TOPIC: DUTY OF LOYALTY

A.C. No. 6174               November 16, 2011

LYDIA CASTRO-JUSTO, Complainant
vs.
ATTY. RODOLFO T. GALING, Respondent.
PEREZ, J.:

Facts: Complainant Justo alleged that sometime in April 2003, she engaged the services of respondent Atty. Galing in
connection with dishonored checks issued by Manila City Councilor Arlene W. Koa (Ms. Koa). After she paid his
professional fees, the respondent drafted and sent a letter to Ms. Koa demanding payment of the checks. Respondent
advised complainant to wait for the lapse of the period indicated in the demand letter before filing her complaint.

Complainant filed a criminal complaint against Ms. Koa for estafa and violation of Batas Pambansa Blg. 22 before the
Office of the City Prosecutor of Manila. Respondent appeared as counsel for Ms. Koa before the prosecutor of Manila.
Complainant submits that by representing conflicting interests, respondent violated the Code of Professional
Responsibility, hence a complaint for disbarment was filed by the complainant against the respondent.

In his Comment, respondent denied the allegations against him. He admitted that he drafted a demand letter for
complainant but argued that it was made only in deference to their long standing friendship and not by reason of a
professional engagement as professed by complainant. He denied receiving any professional fee for the services he
rendered. It was allegedly their understanding that complainant would have to retain the services of another lawyer. He
alleged that complainant, based on that agreement, engaged the services of Atty. Manuel A. Año.

He maintained that the filing of the Motion for Consolidation which is a non-adversarial pleading does not evidence the
existence of a lawyer-client relationship between him and Ms. Koa and Ms. Torralba. Likewise, his appearance in the joint
proceedings should only be construed as an effort on his part to assume the role of a moderator or arbiter of the parties.

The Board of Governors of the IBP adopted and approved with modification the findings of its Investigating Commissioner.
They found respondent guilty of violating Canon 15, Rule 15.03 of the Code of Professional Responsibility by representing
conflicting interests and for his daring audacity and for the pronounced malignancy of his act. It was recommended that he
be suspended from the practice of law for one (1) year with a warning that a repetition of the same or similar acts will be
dealt with more severely.

Respondent argued that no lawyer-client relationship existed between him and complainant because there was no
professional fee paid for the services he rendered. Moreover, he argued that he drafted the demand letter only as a
personal favor to complainant who is a close friend.

Issue: Whether or not respondent violated the Code of Professional Responsibility by representing conflicting interests

Ruling: Yes. Under Rule 15.03, Canon 15 of the Code of Professional Responsibility, "[a] lawyer shall not represent
conflicting interests except by written consent of all concerned given after a full disclosure of the facts." Respondent was
therefore bound to refrain from representing parties with conflicting interests in a controversy. By doing so, without
showing any proof that he had obtained the written consent of the conflicting parties, respondent should be sanctioned.

The prohibition against representing conflicting interest is founded on principles of public policy and good taste. In the
course of the lawyer-client relationship, the lawyer learns of the facts connected with the client’s case, including the weak
and strong points of the case. The nature of the relationship is, therefore, one of trust and confidence of the highest
degree. It behooves lawyers not only to keep inviolate the client’s 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. The case of Hornilla v. Atty. Salunat is instructive on this concept,
thus:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The test is
‘whether or not in behalf of one client, it is the lawyer’s duty to fight for an issue or claim, but it is his duty to oppose it for
the other client. In brief, if he argues for one client, this argument will be opposed by him when he argues for the other
client. This rule covers not only cases in which confidential communications have been confided, but also those in which
no confidence has been bestowed or will be used. Also, there is conflict of interests if the acceptance of the new retainer
will require the attorney to perform an act which will injuriously affect his first client in any matter in which he represents
him and also whether he will be called upon in his new relation to use against his first client any knowledge acquired
through their connection. Another test of the inconsistency of interests is whether the acceptance of a new relation will
prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof.

The excuse proffered by respondent that it was not him but Atty. Año who was eventually engaged by complainant will not
exonerate him from the clear violation of Rule 15.03 of the Code of Professional Responsibility. The take- over of a client’s
cause of action by another lawyer does not give the former lawyer the right to represent the opposing party. It is not only
malpractice but also constitutes a violation of the confidence resulting from the attorney-client relationship.

The Court resolved to SUSPEND Atty. Rodolfo T. Galing from the practice of law for one (1) year, with a WARNING that a
repetition of the same or similar offense will warrant a more severe penalty.
G.R. No. 181359               August 5, 2013
SPOUSES CLEMENCIO C. SABITSANA, JR. and MA. ROSARIO M. SABITSANA, Petitioners,
vs.
JUANITO F. MUERTEGUI, represented by his Attorney-in-Fact DOMINGO A. MUERTEGUI, JR., Respondent.
DEL CASTILLO, J.:

Facts: Alberto Garcia (Garcia) executed an unnotarized Deed of Sale in favor of respondent Juanito Muertegui (Juanito)
over a 7,500-square meter parcel of unregistered land (the lot) located in Dalutan Island, Talahid, Almeira, Biliran, Leyte
del Norte issued in 1985 in Garcia’s name.

Petitioner Atty. Sabitsana was the Muertegui family’s lawyer, and was informed beforehand by Carmen, a member of the
Muertegui family, that her family had purchased the lot; thus, he knew of the sale to Juanito. After conducting an
investigation, he found out that the sale was not registered. With this information in mind, Atty. Sabitsana went on to
purchase the same lot and raced to register the sale ahead of the Muerteguis, expecting that his purchase and prior
registration would prevail over that of his clients, the Muerteguis. Applying Article 1544 of the Civil Code, the trial court
declared that even though petitioners were first to register their sale, the same was not done in good faith. And because
petitioners’ registration was not in good faith, preference should be given to the sale in favor of Juanito, as he was the first
to take possession of the lot in good faith, and the sale to petitioners must be declared null and void for it casts a cloud
upon the Muertegui title. Petitioners filed a Motion for Reconsideration but the trial court denied the same.

Petitioners appealed to the CA asserting that the sale to Juanito was null and void for lack of marital consent; that the sale
to them is valid; that the lower court erred in applying Article 1544 of the Civil Code; that the Complaint should have been
barred by prescription, laches and estoppel; that respondent had no cause of action; that respondent was not entitled to
an award of attorney’s fees and litigation expenses; and that they should be the ones awarded attorney’s fees and
litigation expenses.

The CA denied the appeal and affirmed the trial court’s Decision in toto. It held that even though the lot admittedly was
conjugal property, the absence of Soledad’s signature and consent to the deed did not render the sale to Juanito
absolutely null and void, but merely voidable. In the absence of a decree annulling the deed of sale in favor of Juanito, the
same remains valid.

