Republic of the Philippines

SUPREME COURT
Manila
EN BANC
A.C. No. 7418 October 9, 2007
ANDREA BALCE CELAJE, complainant,
vs.
ATTY. SANTIAGO C. SORIANO, respondent.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
Before this Court is a disbarment case filed against Atty. Santiago C. Soriano
(respondent) for gross misconduct.
In the Complaint dated June 1, 2005 filed before the Integrated Bar of the
Philippines (IBP), Andrea Balce Celaje (complainant) alleged that respondent asked
for money to be put up as an injunction bond, which complainant found out later,
however, to be unnecessary as the application for the writ was denied by the trial
court. Respondent also asked for money on several occasions allegedly to spend for
or to be given to the judge handling their case, Judge Milagros Quijano, of the
Regional Trial Court, Iriga City, Branch 36. When complainant approached Judge
Quijano and asked whether what respondent was saying was true, Judge Quijano
outrightly denied the allegations and advised her to file an administrative case
against respondent.1
In his Answer, respondent denied the charges against him and averred that the
same were merely concocted by complainant to destroy his character. He also
contended that it was complainant who boasted that she is a professional fixer in
administrative agencies as well as in the judiciary; and that complainant promised
to pay him large amounts of attorney's fees which complainant however did not
keep.2
Both parties appeared in the Mandatory Conference and Hearing on January 18,
2006. Thereafter, the case was submitted for decision. 3
In the Report and Recommendation dated January 24, 2006, IBP-Commission on Bar
Discipline Commissioner Dennis A.B. Funa found respondent guilty of Gross
Misconduct in his relations with his client and recommended that respondent be
suspended for three years from the practice of law. 4
In the Report, Commissioner Funa found that:
During the hearing conducted, Complainant alleged that she has remitted to
Respondent, on various dates, amounts of money totaling to more or
less P270,000.00.
According to Complainant the amounts given in several instances were all
undocumented and not acknowledged in writing.
However, for the alleged amount of P14,000.00 intended for an injunction bond,
some documents in writing were made.
xxxx
While the amounts remitted by Complainant to Respondent were never
acknowledged in writing and were not documented, due credence must be given
to Complainant's allegations especially over the amount of P14,800.00 intended for
the injunction. Indeed, there is no ill-motive at all on the part of Complainant
to fabricate charges against Respondent. Unfortunately, none of the P270,000.00
given by Complainant to Respondent was ever documented and therefore accuracy
of the amounts could not be established and substantiated.
What has been documented only pertains to the unpaid P5,800.00 intended for the
injunction bond. However, it has been established that indeed an accumulated
amount of P9,000.00 has been remitted by Respondent to Valentina Ramos
and only the unpaid P5,800.00 remains unaccounted for by the
Respondent.
During the hearing conducted, Complainant reiterated her accusations against the
Respondent and expressed that she has been aggrieved and misled by Respondent.
According to Complainant, this was made possible because she was not aware of
or knowledgeable on legal matters and practices. Respondent has only
offered denials to the charges. However, the circumstances gives credibility to
herein Complainant in the absence of any evil motive on her part.
Accordingly, Respondent is clearly guilty of misappropriating his client's funds in
the amount of P5,800.00. While other amounts may have been misappropriated,
Complainant alleges P270,000.00, the exactness of the amounts could not be
established.
Respondent is also guilty of deceiving his client and abusing his client's
confidence in requesting for several amounts of money on the pretense
that he had to spend for and pay the trial judge.
Respondent is hereby ORDERED to immediately deliver the unaccounted for amount
of Five Thousand Eight Hundred Pesos (P5,800.00) to Complainant, submitting a
Compliance Report thereon.5
On September 8, 2006, the Board of Governors of the IBP passed a Resolution thus:
RESOLVED to ADOPT and Approve, as it is hereby ADOPTED and APPROVED, with
modification, the Report and Recommendation of the Investigating Commissioner
of the above-entitled case, herein made part of this Resolution as Annex "A-; and,
finding the recommendation fully supported by the evidence on record and the
applicable laws and rules, and considering that Respondent is guilty of gross
misconduct for misappropriating his client's funds, Atty. Santiago C. Soriano is
hereby SUSPENDED from the practice of law for two (2) years and likewise
Ordered to immediately deliver that unaccounted amount of P5,800.00 to
complainant.6
The IBP transmitted the Notice of Resolution issued by the IBP Board of Governors
as well as the records of the case, pursuant to Rule 139-B. 7 Then in compliance with
the Court's Resolution dated February 20, 2007, the IBP through Director for
Discipline Rogelio Vinluan informed the Court that per records of the IBP, no Motion
for Reconsideration was filed by either party.
