1

ATTY.
CARMEN
LEONOR
M.
A.C. No. 5859
ALCANTARA,
VICENTE
P.
(Formerly CBD Case No.
MERCADO,
SEVERINO
P. 421)
MERCADO AND SPOUSES JESUS
AND ROSARIO MERCADO,
Present:
Complainants,
CORONA, C.J.,
CARPIO,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
- versus PERALTA,
BERSAMIN,
DEL CASTILLO,*
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SERENO, JJ.
ATTY. EDUARDO C. DE VERA,
Respondent.

Promulgated:

November 23, 2010

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
RESOLUTION
PER CURIAM:
For our review is the Resolution[1] of the Board of Governors of the
Integrated Bar of the Philippines (IBP) finding respondent Atty. Eduardo C.
De Vera liable for professional malpractice and gross misconduct and
recommending his disbarment.
The facts, as appreciated by the investigating commissioner,[2] are
undisputed.
The respondent is a member of the Bar and was the former counsel of
Rosario
P.
Mercado
in
a
civil
case
filed
in
1984
with
the Regional Trial Court of Davao City and an administrative case filed
before the Securities and Exchange Commission, Davao City Extension
Office.[3]
Pursuant to a favorable decision, a writ of execution pending appeal
was issued in favor of Rosario P. Mercado. Herein respondent, as her legal
counsel, garnished the bank deposits of the defendant, but did not turn over

the proceeds to Rosario. Rosario demanded that the respondent turn over
the proceeds of the garnishment, but the latter refused claiming that he had
paid part of the money to the judge while the balance was his, as attorneys
fees. Such refusal prompted Rosario to file an administrative case for
disbarment against the respondent.[4]
On March 23, 1993, the IBP Board of Governors promulgated a
Resolution holding the respondent guilty of infidelity in the custody and
handling of clients funds and recommending to the Court his one-year
suspension from the practice of law.[5]
Following the release of the aforesaid IBP Resolution, the respondent
filed a series of lawsuits against the Mercado family except George Mercado.
The respondent also instituted cases against the family corporation, the
corporations accountant and the judge who ruled against the reopening of
the case where respondent tried to collect the balance of his alleged fee
from Rosario. Later on, the respondent also filed cases against the chairman
and members of the IBP Board of Governors who voted to recommend his
suspension from the practice of law for one year. Complainants allege that
the respondent committed barratry, forum shopping, exploitation of family
problems, and use of intemperate language when he filed several frivolous
and unwarranted lawsuits against the complainants and their family
members, their lawyers, and the family corporation.[6] They maintain that
the primary purpose of the cases is to harass and to exact revenge for the
one-year suspension from the practice of law meted out by the IBP against
the respondent. Thus, they pray that the respondent be disbarred for
malpractice and gross misconduct under Section 27,[7] Rule 138 of the Rules
of Court.
In his defense the respondent basically offers a denial of the charges
against him.
He denies he has committed barratry by instigating or stirring up George
Mercado to file lawsuits against the complainants. He insists that the lawsuits
that he and George filed against the complainants were not harassment suits
but were in fact filed in good faith and were based on strong facts.[8]
Also, the respondent denies that he has engaged in forum shopping.
He argues that he was merely exhausting the remedies allowed by law and
that he was merely constrained to seek relief elsewhere by reason of the
denial of the trial court to reopen the civil case so he could justify his
attorneys fees.

Further, he denies that he had exploited the problems of his clients

family. He argues that the case that he and George Mercado filed against
the complainants arose from their perception of unlawful transgressions
committed by the latter for which they must be held accountable for the
public interest.
Finally, the respondent denies using any intemperate, vulgar, or
unprofessional language. On the contrary, he asserts that it was the
complainants who resorted to intemperate and vulgar language in accusing him
of extorting from Rosario shocking and unconscionable attorneys fees.[9]
After careful consideration of the records of this case and the parties
submissions, we find ourselves in agreement with the findings and
recommendation of the IBP Board of Governors.
It is worth stressing that the practice of law is not a right but a
privilege bestowed by the State upon those who show that they possess,
and continue to possess, the qualifications required by law for the
conferment of such privilege.[10] Membership in the bar is a privilege
burdened with conditions. A lawyer has the privilege and right to practice
law only during good behavior and can only be deprived of it for misconduct
ascertained and declared by judgment of the court after opportunity to be
heard has been afforded him. Without invading any constitutional privilege
or right, an attorneys right to practice law may be resolved by a proceeding
to suspend or disbar him, based on conduct rendering him unfit to hold a
license or to exercise the duties and responsibilities of an attorney. It must
be understood that the purpose of suspending or disbarring an attorney is to
remove from the profession a person whose misconduct has proved him
unfit to be entrusted with the duties and responsibilities belonging to an
office of an attorney, and thus to protect the public and those charged with
the
administration
of
justice,
rather
than
to
punish
the
[11]
[12]
attorney.
In Maligsa v. Cabanting,
we explained that the bar should
maintain a high standard of legal proficiency as well as of honesty and fair
dealing. A lawyer brings honor to the legal profession by faithfully
performing his duties to society, to the bar, to the courts and to his
clients. To this end a member of the legal profession should refrain from
doing any act which might lessen in any degree the confidence and trust
reposed by the public in the fidelity, honesty and integrity of the legal
profession. An attorney may be disbarred or suspended for any violation of
his oath or of his duties as an attorney and counselor, which include
statutory grounds enumerated in Section 27, Rule 138 of the Rules of
Court.

In the present case, the respondent committed professional

malpractice and gross misconduct particularly in his acts against his former
clients after the issuance of the IBP Resolution suspending him from the
practice of law for one year. In summary, the respondent filed against his
former client, her family members, the family corporation of his former
client, the Chairman and members of the Board of Governors of the IBP who
issued the said Resolution, the Regional Trial Court Judge in the case where
his former client received a favorable judgment, and the present counsel of
his former client, a total of twelve (12) different cases in various fora which
included the Securities and Exchange Commission; the Provincial
Prosecutors Office of Tagum, Davao; the Davao City Prosecutors Office; the
IBP-Commission on Bar Discipline; the Department of Agrarian Reform; and
the Supreme Court.[13]
In addition to the twelve (12) cases filed, the respondent also re-filed
cases which had previously been dismissed. The respondent filed six criminal
cases against members of the Mercado family separately docketed as I.S.
Nos. 97-135; 97-136; 97-137; 97-138; 97-139; and 97-140. With the
exception of I.S. No. 97-139, all the aforementioned cases are re-filing of
previously dismissed cases.[14]
Now, there is nothing ethically remiss in a lawyer who files numerous
cases in different fora, as long as he does so in good faith, in accordance
with the Rules, and without any ill-motive or purpose other than to achieve
justice and fairness. In the present case, however, we find that the barrage
of cases filed by the respondent against his former client and others close to
her was meant to overwhelm said client and to show her that the respondent
does not fold easily after he was meted a penalty of one year suspension
from the practice of law.
The nature of the cases filed by the respondent, the fact of re-filing
them after being dismissed, the timing of the filing of cases, the fact that the
respondent was in conspiracy with a renegade member of the complainants
family, the defendants named in the cases and the foul language used in the
pleadings and motions[15] all indicate that the respondent was acting beyond
the desire for justice and fairness. His act of filing a barrage of cases
appears to be an act of revenge and hate driven by anger and frustration
against his former client who filed the disciplinary complaint against him for
infidelity in the custody of a clients funds.
In the case of Prieto v. Corpuz,[16] the Court pronounced that it is
professionally irresponsible for a lawyer to file frivolous lawsuits. Thus, we
stated in Prieto,

Atty. Marcos V. Prieto must be sanctioned for filing this

unfounded complaint. Although no person should be penalized
for the exercise of the right to litigate, however, this right must
be exercised in good faith.[17]
As officers of the court, lawyers have a responsibility to
assist in the proper administration of justice. They do not
discharge this duty by filing frivolous petitions that only add to
the workload of the judiciary.
A lawyer is part of the machinery in the administration
of justice. Like the court itself, he is an instrument to advance
its ends the speedy, efficient, impartial, correct and
inexpensive adjudication of cases and the prompt satisfaction of
final judgments. A lawyer should not only help attain these
objectives but should likewise avoid any unethical or improper
practices that impede, obstruct or prevent their realization,
charged as he is with the primary task of assisting in the speedy
and efficient administration of justice.[18] Canon 12 of the Code
of Professional Responsibility promulgated on 21 June 1988 is
very explicit that lawyers must exert every effort and consider it
their duty to assist in the speedy and efficient administration of
justice.
Further, the respondent not only filed frivolous and unfounded lawsuits
that violated his duties as an officer of the court in aiding in the proper
administration of justice, but he did so against a former client to whom he
owes loyalty and fidelity. Canon 21 and Rule 21.02 of the Code of
Professional Responsibility[19] provides:
CANON 21 - A lawyer shall preserve the confidence and secrets
of his client even after the attorney-client relation is terminated.
Rule 21.02 A lawyer shall not, to the disadvantage of his client,
use information acquired in the course of employment, nor shall
he use the same to his own advantage or that of a third person,
unless the client with full knowledge of the circumstances
consents thereto.
The cases filed by the respondent against his former client involved
matters and information acquired by the respondent during the time when
he was still Rosarios counsel. Information as to the structure and operations
of the family corporation, private documents, and other pertinent facts and
figures used as basis or in support of the cases filed by the respondent in
pursuit of his malicious motives were all acquired through the attorney-client
relationship with herein complainants. Such act is in direct violation of the
Canons and will not be tolerated by the Court.

WHEREFORE,
respondent
Atty.
Eduardo
C.
De
Vera
is
hereby DISBARRED from the practice of law effective immediately upon his
receipt of this Resolution.
Let copies of this Resolution be furnished the Bar Confidant to be spread
on the records of the respondent; the Integrated Bar of the Philippines for
distribution to all its chapters; and the Office of the Court Administrator for
dissemination to all courts throughout the country.
SO ORDERED.
A.C. No. 5108

May 26, 2005

ROSA F. MERCADO, complainant,

vs.
ATTY. JULITO D. VITRIOLO, respondent.
DECISION
PUNO, J.:
Rosa F. Mercado filed the instant administrative complaint against Atty.
Julito D. Vitriolo, seeking his disbarment from the practice of law. The
complainant alleged that respondent maliciously instituted a criminal case
for falsification of public document against her, a former client, based on
confidential information gained from their attorney-client relationship.
Let us first hearken to the facts.
Complainant is a Senior Education Program Specialist of the Standards
Development Division, Office of Programs and Standards while respondent is
a Deputy Executive Director IV of the Commission on Higher Education
(CHED).1
Complainant's husband filed Civil Case No. 40537 entitled "Ruben G.
Mercado v. Rosa C. Francisco," for annulment of their marriage with the
Regional Trial Court (RTC) of Pasig City. This annulment case had been
dismissed by the trial court, and the dismissal became final and executory
on July 15, 1992.2
In August 1992, Atty. Anastacio P. de Leon, counsel of complainant, died.
On February 7, 1994, respondent entered his appearance before the trial
court as collaborating counsel for complainant.3
On March 16, 1994, respondent filed his Notice of Substitution of
Counsel,4 informing the RTC of Pasig City that he has been appointed as
counsel for the complainant, in substitution of Atty. de Leon.
It also appears that on April 13, 1999, respondent filed a criminal action
against complainant before the Office of the City Prosecutor, Pasig City,
entitled "Atty. Julito Vitriolo, et al. v. Rose Dela Cruz F. Mercado," and
docketed as I.S. No. PSG 99-9823, for violation of Articles 171 and 172

(falsification of public document) of the Revised Penal Code.5 Respondent

alleged that complainant made false entries in the Certificates of Live Birth
of her children, Angelica and Katelyn Anne. More specifically, complainant
allegedly indicated in said Certificates of Live Birth that she is married to a
certain Ferdinand Fernandez, and that their marriage was solemnized on
April 11, 1979, when in truth, she is legally married to Ruben G. Mercado
and their marriage took place on April 11, 1978.
Complainant denied the accusations of respondent against her. She denied
using any other name than "Rosa F. Mercado." She also insisted that she has
gotten married only once, on April 11, 1978, to Ruben G. Mercado.
In addition, complainant Mercado cited other charges against respondent
that are pending before or decided upon by other tribunals (1) libel suit
before the Office of the City Prosecutor, Pasig City;6 (2) administrative case
for dishonesty, grave misconduct, conduct prejudicial to the best interest of
the service, pursuit of private business, vocation or profession without the
permission required by Civil Service rules and regulations, and violations of
the "Anti-Graft and Corrupt Practices Act," before the then Presidential
Commission Against Graft and Corruption;7 (3) complaint for dishonesty,
grave misconduct, and conduct prejudicial to the best interest of the service
before the Office of the Ombudsman, where he was found guilty of
misconduct and meted out the penalty of one month suspension without
pay;8 and, (4) the Information for violation of Section 7(b)(2) of Republic
Act No. 6713, as amended, otherwise known as the Code of Conduct and
Ethical Standards for Public Officials and Employees before the
Sandiganbayan.9
Complainant Mercado alleged that said criminal complaint for falsification of
public document (I.S. No. PSG 99-9823) disclosed confidential facts and
information relating to the civil case for annulment, then handled by
respondent Vitriolo as her counsel. This prompted complainant Mercado to
bring this action against respondent. She claims that, in filing the criminal
case for falsification, respondent is guilty of breaching their privileged and
confidential lawyer-client relationship, and should be disbarred.
Respondent filed his Comment/Motion to Dismiss on November 3, 1999
where he alleged that the complaint for disbarment was all hearsay,
misleading and irrelevant because all the allegations leveled against him are
subject of separate fact-finding bodies. Respondent claimed that the pending
cases against him are not grounds for disbarment, and that he is presumed
to be innocent until proven otherwise.10 He also states that the decision of
the Ombudsman finding him guilty of misconduct and imposing upon him the
penalty of suspension for one month without pay is on appeal with the Court
of Appeals. He adds that he was found guilty, only of simple misconduct,
which he committed in good faith.11
In addition, respondent maintains that his filing of the criminal complaint for
falsification of public documents against complainant does not violate the
rule on privileged communication between attorney and client because the
bases of the falsification case are two certificates of live birth which are
public documents and in no way connected with the confidence taken during
the engagement of respondent as counsel. According to respondent, the
complainant confided to him as then counsel only matters of facts relating to

