CANON 18

Dolores C. Belleza, Complainant, v. Atty. Alan S. Macasa, Respondent

Adm. Case No. 7815 | 23 July 2009

Facts:
On 10 November 2004, complainant went to see respondent on referral of their mutual friend,
Joe Chua. Complainant wanted to avail of respondent’s legal services in connection with the
case of her son, Francis John Belleza, who was arrested by policemen of Bacolod City earlier
that day for alleged violation of Republic Act (RA) 9165. Respondent agreed to handle the case
for P30,000.

The following day, complainant made a partial payment of P15,000 to respondent thru their
mutual friend Chua. On 17 November 2004, she gave him an additional P10,000. She paid the
P5,000 balance on 18 November 2004. Both payments were also made thru Chua. On all three
occasions, respondent did not issue any receipt.

On 21 November 2004, respondent received P18,000 from complainant for the purpose of
posting a bond to secure the provisional liberty of her (complainant’s) son. Again, respondent
did not issue any receipt. When complainant went to the court the next day, she found out that
respondent did not remit the amount to the court.

Complainant demanded the return of the P18,000 from respondent on several occasions but
respondent ignored her. Moreover, respondent failed to act on the case of complainant’s son
and complainant was forced to avail of the services of the Public Attorney’s Office for her son’s
defense.

Thereafter, complainant filed a verified complaint for disbarment against respondent in the
Negros Occidental chapter of the Integrated Bar of the Philippines (IBP). In an order dated 13
July 2005, the Commission on Bar Discipline (CBD) required respondent to submit his answer
within 15 days from receipt thereof. Respondent, in an urgent motion for extension of time to
file an answer dated 10 August 2005, simply brushed aside the complaint for being "baseless,
groundless and malicious" without, however, offering any explanation. He also prayed that he
be given until 4 September 2005 to submit his answer.

Respondent subsequently filed urgent motions for second and third extensions of time praying
to be given until 4 November 2005 to submit his answer. He never did.

Issue:
Was the Respondent in violation of the Code of Professional Responsibility due to his
negligence of the case of the respondent’s son?

Held:
For grossly neglecting the cause of his client, Atty. Macasa is guilty. Respondent undertook to
defend the criminal case against complainant’s son. Such undertaking imposed upon him the
following duties:

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

CANON 19 – A LAWYER SHALL REPRESENT HIS CLIENT WITH ZEAL WITHIN THE BOUNDS OF THE
LAW.

A lawyer who accepts the cause of a client commits to devote himself (particularly his time,
knowledge, skills and effort) to such cause. He must be ever mindful of the trust and confidence
reposed in him, constantly striving to be worthy thereof. Accordingly, he owes full devotion to
the interest of his client, warm zeal in the maintenance and defense of his client’s rights and
the exertion of his utmost learning, skill and ability to ensure that nothing shall be taken or
withheld from his client, save by the rules of law legally applied.

A lawyer who accepts professional employment from a client undertakes to serve his client with
competence and diligence. He must conscientiously perform his duty arising from such
relationship. He must bear in mind that by accepting a retainer, he impliedly makes the
following representations: that he possesses the requisite degree of learning, skill and ability
other lawyers similarly situated possess; that he will exert his best judgment in the prosecution
or defense of the litigation entrusted to him; that he will exercise reasonable care and diligence
in the use of his skill and in the application of his knowledge to his client’s cause; and that he
will take all steps necessary to adequately safeguard his client’s interest.

A lawyer’s negligence in the discharge of his obligations arising from the relationship of counsel
and client may cause delay in the administration of justice and prejudice the rights of a litigant,
particularly his client. Thus, from the perspective of the ethics of the legal profession, a lawyer’s
lethargy in carrying out his duties to his client is both unprofessional and unethical.

If his client’s case is already pending in court, a lawyer must actively represent his client by
promptly filing the necessary pleading or motion and assiduously attending the scheduled
hearings. This is specially significant for a lawyer who represents an accused in a criminal case.

The accused is guaranteed the right to counsel under the Constitution. However, this right can
only be meaningful if the accused is accorded ample legal assistance by his lawyer:
The right to counsel proceeds from the fundamental principle of due process which basically
means that a person must be heard before being condemned. The due process requirement is a
part of a person's basic rights; it is not a mere formality that may be dispensed with or
performed perfunctorily.

The right to counsel must be more than just the presence of a lawyer in the courtroom or the
mere propounding of standard questions and objections. The right to counsel means that the
accused is amply accorded legal assistance extended by a counsel who commits himself to the
cause for the defense and acts accordingly. The right assumes an active involvement by the
lawyer in the proceedings, particularly at the trial of the case, his bearing constantly in mind of
the basic rights of the accused, his being well-versed on the case, and his knowing the
fundamental procedures, essential laws and existing jurisprudence.

The right of an accused to counsel is beyond question a fundamental right. Without counsel,
the right to a fair trial itself would be of little consequence, for it is through counsel that the
accused secures his other rights. In other words, the right to counsel is the right to effective
assistance of counsel.

The right of an accused to counsel finds substance in the performance by the lawyer of his
sworn duty of fidelity to his client. Tersely put, it means an effective, efficient and truly decisive
legal assistance, not a simply perfunctory representation.

In this case, after accepting the criminal case against complainant’s son and receiving his
attorney’s fees, respondent did nothing that could be considered as effective and efficient legal
assistance. For all intents and purposes, respondent abandoned the cause of his client. Indeed,
on account of respondent’s continued inaction, complainant was compelled to seek the
services of the Public Attorney’s Office. Respondent’s lackadaisical attitude towards the case of
complainant’s son was reprehensible. Not only did it prejudice complainant’s son, it also
deprived him of his constitutional right to counsel. Furthermore, in failing to use the amount
entrusted to him for posting a bond to secure the provisional liberty of his client, respondent
unduly impeded the latter’s constitutional right to bail.

The Supreme Court found the Respondent GUILTY not only of dishonesty but also of
professional misconduct for prejudicing Francis John Belleza’s (the Complainant’s son) right to
counsel and to bail under Sections 13 and 14(2), Article III of the Constitution, and for
violating Canons 1, 7, 17, 18 and 19 and Rules 12.03, 16.01, 16.02, 16.03 and 18.03 of
the Code of Professional Responsibility. He is therefore DISBARRED from the practice
of law effective immediately.

Respondent is hereby ORDERED to return to complainant Dolores C. Belleza the

amounts of P30,000 and P18,000 with interest at 12% per annum from the date of
promulgation of this decision until full payment. Respondent is further DIRECTED to
submit to the Court proof of payment of the amount within ten days from payment.
Failure to do so will subject him to criminal prosecution.
 GEORGE F. SALONGA and SOLID INTERTAIN
CORPORATION, Petitioner, v. COURT OF APPEALS, HON. JULIO R.
LOGARTA, and PAUL GENEVE ENTERTAINMENT
CORPORATION,  respondents.

DECISION

PANGANIBAN, J.:

Are the professional lapses, inefficiency, carelessness and negligence of a

lawyer enough to annul a default judgment? Do they constitute "extrinsic
fraud"? Alternatively, do they amount to deprivation of due process? Is a
motion (as distinguished from an independent and separate petition)
sufficient to vest contempt jurisdiction on a trial court? These questions are
answered by the Court as it resolves this petition assailing the Decision of
respondent Court of Appeals1 in CA-G.R. SP No. 29138 promulgated on
August 26, 1993, affirming with slight modification the judgment by default
rendered by the trial court.

The Antecedent Facts

The court of origin (Regional Trial Court of Makati, Branch 63, presided by
Judge Julio R. Logarta) narrated the facts it culled from the evidence, as
follows:

"Astra Realty Development Corporation owned a property located at

No. 32 Jupiter St., Bel-Air Village, Makati. This property is being
leased to Alelie A. Montojima under a 'bilateral' contract of lease.
Alelie Montojima constructed a building in the leased premises and
opened a restaurant (sic) under the name and style Aquatic Chef
Seafoods Restaurant which however, did not prosper. Alelie
Montojima then came to transact with (herein private respondent)
Paul Geneve Entertainment Corporation and with the consent of the
lessor Astra Realty they agreed on a Joint Venture Agreement (JVA)
with the following terms: that upon the signing and due execution of
the JVA, Alelie Montojima will be selling all her existing rights and
interests over the leased premises in favor of (herein private
respondent) for P3 Million pesos. The JVA was executed and signed
on September 1, 1989. (Herein private respondent) paid Alelie
Montojima the total amount of P1,000,000.00. (Herein private
respondent) took over the possession of the leased premises, but
before (herein private respondent) could open her business, a
complaint was lodged by Bel-Air Village Homeowner's Association for
violation of some municipal ordinances. Astra was also informed by
 the Bel-Air Village Association of the complaint and Alelie Montojima
demanded (herein private respondent) to vacate the premises.
Meanwhile, (herein private respondent), through Mrs. Milagros Izon,
the president, was looking for a possible taker of the leased premises
for a consideration, so she could recover the huge investments she
had made. Thereafter, (herein private respondent) filed a civil case
with prayer for preliminary injunction and writ of attachment against
Montojima. A Temporary Restraining Order against Montojima was
issued on March 22, 1990 while the writ of preliminary injunction was
granted on November 29, 1991. Mrs. Milagros Izon was introduced by
her friend, Ed Calveria, to (herein petitioner) George Salonga. (Herein
petitioner) Salonga was supposed to buy-out all the leaseholding
rights of the (herein private respondent) in the amount of P5.5
Million. Since (herein petitioner) Salonga did not have the sum of
money(,) he proposed instead to Mrs. Izon a joint venture enterprise
between (herein petitioner) Salonga's company (herein petitioner)
Solid Intertain and (herein private respondent). The idea was that
(herein petitioner) Solid Intertain Corporation and (herein private
respondent) Paul Geneve Corporation will form a new corporation and
the name Solidisque Inc. (sic). The documents all in seven (7) sets
were drafted by both parties' respective counsels, Atty. Garlitos for
(herein petitioners) and Atty. Sadili for (herein private respondent).
(Herein private respondent) through Mrs. Izon has signed the joint
venture agreement. The document with extra copies were then
delivered to (herein petitioner) Salonga for his signature and for
notarization. The document together with the extra copies remained
unsigned and unexecuted. With the memorandum of agreement still
unsigned, not notarized and in the possession of (herein petitioner)
Salonga, the latter transferred all his equipments and properties from
his former business site, Metro Disco, to the subject premises in
question after informing Mrs. Izon that he did not have a place where
he can transfer his things and asked that he be allowed to put it at
No. 32 Jupiter St. Club Ibiza was thus opened and made operational
on the leased premises in question under the name (of herein
petitioner) Solid Intertain Corporation. No corporation under the
name Solidisque (sic) Inc. was ever registered as agreed upon in the
Securities and Exchange Commission. (Herein private respondent)
was totally left out."2
cräläwvirtualibräry

