Lawyers Fiduciary Obligations

7/27/2019 Lawyers Fiduciary Obligations

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X. LAWYER S FIDUCIARY OBLIGATIONS

A. EFFECTS OF FIDUCIARY RELATION

[A.C. No. 5019. April ! "000#

$%&'( ADORACION G. ANGELES! complainant! vs. A))*.T+O,AS C. UY $R.! respondent.

D E C I S I O N

-ANGANIBAN!J.

Lawyers must promptly account for money or property theyreceive on behalf of their clients. Failure to do so constitutes

professional Misconduct and justifies the imposition ofdisciplinary sanctions.

T/( C( 2& )/( F3)

In a letter dated February 11, 1999 addressed to the Office of

the hief !ustice, !ud"e #doracion $. #n"eles of the %e"ional&rial ourt of aloocan ity '(ranch 1)1* char"ed #tty.&homas . +y !r. with violation of anon 1 of the ode of-rofessional %esponsibility. omplainant states thatrespondents acts, which had earlier been held contemptible inher February 1/, 1999 Order, 01also rendered himadministratively liable. In the said Order, she narrated thefollowin" facts2

34hen the case was called for the second time at 11 2)5ocloc6 in the mornin", the private prosecutor #tty.&homas . +y, !r. appeared. In open court, accused

7orma &rajano manifested that she had already settled infull the civil aspect in rim. ase 7o. 851:: '9;* inthe total amount of 0thirty 0si< 0thousand 0five0hundred '-=,5//.//* 0pesos. >he further alle"ed thatshe paid -)/,///.// directly to the private complainantand the balance of -1,5//.// was delivered to #tty.&homas . +y, !r., the lawyer of the private complainantand accordin"ly produced in open court the receipt forsuch payment si"ned by no less than the aforesaidlawyer. Indeed, the civil liability of the accused hadalready been satisfied in full.Miso

3?owever, the private complainant, -rimitiva Malansin"0@el %osario manifested that she did not receive theamount of 0si


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%omeo !amisola !r., is the lone staff of the law firm < I&LKsaid that the -1,5// was paid to the 0respondent. !ud"e#n"eles then too6 the receipt from 7orma &rajano andhad it &O 0DO -O 7# M#(+O #7$ -G%#.

-rimitiva @el %osario, however, tried to e


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amount of -1,5//.// from the office of the 0respondent,throu"h, %omeo !amisola !r. and einumpaan">alaysay. < < inumpaan" >alaysay of -rimitiva @el %osario,dated February 1, 1999 as well as the #c6nowled"ment%eceipt, dated February 1), 19909 was attached to aManifestation caused to be filed by the 0respondent onMarch =, 1999 when the respondent was confined inFatima ?ospital in alenBuela ity, Metro Manila onMarch ), 1999E>cnc m

315*. Learnin" of the instant administrative case a"ainstthe 0respondent, (on" @el %osario, the son of -rimitiva@el %osario, upon whose wish the subject sum of moneywas 6ept at the office of the 0respondent to save the samein whole as well as the future in0stallment payments of

7orma &rajano einumpaan" >alaysay,attestin" 0to and confirmin" the statement of 0his mother-rimitiva @el %osario. < < tripped of unnecessary verbia"e, the omment contends thatthe respondent 6ept the money in his office because that wasthe alle"ed wish of both his client and her son. ?e alle"edlyinformed them of such money and tried to "ive it to them, butthey insisted that he retain it. ?e further maintained that it wasonly after !ud"e #n"eles issue the February 1/, 1999 Orderthat his client relented and accepted the money on February1), 1999.

#fter the jud"e filed her %eply on !une =/, 1999, this ourtreferred the case to the Office of the (ar onfidant for reportand recommendation. &he ourt dispensed with the normalreferral to the Inte"rated (ar of the -hilippines because therecords were complete and the Auestion raised was simple. 7ofurther factual investi"ation was necessary in the premises.

Br Co24i&2) R(por) 2& R(3o66(2&)io2

%ecommendin" that #tty. &homas . +y !r .be suspendedfrom the practice of law for one month, the Office of the (aronfidant in its %eport and %ecommendation dated @ecember15, 1999 said2>daa miso

3< < < 0It is clear that it is the sworn duty of a member ofthe bar to be accountable, at all times, for anythin" whichhe receives for and in behalf of his client.

3In the case at bar, this Office is more inclined to believe

the story of the complainant.

3First, it cannot be disputed that the transcript ofsteno"raphic notes is the most reliable record of whatindeed transpired 'and what words were uttered by the

parties involved* on February 1/, 1999 at the hearin" ofrim. ase 7o. 851:8:: '9;*. %ecords clearly showthat the private complainant in the criminal case, whenas6ed by !ud"e #n"eles as to the whereabouts of the-1,5//.//, spontaneously replied that she had no6nowled"e of the sameE in effect sayin" that #tty. +y hasnot "iven her the subject 1,5//.//. If, indeed, -rimitiva

@el %osario reAuested #tty. +y to 6eep the money as farbac6 as @ecember 199;, then she should have told thesame to !ud"e #n"eles.

3#tty. +ys alle"ation that !ud"e #n"eles prevented-rimitiva @el %osario from sayin" in open court thewords ?I7@I -O D#>I $+>&O DO -O 7# M#(+O#7$ -G%# does not have any proof as nothin" of thatsort appears in the transcript of steno"raphic notes. #tty.+y has not even bothered to refute the truth of thecontents of the steno"raphic notes, all the more bolsterin"this Offices opinion that the said notes are accurate andtruthful.>daad

3>econd, the affidavits ecs daad

A&6i2i)r)i7( Li8ili)* o4 R(po2&(2)

&he relationship between a lawyer and a client is hi"hlyfiduciaryE it reAuires a hi"h de"ree of fidelity and "ood faith. Itis desi"ned 3to remove all such temptation and to preventeverythin" of that 6ind from bein" done for the protection ofthe client.305

&hus, anon 1 of the ode of -rofessional %esponsibilityprovides that 3a lawyer shall hold in trust all moneys and

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properties of his client that may come into his possession.3Furthermore, %ule 1./1 of the ode also states that 3a lawyershall account for all money or property collected or receivedfor or from the client.3 &he anons of -rofessional Gthics iseven more eup rema

3Money of the client collected for the client or other trustproperty comin" into the possession of the lawyer shouldbe reported and accounted forpromptly and should notunder any circumstances be commin"led with his own or

be used by him.30

In the present case, it is clear that respondent failedtopromptly report and account for the -1,5// he hadreceived from 7orma &rajano on behalf of his client, -rimitiva@el %osario. #lthou"h the amount had been entrusted torespondent on @ecember 1, 199;, his client revealed durin"the February 1/, 1999 hearin" that she had not yet received it.4orse, she did not even 6now where it was.

%espondent maintains that on @ecember 15, 199; he informedMrs. @el %osario about the payment. ?e further avers that he6ept the money up n her instruction, as she had alle"edlywanted 3future payments < < 0to be saved in whole and forthem to avoid spendin" the same as what had happened to the

past installment payments < <


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served on the I(-, as well as the ourt #dministrator whoshall circulate them to all the courts in the country for theirinformation and "uidance.