the annulment case. Nothing was said about the alleged falsification of the
entries in the birth certificates of her two daughters. The birth certificates
are filed in the Records Division of CHED and are accessible to anyone.12
In a Resolution dated February 9, 2000, this Court referred the
administrative case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.13
The IBP Commission on Bar Discipline set two dates for hearing but
complainant failed to appear in both. Investigating Commissioner Rosalina R.
Datiles thus granted respondent's motion to file his memorandum, and the
case was submitted for resolution based on the pleadings submitted by the
parties.14
On June 21, 2003, the IBP Board of Governors approved the report of
investigating commissioner Datiles, finding the respondent guilty of violating
the rule on privileged communication between attorney and client, and
recommending his suspension from the practice of law for one (1) year.
On August 6, 2003, complainant, upon receiving a copy of the IBP report
and recommendation, wrote Chief Justice Hilario Davide, Jr., a letter of
desistance. She stated that after the passage of so many years, she has now
found forgiveness for those who have wronged her.
At the outset, we stress that we shall not inquire into the merits of the
various criminal and administrative cases filed against respondent. It is the
duty of the tribunals where these cases are pending to determine the guilt or
innocence of the respondent.
We also emphasize that the Court is not bound by any withdrawal of the
complaint or desistance by the complainant. The letter of complainant to the
Chief Justice imparting forgiveness upon respondent is inconsequential in
disbarment proceedings.
We now resolve whether respondent violated the rule on privileged
communication between attorney and client when he filed a criminal case for
falsification of public document against his former client.
A brief discussion of the nature of the relationship between attorney and
client and the rule on attorney-client privilege that is designed to protect
such relation is in order.
In engaging the services of an attorney, the client reposes on him special
powers of trust and confidence. Their relationship is strictly personal and
highly confidential and fiduciary. The relation is of such delicate, exacting
and confidential nature that is required by necessity and public
interest.15 Only by such confidentiality and protection will a person be
encouraged to repose his confidence in an attorney. The hypothesis is that
abstinence from seeking legal advice in a good cause is an evil which is fatal
to the administration of justice.16 Thus, the preservation and protection of
that relation will encourage a client to entrust his legal problems to an
attorney, which is of paramount importance to the administration of
justice.17 One rule adopted to serve this purpose is the attorney-client
privilege: an attorney is to keep inviolate his client's secrets or confidence

and not to abuse them.18 Thus, the duty of a lawyer to preserve his client's
secrets and confidence outlasts the termination of the attorney-client
relationship,19 and continues even after the client's death.20 It is the glory of
the legal profession that its fidelity to its client can be depended on, and that
a man may safely go to a lawyer and converse with him upon his rights or
supposed rights in any litigation with absolute assurance that the lawyer's
tongue is tied from ever disclosing it.21 With full disclosure of the facts of the
case by the client to his attorney, adequate legal representation will result in
the ascertainment and enforcement of rights or the prosecution or defense
of the client's cause.
Now, we go to the rule on attorney-client privilege. Dean Wigmore cites the
factors essential to establish the existence of the privilege, viz:
(1) Where legal advice of any kind is sought (2) from a professional
legal adviser in his capacity as such, (3) the communications relating
to that purpose, (4) made in confidence (5) by the client, (6) are at his
instance permanently protected (7) from disclosure by himself or by
the legal advisor, (8) except the protection be waived.22
In fine, the factors are as follows:
(1) There exists an attorney-client relationship, or a prospective attorneyclient relationship, and it is by reason of this relationship that the client
made the communication.
Matters disclosed by a prospective client to a lawyer are protected by the
rule on privileged communication even if the prospective client does not
thereafter retain the lawyer or the latter declines the employment.23 The
reason for this is to make the prospective client free to discuss whatever he
wishes with the lawyer without fear that what he tells the lawyer will be
divulged or used against him, and for the lawyer to be equally free to obtain
information from the prospective client.24
On the other hand, a communication from a (prospective) client to a lawyer
for some purpose other than on account of the (prospective) attorney-client
relation is not privileged. Instructive is the case of Pfleider v.
Palanca,25 where the client and his wife leased to their attorney a 1,328hectare agricultural land for a period of ten years. In their contract, the
parties agreed, among others, that a specified portion of the lease rentals
would be paid to the client-lessors, and the remainder would be delivered by
counsel-lessee to client's listed creditors. The client alleged that the list of
creditors which he had "confidentially" supplied counsel for the purpose of
carrying out the terms of payment contained in the lease contract was
disclosed by counsel, in violation of their lawyer-client relation, to parties
whose interests are adverse to those of the client. As the client himself,
however, states, in the execution of the terms of the aforesaid lease contract
between the parties, he furnished counsel with the "confidential" list of his
creditors. We ruled that this indicates that client delivered the list of his
creditors to counsel not because of the professional relation then existing
between them, but on account of the lease agreement. We then held that a
violation of the confidence that accompanied the delivery of that list would
partake more of a private and civil wrong than of a breach of the fidelity
owing from a lawyer to his client.

10

(2) The client made the communication in confidence.

The mere relation of attorney and client does not raise a presumption of
confidentiality.26 The client must intend the communication to be
confidential.27
A confidential communication refers to information transmitted by voluntary
act of disclosure between attorney and client in confidence and by means
which, so far as the client is aware, discloses the information to no third
person other than one reasonably necessary for the transmission of the
information or the accomplishment of the purpose for which it was given.28
Our jurisprudence on the matter rests on quiescent ground. Thus, a
compromise agreement prepared by a lawyer pursuant to the instruction of
his client and delivered to the opposing party,29 an offer and counter-offer
for settlement,30 or a document given by a client to his counsel not in his
professional capacity,31 are not privileged communications, the element of
confidentiality not being present.32
(3) The legal advice must be sought from the attorney in his professional
capacity.33
The communication made by a client to his attorney must not be
for mere information, but for the purpose of seeking legal advice
attorney as to his rights or obligations. The communication must
transmitted by a client to his attorney for the purpose of seeking
advice.34

intended
from his
have been
legal

If the client seeks an accounting service,35 or business or personal

assistance,36 and not legal advice, the privilege does not attach to a
communication disclosed for such purpose.
Applying all these rules to the case at bar, we hold that the evidence on
record fails to substantiate complainant's allegations. We note that
complainant did not even specify the alleged communication in confidence
disclosed by respondent. All her claims were couched in general terms and
lacked specificity. She contends that respondent violated the rule on
privileged communication when he instituted a criminal action against her for
falsification of public documents because the criminal complaint disclosed
facts relating to the civil case for annulment then handled by respondent.
She did not, however, spell out these facts which will determine the merit of
her complaint. The Court cannot be involved in a guessing game as to the
existence of facts which the complainant must prove.
Indeed, complainant failed to attend the hearings at the IBP. Without any
testimony from the complainant as to the specific confidential information
allegedly divulged by respondent without her consent, it is difficult, if not
impossible to determine if there was any violation of the rule on privileged
communication. Such confidential information is a crucial link in establishing
a breach of the rule on privileged communication between attorney and
client. It is not enough to merely assert the attorney-client privilege.37 The
burden of proving that the privilege applies is placed upon the party
asserting the privilege.38

11

IN VIEW WHEREOF, the complaint against respondent Atty. Julito D.

Vitriolo is hereby DISMISSED for lack of merit.
SO ORDERED.
Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
Tinga, J., out of the country.

A.C. No. 927 September 28, 1970

IN THE MATTER OF THE COMPLAINT FOR DISBARMENT OF
ATTORNEY POTENCIANO A. PALANCA. WILLIAM C.
PFLEIDER, complainant,
vs.
POTENCIANO A. PALANCA, respondent.
RESOLUTION

CASTRO, J.:
The respondent Atty. Potenciano A. Palanca was for sometime the legal
counsel of the complainant William C. Pfleider. According to the
complainant, he retained the legal services of Palanca from January 1966,
whereas the latter insists that the attorney-client relationship between
them began as early as in 1960.
At all events, the relations between the two must have attained such a
high level of mutual trust that on October 10, 1969, Pfleider and his wife
leased to Palanca a 1,328 hectare agricultural land in Hinobaan, Negros
Occidental, known as the Hacienda Asia, for a period of ten years. In their
contract, the parties agreed, among others, that a specified portion of the
lease rentals would be paid to Pfleider, and the remainder would be
delivered by Palanca to Pfleider's listed creditors.
The arrangement worked smoothly until October 14, 1969 when the
rupture came with the filing by Pfleider of a civil suit (civil case 9187 of
the CFI of Negros Occidental) against Palanca for rescission of the
contract of lease on the ground of alleged default in the payment of
rentals. In his answer to the complaint, Palanca averred full satisfaction
of his rental liabilities, and therefore contended that the lease should
continue. He also charged that he had already been dispossessed of
the hacienda by Pfleider and the latter's goons at gunpoint and
consequently had suffered tremendous financial losses.
With this history in, perspective, we shall now consider the administrative
charges of gross misconduct in office brought by Pfleider against Palanca.
The indictment consists of four counts.
First count. In regard to a criminal case for estafa filed in December 1965
by one Gregorio Uy Matiao against Pfleider, the latter instructed Palanca
to offer in settlement the sum of P10,000, payable in installments, to Uy

12

Matiao for the dismissal of the case. After sometime, Palanca reported to
Pfleider that the offer has been rejected. Finally in October 1969, Palanca
supposedly informed Pfleider that he had succeeded in negotiating the
dismissal of the estafa case by leaving the sum of P5,000 with the
Dumaguete City Court where the action was then pending. Sometime in
December 1969, however, Pfleider was the object of a warrant of arrest
in connection with the same estafa case. It turned out, charged the
complainant Pfleider, that Palanca had not deposited the sum of P5,000
with the Dumaguete City Court, let alone communicated to Uy Matiao his
earlier offer of settlement.
We have closely examined all the pleadings filed by the parties in this
case and the annexes thereto, and it is our view that the first charge is
devoid of merit. In support of his claim of alleged assurance made by
Palanca that theestafa case had already been terminated, Pfleinder relies
on certain letters written to him by Palanca. Our own reading of these
letters, however, belies his claim. They contain nothing which might
reasonably induce the complainant to believe that the criminal action
against him had been finally settled by his attorney. On the contrary, the
letters merely report a continuing attempt on the part of Palanca to
secure a fair bargain for Pfleider. The letter-report of October 10, 1969,
invoke by the complainant, states in no uncertain terms that "I am
bargaining this (referring to the estafa case) even for P8,000.00 and I
think they will agree. I'll finalize this and pay Tingyan on Tuesday. I have
already left in Dumaguete P5,000.00 to show them the color of our
money and I will bring the balance when I go there Tuesday."
Nothing in the above letter indicates that Palanca had deposited the sum
of P5,000 with the Dumaguete City Court. What he did state is that he
had left that sum in that City to enable their adversaries to see "the color
of our money." In this connection, the veracity of the certification by
Felicisimo T. Hilay, Dumaguete branch manager of RCPI, that he (Hilay)
had been holding the sum of P5,000 during the early part of October in
trust for Pfleider and his lawyer, has not been assailed by Pfleider.
If Pfleider was the object of a warrant of arrest in December 1969, no
substantial blame can be laid at the door of the respondent Palanca
inasmuch as the latter's services were implicitly terminated by Pfleider
when the latter sued his lawyer in October of the same year. While the
object of the suit is the rescission of the contract of lease between the
parties, the conflict of interest which pits one against the other became
incompatible with that mutual confidence and trust essential to every
lawyer-client relation. Moreover, Pfleider fails to dispute Palanca's claim
that on October 26, 1968, Pfleider refused to acknowledge receipt of a
certain letter and several motions for withdrawal, including Palanca's
withdrawal as counsel in the estafa case.
Second count. Palanca had fraudulently charged the sum of P5,000
(which he supposedly had left with the City Court in Dumaguete) to his
rental account with Pfleider as part payment of the lease rentals of the
Hacienda Asia.Third count. In the same statement of account, Palanca
falsely represented having paid, for the account of Pfleider, one Samuel

13

Guintos the sum of P866.50 when the latter would swear that he had
received only the sum of P86.50.
These two charges are anchored upon the same "Statement of
Disbursements" submitted by Palanca to Pfleider. It is our view that this
statement is but a memorandum or report of the expenses which Palanca
considered as chargeable to the account of Pfleider. By its very tentative
nature, it is subject to the examination and subsequent approval or
disapproval of Pfleider, and any and every error which it contains may be
brought to the attention of Palanca for rectification or adjustment. Viewed
in relation to the contract of lease between Pfleinder and Palanca, this
"statement" is but one aspect of the prestation required of Palanca by the
contract. Whatever breach he might have committed in regard to this
prestation would be but a civil or contractual wrong which does not affect
his office as a member of the Bar.
Final count. It is charged that the list of creditors which Pfleider had
"confidentially" supplied Palanca for the purpose of carrying out the terms
of payment contained in the lease contract was disclosed by Palanca, in
violation of their lawyer-client relation, to parties whose interests are
adverse to those of Pfleider.
As Pfleider himself, however, in the execution of the terms of the
aforesaid lease contract between the parties, complainant furnished
respondent with a confidential list of his creditors." This should indicate
that Pfleider delivered the list of his creditors to Palanca not because of
the professional relation then existing between them, but on account of
the lease agreement. A violation therefore of the confidence that
accompanied the delivery of that list would partake more of a private and
civil wrong than of a breach of the fidelity owing from a lawyer to his
client. Moreover, Pfleider fails to controvert Palanca's claim that there is
no such thing as a "confidential" list of creditors and that the list of
creditors referred to by Pfleider is the same list which forms part of the
pleadings in civil case 9187 (the action for rescission of the lease
contract) now, pending between the complainant and the respondent
lawyer, and therefore is embraced within the category of public records
open to the perusal of persons properly interested therein.
In sum, we are satisfied, and we so hold, that nothing in written
complaint for disbarment against Palanca and in his reply to Palanca's
answer supports a prima facie finding of such misconduct in office by
Palanca as would warrant further proceedings in this case.
ACCORDINGLY, the complaint is hereby dismissed.
Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Fernando, Teehankee,
Barredo, Villamor and Makasiar, JJ., concur.
Zaldivar, J., took no part.
Concepcion, C.J., is on leave.