The Court agrees with the IBP Resolution.
The Code of Professional Responsibility (CPR), particularly Canon 16 thereof,
mandates that a lawyer shall hold in trust all moneys and properties of his client
that may come into his possession. He shall account for all money or property
collected or received from his client 8 and shall deliver the funds and property of his
client when due or upon demand.9
As found by Commissioner Funa, it was established that respondent could not
account for P5,800.00 which was part of the sum given by complainant to him for
the purpose of filing an injunctive bond. Respondent admitted having received from
complainant P17,800.00 on April 19, 2002 for the preliminary injunction 10 and
admitted to having a balance of P9,000.00 in his promissory note to the Manila
Insurance Co., Inc. dated April 23, 2002, which was reduced to P5,800.00 by reason
of an additional payment of P4,000.00,11 leaving an amount of P5,800.00
unaccounted for. The affidavit of the insurance agent, Valentina Ramos, dated
December 8, 2005 also states that even up to said date, respondent had not yet
paid the balance of P5,800.00.12
Respondent's failure to return the money to complainant upon demand gave rise to
the presumption that he misappropriated it for his own use to the prejudice of, and
in violation of the trust reposed in him by his client. 13 It is a gross violation of
general morality and of professional ethics and impairs public confidence in the
legal profession which deserves punishment. 14
As the Court has pronounced, when a lawyer receives money from the client for a
particular purpose, the lawyer is bound to render an accounting to the client
showing that the money was spent for a particular purpose. And if he does not use
the money for the intended purpose, the lawyer must immediately return the
money to his client.15
The Court has been exacting in its demand for integrity and good moral character of
members of the Bar who are expected at all times to uphold the integrity and
dignity of the legal profession and refrain from any act or omission which might
lessen the trust and confidence reposed by the public in the fidelity, honesty, and
integrity of the legal profession. Indeed, membership in the legal profession is a
privilege.16 The attorney-client relationship is highly fiduciary in nature. As such, it
requires utmost good faith, loyalty, fidelity and disinterestedness on the part of the
lawyer.17
In Small v. Banares18 the respondent was suspended for two years for violating
Canon 16 of the CPR, particularly for failing to file a case for which the amount
of P80,000.00 was given him by his client, and for failing to return the said amount
upon demand. Considering that similar circumstances are attendant in this case, the
Court finds the Resolution of the IBP imposing on respondent a two-year suspension
to be in order.
WHEREFORE, respondent Atty. Santiago C. Soriano is found GUILTY of violating
Canon 16 of the Code of Professional Responsibility and is
hereby SUSPENDED from the practice of law for a period of two (2) years from
notice, with a STERN WARNING that a repetition of the same or similar acts shall
be dealt with more severely.
Respondent is further ordered to restitute to his clients through Andrea Balce Celaje,
within 30 days from notice, the amount of P5,800.00. Respondent is directed to
submit to the Court proof of payment within fifteen days from payment of the full
amount.
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 respondent's record in this Court.
SO ORDERED.
Puno, (Chief Justice), Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio,
Corona, Carpio-Morales, Azcuna, Tinga, Chico-Nazario, Garcia, Velasco, Jr., Nachura,
Reyes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
A.C. No. 7021 February 21, 2007
MELVIN D. SMALL, Complainant,
vs.
ATTY. JERRY BANARES, Respondent.
DECISION
CARPIO, J.:
The Case
This is a complaint for disbarment filed by Melvin D. Small (complainant) against
Atty. Jerry Banares1(respondent) for failure to render legal services and to return the
money received for his legal services.
The Facts
On 30 August 2001, complainant engaged the services of respondent in connection
with several complaints to be filed against one Lyneth Amar (Amar). Complainant
paid respondent P20,000 as acceptance fee.2
On 4 September 2001, complainant gave respondent P60,000 as filing fees for the
cases against Amar.3Respondent then wrote a demand letter for Amar and talked to
Amar on the phone. Respondent also informed complainant that he would be
preparing the documents for the cases. Complainant consistently communicated
with respondent regarding the status of the cases. But respondent repeatedly told
complainant to wait as respondent was still preparing the documents.
