1

ATTY. CARMEN LEONOR M. ALCANTARA, VICENTE P.

MERCADO, SEVERINO P. MERCADO AND SPOUSES JESUS

AND ROSARIO MERCADO, Complainants,

- versus -

A.C. No. 5859 (Formerly CBD Case No.

421)

Present:

CORONA, C.J., CARPIO,

CARPIO MORALES, VELASCO, JR.,

NACHURA, LEONARDO-DE CASTRO,

BRION, PERALTA,

BERSAMIN,

DEL CASTILLO,* ABAD,

VILLARAMA, JR., PEREZ,

MENDOZA, and SERENO, JJ.

ATTY. EDUARDO C. DE VERA,

Respondent.

Promulgated:

November 23, 2010

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION

PER CURIAM:

For our review is the Resolution[1] of the Board of Governors of the

Integrated Bar of the Philippines (IBP) finding respondent Atty. Eduardo C.

De Vera liable for professional malpractice and gross misconduct and

recommending his disbarment.

The facts, as appreciated by the investigating commissioner,[2] are

undisputed.

The respondent is a member of the Bar and was the former counsel of

Rosario P. Mercado in a civil case filed in 1984 with

the Regional Trial Court of Davao City and an administrative case filed

before the Securities and Exchange Commission, Davao City Extension

Office.[3]

Pursuant to a favorable decision, a writ of execution pending appeal

was issued in favor of Rosario P. Mercado. Herein respondent, as her legal

counsel, garnished the bank deposits of the defendant, but did not turn over

2

the proceeds to Rosario. Rosario demanded that the respondent turn over

the proceeds of the garnishment, but the latter refused claiming that he had

paid part of the money to the judge while the balance was his, as attorneys

fees. Such refusal prompted Rosario to file an administrative case for

disbarment against the respondent.[4]

On March 23, 1993, the IBP Board of Governors promulgated a

Resolution holding the respondent guilty of infidelity in the custody and

handling of clients funds and recommending to the Court his one-year

suspension from the practice of law.[5]

Following the release of the aforesaid IBP Resolution, the respondent

filed a series of lawsuits against the Mercado family except George Mercado.

The respondent also instituted cases against the family corporation, the

corporations accountant and the judge who ruled against the reopening of

the case where respondent tried to collect the balance of his alleged fee

from Rosario. Later on, the respondent also filed cases against the chairman

and members of the IBP Board of Governors who voted to recommend his

suspension from the practice of law for one year. Complainants allege that

the respondent committed barratry, forum shopping, exploitation of family

problems, and use of intemperate language when he filed several frivolous

and unwarranted lawsuits against the complainants and their family

members, their lawyers, and the family corporation.[6] They maintain that

the primary purpose of the cases is to harass and to exact revenge for the

one-year suspension from the practice of law meted out by the IBP against

the respondent. Thus, they pray that the respondent be disbarred for

malpractice and gross misconduct under Section 27,[7] Rule 138 of the Rules

of Court.

In his defense the respondent basically offers a denial of the charges

against him.

He denies he has committed barratry by instigating or stirring up George

Mercado to file lawsuits against the complainants. He insists that the lawsuits

that he and George filed against the complainants were not harassment suits

but were in fact filed in good faith and were based on strong facts.[8]

Also, the respondent denies that he has engaged in forum shopping.

He argues that he was merely exhausting the remedies allowed by law and

that he was merely constrained to seek relief elsewhere by reason of the

denial of the trial court to reopen the civil case so he could justify his

attorneys fees.

3

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

family. He argues that the case that he and George Mercado filed against

the complainants arose from their perception of unlawful transgressions

committed by the latter for which they must be held accountable for the

public interest.

Finally, the respondent denies using any intemperate, vulgar, or

unprofessional language. On the contrary, he asserts that it was the

complainants who resorted to intemperate and vulgar language in accusing him

of extorting from Rosario shocking and unconscionable attorneys fees.[9]

After careful consideration of the records of this case and the parties

submissions, we find ourselves in agreement with the findings and

recommendation of the IBP Board of Governors.

It is worth stressing that the practice of law is not a right but a

privilege bestowed by the State upon those who show that they possess,

and continue to possess, the qualifications required by law for the

conferment of such privilege.[10] Membership in the bar is a privilege

burdened with conditions. A lawyer has the privilege and right to practice

law only during good behavior and can only be deprived of it for misconduct

ascertained and declared by judgment of the court after opportunity to be

heard has been afforded him. Without invading any constitutional privilege

or right, an attorneys right to practice law may be resolved by a proceeding

to suspend or disbar him, based on conduct rendering him unfit to hold a

license or to exercise the duties and responsibilities of an attorney. It must

be understood that the purpose of suspending or disbarring an attorney is to

remove from the profession a person whose misconduct has proved him

unfit to be entrusted with the duties and responsibilities belonging to an

office of an attorney, and thus to protect the public and those charged with

the administration of justice, rather than to punish the

attorney.[11] In Maligsa v. Cabanting,[12] we explained that the bar should

maintain a high standard of legal proficiency as well as of honesty and fair

dealing. A lawyer brings honor to the legal profession by faithfully

performing his duties to society, to the bar, to the courts and to his

clients. To this end a member of the legal profession should refrain from

doing any act which might lessen in any degree the confidence and trust

reposed by the public in the fidelity, honesty and integrity of the legal

profession. An attorney may be disbarred or suspended for any violation of

his oath or of his duties as an attorney and counselor, which include

statutory grounds enumerated in Section 27, Rule 138 of the Rules of

Court.

4

In the present case, the respondent committed professional

malpractice and gross misconduct particularly in his acts against his former

clients after the issuance of the IBP Resolution suspending him from the

practice of law for one year. In summary, the respondent filed against his

former client, her family members, the family corporation of his former

client, the Chairman and members of the Board of Governors of the IBP who

issued the said Resolution, the Regional Trial Court Judge in the case where

his former client received a favorable judgment, and the present counsel of

his former client, a total of twelve (12) different cases in various fora which

included the Securities and Exchange Commission; the Provincial

Prosecutors Office of Tagum, Davao; the Davao City Prosecutors Office; the

IBP-Commission on Bar Discipline; the Department of Agrarian Reform; and

the Supreme Court.[13]

In addition to the twelve (12) cases filed, the respondent also re-filed

cases which had previously been dismissed. The respondent filed six criminal

cases against members of the Mercado family separately docketed as I.S.

Nos. 97-135; 97-136; 97-137; 97-138; 97-139; and 97-140. With the

exception of I.S. No. 97-139, all the aforementioned cases are re-filing of

previously dismissed cases.[14]

Now, there is nothing ethically remiss in a lawyer who files numerous

cases in different fora, as long as he does so in good faith, in accordance

with the Rules, and without any ill-motive or purpose other than to achieve

justice and fairness. In the present case, however, we find that the barrage

of cases filed by the respondent against his former client and others close to

her was meant to overwhelm said client and to show her that the respondent

does not fold easily after he was meted a penalty of one year suspension

from the practice of law.

The nature of the cases filed by the respondent, the fact of re-filing

them after being dismissed, the timing of the filing of cases, the fact that the

respondent was in conspiracy with a renegade member of the complainants

family, the defendants named in the cases and the foul language used in the

pleadings and motions[15] all indicate that the respondent was acting beyond

the desire for justice and fairness. His act of filing a barrage of cases

appears to be an act of revenge and hate driven by anger and frustration

against his former client who filed the disciplinary complaint against him for

infidelity in the custody of a clients funds.

In the case of Prieto v. Corpuz,[16] the Court pronounced that it is

professionally irresponsible for a lawyer to file frivolous lawsuits. Thus, we

stated in Prieto,

5

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

unfounded complaint. Although no person should be penalized for the exercise of the right to litigate, however, this right must

be exercised in good faith.[17]

As officers of the court, lawyers have a responsibility to

assist in the proper administration of justice. They do not discharge this duty by filing frivolous petitions that only add to

the workload of the judiciary.