The CA added that even though petitioners were first to register the sale in their favor, they did not do so in good faith, for
they already knew beforehand of Garcia’s prior sale to Juanito. By virtue of Atty. Sabitsana’s professional and confidential
relationship with the Muertegui family, petitioners came to know about the prior sale to the Muerteguis and the latter’s
possession of the lot, and yet they pushed through with the second sale. Far from acting in good faith, petitioner Atty.
Sabitsana used his legal knowledge to take advantage of his clients by registering his purchase ahead of them. Hence
this petition.

Issues: 1) Whether or not Atty. Sabitsana impaired his duty of loyalty to his client

2) Whether or not the termination of attorney-client relationship likewise terminated the duty of loyalty

Ruling:

1) Yes. It appears that petitioner Atty. Sabitsana was remiss in his duties as counsel to the Muertegui family. Instead of
advising the Muerteguis to register their purchase as soon as possible to forestall any legal complications that accompany
unregistered sales of real property, he did exactly the opposite: taking advantage of the situation and the information he
gathered from his inquiries and investigation, he bought the very same lot and immediately caused the registration thereof
ahead of his clients, thinking that his purchase and prior registration would prevail. The Court cannot tolerate this
mercenary attitude. Instead of protecting his client’s interest, Atty. Sabitsana practically preyed on him.

Petitioner Atty. Sabitsana took advantage of confidential information disclosed to him by his client, using the same to
defeat him and beat him to the draw, so to speak. He rushed the sale and registration thereof ahead of his client. As the
Muertegui family lawyer, he had no right to take a position, using information disclosed to him in confidence by his client,
that would place him in possible conflict with his duty. He may not, for his own personal interest and benefit, gamble on
his client’s word, believing it at one time and disbelieving it the next. He owed the Muerteguis his undivided loyalty. He
had the duty to protect the client, at all hazards and costs even to himself. Moreover, as the Muertegui family’s lawyer,
Atty. Sabitsana was under obligation to safeguard his client's property, and not jeopardize it. Such is his duty as an
attorney, and pursuant to his general agency.

2) No. Even granting that Atty. Sabitsana has ceased to act as the Muertegui family's lawyer, he still owed them his
loyalty. The termination of attorney-client relation provides no justification for a lawyer to represent an interest adverse to
or in conflict with that of the former client on a matter involving confidential information which the lawyer acquired when he
was counsel. The client's confidence once reposed should not be divested by mere expiration of professional
employment. This is underscored by the fact that Atty. Sabitsana obtained information from Carmen which he used to his
advantage and to the detriment of his client.

From the foregoing disquisition, it can be seen that petitioners are guilty of bad faith in pursuing the sale of the lot despite
being apprised of the prior sale in respondent's favor. Moreover, petitioner Atty. Sabitsana has exhibited a lack of loyalty
toward his clients, the Muerteguis, and by his acts, jeopardized their interests instead of protecting them.
A.C. No. 9395               November 12, 2014
DARIA O. DAGING, Complainant,
vs.
ATTY. RIZ TINGALON L. DAVIS, Respondent.
DEL CASTILLO, J.:

Facts: Complainant was the owner and operator of Nashville Country Music Lounge. She leased from Benjie Pinlac
(Pinlac) a building space located at No. 22 Otek St., Baguio City where she operated the bar. Meanwhile, complainant
signed a Retainer Agreement with the respondent and Atty. Sabling.

Because complainant was delinquent in paying the monthly rentals, Pinlac terminated the lease. Together with Novie
Balageo (Balageo) and respondent, Pinlac went to complainant's music bar, inventoried all the equipment therein, and
informed her that Balageo would take over the operation of the bar. Complainant averred that subsequently respondent
acted as business partner of Balageo in operating the bar under her business name, which they later renamed Amarillo
Music Bar. Complainant likewise alleged that she filed an ejectment case against Pinlac and Balageo before the Municipal
Trial Court in Cities (MTCC), Branch 1, Baguio City. At that time, Davis & Sabling Law Office was still her counsel as their
Retainer Agreement remained subsisting and in force. However, respondent appeared as counsel for Balageo in that
ejectment case and filed, on behalf of the latter, an Answer with Opposition to the Prayer for the Issuance of a Writ of
Preliminary Injunction.

In his Comment, respondent denied participation in the takeover or acting as a business partner of Balageo in the
operation of the bar. He asserted that Balageo is the sole proprietress of the establishment. He insisted that it was Atty.
Sabling, his partner, who initiated the proposal and was in fact the one who was able to convince complainant to accept
the law office as her retainer. Respondent maintained that he never obtained any knowledge or information regarding the
business of complainant who used to consult only Atty. Sabling. Respondent admitted though having represented
Balageo in the ejectment case, but denied that he took advantage of the Retainer Agreement between complainant and
Davis and Sabling Law Office. In the interest of justice and fair play, respondent deemed it prudent to withdraw as
Counsel for Novie Balageo. Hence, Respondent filed his Motion to Withdraw As Counsel.

The Investigating Commissioner found respondent guilty of betrayal of his client's trust and for misuse of information
obtained from his client to the disadvantage of the latter and to the advantage of another person. He recommended that
respondent be suspended from the practice of law for a period of one year. The IBP Board of Governors adopted and
approved the Report and Recommendation of the Investigating Commissioner.

Issue: Whether or not respondent violated the Code of Professional Responsibility by representing conflicting interests

Ruling: Based on the established facts, it is indubitable that respondent transgressed Rule 15.03 of Canon 15 of the
Code of Professional Responsibility. It provides:

Rule 15.03 -A lawyer shall 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." The prohibition against representing conflicting interests is absolute and the rule
applies even if the lawyer has acted in good faith and with no intention to represent conflicting interests. In Quiambao v.
Atty. Bambas, the Court emphasized that lawyers are expected not only to keep inviolate the client's 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.

Respondent argues that while complainant is a client of Davis & Sabling Law office, her case is actually handled only by
his partner Atty. Sabling. He was not privy to any transaction between Atty. Sabling and complainant and has no
knowledge of any information or legal matter complainant entrusted or confided to his law partner. He thus inveigles that
he could not have taken advantage of an information obtained by his law firm by virtue of the Retainer Agreement. The
Court is not impressed.