SO ORDERED.

[A.C. No. 5"5. ,r3/ ""! "000#

FERNANDO C. CRU: AND A,ELIA

CRU:! complainants, vs. ATTY. ERNESTO C.$ACINTO! respondents.$%ri;

R E S O L U T I O N

,ELO!J.

In their sworn complaint, spouses Fernando . ruB and#melia Manimbo ruB see6 the disbarment of #tty. Grnesto. !acinto. &he Inte"rated (ar of the -hilippines, throu"hommissioner !esulito #. Manalo of the ommissioner on(ar discipline, conducted an investi"ation. &hereafter, hesubmitted his Findin"s and %ecommendation, thusly2

&his is a disbarment case filed by the spousesFernando and #melia ruB a"ainst #tty. Grnesto .!acinto. &his case was filed with the ommission on(ar @iscipline last =/ !anuary 1991.

&he evidence of the complainants show thatsometime in !une 199/, #tty. Grnesto !acinto, lawyerof the couple in an unrelated case, reAuested the ruBspouses for a loan in behalf of a certain oncepcion$. -adilla, who he claimed to be an old friend as shewas alle"edly in need of money. &he loan reAuestedwas for -h- );5,///.// payable after 1// days for-h- =/,/// to be secured by a real estate mort"a"eon a parcel of land located at PueBon ity.>c juris

&he spouses, believin" and trustin" therepresentations of their lawyer that -adilla was a"ood ris6, authoriBed him to start preparin" all thenecessary documents relative to the re"istration of the%eal Gstate Mort"a"e to secure the payment of theloan in favor of the ruB spouses.

On !uly 199/, the complainants a"reed to thereAuest of #tty. !acinto and were presented by the

latter with a %eal Gstate Mort"a"e ontract and a&ransfer ertificate of &itle 7o. 1):):5 in the nameof oncepcion $. -adilla. &he amount of -h-);5,///.// was "iven by the spouses to therespondent in cash '-h- ):/,///.//* and a -(omchec6 no. :1=9)9 for -h- 15,///.//.

+pon maturity of the loan on 15 October 199/, thespouses demanded payment from oncepcion $.-adilla by "oin" to the address "iven by therespondent but there proved to be no person by thatname livin" therein. 4hen the complainants verifiedthe "enuineness of && 7o. 1):):5 with %e"ister of

@eeds of PueBon ity, it was certified by the saidoffice to be a fa6e and spurious title. Further effortsto locate the debtor8mort"a"or li6ewise provedfutile.!uris sc

In their sworn affidavits "iven before the 7ational(ureau of Investi"ation '7(I*, the spouses claim thatthey relied much on the reassurances made by #tty.!acinto as to oncepcion $. -adillaJs credit,

considerin" that he was their lawyer. It was also theirtrust and confidence in #tty. !acinto that made themdecide to fore"o meetin" the debtor8mort"a"or.

&he complainantsJ evidence also included the swornstatements of Gstrella Grmino8-alipada, the secretaryof the respondent at the 7eri Law Office, and#ve"ail -ayos, a housemaid of #tty. !acinto. Ms.-alipada stated that2

1. she was the one who prepared the %eal GstateMort"a"e ontract and the %eceipt of the loan uponthe instruction of the respondentsE

). she was a witness to the transaction and never oncesaw the person of oncepcion $. -adilla, the alle"edmort"a"orE and that

=. /(


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%espondent further alle"ed that he had not beenremiss nor ne"li"ent in collectin" the proceeds of theloanE that in fact, he had even advanced the full

payment of the loan due to the complainants from hisown savin"s, even if oncepcion $. -adilla had notyet paid, much less found.

%GOMMG7@#&IO7>

It is every lawyerJs sworn duty to obey the laws ofthe land to promote respect for law and le"alprocesses. &he ode of -rofessional %esponsibilitycommand that he shall not en"a"e in unlawful,dishonest, immoral or deceitful conduct. '%ule 1./1,ode of -rofessional %esponsibility*!j ledaamiso

%espondent utterly failed to perform his duties andresponsibilities faithfully and well as to protect the ri"hts andinterests of his clients and by his deceitful actuationsconstitutin" violations of the ode of -rofessional%esponsibilities must be subjected to disciplinary measures forhis own "ood, as well as for the "ood of the entire membershipof the (ar as a whole.

W+EREFORE, the ourt hereby adopts the resolution of the(oard of $overnors of the Inte"rated (ar of the -hilippinesand orders respondent #tty. Grnesto . !acinto suspended

from the practice of law for si< '* months with the warnin"that a repetition of the same or similar offense will be dealtwith more severely.>daad

SO ORDERED.

D(3(68(r >! 19"?ICENTE DIA:! 3o6pli22)!7.RU-ERTO @A-UNAN! r(po2&(2).

#ttorney8$eneral illa8%eal for the $overnment.

-erfecto $abriel and %afael -alma for respondent.

M#LOLM, !.2

&his action for malpractice brou"ht by icente @iaB a"ainst#ttorney %uperto Dapunan, has to do with the conduct of#ttorney Dapunan durin" the le"al proceedin"s whichfollowed the business troubles of icente @iaB and >ecundinode MendeBona, and particularly relates to the conduct of#ttorney Dapunan in civil case 7o. )/9; of the ourt of FirstInstance of Leyte. &he ultimate Auestion on which we wouldconcentrate attention concerns the a"reement between @iaB

and Dapunan at the time of the sale of the property ofMendoBa, whereby Dapunan, on the promise of @iaB to payhim -1,///, a"reed to desist from further participation in thesale, all in alle"ed violation of article 159 of the ivil odeand article 5) of the -enal ode.

Omittin" the irrelevant matter interjected into this case, theprincipal facts of record are the followin"2

In 191:, icente @iaB and >ecundino de MendeBona formed apartnership and entered into eecundino MendeBona, do hereby a"reed that @on %upertoDapunan should withdraw his bid and refrain from biddin" atthe said auction as he does hereby withdraw his bid, and inconsideration thereof, the said Mr. @iaB offers him a premiumof one thousand pesos '-1,///* which, out of consideration tosaid @on icente @iaB, Mr. Dapunan accepts and has, for thisreason, refrained from biddin" in competition with said [email protected]

&acloban, Leyte, @ecember )=, 19)).