On 5 January 2002, complainant required respondent to present all the documents
respondent had prepared for the cases against Amar. Respondent was not able to
present any document. This prompted complainant to demand for a full refund of
the fees he had paid respondent. 4 Complainant even hired the services of Atty.
Rizalino Simbillo to recover the money from respondent. But respondent failed to
return the money. Hence, complainant filed a case for disbarment before the
Integrated Bar of the Philippines (IBP) against respondent.
On 15 October 2004, IBP Director for Bar Discipline Rogelio A. Vinluan ordered
respondent to submit his answer to the complaint. Respondent did not file an
answer despite receipt of the order.
On 21 January 2005, IBP Investigating Commissioner Wilfredo E.J.E. Reyes (IBP
Commissioner Reyes) notified the parties to appear before him for a mandatory
conference on 3 March 2005. Only complainant appeared at the conference. As
there was no proof that respondent received the notice, IBP Commissioner Reyes
reset the mandatory conference to 30 March 2005 and, later, to 14 April 2005.
Respondent was warned that, if he fails to appear at the conference, the case will
be considered submitted for resolution.1awphi1.net
On the 14 April 2005 conference, only complainant appeared despite respondents
receipt of the notice. The Commission on Bar Discipline considered the case
submitted for resolution.
The IBPs Report and Recommendation
On 14 July 2005, IBP Commissioner Reyes submitted his Report and
Recommendation (Report) with the finding that respondent failed to render any
legal service to complainant despite having been paid for his services. The Report
considered complainants evidence sufficient to find respondent guilty of violating
Canons 16,5 18,6 and 197 of the Code of Professional Responsibility (Code). IBP
Commissioner Reyes recommended the imposition on respondent of a penalty of
suspension from the practice of law for two years and that respondent be ordered to
return complainants P80,000.
In a Resolution dated 12 November 2005, the IBP Board of Governors adopted and
approved the Report. The IBP Board of Governors forwarded the instant case to the
Court as provided under Section 12(b), Rule 139-B 8 of the Rules of Court.
The Courts Ruling
We sustain the findings and recommendation of the IBP.
The Code provides that a lawyer shall serve his client with competence and
diligence.9 The Code states that a lawyer shall keep the client informed of the status
of his case and shall respond within a reasonable time to the clients request for
information.10
The records show that after receiving P80,000 respondent was never heard from
again. Respondent failed to give complainant an update on the status of the cases.
Moreover, it appears that respondent failed to file the appropriate cases against
Amar. Respondents failure to communicate with complainant was an unjustified
denial of complainants right to be fully informed of the status of the cases. When
respondent agreed to be complainants counsel, respondent undertook to take all
the necessary steps to safeguard complainants interests. 11 By his inaction,
respondent disregarded his duties as a lawyer.
The Code also mandates that every lawyer shall hold in trust all moneys of his client
that may come into his possession.12 Furthermore, a lawyer shall account for all
money received from the client and shall deliver the funds of the client upon
demand.13
In Meneses v. Macalino,14 the Court ruled that:
When a lawyer receives money from the client for a particular purpose, the lawyer is
bound to render an accounting to the client showing that the money was spent for
the intended purpose. Consequently, if the lawyer does not use the money for the
intended purpose, the lawyer must immediately return the money to the client. 15
Respondent specifically received P80,000 for his legal services and the filing fees for
the cases against Amar. Since respondent failed to render any legal service to
complainant and he failed to file a case against Amar, respondent should have
promptly accounted for and returned the money to complainant. But even after
demand, respondent did not return the money. Respondents failure to return the
money to complainant upon demand is a violation of the trust reposed on him and is
indicative of his lack of integrity. 16
Moreover, respondents misconduct is aggravated by his failure to file an answer to
the complaint and his refusal to appear at the mandatory conference. The IBP
rescheduled the mandatory conference twice to give respondent a chance to
answer the complaint. Still, respondent failed to appear, exhibiting his lack of
respect for the IBP and its proceedings. 17
The relation of attorney and client is highly fiduciary, requiring utmost good faith,
loyalty, and fidelity on the part of the attorney. In this case, respondent clearly fell
short of the demands required of him as a member of the Bar.