14

G.R. No. L-961

September 21, 1949

BLANDINA GAMBOA HILADO, petitioner,

vs.
JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB ASSAD
and SELIM JACOB ASSAD,respondents.
Delgado, Dizon and Flores for petitioner.
Vicente J. Francisco for respondents.
TUASON, J.:
It appears that on April 23, 1945, Blandina Gamboa Hilado brought an
action against Selim Jacob Assad to annul the sale of several houses and
lot executed during the Japanese occupation by Mrs. Hilado's now
deceased husband.
On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer on
behalf of the defendant; and on June 15, Attorneys Delgado, Dizon,
Flores and Rodrigo registered their appearance as counsel for the
plaintiff. On October 5, these attorneys filed an amended complaint by
including Jacob Assad as party defendant.
On January 28, 1946, Attorney Francisco entered his appearance as
attorney of record for the defendant in substitution for Attorney Ohnick,
Velilla and Balonkita who had withdrawn from the case.
On May 29, Attorney Dizon, in the name of his firm, wrote Attorney
Francisco urging him to discontinue representing the defendants on the
ground that their client had consulted with him about her case, on which
occasion, it was alleged, "she turned over the papers" to Attorney
Francisco, and the latter sent her a written opinion. Not receiving any
answer to this suggestion, Attorney Delgado, Dizon, Flores and Rodrigo
on June 3, 1946, filed a formal motion with the court, wherein the case
was and is pending, to disqualify Attorney Francisco.
Attorney Francisco's letter to plaintiff, mentioned above and identified as
Exhibit A, is in full as follows:
VICENTE J. FRANCISCO
Attorney-at-Law
1462 Estrada, Manila
July 13, 1945.
Mrs. Blandina Gamboa Hilado
Manila, Philippines
My dear Mrs. Hilado:
From the papers you submitted to me in connection with civil case
No. 70075 of the Court of First Instance of Manila, entitled

15

"Blandina Gamboa Hilado vs. S. J. Assad," I find that the basic facts
which brought about the controversy between you and the
defendant therein are as follows:
(a) That you were the equitable owner of the property described in
the complaint, as the same was purchased and/or built with funds
exclusively belonging to you, that is to say, the houses and lot
pertained to your paraphernal estate;
(b) That on May 3, 1943, the legal title to the property was with
your husband, Mr. Serafin P. Hilado; and
(c) That the property was sold by Mr. Hilado without your
knowledge on the aforesaid date of May 3, 1943.
Upon the foregoing facts, I am of the opinion that your action
against Mr. Assad will not ordinarily prosper. Mr. Assad had the
right to presume that your husband had the legal right to dispose of
the property as the transfer certificate of title was in his name.
Moreover, the price of P110,000 in Japanese military notes, as of
May 3, 1943, does not quite strike me as so grossly inadequate as
to warrant the annulment of the sale. I believe, lastly, that the
transaction cannot be avoided merely because it was made during
the Japanese occupation, nor on the simple allegation that the real
purchaser was not a citizen of the Philippines. On his last point,
furthermore, I expect that you will have great difficulty in proving
that the real purchaser was other than Mr. Assad, considering that
death has already sealed your husband's lips and he cannot now
testify as to the circumstances of the sale.
For the foregoing reasons, I regret to advise you that I cannot
appear in the proceedings in your behalf. The records of the case
you loaned to me are herewith returned.
Yours very truly,
(Sgd.) VICENTE J. FRANCISCO
VJF/Rag.
In his answer to plaintiff's attorneys' complaint, Attorney Francisco
alleged that about May, 1945, a real estate broker came to his office in
connection with the legal separation of a woman who had been deserted
by her husband, and also told him (Francisco) that there was a pending
suit brought by Mrs. Hilado against a certain Syrian to annul the sale of a
real estate which the deceased Serafin Hilado had made to the Syrian
during the Japanese occupation; that this woman asked him if he was
willing to accept the case if the Syrian should give it to him; that he told
the woman that the sales of real property during the Japanese regime
were valid even though it was paid for in Japanese military notes; that
this being his opinion, he told his visitor he would have no objection to
defending the Syrian;

16

That one month afterwards, Mrs. Hilado came to see him about a suit she
had instituted against a certain Syrian to annul the conveyance of a real
estate which her husband had made; that according to her the case was
in the hands of Attorneys Delgado and Dizon, but she wanted to take it
away from them; that as he had known the plaintiff's deceased husband
he did not hesitate to tell her frankly that hers was a lost case for the
same reason he had told the broker; that Mrs. Hilado retorted that the
basis of her action was not that the money paid her husband was
Japanese military notes, but that the premises were her private and
exclusive property; that she requested him to read the complaint to be
convinced that this was the theory of her suit; that he then asked Mrs.
Hilado if there was a Torrens title to the property and she answered yes,
in the name of her husband; that he told Mrs. Hilado that if the property
was registered in her husband's favor, her case would not prosper either;
That some days afterward, upon arrival at his law office on Estrada
street, he was informed by Attorney Federico Agrava, his assistant, that
Mrs. Hilado had dropped in looking for him and that when he, Agrava,
learned that Mrs. Hilado's visit concerned legal matters he attended to
her and requested her to leave the "expediente" which she was carrying,
and she did; that he told Attorney Agrava that the firm should not handle
Mrs. Hilado's case and he should return the papers, calling Agrava's
attention to what he (Francisco) already had said to Mrs. Hilado;
That several days later, the stenographer in his law office, Teofilo
Ragodon, showed him a letter which had been dictated in English by Mr.
Agrava, returning the "expedients" to Mrs. Hilado; that Ragodon told him
(Attorney Francisco) upon Attorney Agrava's request that Agrava thought
it more proper to explain to Mrs. Hilado the reasons why her case was
rejected; that he forthwith signed the letter without reading it and
without keeping it for a minute in his possession; that he never saw Mrs.
Hilado since their last meeting until she talked to him at the Manila Hotel
about a proposed extrajudicial settlement of the case;
That in January, 1946, Assad was in his office to request him to handle
his case stating that his American lawyer had gone to the States and left
the case in the hands of other attorneys; that he accepted the retainer
and on January 28, 1946, entered his appearance.
Attorney Francisco filed an affidavit of stenographer Ragodon in
corroboration of his answer.
The judge trying the case, Honorable Jose Gutierrez David, later
promoted to the Court of Appeals, dismissed the complaint. His Honor
believed that no information other than that already alleged in plaintiff's
complaint in the main cause was conveyed to Attorney Francisco, and
concluded that the intercourse between the plaintiff and the respondent
did not attain the point of creating the relation of attorney and client.
Stripped of disputed details and collateral matters, this much is
undoubted: That Attorney Francisco's law firm mailed to the plaintiff a
written opinion over his signature on the merits of her case; that this

17

opinion was reached on the basis of papers she had submitted at his
office; that Mrs. Hilado's purpose in submitting those papers was to
secure Attorney Francisco's professional services. Granting the facts to be
no more than these, we agree with petitioner's counsel that the relation
of attorney and client between Attorney Francisco and Mrs. Hilado
ensued. The following rules accord with the ethics of the legal profession
and meet with our approval:
In order to constitute the relation (of attorney and client) a
professional one and not merely one of principal and agent, the
attorneys must be employed either to give advice upon a legal
point, to prosecute or defend an action in court of justice, or to
prepare and draft, in legal form such papers as deeds, bills,
contracts and the like. (Atkinson vs. Howlett, 11 Ky. Law Rep.
(abstract), 364; cited in Vol. 88, A. L. R., p. 6.)
To constitute professional employment it is not essential that the
client should have employed the attorney professionally on any
previous occasion. . . . It is not necessary that any retainer should
have been paid, promised, or charged for; neither is it material that
the attorney consulted did not afterward undertake the case about
which the consultation was had. If a person, in respect to his
business affairs or troubles of any kind, consults with his attorney in
his professional capacity with the view to obtaining professional
advice or assistance, and the attorney voluntarily permits or
acquiesces in such consultation, then the professional employment
must be regarded as established. . . . (5 Jones Commentaries on
Evidence, pp. 4118-4119.)
An attorney is employed-that is, he is engaged in his professional
capacity as a lawyer or counselor-when he is listening to his client's
preliminary statement of his case, or when he is giving advice
thereon, just as truly as when he is drawing his client's pleadings,
or advocating his client's cause in open court. (Denver Tramway Co.
vs. Owens, 20 Colo., 107; 36 P., 848.)
Formality is not an essential element of the employment of an
attorney. The contract may be express or implied and it is sufficient
that the advice and assistance of the attorney is sought and
received, in matters pertinent to his profession. An acceptance of
the relation is implied on the part of the attorney from his acting in
behalf of his client in pursuance of a request by the latter. (7 C. J.
S., 848-849; see Hirach Bros. and Co. vs. R. E. Kennington Co., 88
A. L. R., 1.)
Section 26 (e), Rule 123 of the Rules of Court provides that "an attorney
cannot, without the consent of his client, be examined as to any
communication made by the client to him, or his advice given thereon in
the course of professional employment;" and section 19 (e) of Rule 127
imposes upon an attorney the duty "to maintain inviolate the confidence,
and at every peril to himself, to preserve the secrets of his client." There
is no law or provision in the Rules of Court prohibiting attorneys in

18

express terms from acting on behalf of both parties to a controversy

whose interests are opposed to each other, but such prohibition is
necessarily implied in the injunctions above quoted. (In re De la Rosa, 27
Phil., 258.) In fact the prohibition derives validity from sources higher
than written laws and rules. As has been aptly said in In re Merron, 22 N.
M., 252, L.R.A., 1917B, 378, "information so received is sacred to the
employment to which it pertains," and "to permit it to be used in the
interest of another, or, worse still, in the interest of the adverse party, is
to strike at the element of confidence which lies at the basis of, and
affords the essential security in, the relation of attorney and client."
That only copies of pleadings already filed in court were furnished to
Attorney Agrava and that, this being so, no secret communication was
transmitted to him by the plaintiff, would not vary the situation even if
we should discard Mrs. Hilado's statement that other papers, personal
and private in character, were turned in by her. Precedents are at hand to
support the doctrine that the mere relation of attorney and client ought to
preclude the attorney from accepting the opposite party's retainer in the
same litigation regardless of what information was received by him from
his first client.
The principle which forbids an attorney who has been engaged to
represent a client from thereafter appearing on behalf of the client's
opponent applies equally even though during the continuance of the
employment nothing of a confidential nature was revealed to the
attorney by the client. (Christian vs. Waialua Agricultural Co., 30
Hawaii, 553, Footnote 7, C. J. S., 828.)
Where it appeared that an attorney, representing one party in
litigation, had formerly represented the adverse party with respect
to the same matter involved in the litigation, the court need not
inquire as to how much knowledge the attorney acquired from his
former during that relationship, before refusing to permit the
attorney to represent the adverse party. (Brown vs. Miller, 52 App.
D. C. 330; 286, F. 994.)
In order that a court may prevent an attorney from appearing
against a former client, it is unnecessary that the ascertain in detail
the extent to which the former client's affairs might have a bearing
on the matters involved in the subsequent litigation on the
attorney's knowledge thereof. (Boyd vs. Second Judicial Dist. Court,
274 P., 7; 51 Nev., 264.)
This rule has been so strictly that it has been held an attorney, on
terminating his employment, cannot thereafter act as counsel
against his client in the same general matter, even though, while
acting for his former client, he acquired no knowledge which could
operate to his client's disadvantage in the subsequent adverse
employment. (Pierce vs. Palmer [1910], 31 R. I., 432; 77 Atl., 201,
Ann. Cas., 1912S, 181.)

19

Communications between attorney and client are, in a great number of

litigations, a complicated affair, consisting of entangled relevant and
irrelevant, secret and well known facts. In the complexity of what is said
in the course of the dealings between an attorney and a client, inquiry of
the nature suggested would lead to the revelation, in advance of the trial,
of other matters that might only further prejudice the complainant's
cause. And the theory would be productive of other un salutary results.
To make the passing of confidential communication a condition
precedent; i.e., to make the employment conditioned on the scope and
character of the knowledge acquired by an attorney in determining his
right to change sides, would not enhance the freedom of litigants, which
is to be sedulously fostered, to consult with lawyers upon what they
believe are their rights in litigation. The condition would of necessity call
for an investigation of what information the attorney has received and in
what way it is or it is not in conflict with his new position. Litigants would
in consequence be wary in going to an attorney, lest by an unfortunate
turn of the proceedings, if an investigation be held, the court should
accept the attorney's inaccurate version of the facts that came to him.
"Now the abstinence from seeking legal advice in a good cause is by
hypothesis an evil which is fatal to the administration of justice." (John H.
Wigmore's Evidence, 1923, Section 2285, 2290, 2291.)
Hence the necessity of setting down the existence of the bare relationship
of attorney and client as the yardstick for testing incompatibility of
interests. This stern rule is designed not alone to prevent the dishonest
practitioner from fraudulent conduct, but as well to protect the honest
lawyer from unfounded suspicion of unprofessional practice. (Strong vs.
Int. Bldg., etc.; Ass'n, 183 Ill., 97; 47 L.R.A., 792.) It is founded on
principles of public policy, on good taste. As has been said in another
case, the question is not necessarily one of the rights of the parties, but
as to whether the attorney has adhered to proper professional standard.
With these thoughts in mind, it behooves attorneys, like Caesar's wife,
not only to keep inviolate the client's confidence, but also to avoid the
appearance of treachery and double-dealing. Only thus can litigants be
encouraged to entrust their secrets to their attorneys which is of
paramount importance in the administration of justice.
So without impugning respondent's good faith, we nevertheless can not
sanction his taking up the cause of the adversary of the party who had
sought and obtained legal advice from his firm; this, not necessarily to
prevent any injustice to the plaintiff but to keep above reproach the
honor and integrity of the courts and of the bar. Without condemning the
respondents conduct as dishonest, corrupt, or fraudulent, we do believe
that upon the admitted facts it is highly in expedient. It had the tendency
to bring the profession, of which he is a distinguished member, "into
public disrepute and suspicion and undermine the integrity of justice."
There is in legal practice what called "retaining fee," the purpose of which
stems from the realization that the attorney is disabled from acting as
counsel for the other side after he has given professional advice to the
opposite party, even if he should decline to perform the contemplated
services on behalf of the latter. It is to prevent undue hardship on the

20

attorney resulting from the rigid observance of the rule that a separate
and independent fee for consultation and advice was conceived and
authorized. "A retaining fee is a preliminary fee given to an attorney or
counsel to insure and secure his future services, and induce him to act for
the client. It is intended to remunerate counsel for being deprived, by
being retained by one party, of the opportunity of rendering services to
the other and of receiving pay from him, and the payment of such fee, in
the absence of an express understanding to the contrary, is neither made
nor received in payment of the services contemplated; its payment has
no relation to the obligation of the client to pay his attorney for the
services which he has retained him to perform." (7 C.J.S., 1019.)
The defense that Attorney Agrava wrote the letter Exhibit A and that
Attorney Francisco did not take the trouble of reading it, would not take
the case out of the interdiction. If this letter was written under the
circumstances explained by Attorney Francisco and he was unaware of its
contents, the fact remains that his firm did give Mrs. Hilado a formal
professional advice from which, as heretofore demonstrated, emerged the
relation of attorney and client. This letter binds and estop him in the
same manner and to the same degree as if he personally had written it.
An information obtained from a client by a member or assistant of a law
firm is information imparted to the firm. (6 C. J., 628; 7 C. J. S., 986.)
This is not a mere fiction or an arbitrary rule; for such member or
assistant, as in our case, not only acts in the name and interest of the
firm, but his information, by the nature of his connection with the firm is
available to his associates or employers. The rule is all the more to be
adhered to where, as in the present instance, the opinion was actually
signed by the head of the firm and carries his initials intended to convey
the impression that it was dictated by him personally. No progress could
be hoped for in "the public policy that the client in consulting his legal
adviser ought to be free from apprehension of disclosure of his
confidence," if the prohibition were not extended to the attorney's
partners, employers or assistants.
The fact that petitioner did not object until after four months had passed
from the date Attorney Francisco first appeared for the defendants does
not operate as a waiver of her right to ask for his disqualification. In one
case, objection to the appearance of an attorney was allowed even on
appeal as a ground for reversal of the judgment. In that case, in which
throughout the conduct of the cause in the court below the attorney had
been suffered so to act without objection, the court said: "We are all of
the one mind, that the right of the appellee to make his objection has not
lapsed by reason of failure to make it sooner; that professional
confidence once reposed can never be divested by expiration of
professional employment." (Nickels vs. Griffin, 1 Wash. Terr., 374, 321 A.
L. R. 1316.)
The complaint that petitioner's remedy is by appeal and not by certiorari
deserves scant attention. The courts have summary jurisdiction to protect
the rights of the parties and the public from any conduct of attorneys
prejudicial to the administration of the justice. The summary jurisdiction
of the courts over attorneys is not confined to requiring them to pay over

21

money collected by them but embraces authority to compel them to do

whatever specific acts may be incumbent upon them in their capacity of
attorneys to perform. The courts from the general principles of equity and
policy, will always look into the dealings between attorneys and clients
and guard the latter from any undue consequences resulting from a
situation in which they may stand unequal. The courts acts on the same
principles whether the undertaking is to appear, or, for that matter, not
to appear, to answer declaration, etc. (6 C.J., 718 C.J.S., 1005.) This
summary remedy against attorneys flows from the facts that they are
officers of the court where they practice, forming a part of the machinery
of the law for the administration of justice and as such subject to the
disciplinary authority of the courts and to its orders and directions with
respect to their relations to the court as well as to their clients. (Charest
vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note 26, 7 C. J. S., 1007.)
Attorney stand on the same footing as sheriffs and other court officers in
respect of matters just mentioned.
We conclude therefore that the motion for disqualification should be
allowed. It is so ordered, without costs.
Moran, C.J., Ozaeta, Paras, Feria, Bengzon, Padilla, Montemayor, Reyes
and Torres, JJ., concur.