'>"d.* 3. @I#H. '>"d.*%+-G%&O D#-+7#7.3

Followin" the termination of the sheriffs sale, @iaB on@ecember ), 19)), "ave Dapunan -5// of the -1,///mentioned in the above Auoted document. @iaB furtherfollowed the usual procedure to ta6e over the property ofMendeBona pursuant to his bid of -1),5//, which covered theamount of the mort"a"e with its accumulated interest and withthe judicial e


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#lthou"h it was on @ecember )=, 19)), that @iaB andDapunan entered into the a"reement, @iaB could only waituntil !anuary , 19)=, followin", to lay before this courtchar"es a"ainst #ttorney Dapunan for alle"ed unprofessionalconduct. +ndoubtedly, before Dapunan had 6nowled"e of thedisbarment proceedin"s, on !anuary 1/, 19)=, he presented amotion in the ourt of First Instance of Leyte as6in" that he

be permitted to retain the -5// in Auestion, in part payment ofhis professional fees. Later, on February , 19)=, whenDapunan must have had 6nowled"e of the disbarment

proceedin"s, he filed another motion, withdrawin" his formermotion and as6in" the court to permit him to turn over the-5// to @iaB, which !ud"e ausin" refused to do on the"round that it was a personal matter. 7evertheless, on !uly 1/,19)=, the cler6 of the ourt of First Instance of Leyte handedthe -5// to @iaB who, in turn, receipted for that amount.lawphil.net

From correspondence, it further is evident that the family ofMendeBona was led to believe that the -5// would shortly besent them. 4ithout doubt, the MendeBona family would have

been "ratified to receive even the -5// pittance out of the

business wrec6 in Leyte of the senior MendeBona.

@urin" much of the time here mentioned, Dapunan was theattorney of MendeBona. Dapunan was "iven e


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receipted for by @iaB, and the cler6 of court shall transmit the-5// to >ecundino de MendeBona or, in case of his absence, toMiss armen de MendeBona. osts shall be tao ordered.

!ohnson, #vanceRa, illamor, Ostrand and !ohns, !!., concur.%omualdeB, !., too6 no part.

B. ACCOUNTING OF CLIENTS FUNDS

[A.C. No. 0>. ,r3/ "! "000#

LEONITO GONATO 2& -RI,ROSEGONATO complainants, vs. ATTY. CESILO A.ADA:A! respondent.

R E S O L U T I O N

,ELO!J.>claw

#t bar is an administrative complaint for disbarment filed bythe complainant spouses Leonito and -rimrose $onato a"ainsttheir former counsel, #tty. esilo #. #daBa, char"in" himwith malpractice and violation of trust. -ursuant to %ule 1=98( of the %ules of ourt and the %esolution of the ourt dated@ecember 1, 199=, the present administrative case wasreferred to the Inte"rated (ar of the -hilippines 'I(-* forinvesti"ation, report, and recommendation.

It appears that sometime in February, 199=, complainantsen"a"ed the services of respondent as their counsel in ivilase 7o. 9)8)= entitled $o6in" vs. Kacapin, et al.3 filed with

the %e"ional &rial ourt of Misamis Oriental, whereincomplainants were amon" the defendants in said case.omplainants alle"ed that respondent demanded from themthe sum of -15,9;/.// to be used in payin" the doc6et fee andother court fees in connection with the aforementioned case.>aid amount was loaned to complainants by a friend, icManBano, who delivered the same to respondent, as evidenced

by an ac6nowled"ment receipt dated February 1/, 199= andsi"ned by respondents secretary, Mayette >alceda. &hereafter,complainants as6ed for the official receipts evidencin" theamount of court fees purportedly paid by respondent. icManBano told complainants that respondent only "ave him

photocopies of two %epublic of the -hilippines receipts withnumbers 9):1= 'G


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ethics and a betrayal of public confidence in the le"alprofession %&bia vs. 'atimbang, 19 >%#)= 01991*.Li6ewise, respondent offered no solid proof to support hisdenial that he delivered the two falsified receipts tocomplainants.law

anon : of the ode of -rofessional %esponsibility mandatesthat 3a lawyer shall at all times uphold the inte"rity anddi"nity of the le"al profession.3 &he trust and confidence

necessarily reposed by clients reAuire in the lawyer a hi"hstandard and appreciation of his duty to them. &o this end,nothin" should be done by any member of the le"al fraternitywhich mi"ht tend to lessen in any de"ree the confidence of the

public in the fidelity, honesty, and inte"rity of the profession'(arcelo vs. )avier, r., )1 >%# 1 0199)*.

&he facts and evidence obtainin" in this case "larin"ly revealrespondents failure to live up to his duties as a lawyer inconsonance with the strictures of his oath and the ode of-rofessional %esponsibility, particularly anon 1 which

provides that 3a lawyer shall hold in trust all moneys andproperties of his client that may come into his possession.3 #s

a member of the (ar, respondent was and is e O3)o8(r 9! "00

ANDREA BALCE CELA$E! 3o6pli22)!

7.ATTY. SANTIAGO C. SORIANO! r(po2&(2).

% G > O L + & I O 7

#+>&%I#8M#%&I7GH, !.2

(efore this ourt is a disbarment case filed a"ainst #tty.>antia"o . >oriano 'respondent* for "ross misconduct.

In the omplaint dated !une 1, )//5 filed before the Inte"rated(ar of the -hilippines 'I(-*, #ndrea (alce elaje'complainant* alle"ed that respondent as6ed for money to be

put up as an injunction bond, which complainant found outlater, however, to be unnecessary as the application for thewrit was denied by the trial court. %espondent also as6ed formoney on several occasions alle"edly to spend for or to be"iven to the jud"e handlin" their case, !ud"e Mila"rosPuijano, of the %e"ional &rial ourt, Iri"a ity, (ranch =.4hen complainant approached !ud"e Puijano and as6edwhether what respondent was sayin" was true, !ud"e Puijanooutri"htly denied the alle"ations and advised her to file anadministrative case a"ainst respondent.1

In his #nswer, respondent denied the char"es a"ainst him andaverred that the same were merely concocted by complainantto destroy his character. ?e also contended that it wascomplainant who boasted that she is a professional fi


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@urin" the hearin" conducted, omplainant reiterated heraccusations a"ainst the %espondent and eeptember ;, )//, the (oard of $overnors of the I(-passed a %esolution thus2

%G>OLG@ to #@O-& and #pprove, as it is hereby#@O-&G@ and #--%OG@, with modification, the %eportand %ecommendation of the Investi"atin" ommissioner ofthe above8entitled case, herein made part of this %esolution as#nne< 3#8E and, findin" the recommendation fully supported

by the evidence on record and the applicable laws and rules,and considerin" that %espondent is "uilty of "ross misconductfor misappropriatin" his clients funds, #tty. >antia"o .

>oriano is hereby >+>-G7@G@ from the practice of law fortwo ')* years and li6ewise Ordered to immediately deliver thatunaccounted amount of -5,;//.// to complainant.

&he I(- transmitted the 7otice of %esolution issued by theI(- (oard of $overnors as well as the records of the case,

pursuant to %ule 1=98(.: &hen in compliance with the ourts%esolution dated February )/, )//:, the I(- throu"h @irectorfor @iscipline %o"elio inluan informed the ourt that perrecords of the I(-, no Motion for %econsideration was filed

by either party.

&he ourt a"rees with the I(- %esolution.