In Hilado v. David,reiterated in Gonzales v. Atty. Cabucana, Jr., the Court held that a lawyer who takes up the cause of
the adversary of the party who has engaged the services of his law firm brings the law profession into public disrepute and
suspicion and undermines the integrity of justice. Thus, respondent's argument that he never took advantage of any
information acquired by his law firm in the course of its professional dealings with the complainant, even assuming it to be
true, is of no moment. Undeniably aware of the fact that complainant is a client of his law firm, respondent should have
immediately informed both the complainant and Balageo that he, as well as the other members of his law firm, cannot
represent any of them in their legal tussle; otherwise, they would be representing conflicting interests and violate the Code
of Professional Responsibility. Indeed, respondent could have simply advised both complainant and Balageo to instead
engage the services of another lawyer.

The penalty for representing conflicting interests may either be reprimand or suspension from the practice of law ranging
from six months to two years. 

Atty. Riz Tingalon L. Davis is found GUILTY of violating Rule 15.03, Canon 15 of the Code of Professional Responsibility
and is SUSPENDED from the practice of law for a period of six (6) months effective upon receipt of the Resolution.
A.C. No. 10548               December 10, 2014
CAROLINE CASTANEDA JIMENEZ, Complainant,
vs.
ATTY. EDGAR B. FRANCISCO, Respondent.
MENDOZA, J.:

Facts: Mario Crespo, otherwise known as Mark Jimenez (Jimenez), filed a complaint for estafa against complainant and 6
others. Jimenez alleged that he was the true and beneficial owner of the shares of stock in Clarion Realty and
Development Corporation (Clarion), which was incorporated specifically for the purpose of purchasing a residential house
located in Forbes Park, Makati City (Forbes property). Clarion purchased the Forbes property in the amount of
₱117,000,000.00 from Gerardo Contreras.

Thereafter, Jimenez was informed by Atty. Francisco that, through fraudulent means, complainant and her co-
respondents in the estafa case, put the Forbes property for sale sometime in August 2004. Jimenez’s complaint for estafa
was based on complainant’s alleged participation in the fraudulent means in selling the Forbes property which was
acquired by Clarion with Jimenez’s money.

In support of Jimenez’s complaint for estafa, Atty. Francisco executed an affidavit reiterating its factual averments.
Complainant was shocked upon reading the allegations in the complaint for estafa filed by Jimenez against her. She felt
even more betrayed when she read the affidavit of Atty. Francisco, on whom she relied as her personal lawyer and
Clarion’s corporate counsel and secretary of Clarion. This prompted her to file a disciplinary case against Atty. Francisco
for representing conflicting interests. According to her, she usually conferred with Atty. Francisco regarding the legal
implications of Clarion’s transactions. Without admitting the truth of the allegations in his affidavit, complainant argued that
its execution clearly betrayed the trust and confidence she reposed on him as a lawyer. For this reason, complainant
prayed for the disbarment of Atty. Francisco.

Atty. Francisco mainly argued that he violated neither the rule on disclosures of privileged communication nor the
proscription against representing conflicting interests, on the ground that complainant was not his client. He was the
lawyer of Jimenez and the legal counsel of Clarion, but never of the complainant. Further, though he acted as legal
counsel for Clarion, no attorney-client relationship between him and complainant was formed, as a corporation has a
separate and distinct personality from its shareholders. Therefore, he served no conflicting interests because it was not a
"former client" and a "subsequent client" who were the opposing parties in litigation.

Arguing that the execution of his affidavit in the estafa case was but a truthful narration of facts by a witness, Atty.
Francisco cited Gonzaga v. Cañete,9 where the Court ruled that "the fact that one of the witnesses for the defendant had
been formerly the lawyer for the defendant in this suit was no ground for rejecting his testimony."

The Investigating Commissioner found Atty. Francisco guilty of violations of the CPR and recommended that he be
suspended for one (1) year from the practice of law. The IBP-BOG adopted and approved, in toto, the findings and
recommendation of the CBD against Atty. Francisco.

Atty. Francisco reiterated that his participation in the execution of the documents pertaining to the sale of the Forbes
property were all connected to his capacity as Clarion’s corporate secretary and legal counsel, not to mention his ties with
his client and friend, Jimenez. He admitted that he owed fidelity to Clarion and Jimenez, but denied that this duty
extended to the incorporators and shareholders of Clarion. Thus, when complainant sought advice in her capacity as a
shareholder in Clarion, no fiduciary duty arose on his part. In his own words, Atty. Francisco insisted that "Carol is not
Clarion and vice versa.”

The IBP-BOG denied the respondent’s motion for reconsideration.

Issue: Whether or not Atty. Francisco violated the rule on privileged communication and engaged in an act that
constituted representation of conflicting interests

Ruling: No. Rule 15.03, Canon 15 of the CPR provides that, "[a] lawyer shall not represent conflicting interests except by
written consent of all concerned given after a full disclosure of the facts.” "The relationship between a lawyer and his/her
client should ideally be imbued with the highest level of trust and confidence. This is the standard of confidentiality that
must prevail to promote a full disclosure of the client’s most confidential information to his/her lawyer for an unhampered
exchange of information between them. Needless to state, a client can only entrust confidential information to his/her
lawyer based on an expectation from the lawyer of utmost secrecy and discretion; the lawyer, for his part, is duty-bound to
observe candor, fairness and loyalty in all his dealings and transactions client. Part of the lawyer’s duty in this regard is
to avoid representing conflicting interests…" Thus, even if lucrative fees offered by prospective clients are at stake, a
lawyer must decline professional employment if the same would trigger a violation of the prohibition against conflict of
interest.

In Quiambao v. Bamba,  the Court discussed the application of the rule on conflict of interest in this wise:
26

In broad terms, lawyers are deemed to represent conflicting interests when, in behalf of one client, it is their duty to
contend for that which duty to another client requires them to oppose. Developments in jurisprudence have
particularized various tests to determine whether a lawyer’s conduct lies within this proscription. One test is whether
a lawyer is duty-bound to fight for an issue or claim in behalf of one client and, at the same time, to oppose that
claim for the other client. Thus, if a lawyer’s argument for one client has to be opposed by that same lawyer in
arguing for the other client, there is a violation of the rule.

Another test of inconsistency of interests is whether the acceptance of a new relation would prevent the full
discharge of the lawyer’s duty of undivided fidelity and loyalty to the client or invite suspicion of unfaithfulness or
double-dealing in the performance of that duty. Still another test is whether the lawyer would be called upon in the
new relation to use against a former client any confidential information acquired through their connection or previous
employment.

The proscription against representation of conflicting interest 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 lawyer’s respective retainers with each of them would affect the
performance of the duty of undivided fidelity to both clients.

In determining whether or not Atty. Francisco violated the rule on conflict of interests, a scrutiny of the parties’
submissions with the IBP reveals that the complainant failed to establish that she was a client of Atty. Francisco.