WHEREFORE, we find respondent Atty. Jerry Banares GUILTY of violating Canons
16 and 18 and Rules 16.01, 16.03, and 18.04 of the Code of Professional
Responsibility. Accordingly, we SUSPEND respondent from the practice of law for
two years effective upon finality of this Decision. We ORDER respondent
to RETURN, within 30 days from notice of this decision, complainants P80,000,
with interest at 12% per annum from the date of promulgation of this decision until
full payment. We DIRECT respondent to submit to the Court proof of payment
within fifteen days from payment of the full amount.
Let copies of this decision be furnished the Office of the Bar Confidant, to be
appended to respondents personal record as attorney. Likewise, copies shall be
furnished to the Integrated Bar of the Philippines and all courts in the country for
their information and guidance.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice

CONSUELO YNARES-
LEONARDO A. QUISUMBING
SANTIAGO
Associate Justice
Asscociate Justice

ANGELINA SANDOVAL- MA. ALICIA AUSTRIA-

GUTIERREZ MARTINEZ
Associate Justice Asscociate Justice

RENATO C. CORONA CONCHITA CARPIO MORALES

Associate Justice Asscociate Justice

ROMEO J. CALLEJO, SR. ADOLFO S. AZCUNA

Associate Justice Asscociate Justice

DANTE O. TINGA MINITA V. CHICO-NAZARIO

Associate Justice Asscociate Justice

CANCIO C. GARCIA PRESBITERO J. VELASCO, JR.

Associate Justice Asscociate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

THIRD DIVISION
[A.C. No. 5019. April 6, 2000]
Judge ADORACION G. ANGELES, complainant, vs. Atty. THOMAS C. UY
JR., respondent. Spped jo
DECISION
PANGANIBAN, J.:
Lawyers must promptly account for money or property they receive on behalf of
their clients. Failure to do so constitutes professional Misconduct and justifies the
imposition of disciplinary sanctions.
The Case and the Facts
In a letter dated February 11, 1999 addressed to the Office of the Chief Justice,
Judge Adoracion G. Angeles of the Regional Trial Court of Caloocan City (Branch 121)
charged Atty. Thomas C. Uy Jr. with violation of Canon 16 of the Code of Professional
Responsibility. Complainant states that respondent's acts, which had earlier been
held contemptible in her February 10, 1999 Order, [1] also rendered him
administratively liable. In the said Order, she narrated the following facts:
"When the case was called for the second time at 11 :25 o'clock in the morning, the
private prosecutor Atty. Thomas C. Uy, Jr. appeared. In open court, accused Norma
Trajano manifested that she had already settled in full the civil aspect in Crim. Case
No. C-54177 (98) in the total amount of [t]hirty [s]ix [t]housand [f]ive [h]undred
(P36,500.00) [p]esos. She further alleged that she paid P20,000.00 directly to the
private complainant and the balance of P16,500.00 was delivered to Atty. Thomas C.
Uy, Jr., the lawyer of the private complainant and accordingly produced in open
court the receipt for such payment signed by no less than the aforesaid lawyer.
Indeed, the civil liability of the accused had already been satisfied in full. Miso
"However, the private complainant, Primitiva Malansing [Del Rosario] manifested
that she did not receive the amount of [s]ixteen [t]housand [f]ive [h]undred
(P16,500.00) [p]esos which was paid to his lawyer Atty. Thomas C. Uy, Jr., thereby
constraining this court to direct Atty. Thomas C. Uy to turn over the money to the
private complainant which he received in trust for his client. Atty. Uy however
argued that his client did not like to accept the money but the assertion of the
lawyer was belied by his own client, the herein private complainant, who manifested
in open court x x x her willingness to accept the money. The Court again directed
Atty. Uy to produce the money but the latter argued that he kept it in his office.
Consequently, the Court suspended the proceedings to enable Atty. Uy to get the
money from his law office which is located only at the second floor of the same
building where this court is located.
"Unfortunately, it is already 12: 15 o'clock past noon but Atty. Uy did not show up
anymore and not even his shadow appeared in Court.
"It cannot be denied that the act of Atty. Thomas Uy in deliberately failing to return
to the Court [the] proceedings [of which] were suspended just because of his
representations, mirrors not only an undisguised disobedience of a court order but
also manifests his propensity to mock the dignity of the Court. Disgustingly, he
deliberately ignored his solemn oath to conduct himself as befitting the status of an
officer of the court.