&he ode of -rofessional %esponsibility '-%*, particularlyanon 1 thereof, mandates that a lawyer shall hold in trust allmoneys and properties of his client that may come into his

possession. ?e shall account for all money or propertycollected or received from his client; and shall deliver thefunds and property of his client when due or upon demand.9

#s found by ommissioner Funa, it was established thatrespondent could not account for -5,;//.// which was part ofthe sum "iven by complainant to him for the purpose of filin"an injunctive bond. %espondent admitted havin" receivedfrom complainant -1:,;//.// on #pril 19, )//) for the

preliminary injunction1/ and admitted to havin" a balance of-9,///.// in his promissory note to the Manila Insurance o.,Inc. dated #pril )=, )//), which was reduced to -5,;//.// byreason of an additional payment of -,///.//,11 leavin" anamount of -5,;//.// unaccounted for. &he affidavit of theinsurance a"ent, alentina %amos, dated @ecember ;, )//5also states that even up to said date, respondent had not yet

paid the balance of -5,;//.//.1)

%espondents failure to return the money to complainant upondemand "ave rise to the presumption that he misappropriatedit for his own use to the prejudice of, and in violation of thetrust reposed in him by his client.1= It is a "ross violation of"eneral morality and of professional ethics and impairs publicconfidence in the le"al profession which deserves

punishment.1

#s the ourt has pronounced, when a lawyer receives moneyfrom the client for a particular purpose, the lawyer is bound torender an accountin" to the client showin" that the money wasspent for a particular purpose. #nd if he does not use themoney for the intended purpose, the lawyer must immediatelyreturn the money to his client.15

&he ourt has been eoriano is found$+IL&K of violatin" anon 1 of the ode of -rofessional%esponsibility and is hereby >+>-G7@G@ from the practiceof law for a period of two ')* years from notice, with a>&G%7 4#%7I7$ that a repetition of the same or similar

acts shall be dealt with more severely.

%espondent is further ordered to restitute to his clients throu"h#ndrea (alce elaje, within =/ days from notice, the amountof -5,;//.//. %espondent is directed to submit to the ourt

proof of payment within fifteen days from payment of the fullamount.

Let copies of this %esolution be furnished all courts of theland, the Inte"rated (ar of the -hilippines, as well as theOffice of the (ar onfidant for their information and

12


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"uidance, and let it be entered in respondents record in thisourt.

>O O%@G%G@.

[A.C. CBD No. 1. ,r3/ 9! 1999#

ATTY. -RUDENCIO S. -ENTICOSTES! complainant,vs. -ROSECUTOR DIOSDADO S. IBAE:! respondent.

R E S O L U T I O N

RO,ERO!J.

>ometime in 19;9, Gncarnacion -ascual, the sister8in8law of #tty. -rudencio >. -enticostes 'herein complainant*was sued for non8remittance of >>> payments. &he complaintwas doc6eted as I.>. ;98=5= and assi"ned to -rosecutor@iosdado >. IbaReB 'herein respondent* for preliminaryinvesti"ation. In the course of the investi"ation, Gncarnacion

-ascual "ave -1,;/.// to respondent as payment of her>ocial >ecurity >ystem '>>>* contribution inarrears. %espondent, however, did not remit the amount to thesystem. &he fact of non8payment was certified to by the >>>on October ), 19;9.

On 7ovember 1, 199/ or over a year later, complainantfiled with the %e"ional &rial ourt of &arlac a complaint for

professional misconduct a"ainst IbaReB due to the latterJsfailure to remit the >>> contributions of his sister8in8law. &hecomplaint alle"ed that respondentJs misappropriation ofGncarnacion -ascualJs >>> contributions amounted to aviolation of his oath as a lawyer. >even days later, or on

7ovember )=, 199/, respondent paid -1,;/.// to the >>> onbehalf of Gncarnacion -ascual.

In the meantime, the case was referred to the Inte"rated(ar of the -hilippines8&arlac hapter, the court observin" thatit had no competence to receive evidence on the matter. +ponreceipt of the case, the &arlac hapter forwarded the same toI(-Js ommission on (ar @iscipline.

In his defense, respondent claimed that his act ofaccommodatin" Gncarnacion -ascualJs reAuest to ma6e

payment to the >>> did not amount to professional misconductbut was rather an act of hristian charity. Furthermore, heclaimed that the action was moot and academic, the amount

of -1,;/.// havin" already been paid by him to the>>>. Lastly, he disclaimed liability on the "round that the actscomplained were not done by him in his capacity as a

practicin" lawyer but on account of his office as a prosecutor.

On >eptember =, 199;, the ommission recommendedthat the respondent be reprimanded, with a warnin" that thecommission of the same or similar offense would be dealt withmore severely in the future. On 7ovember 5, 199;, the (oardof $overnors of the Inte"rated (ar of the -hilippines adoptedand approved its ommissionJs recommendation.

&his ourt adopts the recommendation of the I(- andfinds respondent "uilty of professional misconduct. 4hile

there is no doubt that payment of the contested amount hadbeen effected to the >>> on 7ovember )=, 199/, it is clearhowever, that the same was made only after a complaint had

been filed a"ainst respondent. Furthermore, the duties of aprovincial prosecutor do not include receivin" money frompersons with official transactions with his office.

&his ourt has repeatedly admonished lawyers that ahi"h sense of morality, honesty and fair dealin" is e>> does not e


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DO,INGO D. RUBIAS! pli2)i44pp(ll2)!7.ISAIAS BATILLER! &(4(2&2)pp(ll((.

$re"orio M. %ubias for plaintiff8appellant.

icente %. #csay for defendant8appellee.

&GG?#7DGG, !.2

In this appeal certified by the ourt of #ppeals to this ourt asinvolvin" purely le"al Auestions, we affirm the dismissal orderrendered by the Iloilo court of first instance after pre8trial andsubmittal of the pertinent documentary euch dismissal was proper, plaintiff havin" no cause of action,since it was duly established in the record that the applicationfor re"istration of the land in Auestion filed by FranciscoMilitante, plaintiffs vendor and predecessor interest, had beendismissed by decision of 195) of the land re"istration court as

affirmed by final jud"ment in 195; of the ourt of #ppealsand hence, there was no title or ri"ht to the land that could betransmitted by the purported sale to plaintiff.

#s late as 19, the Iloilo court of first instance had in anothercase of ejectment li6ewise upheld by final jud"mentdefendants 3better ri"ht to possess the land in Auestion .havin" been in the actual possession thereof under a claim oftitle many years before Francisco Militante sold the land to the

plaintiff.3

Furthermore, even assumin" that Militante had anythin" tosell, the deed of sale e


15/27

accordin"ly withdrew his application over the same. &his ise


16/27

=. &hat Lot 7o. ), -su 155)1, the subject of Free-atent application of the defendant has been approved.