CLARITA J. SAMALA,
Complainant,

ADM.
5439

CASE

NO.

Present:

- versus -

ATTY. LUCIANO D. VALENCIA,

Respondent.

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVALGUTIERREZ,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
CALLEJO, SR.,
AZCUNA,
TINGA,
CHICO-NAZARIO,
GARCIA, and
VELASCO, JR., JJ.

Promulgated:
___________________

22

____
x---------------------------------------------------------- x

RESOLUTION
AUSTRIA-MARTINEZ, J.
Before us is a complaint[1] dated May 2, 2001 filed by
Clarita J. Samala (complainant) against Atty. Luciano D. Valencia
(respondent) for Disbarment on the following grounds: (a)
serving on two separate occasions as counsel for contending
parties; (b) knowingly misleading the court by submitting false
documentary evidence; (c) initiating numerous cases in exchange
for nonpayment of rental fees; and (d) having a reputation of
being immoral by siring illegitimate children.
After respondent filed his Comment, the Court, in its
Resolution of October 24, 2001, referred the case to the
Integrated Bar of the Philippines (IBP) for investigation, report
and recommendation.[2]
The
by

investigation

was

conducted

Commissioner Demaree Jesus B. Raval. After a series of

hearings, the parties filed their respective memoranda[3] and the

case was deemed submitted for resolution.
Commissioner Wilfredo E.J.E. Reyes prepared the Report
and

Recommendation[4] dated January

12,

2006. He

found

respondent guilty of violating Canons 15 and 21 of the Code of

Professional Responsibility and recommended the penalty of
suspension for six months.
In a minute Resolution[5] passed on May 26, 2006, the IBP
Board

of

Governors

recommendation of

adopted

and

Commissioner

approved the report

Reyes but

increased

penalty of suspension from six months to one year.

and
the

23

We adopt the report of the IBP Board of Governors except

as to the issue on immorality and as to the recommended
penalty.

On serving as counsel for contending parties.

Records show that in Civil Case No. 95-105-MK, filed in the
Regional Trial Court (RTC), Branch 272, Marikina City, entitled
Leonora M. Aville v. Editha Valdez for nonpayment of rentals,
herein respondent, while being the counsel for defendant Valdez,
also

acted

as

counsel

for

the

tenants Lagmay,

Valencia, Bustamante and Bayuga[6] by filing an Explanation and

Compliance before the RTC.[7]
In Civil Case No. 98-6804 filed in the Metropolitan Trial
Court (MTC), Branch 75, Marikina City, entitled Editha S. Valdez
and Joseph J. Alba, Jr. v. Salve Bustamanteand her husband
for ejectment,

respondent

represented

Valdez

against Bustamante one of the tenants in the property subject

of the controversy. Defendants appealed to the RTC, Branch
272, Marikina City docketed as SCA Case No. 99-341-MK. In his
decision dated May 2,

2000,[8] Presiding

Judge

Reuben

P. dela Cruz[9] warned respondent to refrain from repeating the

act of being counsel of record of both parties in Civil Case No. 95105-MK.
But in Civil Case No. 2000-657-MK, filed in the RTC, Branch
273, Marikina City, entitled Editha S. Valdez v. Joseph J. Alba,
Jr. and Register of Deeds of MarikinaCity, respondent, as counsel
for Valdez, filed a Complaint for Rescission of Contract with
Damages and Cancellation of Transfer Certificate of Title No.
275500 against Alba, respondent's former client in Civil Case No.
98-6804 and SCA Case No. 99-341-MK.

24

Records further reveal that at the hearing of November 14,

2003, respondent admitted that in Civil Case No. 95-105-MK, he
was

the

lawyer

for Lagmay (one

[10]

for Bustamante and Bayuga

of

the

tenants)

but

not

albeit he filed the Explanation and

Compliance for and in behalf of the tenants.[11] Respondent also

admitted that he represented Valdez in Civil Case No. 98-6804
and SCA Case No. 99-341-MK against Bustamante and her
husband but denied being the counsel for Alba although the case
is entitled Valdez and Alba v. Bustamante and her husband,
because Valdez told him to include Alba as the two were the
owners of the property[12] and it was only Valdez who signed the
complaint for ejectment.[13] But, while claiming that respondent
did not represent Alba, respondent, however, avers that he
already severed his representation for Alba when the latter
charged respondent with estafa.[14] Thus, the filing of Civil Case
No. 2000-657-MK against Alba.
Rule

15.03,

Responsibility

Canon

provides

15

that

of
a

the

lawyer

Code
shall

of

Professional

not

represent

conflicting interests except by written consent of all concerned

given after a full disclosure of the facts.
A lawyer may not, without being guilty of professional
misconduct, act as counsel for a person whose interest conflicts
with that of his present or former client.[15] He may not also
undertake to discharge conflicting duties any more than he may
represent antagonistic interests. This stern rule is founded on the
principles of public policy and good taste.[16] It springs from the
relation of attorney and client which is one of trust and
confidence. Lawyers are expected not only to keep inviolate the
clients confidence, but also to avoid the appearance of treachery
and double-dealing for only then can litigants be encouraged to
entrust their secrets to their lawyers, which is of paramount
importance in the administration of justice.[17]
One of the tests of inconsistency of interests is whether the
acceptance of a new relation would prevent the full discharge of
the lawyers duty of undivided fidelity and loyalty to the client or

25

invite

suspicion of

unfaithfulness

or

double-dealing in

the

performance of that duty.[18]

The stern rule against representation of conflicting interests
is founded on principles of public policy and good taste. It
springs from the attorneys duty to represent his client with
undivided fidelity and to maintain inviolate the clients confidence
as well as from the injunction forbidding the examination of an
attorney as to any of the privileged communications of his
client.[19]
An attorney owes loyalty to his client not only in the case in
which he has represented him but also after the relation of
attorney and client has terminated.[20] The bare attorney-client
relationship with a client precludes an attorney from accepting
professional employment from the clients adversary either in the
same case[21] or in a different but related action.[22] A lawyer is
forbidden from representing a subsequent client against a former
client when the subject matter of the present controversy is
related, directly or indirectly, to the subject matter of the
previous litigation in which he appeared for the former client.[23]
We held in Nombrado v. Hernandez[24] that the termination
of the relation of attorney and client provides no justification for a
lawyer to represent an interest adverse to or in conflict with that
of the former client. The reason for the rule is that the clients
confidence once reposed cannot be divested by the expiration of
the professional employment.[25] Consequently, a lawyer should
not, even after the severance of the relation with his client, do
anything which will injuriously affect his former client in any
matter in which he previously represented him nor should he
disclose or use any of the clients confidences acquired in the
previous relation.[26]
In this case, respondents averment that his relationship
with Alba has long been severed by the act of the latter of not
turning over the proceeds collected in Civil Case No. 98-6804, in

26

connivance with the complainant, is unavailing. Termination of

the attorney-client relationship precludes an attorney from
representing a new client whose interest is adverse to his former
client. Alba may not be his original client but the fact that he
filed a case entitled Valdez and Alba v. Bustamante and her
husband, is a clear indication that respondent is protecting the
interests of both Valdez and Alba in the said case. Respondent
cannot just claim that the lawyer-client relationship between him
and Alba has long been severed without observing Section 26,
Rule 138 of the Rules of Court wherein the written consent of his
client is required.
In Gonzales

v. Cabucana, Jr.,[27] citing

the

case

of Quiambao v. Bamba,[28] we held that:

The proscription against representation of
conflicting interests applies to a situation where the
opposing parties are present clients in the same action or
in an unrelated action. It is of no moment that the
lawyer would not be called upon to contend for one client
that which the lawyer has to oppose for the other client,
or that there would be no occasion to use the confidential
information acquired from one to the disadvantage of the
other as the two actions are wholly unrelated. It is
enough that the opposing parties in one case, one of
whom would lose the suit, are present clients and the
nature or conditions of the lawyers respective retainers
with each of them would affect the performance of the
duty of undivided fidelity to both clients.[29]

Respondent is bound to comply with Canon 21 of the Code

of Professional Responsibility which states that a lawyer shall
preserve the confidences and secrets of his client even after the
attorney-client relation is terminated.
The reason for the prohibition is found in the relation of
attorney and client, which is one of trust and confidence of the
highest degree. A lawyer becomes familiar with all the facts
connected with his clients case. He learns from his client the

27

weak points of the action as well as the strong ones. Such

knowledge must be considered sacred and guarded with care.[30]
From

the

foregoing,

it

is

evident

that

respondents

representation of Valdez and Alba against Bustamante and her

husband, in one case, and Valdez against Alba, in another case, is
a clear case of conflict of interests which merits a corresponding
sanction from this Court. Respondent may have withdrawn his
representation in Civil Case No. 95-105-MK upon being warned by
the court,[31] but the same will not exculpate him from the
charge of representing conflicting interests in his representation
in Civil Case No. 2000-657-MK.
Respondent is reminded to be more cautious in accepting
professional employments, to refrain from all appearances and
acts of impropriety including circumstances indicating conflict of
interests, and to behave at all times with circumspection and
dedication befitting a member of the Bar, especially observing
candor, fairness and loyalty in all transactions with his clients.[32]

On knowingly misleading the court by submitting false

documentary evidence.
Complainant alleges that in Civil Case No. 00-7137 filed
before MTC, Branch 75 for ejectment, respondent submitted TCT
No. 273020 as evidence of Valdez's ownership despite the fact
that a new TCT No. 275500 was already issued in the name of
Alba on February 2, 1995.
Records reveal that respondent filed Civil Case No. 00-7137
on November 27, 2000 and presented TCT No. 273020 as
evidence of Valdez's ownership of the subject property.[33] During
the hearing before Commissioner Raval, respondent avers that
when the Answer was filed in the said case, that was the time

28

that he came to know that the title was already in the name of
Alba; so that when the court dismissed the complaint, he did not
do

anything

anymore.[34] Respondent

further

avers

that Valdez did not tell him the truth and things were revealed to
him only when the case for rescission was filed in 2002.
Upon examination of the record, it was noted that Civil
Case No. 2000-657-MK for rescission of contract and cancellation
of

TCT

2000,

[35]

No.

275500

was

also

filed

on November

27,

before RTC, Branch 273, Marikina City, thus belying the

averment of respondent that he came to know of Alba's title only

in 2002 when the case for rescission was filed. It was revealed
during the hearing before Commissioner Raval that Civil Case
Nos. 00-7137 and 2000-657-MK were filed on the same date,
although in different courts and at different times.
Hence, respondent cannot feign ignorance of the fact that
the title he submitted was already cancelled in lieu of a new title
issued in the name of Alba in 1995 yet, as proof of the latter's
ownership.
Respondent failed to comply with Canon 10 of the Code of
Professional Responsibility which provides that a lawyer shall not
do any falsehood, nor consent to the doing of any in court; nor
shall he mislead, or allow the Court to be mislead by any
artifice.

It matters not that the trial court was not misled by

respondent's submission of TCT No. 273020 in the name

of Valdez,

as

shown

by

its

decision

dated January

8,

2002[36] dismissing the complaint for ejectment. What is decisive

in this case is respondent's intent in trying to mislead the court
by presenting TCT No. 273020 despite the fact that said title was
already cancelled and a new one, TCT No. 275500, was already
issued in the name of Alba.
In Young v. Batuegas,[37] we held that a lawyer must be a
disciple of truth. He swore upon his admission to the Bar that he
will do no falsehood nor consent to the doing of any in court

29

and he shall conduct himself as a lawyer according to the best of

his knowledge and discretion with all good fidelity as well to the
courts as to his clients.[38] He should bear in mind that as an
officer of the court his high vocation is to correctly inform the
court upon the law and the facts of the case and to aid it in doing
justice and arriving at correct conclusion.[39] The courts, on the
other hand, are entitled to expect only complete honesty from
lawyers appearing and pleading before them. While a lawyer has
the solemn duty to defend his clients rights and is expected to
display the utmost zeal in defense of his clients cause, his
conduct must never be at the expense of truth.
A lawyer is the servant of the law and belongs to a
profession to which society has entrusted the administration of
law and the dispensation of justice.[40] As such, he should make
himself more an exemplar for others to emulate.[41]
On initiating numerous cases in exchange for nonpayment
of rental fees.
Complainant alleges that respondent filed the following
cases: (a) Civil Case No. 2000-657-MK at the RTC, Branch 272;
(b) Civil Case No. 00-7137 at the MTC, Branch 75; and (c) I.S.
Nos. 00-4439 and 01-036162 both entitled Valencia v. Samala
for estafa and

grave

coercion,

respectively,

before

the Marikina City Prosecutor. Complainant claims that the two

criminal cases were filed in retaliation for the cases she filed
against Lagmay docketed as I.S. No. 00-4306 for estafa and I.S.
No. 00-4318 against Alvin Valencia (son of respondent) for
trespass to dwelling.
As culled from the records, Valdez entered into a retainer
agreement with respondent. As payment for his services, he was
allowed to occupy the property for free and utilize the same as
his office pursuant to their retainer agreement.[42]

30

Respondent

filed

I.S.

00-4439[43] and

Nos.

01-

036162[44] both entitled Valencia v. Samala for estafa and grave

coercion, respectively, to protect his client's rights against
complainant

who

filed

4306[45] for estafa against Lagmay,

I.S.
and

No.
I.S.

00-

No.

00-

4318[46] against Alvin Valencia[47] for trespass to dwelling.