"Indeed, this gross misbehavior of Atty. Uy cannot simply be ignored for it is a raw
challenge to the authority of the Court.
"It must also be pointedly emphasized that Atty. Thomas Uy committed a brazen
violation of the provisions of Canon 16 of the Code of Professional Responsibility, to
wit: Nex old
"x x x x x x x x x
"Obviously, Atty. Thomas Uy fell short of the duties expected from him as a member
of the bar."
In compliance with this Court's March 24, 1999 Resolution, Respondent Uy [2] filed his
Comment on June 7, 1999. Denying that he violated Canon 16 of the Code of
Professional Responsibility, he explained:
"1). In a criminal case, then pending before the Regional Trial Court, Branch 121 of
Kalookan City, Metro Manila, presided by the complainant Honorable Adoracion G.
Angeles, entitled 'People of the Philippines vs. Norma Trajano, et., al', Criminal Case
No. C-54176-77 (98), Atty. Thomas C. Uy Jr., herein referred to as [r]espondent, was
engaged as [p]rivate [p]rosecutor of the complainant therein, Mrs. Primitiva
Malansin Del Rosario. At the outset Norma Trajano, accused in said criminal case,
expressed her desire and offered to settle the civil aspect of the criminal case
against her to which Primitiva Del Rosario acceded. On separate hearings, Norma
Trajano made installment payments to Primitiva Del Rosario some of which
payments were duly acknowledged by the latter in the presence of [r]espondent;
"2). On a previously cancelled date of hearing of the aforesaid criminal case x x x on
December 14, 1998, Norma Trajano went to the office of the [r]espondent at about
8:45 o'clock in the morning, x x x and met Mr. Romeo C. Jamisola Jr., who is acting
as [r]espondent's personal secretary and at the same time the liason officer of the
law firm De Veyra, Uy and Associates x x x. Mr[.] Romeo Jamisola Jr., is the lone staff
of the law firm x x x. Respondent was at that time not in the office as he was
attending a hearing before the Regional Trial Court, Branch 122, Kalookan City,
Metro Manila. x x xMani kx
"3). On the aforesaid date and time (December 14, 1998) at the office of the
[r]espondent, Norma Trajano told Mr. Romeo Jamisola Jr. that she will make another
partial payment to Primitiva M. Del Rosario because she cannot attend the hearing
the following day (8[:]30 o'clock a.m. of December 15, 1999) before Judge
Adoracion G. Angeles due to a conflict of schedule with her [other] case in the
Regional Trial Court, Branch 19, Malolos, Bulacan, where she is likewise the accused
for [e]stafa[.] Mr. Romeo Jamisola told Norma Trajano to wait for a while as he will
fetch [r]espondent at the ground floor in the sala of the Honorable Remigio E. Zari.
Respondent, upon being informed of the presence of Norma Trajano in the office of
the [r]espondent by Romeo Jamisola Jr. went to his office and Norma Trajano
immediately told [r]espondent that she knew that the setting for that day
(December 14, 1998) was previously cancelled and that she cannot attend the
hearing the following day (8[:]30 o'clock a.m. December 15, 1998) and further told
the [r]espondent that she (Norma Trajano) will make another partial payment to
Primitiva M. Del Rosario and that she will just leave her payment in the sum of
[s]ixteen [t]housand [five hundred] [p]esos (P16,500.00), Philippine [c]urrency, in
the office of the [r]espondent. Respondent then told Norma Trajano to inform
Primitiva M. Del Rosario first but Norma Trajano replied that she will just call
Primitiva [Del Rosario]. Nonetheless, [r]espondent told Romeo Jamisola Jr. to call
Primitiva Del Rosario, using the office phone, and let her talk with Norma Trajano,
and, if Primitiva Del Rosario agreed [r]espondent instructed Romeo Jamisola Jr., to
just prepare a receipt. Respondent, fearing that his case (People vs. Rommel
Senadrin et al. above-stated) might have been called in the calendar, immediately
left the office and proceeded [at] the sala of the Honorable Remigio E. Zari.
