28] “Sec. 26. Change of attorneys. - An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party.” (Rules of Court, Rule 138, Sec. 26)[29] Perea v. Atty. Almadro, 447 Phil. 434 (2003).[30] Fernandez, supra note 23.














FIRST DIVISION

CARLITO P. CARANDANG, A.C. No. 7813 Complainant, Present: PUNO, C.J., Chairperson, CARPIO, CORONA, - versus - LEONARDO-DE CASTRO, and BERSAMIN, JJ. ATTY. GILBERT S. OBMINA, Promulgated: Respondent. April 21, 2009

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D E C I S I O N

CARPIO, J.:

The Case

This is a complaint filed by Carlito P. Carandang (Carandang) against Atty. Gilbert S. Obmina (Atty. Obmina). Atty. Obmina was counsel for Carandang in Civil Case No. B-5109 entitled “Sps. Emilia A. Carandang and Carlito Carandang v. Ernesto Alzona.” Carandang brought suit for Atty. Obmina’s failure to inform Carandang of the adverse decision in Civil Case No. B-5109 and for failure to appeal the decision.

The Facts The facts of CBD Case No. 06-1869 in the Report and Recommendation of the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) read as follows:

Complainant’s Sworn Statement is hereto reproduced as follows:

SWORN STATEMENT

Ako si CARLITO P. CARANDANG, nasa wastong gulang, may asawa’t mga anak, at nakatira sa 5450 Alberto Apt., St. Francis Homes, Halang Biñan, Laguna.

Na ako ay may kasong isinampa kay ERNESTO T. ALSONA tungkol sa aming bahay at lupa, at isinampa sa BIÑAN RTC BRANCH 25, CIVIL CASE NO. B-5109.

Na ang naturang kaso ay natapos at nadisisyunan noong Enero 28, 2000 at ako ay natalo sa naturang kaso.

Na ang aking naging abogado ay si ATTY. GILBERT S. OBMINA, tubong Quezon at bilang kababayan ako ay nagtiwala sa kanyang kakayahan upang maipagtanggol sa naturang kaso, ngunit taliwas sa aking pananalig sa kanya ang nasabing kaso ay napabayaan hanggang sa magkaroon ng desisyon ang korte na kunin ang aking lupa’t bahay, sa madali’t sabi kami ay natalo ng hindi ko man lang nalalaman at huli na ang lahat ng malaman ko dahil hindi na kami pwedeng umapila.

Na nalaman ko lang na may desisyon na pala ang korte pagkatapos ng anim na buwan. Ang aking anak na si ROSEMARIE ay nagpunta sa BIÑAN, sa RTC ay binati at tinatanong kung saan kayo nakatira at ang sagot [ng] aking anak

BAKIT? At ang sagot naman [ng] taga RTC, HINDI MO BA ALAM NA ANG INYONG KASO AY TAPOS NA. Nang marinig yon ay umuwi na siya at sinabi agad sa akin. Tapos na daw yung kaso [ng] ating bahay at ako ay pumunta sa opisina ni ATTY. OBMINA at aking tinanong “BAKIT DI MO SINABI SA AKIN NA TAPOS NA ANG KASO?” At ang sagot niya sa akin “AY WALA KANG IBABAYAD SA ABOGADO DAHIL WALA KANG PERA PANG-APILA” dahil sa sagot sa akin ay para akong nawalan [ng] pag-asa sa kaso.

Lumapit ako sa Malacañang at binigay yung sulat pero doon ay aking nakausap yung isang abogado at ako’y kanyang pinakinggan at aking inabot ang papeles at aking pinakita at ang sabi ay hindi na pwede dahil anim na buwan na [nang] lumipas ang kaso. Kaya aking sinabi sa ATTY. ng Malacañang na hindi sinabi sa akin agad ni ATTY. OBMINA na may order na pala ang kaso.