To continue the story, we now quote from the respondent Court of Appeals:

"It appears that on November 26, 1991 herein private respondent

(Paul Geneve Entertainment Corporation) filed a complaint for specific
performance with temporary restraining order and preliminary
 injunction with prayer for damages against herein petitioners (George
Salonga and Solid Intertain Corporation) to enforce a memorandum
of agreement that was supposedly perfected between the parties
(Rollo, p. 157). On November 29, 1991 petitioners received a copy of
the summons and complaint, including a copy of the restraining order
issued in the said civil case by public respondent, enjoining
'petitioners from further operating club Ibiza,' which order was
referred by petitioners to Atty. Onofre G. Garlito, Jr., the former
counsel of record (Petition, p. 8 paragraph 16).
During the scheduled hearing for injunction on December 4, 1991,
only private respondents appeared despite notice to petitioners
(Rollo, p. 31 Annex 'A'). For disobeying the restraining order issued
on November 29, 1991, private respondent sought to cite petitioner
for indirect criminal contempt (Rollo, p. 217) during the hearing on
the civil case whereby Atty. Garlito, Jr. presented George F. Salonga
in support of the opposition to the issuance of the Writ of Preliminary
Injunction (Rollo, p. 125, Comment).
On December 9, 1991, petitioners and their counsel failed to appear
on the date set for hearing the motion for issuance of the writ of
preliminary injunction (Rollo, p. 38). Acting on private respondent's
motion to submit the application for the writ of preliminary injunction,
the (Regional Trial Court a quo) resolved to grant the same on
December 12, 1991 (Rollo, p. 38, Decision, Annex 'A').
In the meantime, and despite two motions for extension of time to
file an answer, (Petition, paragraphs 21 and 22) no answer was filed
(Rollo, p. 39). However, (the) trial court received on June 16, 1992
(Petition, p. 10) an answer purportedly dated January 14, 1992.
On January 15, 1992, petitioner's counsel move (sic) to dissolve the
injunction (Rollo, p. 232) and set the hearing thereof on January 17,
but on said latter date, only private respondent's counsel showed up
(Rollo, p. 237).
Due to petitioner's failure to file an answer, private respondent
submitted a third ex parte motion to declare petitioner, as defendant
(before the Regional Trial Court), in default on March 4, 1992 (Rollo,
p. 238) which was favorably acted upon on March 10, 1992 (Petition,
paragraph 25).
On April 14, 1992, the impugned decision was handed down by (the
Regional Trial Court) judge, thus:

"WHEREFORE, judgment is hereby rendered as follows:

1. The writ of preliminary injunction issued on December 12, 1991
is hereby made permanent;

2. Ordering defendants to sign, perform and execute the

formalities of the Memorandum of Agreement (Exh. 'K'),
pursuant to the Joint Venture Agreement (Exh. 'C');

3. Ordering defendants to undertake the creation and formation,

organization and registration of a new corporation pursuant to
and in accordance with Philippine Laws before the Securities and
Exchange Commission, under the business name and style
'Solidisque Inc.' whose primary purpose shall be to operate a
discotique (sic), club restaurant and/or other forms of business
similar thereto on the aforesaid leased premises setting the
authorized capital stock of the Joint Venture Corporation to be
registered at PESOS TEN MILLION (P10,000,000.00), twenty
five (25 %) per cent of the total subscription as paid-up capital,
in compliance to paragraphs Nos. 1 and 2, page (3), of the
Memorandum of Agreement;

4. Ordering defendants to perform and provide as its equity

participation to SOLIDISQUE, INC. a total of SEVEN MILLION
PESOS (P7,000,000,00), more or less consisting of audio and
lighting equipment, inclusive of electrical and construction
materials, among others, and to prepare a list of the aforesaid
equipment, materials together with their present value and cost
of improvements to be introduced on the establishment to be
operated on the leased premises and make such list available to
the plaintiff the soonest possible time, in compliance to
paragraph No. 3, of the Memorandum of Agreement;

5. Ordering defendants to faithfully and religiously perform,

comply, fulfill and satisfy all the terms and conditions as
embodied under paragraphs Nos. 4, 5, 5(a) and 5(b), 6, 7, 8, 9,
10, 11, 12, 13, 14, 15, and 16, pages (3) to (6), of the
Memorandum of Agreement, Exh. 'K';

6. Ordering the defendants to pay the plaintiff, jointly and

severally the cash amount of P500,000.00 plus legal interest,
computed from November 1, 1990, for being in default, until
fully paid, pursuant to paragraph No. 6, page (4) of the MOA as
ACTUAL DAMAGES;
 7. Ordering the defendants to pay the plaintiff, jointly and
severally the amount of P100,000.00 as exemplary damages;

8. Ordering the defendants jointly (and) severally to pay the

amount of P100,000.00 attorney's fees; and

9. Costs of Suit.

SO ORDERED." (PETITION, pp. 2-3)

Petitioner claims that he received a copy of the decision only on

October 7, 1992 (Petition, par. 3). Yet, a Motion for Reconsideration
was filed on July 28, 1992 by his counsel (Petition, par. 24).
On September 25, 1992, herein petitioner George F. Salonga was
adjudged guilty of civil contempt, thus:
'IN VIEW THEREOF, plaintiff's motion are hereby GRANTED
and defendant George F. Salonga, is hereby adjudged guilty of
indirect contempt of court. Accordingly, the (Regional Trial
Court) hereby orders defendant George F. Salonga jointly and
severally with the corporation to pay a fine of TWO
THOUSAND (P2,000.00) PESOS), a day reckoned from
November 1991 until he complies with the orders of the Court
aforementioned and the default judgment. Such fine shall
pertain to the benefit of plaintiff.
Let a warrant of arrest issue on defendant George F. Salonga,
who shall be placed under the custody of the law until such
time that he obeys the orders and judgment of the Court
afore-mentioned (sic).
SO ORDERED.' (Rollo, pp. 115-116)
Four days later, an order for issuance of a writ of execution was
issued over petitioner's plea for a period of five days within which to
submit an opposition. (Rollo, p. 300)
On October 13, 1992, (the Court of Appeals) issued a Temporary
Restraining Order enjoining public respondent (trial court) from
enforcing the Decision dated April 14, 1992 and the Order dated
September 15, 1992 (Rollo, p. 45) and on November 3, 1992, a writ
of preliminary injunction was issued by the (Court of Appeals) upon
approval of the required bond (Rollo, p. 300)."3 chanroblesvirtuallawlibrary

Petitioners raised before the public respondent Court of Appeals the

following arguments:
 "1. The Judgment/Decision dated 14 April 1992 and the Order
dated 25 September 1992 issued in Civil Case No. 91-3261
must be annulled on the ground of fraud on the part of
petitioners' previous counsel.
2. The public respondent judge never acquired jurisdiction over
the person of petitioner Salonga in hearing the criminal
contempt proceedings, thereby depriving petitioner Salonga of
his basic constitutional right to due process and justifying the
annulment of the Order dated 25 September 1992."4 chanroblesvirtuallawlibrary

The respondent Court disagreed with these arguments and ruled that:

"WHEREFORE, IN THE LIGHT OF THE FOREGOING, the petition is

hereby DENIED. The Writ of Preliminary Injunction earlier issued by
this Court is hereby LIFTED and SET ASIDE. Insofar as the fine for
contempt is concerned, the same is reduced to only P1,000.00,
pursuant to and as provided under Section 6, Rule 71 of the Rules of
Court."5

The Issues

Before us, petitioners allege the following "errors" in the challenged Decision
of public respondent:

The public respondent Court of Appeals grievously erred in

denying the Petition for Annulment of Default Judgment filed in
CA-G.R. SP No. 29138 and disregarding the blatant, serious and
culpable negligence and professional misconduct of petitioners'
previous counsel amounting to deprivation of due process of law.

II

The public respondent Court of Appeals committed grave and

serious reversible error in merely reducing the fine for the indirect
contempt instead of nullifying the entire contempt proceedings as
having no basis in law and procedure."6 chanroblesvirtuallawlibrary

In the main, the issue is whether extrinsic fraud and denial of due process
obtain in this case to justify annulment of the default judgment rendered by
the trial court against petitioners.

The Court's Ruling

The petition has no merit.

First Issue: Annulment of Judgment

Well-settled is the doctrine that "a judgment can be annulled only on two (2)
grounds: (a) that the judgment is void for want of jurisdiction or lack of due
process of law; or (b) that it has been obtained by fraud."7 Absent any of
these grounds, a final and executory judgment cannot be voided.

Petitioners George Salonga and Solid Intertain Corporation allege that the
"inimical and antagonistic acts" of their counsel Atty. Onofre G. Garlitos
constitute extrinsic fraud "entitling them to the remedy of annulment of the
assailed Judgment/Decision dated 14 April 1992 and of the Order dated 25
September 1992" that they "may be afforded substantial justice and their
day in court."8 These allegedly fraudulent acts of their previous counsel
Garlitos in handling Civil Case No. 91-3261 are:9 (1) his "very late" arrival at
the December 4, 1991 hearing tackling private respondent's application for a
Writ of Preliminary Injunction, arriving only after the testimony of private
respondent's witness; (2) his failure to appear at the December 9, 1991
hearing "for purposes of submitting evidence/opposition to private
respondent's aforementioned application for the issuance of a Writ of
Preliminary Injunction, as a consequence of which said private respondent's
application was deemed 'submitted for resolution' x x x" by the trial judge;
(3) his failure to appear on the date he himself requested, January 17, 1992,
for the hearing of the Motion for Dissolution of Injunction he had filed on
behalf of petitioners; (4) his failure to file an answer within the period
required by the Rules of Court, which resulted in a decision by default in
favor of private respondents; (5) his failure to appear on the date he
requested for hearing petitioners' Motion for Reconsideration on July 8,
1992, as a result of which the motion was considered submitted for
resolution since only the counsel for private respondent was present; and
(6) his failure to appear at the August 26, 1992 hearing during which the
counsel for private respondent successfully obtained denial of the
aforementioned motion.