A lawyer is part of the machinery in the administration

of justice. Like the court itself, he is an instrument to advance its ends the speedy, efficient, impartial, correct and inexpensive adjudication of cases and the prompt satisfaction of final judgments. A lawyer should not only help attain these

objectives but should likewise avoid any unethical or improper practices that impede, obstruct or prevent their realization,

charged as he is with the primary task of assisting in the speedy

and efficient administration of justice.[18] Canon 12 of the Code of Professional Responsibility promulgated on 21 June 1988 is

very explicit that lawyers must exert every effort and consider it their duty to assist in the speedy and efficient administration of

justice.

Further, the respondent not only filed frivolous and unfounded lawsuits

that violated his duties as an officer of the court in aiding in the proper

administration of justice, but he did so against a former client to whom he

owes loyalty and fidelity. Canon 21 and Rule 21.02 of the Code of

Professional Responsibility[19] provides:

CANON 21 - A lawyer shall preserve the confidence and secrets

of his client even after the attorney-client relation is terminated.

Rule 21.02 A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, nor shall he use the same to his own advantage or that of a third person,

unless the client with full knowledge of the circumstances consents thereto.

The cases filed by the respondent against his former client involved

matters and information acquired by the respondent during the time when

he was still Rosarios counsel. Information as to the structure and operations

of the family corporation, private documents, and other pertinent facts and

figures used as basis or in support of the cases filed by the respondent in

pursuit of his malicious motives were all acquired through the attorney-client

relationship with herein complainants. Such act is in direct violation of the

Canons and will not be tolerated by the Court.

6

WHEREFORE, respondent Atty. Eduardo C. De Vera is

hereby DISBARRED from the practice of law effective immediately upon his

receipt of this Resolution.

Let copies of this Resolution be furnished the Bar Confidant to be spread

on the records of the respondent; the Integrated Bar of the Philippines for

distribution to all its chapters; and the Office of the Court Administrator for

dissemination to all courts throughout the country.

SO ORDERED.

A.C. No. 5108 May 26, 2005

ROSA F. MERCADO, complainant, vs.

ATTY. JULITO D. VITRIOLO, respondent.

D E C I S I O N

PUNO, J.:

Rosa F. Mercado filed the instant administrative complaint against Atty.

Julito D. Vitriolo, seeking his disbarment from the practice of law. The complainant alleged that respondent maliciously instituted a criminal case

for falsification of public document against her, a former client, based on confidential information gained from their attorney-client relationship.

Let us first hearken to the facts.

Complainant is a Senior Education Program Specialist of the Standards Development Division, Office of Programs and Standards while respondent is

a Deputy Executive Director IV of the Commission on Higher Education (CHED).1

Complainant's husband filed Civil Case No. 40537 entitled "Ruben G. Mercado v. Rosa C. Francisco," for annulment of their marriage with the

Regional Trial Court (RTC) of Pasig City. This annulment case had been dismissed by the trial court, and the dismissal became final and executory

on July 15, 1992.2

In August 1992, Atty. Anastacio P. de Leon, counsel of complainant, died. On February 7, 1994, respondent entered his appearance before the trial

court as collaborating counsel for complainant.3

On March 16, 1994, respondent filed his Notice of Substitution of

Counsel,4 informing the RTC of Pasig City that he has been appointed as counsel for the complainant, in substitution of Atty. de Leon.

It also appears that on April 13, 1999, respondent filed a criminal action

against complainant before the Office of the City Prosecutor, Pasig City, entitled "Atty. Julito Vitriolo, et al. v. Rose Dela Cruz F. Mercado," and

docketed as I.S. No. PSG 99-9823, for violation of Articles 171 and 172

7

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

alleged that complainant made false entries in the Certificates of Live Birth of her children, Angelica and Katelyn Anne. More specifically, complainant

allegedly indicated in said Certificates of Live Birth that she is married to a certain Ferdinand Fernandez, and that their marriage was solemnized on

April 11, 1979, when in truth, she is legally married to Ruben G. Mercado and their marriage took place on April 11, 1978.

Complainant denied the accusations of respondent against her. She denied

using any other name than "Rosa F. Mercado." She also insisted that she has gotten married only once, on April 11, 1978, to Ruben G. Mercado.

In addition, complainant Mercado cited other charges against respondent that are pending before or decided upon by other tribunals (1) libel suit before the Office of the City Prosecutor, Pasig City;6 (2) administrative case for dishonesty, grave misconduct, conduct prejudicial to the best interest of

the service, pursuit of private business, vocation or profession without the permission required by Civil Service rules and regulations, and violations of

the "Anti-Graft and Corrupt Practices Act," before the then Presidential Commission Against Graft and Corruption;7 (3) complaint for dishonesty,

grave misconduct, and conduct prejudicial to the best interest of the service before the Office of the Ombudsman, where he was found guilty of

misconduct and meted out the penalty of one month suspension without

pay;8 and, (4) the Information for violation of Section 7(b)(2) of Republic Act No. 6713, as amended, otherwise known as the Code of Conduct and

Ethical Standards for Public Officials and Employees before the Sandiganbayan.9

Complainant Mercado alleged that said criminal complaint for falsification of

public document (I.S. No. PSG 99-9823) disclosed confidential facts and information relating to the civil case for annulment, then handled by

respondent Vitriolo as her counsel. This prompted complainant Mercado to bring this action against respondent. She claims that, in filing the criminal

case for falsification, respondent is guilty of breaching their privileged and

confidential lawyer-client relationship, and should be disbarred.

Respondent filed his Comment/Motion to Dismiss on November 3, 1999 where he alleged that the complaint for disbarment was all hearsay,

misleading and irrelevant because all the allegations leveled against him are subject of separate fact-finding bodies. Respondent claimed that the pending

cases against him are not grounds for disbarment, and that he is presumed to be innocent until proven otherwise.10 He also states that the decision of

the Ombudsman finding him guilty of misconduct and imposing upon him the penalty of suspension for one month without pay is on appeal with the Court

of Appeals. He adds that he was found guilty, only of simple misconduct,

which he committed in good faith.11

In addition, respondent maintains that his filing of the criminal complaint for falsification of public documents against complainant does not violate the

rule on privileged communication between attorney and client because the bases of the falsification case are two certificates of live birth which are

public documents and in no way connected with the confidence taken during the engagement of respondent as counsel. According to respondent, the

complainant confided to him as then counsel only matters of facts relating to

8

the annulment case. Nothing was said about the alleged falsification of the

entries in the birth certificates of her two daughters. The birth certificates are filed in the Records Division of CHED and are accessible to anyone.12

In a Resolution dated February 9, 2000, this Court referred the

administrative case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.13

The IBP Commission on Bar Discipline set two dates for hearing but complainant failed to appear in both. Investigating Commissioner Rosalina R.

Datiles thus granted respondent's motion to file his memorandum, and the case was submitted for resolution based on the pleadings submitted by the

parties.14

On June 21, 2003, the IBP Board of Governors approved the report of investigating commissioner Datiles, finding the respondent guilty of violating

the rule on privileged communication between attorney and client, and recommending his suspension from the practice of law for one (1) year.

On August 6, 2003, complainant, upon receiving a copy of the IBP report and recommendation, wrote Chief Justice Hilario Davide, Jr., a letter of

desistance. She stated that after the passage of so many years, she has now found forgiveness for those who have wronged her.

At the outset, we stress that we shall not inquire into the merits of the

various criminal and administrative cases filed against respondent. It is the

duty of the tribunals where these cases are pending to determine the guilt or innocence of the respondent.

We also emphasize that the Court is not bound by any withdrawal of the

complaint or desistance by the complainant. The letter of complainant to the Chief Justice imparting forgiveness upon respondent is inconsequential in

disbarment proceedings.

We now resolve whether respondent violated the rule on privileged

communication between attorney and client when he filed a criminal case for falsification of public document against his former client.

A brief discussion of the nature of the relationship between attorney and

client and the rule on attorney-client privilege that is designed to protect such relation is in order.