We find the charge to be without sufficient basis. The act

of respondent of filing the aforecited cases to protect the interest
of his client, on one hand, and his own interest, on the other,
cannot be made the basis of an administrative charge unless it
can be clearly shown that the same was being done to abuse
judicial processes to commit injustice.
The filing of an administrative case against respondent for
protecting the interest of his client and his own right would be
putting a burden on a practicing lawyer who is obligated to
defend and prosecute the right of his client.
On having a reputation for being immoral by siring
illegitimate children.
We find respondent liable for being immoral by siring
illegitimate children.
During the hearing, respondent admitted that he sired
three children by Teresita Lagmay who are all over 20 years of
age,[48] while his first wife was still alive. He also admitted that
he has eight children by his first wife, the youngest of whom is
over 20 years of age, and after his wife died in 1997, he
married Lagmay in

1998.[49] Respondent

further

admitted

that Lagmay was staying in one of the apartments being claimed

by complainant. However, he does not consider his affair
with Lagmay as a relationship[50]and does not consider the latter
as his second family.[51] He reasoned that he was not staying

31

with Lagmay because he has two houses, one in Muntinlupa and

another inMarikina.[52]

In this case, the admissions made by respondent are more

than

enough

to

hold

him

liable

on

the

charge

of

immorality. During the hearing, respondent did not show any

remorse. He even justified his transgression by saying that he
does not have any relationship with Lagmay and despite the fact
that he sired three children by the latter, he does not consider
them as his second family. It is noted that during the hearing,
respondent boasts in telling the commissioner that he has two
houses - in Muntinlupa, where his first wife lived, and in Marikina,
where Lagmay lives.[53] It is of no moment that respondent
eventually married Lagmay after the death of his first wife. The
fact still remains that respondent did not live up to the exacting
standard

of

morality

and

decorum

required

of

the

legal

profession.
Under Canon 1, Rule 1.01 of the Code of Professional
Responsibility, a lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct. It may be difficult to specify the
degree of moral delinquency that may qualify an act as immoral,
yet, for purposes of disciplining a lawyer, immoral conduct has
been defined as that conduct which is willful, flagrant, or
shameless, and which shows a moral indifference to the opinion
of respectable members of the community.[54] Thus, in several
cases, the Court did not hesitate to discipline a lawyer for keeping
a mistress in defiance of the mores and sense of morality of the
community.[55] That respondent subsequently married Lagmay in
1998 after the death of his wife and that this is his first infraction
as regards immorality serve to mitigate his liability.
ACCORDINGLY, the Court finds respondent Atty. Luciano D.
Valencia GUILTY of misconduct and violation of Canons 21, 10
and

of

the

Code

of

Professional

Responsibility.

32

He is SUSPENDED from the practice of law for three (3) years,

effective immediately upon receipt of herein Resolution.
Let copies of this Resolution be furnished all courts of the
land, the Integrated Bar of the Philippines as well as the Office of
the Bar Confidant for their information and guidance, and let it be
entered in respondents personal records.
SO ORDERED.

REBECCA J. PALM,
Complainant,

A.C. No. 8242

Present:
PUNO, C.J.,

Chairperson,

CARPIO,
CORONA,
LEONARDO-DE

- versus CASTRO, and

BERSAMIN, JJ.
ATTY. FELIPE ILEDAN, JR.,
Promulgated:
Respondent.
October 2, 2009
x - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - -----------x
DECISION
CARPIO, J.:
The Case
The case before the Court is a disbarment proceeding filed
by Rebecca J. Palm (complainant) against Atty. Felipe Iledan, Jr.
(respondent) for revealing information obtained in the course of
an attorney-client relationship and for representing an interest

33

which

conflicted

with

that

of

his

former

client,

Comtech

Worldwide Solutions Philippines, Inc. (Comtech).

The Antecedent Facts
Complainant is the President of Comtech, a corporation
engaged

in

the

business

development. From

February

of
2003

computer
to

software

November

2003,

respondent served as Comtechs retained corporate counsel for

the

amount

of P6,000

per

month

as

retainer

fee. From

September to October 2003, complainant personally met with

respondent to review corporate matters, including potential
amendments to the corporate by-laws. In a meeting held on 1
October 2003, respondent suggested that Comtech amend its
corporate by-laws to allow participation during board meetings,
through teleconference, of members of the Board of Directors
who were outside the Philippines.
Prior to the completion of the amendments of the corporate
by-laws, complainant became uncomfortable with the close
relationship between respondent and Elda Soledad (Soledad), a
former officer and director of Comtech, who resigned and who
was

suspected

of

releasing unauthorized

disbursements

of

corporate funds. Thus, Comtech decided to terminate its retainer

agreement with respondent effective November 2003.
In a stockholders meeting held on 10 January 2004,
respondent

attended

as

proxy

for

Gary

Harrison

(Harrison). Steven C. Palm (Steven) and Deanna L. Palm,

members of the Board of Directors, were present through
teleconference. When
respondent

objected

the
to

meeting
the

was
meeting

called
for

to

order,

lack

of

quorum. Respondent asserted that Steven and Deanna Palm

could not participate in the meeting because the corporate bylaws had not yet been amended to allow teleconferencing.

34

On 24 March 2004, Comtechs new counsel sent a demand

letter

to

Soledad

of P90,466.10

to

return

representing

or

her

account

for

unauthorized

the

amount

disbursements

when she was the Corporate Treasurer of Comtech. On 22 April

2004,

Comtech

received

Soledads

reply,

signed

by

respondent. In July 2004, due to Soledads failure to comply with

Comtech's written demands, Comtech filed a complaint for Estafa
against Soledad before the Makati Prosecutors Office. In the
proceedings

before

the

City

Prosecution

Office

of

Makati,

respondent appeared as Soledads counsel.

On 26 January 2005, complainant filed a Complaint[1] for
disbarment against respondent before the Integrated Bar of the
Philippines (IBP).
In his Answer,[2] respondent alleged that in January 2002,
Soledad consulted him on process and procedure in acquiring
property. In April 2002, Soledad again consulted him about the
legal requirements of putting up a domestic corporation. In
February 2003, Soledad engaged his services as consultant for
Comtech. Respondent alleged that from February to October
2003, neither Soledad nor Palm consulted him on confidential or
privileged

matter

concerning

the

operations

of

the

corporation. Respondent further alleged that he had no access to

any record of Comtech.
Respondent admitted that during the months of September
and October 2003, complainant met with him regarding the
procedure in amending the corporate by-laws to allow board
members

outside

the

Philippines

to

participate

in

board

meetings.
Respondent further alleged that Harrison, then Comtech
President, appointed him as proxy during the 10 January 2004
meeting. Respondent alleged that Harrison instructed him to
observe the conduct of the meeting. Respondent admitted that
he objected to the participation of Steven and Deanna Palm

35

because the corporate by-laws had not yet been properly

amended to allow the participation of board members by
teleconferencing.

Respondent alleged that there was no conflict of interest

when he represented Soledad in the case for Estafa filed by
Comtech. He alleged that Soledad was already a client before he
became a consultant for Comtech. He alleged that the criminal
case was not related to or connected with the limited procedural
queries he handled with Comtech.
The IBPs Report and Recommendation
In
2006,

[3]

Report

and

Recommendation

dated

28

March

the IBP Commission on Bar Discipline (IBP-CBD) found

respondent guilty of violation of Canon 21 of the Code of

Professional Responsibility and of representing interest in conflict
with that of Comtech as his former client.
The

IBP-CBD

ruled

that

there

was

no

doubt

that

respondent was Comtechs retained counsel from February 2003

to November 2003. The IBP-CBD found that in the course of the
meetings for the intended amendments of Comtechs corporate
by-laws, respondent obtained knowledge about the intended
amendment to allow members of the Board of Directors who were
outside the Philippines to participate in board meetings through
teleconferencing. The IBP-CBD noted that respondent knew that
the corporate by-laws have not yet been amended to allow the
teleconferencing. Hence, when respondent, as representative of
Harrison, objected to the participation of Steven and Deanna
Palm through teleconferencing on the ground that the corporate
by-laws did not allow the participation, he made use of a
privileged information he obtained while he was Comtechs
retained counsel.

36

The IBP-CBD likewise found that in representing Soledad in

a case filed by Comtech, respondent represented an interest in
conflict with that of a former client. The IBP-CBD ruled that the
fact that respondent represented Soledad after the termination of
his professional relationship with Comtech was not an excuse.
The IBP-CBD recommended that respondent be suspended
from the practice of law for one year, thus:
WHEREFORE, premises considered, it is most
respectfully recommended that herein respondent be
found guilty of the charges preferred against him and be
suspended from the practice of law for one (1) year.[4]

In Resolution No. XVII-2006-583[5] passed on 15 December

2006, the IBP Board of Governors adopted and approved the
recommendation

of

the

Investigating

Commissioner

with

modification by suspending respondent from the practice of law

for two years.
Respondent filed a motion for reconsideration.[6]
In

an

undated

Recommendation,

the

IBP

Board

of

Governors First Division found that respondents motion for

reconsideration did not raise any new issue and was just a rehash
of his previous arguments. However, the IBP Board of Governors
First Division recommended that respondent be suspended from
the practice of law for only one year.
In Resolution No. XVIII-2008-703 passed on 11 December
2008, the IBP Board of Governors adopted and approved the
recommendation

of

the

IBP

Board

of

Governors

First

Division. The IBP Board of Governors denied respondents

motion for reconsideration but reduced his suspension from two
years to one year.

37

The IBP Board of Governors forwarded the present case to

this Court as provided under Section 12(b), Rule 139-B[7] of the
Rules of Court.
The Ruling of this Court
We cannot sustain the findings and recommendation of the
IBP.
Violation of the Confidentiality
of Lawyer-Client Relationship
Canon 21 of the Code of Professional Responsibility
provides:
Canon
21.
A
lawyer
shall
preserve
the confidence and secrets of his client even after the
attorney-client relationship is terminated. (Emphasis
supplied)

We agree with the IBP that in the course of complainants

consultations, respondent obtained the information about the
need to amend the corporate by-laws to allow board members
outside the Philippines to participate in board meetings through
teleconferencing. Respondent

himself

admitted

this

in

his

Answer.
However, what transpired on 10 January 2004 was not a
board

meeting

but

stockholders

meeting. Respondent

attended the meeting as proxy for Harrison. The physical

presence of a stockholder is not necessary in a stockholders
meeting because a member may vote by proxy unless otherwise
provided in the articles of incorporation or by-laws.[8] Hence,
there was no need for Steven and Deanna Palm to participate
through teleconferencing as they could just have sent their
proxies to the meeting.

38

In addition, although the information about the necessity to

amend

the

respondent,

corporate

by-laws

it

not

could

be

may

have

considered

been
a

given

to

confidential

information. The amendment, repeal or adoption of new by-laws

may be effected by the board of directors or trustees, by a
majority vote thereof, and the owners of at least a majority of
the outstanding capital stock, or at least a majority of members
of a non-stock corporation.[9] It means the stockholders are
aware of the proposed amendments to the by-laws. While the
power may be delegated to the board of directors or trustees,
there is nothing in the records to show that a delegation was
made in the present case. Further, whenever any amendment or
adoption of new by-laws is made, copies of the amendments or
the new by-laws are filed with the Securities and Exchange
Commission (SEC) and attached to the original articles of
incorporation

and

by-laws.[10] The

documents

are

public

records and could not be considered confidential.

It is settled that the mere relation of attorney and client
does not raise a presumption of confidentiality.[11] The client must
intend the communication to be confidential.[12] Since the
proposed amendments must be approved by at least a
majority of the stockholders, and copies of the amended
by-laws must be filed with the SEC, the information could
not have been intended to be confidential. Thus, the
disclosure made by respondent during the stockholders meeting
could not be considered a violation of his clients secrets and
confidence within the contemplation of Canon 21 of the Code of
Professional Responsibility.

Representing Interest in Conflict

With the Interest of a Former Client

39

The IBP found respondent guilty of representing an interest

in conflict with that of a former client, in violation of Rule 15.03,
Canon 15 of the Code of Professional Responsibility which
provides:
Rule 15.03 - A lawyer shall not represent
conflicting interest except by written consent of all
concerned given after a full disclosure of the facts.

We do not agree with the IBP.

In Quiambao v. Bamba,[13] the Court enumerated various
tests to determine conflict of interests. One test of inconsistency
of interests is whether the lawyer will be asked to use against his
former client any confidential information acquired through their
connection or previous employment.[14] The Court has ruled that
what a lawyer owes his former client is to maintain inviolate the
clients confidence or to refrain from doing anything which will
injuriously affect him in any matter in which he previously
represented him.[15]
We

find

no

conflict

of

interest

when

respondent

represented Soledad in a case filed by Comtech. The case where

respondent represents Soledad is an Estafa case filed by Comtech
against its former officer. There was nothing in the records
that would show that respondent used against Comtech
any confidential information acquired while he was still
Comtechs retained counsel. Further, respondent made the
representation after the termination of his retainer agreement
with Comtech. A lawyers immutable duty to a former client does
not

cover

transactions

that

occurred

beyond the

lawyers

employment with the client.[16] The intent of the law is to impose

upon the lawyer the duty to protect the clients interests only on
matters that he previously handled for the former client and not
for matters that arose after the lawyer-client relationship has
terminated.[17]

40

WHEREFORE, we DISMISS the complaint against Atty.

Felipe Iledan, Jr. for lack of merit.
SO ORDERED.

[A.C. No. 3773. September 24, 1997]

ANGELITA C. ORCINO, complainant, vs.

GASPAR, respondent.

ATTY.