No Extrinsic Fraud

Jurisprudence teaches us that "(i)n order for fraud to serve as a basis for the
annulment of a judgment, it must be extrinsic or collateral in character,
otherwise there would be no end to litigations. Extrinsic fraud refers to any
fraudulent act of the prevailing party which iscommitted outside the trial of
the case, whereby the defeated party has been prevented from exhibiting
fully his side of the case, by fraud or deception practised on him by his
opponent."10 Thus, it "refers to some act or conduct of the prevailing party
which has prevented the aggrieved party from having a trial or presenting
his case to the court, or was used to procure judgment without a fair
submission of the controversy. x x x It must be distinguished from intrinsic
fraud which refers to acts of a party at a trial which prevented a fair and just
determination of the case and which could have been litigated and
determined at the trial or adjudication of the case."11
chanroblesvirtuallawlibrary

The petitioners argue that "(e)xtrinsic fraud justifying the annulment of a

judgment should not and cannot be solely limited to acts attributable to the
adverse party. It likewise includes instances wherein a party was prevented
from defending the action brought against him on account of the delinquent
acts and omissions of his attorney. In other words, there is extrinsic fraud
when a party was prevented from having presented all of his case to the
court as when the lawyer connives at his defeat or corruptly sells out
hisclient's interests (Laxamana vs. Court of Appeals, 87 SCRA
48)."12 (Underscoring found in the original.)

We disagree. The nature of extrinsic fraud, as discussed previously,

necessarily requires that its cause be traceable to some fraudulent act of the
prevailing party committed outside the trial of the case. The Court notes that
the previously enumerated negligent acts attributed to petitioner's former
counsel Garlitos were in no way shown or alleged to have been caused by
private respondents. Atty. Garlitos neither connived nor sold out to the
latter.

Laxamana vs. Court of Appeals13 cited by petitioners does not support their

cause because its factual background is different from the instant case. In
that case, the Court found that "Laxamana had directly charged his lawyer
with having deliberately failed to appear at the trial after having
received P1,500 from Mallari. He introduced evidence in support of that
charge. His lawyer, although subpoenaed by the Mallari plaintiffs, did not
testify to deny that charge." Thus, the fraudulent act of the aggrieved
parties' counsel in the cited case was clearly caused by and done in
connivance with the prevailing party. In contrast, Atty. Garlitos, in the
instant case, was not even charged with, much less shown guilty of, having
neglected his duties to his clients by reason of any compensatory
arrangement or collusion with Private Respondent Paul Geneve
Entertainment Corporation. In fact, petitioners never alleged that private
respondent had anything to do with petitioner's counsel Garlitos. Since there
was no extrinsic fraud, the assailed judgment may not be annulled on such
ground.14

Negligence of Counsel Binds Client

On the other hand, it is well-settled that the negligence of counsel binds the
client.15 This is based on the rule that any act performed by a lawyer within
the scope of his general or implied authority is regarded as an act of his
client.16 Consequently, the mistake or negligence of petitioners' counsel may
result in the rendition of an unfavorable judgment against them.17 chanroblesvirtuallawlibrary

Exceptions to the foregoing have been recognized by the Court in cases

where reckless or gross negligence of counsel deprives the client of due
process of law,18 or when its application "results in the outright deprivation
of one's property through a technicality."19None of these exceptions has
been sufficiently shown in the present case.

Gross or Simple Negligence?

Petitioners argue that their previous counsel Garlitos was guilty of gross
negligence in handling their case before the trial court and, thus, they should
not be bound by the consequences of his said negligence. They insist on the
applicability of Legarda vs. Court of Appeals20 asserting that "it sets the
correct directions upon which the Public Respondent Court of Appeals should
have steered its course."21 We are not persuaded. The factual scenario
in Legarda is not on all fours with the case before us. The counsel in the
cited case was found grossly negligent because of the sheer absence of real
effort on his part to defend his client's cause. In the present case, however,
counsel Garlitos was merely guilty of simple negligence. Although his failure
to file a timely answer had led to a judgment by default against his clients,
his efforts at defending their cause were palpably real, albeit bereft of zeal.
As succinctly stated by the Court of Appeals:

"x x x It may be noted that in the case of Legarda vs. Court of

Appeals, supra, counsel for petitioner Legarda merely entered his
appearance and filed a motion for extension of time to file answer
before the lower court. When the lower court declared petitioner
Legarda as in default and subsequently issued a judgment by default,
her counsel did nothing and allowed the judgment to become final
and executory. Upon the prodding of petitioner Legarda, her counsel
filed a petition for annulment of judgment before the (Court of
Appeals). When the (Court of Appeals) denied the petition, her
counsel allowed the judgment to become final and executory.
Petitioner Legarda's counsel was, therefore, adjudged as grossly
negligent by the Supreme Court. The case at bar is different. Herein
petitioners' previous counsel presented petitioner Salonga as witness
to oppose the issuance of the writ of preliminary injunction. When the
writ of injunction was issued by (the trial court), petitioners' counsel
filed a motion to dissolve the writ. When the assailed judgment was
 rendered by (the trial court), petitioners' counsel filed a motion for
reconsideration. Petitioners' previous counsel was present during one
of the hearings of the motion for contempt and even filed and
objection/comment to the private respondent's offer of exhibits in
support of their motion. Thus, while petitioners' counsel failed to file
some pleadings or to attend other hearings before (the trial court),
(the Court of Appeals) holds that such negligence is purely simple,
not gross as would amount to a deprivation of petitioner's right to due
process of law."22

No Denial of Due Process

The Constitution mandates that "(n)o person shall be deprived of life, liberty,
or property without due process of law x x x"23 The "essence of due process
is to be found in the reasonable opportunity to be heard and submit any
evidence one may have in support of one's defense. 'To be heard' does not
mean only verbal arguments in court; one may be heard also through
pleadings. Where opportunity to be heard, either through oral arguments or
pleadings, is accorded, there is no denial of procedural due process."24Hence,
due process was never denied petitioners Salonga and Solid Intertain
Corporation because the trial court had given them a reasonable opportunity
to be heard and present their side in all the proceedings before it. The
records reveal that the judgment by default was rendered by the trial court
in faithful compliance with Rule 18 of the Rules of Court and the
constitutional guaranty of due process.

In fact, petitioners were declared in default only on the third ex parte motion

filed by private respondents on March 4, 1992.25 Acting on the private
respondents' first motion to declare petitioners in default for their failure to
appear at the hearing of the Motion for Dissolution of Injunction, on the
hearing date petitioners themselves requested, the trial court issued an
order dated February 3, 1992, which read as follows:

"After examination of the record this court finds that the interest of
justice would be better served by giving the parties opportunities to
ventilate their respective positions.
Furthermore, this Court finds that motion to Declare Defendants
(herein petitioners) in Default prematurely filed considering that
(herein petitioners) filed a Motion for Extension of Time to File
Responsive Pleading on December 27, 1991, which was granted by
the Court."
The failure of petitioners and their counsel Garlitos to take full advantage of
this opportunity to be heard does not change the fact that they were
accorded such opportunity.

To agree with petitioners' tenuous argument would enable any defeated

party to render inutile any default judgment through the simple expedient of
alleging negligence of counsel in filing a timely answer. This Court will not
countenance such a farce which contradicts long-settled doctrines of trial
and procedure. As correctly stated by Respondent Court of Appeals:

"Neither can petitioners claim that they were denied of their day in
court. It is axiomatic that as long as the parties were given the
chance to present their case or defense before judgment was
rendered, the demands of due process are sufficiently met. In the
case at bar, petitioners were served with copies of the summons and
the complaint. Petitioners were allowed to present their evidence in
support of their opposition to the writ of preliminary injunction. They
were given the chance to oppose the motion to cite them in contempt
of court. Counsel for petitioners had filed before respondent court
several pleadings and had attended hearings of the case. Indeed, it
cannot be gainsaid that petitioners were given the opportunity to be
heard.

xxx xxx xxx

Corollarily, the records of the case would suggest that petitioner

Salonga is also negligent. For instance, petitioner Salonga knew that
the initial hearing of the application for issuance of writ of injunction
was set on December 4, 1991 but he did not attend. His former
counsel attended, albeit he arrived late. During the hearing on
December 6, 1991, petitioner Salonga arrived late such that (the
Regional Trial Court), the private respondent and his former counsel
had to wait for him. After giving his testimonies on December 6,
1991, petitioner Salonga knew that the next hearing for injunction
was on December 9, 1991 but he, as well as his counsel, did not
arrive on said date. (The Court of Appeals) also notes that the motion
for dissolution of injunction filed by petitioner's former counsel was
verified by petitioner Salonga. Therefore, petitioner Salonga must
have known that as requested by his counsel, the motion for
dissolution was set for hearing on January 17, 1972, yet he and his
counsel again failed to appear during the hearing. Petitioner Salonga
knew about private respondent's motion to cite him in contempt of
court but he did not attend the hearing of said motion. The above
 incidents clearly manifest the in officiousness or lack of zeal on the
part of petitioner Salonga in pursuing his defense."26cräläwvirtualibräry

Parenthetically, petitioners admit that on July 22, 1992, Atty. Garlitos was
able to file a timely Motion for Reconsideration on their behalf which was set
for hearing by the trial court.27 The fact that petitioners and their counsel
Garlitos failed to attend said hearing and adduce evidence on their behalf is
of no moment. What is important is that they were given the chance to do
so. "Indeed, deprivation of due process cannot be successfully invoked
where a party was given the chance to be heard in his motion for
reconsideration."28
chanroblesvirtuallawlibrary

Memorandum of Agreement Consented to by Petitioners

Petitioners further attack the validity of the decision of the trial court by
contending that they "were unjustly and unlawfully compelled to pay the
Private Respondent Corporation the amount of five hundred thousand pesos
(P500,000.00), compelled to make Private Respondent Corporation a partner
of the petitioners in the latter's business under the name and style
'Solidisque, Inc.' and to provide the former with thirty percent (30%) equity
participation in exchange for the alleged three million pesos (P3,000,000.00)
capital contribution, compelled to provide as petitioners' alleged equity
participation in the supposed Joint Venture with Private Respondent
Corporation the exorbitant amount of seven million pesos (P7,000,000.00)
consisting of audio and lightning (sic) equipment, electrical and construction
materials and other assets necessary in the creation and construction of a
discoteque, (sic) and, compelled to enter into a Joint Venture with the
Private Respondent Corporation, all on the basis of an unsigned
Memorandum ofAgreement x x x"29 Thus, petitioners' contention is based on
their alleged lack of consent to the Memorandum of Agreement.