In engaging the services of an attorney, the client reposes on him special powers of trust and confidence. Their relationship is strictly personal and

highly confidential and fiduciary. The relation is of such delicate, exacting and confidential nature that is required by necessity and public

interest.15 Only by such confidentiality and protection will a person be encouraged to repose his confidence in an attorney. The hypothesis is that

abstinence from seeking legal advice in a good cause is an evil which is fatal to the administration of justice.16 Thus, the preservation and protection of

that relation will encourage a client to entrust his legal problems to an attorney, which is of paramount importance to the administration of

justice.17 One rule adopted to serve this purpose is the attorney-client privilege: an attorney is to keep inviolate his client's secrets or confidence

9

and not to abuse them.18 Thus, the duty of a lawyer to preserve his client's

secrets and confidence outlasts the termination of the attorney-client relationship,19 and continues even after the client's death.20 It is the glory of

the legal profession that its fidelity to its client can be depended on, and that a man may safely go to a lawyer and converse with him upon his rights or

supposed rights in any litigation with absolute assurance that the lawyer's tongue is tied from ever disclosing it.21 With full disclosure of the facts of the

case by the client to his attorney, adequate legal representation will result in the ascertainment and enforcement of rights or the prosecution or defense

of the client's cause.

Now, we go to the rule on attorney-client privilege. Dean Wigmore cites the

factors essential to establish the existence of the privilege, viz:

(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating

to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by

the legal advisor, (8) except the protection be waived.22

In fine, the factors are as follows:

(1) There exists an attorney-client relationship, or a prospective attorney-

client relationship, and it is by reason of this relationship that the client made the communication.

Matters disclosed by a prospective client to a lawyer are protected by the rule on privileged communication even if the prospective client does not

thereafter retain the lawyer or the latter declines the employment.23 The reason for this is to make the prospective client free to discuss whatever he

wishes with the lawyer without fear that what he tells the lawyer will be divulged or used against him, and for the lawyer to be equally free to obtain

information from the prospective client.24

On the other hand, a communication from a (prospective) client to a lawyer for some purpose other than on account of the (prospective) attorney-client

relation is not privileged. Instructive is the case of Pfleider v.

Palanca,25 where the client and his wife leased to their attorney a 1,328-hectare agricultural land for a period of ten years. In their contract, the

parties agreed, among others, that a specified portion of the lease rentals would be paid to the client-lessors, and the remainder would be delivered by

counsel-lessee to client's listed creditors. The client alleged that the list of creditors which he had "confidentially" supplied counsel for the purpose of

carrying out the terms of payment contained in the lease contract was disclosed by counsel, in violation of their lawyer-client relation, to parties

whose interests are adverse to those of the client. As the client himself, however, states, in the execution of the terms of the aforesaid lease contract

between the parties, he furnished counsel with the "confidential" list of his creditors. We ruled that this indicates that client delivered the list of his

creditors to counsel not because of the professional relation then existing between them, but on account of the lease agreement. We then held that a

violation of the confidence that accompanied the delivery of that list would

partake more of a private and civil wrong than of a breach of the fidelity owing from a lawyer to his client.

10

(2) The client made the communication in confidence.

The mere relation of attorney and client does not raise a presumption of

confidentiality.26 The client must intend the communication to be confidential.27

A confidential communication refers to information transmitted by voluntary

act of disclosure between attorney and client in confidence and by means

which, so far as the client is aware, discloses the information to no third person other than one reasonably necessary for the transmission of the

information or the accomplishment of the purpose for which it was given.28

Our jurisprudence on the matter rests on quiescent ground. Thus, a compromise agreement prepared by a lawyer pursuant to the instruction of

his client and delivered to the opposing party,29 an offer and counter-offer for settlement,30 or a document given by a client to his counsel not in his

professional capacity,31 are not privileged communications, the element of confidentiality not being present.32

(3) The legal advice must be sought from the attorney in his professional capacity.33

The communication made by a client to his attorney must not be intended

for mere information, but for the purpose of seeking legal advice from his attorney as to his rights or obligations. The communication must have been

transmitted by a client to his attorney for the purpose of seeking legal

advice.34

If the client seeks an accounting service,35 or business or personal assistance,36 and not legal advice, the privilege does not attach to a

communication disclosed for such purpose.

Applying all these rules to the case at bar, we hold that the evidence on

record fails to substantiate complainant's allegations. We note that complainant did not even specify the alleged communication in confidence

disclosed by respondent. All her claims were couched in general terms and lacked specificity. She contends that respondent violated the rule on

privileged communication when he instituted a criminal action against her for falsification of public documents because the criminal complaint disclosed

facts relating to the civil case for annulment then handled by respondent. She did not, however, spell out these facts which will determine the merit of

her complaint. The Court cannot be involved in a guessing game as to the existence of facts which the complainant must prove.

Indeed, complainant failed to attend the hearings at the IBP. Without any testimony from the complainant as to the specific confidential information

allegedly divulged by respondent without her consent, it is difficult, if not impossible to determine if there was any violation of the rule on privileged

communication. Such confidential information is a crucial link in establishing a breach of the rule on privileged communication between attorney and

client. It is not enough to merely assert the attorney-client privilege.37 The burden of proving that the privilege applies is placed upon the party

asserting the privilege.38

11

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

Vitriolo is hereby DISMISSED for lack of merit.

SO ORDERED.

Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur. Tinga, J., out of the country.

A.C. No. 927 September 28, 1970

IN THE MATTER OF THE COMPLAINT FOR DISBARMENT OF

ATTORNEY POTENCIANO A. PALANCA. WILLIAM C. PFLEIDER, complainant,

vs. POTENCIANO A. PALANCA, respondent.

R E S O L U T I O N

CASTRO, J.:

The respondent Atty. Potenciano A. Palanca was for sometime the legal

counsel of the complainant William C. Pfleider. According to the

complainant, he retained the legal services of Palanca from January 1966, whereas the latter insists that the attorney-client relationship between

them began as early as in 1960.

At all events, the relations between the two must have attained such a

high level of mutual trust that on October 10, 1969, Pfleider and his wife leased to Palanca a 1,328 hectare agricultural land in Hinobaan, Negros

Occidental, known as the Hacienda Asia, for a period of ten years. In their contract, the parties agreed, among others, that a specified portion of the

lease rentals would be paid to Pfleider, and the remainder would be

delivered by Palanca to Pfleider's listed creditors.

The arrangement worked smoothly until October 14, 1969 when the rupture came with the filing by Pfleider of a civil suit (civil case 9187 of

the CFI of Negros Occidental) against Palanca for rescission of the

contract of lease on the ground of alleged default in the payment of rentals. In his answer to the complaint, Palanca averred full satisfaction

of his rental liabilities, and therefore contended that the lease should continue. He also charged that he had already been dispossessed of

the hacienda by Pfleider and the latter's goons at gunpoint and

consequently had suffered tremendous financial losses.

With this history in, perspective, we shall now consider the administrative

charges of gross misconduct in office brought by Pfleider against Palanca. The indictment consists of four counts.

First count. In regard to a criminal case for estafa filed in December 1965

by one Gregorio Uy Matiao against Pfleider, the latter instructed Palanca

to offer in settlement the sum of P10,000, payable in installments, to Uy

12

Matiao for the dismissal of the case. After sometime, Palanca reported to

Pfleider that the offer has been rejected. Finally in October 1969, Palanca supposedly informed Pfleider that he had succeeded in negotiating the

dismissal of the estafa case by leaving the sum of P5,000 with the Dumaguete City Court where the action was then pending. Sometime in

December 1969, however, Pfleider was the object of a warrant of arrest

in connection with the same estafa case. It turned out, charged the complainant Pfleider, that Palanca had not deposited the sum of P5,000

with the Dumaguete City Court, let alone communicated to Uy Matiao his earlier offer of settlement.

We have closely examined all the pleadings filed by the parties in this case and the annexes thereto, and it is our view that the first charge is

devoid of merit. In support of his claim of alleged assurance made by Palanca that theestafa case had already been terminated, Pfleinder relies

on certain letters written to him by Palanca. Our own reading of these

letters, however, belies his claim. They contain nothing which might reasonably induce the complainant to believe that the criminal action

against him had been finally settled by his attorney. On the contrary, the letters merely report a continuing attempt on the part of Palanca to

secure a fair bargain for Pfleider. The letter-report of October 10, 1969,

invoke by the complainant, states in no uncertain terms that "I am bargaining this (referring to the estafa case) even for P8,000.00 and I

think they will agree. I'll finalize this and pay Tingyan on Tuesday. I have already left in Dumaguete P5,000.00 to show them the color of our

money and I will bring the balance when I go there Tuesday."