. &he dama"es suffered by the defendant, as alle"ed inhis counterclaim.3 1

&he appellate court further related the developments of thecase, as follows2

On #u"ust 1:, 195, defendants counsel manifested in opencourt that before any trial on the merit of the case could

proceed he would file a motion to dismiss plaintiffs complaintwhich he did, alle"in" that plaintiff does not have cause ofaction a"ainst him because the property in dispute which he'plaintiff* alle"edly bou"ht from his father8in8law, FranciscoMilitante was the subject matter of L% 7o. 95 filed in theFI of Iloilo, which case was brou"ht on appeal to this ourtand doc6eted as #8$.%. 7o. 1=9:8% in which aforesaidcase plaintiff was the counsel on record of his father8in8law,Francisco Militante. Invo6in" #rts. 1/9 and 191 of the ivilode which reads2

#rt. 1/9. &he followin" contracts are ineee pp.))8=1, %ecord on #ppeal*. -laintiff stron"ly opposeddefendants motion to dismiss claimin" that defendant can notinvo6e #rticles 1/9 and 191 of the ivil ode as #rticle1)) of the same ode provides that &he defense of ille"alityof contracts is not available to third persons whose interestsare not directly affected '>ee pp. =)8=5 %ecord on #ppeal*.

On October 1;, 195, the lower court issued an orderdisclaimin" plaintiffs complaint 'pp. )89, %ecord on#ppeal.* In the aforesaid order of dismissal the lower court

practically a"reed with defendants contention that the contract'Gr., now deceased, of the propertycovered by -lan -su899:91, 'Gr.

=. &he lower court erred in entertainin" the motion todismiss of the defendant8appellee after he had already filed hisanswer, and after the termination of the pre8trial, when thesaid motion to dismiss raised a collateral Auestion.

. &he lower court erred in dismissin" the complaint ofthe plaintiff8appellant.

&he appellate court concluded that plaintiffs 3assi"nment oferrors "ives rise to two ')* le"al posers U '1* whether or notthe contract of sale between appellant and his father8in8law,the late Francisco Militante over the property subject of -lan-su899:91 was void because it was made when plaintiff was

counsel of his father8in8law in a land re"istration caseinvolvin" the property in disputeE and ')* whether or not thelower court was correct in entertainin" defendant8appelleesmotion to dismiss after the latter had already filed his answerand after he 'defendant* and plaintiff8appellant had a"reed onsome matters in a pre8trial conference. ?ence, its elevation ofthe appeal to this ourt as involvin" pure Auestions of law.

It is at once evident from the fore"oin" narration that the pre8trial conference held by the trial court at which the parties withtheir counsel a"reed and stipulated on the material andrelevant facts and submitted their respective documentarye


17/27

of the land. >uch dismissal, as already stated, was affirmed bythe final jud"ment in 195; of the ourt of #ppeals.

&he four points on which defendant on his part reserved thepresentation of evidence at the trial dealin" with his and hisancestors continuous, open, public and peaceful possession inthe concept of owner of the land and the @irector of Landsapproval of his survey plan thereof, supra, 5 are li6ewisealready duly established facts of record, in the landre"istration case as well as in the ejectment case wherein theIloilo court of first instance reco"niBed the superiority ofdefendants ri"ht to the land as a"ainst plaintiff.

7o error was therefore committed by the lower court indismissin" plaintiffs complaint upon defendants motion afterthe pre8trial.

1. &he stipulated facts and eoriano, and the heirs of icenta immediately arose, andthe herein appellant >isenando -alarca acted as >orianoslawyer. On May ), 191;, >oriano eisenando -alarcaand on the followin" day, May =, 191;, -alarca filed anapplication for the re"istration of the land in the deed. #fterhearin", the ourt of First Instance declared that the deed wasinvalid by virtue of the provisions of article 159 of the ivil

ode, which prohibits lawyers and solicitors from purchasin"property ri"hts involved in any liti"ation in which they ta6epart by virtue of their profession. &he application forre"istration was conseAuently denied, and upon appeal by-alarca to the >upreme ourt, the jud"ement of the lowercourt was affirmed by a decision promul"ated 7ovember1,19)5. '$.%. 7o. )=)9, -alarca vs. @irector of Lands, notreported.*

In the meantime cadastral case 7o. =/ of the -rovince of&arlac was instituted, and on #u"ust )1, 19)=, GleuteriaMacarae", as administratri< of the estate of icente Macarae"filed claims for the parcels in Auestion. (uenaventura

Lavitoria administrator of the estate of !uan >oriano, didli6ewise and so did >isenando -alarca. In a decision dated!une )1, 19):, the ourt of First Instance, !ud"e arballo

presidin", rendered jud"ment in favor of -alarea and orderedthe re"istration of the land in his name. +pon appeal to thiscourt by the administration of the estates of !uan >oriano andicente Macarae", the jud"ment of the court below wasreversed and the land adjudicated to the two estates asconju"al property of the deceased spouses. '$.%. 7o. );)),@irector of Lands vs. #ba"at, promul"ated May )1, 19);, notreported.* 9

In the very case of #ba"at itself, the ourt, a"ain affirmin" the

invalidity and nullity of the lawyers purchase of the land inliti"ation from his client, ordered the issuance of a writ ofpossession for the return of the land by the lawyer to theadverse parties without reimbursement of the price paid byhim and other e


18/27

the ivil ode of the -hilippines whose counterpart provisionis #rticle 191.

#rticle 191 of our ivil ode 'li6e #rticle 159 of the>panish ivil ode* prohibits in its si< para"raphs certain

persons, by reason of the relation of trust or their peculiarcontrol over the property, from acAuirin" such property intheir trust or control either directly or indirectly and 3even at a

public or judicial auction,3 as follows2 '1* "uardiansE ')*a"entsE '=* administratorsE '* public officers and employeesE

judicial officers and employees, prosecutin" attorneys, andlawyersE and '* others especially disAualified by law.

In 4olfson which involved the sale and assi"nment of amoney jud"ment by the client to the lawyer, 4olfson, whoseri"ht to so purchase the jud"ment was bein" challen"ed by the

jud"ment debtor, the ourt, throu"h !ustice Moreland, theneupreme ourt of >pain to administrators and a"ents inits above cited decision should certainly apply with "reaterreason to jud"es, judicial officers, fiscals and lawyers under

para"raph 5 of the codal article.

itin" the same decisions of the >upreme ourt of >pain,$ullon (allesteros, his 3urso de @erecho ivil, 'ontratosGspeciales*3 'Madrid, 19;* p. 1;, affirms that, with respect to#rticle 159, >panish ivil ode2.

Pue caracter tendra la compra Aue se realice por estaspersonasN -orsupuesto no cabe duda de Aue el caso 'art.*159, / y 5/, la nulidad esabsoluta porAue el motivo de la

prohibicion es de orden publico. 1

-ereB $onBales in such view, statin" that 3@ado el caracterprohibitivo delprecepto, la conseAuencia de la infraccion es lanulidad radical y e< le"e.3 15

astan, Auotin" Manresas own observation that.