JOSUE

RESOLUTION
PUNO, J.:

On June 14, 1992, complainant Angelita C. Orcino filed with this Court a
letter-complaint dated December 10, 1991 against respondent Atty. Josue
Gaspar, her former counsel. Complainant prayed that this Court impose
disciplinary sanctions on respondent for abandoning his duties and for failing
to return the legal fees she fully paid for his services.
The complaint arose from the following facts: Complainant engaged the
services of respondent to prosecute a criminal case she intended to file
against several suspects in the slaying of her husband. In consideration
thereof, complainant bound herself to pay respondent legal fees
of P20,000.00 -- P10,000.00 to be paid upon signing of the contract and the
balance to be paid on or before the conclusion of the case. Complainant was
also to pay P500.00 per appearance of respondent before the court and
fiscal. This agreement was embodied in a contract executed on February 22,
1991.[1]
In accordance with the contract, complainant paid respondent the sum
of P5,000.00 on February 25, 1991,[2] another P5,000.00 on March 31,
1991,[3] and P10,000.00 on May 21, 1991,[4] for a total of P20,000.00.
Forthwith, respondent entered into his duties. He interviewed witnesses
and gathered evidence to build a case against the suspects. He drew up the
necessary sworn statements and dutifully attended the preliminary
investigation. The case was thereafter filed with the Regional Trial Court,
Branch 37, Baloc, Sto. Domingo, Nueva Ecija.[5]
As private prosecutor, respondent religiously attended the bail hearings
for the accused although these hearings were postponed on motion of the
accused's counsel. Respondent however failed to attend the hearing
scheduled in August 1991. It was at this hearing that the court, over
complainant's objections, granted bail to all the accused. After the hearing,
complainant immediately went to respondent's residence and confronted him

41

with his absence.[6] Respondent explained that he did not receive formal
notice of the hearing.[7] Complainant became belligerent and started accusing
him of jeopardizing the case by his absence. Respondent said that her
suspicions were based on rumors and intrigues fed to her by her
relatives.[8] Complainant, however, continued accusing him belligerently. She
asked for the records of the case saying that she could refer them to another
lawyer. Stung by her words, respondent gave her the records.[9]
Complainant never returned the records nor did she see respondent. On
September 18, 1991, respondent filed before the trial court a "Motion to
Withdraw as Counsel."[10] The motion did not bear the consent of
complainant.
On October 23, 1991, the court issued an order directing respondent to
secure complainant's consent to the motion "and his appearance as private
prosecutor shall continue until he has secured this consent."[11]
Complainant refused to sign her conformity to respondent's
withdrawal.[12] Meanwhile,
the
hearings
in
the
criminal
case
continued. Respondent did not appear at the hearings nor did he contact
complainant. Complainant was thus compelled to engage the services of
another lawyer. Hence, the letter-complaint.
We referred the letter-complaint to the Integrated Bar of the Philippines,
Commission on Bar Discipline, for investigation, report and recommendation.
The rule in this jurisdiction is that a client has the absolute right to
terminate the attorney-client relation at any time with or without
cause.[13] The right of an attorney to withdraw or terminate the relation other
than for sufficient cause is, however, considerably restricted.[14] Among the
fundamental rules of ethics is the principle that an attorney who undertakes
to conduct an action impliedly stipulates to carry it to its conclusion. [15] He is
not at liberty to abandon it without reasonable cause.[16] A lawyer's right to
withdraw from a case before its final adjudication arises only from the
client's written consent or from a good cause.[17]
Section 26 of Rule 138 of the Revised Rules of Court provides:

"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.
x

x."

A lawyer may retire at any time from any action or special proceeding
with the written consent of his client filed in court and copy thereof served
upon the adverse party. Should the client refuse to give his consent, the
lawyer must file an application with the court. The court, on notice to the
client and adverse party, shall determine whether he ought to be allowed to
retire. The application for withdrawal must be based on a good cause.[18]

42

In the instant case, complainant did not give her written consent to
respondent's withdrawal. The court thus ordered respondent to secure this
consent. Respondent allegedly informed the court that complainant had
become hostile and refused to sign his motion.[19] He, however, did not file an
application with the court for it to determine whether he should be allowed
to withdraw.
Granting that respondent's motion without complainant's consent was an
application for withdrawal with the court, we find that this reason is
insufficient to justify his withdrawal from the case. Respondent's withdrawal
was made on the ground that "there no longer exist[ed] the xxx confidence"
between them and that there had been "serious diffferences between them
relating to the manner of private prosecution."[20]
Rule 22.01 of Canon 22 of the Code of Professional Responsibility
provides:

"CANON 22 -- A LAWYER SHALL WITHDRAW HIS SERVICES ONLY

FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE
CIRCUMSTANCES.
Rule 22.01-- A lawyer may withdraw his services in any of the
following cases:
a) When the client pursues an illegal or immoral course of conduct
in connection with the matter he is handling;
b) When the client insists that the lawyer pursue conduct violative
of these canons and rules;
c) When his inability to work with co-counsel will not promote the
best interest of the client;
d) When the mental or physical condition of the lawyer renders it
difficult for him to carry out the employment effectively;
e) When the client deliberately fails to pay the fees for the services
or fails to comply with the retainer agreement;
f) When the lawyer is elected or appointed to public office; and
g) Other similar cases."
A lawyer may withdraw his services from his client only in the following
instances: (a) when a client insists upon an unjust or immoral conduct of his
case; (b) when the client insists that the lawyer pursue conduct violative of
the Code of Professional Responsibility; (c) when the client has two or more
retained lawyers and the lawyers could not get along to the detriment of the
case; (d) when the mental or physical condition of the lawyer makes him
incapable of handling the case effectively; (e) when the client deliberately
fails to pay the attorney's fees agreed upon; (f) when the lawyer is elected
or appointed to public office; (g) other similar cases.

43

The instant case does not fall under any of the grounds
mentioned. Neither can this be considered analogous to the grounds
enumerated. As found by the Commission on Bar Discipline, this case arose
from
a
simple
misunderstanding
between
complainant
and
respondent. Complainant was upset by respondent's absence at the hearing
where bail was granted to the suspected killers of her husband. She
vehemently opposed the grant of bail. It was thus a spontaneous and
natural reaction for her to confront respondent with his absence. Her
belligerence arose from her overzealousness, nothing more. Complainant's
words and actions may have hurt respondent's feelings considering the work
he had put into the case. But her words were uttered in a burst of
passion. And even at that moment, complainant did not expressly terminate
respondent's services. She made this clear when she refused to sign his
"Motion to Withdraw as Counsel."
Assuming, nevertheless, that respondent was justified in terminating his
services, he, however, cannot just do so and leave complainant in the cold
unprotected. The lawyer has no right to presume that his petition for
withdrawal will be granted by the court.[21] Until his withdrawal shall have
been approved, the lawyer remains counsel of record who is expected by his
client as well as by the court to do what the interests of his client
require.[22] He must still appear on the date of hearing[23] for the attorneyclient relation does not terminate formally until there is a withdrawal of
record.[24]
Respondent expressly bound himself under the contract to bring the
criminal case to its termination. He was in fact paid in full for his
services. Respondent failed to comply with his undertaking, hence, it is but
fair that he return to complainant half of the amount paid him. The peculiar
circumstances of the case have rendered it impossible for respondent and
complainant to continue their relation under the contract.
IN VIEW WHEREOF, respondent is admonished to exercise more
prudence and judiciousness in dealing with his clients. He is also ordered to
return to complainant within fifteen (15) days from notice the amount of ten
thousand pesos (P10,000.00) representing a portion of his legal fees
received from the latter with a warning that failure on his part to do so will
result in the imposition of stiffer disciplinary action.
SO ORDERED.
Regalado, (Chairman) and Torres, Jr., JJ., concur.
Mendoza, J., on official leave.

G.R. No. L-24163, Aro v.

Hon. Nanawa et al., 27
SCRA 1090

44

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
April 28, 1969
G.R. No. L-24163
REGINO B. ARO, petitioner,
vs.
THE HON. ARSENIO NAAWA, Presiding Judge of
Branch IV, Court of First Instance of Laguna, LUIS
MAGTIBAY, PABLO MAGTIBAY, AURELLO
MARTINEZ, GREGORIO LONTOK, MARIA MENDOZA,
MAXIMO PORTO and ROSARlO ANDAYA,respondents.
Regino B. Aro in his own behalf as petitioner.
Enrique C. Villanueva for respondents.
BARREDO, J.:
Original petition: (1) for certiorari to annul the order of
the Court of First Instance of Laguna, dated November
21, 1964, dismissing its Civil Case No. SC-525 "without
prejudice to the right of Atty. Regino B. Aro (petitioner
herein) to file a separate action against both the plaintiffs
and defendants (private respondents herein) with respect
to his alleged attorney's fees", as well as its order dated
January 9, 1965, denying petitioner's motion for
reconsideration thereof for lack of merit and (2) for
mandamus to compel respondent Judge to take
cognizance of petitioner's opposition and countermotion
or petition dated November 3, 1964 and to resolve the
same on the merits.
There appears to be no dispute as to the following facts
alleged in the petition:

45

2. That the services of herein petitioner, as practising

attorney, was engaged by respondents Luis Magtibay and
Pablo Magtibay for the prosecution of their claim, as
heirs, in the estate of their deceased uncle Lucio
Magtibay, consisting of properties which were in the
possession of the respondents Aurelia Martinez, 1 spouses
Gregorio Lontok and Maria Mendoza and spouses Maximo
Porto and Rosario Andaya.
3. That being without means to prosecute their claim
against the persons concerned, respondents Luis
Magtibay and Pablo Magtibay agreed with herein
petitioner to avail of his services and entrust the
prosecution of their claim on a contingent basis as shown
in the agreement, copy of which is hereto attached as
Annex 'A' and is made an integral part hereof. 2
4. That by virtue of said agreement, herein petitioner
took the necessary steps to gather the needed papers
and documents for the filing of a petition to litigate as
pauper and a complaint in the Court of First Instance of
Laguna, in which respondents Luis Magtibay and Pablo
Magtibay were the plaintiffs and the other respondents,
excepting the respondent Judge, were the defendants, ..
[[ ]]

[[ ]]

5. That said petition to litigate as pauper filed by herein

petitioner for respondents Luis Magtibay and Pablo
Magtibay was granted by the respondent Judge as per
the order dated September 10, 1964, ...
6. That to plaintiffs' complaint in Civil Case No. SC-525,
the defendants in said case interposed a motion to
dismiss dated September 29, 1964.... 3
7. That to the said motion to dismiss herein petitioner, as
attorney for the plaintiffs (now respondents Luis Magtibay
[[ ]]

46

and Pablo Magtibay) filed an opposition dated October 5,

1964..... 4
8. That after the hearing of the motion to dismiss filed by
the defendants and the opposition thereto by the
plaintiffs, which finally took place on October 24, 1964,
the respondent Judge issued its resolution or order dated
October 24, 1964, denying the motion to dismiss, .... 5
9. That on the very day of and after the hearing of the
motion to dismiss, or on October 24, 1964, before receipt
of a copy of the said order (Annex 'G'), there was a
conversation which took place between herein petitioner
and the attorney of the defendants, Atty. Rustico de los
Reyes, Jr., in the civil case and one who was then acting
as a sort of spokesman for the defendants (Ex-Mayor
Cordova of Sta. Maria, Laguna) for the amicable
settlement of the case between the plaintiffs and the
defendants to the effect that a certain property of the
spouses Lucio Magtibay (deceased) and respondent
Aurelia Martinez, worth P3,000.00, would be given to the
plaintiffs in full settlement of their claim, as share in the
properties left by their deceased uncle Lucio Magtibay, it
having been agreed by herein petitioner and Atty. de los
Reyes and the spokesman of the defendants that for the
purpose of said amicable settlement, the plaintiffs or one
of them and herein petitioner would go to Sta. Maria,
Laguna, on October 23, 1964.
[[ ]]

[[ ]]

10. That having given notice to the plaintiffs (now

respondents Luis Magtibay and Pablo Magtibay) at their
given address in Calauag, Quezon to come to Candelaria
for the purpose of going to Sta. Maria, Laguna on
October 23, 1964, petitioner had waited for said plaintiffs
to go to his office on or before said date for the
engagement mentioned, but due to their (plaintiffs')

47

failure to come to Candelaria, petitioner had to send a

telegram to Ex-Mayor Cordova notifying him of his
(petitioner's) and plaintiffs' not being able to go to Sta.
Maria because of the failure of any of the plaintiffs to
come to Candelria, ..
11. That it was only on October 28, 1964, when herein
petitioner received a copy of the order dated October 24,
1964 (Annex "G") and to his surprise he also received on
the said day a second motion to dismiss dated October
26, 1964; together with Annex "A" of said motion, which
is entitled KASULATAN NG PAGHAHATIAN NA LABAS SA
HUKUMAN AT PAGPAPALABI, dated October 23, 1964 at
Sta. Cruz, Laguna and signed by the plaintiffs and
defendant Aurelia Martinez (the three being now
respondents in this case), it having been made to appear
in said Annex "A" of the second motion to dismiss,
among others, that the plaintiffs and defendant Aurelia
Martinez had made an extrajudicial partition of the
properties of the deceased Lucio Magtibay and the said
Aurelia Martinez adjudicating to the plaintiffs one-fourth
() share in the properties of the spouses and threefourth (3/4) share of the defendant Aurelia Martinez, but
making it appear also that said plaintiffs waived their
share in favor of Aurelia Martinez, ..., thru which
fraudulent waiver, herein petitioner was deprived of his
contingent fees, agreed upon, as evidenced by Annex "A"
of this petition. 6
xxxxxxxxx
[[ ]]

14. That petitioner filed by registered mail, on November

4, 1964, his "OPPOSITION TO THE SECOND MOTION TO
DISMISS AND COUNTER-MOTION OR PETITION TO SET
ASIDE DEED OF EXTRAJUDICIAL PARTITION AND

48

WAIVER DATED OCTOBER 23, 1964 AND TO RECORD

ATTORNEY'S LIEN", dated November 3, 1964, wherein he
(petitioner) prayed, among others, invoking the
provisions of Section 5(d) and Section 6, Rule 135 of the
Revised Rules of Court, for the protection of the rights of
herein petitioner as an officer of the Court, to wit:
(a) to deny the second motion to dismiss and get
aside and annul the deed of extrajudicial partition
and waiver dated October 23, 1964;
(b) to fix the compensation of herein counsel in the
proportion of one-third (1/3) of the shares of
plaintiffs, if in land, or in the amount of P1,000.00, if
in cash, and to record the same and expenses
advanced by him for the plaintiffs in the sum of
P22.15 as lien in favor of herein claimant-petitioner
over the properties in litigation, particularly over the
one-fourth (1/4) share of the plaintiffs in all the
properties of the spouses;
xxxxxxxxx
(d) as an alternative to prayer (a) above, to grant
the second motion to dismiss, subjecting, however,
the properties in litigation and subject-matters of the
extrajudicial partition and waiver to the lien for
attorney's fees and expenses in favor of herein
claimant-petitioner, after fixing said attorney's fees
as prayed for in (b) above.
xxxxxxxxx
15. That on the day f finally set for the hearing of
the second motion to dismiss, as well as of the

49

counter-motion or petition, or on November 21,

1964, because of the inquiries or interpellation made
by respondent Judge to herein petitioner as to
whether there is a Philippine precedent which allows
or directs the protection by the Court of the rights of
any of its officers (lawyer) against any collusion
perpetrated by the parties in a case to defraud or
cheat an attorney of his compensation agreed upon
by him and his clients, and his answer that insofar as
his researches were concerned, he could not find
any, although there are a number of cases to that
effect in American jurisdiction, the respondent Judge
had opined in open court that the claim for and the
fixing of the attorney's fees should better be done in
a separate action and, in spite of petitioner's
memorandum citing American authorities to the
effect that,
Though a party may without the consent of his
attorney money make a bona fide adjustment with
the adverse party and dismiss an action or suit
before a judgment or a decree has been rendered
thereon, if it appears, however, that such settlement
was collosive and consummated pursuant to the
intent of both parties to defraud the attorney, the
court in which the action was pending may interfere
to protect him as one of its officers, by setting aside
the order of dismissal, .... (Jackson vs. Stearns, 48
Ore. 25, 84 Pac. 798).
... the respondent Judge, instead of denying the
second motion to dismiss and fixing his attorney's
fees in the said case and recording the same as lien,
... dismissed the case and refused to give herein

