EN BANC

A.C. No. 10912. January 19, 2016.

PAULINA T. YU, complainant, vs. ATTY. BERLIN R. DELA CRUZ, respondent.

DECISION

PER CURIAM p:

Subject of this disposition is the September 28, 2014 Resolution of the Integrated Bar of the Philippines Board of
Governors (IBP-BOG) which adopted and approved the findings and the recommendation of the Investigating
Commissioner for the disbarment of Atty. Berlin Dela Cruz (respondent lawyer).

It appears from the records that respondent lawyer agreed to represent Paulina T. Yu (complainant) in several
cases after having received various amounts as acceptance fees, to wit:

Acceptance
Case Title
Fees

People v. Tortona for attempted P20,000.00

homicide (Case No. 06-359) filed with
the Metropolitan Trial Court, Bacoor,
Cavite

Paulina T. Yu v. Pablo and Rodel P8,000.00

Gamboa for qualified theft/estafa (I.S.
No. XV-07-INV-116-05339) filed with
the City Prosecutor of Manila

Paulino T. Yu v. Roberto Tuazon, et

P15,000.00
al.
(Civil Case No. LP-00-0087) filed
before
the Regional Trial Court of Las Pi as
2

On November 29, 2011, while the lawyer-client relationship was subsisting, respondent lawyer borrowed pieces
of jewelry from complainant and pledged the same with the Citystate Savings Bank, Inc. for the amount of
P29,945.50, as shown in the Promissory Note with Deed of Pledge. Respondent lawyer appropriated the
proceeds of the pledge to his personal use. In order to facilitate the redemption of the said jewelry, respondent
lawyer issued to complainant, Citystate Savings Bank Check No. 0088551, dated August 31, 2011, in the amount
of P34,500.00. Upon presentment, however, complainant was shocked to learn that the check was dishonored
for the reason, "Account Closed." Complainant immediately notified respondent lawyer of the dishonor of the
check. CHTAIc

In a letter, dated March 23, 2012, complainant demanded for the refund of the acceptance fees received by
respondent lawyer prior to the "abandonment" of the cases and the payment of the value of the jewelry, but to
no avail.

In another letter, dated April 18, 2012, this time represented by another lawyer, Atty. Francisco C. Miralles,
complainant yet again demanded the redemption of the check in cash within five days from notice; the refund of
the paid acceptance fees, in exchange for which no service was rendered; the payment of the value of the
pledged jewelry in the amount of P100,000.00 in order to avoid the interests due and the possible foreclosure of
the pledge; and moral damages of P300,000.00.

For his failure to heed the repeated demands, a criminal case for violation of Batas Pambansa Blg. 22 was filed
with the Office of the City Prosecutor, Las Pi as City, against him.

On June 7, 2012, a verified complaint was filed with the IBP-Commission on Bar Discipline (IBP-CBD), where
complainant prayed for the disbarment of respondent lawyer on account of grave misconduct, conduct
unbecoming of a lawyer and commission of acts in violation of the lawyer's oath. The IBP-CBD required
respondent lawyer to submit his answer to the complaint. Despite having been duly served with a copy of the
complaint and the order to file his answer, as shown in a certification issued by the Post Master of the Las Pi as
Central Post Office, respondent still failed to file an answer.

Respondent lawyer was likewise notified of the scheduled mandatory conference/hearing on November 23,
2012, but only the complainant and her counsel appeared on the said day. The IBP-CBD then ordered the
resetting of the mandatory conference for the last time to January 11, 2013 and the personal service of the
notice thereof to respondent lawyer's given address. Notwithstanding the receipt of the notice by respondent
lawyer's mother, he still failed to appear during the conference, prompting complainant to move for the
termination of the conference and the submission of the case for report and recommendation.

On June 7, 2013, the Investigating Commissioner recommended the disbarment of respondent lawyer from the
practice of law. Based on the evidence on record, respondent lawyer was found to have violated Rule 16.04 of
the Code of Professional Responsibility (CPR), which proscribed the borrowing of money from a client, unless
the latter's interests were fully protected by the nature of the case or by independent advice. Worse, respondent
lawyer had clearly issued a worthless check in violation of law which was against Rule 1.01 of Canon 1 of the
CPR stating that, "a lawyer shall not engage in unlawful, dishonest and immoral or deceitful conduct."

On September 28, 2014, the IBP-BOG affirmed the said recommendation in Resolution No. XXI-2014-698.

Neither a motion for reconsideration before the BOG nor a petition for review before this Court was filed.
Nonetheless, the IBP elevated to this Court the entire records of the case for appropriate action with the IBP
Resolution being merely recommendatory and, therefore, would not attain finality, pursuant to par. (b), Section
12, Rule 139-B of the Rules of Court.

The Court acknowledges the fact that respondent lawyer failed to refute the accusations against him despite the
numerous opportunities afforded to him to explain his side. All means were exhausted to give respondent lawyer
a chance to oppose the charges against him but to no avail and for reasons only for known to him. Whether
respondent lawyer had personally read the orders by the IBP-CBD or his mother failed to forward the same for
his personal consideration may only be an object of surmise in which the Court cannot indulge. "Disbarment of
lawyers is a proceeding that aims to purge the law profession of unworthy members of the bar. It is intended to
preserve the nobility and honor of the legal profession." Surely, respondent lawyer's failure or refusal to
participate in the IBP-CBD proceedings does not hinder the Court from determining the full extent of his liability
and imposing an appropriate sanction, if any.

After a judicious review of the records, the Court finds no reason to deviate from the findings of the
Investigating Commissioner with respect to respondent lawyer's violation of Canons 1, 16, 17, and Rules 1.01,
16.04, of the CPR. EATCcI

In the case at bench, the complaint stemmed from the use by respondent lawyer of his client's property. He had,
indeed, come into possession of valuable pieces of jewelry which he presented as security in a contract of
pledge. Complainant voluntarily and willingly delivered her jewelry worth P135,000.00 to respondent lawyer
who meant to borrow it and pawn it thereafter. This act alone shows respondent lawyer's blatant disregard of
Rule 16.04. Complainant's acquiescence to the "pawning" of her jewelry becomes immaterial considering that
the CPR is clear in that lawyers are proscribed from borrowing money or property from clients, unless the
latter's interests are fully protected by the nature of the case or by independent advice. Here, respondent
lawyer's act of borrowing does not constitute an exception. Respondent lawyer used his client's jewelry in order
to obtain, and then appropriate for himself, the proceeds from the pledge. In so doing, he had abused the trust
and confidence reposed upon him by his client. That he might have intended to subsequently pay his client the
value of the jewelry is inconsequential. What deserves detestation was the very act of his exercising influence
and persuasion over his client in order to gain undue benefits from the latter's property. The Court has
repeatedly emphasized that the relationship between a lawyer and his client is one imbued with trust and
confidence. And as true as any natural tendency goes, this "trust and confidence" is prone to abuse. The rule
against borrowing of money by a lawyer from his client is intended to prevent the lawyer from taking advantage
of his influence over his client. The rule presumes that the client is disadvantaged by the lawyer's ability to use
all the legal maneuverings to renege on his obligation. Suffice it to say, the borrowing of money or property from
a client outside the limits laid down in the CPR is an unethical act that warrants sanction.

Due to complainant's respect for respondent lawyer, she trusted his representation that the subject jewelry
would be redeemed upon maturity. She accepted respondent lawyer's check, which was eventually dishonored
upon presentment. Despite notice of the dishonor, respondent lawyer did not take steps to remedy the situation
and, on the whole, reneged on his obligation, constraining complainant to avail of legal remedies against him.

Given the circumstances, the Court does not harbor any doubt in favor of respondent lawyer. Obviously, his
unfulfilled promise to facilitate the redemption of the jewelry and his act of issuing a worthless check constitute
grave violations of the CPR and the lawyer's oath. These shortcomings on his part have seriously breached the
highly fiduciary relationship between lawyers and clients. Specifically, his act of issuing worthless checks
patently violated Rule 1.01 of Canon 1 of the CPR which requires that "a lawyer shall not engage in unlawful,
dishonest, immoral or deceitful conduct." This indicates a lawyer's unfitness for the trust and confidence
reposed on him, shows such lack of personal honesty and good moral character as to render him unworthy of
public confidence, and constitutes a ground for disciplinary action, and thus seriously and irreparably tarnishes
the image of the profession. Such conduct, while already off-putting when attributed to an ordinary person, is
much more abhorrent when exhibited by a member of the Bar. In this case, respondent lawyer turned his back
from the promise that he once made upon admission to the Bar. As "vanguards of the law and the legal system,
lawyers must at all times conduct themselves, especially in their dealings with their clients and the public at
large, with honesty and integrity in a manner beyond reproach." ISHCcT

As to the penalty commensurate to respondent lawyer's actions, the Court takes heed of the guidepost provided
by jurisprudence, viz.:"Disbarment should not be decreed where any punishment less severe, such as reprimand,
suspension, or fine, would accomplish the end desired. This is as it should be considering the consequence of
disbarment on the economic life and honor of the erring person." Hence, caution is called for amidst the Court's
plenary power to discipline erring lawyers. In line with prevailing jurisprudence, the Court finds it proper to
impose the penalty of three-year suspension against respondent lawyer, with a stern warning that a repetition of
any of the infractions attributed to him in this case, or any similar act, shall merit a heavier penalty.

Anent the monetary demands made by complainant, the Court reiterates the rule that in disciplinary
proceedings against lawyers, the only issue is whether the officer of the court is still fit to be allowed to continue
as a member of the Bar. Thus, the Court is not concerned with the erring lawyer's civil liability for money
received from his client in a transaction separate, distinct, and not intrinsically linked to his professional
engagement. Accordingly, it cannot order respondent lawyer to make the payment for the subject jewelry he
pawned, the value of which is yet to be determined in the appropriate proceeding.

As to the return of acceptance fees, a clarification is in order. The Investigating Commissioner erred in referring
to them as "attorney's fees"

As to the charge that respondent abandoned the cases he accepted after payment of attorney's fees, this
commission is not fully satisfied that the complainant was able to prove it with substantial or clear evidence. It
was not fully explained in the complaint how or in what manner were the cases "abandoned" by the respondent;
and what prejudice was caused to the complainant. This Commission noted that not a single document or order
coming from the court of prosecutor's office was appended to the Complaint-Affidavit that would at least apprise
this body of what the respondent actually did with the cases he represented.

There is a distinction between attorney's fee and acceptance fee. It is well-settled that attorney's fee is
understood both in its ordinary and extraordinary concept. In its ordinary sense, attorney's fee refers to the
reasonable compensation paid to a lawyer by his client for legal services rendered. Meanwhile, in its
extraordinary concept, attorney's fee is awarded by the court to the successful litigant to be paid by the losing
party as indemnity for damages. On the other hand, acceptance fee refers to the charge imposed by the lawyer
for merely accepting the case. This is because once the lawyer agrees to represent a client, he is precluded from
handling cases of the opposing party based on the prohibition on conflict of interest. Thus, this incurs an
opportunity cost by merely accepting the case of the client which is therefore indemnified by the payment of
acceptance fee. Since the acceptance fee only seeks to compensate the lawyer for the lost opportunity, it is not
measured by the nature and extent of the legal services rendered.

In the case at bench, the amounts of P20,000.00, P18,000.00, and P15,000.00, respectively, were in the nature
of acceptance fees for cases in which respondent lawyer agreed to represent complainant. Despite this oversight
of the Investigating Commissioner, the Court affirms the finding that aside from her bare allegations,
complainant failed to present any evidence showing that respondent lawyer committed abandonment or neglect
of duty in handling of cases. Hence, the Court sees no legal basis for the return of the subject acceptance fees.