Respondent, after the hearing x x x, returned to his office and upon learning that his
signature was affixed by Romeo Jamisola Jr. upon the insistence of Norma Trajano
scolded Romeo Jamisola Jr. and for his unsuccessful attempt to contact first Primitiva
Del Rosario before receiving the sum of money left by Norma Trajano; Maniks
"4). The following day [o]n the morning of December 15, 1998 [r]espondent arrived
at his office and met Primitiva Del Rosario and her daughter Aurora Del Rosario and
immediately the trio appeared before the sala of Judge Adoracion G. Angeles in the
hearing of the Norma Trajano case. Returning [to] the office of the [r]espondent
after the hearing, Primitiva Del Rosario and Aurora Del Rosario, being earlier
informed that on December 14, 1998 Norma Trajano went [to] his office and made
partial payment in the sum of P16,500 thru Mr. Romeo Jamisola Jr., the [r]espondent
told Mr. Romeo Jamisola to get the money from the filing cabinet and while the
money in the envelope [was] being handed over to Primitiva Del Rosario, [the latter]
and her daughter x x x, however, told [r]espondent to just let the money in the sum
of P16,500.00 be kept at the office of the [r]espondent so that future payments of
Norma Trajano will be save[d] in whole and for them to avoid spending the same as
what had happened to the past installment payments of Norma Trajano. Respondent
then acceded to the request of Primitiva Del Rosario and her daughter and told
them that they can get the money anytime they want from the [r]espondent's
office. Hence, the money was kept locked [in] the filing cabinet of the [r]espondent
where he used to keep all his personal file[s]. Manikan
"5). On December 23, 1998, early before noon, Primitiva Del Rosario and her
daughter Aurora Del Rosario, on a prior invitation, attended the Christmas Party of
the office of [r]espondent and undersigned counsel. x x x Respondent, after the x x
x lunch, instructed Mr. Romeo Jamisola Jr., to give the sum of money (P16,500.00)
and for Primitiva Del Rosario to receive the same for fear of a repetition of a
burglary incident before, where some cash and minor office appliances of
undersigned were lost. Primitiva Del Rosario, however, insisted that said sum of
money be kept at the office of the [r]espondent to save in whole the installment
payments of Norma Trajano and that [was] the wish of her son Fernando 'Bong' Del
Rosario, who is a long time friend and a compadre of the [r]espondent. Respondent,
respecting the trust reposed upon him by Primitiva Del Rosario, her daughter Aurora
Del Rosario, and son Fernando Del Rosario, acceded to hold in trust the said sum of
[s]ixteen [t]housand [f]ive [h]undred (P16,500.00) [p]esos, Philippine [c]urrency,
which [was] locked and safely kept [in] the filing cabinet of the [r]espondent until
February 12, 1999; x x x;
"6). On February 10, 1999 [during] the hearing of the Norma Trajano case before the
Hon. Adoracion G. Angeles, [r]espondent appeared shortly before 10:30 o'clock in
the morning, pursuant to a 'Motion to Call Case at 10:30 o'clock in the Morning x x
x.
"7). When the said Norma Trajano [case] x x x was called on second call at 11[:]25
a.m., [i]n said February 10, 1999 hearing, respondent was first scolded by the
Honorable Court (Judge Adoracion G. Angeles) x x x [for] giving more preference to
the Metropolitan Trial Court than her Court. Resp[o]ndent, however, beg[ged the]
indulgence of the Honorable Court (Judge Adoracion G. Angeles) and explained why
[he] first attend[ed] the Mandaluyong hearing of Manny Chua's case, to wit; x x
x. Oldmis o
"8). That it was during the course of [the] litany of sermon, [i]n that hour, made by
the Honorable Court addressed to the [r]espondent that Norma Trajano x x x butted
in and informed the Honorable Court (Judge Adoracion G. Angeles) that she will be
tendering another partial payment; it was at that moment that Judge Adoracion G.
Angeles asked Norma Trajano how much had she paid Primitiva Del Rosario, and,
Norma [T]rajano answered that she had already paid P36,500.00 as full payment for
one case, and that of the P36,500, P20,000.00 was paid to Primitiva Del Rosario and
HESITANTLY said that the P16,500 was paid to the [r]espondent. Judge Angeles then
took the receipt from Norma Trajano and had it xeroxed by a personnel of the Court.