The Court found that the totality of evidence presented by the complainant miserably failed to discharge the burden of
proving that Atty. Francisco was her lawyer. At most, he served as the legal counsel of Clarion and, based on the
affirmation presented, of Jimenez. As discussed, the complainant failed to establish the professional relationship between
her and Atty. Francisco. The records are further bereft of any indication that the "advice" regarding the sale of the Forbes
property was given to Atty. Francisco in confidence. Neither was there a demonstration of what she had communicated to
Atty. Francisco nor a recital of circumstances under which the confidential communication was relayed. All that complaint
alleged in her complainant was that "she sought legal advice from respondent in various occasions."

A.C. No. 10567               February 25, 2015

WILFREDO ANGLO, Complainant,
vs.
ATTY. JOSE MA. V. VALENCIA, ATTY. JOSE MA. J. CIOCON, ATTY. PHILIP Z. DABAO, ATTY. LILY UYV ALENCIA,
ATTY. JOEY P. DE LA PAZ, ATTY. CRIS G. DIONELA, ATTY. RAYMUNDO T. PANDAN, JR.,* ATTY. RODNEY K.
RUBICA,** and ATTY. WILFRED RAMON M. PENALOSA, Respondents.
PERLAS-BERNABE, J.:

Facts: Complainant alleged that he availed the services of the law firm Valencia Ciocon Dabao Valencia De La Paz
Dionela Pandan Rubica Law Office(law firm), of which Attys. Valencia, Ciocon, Dabao, Uy-Valencia, De La Paz, Dionela,
Pandan, Jr., and Rubica were partners, for two (2) consolidated labor cases where he was impleaded as respondent. Atty.
Dionela, a partner of the law firm, was assigned to represent complainant. The labor cases were terminated on June 5,
2008 upon the agreement of both parties.

A criminal case for qualified theft was filed against complainant and his wife by FEVE Farms Agricultural Corporation
(FEVE Farms) acting through a certain Michael Villacorta (Villacorta). Villacorta, however, was represented by the law
firm, the same law office which handled complainant’s labor cases. Aggrieved, complainant filed this disbarment case
against respondents, alleging that they violated Rule 15.03, Canon 15 and Canon 21 of the CPR.

In their defense, respondents admitted that they indeed operated under the name Valencia Ciocon Dabao Valencia De La
Paz Dionela Pandan Rubica Law Office, but explained that their association is not a formal partnership, but one that is
subject to certain "arrangements." As such, the lawyers do not discuss their clientele with the other lawyers and
associates, unless they agree that a case be handled collaboratively. They averred that complainant’s labor cases were
solely and exclusively handled by Atty. Dionela and not by the entire law firm. Moreover, respondents asserted that the
qualified theft case filed by FEVE Farms was handled by Atty. Peñalosa, a new associate who had no knowledge of
complainant’s labor cases, as he started working for the firm after the termination thereof.

The IBP Commissioner found respondents to have violated the rule on conflict of interest and recommended that they be
reprimanded therefor. Moreover, the termination of attorney-client relation provides no justification for a lawyer to
represent an interest adverse to or in conflict with that of the former client.

The IBP Board of Governors adopted and approved the IBP Commissioner’s Report and Recommendation with
modification. Instead of the penalty of reprimand, the IBP Board of Governors dismissed the case with warning that a
repetition of the same or similar act shall be dealt with more severely.

Complainant filed a motion for reconsideration thereof, which the IBP Board of Governors and thereby adopted and
approved the IBP Commissioner’s Report and Recommendation, with modification, (1) reprimanding the respondents for
violation of the rule on conflict of interest; (2) dismissing the case against Atty. Dabao in view of his death; and (3)
suspending Atty. Dionela from the practice of law for one year, being the handling counsel of complainant’s labor cases.
Issue: Whether or not respondents are guilty of representing conflicting interests in violation of the pertinent provisions of
the CPR

Ruling: RULE 15.03 – A lawyer shall not represent conflicting interests except by written consent of all concerned given
after a full disclosure of the facts.

In Hornilla v. Atty. Salunat, the Court explained the concept of conflict of interest in this wise:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The test is
"whether or not in behalf of one client, it is the lawyer’s duty to fight for an issue or claim, but it is his duty to oppose it for
the other client. In brief, if he argues for one client, this argument will be opposed by him when he argues for the other
client." This rule covers not only cases in which confidential communications have been confided, but also those in which
no confidence has been bestowed or will be used. Also, there is conflict of interests if the acceptance of the new retainer
will require the attorney to perform an act which will injuriously affect his first client in any matter in which he represents
him and also whether he will be called upon in his new relation to use against his first client any knowledge acquired
through their connection. Another test of the inconsistency of interests is whether the acceptance of a new relation will
prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof.

As such, a lawyer is prohibited from representing new clients whose interests oppose those of a former client in any
manner, whether or not they are parties in the same action or on totally unrelated cases. The prohibition is founded on the
principles of public policy and good taste. In this case, the Court concurs with the IBP’s conclusions that respondents
represented conflicting interests and must therefore be held liable. As the records bear out, respondents’ law firm was
engaged and, thus, represented complainant in the labor cases instituted against him. However, after the termination
thereof, the law firm agreed to represent a new client, FEVE Farms, in the filing of a criminal case for qualified theft
against complainant, its former client, and his wife. As the Court observes, the law firm’s unethical acceptance of the
criminal case arose from its failure to organize and implement a system by which it would have been able to keep track of
all cases assigned to its handling lawyers to the end of, among others, ensuring that every engagement it accepts stands
clear of any potential conflict of interest. As a final point, the Court clarifies that respondents' pronounced liability is not
altered by the fact that the labor cases against complainant had long been terminated. Verily, the termination of attorney-
client relation provides no justification for a lawyer to represent an interest adverse to or in conflict with that of the former
client. The client's confidence once reposed should not be divested by mere expiration of professional employment.

Respondents Attys. Jose Ma. V. Valencia, Jose Ma. J. Ciocon, Lily Uy-Valencia, Joey P. De La Paz, Cris G. Dionela,
Raymundo T. Pandan, Jr., Rodney K. Rubica, and Wilfred Ramon M. Penalosa are found GUILTY of representing
conflicting interests in violation of Rule 15.03, Canon 15 and Canon 21 of the Code of Professional Responsibility and are
therefore REPRIMANDED for said violations, with a STERN WARNING that a repetition of the same or similar infraction
would be dealt with more severely.