WHEREFORE,finding respondent Atty. Berlin R. Dela Cruz GUILTY of violating Canons 1, 16, 17, and Rules
1.01 and 16.04 of the Code of Professional Responsibility, the Court hereby SUSPENDS him from the practice
of law for THREE YEARS with a STERN WARNING that a repetition of the same or similar act would be dealt
with more severely.

Let copies of this decision be furnished the Bar Confidant to be entered in the personal record of the respondent
as a member of the Philippine Bar; the Integrated Bar of the Philippines for distribution to all its chapters; and
the Office of the Court Administrator for circulation to all courts throughout the country.

SO ORDERED.

Sereno, C.J.,Carpio, Velasco, Jr.,Leonardo-de Castro, Peralta, Bersamin, Del Castillo, Perez, Mendoza, Reyes,
Perlas-Bernabe, Leonen and Jardeleza, JJ.,concur.

Brion, * J., is on leave.

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THIRD DIVISION

A.C. No. 5067. June 29, 2015.

CORAZON M. DALUPAN, complainant, vs. ATTY. GLENN C. GACOTT, respondent.

DECISION

VILLARAMA, JR., J p:

Before us is a petition for review under Rule 139-B, Section 12 (c) of the Rules of Court assailing Resolution No.
XVII-2007-115 dated March 17, 2007 and Resolution No. XIX-2010-544 dated October 8, 2010 of the Board of
Governors of the Integrated Bar of the Philippines (IBP) which adopted and approved the Report and
Recommendation dated December 12, 2006 of the Investigating Commissioner of the Commission on Bar
Discipline of the IBP. Although the IBP Board of Governors dismissed the complaint for disbarment filed against
the respondent, it ordered the latter to return the payment of the attorney's fee to the complainant in the
amount of P5,000. This order to return the attorney's fee is the subject of the present petition.

The salient facts of the case follow:

In her affidavit-complaint dated April 20, 1999, the complainant claimed that she was a defendant in a criminal
case for grave slander pending before the Municipal Trial Court (MTC) of Puerto Princesa City, Palawan.
Meanwhile, her son, Wilmer Dalupan, was also a defendant in a separate criminal case for grave slander and
malicious mischief pending before the same court. In order to represent the complainant and her son, the
complainant engaged the legal services of the respondent who then charged an acceptance fee of P10,000.

On August 20, 1996, the complainant paid the respondent P5,000 as initial payment for his acceptance fee.

On August 27, 1996, the complainant requested the respondent to draft a Motion to Reduce Bail Bond. However,
the respondent allegedly denied the request and claimed that it was beyond the scope of his retainer services.
Thus, the complainant alleged that she caused a certain Rolly Calbentos to draft the same which was however
signed by the respondent.

On January 31, 1997, the complainant paid the respondent the remaining balance of P5,000 for his acceptance
fee. When the complainant asked for an Official Receipt from the respondent, the latter refused saying that
there was no need for the issuance of a receipt. On that same day, the complainant also paid the respondent
P500 for his appearance fee in the preliminary conference and arraignment which occurred on the same day.

Thereafter, the complainant alleged that the respondent neglected his duties as counsel and failed to attend any
of the hearings before the MTC. In view of the respondent's repeated absences before the MTC, Judge Jocelyn S.
Dilig issued an Order which appointed a counsel de oficio to represent the complainant.

Aggrieved, the complainant filed the instant complaint for disbarment against the respondent.

On the other hand, in his comment, the respondent denied all the allegations of the complainant.

The respondent alleged that the complainant approached him and represented herself as an indigent party in
the following cases for which she sought to engage the legal services of the respondent: (1) Criminal Case No.
12586, People of the Philippines v. Corazon Dalupan, et al. for Grave Slander, (2) Criminal Case No. 12585,
People of the Philippines v. Wilmer Dalupan for Malicious Mischief, (3) I.S. No. 96-1104, Custodio Family v.
Cesar Dalupan, et al. for Frustrated Murder, (4) I.S. No. 97-54, Dalupan Family v. Romulo Custodio, et al. for
Physical Injuries, and (5) I.S. No. 9760 Dalupan Family v. Romulo Custodio for Frustrated Murder. The
respondent agreed to represent the complainant in the aforementioned cases subject to the payment of an
acceptance fee of P5,000 per case and an appearance fee of P500 for each court appearance.

On August 20, 1996, the complainant paid the respondent P5,000 for his acceptance fee.

On August 27, 1996, the respondent filed a Motion for Reduction of Bail in favor of the complainant before the
MTC of Puerto Princesa City. On that same day, the complainant proceeded to the law office of the respondent
and demanded that the latter negotiate with the MTC judge to ensure the grant of the Motion for Reduction of
Bail. When the respondent refused the demand of the complainant, the latter replied at the top of her voice:
"Binabayaran kita, bakit hindi mo ginagawa ang gusto ko?" The respondent answered her with, "Hindi po lahat
ng gusto ninyo ay gagawin ko, sa tama lamang po tayo, abogado po ninyo ako, hindi ako fixer." This irked the
complainant who then made verbal threats that she will replace the respondent with a certain Atty. Roland Pay
who held office nearby. However, when the MTC of Puerto Princesa City eventually ruled in favor of the
complainant and granted the motion, the latter revoked her threats that she will replace the respondent.

On August 19, 1997, the MTC of Puerto Princesa City issued a Notice of Hearing to the complainant and her son
Wilmer Dalupan which ordered them to appear before the court on September 9, 1997 in connection with their
criminal cases pending therein. However, the respondent failed to attend the scheduled hearing as he allegedly
failed to receive a copy of the Notice of Hearing. Thus, in his written explanation dated October 7, 1997, the
respondent attributed his failure to appear before the MTC to the inefficiency of the process server of the said
court.

On October 10, 1997, the complainant told the respondent that she was terminating the latter's services on the
ground of loss of trust and confidence. Furthermore, the complainant also told the respondent that she engaged
the services of Atty. Roland Pay to replace the respondent. As a result, on October 30, 1997, the complainant
withdrew all her records from the law office of the respondent.

On January 29, 1998, the MTC of Puerto Princesa City issued an Order which relieved the respondent of any
responsibility in Criminal Case Nos. 12585 and 12586:

Acting on what the counsel of record of all the accused in the above-entitled cases call "Compliance", where
obvious on the face of which is his desire to withdraw as Counsel, and it appearing that said intention to
withdraw is not only with the full conformity of all the accused but at their own initiative, Atty. Glenn Gacott is
hereby relieved of any responsibility in the further prosecution of the above-captioned cases.

In view of the above Order, the respondent argued that he was not guilty of abandonment or neglect of duty
because it was the complainant who wilfully terminated his services even without fault or negligence on his part.

We referred this case to the IBP for its investigation, report, and recommendation.

On December 12, 2006, Investigating Commissioner Wilfredo E.J.E. Reyes recommended the dismissal of the
complaint for disbarment against the respondent. At the same time, he also recommended that the respondent
return the payment of the attorney's fee to the complainant in the amount of P5,000.

The Investigating Commissioner opined that the respondent cannot be held liable for abandonment or neglect of
duty because it was the complainant who discharged the respondent for loss of trust and confidence. This was
confirmed by the act of the complainant in withdrawing all her records from the law office of the respondent.
Furthermore, the Investigating Commissioner said that absent evidence showing that the respondent committed
abandonment or neglect of duty, the presumption of regularity should prevail in favor of the respondent.

Although there was no evidence to support the claim of the complainant that she paid the respondent the
remaining balance of P5,000 as acceptance fee and an appearance fee of P500 on January 31, 1997, the
Investigating Commissioner gave credence to an Official Receipt dated August 20, 1996 which proved that the
complainant indeed paid the respondent an amount of P5,000. However, the Investigating Commissioner found
that the respondent did not perform any substantial legal work on behalf of the complainant. For this reason,
and in the interest of justice, the Investigating Commissioner recommended that the respondent return the
amount of P5,000 to the complainant.

On March 17, 2007, the IBP Board of Governors passed Resolution No. XVII-2007-115 which adopted and
approved in toto the Report and Recommendation of the Investigating Commissioner.

On October 8, 2010, the IBP Board of Governors passed Resolution No. XIX-2010-544 which denied the Motion
for Reconsideration dated July 27, 2007 filed by the respondent.

Hence, the present petition which raises the sole issue of whether the respondent should return the payment of
the attorney's fee to the complainant in the amount of P5,000.

Firstly, the respondent argued that when the MTC of Puerto Princesa City issued the Order dated January 29,
1998 which relieved the respondent of any responsibility in Criminal Case Nos. 12585 and 12586, the trial court
did not require the respondent to reimburse the payment of the attorney's fee to the complainant. Thus, the IBP
Board of Governors exceeded its authority in ordering the respondent to return such fees to the complainant.

Secondly, the respondent argued that a plain reading of the Official Receipt dated August 20, 1996 would reveal
that the parties intended the payment of P5,000 to serve as acceptance fee which is different from attorney's
fee. According to the respondent, the acceptance fee corresponds to the opportunity cost incurred by the lawyer
for not representing other potential clients due to a conflict of interest with the present client. Thus, the
payment of acceptance fee to the lawyer does not depend on the latter's performance of legal services.

Since the complainant failed to file any comment on the petition for review, we proceed to resolve the sole issue
raised, and rule in favor of the respondent.

We find that the respondent did not commit any fault or negligence in the performance of his obligations under
the retainer agreement which was wilfully terminated by the complainant on the ground of loss of trust and
confidence. As held by the Investigating Commissioner, the evidence on record shows that the respondent is not
liable for abandonment or neglect of duty.

However, we disagree with the conclusion of the Investigating Commissioner that the respondent should return
the payment of the attorney's fee to the complainant in the amount of P5,000.

Firstly, the Investigating Commissioner seriously erred in referring to the amount to be returned by the
respondent as attorney's fee. Relevantly, we agree with the respondent that there is a distinction between
attorney's fee and acceptance fee.

It is well-settled that attorney's fee is understood both in its ordinary and extraordinary concept. In its ordinary
sense, attorney's fee refers to the reasonable compensation paid to a lawyer by his client for legal services
rendered. Meanwhile, in its extraordinary concept, attorney's fee is awarded by the court to the successful
litigant to be paid by the losing party as indemnity for damages. In the present case, the Investigating
Commissioner referred to the attorney's fee in its ordinary concept.

On the other hand, acceptance fee refers to the charge imposed by the lawyer for merely accepting the case.
This is because once the lawyer agrees to represent a client, he is precluded from handling cases of the
opposing party based on the prohibition on conflict of interest. Thus, he incurs an opportunity cost by merely
accepting the case of the client which is therefore indemnified by the payment of acceptance fee. Since the
acceptance fee only seeks to compensate the lawyer for the lost opportunity, it is not measured by the nature
and extent of the legal services rendered.

In the present case, based on a simple reading of the Official Receipt dated August 20, 1996, the parties clearly
intended the payment of P5,000 to serve as acceptance fee of the respondent, and not attorney's fee. Moreover,
both parties expressly claimed that they intended such payment as the acceptance fee of the respondent. Absent
any other evidence showing a contrary intention of the parties, we find that the Investigating Commissioner
gravely erred in referring to the amount to be returned by the respondent as attorney's fee.

Since the Investigating Commissioner made an erroneous reference to attorney's fee, he therefore mistakenly
concluded that the respondent should return the same as he did not perform any substantial legal work on
behalf of the complainant. As previously mentioned, the payment of acceptance fee does not depend on the
nature and extent of the legal services rendered.

Secondly, the respondent did not commit any fault or negligence which would entail the return of the
acceptance fee.

Once a lawyer receives the acceptance fee for his legal services, he is expected to serve his client with
competence, and to attend to his client's cause with diligence, care and devotion. In Cari o v. Atty. De Los Reyes,
the respondent lawyer who failed to file a complaint-affidavit before the prosecutor's office, returned the
P10,000 acceptance fee paid to him. Moreover, he was admonished by the Court to be more careful in the
performance of his duty to his clients. Meanwhile, in Voluntad-Ramirez v. Bautista, we ordered the respondent
lawyer to return the P14,000 acceptance fee because he did nothing to advance his client's cause during the six-
month period that he was engaged as counsel.