Prevailing jurisprudence uniformly holds that findings of fact of the trial

court, particularly when affirmed by the Court of Appeals, are binding upon
this Court.30 Hence, the factual finding of the trial court affirmed by the
respondent Court of Appeals as to the perfection of the Memorandum of
Agreement between petitioners and private respondent, is binding on this
Court. This is more than sufficient to debunk petitioners' contention.

Understood properly, it is clear that the lower courts are not compelling
petitioners to enter into any contract or to pay any sum of money. The
courts are merely enforcing the terms of the agreement voluntarily entered
into by the parties, particularly petitioners.

Second Issue: Petitioners Guilty of Indirect Contempt?

Petitioners argue that the trial court never acquired jurisdiction over the
person of Petitioner Salonga because the contempt proceedings were
"wrongly initiated." Citing Slade Perkins vs. Director of Prisons,31 they
contend that the Motion to Cite for Indirect Contempt filed by private
respondent partakes of the nature of criminal contempt as distinguished
from civil contempt; hence, the mode of procedure and rules of evidence in
criminal prosecutions should apply.32 chanroblesvirtuallawlibrary

The Court is not persuaded. The distinction between civil and criminal
contempt made by this Court in Slade Perkins does not support petitioners'
contention. As we stated in Slade Perkins, the "question of whether the
contempt for which the petitioner was committed in jail is civil or criminal,
does not affect either the jurisdiction or the power of the court in the
premises."33 The Court of Appeals correctly ruled that "(in) indirect contempt
proceedings such as in the case at bar, a mere motion to that effect will
suffice for the (trial court) to acquire jurisdiction."34 For after all, Section 3 of
the Rules of Court requires merely that "a charge in writing has been filed,
and an opportunity given to the accused to be heard by himself or counsel"
before one guilty of indirect contempt may be punished therefor. The
conclusion of Respondent Court of Appeals was based on the pronouncement
of this Court in Gavieres vs. Falcis:

"A court's power to punish for contempt is primarily self-preservative,

in the exercise of which the interest of private parties -- be they
litigants or not in the case in which it is invoked -- is at best only a
coincidental, not a necessary or an indispensable, factor. A citation
for indirect contempt issued by the Court itself, even if based on
information only privately or informally communicated to the court,
operates as the written charge prescribed by the Rule and if duly and
regularly heard, makes a resulting contempt order no less valid than
if it had been rendered upon formal charges preferred by a party-
litigant. Indeed, it has been held that such charges may be made, not
only by the court or the prosecuting office, but 'x x x even by a
private person.'"35cräläwvirtualibräry

Incidentally, as aptly observed by respondent appellate court, the order for

petitioners to pay a fine inuring to the benefit of private respondent finds
support in Slade Perkins, viz.:

"Where the punishment is by fine directed to be paid to a party in the

nature of damages for the wrong inflicted or by imprisonment as a
coercive measure to enforce the performance of some act for the
benefit of the party or in aid of the final judgment or decree rendered
in his behalf, the contempt judgment will, if made before final decree,
 be treated as in the nature of an interlocutory order, or, if made after
final decree, as remedial in nature, and may be reviewed only on
appeal from the final decree, or in such other mode as in appropriate
to the review of judgments in civil cases."36 chanroblesvirtuallawlibrary

Finally, this Decision is without prejudice to whatever cause of action

petitioners may have in law against their former counsel Garlitos.
Elementary dictates of due process prevent us from acting against him in
this proceeding.

WHEREFORE, premises considered, the petition is hereby DENIED for lack

of merit, for its failure to show any reversible error on the part of
Respondent Court. The assailed Decision is AFFIRMED in toto. No costs.

SO ORDERED.

Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ.,

concur. 

Canon 19

Mobil Oil v CFI

This is a petition for review on certiorari filed by petitioner Mobil Oil Philippines, Inc.
questioning (1) the Order of respondent Court of First Instance, Branch VI, Pasig, Rizal,
promulgated on November 20, 1974 declaring its earlier Decision dated July 25, 1974
as null and void insofar as it concerned private respondents Geminiano F. Yabut and
Agueda Enriquez Yabut, and (2) the Order promulgated on February 20, 1975 and
denying petitioner’s Motion for the Issuance of a Writ of Execution and Appointment of
Special Sheriff. chanrobles virtual lawlibrary

The facts of the case are as follows: chanrob1es virtual 1aw library

On November 8, 1972, petitioner filed a complaint 1 in the Court of First Instance of

Rizal against the partnership La Mallorca and its general partners, which included
private respondents, for collection of a sum of money arising from gasoline purchased
on credit but not paid, for damages and attorney’s fees.

On December 22, 1972, Petitioner, with leave of court, filed an Amended Complaint 2

impleading the heirs of the deceased partners as defendants. During the hearing held
on April 1, 1974, after petitioner had presented its evidence, the parties agreed to
submit the case for decision on the basis of the evidence on record adduced by
petitioner but "to exclude past interest in the amount of P150,000.00 and to award
nominal attorney’s fees." Consequently, on July 25, 1974, a Decision 3 was rendered in
favor of the petitioner and against defendants. Private respondents thereafter filed a
Petition to Modify Decision and/or Petition for Reconsideration, 4 which was opposed 5
by petitioner.

The Petition to Modify Decision and/or Reconsideration is predicated on the following

grounds: chanrob1es virtual 1aw library

1. That there was no stipulation or agreement of the parties on the award of attorney’s
fees;

2. That Miguel Enriquez, not being a general partner, could not bind the partnership in
the Sales Agreement he signed with plaintiff; and

3. That defendant Geminiano Yabut already withdrew as partner and president of La

Mallorca as of September 14, 1972.

On November 20, 1974, respondent court issued its disputed Order 6 declaring its
decision null and void insofar as private respondents were concerned on the ground
that there was no evidence to show that the counsel for the defendants had been duly
authorized by their respective clients to enter into a stipulation or facts, a compromise
agreement or a confession judgment with petitioner, a ground never raised by the
parties. Petitioner filed a Motion for Reconsideration and Clarification, 7 seeking the
reconsideration of said order or, if not reconsidered, clarification from respondent court
as to whether or not there will be further proceedings for reception of private
respondents’ evidence in court. Respondent court denied the motion, as well as
petitioner’s Motion for the Issuance of a Writ of Execution and Appointment of Special
Sheriff, by way of the Order dated February 20, 1975. Hence, this petition.

The issue presented before Us is whether or not public respondent acted with grave
abuse of discretion amounting to lack of jurisdiction in declaring null and void its earlier
decision of July 25, 1974.

We find merit in the instant petition.

In the Order of November 20, 1974, 8 respondent court declared the decision dated
July 25, 1974 null and void for the following reason: jgc:chanrobles.com.ph

"There is no evidence on record to show that the attorneys of record for the defendants
had been duly authorized by their respective clients, including present movants, to
enter into a stipulation of facts or a compromise agreement or confession of judgment.
And any settlement or confession of judgment which an attorney may enter for his
client without any written authority cannot bind the client. To be sure, the stipulation of
facts which amounts to or approximates a compromise agreement, or waives a right or
practically confesses judgment, entered into by a lawyer without the consent and
conformity of his clients, is an absolute nullity. This precisely is what appears to be the
stipulation of the movants, as well as the other defendants as the records show. In view
of the conclusion thus reached, it would appear that there is no necessity to discuss the
other grounds raised by the movants." cralaw virtua1aw library

The records show that petitioner had already adduced evidence and formally offered its
evidence in court; that at the hearing of April 1, 1974, for the presentation of
defendants’ evidence, the parties through their counsels, 9 mutually agreed to the
waiver of the presentation of defendants’ evidence on one hand, and the waiver of past
interest in the amount of P150,000.00 on the part of plaintiff and the payment of only
nominal attorney’s fees, thus the respondent court issued the following order: cralawnad

"Calling this case for hearing today, the parties pray the Court that they are submitting
the case for decision on the basis of the evidence thus presented but to exclude past
interest in the amount of about P150,000.00 and to award nominal attorney’s fees.

Finding the said motion in order, let judgment be rendered in accordance with the
evidence so far presented." 10 

The foregoing Order is not a stipulation of facts nor a confession of judgment. If at all,
there has been a mutual waiver by the parties of the right to present evidence in court
on the part of the defendants on one hand, and waiver of interest in the amount of
P150,000.00 and the stipulated attorney’s fees of 25% of the principal amount on the
part of the plaintiff, except a nominal one.

The counsels of the parties in this case had the implied authority to do all acts
necessary or incidental to the prosecution and management of the suit in behalf of their
clients who were all present and never objected to the disputed order of the respondent
court. They have the exclusive management of the procedural aspect of the litigation
including the enforcement of the rights and remedies of their client. Thus, when the
case was submitted for decision on the evidence so far presented, the counsel for
private respondents acted within the scope of his authority as agent and lawyer in
negotiating for favorable terms for his clients. It may be that in waiving the
presentation of defendants’ evidence, counsel believed that petitioner’s evidence was
insufficient to prove its cause of action or knowing the futility of resisting the claim,
defendants opted to waive their right to present evidence in exchange for the
condonation of past interest in the amount of around P150,000.00 and the award of a
nominal attorney’s fees instead of the 25% stipulated in the Sales Agreement and
Invoices. In fact, when counsel secured a waiver of the accumulated interest of
P150,000.00, and the 25% stipulated attorney’s fees, the defendant were certainly
benefited.

Parties are bound by the acts and mistakes of their counsel in procedural matters.
Mistakes of counsel as to the relevancy or irrelevancy of certain evidence or mistakes in
the proper defense, in the introduction of certain evidence, or in argumentation are
among others all mistakes of procedure, and they bind the clients, as in the instant
case. 11 

Having obtained what defendants bargained for and having wrongly appreciated the
sufficiency or insufficiency of petitioner’s evidence, private respondents are now
estopped from assailing the decision dated July 25, 1974. chanrobles law library

Records would show that private respondents have not submitted any evidence or
pleading to contest the authority of their counsel to waive as he did waive presentation
of their evidence in exchange for and in consideration of petitioner’s waiver of past
interest and the stipulated 25% of attorney’s fees.