Nothing in the above letter indicates that Palanca had deposited the sum

of P5,000 with the Dumaguete City Court. What he did state is that he had left that sum in that City to enable their adversaries to see "the color

of our money." In this connection, the veracity of the certification by

Felicisimo T. Hilay, Dumaguete branch manager of RCPI, that he (Hilay) had been holding the sum of P5,000 during the early part of October in

trust for Pfleider and his lawyer, has not been assailed by Pfleider.

If Pfleider was the object of a warrant of arrest in December 1969, no

substantial blame can be laid at the door of the respondent Palanca inasmuch as the latter's services were implicitly terminated by Pfleider

when the latter sued his lawyer in October of the same year. While the object of the suit is the rescission of the contract of lease between the

parties, the conflict of interest which pits one against the other became

incompatible with that mutual confidence and trust essential to every lawyer-client relation. Moreover, Pfleider fails to dispute Palanca's claim

that on October 26, 1968, Pfleider refused to acknowledge receipt of a certain letter and several motions for withdrawal, including Palanca's

withdrawal as counsel in the estafa case.

Second count. Palanca had fraudulently charged the sum of P5,000

(which he supposedly had left with the City Court in Dumaguete) to his

rental account with Pfleider as part payment of the lease rentals of the Hacienda Asia.Third count. In the same statement of account, Palanca

falsely represented having paid, for the account of Pfleider, one Samuel

13

Guintos the sum of P866.50 when the latter would swear that he had

received only the sum of P86.50.

These two charges are anchored upon the same "Statement of Disbursements" submitted by Palanca to Pfleider. It is our view that this

statement is but a memorandum or report of the expenses which Palanca

considered as chargeable to the account of Pfleider. By its very tentative nature, it is subject to the examination and subsequent approval or

disapproval of Pfleider, and any and every error which it contains may be brought to the attention of Palanca for rectification or adjustment. Viewed

in relation to the contract of lease between Pfleinder and Palanca, this

"statement" is but one aspect of the prestation required of Palanca by the contract. Whatever breach he might have committed in regard to this

prestation would be but a civil or contractual wrong which does not affect his office as a member of the Bar.

Final count. It is charged that the list of creditors which Pfleider had "confidentially" supplied Palanca for the purpose of carrying out the terms

of payment contained in the lease contract was disclosed by Palanca, in violation of their lawyer-client relation, to parties whose interests are

adverse to those of Pfleider.

As Pfleider himself, however, in the execution of the terms of the

aforesaid lease contract between the parties, complainant furnished

respondent with a confidential list of his creditors." This should indicate that Pfleider delivered the list of his creditors to Palanca not because of

the professional relation then existing between them, but on account of the lease agreement. A violation therefore of the confidence that

accompanied the delivery of that list would partake more of a private and

civil wrong than of a breach of the fidelity owing from a lawyer to his client. Moreover, Pfleider fails to controvert Palanca's claim that there is

no such thing as a "confidential" list of creditors and that the list of creditors referred to by Pfleider is the same list which forms part of the

pleadings in civil case 9187 (the action for rescission of the lease

contract) now, pending between the complainant and the respondent lawyer, and therefore is embraced within the category of public records

open to the perusal of persons properly interested therein.

In sum, we are satisfied, and we so hold, that nothing in written

complaint for disbarment against Palanca and in his reply to Palanca's answer supports a prima facie finding of such misconduct in office by

Palanca as would warrant further proceedings in this case.

ACCORDINGLY, the complaint is hereby dismissed.

Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Fernando, Teehankee,

Barredo, Villamor and Makasiar, JJ., concur.

Zaldivar, J., took no part.

Concepcion, C.J., is on leave.

14

G.R. No. L-961 September 21, 1949

BLANDINA GAMBOA HILADO, petitioner,

vs. JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB ASSAD

and SELIM JACOB ASSAD,respondents.

Delgado, Dizon and Flores for petitioner.

Vicente J. Francisco for respondents.

TUASON, J.:

It appears that on April 23, 1945, Blandina Gamboa Hilado brought an

action against Selim Jacob Assad to annul the sale of several houses and

lot executed during the Japanese occupation by Mrs. Hilado's now deceased husband.

On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer on

behalf of the defendant; and on June 15, Attorneys Delgado, Dizon,

Flores and Rodrigo registered their appearance as counsel for the plaintiff. On October 5, these attorneys filed an amended complaint by

including Jacob Assad as party defendant.

On January 28, 1946, Attorney Francisco entered his appearance as

attorney of record for the defendant in substitution for Attorney Ohnick, Velilla and Balonkita who had withdrawn from the case.

On May 29, Attorney Dizon, in the name of his firm, wrote Attorney Francisco urging him to discontinue representing the defendants on the

ground that their client had consulted with him about her case, on which occasion, it was alleged, "she turned over the papers" to Attorney

Francisco, and the latter sent her a written opinion. Not receiving any

answer to this suggestion, Attorney Delgado, Dizon, Flores and Rodrigo on June 3, 1946, filed a formal motion with the court, wherein the case

was and is pending, to disqualify Attorney Francisco.

Attorney Francisco's letter to plaintiff, mentioned above and identified as

Exhibit A, is in full as follows:

VICENTE J. FRANCISCO

Attorney-at-Law 1462 Estrada, Manila

July 13, 1945.

Mrs. Blandina Gamboa Hilado Manila, Philippines

My dear Mrs. Hilado:

From the papers you submitted to me in connection with civil case

No. 70075 of the Court of First Instance of Manila, entitled

15

"Blandina Gamboa Hilado vs. S. J. Assad," I find that the basic facts

which brought about the controversy between you and the defendant therein are as follows:

(a) That you were the equitable owner of the property described in

the complaint, as the same was purchased and/or built with funds

exclusively belonging to you, that is to say, the houses and lot pertained to your paraphernal estate;

(b) That on May 3, 1943, the legal title to the property was with your husband, Mr. Serafin P. Hilado; and

(c) That the property was sold by Mr. Hilado without your

knowledge on the aforesaid date of May 3, 1943.

Upon the foregoing facts, I am of the opinion that your action

against Mr. Assad will not ordinarily prosper. Mr. Assad had the right to presume that your husband had the legal right to dispose of

the property as the transfer certificate of title was in his name.

Moreover, the price of P110,000 in Japanese military notes, as of May 3, 1943, does not quite strike me as so grossly inadequate as

to warrant the annulment of the sale. I believe, lastly, that the transaction cannot be avoided merely because it was made during

the Japanese occupation, nor on the simple allegation that the real

purchaser was not a citizen of the Philippines. On his last point, furthermore, I expect that you will have great difficulty in proving

that the real purchaser was other than Mr. Assad, considering that death has already sealed your husband's lips and he cannot now

testify as to the circumstances of the sale.

For the foregoing reasons, I regret to advise you that I cannot

appear in the proceedings in your behalf. The records of the case you loaned to me are herewith returned.

Yours very truly,

(Sgd.) VICENTE J. FRANCISCO

VJF/Rag.

In his answer to plaintiff's attorneys' complaint, Attorney Francisco

alleged that about May, 1945, a real estate broker came to his office in connection with the legal separation of a woman who had been deserted

by her husband, and also told him (Francisco) that there was a pending suit brought by Mrs. Hilado against a certain Syrian to annul the sale of a

real estate which the deceased Serafin Hilado had made to the Syrian

during the Japanese occupation; that this woman asked him if he was willing to accept the case if the Syrian should give it to him; that he told

the woman that the sales of real property during the Japanese regime were valid even though it was paid for in Japanese military notes; that

this being his opinion, he told his visitor he would have no objection to

defending the Syrian;

16

That one month afterwards, Mrs. Hilado came to see him about a suit she

had instituted against a certain Syrian to annul the conveyance of a real estate which her husband had made; that according to her the case was

in the hands of Attorneys Delgado and Dizon, but she wanted to take it away from them; that as he had known the plaintiff's deceased husband

he did not hesitate to tell her frankly that hers was a lost case for the

same reason he had told the broker; that Mrs. Hilado retorted that the basis of her action was not that the money paid her husband was

Japanese military notes, but that the premises were her private and exclusive property; that she requested him to read the complaint to be

convinced that this was the theory of her suit; that he then asked Mrs.