April 20, 2016

A.C. No. 7110
ARTHUR S. TULIO, Complainant,
vs.
ATTY. GREGORY F. BUHANGIN, Respondent.
PERALTA, J.:

Facts: In his Complaint, Tulio narrated when Atty. Buhangin was not yet a lawyer but a surveyor, the latter was the one
who prepared survey plans for the former in connection with the estate left by his mother. Eventually, when he became a
lawyer, Tulio sought his legal advice concerning a property owned by his mother which was then transferred in the names
of third parties. Atty. Buhangin prepared and notarized a Deed of Waiver of Rights dated June 29, 2000 which was signed
by all of his siblings in his favor. Thereafter, Tulio engaged the services of Atty. Buhangin to represent him in filing a case
for specific performance and damages.

To Tulio's surprise, Atty. Buhangin represented his siblings and filed a complaint against for the rescission of the deed of
waiver of rights which he himself prepared and notarized. Tulio further averred that Atty. Buhangin made
misrepresentations in the complaint since he knew beforehand that his siblings waived their rights in his favor over the
subject parcel of land.

Tulio immediately filed a Motion to Disqualify Atty. Buhangin for his unethical conduct in gross violation of his duties and
responsibilities as a lawyer. Subsequently, Atty. Buhangin filed a Motion to Withdraw as counsel. It was stated in the said
motion that Atty. Buhangin: "due to conflict of interest, undersigned respectfully requests that he be allowed by this
Honorable Court to withdraw his appearance in this case as counsel for the plaintiff." Complainant alleged that the actions
of Atty. Buhangin were deliberate and intentional in order to serve his own personal interests against his interests as his
client, hence, constitutes gross dishonesty in violation of his oath and responsibility as a lawyer and notary public.Thus,
the complaint for disbarment against Atty. Buhangin.

Atty. Buhangin submitted his Comment on where he admitted that indeed he had been engaged as legal counsel of the
Estate of Angeline Tulio.. He, however, asserted that his legal representation was neither personal nor directed in favor of
complainant Tulio alone but instead in the latter's capacity as an heir of Angeline Tulio. He maintained that there was no
conflict of interest when he filed the complaint for the declaration of nullity of the waiver of rights as he was in fact merely
protecting the interests of the other heirs of Angeline Tulio.
The Court referred the instant case to the Integrated Bar of the Philippines for investigation, report and recommendation/
decision. In its Report and Recommendation, the IBP-CBD found Atty. Buhangin to have violated not only his lawyer's
oath but also the Code of Professional Responsibility, and recommended that he be meted the penalty of suspension for
two (2) months. The IBP-CBD found Atty. Buhangin guilty of violating the rule on conflict of interest since it believed there
was indeed an attorney-client relationship existing between Tulio and Atty. Buhangin, and not between the latter and the
heirs of Angeline Tulio. It further held that when Atty. Buhangin filed a complaint against Tulio in representation of his
other siblings over legal matters which the former entrusted to him, he clearly violated the trust and confidence reposed to
him by his client.

Issue: Whether or not respondent is guilty of representing conflicting interests

Ruling: Yes. Rule 15.03 of the Code reads:

Canon 15 - A lawyer shall observe candor, fairness and loyalty in all his dealings and transactions with his clients.

Rule 15 .03 - A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full
disclosure of the facts.

Under the afore-cited rule, it is explicit that a lawyer is prohibited from representing new clients whose interests oppose
those of a former client in any manner, whether or not they are parties in the same action or on totally unrelated cases.
The prohibition is founded on the principles of public policy and good taste. It behooves lawyers not only to keep inviolate
the client's 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.

In Hornilla v. Atty. Salunat,  9 the Court discussed the concept of conflict of interest, to wit:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The test is
"whether or not in behalf of one client, it is the lawyer's duty to fight for an issue or claim, but it is his duty to oppose it for
the other client. In brief, if he argues for one client, this argument will be opposed by him when he argues for the other
client." This rule covers not only cases in which confidential communications have been confided, but also those in which
no confidence has been bestowed or will be used. Also, there is conflict of interests if the acceptance of the new retainer
will require the attorney to perform an act which will injuriously affect his first client in any matter in which he represents
him and also whether he will be called upon in his new relation to use against his first client any knowledge acquired
through their connection. Another test of the inconsistency of interests is whether the acceptance of a new relation will
prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof. 

The rule prohibiting conflict of interest was fashioned to prevent situations wherein a lawyer would be representing a client
whose interest is directly adverse to any of his present or former clients. In the same way, a lawyer may only be allowed
to represent a client involving the same or a substantially related matter that is materially adverse to the former client only
if the former client consents to it after consultation. The rule is grounded in the fiduciary obligation of loyalty. Throughout
the course of a lawyer-client relationship, the lawyer learns all the facts connected with the client's case, including the
weak and strong points of the case. Knowledge and information gathered in the course of the relationship must be treated
as sacred and guarded with care. It behooves lawyers not only to keep inviolate the client's 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 paramount in the administration of justice. The nature of that relationship is, therefore, one of trust and
confidence of the highest degree.

Atty. Buhangin's allegation that he represents for and in behalf of the Heirs of Angeline Tulio and not personal or exclusive
to complainant cannot be given any credence. First,  Atty. Buhangin himself admitted in his Motion to Withdraw that he
was withdrawing his appearance in Civil Case No. 6185 against Tulio due to conflict of interest. Secondly,  it cannot be
denied that there was an exclusive attorney-client relationship between Tulio and Atty. Buhangin as evidenced by the
demand letters which Atty. Buhangin prepared specifically as counsel of Tulio. Thirdly,  as correctly observed by the IBP,
other than his bare assertion that he was representing the estate and the Heirs of Angeline Tulio, Atty. Buhangin failed to
satisfactorily show any circumstance that he was actually representing the Heirs of Angeline Tulio and not solely for Tulio.

Atty. Gregory F. Buhangin was held GUILTY of representing conflicting interests in violation of Rule 15.03, Canon 15 of
the Code of Professional Responsibility. He was SUSPENDED from the practice of law for a period of six (6) months, with
a WARNING that a repetition of the same or similar acts in the future will be dealt with more severely.

TOPIC: DUTY OF FIDELITY

A.C. No. 9310               February 27, 2013

VERLEEN TRINIDAD, FLORENTINA LANDER, WALLY CASUBUAN, MINERVA MENDOZA, CELEDONIO ALOJADO,
ROSENDO VILLAMIN and AUREA TOLENTINO, Complainants,
vs.
ATTY. ANGELITO VILLARIN, Respondent.
SERENO, J.:

Facts: The instant case stemmed from a Complaint for specific performance filed with the Housing and Land Use
Regulatory Board (HLURB) by the buyers of the lots in Don Jose Zavalla Subdivision against the subdivision's owner and
developer- Purence Realty Corporation and Roberto Bassig.
In the final adjudication of that case on 11 October 2000, the HLURB ordered the respondents therein to accept the
payments of the buyers under the old purchase price. These buyers included some of the complainants in the instant
case, to wit: Florentina Lander, Celedonio Alojado, Aurea Tolentino and Rosendo Villamin. The HLURB ordered the
owner and the developer to deliver the Deeds of Sale and the Transfer Certificates of Title to the winning litigants. The
Decision did not evince any directive for the buyers to vacate the property.