Even if We construe the Order of April 1, 1974 to be based on an oral compromise

agreement, the same is valid for as held in the case of Cadano v. Cadano 12 an oral
compromise may be the basis of a judgment although written evidence thereof is not
signed. It has been said that the elements necessary to a valid agreement of
compromise are the reality of the claim made and the bona fides of the compromise.
13 

The validity of a judgment or order of a court cannot be assailed collaterally unless the
ground of attack is lack of jurisdiction or irregularity in their entry apparent on the face
of the record or because it is vitiated by fraud. If the purported nullity of the judgment
lies on the party’s lack of consent to the compromise agreement, the remedy of the
aggrieved party is to have it reconsidered, and if denied, to appeal from such judgment,
or if final to apply for relief under Rule 38. 14 It is well settled that a judgment on
compromise is not appealable and is immediately executory unless a motion is filed to
set aside the compromise on the ground of fraud, mistake or duress, in which case an
appeal may be taken from the order denying the motion. 15 

Moreover, We do not find the grounds relied upon in private respondents’ Petition to
Modify Decision to be meritorious.

Mr. Miguel Enriquez automatically became a general partner of the partnership La

Mallorca being one of the heirs of the deceased partner Mariano Enriquez. Article IV of
the uncontested Articles of Co-Partnership of La Mallorca provides: jgc:chanrobles.com.ph

"IV. Partners. — The parties above-named, with their civil status, citizenship and
residences set forth after their respective names, shall be members comprising this
partnership, all of whom shall be general partners.

If during the existence of this co-partnership, any of the herein partners should die, the
co-partnership shall continue to exist amongst the surviving partners and the heir or
heirs of the deceased partner or partners; Provided, However, that if the heir or heirs of
the deceased partner or partners elect not to continue in the co-partnership, the
surviving partners shall have the right to acquire the interests of the deceased partner
or partners at their book value based upon the last balance sheet of the co-partnership,
and in proportion to their respective capital contributions; And, Provided Further, that
should a partner or partners desire to withdraw from the co-partnership and the
remaining partners are not willing to acquire his or their shares or interest in the co-
partnership in accordance with the foregoing provisions, the co-partnership shall not
thereby be dissolved, but such retiring partner or partners shall only be entitled to his
or their shares in the assets of the co-partnership according to the latest balance sheet
which have been drawn prior to the date of his or their withdrawal. In such event, the
co-partnership shall continue amongst the remaining partners." 16 

As to respondent Geminiano Yabut’s claim that he cannot be liable as a partner, he

having withdrawn as such, does not convince Us. The debt was incurred long before his
withdrawal as partner and his resignation as President of La Mallorca on September 14,
1972. Respondent Geminiano Yabut could not just withdraw unilaterally from the
partnership to avoid his liability as a general partner to third persons like the petitioner
in the instant case.

This is likewise true with regard to the alleged non-active participation of respondent
Agueda Yabut in the partnership. Active participation in a partnership is not a condition
precedent for membership in a partnership so as to be entitled to its profits nor be
burdened with its liabilities. chanrobles law library : red

From the foregoing, it is evident that the court a quo erred in issuing the Orders of
November 20, 1974 and February, 20, 1975 nullifying the decision dated July 25, 1974
and dismissing the complaint against private respondents Geminiano Yabut and Agueda
Enriquez-Yabut.

WHEREFORE, the Orders of November 20, 1974 and February 20, 1975 is hereby
REVERSED and SET ASIDE and the Decision dated July 25, 1975 is reinstated and
declaring the same valid and binding against private respondents Geminiano Yabut and
Agueda Enriquez-Yabut. With costs de officio.

SO ORDERED.

Canon 20

G.R. No. 148923. August 11, 2005

VICENTE LAMIS and SANDIGAN PROTECTIVE & INVESTIGATION AGENCY, INC., Petitioners, 

vs.
DAVID Y. ONG, Respondent.

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari filed by Vicente Lamis and Sandigan Protective &
Investigation Agency, Inc. assailing the Decision dated March 13, 2001 of the Court of Appeals and
1 

its Resolution dated June 28, 2001 in CA-G.R. CV No. 61034, entitled "David Y. Ong, petitioner,
versus Vicente Lamis and Sandigan Protective & Investigation Agency, Inc., respondents."

The facts as shown by the records are:

Sandigan Protective and Investigation Agency, Inc. (Sandigan), petitioner, was the security agency
providing security services at the Manila Chinese Cemetery. The visiting hours were at 6:00 a.m. to
6:00 p.m. Sandigan instructed the security guards not to allow any one to enter the cemetery from
6:00 p.m. to 6:00 a.m.

On September 20, 1994, Vicente Lamis, also a petitioner, was the guard assigned at the south gate
of the cemetery for the 6:00 p.m. to 6:00 a.m. slot.

Around 3:00 in the morning, a Mitsubishi Lancer, with a PSM 679 plate, driven by David Y. Ong,
herein respondent, arrived at the south gate of the cemetery. He beeped his car and continued doing
so, but Lamis did not open the gate. Eventually, he went outside the gate and informed respondent
that being beyond visiting hours, he cannot enter the cemetery. Suddenly, respondent accelerated
the speed of his car, trying to enter the cemetery. This irked Lamis. He closed the gate and took a
shot gun entrusted to him by one of the roving guards.

About thirty minutes thereafter, respondent’s car returned at full speed toward the closed gate where
Lamis was standing. He fired a warning shot but respondent did not stop his car. Lamis fired another
warning shot. Respondent then alighted from his car. Seeing it was closed, he got inside the car, but
before he could do so, Lamis shot him, hitting his right arm, left hip, and right waist. He managed to
drive to the Chinese General Hospital where he was examined and treated. Thereafter, the hospital
guard reported the incident to the police who immediately conducted an investigation.

Petitioner Sandigan conducted its own investigation but did not turn over to the police the firearm
used by Lamis.

Subsequently, Sandigan paid Lamis’ mother the amount spent for his medical expenses. Meanwhile,
he was given another job but he absented from work without leave. Thus, he was suspended and
eventually dismissed from the service.

On March 16, 1994, respondent filed with the Regional Trial Court, Branch 45, Manila a complaint
for frustrated homicide against Lamis, docketed as Criminal Case No. 94-J-27836.

Later, or on March 31, 1995, respondent also filed a complaint for damages against both petitioners,
docketed as Civil Case No. 95-73446. On March 20, 1998, the trial court rendered a Decision, the
dispositive portion of which reads:

"WHEREFORE, premises considered, the defendants Vicente Lamis and Sandigan Protective &
Investigation Agency, Inc. are ordered to pay jointly and solidarily to plaintiff the following amounts:

1. Five Hundred Thousand Pesos (₱500,000.00) as moral damages;

2. Three Hundred Thousand Pesos (₱300,000.00) as exemplary damages;

3. Fifty Thousand Pesos (₱50,000.00) as attorney’s fees, and;

4. The costs of suit.

The respective counterclaims of the defendants are dismissed for lack of merit.

SO ORDERED." 2 

On appeal, the Court of Appeals rendered the assailed Decision affirming the trial court’s judgment,
holding that:

xxx

"We do not agree with the appellants (now petitioners).

xxx

Indeed, the acts of appellant Lamis were not the result of negligence but were deliberate and
intentionalconstituting, as they were, delictual acts for which he was even charged of
‘Frustrated Homicide’ in ‘People versus Vicente Lamis, Criminal Case No. 94-J-27836’
(Exhibit ‘H’). Hence, we agree with the court a quo that appellant Lamis’ plea of having acted in
complete self-defense in shooting the appellee with two (2) guns and, hence, not civilly liable to the
appellee, is barren of merit.

xxx

The appellants fault the court a quo for not giving approbation to appellant Lamis’ plea of having
acted in self-defense. But, then, case law has it that the findings of facts of the trial court, its
calibration of the testimonial evidence of the parties, the probative weight accorded by the court a
quo of the evidence of the parties and its conclusions anchored on its findings, are accorded by the
Appellate Court, high respect, if not, conclusive effect, because of the unique advantage of the trial
court of observing, at close, range, the demeanor and conduct of the witnesses as they regale the
court with their respective testimonies.

xxx

Our Supreme Court expostulated in ‘Maria A. Dulay, et al. versus Court of Appeals, et al., 293
SCRA 720’ that the law is not limited, in scope, to acts or omissions resulting from negligence. It
also includes acts committed with negligence and acts that are voluntary and intentional, whether
such acts are delictual or not and whether or not the defendant is prosecuted in a criminal case
independently and separately from the civil action instituted by the aggrieved party for the recovery
of damages against the offending party x x x.

xxx

The next issue that comes to fore is whether or not appellant Sandigan mustered the requisite
quantum of evidence to prove that it exercised due diligence of a good father of a family in the
selection and its supervision of its employees to prevent damage/injuries.

xxx

In the present recourse, appellant Sandigan failed to discharge its burden. The appellant relied
solely on a copy of its Rules and Regulations, Exhibit ‘1’, and the testimony of Salvador Manansala
to discharge its burden.

xxx

Appellant Sandigan’s utter neglect was made more pronounced when it failed to adduce in evidence
any copy of its Report on the shooting incident involving appellant Lamis. Neither did it surrender to
the police authorities the .38 caliber gun and shotgun used by appellant Lamis in shooting the
appellee.

xxx

The appellants, however, plead that the awards for damages be reduced because of the flagrant
violation by the appellee of the curfew imposed by the management of the cemetery. We are not
inclined to agree to appellant’s plea. We find and consider the awards by the court a quo reasonable
in the light of the factual milieu in the present recourse."
Petitioner filed a motion for reconsideration but the Appellate Court denied the same in its Resolution
dated June 28, 2001.

Hence, the instant petition for review on certiorari raising the following issues:

"I

WHETHER, CONSIDERING THE EVIDENCE ON RECORD, THE COURT OF APPEALS

CORRECTLY DISMISSED PETITIONER LAMIS’ PLEA OF SELF-DEFENSE.