In the present case, the complainant alleged that she requested the respondent to draft a Motion to Reduce Bail
Bond which was denied by the latter. She also claimed that the respondent failed to attend any of the hearings
before the MTC. Thus, the complainant filed the present complaint for disbarment on the ground of
abandonment or neglect of duty. On the other hand, the respondent denied the allegation that he failed to draft
the Motion to Reduce Bail Bond and submitted a copy of the MTC Order dated August 28, 1996 granting the
motion to reduce bail. He also justified his failure to attend the hearings before the MTC to the failure of the
process server to provide him with a Notice of Hearing.

Other than her bare allegations, the complainant failed to present any evidence to support her claim that the
respondent committed abandonment or neglect of duty. Thus, we are constrained to affirm the factual findings
of the Investigating Commissioner that the presumption of regularity should prevail in favor of the respondent.
Absent any fault or negligence on the part of the respondent, we see no legal basis for the order of the
Investigating Commissioner to return the attorney's fee (acceptance fee) of P5,000.

WHEREFORE, premises considered, the petition is hereby GRANTED. Resolution No. XVII-2007-115 and
Resolution No. XIX-2010-544 of the IBP Board of Governors insofar as they ordered the respondent to return the
attorney's fee (acceptance fee) to the complainant in the amount of Five Thousand Pesos (P5,000) are
REVERSED and SET ASIDE.

SO ORDERED.

Peralta, * Perez,** Perlas-Bernabe *** and Jardeleza, JJ., concur.

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FIRST DIVISION

A.C. No. 9119. March 12, 2018.

EUGENIO E. CORTEZ, complainant, vs. ATTY. HERNANDO P. CORTES, respondent.

DECISION

TIJAM, J p:

The instant controversy arose from a Complaint-Affidavit filed by complainant Eugenio E. Cortez against
respondent Atty. Hernando P. Cortes (Atty. Cortes) for grave misconduct, and violation of the Lawyer's Oath and
the Code for Professional Responsibility. caITAC

Complainant alleged that he engaged the services of Atty. Cortes as his counsel in an illegal dismissal case
against Philippine Explosives Corporation (PEC). He further alleged that he and Atty. Cortes had a handshake
agreement on a 12% contingency fee as and by way of attorney's fees.

Atty. Cortes prosecuted his claims for illegal dismissal which was decided in favor of complainant. The Court of
Appeals affirmed the decision of the National Labor Relations Commission ordering PEC to pay complainant the
total amount of One Million One Hundred Thousand Pesos (P1,100,000) in three staggered payments. PEC then
issued City Bank Check No. 1000003986 dated March 31, 2005 in the amount of Five Hundred Fifty Thousand
Pesos (P550,000), Check No. 1000003988 in the amount of Two Hundred Seventy-Five Thousand Pesos
(P275,000) dated April 15, 2005, and Check No. 1000003989 also in the amount of Two Hundred Seventy-Five
Thousand Pesos (P275,000) dated April 30, 2005, all payable in the name of complainant.

Complainant narrated that after the maturity of the first check, he went to China Bank, Southmall Las Pi as with
Atty. Cortes and his wife to open an account to deposit the said check. Atty. Cortes asked complainant to wait
outside the bank while he personally, for and in his behalf, facilitated the opening of the account. After thirty
minutes, he was asked to go inside and sign a joint savings account with Atty. Cortes.

On April 7, 2005, complainant alleged that when he was about to withdraw the amount of the initial check
deposited, Atty. Cortes arrived with his wife and ordered the bank teller to hold off the transaction. When
complainant asked why he did that, Atty. Cortes answered that 50% of the total awarded claims belongs to him
as attorney's fees. When complainant questioned him, Atty. Cortes became hysterical and imposingly maintained
that 50% of the total awarded claims belongs to him.

Complainant then tried to pacify Atty. Cortes and his wife and offered to pay P200,000, and when Atty. Cortes
rejected it, he offered the third check amounting to P275,000, but Atty. Cortes still insisted on the 50% of the
total award. Complainant was then forced to endorse the second and third checks to Atty. Cortes, after which he
was able to withdraw the proceeds of the first check. With the help of the lawyers in the Integrated Bar of the
Philippines (IBP), complainant was able to have the drawer of the checks cancel one of the checks endorsed to
Atty. Cortes before he was able to encash the same.

Atty. Cortes, in his Answer, admitted that his services were engaged by complainant to pursue the labor claims.
He, however, denied that they agreed on a 12% contingency fee by way of attorney's fees.

Atty. Cortes claimed that complainant is a relative of his, but considering that the case was to be filed in
Pampanga and he resided in Las Pi as, he would only accept the case on a fifty-fifty sharing arrangement.

Atty. Cortes alleged that the checks were issued pursuant to the pre-execution agreement reached by the parties
at the office of Labor Arbiter Herminio V. Suelo. He and complainant agreed that the amount of the first check
be divided fifty-fifty, the whole of the second check would be the complainant's, and the third check would be
his.

Atty. Cortes further alleged that he had to assist complainant in the opening of an account to deposit the checks.
Atty. Cortes had to convince the bank manager to accept the checks issued in the name of Eugene E. Cortez
despite the fact that complainant's ID's are all in the name of Eugenio E. Cortez. He claimed that anyone in his
place would have demanded for the holding off of the transaction because of the base ingratitude, patent
deception and treachery of complainant.

Atty. Cortes posited that the check forms part and parcel of the judgment award to which he had a lien
corresponding to his attorney's fees and complainant should have at least invited him to witness the "harvest of
the fruits."

Atty. Cortes insisted that the alleged 12% agreement is false, being merely a concoction of complainant's fertile
and unstable mind. He also pointed out that the fifty-fifty sharing arrangement is not unconscionably high
because the complainant was given the option to hire other lawyers, but still he engaged his services.

After hearing and submission of position papers, the IBP Commission on Bar Discipline, in a Report and
Recommendation dated April 11, 2007, recommended the six-month suspension of Atty. Cortes. It ruled that a
contingent fee arrangement should generally be in writing, and that contingent fees depend upon an express
contract without which the lawyer can only recover on the basis of quantum meruit. It also pointed out that the
Labor Code establishes a limit as to the amount of attorney's fees that a lawyer may collect or charge his client
in labor cases.
The report and recommendation was adopted and approved by the IBP Board of Governors in an August 17,
2007 Resolution:

RESOLUTION NO. XVIII-2007-74

CBD Case No. 05-1482
Eugenio E. Cortez vs.
Atty. Hernando P. Cortes

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED the Report and
Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this
Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the
applicable laws and rules, and for violation of Article 11(b) of the Labor Code, Atty. Hernando P. Cortes is
hereby SUSPENDED from the practice of law for six (6) months and Ordered to Return to complainant whatever
amount he received in excess of the 10% allowable attorney's fees in labor case (sic). ICHDca

TOMAS N. PRADO
National Secretary

A motion for reconsideration was filed by Atty. Cortes, which was denied by the IBP Board of Governors.

The issue, plainly, is whether or not the acts complained of constitute misconduct on the part of Atty. Cortes,
which would subject him to disciplinary action.

We rule in the affirmative.

We have held that a contingent fee arrangement is valid in this jurisdiction. It is generally recognized as valid
and binding, but must be laid down in an express contract. The case of Rayos v. Atty. Hernandez discussed the
same succinctly, thus:

A contingent fee arrangement is valid in this jurisdiction and is generally recognized as valid and binding but
must be laid down in an express contract. The amount of contingent fee agreed upon by the parties is subject to
the stipulation that counsel will be paid for his legal services only if the suit or litigation prospers. A much
higher compensation is allowed as contingent fee in consideration of the risk that the lawyer may get nothing if
the suit fails. Contracts of this nature are permitted because they redound to the benefit of the poor client and
the lawyer especially in cases where the client has meritorious cause of action, but no means with which to pay
for legal services unless he can, with the sanction of law, make a contract for a contingent fee to be paid out of
the proceeds of the litigation. Oftentimes, the contingent fee arrangement is the only means by which the poor
and helpless can seek redress for injuries sustained and have their rights vindicated. (Emphasis Ours)

In this case, We note that the parties did not have an express contract as regards the payment of fees.
Complainant alleges that the contingency fee was fixed at 12% via a handshake agreement, while Atty. Cortes
counters that the agreement was 50%.

The IBP Commission on Discipline pointed out that since what respondent handled was merely a labor case, his
attorney's fees should not exceed 10%, the rate allowed under Article 111 of the Labor Code.

Although we agree that the 50% contingency fee was excessive, We do not agree that the 10% limitation as
provided in Article 111 is automatically applicable.

The case of Masmud v. NLRC (First Division), et al., discussed the matter of application of Article 111 of the
Labor Code on attorney's fees:

There are two concepts of attorney's fees. In the ordinary sense, attorney's fees represent the reasonable
compensation paid to a lawyer by his client for the legal services rendered to the latter. On the other hand, in its
extraordinary concept, attorney's fees may be awarded by the court as indemnity for damages to be paid by the
losing party to the prevailing party, such that, in any of the cases provided by law where such award can be
made, e.g., those authorized in Article 2208 of the Civil Code, the amount is payable not to the lawyer but to the
client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part
thereof.

...

Contrary to Evangelina's proposition, Article 111 of the Labor Code deals with the extraordinary concept of
attorneys fees. It regulates the amount recoverable as attorney's fees in the nature of damages sustained by and
awarded to the prevailing party. It may not be used as the standard in fixing the amount payable to the lawyer
by his client for the legal services he rendered. (Emphasis Ours)

It would then appear that the contingency fees that Atty. Cortes required is in the ordinary sense as it
represents reasonable compensation for legal services he rendered for complainant. Necessarily, the 10%
limitation of the Labor Code would not be applicable. Beyond the limit fixed by Article 111, such as between the
lawyer and the client, the attorney's fees may exceed 10% on the basis of quantum meriut. We, however, are
hard-pressed to accept the justification of the 50% contingency fee that Atty. Cortes is insisting on for being
exorbitant.

Generally, the amount of attorney's fees due is that stipulated in the retainer agreement which is conclusive as
to the amount of the lawyers compensation. In the absence thereof, the amount of attorney's fees is fixed on the
basis of quantum meruit, i.e., the reasonable worth of the attorneys services. Courts may ascertain also if the
attorney's fees are found to be excessive, what is reasonable under the circumstances. In no case, however,
must a lawyer be allowed to recover more than what is reasonable, pursuant to Section 24, Rule 138 of the
Rules of Court.

Canon 20 of the Code of Professional Responsibility states that "A lawyer shall charge only fair and reasonable
fees." Rule 20.01 of the same canon enumerates the following factors which should guide a lawyer in
determining his fees:

(a) The time spent and the extent of the services rendered or required;

(b) The novelty and difficulty of the questions involved;

(c) The importance of the subject matter;

(d) The skill demanded;

(e) The probability of losing other employment as a result of acceptance of the proffered case;

(f) The customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs;
TCAScE

(g) The amount involved in the controversy and the benefits resulting to the client from the service;

(h) The contingency or certainty of compensation;

(i) The character of the employment, whether occasional or established; and

(j) The professional standing of the lawyer.

Here, as set out by Atty. Cortes himself, the complainant's case was merely grounded on complainant's alleged
absence without leave for the second time and challenging the plant manager, the complainant's immediate
superior, to a fist fight. He also claimed that the travel from his home in Las Pi as City to San Fernando,
Pampanga was costly and was an ordeal. We likewise note that Atty. Cortes admitted that complainant was a
close kin of his, and that complainant appealed to his services because, since his separation from work, he had
no visible means of income and had so many mouths to feed. These circumstances cited by Atty. Cortes to justify
the fees, to Our mind, does not exculpate Atty. Cortes, but in fact, makes Us question all the more, the
reasonableness of it.