Purence Realty and Roberto Bassig did not appeal the Decision, thus making it final and executory. Thereafter, the
HLURB issued a Writ of Execution. It was at this point that respondent Villarin entered his special appearance to represent
Purence Realty. Specifically, he filed an Omnibus Motion to set aside the Decision and to quash the Writ of Execution for
being null and void on the ground of lack of jurisdiction due to the improper service of summons on his client. This motion
was not acted upon by the HLURB.

Respondent sent demand letters to herein complainants to immediately vacate the property and surrender it to Purence
Realty, otherwise, he would file the necessary action against them. True enough, Purence Realty, as represented by
respondent, filed a Complaint for forcible entry before the Municipal Trial Court (MTC) against
Trinidad, Lander, Casubuan and Mendoza. Aggrieved, the four complainants filed an administrative case against
respondent. A month after, Alojado, Villamin and Tolentino filed a disbarment case against respondent.

As found by the Integrated Bar of the Philippines (IBP) and affirmed by its Board of Governors, complainants asserted in
their respective verified Complaints that the demand letters sent by Villarin had been issued with malice and intent to
harass them. They insisted that the letters also contravened the HLURB Decision ordering his client to permit the buyers
to pay the balance of the purchase price of the subdivision lots.

In his Position Paper, Villarin denied the allegations of harassment and claimed that no malice attended the sending of the
demand letters. He narrated that when he inquired at the HLURB, he was informed that his client did not receive a
summons pertinent to the Complaint for specific damages. With this information, he formed the conclusion that the
HLURB Decision was void and not binding on Purence Realty. Since his client was the lawful owner of the property,
respondent issued the ejectment letters, which were indispensable in an action for unlawful detainer. Moreover, he
insisted that the addressees of the letters were different from the complainants who had filed the case with the HLURB.

Issue: Whether or not respondent should be administratively sanctioned for sending the demand letters despite a final
and executory HLURB Decision

Ruling: No. Respondent counsel merely acted on his legal theory that the HLURB Decision was not binding on his client,
since it had not received the summons. Espousing the belief that the proceedings in the HLURB were void, Villarin
pursued the issuance of demand letters as a prelude to the ejectment case he would later on file to protect the property
rights of his client.

As the lawyer of Purence Realty, respondent is expected to champion the cause of his client with wholehearted fidelity,
care, and devotion. This simply means that his client is entitled to the benefit of any and every remedy and defense –
including the institution of an ejectment case – that is recognized by our property laws. In Legarda v. Court of Appeals, we
held that in the full discharge of their duties to the client, lawyers shall not be afraid of the possibility that they may
displease the general public.

Nevertheless, the Code of Professional Responsibility provides the limitation that lawyers shall perform their duty to the
client within the bounds of law. In this case, respondent’s act of issuing demand letters, moved by the understanding of a
void HLURB Decision, is legally sanctioned. If his theory holds water, the notice to vacate becomes necessary in order to
file an action for ejectment. Hence, he did not resort to any fraud or chicanery prohibited by the Code, just to maintain his
client’s disputed ownership over the subdivision lots.

Even so, respondent cannot be considered free of error. The factual findings of the IBP board of governors reveal that in
his demand letter, he brazenly typified one of the complainants, Florentina Lander, as an illegal occupant. However, this
description is the exact opposite of the truth, since the final and executory HLURB Decision had already recognized her
as a subdivision lot buyer who had a right to complete her payments in order to occupy her property. Given that
respondent knew that the aforementioned falsity totally disregarded the HLURB Decision, he thus advances the interest of
his client through means that are not in keeping with fairness and honesty. Lawyers must not present and offer in
evidence any document that they know is false.

Respondent Atty. Angelito Villarin is REPRIMANDED with a warning that a repetition of the same or a similar act shall be
dealt with more severely.

Adm. Case No. 9612               March 13, 2013

JOHNNY M. PESTO, Complainant,
vs.
MARCELITO M. MILLO, Respondent.
BERSAMIN, J.:

Facts: Johnny Pesto (Johnny), a Canadian national, charged Atty. Marcelito M. Millo with conduct unbecoming an officer
of the Court, misleading his client, bungling the transfer of title, and incompetence and negligence in the performance of
his duty as a lawyer.
Johnny averred that in May 1990, his wife Abella Pesto (Abella) retained the services of Atty. Millo to handle the transfer
of title over a parcel of land to her name, and the adoption of her niece, Arvi Jane Dizon; that Johnny and Abella gave to
Atty. Millo the amounts of ₱14,000.00 for the transfer of title and ₱10,000.00 for the adoption case; that Atty. Millo
thereafter repeatedly gave them false information and numerous excuses to explain his inability to complete the transfer
of title; that Atty. Millo likewise made them believe that the capital gains tax for the property had been paid way back in
1991, but they found out upon their return to the country in February 1995 that he had not yet paid the tax; that Atty. Millo
reluctantly returned to Abella the amount of ₱14,000.00 only after he stormed out of Atty. Millo’s office in exasperation
over his stalling tactics; and that Atty. Millo then further promised in writing to assume the liability for the accrued
penalties.

Likewise, Johnny blamed Atty. Millo for letting the adoption case be considered closed by the Tarlac office of the
Department of Social Welfare and Development (Tarlac DSWD) due to two years of inaction. Exasperated by Atty. Millo’s
neglect and ineptitude, Johnny brought this administrative complaint in the Integrated Bar of the Philippines (IBP) praying
for disciplinary action to be taken against Atty. Millo, and seeking the refund of ₱15,643.75 representing the penalties for
the non-payment of the capital gains tax, and of the ₱10,000.00 given for the adoption case.

Atty. Millo, although an extension of the period to file was granted at his instance, he filed no answer in the end. He did not
also appear at the hearings despite due notice. The IBP Commission on Bar Discipline (IBP-CBD) scheduled another
hearing and on that hearing, Atty. Millo appeared through a representative, and presented a
manifestation/motion, whereby he claimed that Johnny had meanwhile died, and that Abella would be withdrawing the
complaint against him.

Investigating Commissioner Victor C. Fernandez found Atty. Millo liable for violating Canon 18 of the Code of Professional
Responsibility, and recommended his suspension from the practice of law for six months. The IBP Board of Governors
affirmed the findings of Investigating Commissioner Fernandez, but lowered the suspension to two months; and ordered
Atty. Millo to return the amount of ₱16,000.00.