Hilado if there was a Torrens title to the property and she answered yes, in the name of her husband; that he told Mrs. Hilado that if the property

was registered in her husband's favor, her case would not prosper either;

That some days afterward, upon arrival at his law office on Estrada

street, he was informed by Attorney Federico Agrava, his assistant, that Mrs. Hilado had dropped in looking for him and that when he, Agrava,

learned that Mrs. Hilado's visit concerned legal matters he attended to her and requested her to leave the "expediente" which she was carrying,

and she did; that he told Attorney Agrava that the firm should not handle

Mrs. Hilado's case and he should return the papers, calling Agrava's attention to what he (Francisco) already had said to Mrs. Hilado;

That several days later, the stenographer in his law office, Teofilo

Ragodon, showed him a letter which had been dictated in English by Mr.

Agrava, returning the "expedients" to Mrs. Hilado; that Ragodon told him (Attorney Francisco) upon Attorney Agrava's request that Agrava thought

it more proper to explain to Mrs. Hilado the reasons why her case was rejected; that he forthwith signed the letter without reading it and

without keeping it for a minute in his possession; that he never saw Mrs.

Hilado since their last meeting until she talked to him at the Manila Hotel about a proposed extrajudicial settlement of the case;

That in January, 1946, Assad was in his office to request him to handle his case stating that his American lawyer had gone to the States and left

the case in the hands of other attorneys; that he accepted the retainer and on January 28, 1946, entered his appearance.

Attorney Francisco filed an affidavit of stenographer Ragodon in corroboration of his answer.

The judge trying the case, Honorable Jose Gutierrez David, later

promoted to the Court of Appeals, dismissed the complaint. His Honor

believed that no information other than that already alleged in plaintiff's complaint in the main cause was conveyed to Attorney Francisco, and

concluded that the intercourse between the plaintiff and the respondent did not attain the point of creating the relation of attorney and client.

Stripped of disputed details and collateral matters, this much is undoubted: That Attorney Francisco's law firm mailed to the plaintiff a

written opinion over his signature on the merits of her case; that this

17

opinion was reached on the basis of papers she had submitted at his

office; that Mrs. Hilado's purpose in submitting those papers was to secure Attorney Francisco's professional services. Granting the facts to be

no more than these, we agree with petitioner's counsel that the relation of attorney and client between Attorney Francisco and Mrs. Hilado

ensued. The following rules accord with the ethics of the legal profession

and meet with our approval:

In order to constitute the relation (of attorney and client) a professional one and not merely one of principal and agent, the

attorneys must be employed either to give advice upon a legal

point, to prosecute or defend an action in court of justice, or to prepare and draft, in legal form such papers as deeds, bills,

contracts and the like. (Atkinson vs. Howlett, 11 Ky. Law Rep. (abstract), 364; cited in Vol. 88, A. L. R., p. 6.)

To constitute professional employment it is not essential that the client should have employed the attorney professionally on any

previous occasion. . . . It is not necessary that any retainer should have been paid, promised, or charged for; neither is it material that

the attorney consulted did not afterward undertake the case about

which the consultation was had. If a person, in respect to his business affairs or troubles of any kind, consults with his attorney in

his professional capacity with the view to obtaining professional advice or assistance, and the attorney voluntarily permits or

acquiesces in such consultation, then the professional employment

must be regarded as established. . . . (5 Jones Commentaries on Evidence, pp. 4118-4119.)

An attorney is employed-that is, he is engaged in his professional capacity as a lawyer or counselor-when he is listening to his client's

preliminary statement of his case, or when he is giving advice thereon, just as truly as when he is drawing his client's pleadings,

or advocating his client's cause in open court. (Denver Tramway Co.

vs. Owens, 20 Colo., 107; 36 P., 848.)

Formality is not an essential element of the employment of an attorney. The contract may be express or implied and it is sufficient

that the advice and assistance of the attorney is sought and

received, in matters pertinent to his profession. An acceptance of the relation is implied on the part of the attorney from his acting in

behalf of his client in pursuance of a request by the latter. (7 C. J. S., 848-849; see Hirach Bros. and Co. vs. R. E. Kennington Co., 88

A. L. R., 1.)

Section 26 (e), Rule 123 of the Rules of Court provides that "an attorney

cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in

the course of professional employment;" and section 19 (e) of Rule 127

imposes upon an attorney the duty "to maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client." There

is no law or provision in the Rules of Court prohibiting attorneys in

18

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

whose interests are opposed to each other, but such prohibition is necessarily implied in the injunctions above quoted. (In re De la Rosa, 27

Phil., 258.) In fact the prohibition derives validity from sources higher than written laws and rules. As has been aptly said in In re Merron, 22 N.

M., 252, L.R.A., 1917B, 378, "information so received is sacred to the

employment to which it pertains," and "to permit it to be used in the interest of another, or, worse still, in the interest of the adverse party, is

to strike at the element of confidence which lies at the basis of, and affords the essential security in, the relation of attorney and client."

That only copies of pleadings already filed in court were furnished to Attorney Agrava and that, this being so, no secret communication was

transmitted to him by the plaintiff, would not vary the situation even if we should discard Mrs. Hilado's statement that other papers, personal

and private in character, were turned in by her. Precedents are at hand to

support the doctrine that the mere relation of attorney and client ought to preclude the attorney from accepting the opposite party's retainer in the

same litigation regardless of what information was received by him from his first client.

The principle which forbids an attorney who has been engaged to represent a client from thereafter appearing on behalf of the client's

opponent applies equally even though during the continuance of the employment nothing of a confidential nature was revealed to the

attorney by the client. (Christian vs. Waialua Agricultural Co., 30

Hawaii, 553, Footnote 7, C. J. S., 828.)

Where it appeared that an attorney, representing one party in

litigation, had formerly represented the adverse party with respect to the same matter involved in the litigation, the court need not

inquire as to how much knowledge the attorney acquired from his former during that relationship, before refusing to permit the

attorney to represent the adverse party. (Brown vs. Miller, 52 App.

D. C. 330; 286, F. 994.)

In order that a court may prevent an attorney from appearing against a former client, it is unnecessary that the ascertain in detail

the extent to which the former client's affairs might have a bearing

on the matters involved in the subsequent litigation on the attorney's knowledge thereof. (Boyd vs. Second Judicial Dist. Court,

274 P., 7; 51 Nev., 264.)

This rule has been so strictly that it has been held an attorney, on

terminating his employment, cannot thereafter act as counsel against his client in the same general matter, even though, while

acting for his former client, he acquired no knowledge which could operate to his client's disadvantage in the subsequent adverse

employment. (Pierce vs. Palmer [1910], 31 R. I., 432; 77 Atl., 201,

Ann. Cas., 1912S, 181.)

19

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

litigations, a complicated affair, consisting of entangled relevant and irrelevant, secret and well known facts. In the complexity of what is said

in the course of the dealings between an attorney and a client, inquiry of the nature suggested would lead to the revelation, in advance of the trial,

of other matters that might only further prejudice the complainant's

cause. And the theory would be productive of other un salutary results. To make the passing of confidential communication a condition

precedent; i.e., to make the employment conditioned on the scope and character of the knowledge acquired by an attorney in determining his

right to change sides, would not enhance the freedom of litigants, which

is to be sedulously fostered, to consult with lawyers upon what they believe are their rights in litigation. The condition would of necessity call

for an investigation of what information the attorney has received and in what way it is or it is not in conflict with his new position. Litigants would

in consequence be wary in going to an attorney, lest by an unfortunate

turn of the proceedings, if an investigation be held, the court should accept the attorney's inaccurate version of the facts that came to him.