We believe and so hold that the contingent fee here claimed by Atty. Cortes was, under the facts obtaining in
this case, grossly excessive and unconscionable. The issues involved could hardly be said to be novel and Atty.
Cortes in fact already knew that complainant was already hard up. We have held that lawyering is not a
moneymaking venture and lawyers are not merchants. Law advocacy, it has been stressed, is not capital that
yields profits. The returns it births are simple rewards for a job done or service rendered. It is a calling that,
unlike mercantile pursuits which enjoy a greater deal of freedom from governmental interference, is impressed
with a public interest, for which it is subject to State regulation.

Here, considering that complainant was amenable to a 12% contingency fee, and which we likewise deem to be
the reasonable worth of the attorney's services rendered by Atty. Cortes under the circumstances, Atty. Cortes is
hereby adjudged to return to complainant the amount he received in excess of 12% of the total award. If the Law
has to remain an honorable profession and has to attain its basic ideal, those enrolled in its ranks should not
only master its tenets and principles but should also, by their lives, accord continuing fidelity to such tenets and
principles.

We, however, find that the recommended suspension of six months is too harsh and considering that Atty. Cortes
is nearing ninety years old and that there was no question that Atty. Cortes was able to get a favorable outcome,
a reduction of the suspension is proper. We then reduce and sanction Atty. Cortes to a three-month suspension
from the practice of law.

WHEREFORE, premises considered, respondent Atty. Hernando P. Cortes is found GUILTY of violation of Canon
20 of the Code of Professional Responsibility and is hereby SUSPENDED from the practice of law for three (3)
months, and is ordered to return to complainant Eugenio E. Cortez the amount he received in excess of the 12%
allowable attorney's fees.

SO ORDERED.

Leonardo-de Castro, ** Del Castillo and Jardeleza, JJ., concur.

Sereno, * C.J., is on leave.

Downloaded at www.jur.ph
EN BANC

A.C. No. 8494. October 5, 2016.

SPOUSES EMILIO AND ALICIA JACINTO, complainants, vs. ATTY. EMELIE P. BANGOT, JR., respondent.

DECISION

BERSAMIN, J p:

A lawyer shall observe candor, honesty and fairness in dealing with his clients, and shall only charge fair and
reasonable fees for his legal services. He should not excessively estimate the value of his professional services.
In drawing up the terms of his professional engagement, he should not practice deceit. The clients are entitled
to rescind the written agreement on his professional fees if the terms thereof contravened the true agreement of
the parties.

Antecedents

This administrative case stems from the complaint brought on December 8, 2009 by the Spouses Emilio and
Alicia Jacinto, then 81 and 76 years of age, respectively, against Atty. Emelie P. Bangot, Jr. for the latter's unjust
and dishonest treatment of them as his clients. They hereby seek that he be sanctioned for his actuations.

The complainants averred that a private survey team had conducted a survey of Cad. 237 Lot No. 1351 on
October 10-11, 2008 pursuant to the order of the Regional Trial Court, Branch 39, in Cagayan de Oro City in
connection with the reconstitution of the lost certificate of title of said lot by the owners; that after conducting
the perimeter survey, the survey team had tried to enter the premises owned by them but they had prevented
the team from doing so because their premises had already been segregated by virtue of the issuance of Original
Certificate of Title No. P-3387; that their land covered by OCT No. P-3387 had already been subdivided into nine
lots; that the survey team had then desisted from proceeding with their survey of their land but had nonetheless
informed them that they would return another time for the survey; and that this had forced them to consult a
lawyer on the legal remedies to prevent the intrusion on their property.

The complainants further averred that they had then consulted with the respondent, briefing him on their
concern, and delivering to him the documents pertinent to their land; that after scrutinizing the documents, he
had told them that he would be initiating a case for certiorari in their behalf to nullify the order for the
reconstitution of the lost title covering Cad. 237 Lot No. 1351; that he had then insinuated that one of their lots
would be his attorney's fees; and that they had not initially agreed to the insinuation because the lots had
already been allocated to each of their seven children, but they had ultimately consented to giving him only a
portion of Lot No. 37926-H with an area of 250 square meters. caITAC

It appears that soon after the respondent unilaterally prepared the document so-called Memorandum of
Agreement (MOA), to wit:

MEMORANDUM OF AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

I, ATTY. EMELIE P. BANGOT, JR., of legal age, married and a resident of Lot 13, Block 1, Xavier Heights Subd.,
Upper Balulang, Cagayan de Oro City, hereinafter referred as the FIRST PARTY; and

WE, SPOUSES EMILIO JACINTO AND ALICIA JACINTO, both legal age, and residents of Cagayan de Oro City,
herein referred as the SECOND PARTY;

WITNESSETH:

1. That the FIRST PARTY shall be the counsel/lawyer of the SECOND PARTY, regarding their parcel of land
formerly covered by Original Certificate of Title No. P-3387 with an area of 4,138 sq. m., located at Kauswagan,
Cagayan de Oro City, presently subdivided into 8 lots with individual certificate of titles (sic);

2. That the First Party shall get 300 sq. m., from Lot No. 37925-G covered by TCT No. 121708;

3. That this agreement shall take effect immediately upon the signing of the parties (sic) cannot be revoked,
amended or modified by the Second Party without the consent of the First Party.

The complainants recalled that on October 17, 2008 the respondent requested them to proceed to his law office.
What thereafter transpired and that led to the signing of the MOA were set forth in their complaint, as follows:

On October 17, 2008, my wife received a phone call from the office of Atty. Bangot directing us to go to his
office to sign documents they have prepared. The phone call was relayed to me by my wife so we immediately
proceeded to his office arriving thereat at exactly 4:00 PM. The daughter of Atty. Bangot handed to us two sets
of documents for our signatures. Because of full trust to Atty. Bangot, we did not bother reading the contents of
the documents. Per instruction, we brought the papers to their friend lawyer for notarization and after the
notarization returned to the office where we were given our personal file, without reading every detail of the
documents.

Upon arriving at our residence, I read the contents of the Memorandum of Agreement (MOA). Said MOA was not
signed by Atty. Bangot and did not bear the signature of witnesses. I was surprised to know that the terms of the
(MOA) did not reflect the true intentions being contemplated in our previous discussions. Contrary to what I
have told him, a different area which is 37925-G under TCT No. 121708 was written. I already told him that my
other lots including the lot written in the MOA could no longer be disposed of because these lots were already
committed to each of my children. The lot area was also increased from 250 sq. m. to 300 sq. m. Because of this
situation, I called my wife and children and told them about the problem. My daughter whose share was involved
reacted badly and she was hurt because she will then be deprived of her place to live in, in the future. We
continued our discussion and we decided to see Atty. Bangot to have the MOA be revoked because we felt that
we were deceived, Atty. Bangot took advantage of our old age, thus breaking the trust and confidence the
client's and lawyer should uphold at all times in the exercise of one's profession.

As a gesture of acknowledging his efforts, we offered to pay him in cash, fair enough for the services he had
rendered to us. However, he refused to revoke the MOA because accordingly, he would consult his wife which
finally did not materialize because his wife was not amenable which in effect showed that they have vested
interest on the property and they are bent on taking the property at any cause. He even challenged us to file an
appropriate case in court against him rather than agree with our pleading for payment of cash. Likewise, he
refused our offer to pay his services in cash alleging that he already filed a Manifestation in court and claimed
that our possession would not be disturbed and that he will be filing a case for Certiorari as promised.

To our surprise though, we came to know that the Manifestation filed by Atty. Bangot is not a preparatory
pleading for certiorari. No way could it even stop the intrusion into our property. Basically, we were deceived by
Atty. Bangot into believing that the Manifestation he filed would stop any legal disturbance on our property and
the same is preparatory for certiorari.

Feeling aggrieved, the complainants decided to bring their complaint against the respondent.

On his part, the respondent denied the allegations of the complainants. He insisted that the complaint against
him was a harassment tactic designed to intimidate him from seeking judicial remedies to settle their dispute on
the validity of the MOA; that the MOA was valid; that the Manifestation for Information he had filed in court
prevented the intrusion into the complainants' land; that the administrative complaint was designed to insure
the derailment of his application for a judgeship position, and to cover up the negligence of the complainants'
counsel as the plaintiffs in Civil Case No. 2008-302 (for annulment and/or rescission of agreement), which case
was dismissed for failure to comply with the requirement for the prior barangay conciliation proceedings; and
that they had voluntarily signed the MOA without intimidation, fraud or undue influence. ICHDca

On August 23, 2010, the Court referred the complaint to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.

Findings and Recommendation of the IBP

In due course, IBP Commissioner Oliver A. Cachapero submitted his Report and Recommendation finding the
complaint against the respondent meritorious, and recommending that the respondent be suspended from the
practice of law for one year for his unfair and injudicious treatment of the complainants as his clients.

In Resolution No. XX-2013-71, the IBP Board of Governors increased the duration of the respondent's
recommended penalty to suspension from the practice of law for two years, viz.:

RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED AND APPROVED, with
modification, the Report and Recommendation of the Investigating Commissioner in the above-entitled case,
herein made part of this Resolution as Annex "A," and finding the recommendation fully supported by the
evidence on record and the applicable laws and rules and considering that Respondent breached his duty of
candor and fairness to his client, Atty. Emelie P. Bangot, Jr. is hereby SUSPENDED from the practice of law
for two (2) years.

Through its Resolution No. XXI-2014-315, the IBP Board of Governors denied the respondent's motion for
reconsideration.

Issue

Did the respondent violate his ethical duties as a member of the Bar in his dealings with the complainants?

Ruling of the Court

We find and hold that the respondent grossly violated his Lawyer's Oath and his ethical duties as an attorney
because he did not observe candor and fairness in his dealings with his clients.

The findings of IBP Commissioner Cachapero, which sufficiently described the violations of the respondent,
provide an irrefutable insight into the gravity of the violations by the respondent, as follows:

The question to ask is, "Was the MOA fair to the parties and entered into by them in good faith?"

The undersigned resolves in the negative. To begin with, the conduct of Respondent had evinced an instinctive
interest in the property of Complainants. He had the MOA executed at the same time he filed the Manifestation
for Information before the court that was hearing LRC Case No. 98-010. Not only that, Respondent's proposal to
have a MOA executed between him and the Complainant was meant to impress that his supposed attorney's fees
would be paid on contingent basis, however, a perusal of the MOA indicates that the payment of Respondents'
fee by way of a real property is being made immediately effective upon execution of the agreement.
As to the agreement of the Complainant and the Respondent, the undersigned gives full faith to the allegation of
Complainant that the payment of Respondent's attorney's fees by way of a real property would come from TCT
No. 121709 and not T-121708. Complainants explained that the latter lot had already been committed to their
seven (7) children especially because this lot is situated in a prime location thus they could not have picked the
same over Lot No. 121709. The Respondent knew straightforwardly that lot 121708 was a better lot yet
Respondent gave a different account of their agreement and took advantage of the frailty and advance ages (sic)
of his clients.

But, the most shocking of all, is the apparent inequity or disproportion between the amount of attorney's fees
(measured from the value of the property taken by Respondent) and the effort or service already performed or
still to be performed by him. The Complainants were not made parties to the LRC case or any other case and
Respondent filed a mere two-paged Manifestation for Information in court which he did almost effortlessly. It is
not clear how the court had reacted to the manifestation but Respondent did not follow it up with any other
action. Despite the same, Respondent stuck to his tale that the Complainants had signed the MOA and despite
his minimal representation of the Complainants in court, he held on to his idea that he had taken from his clients
valid title to a million pesos worth of real estate in payment of his fees.