On March 27, 2012, Atty. Millo moved for a reconsideration, stating that he had honestly believed that Abella had already
caused the withdrawal of the complaint prior to her own death; that he had already caused the preparation of the
documents necessary for the transfer of the certificate of title, and had also returned the ₱14,000.00 paid by Johnny; that
the adoption case had been finally granted by the trial court; that he had lost contact with Johnny and Abella who resided
in Canada; that Juan Daquis, Abella’s brother, could have confirmed that the charge had arisen from a simple
misunderstanding, and that Abella would cause the withdrawal of the complaint, except that Daquis had meanwhile died
in November 2011.

The IBP Board of Governors denied Atty. Millo’s motion for reconsideration.

Issue: Whether or not respondent failed to discharge his duty of fidelity to his client

Ruling: Yes. Every attorney owes fidelity to the causes and concerns of his clients. He must be ever mindful of the trust
and confidence reposed in him by the clients. His duty to safeguard the clients’ interests commences from his
engagement as such, and lasts until his effective release by the clients. In that time, he is expected to take every
reasonable step and exercise ordinary care as his clients’ interests may require.

Atty. Millo’s acceptance of the sums of money from Johnny and Abella to enable him to attend to the transfer of title and to
complete the adoption case initiated the lawyer-client relationship between them. From that moment on, Atty. Millo
assumed the duty to render competent and efficient professional service to them as his clients. Yet, he failed to discharge
his duty. He was inefficient and negligent in going about what the professional service he had assumed required him to
do. He concealed his inefficiency and neglect by giving false information to his clients about having already paid the
capital gains tax. In reality, he did not pay the capital gains tax, rendering the clients liable for a substantial financial
liability in the form of penalties.

Without doubt, Atty. Millo had the obligation to serve his clients with competence and diligence. Rule 18.03, Canon 18 of
the Code of Professional Responsibility, expressly so demanded of him, to wit:

CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.

xxxx

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

Atty. Millo’s belated and terse characterization of the charge by claiming that the charge had emanated from a mere
"misunderstanding" was not sufficient. He did not thereby refute the charge against him, which omission indicated that the
complaint had substance. It mattered little now that he had in the meantime returned the amount of ₱14,000.00 to the
clients, and that the application for adoption had been eventually granted by the trial court. Such events, being not only
post facto, but also inevitable from sheer passage of time, did not obliterate his liability based on the neglect and
ineptitude he had inflicted on his clients.

The Court FINDS and HOLDS Atty. MARCELITO M. MILLO guilty of violating Canon 18, Rule 18.03 of the Code of
Professional Responsibility and the Lawyer’s Oath; SUSPENDS him from the practice of law for a period of six months
effective from notice, with the STERN WARNING that any similar infraction in the future will be dealt with more severely;
A.C. No. 10537               February 3, 2015
REYNALDO G. RAMIREZ, Complainant,
vs.
ATTY. MERCEDES BUHAYANG-MARGALLO, Respondent.
LEONEN, J.:

Facts: Complainant Reynaldo Ramirez (Ramirez) alleged that he engaged Atty. Margallo’s services as legal counsel in a
civil case for Quieting of Title entitled "Spouses Roque v. Ramirez." According to Ramirez, Atty. Margallo contacted him
on or about March 2004, as per a referral from a friend of Ramirez’s sister. He alleged that Atty. Margallo had offered her
legal services on the condition that she be given 30% of the land subject of the controversy instead of attorney’s fees. 

The Regional Trial Court promulgated a Decision adverse to Ramirez. Atty. Margallo advised him to appeal the judgment.
She committed to file the Appeal before the Court of Appeals. The Court of Appeals directed Ramirez to file his
Appellant’s Brief. On several occasions, Ramirez followed up on the status of the brief, but he was told that there was still
no word from the Court of Appeals. Atty. Mercedes Buhayang-Margallo’s (Atty. Margallo) inaction resulted in a lost
appeal, terminating the case of her client not on the merits but due to her negligence. She made it appear that the case
was dismissed on the merits when, in truth, she failed to file the Appellant’s Brief on time.

In the Complaint filed before the IBP Commission on Bar Discipline, Ramirez alleged that Atty. Margallo had violated
Canon 17 and Canon 18, Rules 18.03 and 18.04 of the Code of Professional Responsibility. 

By way of defense, Atty. Margallo argued that she had agreed to take on the case for free, save for travel expense of
₱1,000.00 per hearing. She also claimed that she had candidly informed Ramirez and his mother that they only had a
50% chance of winning the case. She denied ever having entered into an agreement regarding the contingent fee worth
30% of the value of the land subject of the controversy. Atty. Margallo asserted that she would not have taken on the
Appeal except that the mother of Ramirez had begged her to do so. She claimed that when she instructed Ramirez to see
her for document signing on January 8, 2009, he ignored her. When he finally showed up on March 2009, he merely told
her that he had been busy. Her failure to immediately inform Ramirez of the unfavorable Decision of the Court of Appeals
was due to losing her client’s number because her 8-year-old daughter played with her phone and accidentally erased all
her contacts.

The dispute was set for mandatory conference but only Ramirez appeared despite Atty. Margallo having received
notice. The mandatory conference was reset. Both parties then appeared and were directed to submit their position
papers. Commissioner Cecilio A.C. Villanueva (Comm Ted!!) recommended that Atty. Margallo be reprimanded for her
actions and be given a stern warning that her next infraction of a similar nature shall be dealt with more severely. This was
based on his two key findings. First, Atty. Margallo allowed the reglementary period for filing an Appellant’s Brief to lapse
by assuming that Ramirez no longer wanted to pursue the case instead of exhausting all means possible to protect the
interest of her client. Second, Atty. Margallo had been remiss in her duties as counsel, resulting in the loss of Ramirez’s
statutory right to seek recourse with the Court of Appeals.

The IBP Board of Governors adopted and approved the recommendation of the Commission on Bar Discipline. Ramirez
seasonably filed a Motion for Reconsideration which the Board of Governors granted and increased the recommended
penalty to suspension from practice of law for two (2) years.

On August 20, 2014, Atty. Margallo filed a Petition for Review under Rule 139-B, Section 12 of the Rules of Court. She
alleged that the recommended penalty of suspension was too severe considering that she had been very careful and
vigilant in defending the cause of her client. She also averred that this was the first time a Complaint was filed against her.

Issue: Whether or not respondent was remiss in her duties as legal counsel to her client

Ruling: The relationship between a lawyer and a client is "imbued with utmost trust and confidence." Lawyers are
expected to exercise the necessary diligence and competence in managing cases entrusted to them. They commit not
only to review cases or give legal advice, but also to represent their clients to the best of their ability without need to be
reminded by either the client or the court. The expectation to maintain a high degree of legal proficiency and attention
remains the same whether the represented party is a high-paying client or an indigent litigant.