"Now the abstinence from seeking legal advice in a good cause is by hypothesis an evil which is fatal to the administration of justice." (John H.

Wigmore's Evidence, 1923, Section 2285, 2290, 2291.)

Hence the necessity of setting down the existence of the bare relationship

of attorney and client as the yardstick for testing incompatibility of interests. This stern rule is designed not alone to prevent the dishonest

practitioner from fraudulent conduct, but as well to protect the honest

lawyer from unfounded suspicion of unprofessional practice. (Strong vs. Int. Bldg., etc.; Ass'n, 183 Ill., 97; 47 L.R.A., 792.) It is founded on

principles of public policy, on good taste. As has been said in another case, the question is not necessarily one of the rights of the parties, but

as to whether the attorney has adhered to proper professional standard.

With these thoughts in mind, it behooves attorneys, like Caesar's wife, not only to keep inviolate the client's confidence, but also to avoid the

appearance of treachery and double-dealing. Only thus can litigants be encouraged to entrust their secrets to their attorneys which is of

paramount importance in the administration of justice.

So without impugning respondent's good faith, we nevertheless can not

sanction his taking up the cause of the adversary of the party who had sought and obtained legal advice from his firm; this, not necessarily to

prevent any injustice to the plaintiff but to keep above reproach the

honor and integrity of the courts and of the bar. Without condemning the respondents conduct as dishonest, corrupt, or fraudulent, we do believe

that upon the admitted facts it is highly in expedient. It had the tendency to bring the profession, of which he is a distinguished member, "into

public disrepute and suspicion and undermine the integrity of justice."

There is in legal practice what called "retaining fee," the purpose of which

stems from the realization that the attorney is disabled from acting as counsel for the other side after he has given professional advice to the

opposite party, even if he should decline to perform the contemplated

services on behalf of the latter. It is to prevent undue hardship on the

20

attorney resulting from the rigid observance of the rule that a separate

and independent fee for consultation and advice was conceived and authorized. "A retaining fee is a preliminary fee given to an attorney or

counsel to insure and secure his future services, and induce him to act for the client. It is intended to remunerate counsel for being deprived, by

being retained by one party, of the opportunity of rendering services to

the other and of receiving pay from him, and the payment of such fee, in the absence of an express understanding to the contrary, is neither made

nor received in payment of the services contemplated; its payment has no relation to the obligation of the client to pay his attorney for the

services which he has retained him to perform." (7 C.J.S., 1019.)

The defense that Attorney Agrava wrote the letter Exhibit A and that

Attorney Francisco did not take the trouble of reading it, would not take the case out of the interdiction. If this letter was written under the

circumstances explained by Attorney Francisco and he was unaware of its

contents, the fact remains that his firm did give Mrs. Hilado a formal professional advice from which, as heretofore demonstrated, emerged the

relation of attorney and client. This letter binds and estop him in the same manner and to the same degree as if he personally had written it.

An information obtained from a client by a member or assistant of a law

firm is information imparted to the firm. (6 C. J., 628; 7 C. J. S., 986.) This is not a mere fiction or an arbitrary rule; for such member or

assistant, as in our case, not only acts in the name and interest of the firm, but his information, by the nature of his connection with the firm is

available to his associates or employers. The rule is all the more to be

adhered to where, as in the present instance, the opinion was actually signed by the head of the firm and carries his initials intended to convey

the impression that it was dictated by him personally. No progress could be hoped for in "the public policy that the client in consulting his legal

adviser ought to be free from apprehension of disclosure of his

confidence," if the prohibition were not extended to the attorney's partners, employers or assistants.

The fact that petitioner did not object until after four months had passed

from the date Attorney Francisco first appeared for the defendants does

not operate as a waiver of her right to ask for his disqualification. In one case, objection to the appearance of an attorney was allowed even on

appeal as a ground for reversal of the judgment. In that case, in which throughout the conduct of the cause in the court below the attorney had

been suffered so to act without objection, the court said: "We are all of

the one mind, that the right of the appellee to make his objection has not lapsed by reason of failure to make it sooner; that professional

confidence once reposed can never be divested by expiration of professional employment." (Nickels vs. Griffin, 1 Wash. Terr., 374, 321 A.

L. R. 1316.)

The complaint that petitioner's remedy is by appeal and not by certiorari

deserves scant attention. The courts have summary jurisdiction to protect the rights of the parties and the public from any conduct of attorneys

prejudicial to the administration of the justice. The summary jurisdiction

of the courts over attorneys is not confined to requiring them to pay over

21

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

whatever specific acts may be incumbent upon them in their capacity of attorneys to perform. The courts from the general principles of equity and

policy, will always look into the dealings between attorneys and clients and guard the latter from any undue consequences resulting from a

situation in which they may stand unequal. The courts acts on the same

principles whether the undertaking is to appear, or, for that matter, not to appear, to answer declaration, etc. (6 C.J., 718 C.J.S., 1005.) This

summary remedy against attorneys flows from the facts that they are officers of the court where they practice, forming a part of the machinery

of the law for the administration of justice and as such subject to the

disciplinary authority of the courts and to its orders and directions with respect to their relations to the court as well as to their clients. (Charest

vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note 26, 7 C. J. S., 1007.) Attorney stand on the same footing as sheriffs and other court officers in

respect of matters just mentioned.

We conclude therefore that the motion for disqualification should be

allowed. It is so ordered, without costs.

Moran, C.J., Ozaeta, Paras, Feria, Bengzon, Padilla, Montemayor, Reyes

and Torres, JJ., concur.

CLARITA J. SAMALA, Complainant,

ADM. CASE NO. 5439

Present: PUNO, C.J., QUISUMBING,

YNARES-SANTIAGO, SANDOVAL-

GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, - versus - CORONA, CARPIO MORALES, CALLEJO, SR.,

AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, and

VELASCO, JR., JJ. ATTY. LUCIANO D. VALENCIA,

Promulgated:

Respondent. ___________________

22

____

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

R E S O L U T I O N AUSTRIA-MARTINEZ, J.

Before us is a complaint[1] dated May 2, 2001 filed by

Clarita J. Samala (complainant) against Atty. Luciano D. Valencia

(respondent) for Disbarment on the following grounds: (a)

serving on two separate occasions as counsel for contending

parties; (b) knowingly misleading the court by submitting false

documentary evidence; (c) initiating numerous cases in exchange

for nonpayment of rental fees; and (d) having a reputation of

being immoral by siring illegitimate children.

After respondent filed his Comment, the Court, in its

Resolution of October 24, 2001, referred the case to the

Integrated Bar of the Philippines (IBP) for investigation, report

and recommendation.[2]

The investigation was conducted

by Commissioner Demaree Jesus B. Raval. After a series of

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

case was deemed submitted for resolution.

Commissioner Wilfredo E.J.E. Reyes prepared the Report

and Recommendation[4] dated January 12, 2006. He found

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

Professional Responsibility and recommended the penalty of

suspension for six months.

In a minute Resolution[5] passed on May 26, 2006, the IBP

Board of Governors adopted and approved the report and

recommendation of Commissioner Reyes but increased the

penalty of suspension from six months to one year.

23

We adopt the report of the IBP Board of Governors except

as to the issue on immorality and as to the recommended

penalty.

On serving as counsel for contending parties.

Records show that in Civil Case No. 95-105-MK, filed in the

Regional Trial Court (RTC), Branch 272, Marikina City, entitled

Leonora M. Aville v. Editha Valdez for nonpayment of rentals,

herein respondent, while being the counsel for defendant Valdez,

also acted as counsel for the tenants Lagmay,

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

Compliance before the RTC.[7]

In Civil Case No. 98-6804 filed in the Metropolitan Trial

Court (MTC), Branch 75, Marikina City, entitled Editha S. Valdez

and Joseph J. Alba, Jr. v. Salve Bustamanteand her husband

for ejectment, respondent represented Valdez

against Bustamante one of the tenants in the property subject

of the controversy. Defendants appealed to the RTC, Branch

272, Marikina City docketed as SCA Case No. 99-341-MK. In his

decision dated May 2, 2000,[8] Presiding Judge Reuben

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

act of being counsel of record of both parties in Civil Case No. 95-

105-MK.