The undersigned does not see fairness and judiciousness to Respondent's treatment of his clients, 81 and 76
years old, respectively, and he need not add to his brief disquisition in this regard.

We adopt the findings and note the insights thus expressed.

We must, therefore, highlight the following reasons why the findings and insights should be sustained.

To determine the reasonableness of attorney's fees, the following factors as enumerated in Rule 20.1 of the Code
of Professional Responsibility may serve as a guide, to wit: (a) the time spent and the extent of the services
rendered or required; (b) the novelty and difficulty of the questions involved; (c) the importance of the subject
matter; (d) the skill demanded; (e) the probability of losing other employment as a result of acceptance of the
proffered case; (f) the customary charges for similar services and the schedule of fees of the IBP chapter to
which he belongs; (g) the amount involved in the controversy and the benefits resulting to the client from the
service; (h) the contingency or certainty of compensation; (i) the character of the employment, whether
occasional or established; and (j) the professional standing of the lawyer. TCAScE

It was not disputed that only the filing of the two-paged Manifestation for Information constituted the
respondent's rendition of professional services for the complainants. Although he did claim that the filing of the
Manifestation for Information had prevented any intrusion on their property, thereby fulfilling his end of the
contract, the worth of such minimal effort was exaggerated and disproportionate when taken in the context of
the attorney's fees being Lot No. 37925-G with 300 square meters in area. The two-paged Manifestation for
Information was not even the procedural precursor of the promised petition for certiorari. Moreover, he did not
actually file the petition for certiorari as he had promised. And, lastly, he did nothing more after filing the
Manifestation for Information. He certainly transgressed the Lawyer's Oath by receiving property of a
substantial value from the complainants after having made them believe that he could ensure their land from
intrusion by third parties. He took advantage of them who had reposed their full trust and confidence in his
ability to perform the task by virtue of his being a lawyer. He was definitely bent on obtaining Lot No. 37925-G
than in protecting the complainants' interest in their property. He exhibited this zeal by refusing their offer to
give cash for his attorney's fees instead of the land. We sadly note in this connection that his changing the
property ostensibly agreed upon with the bigger lot as payment for his legal services reflected his deceit at the
start of the relationship. He maintained the deceit by ultimately enforcing the MOA against them through the
action for specific performance.

Surely, the totality of the respondent's actuations inevitably eroded public trust in the Legal Profession. On the
basis of his acts and actuations, the attorney's fees in the form of the lot he charged from them were
unconscionable and unreasonable, and should be struck down for failing to pass muster under the aforestated
guidelines.

The respondent appears to have impressed on the complainants at the time of their negotiations that the
attorney's fees in the form of the lot would be delivered to him only on a contingent basis. Again, he had
misrepresented himself to them because the express terms of the MOA stipulated that "this agreement shall
take effect immediately upon the signing of the parties and cannot be revoked, amended or modified by the
Second Party without the consent of the First Party."

As worded, the agreement was not a contingent fee arrangement. Indeed, a contingent fee arrangement is a
contract in writing in which the fee, usually a fixed percentage of what may be recovered in the action, is made
to depend upon the success in the effort to enforce or defend a supposed right. The amount of the contingent fee
agreed upon by the parties is subject to the stipulation that counsel will be paid for his legal services only if the
suit or litigation prospers. A much higher compensation is allowed as contingent fee in consideration of the risk
that the lawyer may get nothing should the suit fail. Such arrangement is generally recognized as valid and
binding in this jurisdiction but its terms must be reasonable. Canon 13 of the Canons of Professional Ethics
states that "a contract for a contingent fee, when sanctioned by law, should be reasonable under all the
circumstances of the case including the risk and uncertainty of the compensation, but should always be subject
to the supervision of a court, as to its reasonableness." A contract of this nature is permitted because it
redounds to the benefit of the poor client and the lawyer especially in cases where the client has a meritorious
cause of action but has no means with which to pay for the legal services unless he can, with the sanction of law,
make a contract for a contingent fee to be paid out of the proceeds of the litigation. Oftentimes, such
arrangement is the only means by which the poor and helpless can seek redress for injuries sustained and have
their rights vindicated.
Considering that a contingent fee arrangement is susceptible to abuse, the courts should closely scrutinize it to
protect the client from unjust charges. The court looks in large measure at the reasonableness of the stipulated
fee under the circumstances of each case. Section 24, Rule 138 of the Rules of Court explicitly provides:

Section 24. Compensation of attorneys; agreement as to fees. An attorney shall be entitled to have and recover
from his client no more than a reasonable compensation for his services, with a view to the importance of
the subject matter of the controversy, the extent of the services rendered, and the professional standing of the
attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation,
but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract
for services shall control the amount to be paid therefor unless found by the court to be unconscionable or
unreasonable. (Emphasis ours)

All the foregoing circumstances established that the respondent was deceitful, dishonest and unreasonable in
his dealings with the complainants as his clients. He thus violated his Lawyer's Oath, whereby he vowed, among
others, to do no falsehood, and not to consent to the doing of any falsehood, as well as not to delay any man's
cause for money or malice but to conduct himself as a lawyer according to the best of his knowledge and
discretion "with all good fidelity as well to the courts as to his clients. He also breached the following canons of
the Code of Professional Responsibility, to wit:

Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

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

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. cTDaEH

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

Canon 20 A lawyer shall charge only fair and reasonable fees.

Rule 20.4 A lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial
action only to prevent imposition, injustice or fraud.

We have said time and again, and this we cannot overemphasize, that the Law is neither a trade nor a craft but a
profession whose basic ideal is to render public service and to secure justice for those who seek its aid. If the
Law has to remain an honorable profession and has to attain its basic ideal, those enrolled in its ranks should
not only master its tenets and principles but should also, by their lives, accord continuing fidelity to such tenets
and principles. The respondent's behavior and deceit demonstrated a preference for self-gain that transgressed
his sworn duty of fidelity, loyalty and devotion to his clients' cause. His betrayal of his clients' trust besmirched
the honorable name of the Law Profession. These considerations justify suspending him from the practice of law.

Moreover, the respondent made the following allegations in his motion for reconsideration filed with the IBP
Board of Governors, to wit:

9. It is quite disturbing that to cover up Atty. Palasan's negligence and reckless filing of Annulment and/or
Rescission of Agreement titled Spouses Emilio Jacinto and Alicia Jacinto vs. Atty. Emelie P. Bangot docketed as
Civil Case No. 2008-302 before the Regional Trial Court, Branch 41, Cagayan de Oro City where the subject
matter was the Memorandum of Agreement (MOA) between the complainant and respondent, said counsel
resorted to another forum by filing this administrative case where his chance of oppressing and harassing
respondent is far greater because when he filed said administrative case Atty. Roan Libarios then one of the
Officers of the IBP National Chapter and member of the Board of Governors, representing Eastern Mindanao,
was holding office at IBP, Ortigas Center, Pasig City as such, his officemate or law partner at Butuan City (sic).
Unfortunately, for respondent, Atty. Libarios eventually became the IBP National President;

...

18. The statement by Commissioner Cachapero in his Report and Recommendation, 1st sentence, 2nd par.,
thereof that: "On October 10 & 11, 2008, a survey was conducted on Cadastral Lot No. 1351 situated at
Kauswagan, Cagayan de Oro City in connection with the reconstitution of the lost title of the lot which was then
pending before the Regional Trial Court, Branch 39, R-10, Cagayan de Oro City." is quite confusing and
designed to put down respondent probably at any cost and probably by an "unseen but influential hands
(sic)";

The aforequoted allegations indicated that the respondent had readily attributed the filing of the administrative
charge to the lawyer representing the complainants in the suit against him to annul or rescind the MOA, as well
as to "unseen but influential hands" in the hierarchy of the IBP. The attribution was bereft of factual and legal
justifications, however, because he did not even attempt to establish it with satisfactory proof. We cannot but
dismiss the attribution as malicious and unfounded in view of the record establishing his serious ethical
violations. He displayed an unmitigated lack of professionalism by casting aspersions against his peers, and
exhibited a dangerous propensity to disparage others, which should move us to consider his violations as
aggravated.

To be now considered, therefore, is the condign penalty of the respondent. A review of precedents shows that
the penalty of suspension, or even disbarment, has been meted on similar violations and transgressions. In
Santeco v. Avance, the respondent attorney was suspended for five years for abandoning the cause of her client
without notice despite her having collected her legal fees. She also failed to account for the money of the client
and constantly refused to submit herself to the proceedings of the IBP. In Lemoine v. Balon, Jr., this Court
disbarred the respondent attorney who did not promptly account for the funds he had received for the benefit of
his client, and for his deceit in dealings with his client. In Overgaard v. Valdez, the respondent attorney was
disbarred for assuring the complainant that his property involved in a civil case would be safeguarded, and then
collecting the full amount of legal fees amounting to P900,000.00, only to desert the complainant after receiving
the fees. The respondent attorney had further failed to submit an answer as well as to attend the proceedings
before the IBP.

Although the complainants appeared to have initially bound themselves to give a part of their land as the
respondent's professional fees, they did so apparently because he had misrepresented to them the gravity and
extent of their legal matter. His misrepresentation was undeniably calculated to make them part with their
valuable asset in lieu of cash. He did not thereafter render any worthy professional legal service in their favor.
Verily, as the clich goes, they did not get their money's worth from him. Even if this charge was his first
infraction, the grossness of his violations of the Lawyer's Oath and the various relevant canons of the Code of
Professional Responsibility quoted earlier absolutely warranted his suspension from the practice of law for five
years effective upon his receipt of this decision, with warning of sterner sanctions should he hereafter commit a
similar offense. This duration of suspension was the penalty we prescribed in the recent case of Mercullo v.
Ramon where the respondent lawyer had deceived the complainants into parting with the substantial sum of
P350,000.00 as her attorney's fees but did not subsequently perform her professional undertaking.

In addition, the respondent should not be entitled to receive any attorney's fees in view of the worthlessness of
the professional services he supposedly rendered. There is no question, as ruled in Sanchez v. Aguilos, that
every attorney is entitled to have and receive a just and reasonable compensation for services performed at the
special instance and request of his client; and that for as long as the attorney is in good faith and honestly trying
to represent and serve the interests of the client, he should have a reasonable compensation for such services.
Yet, equally without question is that the attorney should not accept the engagement that is way above his ability
and competence to handle, for there will then be no basis for him to accept any amount as attorney's fees; or
that he should at least begin to perform the contemplated task undertaken for the client to entitle him to be
compensated on the basis of quantum meruit.

cSaATC

WHEREFORE, this Court FINDS and HOLDS respondent ATTY. EMELIE P. BANGOT, JR. guilty of violation
of the Lawyer's Oath and of the Code of Professional Responsibility; SUSPENDS him from the practice of law
for five (5) years effective upon notice of this decision, with warning that sterner sanctions will be meted on him
for a similar offense; and DECLARES that he is not entitled to recover any attorney's fees from the
complainants.

Let copies of this decision be furnished to the Office of the Bar Confidant; the Integrated Bar of the Philippines;
and to the Office of the Court Administrator.

The Office of the Court Administrator shall disseminate this decision to all courts of the Philippines.

SO ORDERED.

Carpio, Velasco, Jr., Leonardo-de Castro, Peralta, Del Castillo, Perez, Mendoza, Reyes, Perlas-Bernabe, Leonen,
Jardeleza and Caguioa, JJ., concur.

Sereno, * C.J., is on official business.

Brion, ** J., is on leave.

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THIRD DIVISION

A.C. No. 9537. June 10, 2013.

Formerly CBD Case No. 09-2489

DR. TERESITA LEE, complainant, vs. ATTY. AMADOR L. SIMANDO, respondent.