Kaya ang ginawang paraan ay binigyan ako ng sulat para ibigay sa IBP, at nang mabasa ang sulat ay sinabi sa akin na doon sa SAN PABLO ang hearing, at tinanong ako kung nasaan ang ATTORNEY’S WITHDRAWAL NYO? Ang sagot ko ay “WALA HO,” kaya inutusan ako na kunin ang ATTORNEY’S WITHDRAWAL at agad akong nagpunta sa opisina ni ATTY. OBMINA at tinanong ko sa sekretarya niya kung nasaan si ATTY. OBMINA ang sagot sa akin ay nasa AMERICA NA! Kaya’t aking tinanong kung sinong pwede magbigay sa akin ng attorney’s withdrawal at ang sabi ay yung anak nya na si CARMELITSA OBMINA. Bumalik ako noong araw ng Biyernes at aking nakuha, pero hindi na ako nakabalik sa IBP dahil noong araw na iyon ay hindi ko na kayang maglakad, kaya hindi na natuloy ang hearing sa SAN PABLO.

CARLITO P. CARANDANGAffiantCTC No. 21185732Issued on March 7, 2006At Biñan, Laguna

On November 16, 2006, the Commission on Bar Discipline, through Rogelio A. Vinluan, the then Director for Bar Discipline (now the incumbent Executive Vice President of the Integrated Bar of the Philippines), issued an Order directing respondent Atty. Gilbert S. Obmina to submit his Answer, duly verified, in six (6) copies, and furnish the complainant with a copy thereof, within fifteen (15) days from receipt of the Order.

On December 12, 2006, this Commission was in receipt of a Manifestation dated December 11, 2006 filed by a certain Atty. Ma. Carmencita C. Obmina-Muaña. Allegedly, she is the daughter of respondent Atty. Gilbert S. Obmina. She further alleged that [her] father is already a permanent resident of the United States of America since March 2001 and had already retired from the practice of law.

That on February 20, 2007, undersigned Commissioner [Jose I. De La Rama, Jr.] scheduled the Mandatory Conference/Hearing of the case on March 20, 2007 at 9:30 a.m.

On March 19, 2007, Atty. Ma. Carmencita C. Obmina-Muaña filed a Manifestation and Motion reiterating her earlier Manifestation that the respondent, Atty. Gilbert S. Obmina is already a permanent resident of the United States for the last six (6) years and likewise, she reiterated her request that summons be served on her father thru extraterritorial service. Atty. Muaña likewise requested the cancellation of the mandatory conference and resetting of the same on April 10, 2007.

On the scheduled Mandatory Conference on March 20, 2007, complainant Carlito P. Carandang appeared. The undersigned Commissioner directed Atty. Carmelita Muaña to appear before this Commission on May 18, 2007 at 2:00 p.m. and to bring with her the alleged withdrawal of appearance filed by her father and to bring proof that her father is now really a permanent resident of the United States of America.

That on May 18, 2007, Atty. Muaña again filed a Manifestation and Motion informing this Honorable Commission that she cannot possibly appear for the reason that she is the legal counsel of a candidate in Muntinlupa City and that the canvassing of the election results is not yet finished. She likewise submitted copies of her father’s Passport and US Permanent Residence Card. That with respect [to] the Withdrawal of Appearance, Atty. Muaña alleged that copies of the same were all given to complainant Carlito P. Carandang.

That an Order dated May 18, 2007 was issued by the undersigned Commissioner granting the aforesaid Manifestation and Motion. Atty. Muaña was likewise directed to appear before this Office on June 22, 2007 at 2:00 p.m.

On June 22, 2007, in the supposed Mandatory Conference, Atty. Carmencita Obmina Muaña appeared. Likewise presented was Mr. Carlito Carandang who is the complainant against Atty. Gilbert Obmina. In the interest of justice, Atty. Muaña was given a period of ten (10) days within which to file a verified answer. The Mandatory Conference was set on August 3, 2007 at 3:00 o’clock in the afternoon.

On June 29, 2007, Atty. Muaña filed a Motion for Extension of Time to file Answer.

On July 3, 2007, this Commission is in receipt of the verified Answer filed by respondent Atty. Gilbert S. Obmina.

On August 3, 2007, during the Mandatory Conference, complainant Carlito Carandang appeared. Atty. Muaña appeared in behalf of [her] father. After making some admissions, stipulations and some clarificatory matters, the parties were directed to submit their verified position papers within ten (10) days. Thereafter, the case will be submitted on report and recommendation.