The carbon duplicate original of the Receipt, dated [D]ecember 14, 1998, showing
the receipt by the office of the [r]espondent, through Romeo Jamisola Jr., whose
printed [name] was pre[ceded] by the word 'By', indicating that he received the sum
of money on behalf of or in representation of the [r]espondent, is hereto [attached]
and marked as ANNEX '5', to form part hereof;
"9). That it was perhaps due to the belief [in] and the immediate impression of
Judge Adoracion G. Angeles [of the] answer of Norma Traiano that prompted Judge
Angeles to ask, instantaneously in a loud manner, Primitiva Del Rosario IN
TAGALOG', the question, 'NATANGGAP MO BA KAY ATTY. UY ANG PERA NA
P16,500.00?'. Primitiva Del Rosario, a seventy-year-old, who was shocked by the
tone and the manner she was asked by Judge Angeles simply just answered 'HINDI
PO, KASI GUSTO [KO] PO NA MABUO ANG PERA'. Primitiva Del Rosario, however,
tried to explain her answer 'HINDI PO' and why she did not yet [receive] the money
from the [r]espondent by raising her hand but was prevented by Judge Adoracion G.
Angeles from further answering by telling Primitiva Del Rosario to stop. With that
answer of Primitiva Del Rosario, [r]espondent butted in to explain Primitiva Del
Rosario's answer of 'HINDI PO' and her having not yet received the sum of money,
subject of the inquisition of Judge Angeles by manifesting to wit; x x x that Primitiva
Del Rosario did not get the money when x x x handed the same on December 15,
1998 because she wanted [it] to be save[d] in whole together with the future
installment payments of Norma Trajano and to be kept in the office of the
[r]espondent as wished by her son Bong Del Rosario; and, that the said sum of
money [was] kept in the filing cabinet in the office of the [r]espondent. All
explanation[s] of the [r]espondent went to x x x naught as the [r]espondent was cut
short by x x x Judge Angeles, [who] in a loud and angry voice orally directed the
[r]espondent to get the money from [r]espondent's office and give the same to
Primitiva Del Rosario. It was already 11 :45 o'clock in the morning, more or less, an
the [r]espondent was given fifteen (15) minutes to comply; [r]espondent requested
Judge Angeles to be accompanied by Primitiva Del Rosario and her daughter Aurora
Del Rosario but both were ordered to stay in court by Judge Angeles; Ncm
"10). Respondent in compliance with the oral order of Judge Angeles immediately
proceeded [to] his office but only to find out that Romeo Jamisola Jr., who [held] the
only key [to r]esponddnt's filing cabinet, was on errand x x x that morning of
February 10, 1999 [for] Atty. Angel B. De Veyra (the Undersigned Counsel) [who had
sent him] to the offices of the solicitor general in Makati City, and, the City
Prosecutor's Office of Manila to [furnish copies to] both offices; x x x;
"11). Respondent, expecting that Romeo Jamisola Jr. would [arrive] before 12[:]00
noon, x x x waited for Romeo Jamisola Jr. while at the same time called up [his] wife
to immediately [come] to his office to spare the sum of P16,500.00 as Romeo
Ja[mi]sola may not [arrive] [within] the time allotted by Judge Angeles. The wife of
respondent, however, arrived at about 12:25 P .M., more or less, ahead of Romeo
Jamisola Jr. and spared [r]espondent the sum of P16,500.00 and [r]espondent
immediately went [to] the fourth floor, where the sala of Judge Angeles [was]
located but unfortunately the session was already adjourned. Respondent then
talked to 'Armand', one 'of the court personnel and is known as the door keeper of
the chamber of Judge Angeles, and [requested that he be allowed to go inside the
chamber to show [his] compliance, though late. Respondent, however, was told by
'Armand' that Judge Angeles was on her lunch break an that it [was] better for
[r]espondent to take his lunch too and return a little later; Ncmmis
"12). At about 1:30 o'clock in the afternoon of that day (February 10, 1999)
[r]espondent returned [to] the sala of Judge Angeles together with Primitiva Del
Rosario and her daughter Aurora Del Rosario, who likewise returned to the court, to
seek an audience in [the] chamber [of] Judge Angeles. Said audience with Judge
Angeles was desired by Primitiva Del Rosario to let Judge Angeles [witness] the
giving of the money to Primitiva Del Rosario. But request[s] for the same, through
'Armand', were twice denied by Judge Angeles because at that time Judge Angeles
was being interviewed by several media personnel of some TV stations. The Del