DECISION

PERALTA, J p:

Before us is a Petition for Disbarment 1 dated July 21, 2009 filed by Dr. Teresita Lee (Dr. Lee) against
respondent Atty. Amador L. Simando (Atty. Simando) before the Integrated Bar of the Philippines-Commission
on Bar Discipline (IBP-CBD), docketed as CBD Case No. 09-2489, now A.C. No. 9537, for violation of the Code of
Judicial Ethics of Lawyers.

The facts of the case, as culled from the records, are as follows:

Atty. Simando was the retained counsel of complainant Dr. Lee from November 2004 until January 8, 2008, with
a monthly retainer fee of Three Thousand Pesos (Php3,000.00). 2

Sometime during the above-mentioned period, Atty. Simando went to see Dr. Lee and asked if the latter could
help a certain Felicito M. Mejorado (Mejorado) for his needed funds. He claimed that Mejorado was then
awaiting the release of his claim for informer's reward from the Bureau of Customs. Because Dr. Lee did not
know Mejorado personally and she claimed to be not in the business of lending money, the former initially
refused to lend money. But Atty. Simando allegedly persisted and assured her that Mejorado will pay his
obligation and will issue postdated checks and sign promissory notes. He allegedly even offered to be the co-
maker of Mejorado and assured her that Mejorado's obligation will be paid when due. Atty. Simando was quoted
saying: "Ipapahamak ba kita, kliyente kita"; "Sigurado ito, kung gusto mo, gagarantiyahan ko pa ito, at pipirma
din ako"; "Isang buwan lang, at hindi hihigit sa dalawang buwan ito, bayad ka na." 3 AIHDcC

Due to Atty. Simando's persistence, his daily calls and frequent visits to convince Dr. Lee, the latter gave in to
her lawyer's demands, and finally agreed to give Mejorado sizeable amounts of money. Respondent acted as co-
maker with Mejorado in various cash loans, to wit: 4

Date: Amount
November 11,
Php400,000.00
2006
November 24,
200,000.00
2006
November 27,
400,000.00
2006
December 7,
200,000.00
2006
December 13,
200,000.00
2006

Total: Php1,400,000.00
=============

When the said obligation became due, despite Dr. Lee's repeated demands, Mejorado failed and refused to
comply with his obligation. Since Atty. Simando was still her lawyer then, Dr. Lee instructed him to initiate legal
action against Mejorado. Atty. Simando said he would get in touch with Mejorado and ask him to pay his
obligation without having to resort to legal action. However, even after several months, Mejorado still failed to
pay Dr. Lee, so she again asked Atty. Simando why no payment has been made yet. Dr. Lee then reminded Atty.
Simando that he was supposed to be the co-maker of the obligation of Mejorado, to which he replied: "Di
kasuhan din ninyo ako!" 5

Despite complainant's repeated requests, respondent ignored her and failed to bring legal actions against
Mejorado. Thus, in January 2008, complainant was forced to terminate her contract with Atty. Simando.

Subsequently, complainant's new lawyer, Atty. Gilbert Morandarte, sent a demand letter dated June 13, 2008 to
Atty. Simando in his capacity as the co-maker of some of the loans of Mejorado.

In his Letter dated June 30, 2008, respondent denied his liability as a co-maker and claimed that novation had
occurred because complainant had allegedly given additional loans to Mejorado without his knowledge. 6

Dr. Lee then accused Atty. Simando of violating the trust and confidence which she gave upon him as her
lawyer, and even took advantage of their professional relationship in order to get a loan for his client. Worse,
when the said obligation became due, respondent was unwilling to help her to favor Mejorado. Thus, the instant
petition for disbarment against Atty. Simando. ADECcI

On August 12, 2009, the IBP-CBD ordered respondent to submit his Answer on the complaint against him. 7
In his Answer 8 dated September 17, 2009, Atty. Simando claimed that complainant, who is engaged in lending
money at a high interest rate, was the one who initiated the financial transaction between her and Mejorado. He
narrated that complainant asked him if it is true that Mejorado is his client as she found out that Mejorado has a
pending claim for informer's reward with the Bureau of Customs. When he affirmed that Mejorado is his client,
complainant signified that she is willing to give money for Mejorado's financial needs while awaiting for the
release of the informer's reward. Eventually, parties agreed that Mejorado will pay double the amount and that
payment shall be made upon receipt by Mejorado of the payment of his claim for informer's reward. 9

Meanwhile, Atty. Simando stressed that Dr. Lee gave Mejorado a total of Php700,000.00 as an investment but he
signed as co-maker in all the receipts showing double the amount or Php1,400,000.00. 10

Respondent claimed that complainant is a money-lender exacting high interest rates from borrowers. 11 He
narrated several instances and civil cases where complainant was engaged in money-lending where he divulged
that even after defendants had already paid their loan, complainant still persists in collecting from them. 12
Respondent asserted that he knew of these transactions, because he was among the four lawyers who handled
complainant's case. 13

Respondent averred that from the time that Mejorado and Dr. Lee had become close to each other, the latter
had given Mejorado additional investments and one (1) Silverado Pick-up at the price of P500,000.00 and fifty
(50) sacks of old clothings. He claimed that the additional investments made by Dr. Lee to Mejorado were given
without his knowledge.

Atty. Simando further alleged that with Dr. Lee's investment of around P2 Million which included the Silverado
Pick-up and the fifty (50) sacks of old clothings, the latter required Mejorado to issue five (5) checks with a total
value of P7,033,500.00, an amount more than the actual value which Mejorado received. 14 DCESaI

Atty. Simando added that while Dr. Lee and Mejorado agreed that the issued checks shall be presented to the
bank only upon payment of his informer's reward, Dr. Lee presented the checks to the bank despite being aware
that Mejorado's account had no funds for said checks. Atty. Simando further denied that he refused to take legal
action against Mejorado. He claimed that complainant never instructed him to file legal action, since the latter
knew that Mejorado is obligated to pay only upon receipt of his informer's reward.

Finally, Atty. Simando insisted that he did not violate their lawyer-client relationship, since Dr. Lee voluntarily
made the financial investment with Mejorado and that he merely introduced complainant to Mejorado. He
further claimed that there is no conflict of interest because he is Mejorado's lawyer relative to the latter's claim
for informer's reward, and not Mejorado's lawyer against Dr. Lee. He reiterated that there is no conflicting
interest as there was no case between Mejorado and Dr. Lee that he is handling for both of them. 15

In her Reply dated October 30, 2009, Dr. Lee denied that what she entered into was a mere investment. She
insisted that she lent the money to Mejorado and respondent, in his capacity as co-maker and the transaction
was actually a loan. 16 To prove her claim, Dr. Lee submitted the written loan agreements/receipts which
categorically stated that the money received was a loan with due dates, signed by Mejorado and respondent as
co-maker. 17 She further claimed that she did not know Mejorado and it was respondent who brought him to her
and requested her to assist Mejorado by lending him money as, in fact, respondent even vouched for Mejorado
and agreed to sign as co-maker.

Complainant further emphasized that what she was collecting is the payment only of the loan amounting to One
Million Four Hundred Thousand Pesos (Php1,400,000.00) which respondent had signed as co-maker. Thus,
respondent's claim that his obligation was already extinguished by novation holds no water, since what was
being collected is merely his obligation pertaining to the loan amounting to Php1,400,000.00 only, and nothing
more.

Finally, complainant lamented that respondent, in his comments, even divulged confidential informations he had
acquired while he was still her lawyer and even used it against her in the present case, thus, committing another
unethical conduct. She, therefore, maintained that respondent is guilty of violating the lawyer-client
confidentiality rule. HaEcAC

Both parties failed to appear during the mandatory conference on January 15, 2010. Both parties requested for
resetting of the mandatory conference, however, both failed to agree on a certain date. Hence, the IBP, so as not
to delay the disposition of the complaint, terminated the mandatory conference and instead required the parties
to submit their respective position papers. 18

On March 18, 2010, the IBP-CBD found Atty. Simando guilty of violating the Code of Professional Responsibility.
It recommended that respondent be suspended from the practice of law for six (6) months.

On December 29, 2010, the IBP Board of Governors adopted and approved the Report and Recommendation of
the IBP-CBD to suspend Atty. Simando from the practice of law for a period of six (6) months.

Respondent moved for reconsideration.

On March 10, 2012, the IBP Board of Governors granted respondent's motion for reconsideration for lack of
sufficient evidence to warrant the penalty of suspension. The Resolution dated December 29, 2010 was reversed
and the case against respondent was dismissed.

RULING

We reverse the ruling of the IBP Board of Governors.

Jurisprudence has provided three tests in determining whether a lawyer is guilty of representing conflicting
interest:

One test is whether a lawyer is duty-bound to fight for an issue or claim in behalf of one client and, at the same
time, to oppose that claim for the other client. Thus, if a lawyer's argument for one client has to be opposed by
that same lawyer in arguing for the other client, there is a violation of the rule. EACTSH

Another test of inconsistency of interests is whether the acceptance of a new relation would prevent the
full discharge of the lawyer's duty of undivided fidelity and loyalty to the client or invite suspicion of
unfaithfulness or double-dealing in the performance of that duty. Still another test is whether the lawyer
would be called upon in the new relation to use against a former client any confidential information acquired
through their connection or previous employment. 19

In the instant case, we find substantial evidence to support respondent's violation of the above parameters, as
established by the following circumstances on record:

First, it is undisputed that there was a lawyer-client relationship between complainant and Atty. Simando as
evidenced by the retainer fees received by respondent and the latter's representation in certain legal matters
pertaining to complainant's business;

Second, Atty. Simando admitted that Mejorado is another client of him albeit in a case claiming rewards against
the Bureau of Customs;

Third, Atty. Simando admitted that he was the one who introduced complainant and Mejorado to each other for
the purpose of entering into a financial transaction while having knowledge that complainant's interests could
possibly run in conflict with Mejorado's interests which ironically such client's interests, he is duty-bound to
protect; SHTcDE

Fourth, despite the knowledge of the conflicting interests between his two clients, respondent consented in the
parties' agreement and even signed as co-maker to the loan agreement;

Fifth, respondent's knowledge of the conflicting interests between his two clients was demonstrated further by
his own actions, when he:

(a) failed to act on Mejorado's failure to pay his obligation to complainant despite the latter's instruction to do
so;

(b) denied liability despite signing as co-maker in the receipts/promissory notes arising from the loan agreement
between his two clients;

(c) rebutted complainant's allegations against Mejorado and him, and even divulged informations he acquired
while he was still complainant's lawyer.

Clearly, it is improper for respondent to appear as counsel for one party (complainant as creditor) against the
adverse party (Mejorado as debtor) who is also his client, since a lawyer is prohibited from representing
conflicting interests. He may not, without being guilty of professional misconduct, act as counsel for a person
whose interest conflict with that of his present or former client.

Respondent's assertion that there is no conflict of interest because complainant and respondent are his clients in
unrelated cases fails to convince. His representation of opposing clients in both cases, though unrelated,
obviously constitutes conflict of interest or, at the least, invites suspicion of double-dealing. 20 Moreover, with
the subject loan agreement entered into by the complainant and Mejorado, who are both his clients, readily
shows an apparent conflict of interest, moreso when he signed as co-maker. IEDHAT

Likewise, respondent's argument that the money received was an investment and not a loan is difficult to accept,
considering that he signed as co-maker. Respondent is a lawyer and it is objectionable that he would sign as co-
maker if he knew all along that the intention of the parties was to engage in a mere investment. Also, as a
lawyer, signing as a co-maker, it can be presupposed that he is aware of the nature of suretyship and the
consequences of signing as co-maker. Therefore, he cannot escape liability without exposing himself from
administrative liability, if not civil liability. Moreover, we noted that while complainant was able to show proof of
receipts of various amounts of money loaned and received by Mejorado, and signed by the respondent as co-
maker, the latter, however, other than his bare denials, failed to show proof that the money given was an
investment and not a loan.