On August 10, 2007, complainant, by himself, filed an Urgent Motion for Extension of Time to File Position Paper. Likewise, respondent, through Atty. Muaña, filed a Motion for Extension of Time to File Position Paper on August 13, 2007.

On September 3, 2007, the Commission on Bar Discipline received copy of the Respondent’s Memorandum.

On September 12, 2007, this Commission received copy of complainant’s Position Paper.[1]

The IBP’s Report and Recommendation

In a Report[2] dated 2 October 2007, IBP Commissioner for Bar Discipline

Jose I. De La Rama, Jr. (Commissioner De La Rama) found that Atty. Obmina was still counsel of record for complainant at the time the decision was rendered and up to the time of the issuance of the writ of execution. Atty. Obmina received the Decision dated 28 January 2000 on 1 March 2000. Atty. Carmencita Obmina-Muaña manifested in Court that her father has been living in the United States of America since 2001. There is nothing on record that will show that Atty. Obmina notified complainant in any manner about the decision.

Although Commissioner De La Rama observed that complainant is partly to

blame for his loss for failure to maintain contact with Atty. Obmina and to inform himself of the progress of his case, Commissioner De La Rama nonetheless

underscored the duty of Atty. Obmina to notify his client as to what happened to his case. Thus:

One cannot escape the fact that the complainant himself failed to communicate with his counsel for quite sometime. There is nothing in the complainant’s Sworn Statement that would show that he regularly visited the office of the respondent, Atty. Gilbert S. Obmina. Complainant is partly to blame for his loss and it should not be attributed solely to the respondent.

The Supreme Court held that “clients should maintain contact with their counsel from time to time and inform themselves of the progress of their case, thereby exercising that standard of care which an ordinary prudent man bestows upon his business (Leonardo vs. S.T. Best, Inc., 422 SCRA 347)

However, the respondent who has in his possession the complete files and address of the complainant, should have exerted efforts to even notify Mr. Carandang as to what happened to his case. Whether the decision is adverse [to] or in favor of his client, respondent is duty bound to notify the clients pursuant to Canon 18 of the Code of Professional Ethics which provides that “a lawyer shall serve his client with competence and diligence.” Further under Rule 18.03 of Canon 18, “a lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable.” Lastly, under Rule 18.04, “a lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to client’s request for information.”

That as a result of the respondent’s failure to notify the complainant, the latter lost the case leading to his eviction.

In the case of Mijares vs. Romana 425 SCRA 577, the Supreme Court held that “as an officer of the court, it is the duty of an attorney to inform his client of whatever information he may have acquired which it is important that the client should have knowledge of.” In another case, the Supreme Court held that “respondent’s failure to perfect an appeal within the prescribed period constitutes negligence and malpractice proscribed by the Code of Professional Responsibility” (Cheng vs. Agravante, 426 SCRA 42).

WHEREFORE, in view of the foregoing, with head bowed in sadness, it is respectfully recommended that Atty. Gilbert S. Obmina be suspended from the practice of law for a period of one (1) year.

Although the said respondent is reportedly in the United States of America and accordingly retired from the practice of law, this Commission will not close its eyes on the negligence that he has committed while in the active practice.

SO ORDERED.[3] (Emphasis in the original)

In a Resolution[4] dated 19 October 2007, the IBP Board of Governors adopted and approved the Report and Recommendation of Commissioner De La Rama. The Office of the Bar Confidant received the notice of the Resolution and the records of the case on 14 March 2008.

The Ruling of the Court

We sustain the findings of the IBP and adopt its recommendations. Atty. Obmina violated Canon 18, and Rules 18.03 and 18.04 of the Code of Professional Responsibility.

Atty. Obmina Failed to Serve Complainantwith Competence and Diligence

Canon 18 states that “[a] lawyer shall serve his client with competence and diligence.” Rules 18.03 and 18.04 provide that “[a] lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable” and “[a] lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the client’s request for information.”

In his Memorandum, Atty. Obmina admitted that he was counsel for Carandang in Civil Case No. B-5109. Atty. Obmina blamed Carandang for the adverse decision in Civil Case No. B-5109 because Carandang did not tell him that there was a Compromise Agreement executed prior to Atty. Obmina’s filing of the complaint in Civil Case No. B-5109. Carandang, on the other hand, stated that Atty. Obmina made him believe that they would win the case. In fact, Carandang engaged the services of Atty. Obmina on a contingent basis. Carandang shall pay Atty. Obmina 40% of the sale proceeds of the property subject matter of the case. Atty. Obmina promised to notify Carandang as soon as the decision of the court was given.