50

petitioner any kind of immediate protection to

safeguard his rights ... in said Civil Case No. SC-525
of the Court of First Instance of Laguna.
16. That by the express terms of the agreement,
Annex "A" of this petition, plaintiffs in Civil Case No.
SC-525 had expressly ceded to herein petitioner
one-half () [later verbally reduced to one-third
(1/3) or P1,000.00] or whatever share they would
get from the estate of their deceased uncle Lucio
Magtibay, and the defendants in said Civil Case had
full knowledge of said right of herein petitioner in the
properties in controversy from and after the time
they were served with summons and copies of the
complaint in said civil case because of the
allegations contained in par. 10 thereof. 7 [Emphasis
by the Court]
18. That on December 5, 1964, herein petitioner
filed his motion for reconsideration dated December
4, 1664 asking for the reconsideration of the order
dated November 21, 1964, ..
19. That the motion for reconsideration was denied
by the court, thru the respondent Judge, as per the
order dated January 9, 1965, ..
Upon these facts, petitioner tries to make out before this
Court a case of certiorari for grave abuse of discretion on
the part of respondent Judge in dismissing the case on
the basis of the compromise agreement of the parties,
entered into at the back of petitioner notwithstanding the
reservation made in his favor to file an action against
both parties "with respect to his alleged attorney's fees",
as well as a case of mandamus "to order and command

51

the said respondent judge" to take cognizance of and

resolve his opposition and counter-motion for the court to
fix the compensation he should be paid. Unable to find
any local precedent to support his position, he cites
American authorities thus:
In the American jurisdiction, it would seem that, even
without the specific provisions of the rules of court cited
above, courts had always intervened, in the mere
exercise of their inherent powers, to protect attorneys
against collusive agreements or fraudulent settlements
entered into by the parties in a case to cheat attorneys
out of their costs or of their fees. Thus, it was held or had
been stated in:
(a) Coughlin vs. N.Y. Cont. & H.R.R. Co., 71 N.Y. 443, 27
Am. Rep. 75.
... But since the time of Lord Mansfield, it has been
the practice of courts to intervene to protect
attorneys against settlement made to cheat them
out of their costs. If an attorney has commenced an
action, and his client settles it with the opposite
party before judgment, collusively, to deprive him of
his costs, the court will permit the attorney to go on
with the suit for the purpose of collecting his costs.
Swain v. Senate, 5 Bos. & Pul. 99; Cole v. Bennett, 6
Price, 15; Moore v. Cook, 13 Id. 473; Talcott v.
Bronson, 4 Paige, 501; Rusquin v. The Knickerbocker
Stage Col., 12 Abb. Pr 324; Ward v. Syme, 9 How.
Pr. 16; McDonald v. Napier, 14 Ga. 89.
There are many cases where this had been allowed
to be done. It is impossible to ascertain precisely
when this practice commenced, nor how originated,

52

nor upon what principle it was based. It was not

upon the principle of a lien, because an attorney has
no lien upon the cause of as it upon the action before
judgment for his costs; nor was it upon principle that
his services had produced the money paid his client
upon the settlement, because that could not be
known, and in fact no money may have been paid
upon the settlement. So far as I can perceive, it was
based upon no principle. It was a mere arbitrary
exercise of power by the courts; not arbitrary in the
sense that it was unjust or improper, but in the
sense that it was not based upon any right or
principle recognized in other cases. The parties being
in court, and a suit commenced and pending, for the
purpose of protecting attorneys who were their
officers and subject to their control, the courts
invented this practice and assumed this
extraordinary power to defeat attempts to cheat the
attorneys out of their costs. The attorney's fees were
fixed in definite sums, easily determined by taxation
and this power was exercised to secure them their
fees. (pp. 76-77)
(b) Randall v. Van Wagenan et al., 22 N.E. 361, 362.
... But where such settlement is made collusively for
the purpose of defrauding the attorney out of his
costs, courts have been accustomed to intervene,
and to protect the attorney by permitting him to
proceed with the suit, and, if he is able to establish a
right to recover on the cause of action as it originally
stood, to permit such recovery to the extent of his
costs in the action. Coughlin v. Railroad Co., 71 N. Y.
443, and pages cited. And the court will set aside an
order of discontinuance if it stands in the way. This is

53

an adequate remedy, and we think the exclusive

remedy where the suit has been fraudulently settled
by the parties before judgment to cheat the attorney
out of his costs. We have found no case of an
equitable action to enforce the inchoate right of an
attorney, under such circumstances, and no such
precedent ought, we think, to be established.
(c) Jackson v. Stearns, et al., 43 Ore 25, 84 Pac.
798.
... Though a party may, without the consent of his
attorney, make a bona fide adjustment with the
adverse party, and dismiss an action or suit before a
judgment or a decree has been rendered therein, if it
appears, however, that such settlement was
collusive and consummated pursuant to the intent of
both parties to defraud the attorney, the court in
which the action or suit was pending may interfere to
protect him, as one of its officers, by setting aside
the order of dismissal and permitting him to proceed
in the cause in the name of his client to final
determination to ascertain what sum of money, or
interest in the subject-matter, if any, is due him for
his services when fully performed. Jones v. Morgage
99 Am. Dec. 458; Randall v. Van Wagenen (N.Y.) 22
N.E. 361, 12 Am. St. Rep. 828. (p. 800)
Before a court will set aside an order dismissing a
suit or an action, made upon stipulation of the
parties, without the consent of plaintiff's attorney,
and allow the latter to proceed with the cause in the
name of his client, to determine the amount of fees
due him, it must appear that the defendant

54

participated in the fraudulent intent to deprive the

attorney of his compensation. Courtney v.
McGavock, 25 Wis. 619. When no adequate
consideration is given by the defendant for the
settlement and discharge of an action or a suit, the
insufficiency of the inducement to the contract
affords evidence of his bad faith. Young v. Dearborn,
27 N.E. 324. It will be remembered that the
complaint alleges that the value of the real property
in question is $3,000.00, and that Stearns executed
to Wilson a deed to the premises for a nominal
consideration. This is a sufficient averment of the
defendant's intent to deprive the plaintiff of his
compensation thereby imputing to Wilson bad faith.
(p. 800)
(d) Desaman v. Butler Bros., 188 Minn. 198, 136
N.W. 747.
We have recently held that a client has always the
right to settle his cause of action and stop litigation
at any stage of the proceeding, subject, however, to
the right of the attorney to receive compensation for
services rendered. Burho v. Camichael 135 N.W.
386. It is therefore contended by defendant that a
litigant retains the unrestricted right to determine for
what amount the cause of action may be settled,
and, having so done, the lien of his attorney for
services is measured by the amount determined on
and actually settled for. Conceding, without deciding,
that this may be true of any time prior to the
rendition of a verdict in the action which the attorney
has been employed to bring, we are of opinion that
after verdict fixing the amount of a plaintiff's cause

55

of action a secret and collusive compromise between

parties litigant does not affect the amount of the
attorney's lien...; but therein is also clearly indicated
by Mr. Justice Brown that, if there be fraud and
collusion to deprive the attorney of his lien, the
settlement will not be permitted to accomplish such
result. (p. 748)
To be sure, these authorities are quite persuasive, but
contrary to petitioner's impression, there is already a
precedent setting decision of this Court handed down way
back in 1922 in a case very similar to his, that in Rustia
vs. the Judge of the Court of First Instance of Batangas,
et al., 44 Phil. 62. As it is very brief, it can be quoted in
full:
This is a petition for a writ of certiorari, the petitioner
alleging that the respondent Judge of the Court of First
Instance exceeded his jurisdiction in dismissing a pending
action at the instance of the parties but without the
intervention of the attorney for the plaintiff in the case,
the herein petitioner.
It appears from the record that on July 31, 1921, the
respondent Justo Porcuna, for himself and on behalf of
his wife, the respondent Rosa H. de Porcuna, by means
of a written contract, retained the petitioner to represent
them as their lawyer in case No. 1435 then pending in
the Court of First Instance of Batangas and in which Rosa
H. de Porcuna was the plaintiff and one Eulalia
Magsombol was the defendant. The contract fixed the
petitioner's fee at P200 in advance with an additional
contingent fee of P1,300. It was also provided in the
contract that Justo Porcuna should not compromise the

56

claim against the defendant in the case without express

consent of his lawyer, the herein petitioner.
After trial, the petitioner then being plaintiff's attorney of
record, the Court of First Instance, under date of
December 24, 1921, rendered judgment in favor of Justo
Porcuna and Rosa H. de Porcuna ordering the defendant
Eulalia Magsombol to return to them 602 pieces of cloth
or in default thereof to pay to them the sum of P3,250.
On January 14, 1922, Eulalia Magsombol filed her
exception to the judgment and on the following day
presented a motion for a new trial, which was denied on
the 21st of the same month. She thereupon gave notice
of appeal and presented a bill of exceptions which was
approved on February 20, 1922. On March 2, 1922, and
before the transmission of the bill of exceptions to this
court, the plaintiffs presented the following motion in the
Court of First Instance:
The plaintiffs, without any further intervention of
their attorney, now appear before this Honorable
Court and respectfully aver:
That, through Mr. Miguel Olgado they already settled
this case with the herein defendant.
That the basis of the compromise is that we, the
plaintiffs, finally agree that we should be paid the
amount of eight hundred pesos (P800) in two
installments; P300 to be paid on this same date, and
the remaining five hundred pesos (P500) at the end
of March, 1922.
That we, the plaintiffs, recognize not to have any
further rights in this case than to the aforesaid

57

amount of eight hundred pesos (P800) and that this

is the total amount the defendant Eulalia Magsombol
should pay us, and we have no right whatever to any
other amount than the aforementioned.
That we have not sold to any other person our rights
as plaintiffs in this case.
Wherefore, the plaintiffs respectfully request the
dismissal of this case, without any pronouncement
as to costs, and that the appeal interposed by the
defendant be further dismissed.
Batangas, Batangas, P.I., March 2, 1922.
(Sgd) ROSA H. PORCUNA
Plaintiff
JUSTO M. PORCUNA
Plaintiff
The defendant, through her attorney, Jose Mayo
Librea, having signified her assent to the motion, the
Court of First Instance on the same day, March 2,
dismissed the action without notice to counsel for the
plaintiffs.
The petitioner alleges that he did not discover the
dismissal of the action until April 4, 1922. After an
unsuccessful effort to obtain a reconsideration of the
order of dismissal from the trial court, he filed the
present petition for a writ of certiorari. By resolution
dated October 24, 1922, this court denied the
petition and upon motion of the petitioner we shall
now briefly state our reasons for such denial.

58

The burden of the petitioner's contention is (1) that

he, as attorney of record, was entitled to notice of
his client's motion to dismiss the case, and (2) that
after the approval of the bill of exceptions the lower
court had lost jurisdiction of the case and had no
power to dismiss it. A moment's reflection should
make it clear that neither of these propositions is
tenable.
Both at the common law and under section 32 of
the Code of Civil Procedure a client may dismiss his
lawyer at any time or at any stage of the
proceedings and there is nothing to prevent a litigant
from appearing before the court to conduct his own
litigation. (Sec. 34, Code of Civil Procedure.) The
client has also an undoubted right to compromise a
suit without the intervention of his lawyer.
Though there is a valid agreement for the payment
to the attorney of a large proportion of the sum
recovered in case of success this does not give the
attorney such an interest in the cause of action that
it prevents plaintiff from compromising the suit. (4
Cyc. 990, and authorities cited in Note 6; see also
Louque vs. Dejan 129 La. 519; Price vs. Western
Loan & Savings Co., 19 Am. Cas. 589 and Note.)
In the present instance the clients did nothing that
they did not have a perfect right to do. By appearing
personally and presenting a motion they impliedly
dismissed their lawyer. The petitioner's contingent
interests in the judgment rendered did not appear of
record. Neither as a party in interest nor as and
attorney was he therefore entitled to notice of the
motion.

59

As to the second proposition that the court below

could not dismiss the case after the bill of exceptions
had been approved, it is very true that upon such
approval the lower court loses its jurisdiction over all
contentious matters connected with the issues in the
case. But there is nothing to prevent all of the
parties by agreement to withdraw the bill of
exceptions with the consent of said court and
resubmit the case to the jurisdiction of the court.
That was all that was done in this case. A valid
agreement between the parties to a case is the law
of the case in everything covered by the agreement.
(Civil Code, art. 1091; Compania General de Tabacos
vs. Obed, 13 Phil. 391.) The petitioner might have
protected his interests by entering an attorney's lien
under section 37 of the Code of Civil Procedure.
The petition for a writ of certiorari was therefore
properly denied. So ordered.
The difference We perceive, however, between
petitioner's case, on the one hand, and that of Atty.
Rustia, in the above decision, on the other, is that in the
latter's case, neither the court nor the party adverse to
his clients were aware of the exact agreement as to his
fees, whereas in the case of petitioner, both the court
and the other parties knew the terms of the contract for
professional services between petitioner and his clients,
the Magtibay brothers, because the written contract
therefor, Annex A, was made part of the complaint, and
none seriously disputes its authenticity. Besides, the
court had already dismissed the case when Atty. Rustia
raised the question of his fees before the court; in
petitioner's instance, he opposed the motion to dismiss
and pleaded with the court to protect his rights as officer
of the court before the first order in question was issued

60

by respondent judge. Were it not for these differences,

We would have inclined towards denying the herein
petition in line with the Rustia ruling that, in any event,
certiorari is not the appropriate remedy, the American
authorities cited by petitioner not withstanding.
Withal, there is another Philippine case which Us to
sustain petitioner. In the case of Recto vs. Harden, 100
Phil. 440, Atty. Claro M. Recto found himself practically in
the same situation as petitioner herein. After Atty. Recto
had rendered services to Mrs. Esperanza P. de Harden in
a protracted suit against her husband for the purposes of
securing an increase of her and her daughter's monthly
support, (the spouses were separated), to P10,000.00
and of protecting and preserving her rights in the
properties of the conjugal partnership, which suit lasted
from 1941 to 1949, and after the Court of First Instance
of Manila had rendered a judgment favorable to Mrs.
Harden acknowledging, inter alia, her rights to the assets
of the conjugal partnership, which turned out to be
P4,000,000, and awarding her a monthly support of
P2,500, practically as prayed for in Atty. Recto's
pleadings, while the case was already pending on appeal
before this Court, Mrs. Harden and her husband, Mr. Fred
Harden, entered into a compromise of their case, without
the knowledge of Atty. Recto, whereby said spouses
"purportedly agreed to settle their differences in
consideration of the sum of P5,000 paid by Mr. Harden to
Mrs. Harden, and a monthly pension of $500 to be paid
by him to her; (2) Mr. Harden created a trust fund of
$20,000 from which said monthly pension of $500 would
be taken; and (3) Mr. and Mrs. Harden had mutually
released and forever discharged each other from all
actions, debts, duties, accounts, demands and claims to