II

WHETHER THE COURT OF APPEALS CORRECTLY HELD PETITIONER SANDIGAN LIABLE

DESPITE THE FACT THAT SANDIGAN EXERCISED DUE DILIGENCE IN THE SELECTION AND
SUPERVISION OF ITS SECURITY GUARDS.

III

WHETHER THE COURT OF APPEALS, DESPITE LACK OF BASIS TO SUPPORT ANY FINDING
OF LIABILITY AGAINST PETITIONERS, CORRECTLY AWARDED DAMAGES IN FAVOR OF
RESPONDENT."

Anent the first and second issues, petitioners contend that the Court of Appeals erred in ruling that:
(a) petitioner Lamis did not act in self-defense, and (b) petitioner Sandigan failed to prove that it
exercised due diligence in the selection and supervision of its security guards.

The first two issues are obviously questions of fact. Certainly, such matters mainly require a
calibration of the evidence or a determination of the credibility of the witnesses presented by the
parties and the existence and relevancy of specific surrounding circumstances, their relation to each
other and to the whole, and the probabilities of the situation.3 

The well-entrenched rule is that questions of fact may not be the subject of an appeal
by certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, as this recourse is
generally confined to questions of law. Under the said Rule, the jurisdiction of this Court over cases
4 

brought to it is limited to the review and rectification of errors of law committed by the lower court.

Moreover, it is doctrinally settled that where the trial court’s factual findings are adopted and
affirmed by the Court of Appeals, as in this case, the same are final and conclusive and may not be
reviewed by this Court. It bears emphasis that in the appreciation of evidence, the Appellate Court
5 

accords due deference to the trial court’s factual findings because the latter had the opportunity to
observe the demeanor of the witnesses when they testified during the trial and, therefore, is in a
better position to determine their credibility. Thus, we find no compelling reason to overturn the
6 

factual findings and conclusion of law by the Court of Appeals relative to the first and second issues.

With respect to the third issue, petitioners maintain that there is no legal basis for the trial court’s
award of damages.

As earlier stated, the trial court found that Lamis’ act of shooting the respondent was "deliberate and
intentional," hence, both petitioners are jointly and solidarily liable to respondent for damages.
Article 2176 of the Civil Code provides that "Whoever by an act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. x x x." The
obligation imposed by this Article is "demandable not only for one’s own wrongful acts or omissions,
but also for those persons for whom one is responsible." Thus, petitioner Sandigan, being the
7 

employer of petitioner Lamis, is likewise liable for damages caused by the latter.8 

As stated earlier, petitioner Sandigan already paid the medical expenses (or actual damages)
incurred by respondent.

We find, however, that the trial court erred in awarding to respondent moral damages in the sum of
₱500,000.00, exemplary damages of ₱300,000.00 and attorney’s fee in the amount of ₱50,000.00.
These amounts are quite excessive. We have held that although the trial court is given the discretion
to determine the amount of such damages, the appellate court may modify or change the amount
awarded when it is inordinate, as in this case.
9 

It bears stressing that the award of moral damages is meant to compensate the claimant for any
physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury unjustly caused by the defendant’s wrongful
acts. Although incapable of pecuniary estimation, the amount must somehow be proportional to
10 

and in approximation of the suffering inflicted. Moral damages are not intended to impose a
11 

penalty to the wrongdoer, neither to enrich the claimant at the expense of the defendant. There is
12  13 

no hard-and-fast rule in determining what would be a fair and reasonable amount of moral damages,
since each case must be governed by its own peculiar facts. Trial courts are given discretion in
determining the amount, with the limitation that it should not be palpably and scandalously
excessive. We hold that an award to respondent of ₱30,000.00, instead of ₱500,000.00, as moral
14 

damages is reasonable.

Likewise, we are convinced that the award of exemplary damages should be reduced from
₱300,000.00 to ₱25,000.00. Such damages are imposed not to enrich the claimant and impoverish
the defendant but to serve as a deterrent against, or as a negative incentive to curb, socially
deleterious actions.15 

Finally, an award of ₱20,000.00 as attorney’s fee is deemed sufficient considering that the suit
involved is merely for damages. Attorney’s fee may be awarded when a party is compelled to litigate
or incur expenses to protect his interest by reason of an unjustified act of the other party, as in the
16 

present case.

WHEREFORE, the petition is DENIED. The assailed Decision dated March 13, 2001 and Resolution
dated June 28, 2001 of the Court of Appeals in CA-G.R. CV No. 61034 are AFFIRMED with
MODIFICATION in the sense that petitioners are ordered to pay respondent (a) ₱30,000.00 as moral
damages, (b) ₱25,000.00 as exemplary damages, and (c) ₱20,000.00 as attorney’s fee. Costs
against petitioners.

SO ORDERED.
Canon 21

G.R. No. L-41957             August 28, 1937

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 

vs.
SANTIAGO SY JUCO, defendant. 
TEOPISTO B. REMO, petitioner-appellant.

Laurel, Del Rosario and Sabido for appellant.

Office of the Solicitor-General for appellee.

DIAZ, J.:

Upon petition of the agent and representatives of the Bureau of Internal Revenue, named Narciso
Mendiola, who alleged that, according to information given him by a person whom he considered
reliable, certain fraudulent bookletters and papers or records were being kept in the building marked
No. 482 on Juan Luna Street, Binondo, Manila, occupied by Santiago Sy Juco, a warrant to search
the building in question was issued against said person on March 7, 1933, by the Court of First
Instance of Manila, through Judge Mariano A. Albert. In said warrant, the peace officers to whom it
was directed for execution were required to seize the above-stated articles for the purpose of
delivering them to the court, for the proper action to be taken in due time. After making the required
search the officers concerned seized, among things, an art metal filing cabinet claimed by Attorney
Teopisto B. Remo to be his and to contain some letters, documents and papers belonging to his
clients. Inasmuch as said officers later refused to return the filing cabinet in question to him, he filed
a petition in the Court of First Instance of Manila, praying that the Collector of Internal Revenue and
his agents be prohibited from opening said art metal filing cabinet and that the sheriff of the City of
Manila likewise be ordered to take charge of said property in the meantime, on the ground that the
warrant by virtue of which the search was made is null and void, being illegal and against the
Constitution. A similar petition was later filed in the same case by the Salakan Lumber Co., Inc., the
same agents of the Bureau of Internal Revenue having also seized some books belonging to it by
virtue of the above-mentioned search warrant.

After due hearing, the Court of First Instance through Judge Delfin Jaranilla, decided to overrule both
petitions, declaring that the art metal filing cabinet and the books and papers claimed by the Salakan
Lumber Co., Inc., would be returned to Attorney Teopisto B. Remo and to the company, respectively,
as soon as it be proven, by means of an examination thereof to be made in the presence of the
interested parties, that they contain nothing showing that they have been used to commit fraud
against the Government. Only Attorney Teopisto B. Remo appealed from the decision of the court
and he now contends that it committed the nine errors assigned by him as follows:

1. The lower court erred in not holding that the search warrant, Exhibit B, issued in the case
at bar is unconstitutional and void ab initio and hence can confer no legal right upon the
Government to seize, much less to retain or open the filing cabinet in question, Exhibit 3.

2. The lower court erred in not holding that the search warrant, which is void ab initio may
not be legalized by evidence secured subsequent to the issuance, or in consequence, of
said illegal search warrant.

3. The lower court erred in not holding that the doctrine of the case of People vs. Rubio (G.
R. No. 35500, 57 Phil., 384), is not applicable to the case at bar.
 4. The lower court erred in not holding that the search warrant, Exhibit B, was procured in
order to obtain evidence against the defendant Santiago Sy Juco.

5. The lower court erred in not holding that the search warrant, Exhibit B, was issued solely
against the premised occupied by the defendant Santiago Sy Juco, and hence cannot be
used against the premises occupied by a stranger, or the petitioner, Teopisto B. Remo.

6. The lower court erred in not holding that the filing cabinet, Exhibit 3, is the personal
property of the petitioner, Teopisto B. Remo, and not of the defendant Santiago Sy Juco.

7. The lower court erred in not upholding the inviolability of the contents of the filing cabinet,
Exhibit 3, the same being confidential documents entrusted to the herein petitioner, Attorney
Teopisto B. Remo, by his clients, in his professional capacity and in connection with cases
pending before the courts of justice and administrative tribunals.

8. The lower court erred in not holding that the Internal Revenue agents gave infringed the
penal laws not only by procuring the search warrant, Exhibit B, against the premises of the
defendant, Santiago Sy Juco, without just cause, but also by exceeding their authority in
enforcing said search warrant against the premises of the petitioner, Teopisto B. Remo, who
is stranger to said search warrant, which acts also constitute a violation of the domicile of
said petitioner; and in not endorsing the matter to the city fiscal for proper action.

9. The lower court erred in not ordering the return of the filing cabinet, Exhibit 3, intact and
unopened, to its lawful owner, the petitioner Teopisto B. Remo.

The pertinent part of the search warrant in question was couched in the following language:

Proof by affidavit having this day been made before me, Mariano Albert, Judge of the Court
of First Instance of the City of Manila, Philippine Islands, by the complainant on oath of
Narciso Mendiola, special investigator, Bureau of Internal Revenue, Manila, that the
defendant, Santiago Sy Juco, of No. 482 Juan Luna, Manila, keeps illegally and feloniously
fraudulent books, correspondence, and records and that he verily believes upon probable
cause that the said books, correspondence and records at No. 482 Juan Luna, Manila, and
the said (personal) property is now being used in the commission of fraud of the revenue of
the Government.

You are therefore commanded to take with you the necessary and proper assistance and to
enter, in the daytime, into the said premises and there diligently search for fraudulent books,
correspondence and records and that you seize and bring them before the court to be
disposed of according to law.

Given under my hands this 7th day of March, 1933, in the City of Manila.

[SEAL]      (Sgd.) MARIANO A. ALBERT

Judge of Court of First instance of Manila

The affidavit or deposition referred to in the warrant above-quoted contained the following questions
and answers:

TESTIMONY TAKEN BEFORE HON. JUDGE MARIANO A. ALBERT, Narciso Mendiola,

being duly sworn, testifies as follows:
 Q. What is your name, residence and occupation? — A. Narciso Mendiola, special
investigator, Bureau of Internal Revenue, Manila.