But in Civil Case No. 2000-657-MK, filed in the RTC, Branch

273, Marikina City, entitled Editha S. Valdez v. Joseph J. Alba,

Jr. and Register of Deeds of MarikinaCity, respondent, as counsel

for Valdez, filed a Complaint for Rescission of Contract with

Damages and Cancellation of Transfer Certificate of Title No.

275500 against Alba, respondent's former client in Civil Case No.

98-6804 and SCA Case No. 99-341-MK.

24

Records further reveal that at the hearing of November 14,

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

was the lawyer for Lagmay (one of the tenants) but not

for Bustamante and Bayuga[10] albeit he filed the Explanation and

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

admitted that he represented Valdez in Civil Case No. 98-6804

and SCA Case No. 99-341-MK against Bustamante and her

husband but denied being the counsel for Alba although the case

is entitled Valdez and Alba v. Bustamante and her husband,

because Valdez told him to include Alba as the two were the

owners of the property[12] and it was only Valdez who signed the

complaint for ejectment.[13] But, while claiming that respondent

did not represent Alba, respondent, however, avers that he

already severed his representation for Alba when the latter

charged respondent with estafa.[14] Thus, the filing of Civil Case

No. 2000-657-MK against Alba.

Rule 15.03, Canon 15 of the Code of Professional

Responsibility provides that 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.[15] He may not also

undertake to discharge conflicting duties any more than he may

represent antagonistic interests. This stern rule is founded on the

principles of public policy and good taste.[16] It springs from the

relation of attorney and client which is one of trust and

confidence. Lawyers are expected not only to keep inviolate the

clients confidence, but also to avoid the appearance of treachery

and double-dealing for only then can litigants be encouraged to

entrust their secrets to their lawyers, which is of paramount

importance in the administration of justice.[17]

One of the tests of inconsistency of interests is whether the

acceptance of a new relation would prevent the full discharge of

the lawyers duty of undivided fidelity and loyalty to the client or

25

invite suspicion of unfaithfulness or double-dealing in the

performance of that duty.[18]

The stern rule against representation of conflicting interests

is founded on principles of public policy and good taste. It

springs from the attorneys duty to represent his client with

undivided fidelity and to maintain inviolate the clients confidence

as well as from the injunction forbidding the examination of an

attorney as to any of the privileged communications of his

client.[19]

An attorney owes loyalty to his client not only in the case in

which he has represented him but also after the relation of

attorney and client has terminated.[20] The bare attorney-client

relationship with a client precludes an attorney from accepting

professional employment from the clients adversary either in the

same case[21] or in a different but related action.[22] A lawyer is

forbidden from representing a subsequent client against a former

client when the subject matter of the present controversy is

related, directly or indirectly, to the subject matter of the

previous litigation in which he appeared for the former client.[23]

We held in Nombrado v. Hernandez[24] that the termination

of the relation of attorney and client provides no justification for a

lawyer to represent an interest adverse to or in conflict with that

of the former client. The reason for the rule is that the clients

confidence once reposed cannot be divested by the expiration of

the professional employment.[25] Consequently, a lawyer should

not, even after the severance of the relation with his client, do

anything which will injuriously affect his former client in any

matter in which he previously represented him nor should he

disclose or use any of the clients confidences acquired in the

previous relation.[26]

In this case, respondents averment that his relationship

with Alba has long been severed by the act of the latter of not

turning over the proceeds collected in Civil Case No. 98-6804, in

26

connivance with the complainant, is unavailing. Termination of

the attorney-client relationship precludes an attorney from

representing a new client whose interest is adverse to his former

client. Alba may not be his original client but the fact that he

filed a case entitled Valdez and Alba v. Bustamante and her

husband, is a clear indication that respondent is protecting the

interests of both Valdez and Alba in the said case. Respondent

cannot just claim that the lawyer-client relationship between him

and Alba has long been severed without observing Section 26,

Rule 138 of the Rules of Court wherein the written consent of his

client is required.

In Gonzales v. Cabucana, Jr.,[27] citing the case

of Quiambao v. Bamba,[28] we held that: The proscription against representation of conflicting interests applies to a situation where the opposing parties are present clients in the same action or in an unrelated action. It is of no moment that the lawyer would not be called upon to contend for one client that which the lawyer has to oppose for the other client, or that there would be no occasion to use the confidential information acquired from one to the disadvantage of the other as the two actions are wholly unrelated. It is enough that the opposing parties in one case, one of whom would lose the suit, are present clients and the nature or conditions of the lawyers respective retainers with each of them would affect the performance of the duty of undivided fidelity to both clients.[29]

Respondent is bound to comply with Canon 21 of the Code

of Professional Responsibility which states that a lawyer shall

preserve the confidences and secrets of his client even after the

attorney-client relation is terminated.

The reason for the prohibition is found in the relation of

attorney and client, which is one of trust and confidence of the

highest degree. A lawyer becomes familiar with all the facts

connected with his clients case. He learns from his client the

27

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

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

From the foregoing, it is evident that respondents

representation of Valdez and Alba against Bustamante and her

husband, in one case, and Valdez against Alba, in another case, is

a clear case of conflict of interests which merits a corresponding

sanction from this Court. Respondent may have withdrawn his

representation in Civil Case No. 95-105-MK upon being warned by

the court,[31] but the same will not exculpate him from the

charge of representing conflicting interests in his representation

in Civil Case No. 2000-657-MK.

Respondent is reminded to be more cautious in accepting

professional employments, to refrain from all appearances and

acts of impropriety including circumstances indicating conflict of

interests, and to behave at all times with circumspection and

dedication befitting a member of the Bar, especially observing

candor, fairness and loyalty in all transactions with his clients.[32]

On knowingly misleading the court by submitting false

documentary evidence.

Complainant alleges that in Civil Case No. 00-7137 filed

before MTC, Branch 75 for ejectment, respondent submitted TCT

No. 273020 as evidence of Valdez's ownership despite the fact

that a new TCT No. 275500 was already issued in the name of

Alba on February 2, 1995.

Records reveal that respondent filed Civil Case No. 00-7137

on November 27, 2000 and presented TCT No. 273020 as

evidence of Valdez's ownership of the subject property.[33] During

the hearing before Commissioner Raval, respondent avers that

when the Answer was filed in the said case, that was the time

28

that he came to know that the title was already in the name of

Alba; so that when the court dismissed the complaint, he did not

do anything anymore.[34] Respondent further avers

that Valdez did not tell him the truth and things were revealed to

him only when the case for rescission was filed in 2002.

Upon examination of the record, it was noted that Civil

Case No. 2000-657-MK for rescission of contract and cancellation

of TCT No. 275500 was also filed on November 27,

2000,[35] before RTC, Branch 273, Marikina City, thus belying the

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

in 2002 when the case for rescission was filed. It was revealed

during the hearing before Commissioner Raval that Civil Case

Nos. 00-7137 and 2000-657-MK were filed on the same date,

although in different courts and at different times.

Hence, respondent cannot feign ignorance of the fact that

the title he submitted was already cancelled in lieu of a new title

issued in the name of Alba in 1995 yet, as proof of the latter's

ownership.

Respondent failed to comply with Canon 10 of the Code of

Professional Responsibility which provides that a lawyer shall not

do any falsehood, nor consent to the doing of any in court; nor

shall he mislead, or allow the Court to be mislead by any

artifice. It matters not that the trial court was not misled by

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

of Valdez, as shown by its decision dated January 8,

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

in this case is respondent's intent in trying to mislead the court

by presenting TCT No. 273020 despite the fact that said title was

already cancelled and a new one, TCT No. 275500, was already

issued in the name of Alba.

In Young v. Batuegas,[37] we held that a lawyer must be a

disciple of truth. He swore upon his admission to the Bar that he

will do no falsehood nor consent to the doing of any in court

29

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

his knowledge and discretion with all good fidelity as well to the

courts as to his clients.[38] He should bear in mind that as an

officer of the court his high vocation is to correctly inform the

court upon the law and the facts of the case and to aid it in doing

justice and arriving at correct conclusion.[39] The courts, on the

other hand, are entitled to expect only complete honesty from

lawyers appearing and pleading before them. While a lawyer has

the solemn duty to defend his clients rights and is expected to

display the utmost zeal in defense of his clients cause, his

conduct must never be at the expense of truth.