3Gl fundamento do esta prohibicion es clarisimo. 7o sa tratacon este precepto tan solo de "uitar la ocasion al fraudeE

persi"uese, ademasel proposito de rodear a las personas Aueintervienen en la administrcionde justicia de todos los reti"iosAue necesitan pora ejercer su ministerio librandolos de todasuspecha, Aue aunAue fuere in fundada, redunduraendescredito de la institucion.3 1 arrives at the contrary andnow accepted view that 3-uede considerace en nuestroderecho ine


19/27

become possibleE or the intention which could not beascertained may have been clarified by the parties. &heratification or second contract would then be valid from itseo ordered.

G.R. No. L">>" April 5! 19>

ROSARIO ?DA. DE LAIG! RO,EO! $OSE! NESTOR2& BENITO! $R.! ll %r26(& LAIG! 6i2or! i)(& 8*Rorio ?&. &( Li'! T/(ir G%r&i2 A& Li)(6!p()i)io2(r!7.COURT OF A--EALS! CAR,EN ?ER:O! -ETREGALERO! T+E REGISTER OF DEEDS OFCA,ARINES NORTE! T+E DIRECTOR OF LANDS!AND T+E SECRETARY OF AGRICULTURE ANDNATURAL RESOURCES! r(po2&(2).

G(lio L. Di62o 4or p()i)io2(r.

-(&ro A. ?(2i& 4or pri7)( r(po2&(2).

Office of the >olicitor $eneral for respondents &he @irector ofLands, etc., et al.

M#D#>I#%, !.2

#ppeal by certiorari from the decision of respondent ourt of#ppeals which affirmed the jud"ment of the ourt of FirstInstance of amarines 7orte in ivil ase 7o. 5:: entitled3%osario da. de Lai", et al. vs. armen erBo, et al.,3dismissin" herein petitioners complaint for the reconveyanceof a parcel of land with dama"es, and declarin" hereinrespondent armen erBo as the lawful owner of the land inissue.

It appears that on March ):, 19=9, one -etre $alero obtainedrained from the (ureau of Lands ?omestead -atent 7o. 5=81: coverin" )19,99 sAuare meters of land located at (arrio-ina"tamban"an, Labo, amarines 7orte, for which Ori"inalertificate of &itle 7o. 1/9: was issued in $aleros name.

On !une )5, 19/, $alero sold the land to a certain MarioGscuta for -=//.//. Gscuta in turn, sold the same land toFlorencio aramoan in @ecember, 19), Later, however, -etre$alero, throu"h proper court action, and with #tty. (enito D.Lai" U the deceased husband of herein petitioner %osarioda. de Lai" U as counsel recovered the land, the courthavin" been convinced that its alienation violated >ection 11;of the -ublic Land #ct, which reads2

7o alienation, transfer, or conveyance of any homestead afterfive years and before twenty8five years after issuance of titleshall be valid without the approval of the >ecretary of

#"riculture and ommerce, which approval shall not bedenied e


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It was only after #tty. Lai"s death in 1951 that his wife,herein petitioner %osario, noticed the deficiency.

On 7ovember 5, 1951, herein petitioner da. de Lai" wrotethe then %e"ister of @eeds of amarines 7orte, respondent(aldomero M. Lapa6, statin" that the disputed parcel of landcovered by ori"inal ertificate of &itle 7o. 1/9: in the sameof -etre $alero, had been sold to her late husband, reAuestin"that she be informed of any claim of ownership by other

parties so that she could ta6e the necessary steps, and servin"notice of her claim over the said property as survivin" spouseof the late #tty. Lai" and as natural "uardian of their children.

On 7ovember 1), 1951, %e"ister of @eeds Lapa6 replied thatOri"inal ertificate of &itle 7o. 1/9: was still intact and too6note of her letter.

On March )9, 195), petitioner da. de Lai" filed with the(ureau of Lands an affidavit to"ether with copy of the deed ofsale in her husbands favor. >aid affidavit stated that shewanted to have the ownership over the land transferred to herhusbands name.

On #u"ust 1, 195), the (ureau of Lands forwarded the saidaffidavit of da. de Lai", to"ether with the deed of sale, to theOffice of the >ecretary of #"riculture and 7atural %esourceswith a recommendation that the said deed of sale be approvedas the same does not violate any pertinent provisions of the-ublic Land #ct or the correspondin" rules and re"ulationsthereunder promul"ated. On the same day, the Office of the>ecretary of #"riculture and 7atural %esources, thru then+ndersecretary !ose >. amus, approved the deed of sale. #ndalso on the same day, the Office of the @irector of Lands, thruicente &ordesillas, hief of the -ublication Lands @ivision,addressed a letter to #tty. (enito Lai" informin" him of theapproval of the deed of sale eecretary of #"riculture !ose>. amus approved the sale in favor of armen erBo.

On >eptember ):, 195), the office of the @irector of Landsnotified armen erBo of such approval. 4hereupon, onOctober 1=, 195), erBo declared the land in her name forta


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affirmed by the ourt of #ppeals in -eople vs. -etre $alero'#8$.%. 7o. 1)/=8%, @ecember ), 195*.

On #pril 1=, 195, petitioner da. de Lai", to"ether with herminor children, filed the present action, doc6eted as ivil ase

7o. 5:: in the ourt of First Instance of amarines 7ortea"ainst respondents armen erBo, -etre $alero, the @irectorof Lands, the %e"ister of @eeds of amarines 7orte and the>ecretary of #"riculture and 7atural %esources prayin" forthe annulment of the sale in favor of armen erBo and thecancellation of the second owners duplicate of Ori"inalertificate of &itle 7o. 1/9: and &ransfer ertificate of &itle

7o. &81/55 by declarin" the first O& 7o. 1/9: valid andeffective or in the alternative, by orderin" armen erBo toreconvey the land in Auestion to petitioners, plus -5,///.// byway of dama"es.

>ometime in 195;, $alero died while servin" his sentence atthe 7ational -enitentiary, and was, on 7ovember 11, 195;,substituted by his wife, -erpetua @ar, as party defendant 'p.):, %O#E p. 11, rec.*.

On 7ovember )1, 191, the trial court, in a decision,

dismissed the complaint and declared that the land describedin && 7o. 1/55 to be ri"htfully owned by armen erBo.&he lower court also found (aldomero M. Lapa6, then the%e"ister of @eeds of amarines 7orte, "uilty of ne"li"ence,

but eecretary of #"riculture and 7atural %esourcesli6ewise "uilty of ne"li"ence, but eecretary of #"riculture and 7atural %esources,to"ether with respondent armen erBo, be held liable fordama"es for approvin" the sale of one and the same piece ofland in favor of two different personsN

I

#s in the present case of %osario arbonell vs. ?on. ourt of#ppeals, et al.'L8)99:), !an. ), 19:*, the first issue calls for theapplication of #rticle 15, para"raph ), of the 7ew ivilode re"ardin" double sale.

&he above8said provision reads2

>hould it be immovable property, the ownership shall belon"to the person acAuirin" it who in "ood faith recorded it in the%e"ister of -roperty 'emphasis supplied*.