Contrary to Atty. Obmina’s promise, there is no evidence on record that Atty. Obmina took the initiative to notify Carandang of the trial court’s adverse decision. Atty. Obmina again put Carandang at fault for failure to advance the appeal fee. Atty. Obmina’s version of Carandang’s confrontation with him was limited to this narrative:

Sometime in the year 2000, complainant went to respondent’s law office. He was fuming mad and was blaming respondent for having lost his case. He asked for the records of the case because according to him, he will refer the case to a certain Atty. Edgardo Salandanan. Respondent gave complainant the case file. Complainant did not return to pursue the appeal or at least had given an appeal fee to be paid to Court in order to perfect the appeal.[5]

Atty. Obmina’s futile efforts of shifting the blame on Carandang only serve to emphasize his failure to notify Carandang that the trial court already promulgated a decision in Civil Case No. B-5109 that was adverse to Carandang’s interests. Atty. Obmina cannot overlook the fact that Carandang learned about the promulgation of the decision not through Atty. Obmina himself, but through a chance visit to the trial court. Instead of letting Carandang know of the adverse decision himself, Atty. Obmina should have immediately contacted Carandang, explained the decision to him, and advised them on further steps that could be taken. It is obvious that Carandang lost his right to file an appeal because of Atty. Obmina’s inaction. Notwithstanding Atty. Obmina’s subsequent withdrawal as Carandang’s lawyer, Atty. Obmina was still counsel of record at the time the trial court promulgated the decision in Civil Case No. B-5109.

In Tolentino v. Mangapit, we stated that: As an officer of the court, it is the duty of an attorney to inform her client of whatever information she may have acquired which it is important that the client should have knowledge of. She should notify her client of any adverse decision to enable her client to decide whether to seek an appellate review thereof. Keeping the client informed of the developments of the case will minimize misunderstanding and [loss] of trust and confidence in the attorney.[6]

The relationship of lawyer-client being one of confidence, there is ever present the need for the lawyer to inform timely and adequately the client of important developments affecting the client’s case. The lawyer should not leave the client in the dark on how the lawyer is defending the client’s interests.[7]

The Court finds well-taken the recommendation of the IBP to suspend Atty. Gilbert S. Obmina from the practice of law for one year. In the cases of Credito v. Sabio[8] and Pineda v. Macapagal,[9] we imposed the same penalty upon attorneys who failed to update their clients on the status of their cases. Considering Atty. Obmina’s advanced age, such penalty serves the purpose of protecting the interest of the public and legal profession.

WHEREFORE, the Court AFFIRMS the resolution of the IBP Board of Governors approving and adopting the report and recommendation of the Investigating Commissioner. Accordingly, Atty. Gilbert S. Obmina is found GUILTY of violation of Canon 18 and of Rules 18.03 and 18.04 of the Code of Professional Responsibility. The Court SUSPENDS Atty. Gilbert S. Obmina from the practice of law for one year, and WARNS him that a repetition of the same or similar offense will be dealt with more severely.

Let copies of this Decision be furnished the Office of the Bar Confidant, to be appended to respondent’s personal record as attorney. Likewise, copies shall be furnished the Integrated Bar of the Philippines and all courts in the country for their information and guidance. SO ORDERED.

ANTONIO T. CARPIO Associate Justice

WE CONCUR:

REYNATO S. PUNO

Chief Justice

Chairperson

RENATO C. CORONA TERESITA J. LEONARDO-DE

CASTRO

Associate Justice Associate

Justice

LUCAS P. BERSAMIN

Associate Justice

[1] Rollo, pp. 125-129.[2] Id. at 125-135.[3] Id. at 133-135.[4] Id. at 124.[5] Id. at 49.[6] 209 Phil. 607, 611 (1983).[7] Mejares v. Atty. Romana, 469 Phil. 619 (2004).[8] A.C. No. 4920, 19 October 2005, 473 SCRA 301.[9] A.C. No. 6026, 29 November 2005, 476 SCRA 292.

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