A lawyer is the servant of the law and belongs to a

profession to which society has entrusted the administration of

law and the dispensation of justice.[40] As such, he should make

himself more an exemplar for others to emulate.[41]

On initiating numerous cases in exchange for nonpayment

of rental fees.

Complainant alleges that respondent filed the following

cases: (a) Civil Case No. 2000-657-MK at the RTC, Branch 272;

(b) Civil Case No. 00-7137 at the MTC, Branch 75; and (c) I.S.

Nos. 00-4439 and 01-036162 both entitled Valencia v. Samala

for estafa and grave coercion, respectively, before

the Marikina City Prosecutor. Complainant claims that the two

criminal cases were filed in retaliation for the cases she filed

against Lagmay docketed as I.S. No. 00-4306 for estafa and I.S.

No. 00-4318 against Alvin Valencia (son of respondent) for

trespass to dwelling.

As culled from the records, Valdez entered into a retainer

agreement with respondent. As payment for his services, he was

allowed to occupy the property for free and utilize the same as

his office pursuant to their retainer agreement.[42]

30

Respondent filed I.S. Nos. 00-4439[43] and 01-

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

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

complainant who filed I.S. No. 00-

4306[45] for estafa against Lagmay, and I.S. No. 00-

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

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

of respondent of filing the aforecited cases to protect the interest

of his client, on one hand, and his own interest, on the other,

cannot be made the basis of an administrative charge unless it

can be clearly shown that the same was being done to abuse

judicial processes to commit injustice.

The filing of an administrative case against respondent for

protecting the interest of his client and his own right would be

putting a burden on a practicing lawyer who is obligated to

defend and prosecute the right of his client.

On having a reputation for being immoral by siring

illegitimate children.

We find respondent liable for being immoral by siring

illegitimate children.

During the hearing, respondent admitted that he sired

three children by Teresita Lagmay who are all over 20 years of

age,[48] while his first wife was still alive. He also admitted that

he has eight children by his first wife, the youngest of whom is

over 20 years of age, and after his wife died in 1997, he

married Lagmay in 1998.[49] Respondent further admitted

that Lagmay was staying in one of the apartments being claimed

by complainant. However, he does not consider his affair

with Lagmay as a relationship[50]and does not consider the latter

as his second family.[51] He reasoned that he was not staying

31

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

another inMarikina.[52]

In this case, the admissions made by respondent are more

than enough to hold him liable on the charge of

immorality. During the hearing, respondent did not show any

remorse. He even justified his transgression by saying that he

does not have any relationship with Lagmay and despite the fact

that he sired three children by the latter, he does not consider

them as his second family. It is noted that during the hearing,

respondent boasts in telling the commissioner that he has two

houses - in Muntinlupa, where his first wife lived, and in Marikina,

where Lagmay lives.[53] It is of no moment that respondent

eventually married Lagmay after the death of his first wife. The

fact still remains that respondent did not live up to the exacting

standard of morality and decorum required of the legal

profession.

Under Canon 1, Rule 1.01 of the Code of Professional

Responsibility, a lawyer shall not engage in unlawful, dishonest,

immoral or deceitful conduct. It may be difficult to specify the

degree of moral delinquency that may qualify an act as immoral,

yet, for purposes of disciplining a lawyer, immoral conduct has

been defined as that conduct which is willful, flagrant, or

shameless, and which shows a moral indifference to the opinion

of respectable members of the community.[54] Thus, in several

cases, the Court did not hesitate to discipline a lawyer for keeping

a mistress in defiance of the mores and sense of morality of the

community.[55] That respondent subsequently married Lagmay in

1998 after the death of his wife and that this is his first infraction

as regards immorality serve to mitigate his liability.

ACCORDINGLY, the Court finds respondent Atty. Luciano D.

Valencia GUILTY of misconduct and violation of Canons 21, 10

and 1 of the Code of Professional Responsibility.

32

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

effective immediately upon receipt of herein Resolution.

Let copies of this Resolution be furnished all courts of the

land, the Integrated Bar of the Philippines as well as the Office of

the Bar Confidant for their information and guidance, and let it be

entered in respondents personal records.

SO ORDERED.

REBECCA J. PALM, A.C. No. 8242 Complainant, Present: PUNO, C.J., Chairperson, CARPIO, - versus - CORONA, LEONARDO-DE CASTRO, and BERSAMIN, JJ. ATTY. FELIPE ILEDAN, JR., Promulgated: Respondent. October 2, 2009 x - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

CARPIO, J.:

The Case

The case before the Court is a disbarment proceeding filed

by Rebecca J. Palm (complainant) against Atty. Felipe Iledan, Jr.

(respondent) for revealing information obtained in the course of

an attorney-client relationship and for representing an interest

33

which conflicted with that of his former client, Comtech

Worldwide Solutions Philippines, Inc. (Comtech).

The Antecedent Facts

Complainant is the President of Comtech, a corporation

engaged in the business of computer software

development. From February 2003 to November 2003,

respondent served as Comtechs retained corporate counsel for

the amount of P6,000 per month as retainer fee. From

September to October 2003, complainant personally met with

respondent to review corporate matters, including potential

amendments to the corporate by-laws. In a meeting held on 1

October 2003, respondent suggested that Comtech amend its

corporate by-laws to allow participation during board meetings,

through teleconference, of members of the Board of Directors

who were outside the Philippines.

Prior to the completion of the amendments of the corporate

by-laws, complainant became uncomfortable with the close

relationship between respondent and Elda Soledad (Soledad), a

former officer and director of Comtech, who resigned and who

was suspected of releasing unauthorized disbursements of

corporate funds. Thus, Comtech decided to terminate its retainer

agreement with respondent effective November 2003.

In a stockholders meeting held on 10 January 2004,

respondent attended as proxy for Gary Harrison

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

members of the Board of Directors, were present through

teleconference. When the meeting was called to order,

respondent objected to the meeting for lack of

quorum. Respondent asserted that Steven and Deanna Palm

could not participate in the meeting because the corporate by-

laws had not yet been amended to allow teleconferencing.

34

On 24 March 2004, Comtechs new counsel sent a demand

letter to Soledad to return or account for the amount

of P90,466.10 representing her unauthorized disbursements

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

2004, Comtech received Soledads reply, signed by

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

Comtech's written demands, Comtech filed a complaint for Estafa

against Soledad before the Makati Prosecutors Office. In the

proceedings before the City Prosecution Office of Makati,

respondent appeared as Soledads counsel.

On 26 January 2005, complainant filed a Complaint[1] for

disbarment against respondent before the Integrated Bar of the

Philippines (IBP).

In his Answer,[2] respondent alleged that in January 2002,

Soledad consulted him on process and procedure in acquiring

property. In April 2002, Soledad again consulted him about the

legal requirements of putting up a domestic corporation. In

February 2003, Soledad engaged his services as consultant for

Comtech. Respondent alleged that from February to October

2003, neither Soledad nor Palm consulted him on confidential or

privileged matter concerning the operations of the

corporation. Respondent further alleged that he had no access to

any record of Comtech.

Respondent admitted that during the months of September

and October 2003, complainant met with him regarding the

procedure in amending the corporate by-laws to allow board

members outside the Philippines to participate in board

meetings.

Respondent further alleged that Harrison, then Comtech

President, appointed him as proxy during the 10 January 2004

meeting. Respondent alleged that Harrison instructed him to

observe the conduct of the meeting. Respondent admitted that

he objected to the participation of Steven and Deanna Palm

35

because the corporate by-laws had not yet been properly

amended to allow the participation of board members by

teleconferencing.

Respondent alleged that there was no conflict of interest

when he represented Soledad in the case for Estafa filed by

Comtech. He alleged that Soledad was already a client before he

became a consultant for Comtech. He alleged that the criminal