It must be stressed that the proscription against representation of conflicting interests finds application where
the conflicting interests arise with respect to the same general matter however slight the adverse interest may
be. It applies even if the conflict pertains to the lawyer's private activity or in the performance of a function in a
non-professional capacity. In the process of determining whether there is a conflict of interest, an important
criterion is probability, not certainty, of conflict. 21

We likewise note that respondent offered several excuses in order to avoid payment of his liability. First, in his
Answer to complainant's demand letter, he claimed there was novation which extinguished his liability;
Secondly, he claimed that the amount received by Mejorado for which he signed as co-maker was merely an
investment and not a loan. Finally, he alleged that it was agreed that the investment with profits will be paid
only after Mejorado receives the payment for his claim for reward which complainant violated when she
presented the checks for payment prematurely. These actuations of Atty. Simando do not speak well of his
reputation as a lawyer. 22
Finally, we likewise find respondent guilty of violating Rule 21.01 of the Code of Professional Responsibility. 23
In his last-ditch effort to impeach the credibility of complainant, he divulged informations 24 which he acquired
in confidence during the existence of their lawyer-client relationship. HaECDI

We held in Nombrado v. Hernandez 25 that the termination of the relation of attorney and client provides no
justification for a lawyer to represent an interest adverse to or in conflict with that of the former client. The
reason for the rule is that the client's confidence once reposed cannot be divested by the expiration of the
professional employment. Consequently, a lawyer should not, even after the severance of the relation with his
client, do anything which will injuriously affect his former client in any matter in which he previously
represented him nor should he disclose or use any of the client's confidences acquired in the previous relation.

Accordingly, we reiterate that lawyers are enjoined to look at any representation situation from "the point of
view that there are possible conflicts," and further, "to think in terms of impaired loyalty" that is to evaluate if
his representation in any way will impair loyalty to a client. 26

WHEREFORE, premises considered, this Court resolves to ADOPT the findings and recommendation of the IBP
in Resolution No. XIX-2010-733 suspending respondent Atty. Amador L. Simando for six (6) months from the
practice of law, with a WARNING that a repetition of the same or similar offense will warrant a more severe
penalty.

Let copies of this Decision be furnished all courts, the Office of the Bar Confidant and the Integrated Bar of the
Philippines for their information and guidance. The Office of the Bar Confidant is DIRECTED to append a copy
of this Decision to respondent's record as member of the Bar.

Atty. Simando is DIRECTED to inform the Court of the date of his receipt of this Decision so that we can
determine the reckoning point when his suspension shall take effect.

This Decision shall be immediately executory.

SO ORDERED.

Velasco, Jr., Abad, Mendoza and Leonen, JJ., concur.

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SECOND DIVISION

A.C. No. 9395. November 12, 2014.

DARIA O. DAGING, complainant, vs. ATTY. RIZ TINGALON L. DAVIS, respondent.

RESOLUTION

DEL CASTILLO, J p:

This administrative complaint for disbarment arose from an Affidavit Complaint filed by Daria O. Daging
(complainant) before the Integrated Bar of the Philippines (IBP), Benguet Chapter, against Atty. Riz Tingalon L.
Davis (respondent).

Antecedents

Complainant was the owner and operator of Nashville Country Music Lounge. She leased from Benjie Pinlac
(Pinlac) a building space located at No. 22 Otek St., Baguio City where she operated the bar.

Meanwhile, complainant received a Retainer Proposal from Davis & Sabling Law Office signed by respondent
and his partner Atty. Amos Saganib Sabling (Atty. Sabling). This eventually resulted in the signing by the
complainant, the respondent and Atty. Sabling of a Retainer Agreement dated March 7, 2005.

Because complainant was delinquent in paying the monthly rentals, Pinlac terminated the lease. Together with
Novie Balageo (Balageo) and respondent, Pinlac went to complainant's music bar, inventoried all the equipment
therein, and informed her that Balageo would take over the operation of the bar. Complainant averred that
subsequently respondent acted as business partner of Balageo in operating the bar under her business name,
which they later renamed Amarillo Music Bar.

Complainant likewise alleged that she filed an ejectment case against Pinlac and Balageo before the Municipal
Trial Court in Cities (MTCC), Branch 1, Baguio City. At that time, Davis & Sabling Law Office was still her
counsel as their Retainer Agreement remained subsisting and in force. However, respondent appeared as
counsel for Balageo in that ejectment case and filed, on behalf of the latter, an Answer with Opposition to the
Prayer for the Issuance of a Writ of Preliminary Injunction.

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

3.a Prior to the engagement of the Complainant of the DAVIS and SABLING LAW OFFICE as her retainer, Novie
Balageo was already one of the Clients of Respondent in several cases; ITaESD

3.b Sometime in the last week of the month of May 2005, while Respondent was in his office doing some legal
works, Novie Balageo called up Respondent informing the latter that his assistance is needed for purposes of
conducting an inventory of all items at the former Nashville Country Music Lounge;

3.c Respondent asked Novie Balageo the purpose of the inventory to which the latter . . . responded . . . that she
entered into a lease contract with the present administrator of the building, Benjie Pinlac;

3.d Respondent, to his disbelief requested Novie Balageo to go to the LAW OFFICE for further clarification of
the matter. Thereafter, Respondent was later informed that the business of Complainant was taken over and
operated by Mr. Benjie Pinlac for seven days. Furthermore, Mr. Benjie Pinlac offered the said place to Novie
Balageo which the latter readily accepted;

3.e Left with no recourse, Respondent requested one of his staff to assist Novie Balageo in conducting an
inventory. Furthermore, Respondent never acted as partner of Novie Balageo in operating the former Nashville
Country Music Lounge;

3.f When Complainant filed the civil case for Ejectment against Novie Balageo and Benjie Pinlac, Respondent
represented the former thereof without taking advantage of the retainership contract between the DAVIS and
SABLING LAW OFFICE and Complainant as Respondent has no knowledge or information of any matters related
by complainant to Atty. Sabling regarding the former's business;

3.g While the Complaint was pending, respondent was . . . informed by Novie Balageo and Benjie Pinlac of the
truth of all matters . . . which . . . Respondent was unaware of;

3.h However, for the interest of justice and fair play, . . . Respondent deemed it prudent to . . . withdraw as
Counsel for Novie Balageo. Hence, Respondent filed his Motion to Withdraw As Counsel. . . .

3.i The civil case was subsequently dismissed for lack of jurisdiction over the Complaint's subject matter. . . .

On October 15, 2008, the Investigating Commissioner rendered a Report and Recommendation finding
respondent guilty of betrayal of his client's trust and for misuse of information obtained from his client to the
disadvantage of the latter and to the advantage of another person. He recommended that respondent be
suspended from the practice of law for a period of one year.

On December 11, 2008, the IBP Board of Governors adopted and approved the Report and Recommendation of
the Investigating Commissioner. Upon motion of the respondent, it reduced the penalty imposed to six months
suspension considering that there is no proof that respondent actually handled any previous legal matters
involving complainant.

Our Ruling

It is undisputed that complainant entered into a Retainer Agreement dated March 7, 2005 with respondent's law
firm. This agreement was signed by the respondent and attached to the rollo of this case. And during the
subsistence of said Retainer Agreement, respondent represented and defended Balageo, who was impleaded as
one of the defendants in the ejectment case complainant filed before the MTCC of Baguio City. In fact,
respondent filed on behalf of said Balageo an Answer with Opposition to the Prayer for the Issuance of a Writ of
Preliminary Injunction dated July 11, 2005. It was only on August 26, 2005 when respondent withdrew his
appearance for Balageo.

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

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

"A lawyer may not, without being guilty of professional misconduct, act as counsel for a person whose interest
conflicts with that of his present or former client." The prohibition against representing conflicting interests is
absolute and the rule applies even if the lawyer has acted in good faith and with no intention to represent
conflicting interests. In Quiambao v. Atty. Bamba, this Court emphasized that lawyers are expected not only to
keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing for only
then can litigants be encouraged to entrust their secrets to their lawyers, which is of paramount importance in
the administration of justice.

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

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

The penalty for representing conflicting interests may either be reprimand or suspension from the practice of
law ranging from six months to two years. We thus adopt the recommendation of the IBP Board of Governors.

WHEREFORE, the Court ADOPTS and AFFIRMS the January 15, 2012 Resolution of the Integrated Bar of the
Philippines Board of Governors. Atty. Riz Tingalon L. Davis is found GUILTY of violating Rule 15.03, Canon 15
of the Code of Professional Responsibility and is hereby SUSPENDED from the practice of law for a period of
six (6) months effective upon receipt of this Resolution. He is warned that a commission of the same or similar
offense in the future will result in the imposition of a stiffer penalty.

Let a copy of this Resolution be entered into the records of Atty. Riz Tingalon L. Davis and furnished to the
Office of the Clerk of Court, the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts
in the Philippines, for their information and guidance.

Atty. Riz Tingalon L. Davis is DIRECTED to inform the Court of the date of his receipt of this Resolution.

SO ORDERED.

Carpio, * Acting C.J., Brion, Mendoza and Leonen, JJ., concur.

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 EN BANC

[Adm. Case No. 76 . July 23, 1952.]

SIMPLICIO NATAN, as administrator of the Intestate Estate of the deceased Maria Sandoval de
Patero, complainant, vs. ATTORNEY SIMEON CAPULE, respondent.

Simeon Capule in his own behalf.

Solicitor General Pompeyo Diaz and Solicitor Juan T. Alano for the Government.

SYLLABUS

1. EVIDENCE; DIFFERENCES IN TESTIMONY; WEIGHT GIVEN TO ASSERTIONS MADE BY THE LOWLY-

CLASS. As between the respondent attorney's uncorroborated denial and the positive assertion of three
members of the poor working class that he asked them to sign the compromise, our choice is the latter, not only
because the attorney's own testimony must necessarily be biased and that of his opponents more impartial, as
they are indifferent to the results of these proceedings, but also because the lowly and the indigent are generally
reputed to be timid, God-fearing, and truthful.

2. ATTORNEYS-AT-LAW; MISCONDUCT IN OFFICE; BREACH OF LOYALTY TO CLIENT. An attorney who

accepts professional employment in the very case in which his former client is the adverse party, and utilizing
against the latter papers, knowledge, and information obtained in the course of his previous employment is
guilty of misconduct. The fact that he had retired from the first case prior to accepting the second case against
his former client, does not relieve him from his obligation of fidelity and loyalty to the latter.

3. ID.; ID.; VIOLATION OF LAWYER'S OATH. In prosecuting the tenants of his former client for estafa without
reasonable grounds causing their imprisonment in order to compel them to deliver a portion of their palay
harvests to his second client, respondent attorney is guilty not merely of unethical practice but a clear and
direct violation of his oath as a lawyer. His conduct evinces a character wanting in truthfulness, and devoid of
that sense of fairness and justice so essential to the profession that he has embraced.

DECISION

LABRADOR, J p:

These proceedings were instituted by the Solicitor General upon complaint of Simplicio Natan against Simeon
Capule, an attorney-at- law, who is charged with the following acts of misconduct in his office as lawyer: (1) for
having failed to appear, without any justifiable reason, in the hearing of a case for which he had received his
fees in full; (2) for having accepted professional employment in the very case in which his former client is the
adverse party, and utilizing against the latter papers, knowledge, and information obtained in the course of his
previous employment; and (3) for falsely accusing tenants of his former client and causing their detention, in
order to compel them to enter into a compromise by giving him (respondent) one-half of their rice harvests.

Complainant Simplicio Natan is the judicial administrator of the estate of the deceased Maria Sandoval de
Patero, appointed by the Court of First Instance of Palawan, and is in possession of all the properties of said
deceased. During the lifetime of the decedent's husband, Santiago Patero, Natan had filed an action against
Patero to recover the wife's share in the conjugal properties. Santiago Patero was condemned to deliver his
wife's share in the conjugal assets to Natan and to render an accounting of the fruits thereof while he was in
possession. As he failed to make such accounting, his one-half share in the hacienda known as Hacienda Minit
was ordered delivered to Natan for Administration.