Q. Are you the applicant for this search warrant? — A. Yes, sir.

Q. do you know the premises situated at No. 482 Juan Luna, Manila? — A. Yes, sir.

Q. Do you know who occupy said premises? — A. According to the best of my information,
the house is occupied by Santiago Sy Juco.

Q. What are your reasons for applying for a search warrant? — A. It has been reported to us
by person whom I considered reliable that in said premises are fraudulent books,
correspondence and records.

I. Narciso Mendiola, being duly sworn, depose and say that I have read the foregoing
questions and answers and that I found the same to be correct and true to the best of my
knowledge and belief.

(Sgd.) NARCISCO MENDIOLA.

Subscribed and sworn to before me this 7th day of March, 1933, in the City of Manila, P. I.

[SEAL]       (Sgd.) MARIANO A. ALBERT

Judge, Court of First Instance, Manila

It appears clear to this court that the question that the appellant wishes to raise by means of the
allege errors attributed by him to the lower court, may be reduced to the following:

1. Is the search warrant in question valid or not, taking into consideration the provisions of
the law and of the Constitution relative thereto?

2. Does the art metal filing cabinet seized by the agents of the Bureau of Internal Revenue
belong to Santiago Sy Juco or to Teopisto B. Remo?

3. Could the search warrant in question affect Attorney Teopisto B. Remo, not being the
person against whom it was directed?

4. Had the court authority to order the opening of the cabinet in question for the purpose of
determining, by an examination of the books, documents and records contained therein,
whether or not same were used to commit fraud against the Government?

1. A question which is very similar to the first one herein raised by the appellant, has been decided
by this court in the negative in its judgment rendered in the case of Alvarez vs. Court of First
Instance of Tayabas and Anti Usury Board, p. 33, ante. According to our laws in force on the date in
question, which do not differ substantially from the provisions of the Constitution of the
Commonwealth in matters regarding search, in order that a search warrant may be valid, the
following requisites, among others, must be present: That the application upon which it is issued be
supported by oath; That the search warrant particularly describes not only place to be searched but
also the person or thing to be seized and that there be probable cause (sec. 97, General Orders, No.
58: sec. 3, Jones Law; Article III, sec. 1, paragraph 3, Constitution of the Commonwealth).
In the above-cited case of Alvarez vs. Court of First Instance of Tayabas and Anti-Usury Board,
supra, and in that of United States vs. Addison (28 Phil., 566), this court held that the oath required
must be such that it constitutes a guaranty that the person taking it has personal knowledge of the
facts of the case and that it convince the committing magistrate, not the individual seeking the
issuance of the warrant or the person making the averment by hearsay, of the existence of the
requisite of probable cause. It has likewise been held by this court that by probable cause are meant
such facts and circumstances antecedent to the issuance thereof. It has furthermore been held that
the true test of the sufficiency of an affidavit to warrant issuance of a search warrant is whether it has
been drawn in such a manner that perjury could be charged thereon in case the allegations
contained therein prove false (Sate vs. Roosevelt, 244 Pac., 280), and that the provisions of the
Constitution and the statutes relative to searches and seizures must be construed liberally in favor of
the individual who may be affected thereby, and strictly against the State and against the person
invoking them for the issuance of the warrant ordering their execution (Elardo vs. State of Misissippi,
145 So., 615; Fowler vs. U. S., 62 Fed. [2d], 656; Saforik vs. U. S. Feed. [2d], 892; Boyd vs. U. S.,
116 U. S., 616; 29 Law. ed., 746), for the simple reason that the proceedings of search and seizure
are, by their very nature, summary and drastic ones (Alvarez vs. Court of First Instance of Tayabas
and Anti-Usury Board, supra, and the authorities cited therein).

By reading the affidavit which gave rise to the issuance of the search warrant in question, it will be
seen that the latter does not fulfill the necessary conditions in support of its validity. In the first place,
it is not stated in said affidavit that the books, documents or records referred to therein are being
used or are intended to be used in the commission of fraud against the Government and,
notwithstanding the lack of such allegation, the warrant avers that they are actually being used for
such purpose. In the second place, it assumes that the entire building marked No. 482 on Juan Luna
Street is occupied by Santiago Sy Juco against whom the warrant was exclusively issued, when the
only ground upon which such assumption is based is Narciso Mendiola's statement which is mere
hearsay and when in fact part thereof was occupied by the appellant. In the third place, it was not
asked that the things belonging to the appellant and to others also be searched. In otherwords, the
warrant in question has gone beyond what had been applied for by Narciso Mendiola and the agent
who executed it performed acts not authorized by the warrant, and it is for this and the above-stated
reason why it is unreasonable, it being evidence that the purpose thereof was solely to fish for
evidence or search for it by exploration, in case some could be found. It is of common knowledge
that search warrants have not been designed for such purpose (Gouled vs. U. S., 255 U. S., 298, S.
C. R., 65 Law. ed., 647; Uy Kheytin vs. Villareal, 42 Phil., 886) much less in a case as the one under
consideration where it has not even been alleged in the affidavit of Narciso Mendiola what crime had
been committed by Santiago Sy Juco or what crime he was about commit. On this point said affidavit
merely contained the following allegation: "It has been reported to us by a person whom I considered
reliable that in said premises are fraudulent books, correspondence and records." Therefore, the first
question raised should be decided in the negative.

2. The resolution of the second question depends entirely on the nature of the evidence presented
and the relative preponderance thereof. The only witness who testified that the art metal filing
cabinet belongs to the accused Santiago Sy Juco, is Macario Garcia. Against Garcia's testimony, we
certainly have that of the appellant himself and his witnesses Rufino C. Wenceslao, Vicente del
Rosario, Jose Jeuquenco and Feliciano Belmonte, besides Exhibits E, F, G, H and L, which
conclusively proves that the furniture in question was purchased by said appellant at the beginning
of January, 1933, and that he had it precisely in a room on one of the upper floors of building No.
482 on Juan Luna Street, which he was then subleasing from Santiago Sy Juco, to keep his records
and those of his clients. On the otherhand, it is unimportant now to determine whether the furniture
in question belongs to Santiago Sy Juco or to the appellant Attorney Topisto B. Remo. It should
have been alleged at the time he applied for the issuance of the search warrant, to show with the
other allegations, reason and evidence that the issuance thereof was justified because of the
existence of probable cause, the latter being a requisite without which the issuance of the judicial
warrant authorizing such search would be unwarranted. For these reasons, this court concludes that
the second question raised calls for an answer in the negative.

3. After the considerations just made, the third question cannot be resolved except in the negative.
The search warrant in question could not and should not in any way affect the appellant attorney on
the ground that he is not the person against whom it had been sought. It is Santiago Sy Juco alone
against whom the search warrant could be used, because it had been obtained precisely against
him; so much so that Narciso Mendiola, who applied for it, mentioned him expressly in his affidavit
and again did so in his report to his superior, that is, the Collector of Internal Revenue (Exhibit C);
and at the trial of this case, it was insisted that there was necessity of making the search in the
premises occupied by Santiago Sy Juco because an investigation was then pending against him, for
having defrauded the Government in its public revenue. The doctrine laid down in the case
of People vs. Rubio (57 Phil., 384), invoked against the appellant, is not applicable to the case at bar
because, unlike in the above-cited case, neither books nor record indicating fraud were found in his
possession, and it is not he against whom the warrant was issued.

4. It is clear that the court could not and can not order the opening of the art metal filing cabinet in
question because, it having been proven that it belongs to the appellant attorney and that in it he
keeps the records and documents of his clients, to do so would be in violation of his right as such
attorney, since it would be tantamount to compelling him to disclose or divulge facts or things
belonging to his clients, which should be kept secret, unless she is authorized by them to make such
disclosure, it being a duty imposed by law upon an attorney to strictly preserve the secrets or
communications made to him. Such an act would constitute a qualified violation of section 383, No.
4, and of section 31 of Act No. 190, which read as follows:

An attorney can not, 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; nor can an attorney's secretary stenographer, or clerk be examined, without the
consent of client and his employer, concerning any fact, the knowledge of which has been
acquired in such capacity. (Sec. 383, No. 4, Act No. 190.)

A lawyer must strictly maintain inviolate the confidence and preserve the secrets of his client.
He shall not be permitted in any court without the consent of his client, given in open court, to
testify to any facts imparted to him by his client in professional consultation, or for the
purpose of obtaining advice upon legal matters. (Sec. 31, Act No. 190.)

For all the foregoing reasons, and finding that the errors assigned by the appellant are very well
founded, the appealed judgment is reversed, and it is ordered that the art metal filing cabinet,
together with the key thereof seized by the internal revenue agent by virtue of the judicial warrant in
question, which is hereby declared null and void, be immediately returned unopened to the
appellant; and that a copy of this decision be sent to the Solicitor-General for him to take action, if he
deems it justified, upon careful investigation of the facts, against the internal revenue agent or
agents who obtained and executed the warrant in question, in accordance with the provisions of
article 129 of the Revised Penal Code, without special pronouncement as to costs. So ordered.

Avanceña, C.J., Villa-Real, Abad Santos, Imperial and Concepcion, JJ., concur.
Canon 22

MERCADO VS. UBAY

GR No. L-35830 July 24, 1990
First Division, Medialdea

FACTS:
(1) CIVIL CASE NO. TM-223: Herein petitioners - The MERCADO (siblings) filed an action for partition
with the Court of First Instance (CFI) Cavite Br. 1 against the SAMONTE siblings. The defendants filed
their answer to the complaint thru their counsel, Atty. Danilo Pine.
(2) CFI rendered judgment in favor of petitioners. Since no appeal was made by any of the defendants,
the decision became final and executory, then the trial court issued the corresponding writ of execution.
(3) Before the writ of execution could be carried out, the defendants filed a petition for certiorari and
mandamus seeking to annul the writ of execution. The Court of Appeals dismissed the petition for lack of
merit.
(4) CIVIL CASE NO. C-2442: Respondent Lucina and Trinidad Samonte filed an action before the CFI of
Rizal for the annulment of the judgment rendered by the trial court on CIVIL CASE NO. TM-223, alleging
that they did not authorize anyone including Atty. Pine to represent them in said case. Petitioner’s motion
to dismiss was denied.

ISSUE:
(1) Whether or not a CFI or a branch thereof has the authority to annul a final and executory judgment
rendered by another branch of the same court?
(2) Whether or not Atty. Pine is duly authorized to represent petitioner in the case at bar?