Canon 17 and Canon 18, Rules 18.03and 18.04 of the Code of Professional Responsibility clearly provide:

CANON 17 - A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE MINDFUL OF THE
TRUST AND CONFIDENCE REPOSED IN HIM.

CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE. Rule 18.03 - A lawyer
shall not neglect a legal matter entrusted to him, and his negligence in connection there with shall render him liable.

Rule 18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to
client’s request for information.
In this light, clients are led to expect that lawyers would be ever-mindful of their cause and accordingly exercise the
required degree of diligence in handling their affairs. Verily, a lawyer is expected to maintain at all times a high standard of
legal proficiency, and to devote his full attention, skill, and competence to the case, regardless of its importance and
whether he accepts it for a fee or for free.

The Court has consistently held that the lawyer’s mere failure to perform the obligations due his client is per se a violation.
Respondent Atty. Margallo was unjustifiably remiss in her duties as legal counsel to Ramirez. Respondent Atty. Margallo
failed to exhaust all possible means to protect complainant Ramirez’s interest, which is contrary to what she had sworn to
do as a member of the legal profession. For these reasons, she clearly violated Canon 17 and Canon 18, Rules 18.03 and
18.04 of the Code of Professional Responsibility.

Respondent Atty. Margallo’s neglect resulted in her client having no further recourse in court to protect his legal interests.
This lack of diligence, to the utmost prejudice of complainant Ramirez who relied on her alleged competence as counsel,
must not be tolerated. It is time that we communicate that lawyers must actively manage cases entrusted to them. There
should be no more room for an inertia of mediocrity.

The Recommendations and Resolution of the Board of Governors of the Integrated Bar of the Philippines dated March 21,
2014 is ACCEPTED, ADOPTED AND AFFIRMED. Atty. Mercedes Buhayang-Margallo is SUSPENDED from the practice
of law for two (2) years, with a stern warning that a repetition of the same or similar act shall be dealt with more severely.
This decision is immediately executory.

March 18, 2015

A.C. No. 10672
EDUARDO A. MAGLENTE,* Complainant,
vs.
ATTY. DELFIN R. AGCAOILI, Respondent.
PERLAS-BERNABE, J:.

Facts: Complainant, as President of "Samahan ng mga Maralitang Taga Ma. Corazon III, Incorporated'' (Samahan),
alleged that he engaged the services of respondent for the purpose of filing a case in order to determine the true owner of
the land being occupied by the members of Samahan. In connection therewith, he gave respondent the aggregate amount
of P48,000.00 intended to cover the filing fees for the action to be instituted, as evidenced by a written acknowledgment
executed by respondent himself. Despite the payment, respondent failed to file an action in court.

When confronted, respondent explained that the money given to him was not enough to fully pay for the filing fees in
court. Thus, complainant asked for the return of the money, but respondent claimed to have spent the same and even
demanded more money. Complainant further alleged that when he persisted in seeking restitution of the aforesaid sum,
respondent told him to shut up because it was not his money in the first place. Hence, complainant filed this administrative
complaint seeking the return of the full amount he had paid to respondent.

In his defense, respondent denied spending complainant’s money, explaining that he had already prepared the initiatory
pleading and was poised to file the same, when he discovered through the Clerk of Court of the Regional Trial Court of
Antipolo City that the filing fee was quite costly. This prompted him to immediately relay such information to complainant
who undertook to raise the amount needed. While waiting, however, the instant administrative case was filed against him.

The IBP Investigating Commissioner found respondent guilty of violating Rule 16.01 of the Code of Professional
Responsibility (CPR). The Investigating Commissioner found that respondent clearly received the amount of 48,000.00
from complainant, which was intended to answer for the filing fees of a case he was supposed to file for the Samahan, but
which he failed to do so. In this relation, the Investigating Commissioner observed that had respondent prepared the
complaint and performed research works, as he claimed, then he could have kept a reasonable amount for his effort
under the doctrine of quantum meruit, but unfortunately, he could not present any proof in this respect.

The IBP Board of Governors adopted and approved the Report and Recommendation, with modification increasing the
recommended penalty from Censure to suspension from the practice of law for a period of three (3) months. Aggrieved,
respondent moved for reconsideration which was, however, denied.

Issue: Whether or not respondent should be held administratively liable for the acts complained of

Ruling: Yes. It must be stressed that once a lawyer takes up the cause of his client, he is duty-bound to serve the latter
with competence, and to attend to such client’s cause with diligence, care, and devotion, whether he accepts it for a fee or
for free. He owes fidelity to such cause and must always be mindful of the trust and confidence reposed upon him.
Therefore, a lawyer’s neglect of a legal matter entrusted to him by his client constitutes inexcusable negligence for which
he must be held administratively liable for violating Rule 18.03, Canon 18 of the CPR, which reads:

CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.

xxxx

Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection [therewith] shall
render him liable.1âwphi1
In the instant case, it is undisputed that complainant engaged the services of respondent for the purpose of filing a case in
court, and in connection therewith, gave the amount of 48,000.00 to answer for the filing fees. Despite the foregoing,
respondent failed to comply with his undertaking and offered the flimsy excuse that the money he received from
complainant was not enough to fully pay the filing fees.

Furthermore, respondent also violated Rules 16.01 and 16.03, Canon 16 of the CPR when he failed to refund the amount
of 48,000.00 that complainant gave him despite repeated demands, viz.:

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

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

xxxx

Rule 16.03 – A lawyer shall deliver the funds and property of his client when due or upon demand. x x x.

Verily, when a lawyer receives money from the client for a particular purpose, the lawyer is bound to render an accounting
to the client showing that the money was spent for the intended purpose. Consequently, if the money was not used
accordingly, the same must be immediately returned to the client. A lawyer’s failure to return the money to his client
despite numerous demands is a violation of the trust reposed on him and is indicative of his lack of integrity, as in this
case.

Clearly, respondent failed to exercise such skill, care, and diligence as men of the legal profession commonly possess
and exercise in such matters of professional employment, and hence, must be disciplined accordingly.

Atty. Delfin R. Agcaoili, Jr. was found GUILTY of violating Rules 16.01 and 16.03 of Canon 16, and Rule 18.03 of Canon
18 of the Code of Professional Responsibility. He was SUSPENDED from the practice of law for a period of one (1) year,
with a STERN WARNING that a repetition of the same or similar acts will be dealt with more severely. Furthermore,
respondent was ORDERED to return to complainant Eduardo A. Maglente the amount of 48,000.00 he received from the
latter.