The above proceedings took place before the year 1922. Santiago Patero died in August, 1925. Both he and his
deceased wife left no descendants. In 1935 Natan filed a project of partition of the properties left by Maria
Sandoval de Patero, and said partition was approved on March 23, 1937. Natan has continued in possession of
the Hacienda Minit in his original capacity as administrator.

In the middle of the year 1949, Natan filed an action of forcible entry against Francisco Edonga, Jose Cabugan,
and Piloromo Raon (Civil Case No. 15, in the Justice of the Peace Court of Coron, Palawan) for having illegally
occupied and detained portions of the Hacienda Minit under Natan's administration, and contracted the services
of the respondent herein, Simeon Capule, for the hearing of the case. The first professional act made by
respondent in connection with that case was the preparation of an amended complaint and an opposition to a
motion to dismiss the case. Capule received the amount of P50 as part of his fees at that time, and fixed his fees
for the whole case in the amount of P250. From time to time he had been getting sums of money from the
complainant as partial payments of his fee. Up to October 7, 1949, he had received the sum of P180. On this
date the case was called for hearing and respondent appeared at the trial, but it had to be postponed to
November 17, 1949. As respondent maintained an office in Manila and had to come to Manila before the
hearing, he told his client not to worry as he would take a boat from Manila in time to reach Coron for the
hearing on November 17, 1949. He assured his client that in case he would not be able to arrive on time, he
would ask the judge for postponement.

The respondent did not arrive on the date of the hearing, and as the judge refused to grant postponement,
complainant handled his case personally being a lawyer himself, without the presence of respondent. All in all he
was able to collect the amount of P275 from complainant. On November 21, 1949, respondent filed a petition,
with the conformity of Natan, to withdraw as attorney for the latter in said Civil Case No. 15.
The above are the facts involved in the first charge. With respect to the other charges, it appears that when
Natan contracted respondent's professional services in the month of August, 1949, he delivered to respondent
various documents, among which are a copy of the decision in Civil Case No. 96 of the Court of First Instance of
Palawan instituted by Natan against the deceased Santiago Patero for the recovery of certain properties
belonging to the latter's wife, Exhibit A-2, a copy of the decision in Civil Case No. 104 of the same court filed by
Natan against Santiago Patero for the recovery of the wife's share in the conjugal properties in the possession of
Patero, Exhibit A-3, the project of partition, Exhibit A-5 the order of the Court approving the project of partition,
Exhibit A-4, tax declarations of Hacienda Minit, Exhibits A-6, A-7, A-9, and A-10, the new tax declaration of
Hacienda Minit in the name of the deceased Estefania Rodriguez, Exhibit A-8, various receipts for the payment
of taxes, Exhibits A-11 to A-15, and the plan of Hacienda Minit, Exhibit A-16. Towards the end of the month of
November, 1949, according to respondent's own witness Olimpio Patero, the latter had talked to respondent in
connection with his claim to the Hacienda Minit, based on his pretension that he was a recognized child of the
deceased Santiago Patero (see certificate of baptism, Exhibit 12). After respondent was employed by Olimpio
Patero, the following incidents took place:

(1) On January 13, 1950, Olimpio Patero filed a motion that he be allowed to intervene in Civil Case 188 of the
Court of First Instance of Palawan, entitled Simplicio Natan vs. Francisco Edonga, et al. (the same Civil Case
No. 15 of the Justice of the Peace Court of Coron, supra), in which the professional services of respondent had
been contracted and paid for by Natan (Exhibits L and N). The intervention is improperly designated third party
complaint. Both motion and pleading are, however, signed by Olimpio Patero.

(2) On February 27, 1950, respondent herein filed on behalf of Olimpio Patero a petition in the administration
proceedings (Civil Case No. 71, Court of First Instance of Palawan), alleging that Olimpio Patero is the sole heir
of Santiago M. Patero, and that he is in possession of Hacienda Minit; that the administrator of the estate of the
deceased Maria Sandoval de Patero, complainant herein Simplicio Natan, had been encroaching upon the land
constituting the Hacienda Minit, interfering with its use and occupation and depriving Olimpio Patero of the
harvests of coconut and palay; and praying that Simplicio Natan be restrained from interfering with the
occupation and enjoyment of the Hacienda Minit by Olimpio Patero, and that Natan should be ordered to return
to Olimpio Patero 400 cavanes of palay representing his one-half share in the land, or the equivalent value of
P4,400, as well as the coconuts and copra which he may have gathered amounting to not less than 37 tons
valued at not less than P13,320 (Exhibit O). This petition was opposed by Natan (Exhibit Q). In the petition the
lands constituting the Hacienda Minit are set forth in accordance with the description appearing in Tax
Declarations Nos. 5785 and 7862, both in the name of Santiago Patero (Exhibits A-9 and A-6). The petition also
contains a statement of the area of the land constituting the Hacienda Minit, together with the number of
coconut trees thereon, also based on Tax Declaration No. 2037 (Exhibit A-7), which was furnished respondent by
complainant herein.

(3) On May 5, 1950, Olimpio Patero signed an affidavit that he was the sole heir of the deceased Santiago Patero
stating the number of cattle and carabaos left by his deceased father and describing the land also left by him,
and asserting that he adjudicated to himself the entire estate of the deceased under Rule 74, section 1, of the
Rules of Court (Exhibit P-1). Before the end of the year 1949, a complaint had been filed by Natan against
Olimpio Patero for trespass. In a motion for postponement of the hearing of said case filed by Patero (Exhibit 7),
he alleges that his lawyer was to come from Manila, and this lawyer must have been respondent herein. Again in
the month of March, 1950, another complaint was filed against Olimpio Patero, et al. charging him and others of
frustrated murder committed on the persons of Arsenio Santillan and Manuel Natan (Exhibit Y).

(4) Olimpio Patero had filed on January 10, 1950, an action for robbery with attempted homicide against Ernesto
Natan and cases for swindling against Benigno Rios, Maximiano Pabia, Balbino Yapla, and Juan Bermudes
(Exhibits C, D, E, F). The above accusations were, however, dismissed by the Justice of the peace on the ground
that there was no probable cause that the crimes had been committed (Exhibits J and K). Upon the filing of the
complaint for estafa the four accused were arrested and detained in the municipal jail of Coron. Thereupon,
respondent herein went to see them and secured from three of them a written statement that they would deliver
to Olimpio Patero, the owner of Hacienda Minit, his share in the harvest that the three obtained from the
portions they had cultivated (Exhibit 6). When the three accused signed the affidavit, respondent asked the chief
of police to release them, but when they went to get the palay in the granary where their harvest were being
kept, the granary was closed. Thereupon, respondent ask them to break open the lock, but the three refused, so
the respondent told the chief of police to take them back into his custody again, and so they were put back in
jail.

In connection with the complaint filed against the four above- named persons, including complainant's son,
respondent denied having acted as lawyer for Olimpio Patero, or for having asked them to compromise their
criminal case upon giving him the palay which is the share of the owner of the land. But we can not agree to his
claim. Olimpio Patero was already his client when the estafa cases were filed, and the same are evident attempts
to get possession of the land and get the tenants of the Hacienda Minit to recognize him as the owner, clearly
for the direct benefit of his client. He admits that he was present when the compromise was being signed, but
that it was not he who secured the signatures thereto. For what purpose was he present, if not in the ultimate
interest of his client? As between his uncorroborated denial and the positive assertion of three members of the
poor working class, that he asked them to sign the compromise, our choice is the latter, not only because
respondent's own testimony must necessarily be biased and that of his opponents more impartial, as they are
indifferent to the result of these proceedings, but also because the lowly and the indigent are generally reputed
to be timid, God-fearing, and truthful.

We are convinced that the respondent had utilized the papers and the knowledge and information that he had
received from his former client Simplicio Natan, in relation to the Hacienda Minit, against Natan and for the
benefit of his new client Patero. The data appearing in the petition that he had filed in Civil Case No. 71,
intestate proceedings of the deceased Maria Sandoval de Patero, could have been obtained by him only from the
papers of said case (Exhibit A-2). We are also convinced that the respondent must have been the one who
induced Olimpio Patero (his client) to accuse falsely the tenants of the complainant in Hacienda Minit of the
crime of estafa. More than that, as the respondent knew that his client was not in possession of the hacienda, he
also must have known that his new client had no right to demand the harvests thereon from the tenants of the
complainant. He also must have known that under no circumstances whatsoever could the tenants be guilty of
estafa for their failure or refusal to deliver the harvests to his new client. From all of these it is apparent that the
action for estafa must have been maliciously conceived to obtain unlawfully what he could not lawfully get.

As to the first charge, however, we find that respondent's failure to appear, as he had agreed and promised, was
involuntary on his part, because it appears that he had never expected that the judge before whom the case was
pending would refuse to grant his motion for postponement.

It is evident from the foregoing that respondent, because of his previous relationship with the complainant
herein, was disqualified to accept the case of Olimpio Patero, who claimed ownership of the Hacienda Minit. The
immediate objective of Patero was to wrest possession of the Hacienda Minit from respondent's former client,
Natan, which possession it was the latter's duty to protect and support. The fact that respondent herein retired
from the forcible entry case on November 21, 1949, prior to retaining the case of Olimpio Patero, did not relieve
him from his obligation of fidelity and loyalty to his former client. (7 C. J. S. 827.) The inconsistency between his
position as attorney or Olimpio Patero and that as attorney for complainant was so apparent that it could not
have escaped respondent's attention. Respondent may not excuse his conduct behind the shield of the
presumption of good faith, because the inconsistency was clear. But what makes the violation of his obligation of
fidelity more improper is the fact that in forwarding Patero's interests, he did actually utilize the papers,
knowledge, and information which he had received in the course of his employment as lawyer for complainant
herein.

An attorney is forbidden to do either of two things after severing his relationship with a former client. He may
not do anything which will injuriously affect his former client in any matter in which he formerly represented
him, nor may he at any time use against his former client knowledge or information acquired by virtue of the
previous relationship. Wutchumna Water Co. vs. Bailey, 15 P. (2d) 505, 509, 216 Cal. 564 (7 C. J. S. 828.)

But if the conduct of the respondent in accepting Patero's case and in using papers and documents to the
prejudice of his former client is unexcusable, in prosecuting the tenants of his former client for estafa without
reasonable grounds, causing their imprisonment in order to compel them to deliver portion of their palay
harvests to his second client, his conduct was reprehensible, constituting not merely unethical practice but a
clear and direct violation of the following portion of his oath as lawyer:

. . .. I will do no falsehood, nor consent to the doing of any in court; I will not wittingly or willingly promote or
sue any groundless, false or unlawful suit, nor give aid nor consent to the same; I will conduct myself as a lawyer
according to the best of my knowledge and discretion, with all good fidelity as well to the courts as to my clients;
. . . (Emphasis ours.).

His conduct evinces a character wanting in truthfulness, and devoid of that sense of fairness and justice so
essential to the profession that he has embraced. But this is the first occasion that respondent is charged in this
Court with misconduct, and we prefer to grant him the opportunity to reform. But we can not let his misconduct
pass unpunished; we must impose upon him a penalty which would, at the same time, serve the purpose of a
warning. The majority of this Court believes that suspension from his office as lawyer for a period of two (2)
years would serve both purposes.

Wherefore, this Court absolves respondent from the first charge, but finds him guilty of all the other charges
proferred against him by the Solicitor General and suspends him from the exercise of his profession as attorney-
at-law for a period of two (2) years, the period to commence upon receipt by him of notice of the final resolution
of this Court in this case.

Paras, C.J., Feria, Pablo, Bengzon, Padilla, Tuason, Montemayor, and Bautista Angelo, JJ., concur.

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