HELD:
Petition is granted and respondent judge of the CFI or Rizal is ordered to dismiss Civil Case No. 2442.

RATIO:
(1) BP 129 enacted August 10, 1982, transferred jurisdiction over actions for annulment of judgment to
the Court of Appeals. Although the prevailing rule before the enactment of BP 129 was that the CFI and
their branches have jurisdiction to annul each other’s final judgments. However fundamental principles
still dictate that the better policy, as a matter of comity or courteous interaction between courts of first
instance and branches thereof, the annulment of cases to be tried by the same court or branch which
heard the main action sought to be annulled, pursuant to judicial stability, the doctrine of non-interference
should be regarded as highly important in the administration of justice whereby the judgment of a court of
competent jurisdiction may not be opened, modified or vacated by any court of concurrent jurisdiction.
(2) An attorney is presumed to be properly authorized to represent any cause in which he appears, and
no written power of attorney is required of him to appear in Court for his client. (SEC 21, Rule 138, Rules
of Court)

Canon 22

RINCONADA TELEPHONE COMPANY, INC., petitioner, 

vs.
HON. CARLOS R. BUENVIAJE, IRIGA TELEPHONE COMPANY INC. and FRANCISCO
IMPERIAL, respondents.

Benjamin S. Santos for petitioner.

Mulry P. Mendez for respondent Company.
MEDIALDEA, J.:

This petition for certiorari and mandamus is directed against the order of respondent judge dated
January 23, 1978, denying petitioner's right to appeal from his previous orders dated September 16
and 29, 1977 ordering the dismissal of Civil Cases No. IR-265 and IR-578 both entitled Rinconada
Telephone Co., Inc., Plaintiff v. Iriga Telephone Co., Inc., and Francisco Imperial, Defendants.

The record discloses the following factual backdrop:

For and in consideration of the sum of P12,500. 00 in the form of shares of stocks totalling 125 at
P100.00 per share, respondent Francisco Imperial, on July 30, 1971, orally conveyed to petitioner, a
certificate of public convenience and necessity to operate a telephone company in Iriga City issued
to him by the defunct Public Service Commission (now Land Transportation Franchising and
Regulatory Board). After the agreement, petitioner started to operate under the strength of said
certificate. It was only on October 14, 1971 that petitioner and respondent Imperial, executed the
deed of sale pursuant to their earlier agreement.  On September 21, 1972, respondent Imperial
1

again sold the same certificate to herein respondent Iriga Telephone Company, Inc. (ITELCO) This
second sale was approved by the then Public Service Commission. By reason of the second sale,
petitioner charged respondent Imperial of Estafa before the then CFI (now RTC) of Manila. Petitioner
also filed with the then CFI of Iriga City two (2) actions against respondent Imperial, one for breach
of contract with damages,   docketed as Civil Case IR No. 265, and the other, for annulment of Deed
2

of Sale with damages,   docketed as Civil Case IR 578. Both cases were assigned to respondent
3

judge and petitioner was represented by Atty. Luciano Maggay.

Because his guilt was not proven beyond reasonable doubt, respondent Imperial was absolved in
the criminal case.   He then moved for the dismissal of the civil cases pending before respondent
4

judge on the ground of res judicata.  Petitioner opposed the motion   but nevertheless respondent
5 6

judge granted the same in two (2) orders dated September 16 and 29, 1977.  Petitioner, thru Atty.
7

Benjamin Santos sought reconsideration   but respondent judge refused to reconsider the orders of
8

dismissal.  Thus petitioner, thru the same counsel, filed a notice of appeal and appeal bond.
9

Respondent Imperial opposed the appeal because the same was filed out of time. Respondent judge
in an order dated January 23, 1978 denied the notice of appeal. In agreement with respondent
Imperial, the trial court said.

This is so for the order of dismissal dated September 18, 1977 (sic) was shown to have been
received by Atty. Luciano Maggay for Rinconada Telephone Co. on October 11, 1977, and
28 days thereafter, or on November 8, 1978, Atty. Benjamin Santos, another counsel for the
same party filed a Motion for Reconsideration which was denied by proper order on January
23, 1978. The aforesaid latest order was received for Rinconada Telephone Co., Inc.
through Atty. Maggay, who has been shown in the records to be still a counsel of record for
the same party on February 2, 1978. Since the notice of Appeal and Appeal Bond appear to
have been filed on April 19, 1978 and the Record on Appeal only on June 7, 1978, and not
on February 4, 1978, which was the last and 30th day reglementary period for interposing
the contemplated. (p. 58, Rollo)

Petitioner is now before Us claiming that respondent judge gravely abused his discretion in denying
it the right to appeal. Petitioner contends that it received court processes thru Atty. Santos when the
latter entered his appearance in both cases by his filing of a notice of appearance and a motion for
reconsideration of the orders of dismissal which he furnished the counsel of respondent Imperial.
Specifically, it mentioned the order of respondent judge sent to Atty. Benjamin Santos considering
the motion for reconsideration submitted for resolution.   It expressed amazement over the act of
10

respondent judge in not sending to Atty. Santos a copy of the order denying the motion for
reconsideration knowing fully well that the period to appeal therefrom would lapse without the
knowledge of Atty. Santos, its new counsel. While admitting that its notice of appeal and appeal
bond was filed out of time; petitioner considers such fact as the result of the collusion between
respondent judge and respondent Imperial.

The right of client to terminate his relations with his counsel is universally recognized (Enos v.
Casting, 67 ALR 430).  Such termination may be with or without cause (Aro v. Narawa L-24146,
1âwphi1

April 28, 1969, 21 SCRA 1160). The light of a client to terminate the authority of his counsel includes
the right to make a change or substitution at any stage of the proceedings. To be valid, any such
change or substitution must be made: a) upon written application; b) with written consent of the
client; c) upon written consent of the attorney to be substituted; d) in case the consent of attorney to
be substituted cannot be obtained there must be at least a proof of notice that the motion for
substitution has been served upon him in the manner prescribed by the rules (Section 26, Rule 138,
Rules of Court).

Undisputedly, there was no valid substitution in cases at bar. Neither can it be said that Atty. Maggay
formally withdrew as counsel for petitioner in the cases. Therefore, he continued to represent
petitioner and he remained the counsel of record and was for all legal purposes, petitioners' attorney
upon whom respondent court's processes may be served. When a party is represented by counsel,
notice should be made upon the counsel of record (Jalover v. Ytorriaga, L-35989, October 28, 1977,
80 SCRA 100) at his given address in the absence of notice of change of address (Lopez v. de los
Reyes, L-23671, January 30, 1970, 31 SCRA 214). Since he was the last to appear before any
application for substitution was filed, Atty. Maggay remained responsible for the conduct of
petitioner's cause (Olivares v. Leola, 97 Phil. 352; Aban v. Enage, L-30666, February 25, 1983, 120
SCRA 778).

Despite the filing of Atty. Santos of a motion for reconsideration, copy of which he furnished the
opposing counsel, Atty. Maggay is still considered counsel of record (Aban v. Galope L-30666,
February 25, 1983, 120 SCRA 778). Not having formally withdrawn as counsel, the order denying
the notice of appeal and appeal bond was deemed properly served upon Atty. Maggay. Notice of the
order to him was notice to petitioner and for all legal intents and purposes, the date of his receipt is
considered the starting point from which the period to appeal prescribed by law starts to run (Cubar
v. Mendoza, L-55035, February 23, 1983, 120 SCRA 768; Baquiran v. Court of Appeals, L-14551,
July 31, 1961, 2 SCRA 873).

However, to the mind of the Court, there are circumstances present in these cases which warrant a
relaxation of the foregoing rule and jurisprudence. It cannot be denied that respondent judge
recognized Atty. Santos as petitioner's new counsel. This is apparent when the trial court sent Atty.
Santos a copy of the order considering the motion for reconsideration for resolution and also when it
referred to Attys. Maggay and Raneses as petitioner's former counsels and Atty. Santos as the new
counsel of petitioner in its order denying reconsideration. Having acknowledged Atty. Santos as the
new counsel of petitioner, there is a clear case of negligence when said lawyer was not furnished
copy of the order denying reconsideration as a copy of the order considering that motion for
resolution was furnished to petitioner thru said lawyer.

In view of respondent judge's recognition of Atty. Santos as new counsel for petitioner without even
a valid substitution or withdrawal of petitioner's former counsel, said new counsel logically awaited
for service to him of any action taken on his motion for reconsideration. Respondent judge's sudden
change of posture in insisting that Atty. Maggay is the counsel of record is, therefore, a whimsical
and capricious exercise of discretion that prevented petitioner and Atty. Santos from taking a timely
appeal from said order. Clearly, respondent judge committed grave abuse of discretion, amounting
to lack of jurisdiction in denying petitioner's notice of appeal. While it is desirable that the Rules of
Court be faithfully and even meticulously observed, courts should not be so strict about procedural
lapses that do not really impair the administration of justice especially when such strict compliance
was apparently relaxed by the trial court itself. If the rules are intended to insure the orderly conduct
of litigation it is because of the higher objective they seek which is the protection of substantive right
of the parties (Serina v. CA, G.R. No. 28661, February 21, 1989). As was held in several cases:

. . . Because there is no vested right in technicalities, in meritorious cases, a liberal, not

literal, interpretation of the rules becomes imperative and technicalities should not be
resorted to in derogation of the intent and purpose of the rules which is the proper and just
determination of litigation. Litigations, should as much as possible, be decided on their merits
and not on technicality. Dismissal of appeals purely on technical grounds is frowned upon,
and the rules of procedure ought not to be applied in a very rigid, technical sense, for they
are adopted to help secure, not override, substantial justice, and thereby defeat their very
aims. As has been the constant rulings of this Court, every party-litigant should be afforded
the amplest opportunity for the proper and just disposition of his cause, free from the
constraints of technicalities. . . (Fonseca v Court of Appeals, G.R. No. L-36035, August 30,
1988; Hernandez v. Quitain, G.R. No. L48457, November 29, 1988; 168 SCRA 99).

ACCORDINGLY, the writs prayed for are GRANTED. Respondent trial court is hereby ordered to
allow the appeal of petitioner from the orders dismissing Civil Cases No. IR-265 and IR-578.

SO ORDERED.

Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.