In the arbonell case, supra, 4G held that to be under theprotective umbrella of para"raph ), #rticle 15, of the 7ewivil ode, it is essential that the vendee of the immovablemust act in "ood faith in re"isterin" his deed of sale. In otherwords, "ood faith must characteriBe the vendees act of priorre"istration.

&o this effect was Our rulin" in a 191; case that

&he force and effect "iven by law to an inscription in a publicrecord presupposes the "ood faith of him who enters such

inscriptionE and ri"hts created by statute, which are predicatedupon an inscription in a public re"istry, do not and cannotaccrue under an inscription in bad faith, to the benefit of the

person who thus ma6es the inscription 'Leun" Kee vs. F.L.>tron" Machinery o. and 4illiamson, 7o. 115;, Feb. 15,191;, =: -hil. , 9*.

&he records reveal that respondent armen erBo was not in"ood faith when she facilitated the re"istration of her deed ofsale. &he followin" indicia of bad faith characteriBed 7O&O7LK her act of re"isterin" her deed of sale, (+& #L>O her

purchase of the disputed realty2

1. #t the time of the sale of the land in Auestion by -etre$alero to #tty. (enito D. Lai" in 19;, the latter was aboarder of armen erBo in her house. #s a matter of fact,#tty. Lai" maintained his law office, and received his clients'amon" whom was -etre $alero* therein 0p. ;1, t.s.n., sessionof #u". )=, 191 .

#tty. (enito D. Lai", as her boarder, must have mentioned toarmen erBo, his landlady, the land sold to him by $alero.(y the same to6en, armen erBo must have 6nown suchsaleE because transactions of this sort in the rural areas do notescape the 6nowled"e of persons livin" under one roof with a

party to the document, more especially when there e


22/27

of sale, is not a common daily ehe could have also as6edabout said title the first buyer, Florencio aramoan, who wasordered by the court to reconvey the land and return theowners duplicate of the to title.

5. -rior to the sale in her favor, armen erBo 6newthat the disputed property belon"s to #tty. Lai", becausewhenever #tty. Lai" was in Manila, armen erBo attended tosaid property and communicated with #tty. Lai" in Manilaabout his share of the harvest from the land 'pp. ==8=, t.s.n.,session of #u". , 19*. ?ow can armen erBo spea6 of

#tty. Lai"s share of the harvest without first 6nowin" that theland from where the crop was harvested was owned by #tty.(enito Lai"N (ad faith can be demonstrated, not O7LK bydirect proof, but also by substantial evidence.

(ad faith is a state of mind indicated by acts andcircumstances and is provable by I%+M>&I#L ...evidence 'Humwalt v. +tilities Ins. o., )); >.4. )d :5/, :5=/ Mo. =)E 4ords and -hrases -ermanent Gd., ol. 5, p.)1*.

Lo"ically, therefore, since, as has already been earlier shown,respondent armen erBo was not a purchaser in "ood faith,

she could never have been a re"istrant in "ood faith of thedeed of sale of said land in her favor. onseAuently, shecannot claim the protection accorded to a re"istrant in "oodfaith by para"raph ), #rticle 15 of the 7ew ivil ode.

Finally, since there is no valid inscription to spea6 of in thepresent case, the applicable provision of law is para"raph =,#rticle 15, 7ew ivil ode 'arbonell vs. ?on. ourt of#ppeals, supra*, which states2

>hould there be no insciption, the ownership shall pertain tothe person who in "ood faith was first in the possessionE and,in the ab thereat to the person who presents the oldest title,

provided there is "ood faith 'emphasis supplied*.

In the present case, the fact of #tty. (enito Lai"s havin" beenthe first possessor in "ood faith of the property in issue wasnever disputed by respondent armen erBo.

Moreover, the deed of sale in favor of the late #tty. (enitoLai" was e


23/27

cleared of any liability. It is not difficult to see that the reasonwhy separate approvals concernin" two separate sale of thesame piece of land were had was the fact that two sets ofofficials too6 char"e of both reAuests. (ut no malice can be"leaned from this fact. It should be borne in mind that bothofficials daily attend to thousands upon thousands of papers. Itis also possible that their assistants failed to notice that twodeeds of sale covered the same parcel of land or failed toadvise these two officials of such fact.

#s heretofore indicated, the malicious participation ofrespondent re"ister of deeds (aldomero Lapa6 and his son#tty. Lapa6 is evident.

Dnowin" of the eection1/9 of #ct 7o. 9, which reads2

If the duplicate certificate is lost or destroyed, or cannot beproduced by a "rantee, heir, devisee, assi"nee, or other person

applyin" for the entry of a new certificate to him ..., asu""estion may be filed by the re"istered owner or other

person in interest and re"istered. &he court 'the ourt of FirstInstance actin" as land re"istration court* may thereupon,upon the petition of the re"istered owner or other person ininterest, #F&G% 7O&IG #7@ ?G#%I7$, direct the issueof a new duplicate certificate, which shall contain amemorandum of the fact that it is issued in place of the lostduplicate certificate, but shall in all respects be entitled to li6efaith and credit as the ori"inal duplicate, and shall thereafter

be re"arded as the ori"inal duplicate for all the purposes ofthis #ct 'Ocampo vs. $arcia, L811)/, #pril )9, 1959, 1/5-hil. 55=*.

For his malicious involvement, 4G find (aldomero Lapa6liable under the followin" provision of the Land %e"istration#ct2

4hoever fraudulently procures, or assists in fraudulentlyprocurin" or is privy to the fraudulent procurement of anycertificate of title or owners duplicate certificate, shall befined not e


24/27

In compliance with a resolution of this ourt, respondent filedhis comment to the complaint on !anuary )/, 19;=. #ftercomplainant filed his reply, the ourt resolved to refer thecase to the >olicitor $eneral for investi"ation, report andrecommendation.

In a hearin" conducted on May 15, 19;5 by the investi"atin"officer assi"ned to the case, counsel for the complainant

proposed that the case be considered on the basis of positionpapers and memoranda to be submitted by the parties.%espondent a"reed. &hus, the investi"atin" officer reAuiredthe parties to submit their respective position papers andmemoranda, with the understandin" that with or without thememoranda, the case will be deemed submitted for resolutionafter the e @G !O>G ILLG$#> without notifyin" andsecurin" the approval of the probate court. ?owever, the>olicitor $eneral opined that there was no sufficient evidenceto warrant a findin" that respondent had allowed the propertiesto be leased in favor of his family partnership at a very lowrental or in violation of #rticles 191 and 1 of the newivil ode. &hus, the >olicitor $eneral recommended thatrespondent be suspended from the practice of law for a periodof &?%GG '=* months with a warnin" that future misconducton respondents part will be more severely dealt with 0%eportand %ecommendation of the >olicitor $eneral, pp. 181/E

%ollo, pp. =:8. #lso, omplaint of the >olicitor $eneral, pp.18=E %ollo, pp. :89.