61

the conjugal partnership, in consideration of the sum of

$1." (p. 435)
Whereupon Atty. Recto filed a motion with this Court
praying that:
a) Pending the resolution of this motion, the receiver
appointed herein be authorized to continue holding the
properties above mentioned in his custody in order not to
defeat the undersigned's inchoate lien on them;
b) A day set aside to receive the evidence of the
undersigned and those of the plaintiff and the defendant
Fred M. Harden, in order to determine the amount of fees
due to the undersigned, by the appointment of a referee
or commissioner for the reception of such evidence;
c) After due hearing, the undersigned be declared
entitled to the sum of P400,000 as his fees for services
rendered in behalf of the plaintiff in this case, under
paragraph 3 of the contract, Annex "A" and to that end a
charging lien therefore be established upon the
properties above-mentioned;
d) And the receiver be ordered to pay to the undersigned
the full amount of the fees to which the latter is found to
be entitled.
This motion was objected to by Mr. Hardens counsel, who
in turn, moved for the dismissal of the case, to which
Atty. Recto objected. Under these circumstances, this
Court acceded to Atty. Recto's prayer that the case be
not dismissed, that the receivership be maintained except
as to certain properties not material to mention here, and
that the case be remanded to the lower court so that his

62

fees may be determined and ordered paid. Upon the

remand of the case to the lower court, a commissioner
was appointed to hear the matter of the amount of the
fees in question, and after the commissioner had
submitted a report recommending the payment to Atty.
Recto of the 20,70 attorney's fees stipulated in the
contract for his services, equivalent to P369,410.04, the
court rendered judgment as follows:
The contingent fee to which the claimant is entitled under
paragraph 3 of the contract, Exhibit JJJ or 20, is 20% of
P1,920,554.85 or the sum of P384,110.97.
WHEREFORE, this Court hereby approves the
recommendation of the Commissioner with the abovestated modification, and finds that Attorney Claro M.
Recto is entitled to the sum of THREE HUNDRED EIGHTYFOUR THOUSAND ONE HUNDRED AND TEN PESOS AND
NINETY-SEVEN CENTAVOS (P384,110.97), representing
20% of Esperanza P. de Harden's share in the conjugal
properties owned by her and her husband, Fred M.
Harden, as contingent fee stipulated in paragraph 3 of
the Contract of Professional Services, Exhibit JJJ or 20,
and the said Esperanza P. de Harden is hereby ordered to
pay the said amount above-stated.
On appeal from this judgment to this Court, the same
was affirmed, the decision stating pertinently in part:
The last objection is based upon principles of equity, but,
pursuant thereto, one who seeks equity must come with
clean hands (Bastida et al. vs. Dy Buncio & Co.,93 Phil.
195; 30 C.J.S. 475), and appellants have not done so, for
the circumstances surrounding the case show, to our

63

satisfaction, that their aforementioned agreements,

ostensibly for the settlement of the differences between
husband and wife, were made for the purpose of
circumventing or defeating the rights of herein appellee,
under his above-quoted contract of services with Mrs.
Harden. Indeed, having secured a judgment in her favor,
acknowledging her rights to the assets of the conjugal
partnership, which turned out to be worth almost
P4,000,000 in addition to litis expensae in the sum of
P175,000, it is inconceivable that Mrs. Harden would
have waived such rights, as well as the benefits of all
orders and judgments in her favor, in consideration of
the paltry sum of $5,000 allegedly paid to her by Mr.
Harden and the additional sum of $20,000 to be paid by
him in installments, at the rate of $500 a month. In fact,
no explanation has been given for this moat unusual
avowed settlement between Mr. and Mrs. Harden. One
can not even consider the possibility of a reconciliation
between the spouses, the same being inconsistent with
the monetary consideration for said alleged settlement.
What is more, the records show that the relations
between said spouses which were bad indeed, not only
in July, 1941, when Mrs. Harden engaged the services of
the appellee, but, even, before, for Mr. and Mrs. Harden
were separated since 1938 had worsened considerably
thereafter, as evidenced by an action for divorce filed by
Mr. Harden in New Jersey, in July 1948, upon the ground
of repeated acts of infidelity allegedly committed by Mrs.
Harden in 1940 and 1941.
On the same considerations of equity, and for the better
protection of lawyers, who, trusting in the good faith of
their clients, render professional services on contingent
basis, and so that it may not be said that this Court,
sanctions in any way the questionable practice of clients

64

of compromising their cases at the back of their counsel

with the consequence that the stipulated contingent fees
of the lawyer are either unreasonably reduced or even
completely rendered without basis, as in this case
wherein the clients waived the whole of their rights in
favor of their opponent after the latter had
acknowledged, in effect, the correctness of said clients'
contention We have decided to grant the herein
petition, in so far as the rights of petitioner have been
prejudiced by the questioned compromise agreement.
While We here reaffirm the rule that "the client has an
undoubted right to compromise a suit without the
intervention of his lawyer", 8 We hold that when such
compromise is entered into in fraud of the lawyer, with
intent to deprive him of the fees justly due him, the
compromise must be subject to the said fees, and that
when it is evident that the said fraud is committed in
confabulation with the adverse party who had knowledge
of the lawyer's contingent interest or such interest
appears of record and who would benefit under such
compromise, the better practice is to settle the matter of
the attorney's fees in the same proceeding, after hearing
all the affected parties and without prejudice to the
finality of the compromise in so far as it does not
adversely affect the rights of the lawyer. Surely, "the
client cannot, by setting, compromising or dismissing his
suit during its pendency, deprive the attorney of his
compensation for the agreed amount, unless the lawyer
consents to such settlement, compromise or dismissal",
(Legal and Judicial Ethics by Martin, 1967 Rev. Ed p.
121) for the, attorney is or "Shall be entitled to have and
recover from his client - a reasonable compensation (not
more) for his services, with a view to the importance of
the subject-matter of the controversy, the extent of the
[[ ]]

65

services rendered, and the professional standing of the

attorney", (Sec. 24, Rule 138, on Attorney and Admission
to Bar) albeit, under Canon 12 of the Canons of
Professional Ethics, "in fixing fees, it should not be
forgotten that the profession is a branch of the
administration of justice and not a mere money-getting
trade."
True it is also that "a client may, at anytime, dismiss his
attorney or substitute another in his place", (Sec. 26,
Rule 138) but it must be emphasized that the same
provision, which is an incorporation of Republic Act
636 into the Rules of Court, also provides that "if the
contract between client and attorney had been reduced
to writing and the dismissal of the attorney was without
justifiable cause, he shall be entitled to recover from the
client full compensation ..." In the case at bar, by
entering into the compromise agreement in question and
even inserting therein a prayer to the court to dismiss
their case filed by petitioner, (see footnote 6, ante)
petitioner's clients impliedly dismissed him. (Rustia vs.
the Court, etc., supra.) Such implied dismissal appears to
Us to have been made without justifiable cause, none is
urged anywhere in the record, and so, the above-quoted
provision of Section 26, Rule 138 applies here. The terms
of the compromise in question, as spelled out in Annex A
of Annex I of the petition, indicate clearly that Aurelia
Martinez, the defendant aunt in-law of petitioner's clients,
acknowledged that the rights of said clients were
practically as alleged by petitioner in the complaint he
filed for them. In other words, through the services of
petitioner, his clients secured, in effect, a recognition,
which had been previously denied by their aunt-in-law,
that they were entitled to a share in the estate left by
their uncle. We hold that under these circumstances, and

66

since it appears that said clients have no other means to

pay petitioner, since they instituted their case as
paupers, and that their aunt-in-law was aware of the
terms of their contract of professional services with
petitioner', said clients had no right to waive the portion
of their such acknowledged rights in favor of their
opponent to the extent that such waiver would prejudice
the stipulated contingent interest of their lawyer and
their aunt-in-law had no right to accept such waiver
unqualified. The Civil Code enjoins that:
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.
Under the circumstance extant in the record, it is clear
that the compromise agreement in question falls short of
the moral requirements of this quoted article of the Civil
Code. If for this reason alone, it should not be allowed to
prejudice the rights of petitioner. Accordingly, as all of
these circumstances were presented to respondent judge
before he issued the challenged order of dismissal and all
the parties were heard thereon, it was incumbent upon
His Honor, in equity and to avoid multiplicity of suits,
particularly, because the amount claimed by petitioner is
only P1,000.00, to have directly passed upon petitioner's
claim, and not having done so, it would appear that the
court a quo abused its discretion gravely enough to
warrant the writ of certiorari herein prayed for in so far
as the questioned orders prejudiced petitioner's right to
the fees for the professional services which appear to
have been creditably rendered by him. Respondents
allege that the judgment of dismissal in question is
already final because no appeal was taken therefrom, but

67

since We hold that the same was rendered with enough

grave abuse of discretion to warrant the certiorari prayed
for, such alleged finality could not have materialized;
obviously, petitioner could not have appealed, not being
a party in the case.
IN VIEW OF THE FOREGOING, the orders of the
respondent court dated November 21, 1964 and January
9, 1965 in Civil Case No. SC-525 are hereby set aside in
so far as they prejudice the payment of petitioner's claim
of attorney's fees in the form of either one-third of the
share acknowledged as his clients in the compromise in
question or P1,000.00, which should constitute as a lien
on the said share, in spite of the waiver thereof in favor
of respondent Aurelia Martinez. It is unnecessary to
consider the petition for mandamus. Costs against,
private respondents.
Reyes, J.B.L., Dizon,: Makalintal, Zaldivar, Sanchez,
Fernando and Teehankee, JJ., concur.
Concepcion, C.J. and Castro, J., are on leave.
Capistrano, J., took no part.
A.M. No. 219

September 29, 1962

CASIANO U. LAPUT, petitioner,

vs.
ATTY. FRANCISCO E.F. REMOTIGUE and ATTY. FORTUNATO P.
PATALINGHUG, respondents.

LABRADOR, J.:
This is an original complaint filed with this Court charging respondents
with unprofessional and unethical conduct in soliciting cases and
intriguing against a brother lawyer, and praying that respondents be
dealt with accordingly.

68

The facts which led to the filing of this complaint are as follow: In May,
1952, petitioner was retained by Nieves Rillas Vda. de Barrera to handle
her case (Sp. Proc. No. 2-J) in the Court of First Instance of Cebu,
entitled "Testate Estate of Macario Barrera". By January, 1955, petitioner
had contemplated the closing of the said administration proceedings and
prepared two pleadings: one, to close the proceedings and declare Nieves
Rillas Vda. de Barrera as universal heir and order the delivery to her of
the residue of the estate and, second, a notice for the rendition of final
accounting and partition of estate. At this point, however, the
administratrix Nieves Rillas Vda. de Barrera refused to countersign these
two pleadings and instead advised petitioner not to file them. Some
weeks later, petitioner found in the records of said proceedings that
respondent Atty. Fortunato Patalinghug had filed on January 11, 1955 a
written appearance as the new counsel for Nieves Rillas Vda. de Barrera.
On February 5, 1955 petitioner voluntarily asked the court to be relieved
as counsel for Mrs. Barrera. On February 7, 1955, the other respondent,
Atty. Francisco E. F. Remotigue, entered his appearance, dated February
5, 1955.
Complainant here alleges that the appearances of respondents were
unethical and improper for the reason that they had nursed the desire to
replace the petitioner as attorney for the estate and the administratrix
and, taking advantage of her goodwill, intrigued against the preparation
of the final inventory and accounting and prodded Mrs. Barrera not to
consent to petitioner's decision to close the administration proceedings;
that before their appearance, they brought petitioner's client to their law
office and there made her sign four documents captioned "Revocation of
Power of Attorney" and sent the same by mail to several corporations and
establishments where the Estate of Macario Barrera is owner of
certificates of stocks and which documents purported to disauthorize the
petitioner from further collecting and receiving the dividends of the estate
from said corporations, when in fact and in truth the respondents fully
knew that no power of attorney or authority was given to the petitioner
by his client, the respondents motive being to embarrass petitioner to the
officials, lawyers and employees of said corporations, picturing him as a
dishonest lawyer and no longer trusted by his client all with the
purpose of straining the relationship of the petitioner and his client,
Nieves Rillas Vda. de Barrera; and that Atty. Patalinghug entered his
appearance without notice to petitioner.
In answer, respondent Atty. Patalinghug stated that when he entered his
appearance on January 11, 1955 the administratrix Nieves Rillas Vda. de
Barrera had already lost confidence in her lawyer, the herein petitioner,
and had in fact already with her a pleading dated January 11, 1955,
entitled "Discharge of Counsel for the Administration and Motion to Cite
Atty. Casiano Laput", which she herself had filed with the court.
1awph l.nt

In answer, respondent Atty. Remotigue stated that when he filed his

appearance on February 7, 1955, the petitioner has already withdrawn as
counsel.

69

After separate answers were filed by the respondents, the Supreme Court
referred the case to the Solicitor General for investigation, report and
recommendation. The Solicitor General recommended the complete
exoneration of respondents.
It appears and it was found by the Solicitor General that before
respondent Atty. Fortunato Patalinghug entered his appearance, the
widow administratrix had already filed with the court a pleading
discharging the petitioner Atty. Casiano Laput. If she did not furnish Atty.
Laput with a copy of the said pleading, it was not the fault of Atty.
Patalinghug but that of the said widow. It appears that the reason why
Mrs. Barrera dismissed petitioner as her lawyer was that she did not trust
him any longer, for one time she found out that some dividend checks
which should have been sent to her were sent instead to petitioner,
making her feel that she was being cheated by petitioner. Moreover, she
found that withdrawals from the Philippine National Bank and Bank of the
Philippine Islands have been made by petitioner without her prior
authority.
We see no irregularity in the appearance of respondent Atty. Fortunato
Patalinghug as counsel for the widow; much less can we consider it as an
actual grabbing of a case from petitioner. The evidence as found by the
Solicitor General shows that Atty. Patalinghug's professional services
were contracted by the widow, a written contract having been made as to
the amount to be given him for his professional services.
Petitioner's voluntary withdrawal on February 5, 1955, as counsel for Mrs.
Barrera after Atty. Patalinghug had entered his appearance, and his
(petitioner's) filing almost simultaneously of a motion for the payment of
his attorney's fees, amounted to an acquiescence to the appearance of
respondent Atty. Patalinghug as counsel for the widow. This should estop
petitioner from now complaining that the appearance of Atty. Patalinghug
was unprofessional.
Much less could we hold respondent Atty. Remotigue guilty of
unprofessional conduct inasmuch as he entered his appearance, dated
February 5, 1955, only on February 7, same year, after Mrs. Barrera had
dispensed with petitioner's professional services on January 11, 1955,
and after petitioner had voluntarily withdrawn his appearance on
February 5, 1955.
With respect to the preparation by Atty. Patalinghug of the revocations of
power of attorney as complained of by petitioner, the Solicitor General
found that the same does not appear to be prompted by malice or
intended to hurt petitioner's feelings, but purely to safeguard the interest
of the administratrix. Evidently, petitioner's pride was hurt by the
issuance of these documents, and felt that he had been pictured as a
dishonest lawyer; for he filed a case before the City Fiscal of Cebu against
Atty. Patalinghug and the widow for libel and falsification. It was shown,
however, that the case was dismissed.

70

No sufficient evidence having been submitted to sustain the charges,

these are hereby dismissed and the case closed.
Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Paredes, Dizon,
Regala and Makalintal, JJ., concur.