#s "leaned from the record of the case and the report andrecommendation of the >olicitor $eneral, the followin" factsare uncontroverted2

&hat as early as March )1, 191, respondent was retained ascounsel of record for Feli< Leon", one of the heirs of the lateFelomina Herna, who was appointed as administrator of the&estate Gstate of the Felomina Herna in >pecial 7o. / onMay )), 191E

&hat, a lease contract dated #u"ust 1=, 19= was e @G!O>G ILLG$#>, containin" basically the same terms and

conditions as the first contract, with Marcelo -astrano si"nin"once a"ain as representative of the lesseeE

&hat, on March 1, 19;, after the demise of Marcelo-astrano, respondent was appointed mana"er of ?I!O> @G!O>G ILLG$#> by the majority of partnersE

&hat, renewals of the lease contract were eolicitor $eneralsfindin", that respondent committed acts of misconduct infailin" to secure the approval of the court in >pecial-roceedin"s 7o. / to the various lease contracts er. v. ?ombre, $.% 7oL819)5, May )9, 19, 11 >%# 15.

&hus, considerin" that administrator Feli< Leon" was notreAuired under the law and prevailin" jurisprudence to see6

24


25/27

prior authority from the probate court in order to validly leasereal properties of the estate, respondent, as counsel of Feliolicitor $eneral,the ourt finds sufficient evidence to hold respondent subjectto disciplinary sanction for havin", as counsel of record for theadministrator in >pecial -roceedin"s 7o. /, participated inthe e @G !O>G ILLG$#>, of whichrespondent is a member and in 19; was appointed mana"in"

partner.

(y virtue of #rticle 1 of the new ivil ode, the personsreferred to in #rticle 191 are prohibited from leasin", eitherin person or throu"h the mediation of another, the propertiesor thin"s mentioned in that article, to wit2

@G !O>G ILLG$#>stands to benefit from the contractual relationship created

between his client Feli< Leon" and his family partnership over

properties involved in the on"oin" testate proceedin"s.

In his defense, respondent claims that he was neither aware of,nor participated in, the eG ILLG$#>, he ar"uesthat he acted in "ood faith considerin" that the heirs ofFilomena Herna consented or acAuiesced to the terms andconditions stipulated in the ori"inal lease contract. ?e furthercontends that pursuant to the rulin" of the ourt in &uason v.

&uason 0;; -hil. ); '1951* the renewal contracts do not fallwithin the prohibition of #rticles 191 and 1 since hesi"ned the same as a mere a"ent of the partnership.

%espondents contentions do not provide sufficient basis toescape disciplinary action from this ourt.

It ta@G !O>G ILLG$#>.

Moreover, the claim that the heirs of Filomena Herna haveacAuiesced and consented to the assailed lease contracts doesnot militate a"ainst respondents liability under the rules of

professional ethics. &he prohibition referred to in #rticles191 and 1 of the new ivil ode, as far as lawyers areconcerned, is intended to curtail any undue influence of thelawyer upon his client on account of his fiduciary andconfidential association 0>otto v. >amson, $.%. 7o. L8191:,!uly =1, 19), 5 >%# :==. &hus, the law ma6es the

25


26/27

prohibition absolute and permanent 0%ubias v. (atiller, supra.#nd in view of anon 1 of the new ode of -rofessional%esponsibility and >ections = V ): of %ule 1=; of the %evised%ules of ourt, whereby lawyers are duty8bound to obey anduphold the laws of the land, participation in the eee (autista v. $onBaleB, #dm. Matter 7o. 1)5,February 1), 199/*. #ccordin"ly, the ourt must reiterate therule that the claim of "ood faith is no defense to a lawyer whohas failed to adhere faithfully to the le"al disAualificationsimposed upon him, desi"ned to protect the interests of hisclient 0>ee In re %uste, :/ -hil. )= '19/*E #lso, >everino v.>everino, -hil. == '19)=*.

7either is there merit in respondents reliance on the case of&uason v. &uason 0supra. It cannot be inferred from thestatements made by the ourt in that case that contracts of saleor lease where the vendee or lessee is a partnership, of which alawyer is a member, over a property involved in a liti"ation inwhich he ta6es part by virtue of his profession, are not covered

by the prohibition under #rticles 191 and 1.

?owever, the ourt sustains the >olicitor $enerals holdin"that there is no sufficient evidence on record to warrant afindin" that respondent allowed the properties of the estate ofFilomena Herna involved herein to be leased to his family

partnership at very low rental payments. #t any rate, it is amatter for the court presidin" over >pecial -roceedin"s 7o./ to determine whether or not the a"reed rental paymentsmade by respondents family partnership is reasonablecompensation for the use and occupancy of the estate

properties.

onsiderin" thus the nature of the acts of misconductcommitted by respondent, and the facts and circumstances ofthe case, the ourt finds sufficient "rounds to suspendrespondent from the practice of law for a period of three '=*months.

4?G%GFO%G, findin" that respondent #tty. risostomo .ille"as committed acts of "ross misconduct, the ourt%esolved to >+>-G7@ respondent from the practice of lawfor four '* months effective from the date of his receipt ofthis %esolution, with a warnin" that future misconduct onrespondents part will be more severely dealt with. Let copiesof this %esolution be circulated to all courts of the country for

their information and "uidance, and spread in the personalrecord of #tty. ille"as.

>O O%@G%G@.

A.,. No. "1 ,r3/ 1! 199"

DO,INGA ?ELASCO ORDONIO! p()i)io2(r!

7.ATTY. $OSE-+INE -ALOGAN EDUARTE! r(po2&(2).% G > O L + & I O 7-G% +%I#M2

&his is a complaint for the disbarment of respondent #tty.!osephine -alo"an8Gduarte ori"inally filed with this ourt on#pril 1;, 19;;. On #u"ust 1/, 19;9, the ommission on (ar@iscipline of the Inte"rated (ar of the -hilippines, to whichthe case was referred for investi"ation, submitted a reportconfirmin" in substance the char"e of violation of #rt. 191 ofthe ivil ode and part of the Oath of Office of a lawyer andrecommendin" the suspension of herein respondent.

&he evidence discloses that on !uly 1;, 19;=, #ntonia +libarifiled with the %&, (ranch II, aba"an, Isabela, ivilase 7o. =91 for annulment of a document '6nown as#ffidavit of #djudication of the Gstate of Felicisimo elascoand Puitclaim &hereof* a"ainst her children. &he case washandled by #tty. ?enedino Gduarte, herein respondentshusband, until his appointment as %& jud"e on October ),19;. ?is wife, #tty. !osephine -alo"an8Gduarte, too6 over.On #u"ust )), 19;5, decision in ivil ase 7o. =91 was

rendered in favor of #ntonia +libari. Gi"nificantly, on the same day, #ntonia +libarialso conveyed )/ hectares of land to herein respondent and herhusband as their #ttorneys fees for le"al services rendered.#ll the titles of the lands subject of the deeds of absolute saleand the deed of conveyance however remained in the name of#ntonia +libari.

On #pril , 19;;, @omin"a elasco8Ordonio filed thiscomplaint for disbarment a"ainst herein respondent on the

basis of an affidavit e


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causin" the e

Lawyers Fiduciary Obligations

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