[Rosarios], however, left earlier upon knowing that Judge Angeles denied their
request for an audience. [They] told [r]espondent that they will be back the
following day. It was only when Romeo Jamisola arrived at about 3:00 o'clock, more
or less, in the afternoon and went at the fourth floor at the premises of the sala of
Judge Angeles and informed the [r]espondent that he carried with him the key to
[r]espondent's cabinet and the presence of some [squatter] families of Batasan
Hills, Quezon City at the office of the [r]espondent, who has an appointment with
the [r]espondent, that the [r]espondent left the premises of the sala of Judge
Angeles. [sic] Respondent, at his office ordered Romeo Jamisola Jr. to open the filing
cabinet and returned to the premises of the sala of Judge Angeles alone at about
4:00 o'clock P .M. after his meeting with the squatter families. But again, his request
to 'Armand' to talk with Judge Angeles, after the media interview, was denied. At
about 5:30 o'clock in the afternoon, 'Armand', the court personnel, served the
Order, of said date, February 10, 1999 at the office of the [r]espondent;
"13). In the early afternoon of the following day, February 11, 1999, [r]espondent
together with Primitiva Del Rosario and her daughter Aurora Del Rosario went again
[to] the sala of Judge Angeles x x x to seek an audience with Judge Angeles. Their
request x x x w[as] likewise in vain. Primitiva Del Rosario, after the last attempt to
seek audience with Judge Angeles and already tired of going [to] and [from] the sala
of Judge Angeles, decided on February 12, 1999, to receive the sum of money in the
amount of P16,500.00 from the office of the [r]espondent, through, Romeo Jamisola
Jr. and executed a Sinumpaang Salaysay. x x x;
"14). The Sinumpaang Salaysay of Primitiva Del Rosario, dated February 16, 1999 as
well as the Acknowledgment Receipt, dated February 12, 199[9] was attached to a
Manifestation caused to be filed by the [r]espondent on March 3, 1999 when the
respondent was confined in Fatima Hospital in Valenzuela City, Metro Manila on
March 2, 1999; Scnc m
"15). Learning of the instant administrative case against the [r]espondent, Bong Del
Rosario, the son of Primitiva Del Rosario, upon whose wish the subject sum of
money was kept at the office of the [r]espondent to save the same in whole as well
as the future in[s]tallment payments of Norma Trajano executed a Sinumpaang
Salaysay, attesting [to] and confirming the statement of [his] mother Primitiva Del
Rosario. x x x"[3]
Stripped of unnecessary verbiage, the Comment contends that the respondent kept
the money in his office because that was the alleged wish of both his client and her
son. He allegedly informed them of such money and tried to give it to them, but
they insisted that he retain it. He further maintained that it was only after Judge
Angeles issue the February 10, 1999 Order that his client relented and accepted the
money on February 12, 1999.
After the judge filed her Reply on June 30, 1999, this Court referred the case to the
Office of the Bar Confidant for report and recommendation. The Court dispensed
with the normal referral to the Integrated Bar of the Philippines because the records
were complete and the question raised was simple. No further factual investigation
was necessary in the premises.
Bar Confidant's Report and Recommendation
Recommending that Atty. Thomas C. Uy Jr .be suspended from the practice of law
for one month, the Office of the Bar Confidant in its Report and Recommendation
dated December 15, 1999 said: Sdaa miso
"x x x [I]t is clear that it is the sworn duty of a member of the bar to be accountable,
at all times, for anything which he receives for and in behalf of his client.
"In the case at bar, this Office is more inclined to believe the story of the
complainant.
"First, it cannot be disputed that the transcript of stenographic notes is the most
reliable record of what indeed transpired (and what words were uttered by the
parties involved) on February 10, 1999 at the hearing of Crim. Case No. C-54176-77
(98). Records clearly show that the private complainant in the criminal case, when
asked by Judge Angeles as to the whereabouts of the P16,500.00, spontaneously
replied that she had no knowledge of the same; in effect saying that Atty. Uy has
not given her the subject 16,500.00. If, indeed, Primitiva Del Rosario requested Atty.
Uy to keep the money as far back as December 1998, then she should have told the
same to Judge Angeles.
"Atty. Uy's allegation that Judge Angeles prevented Primitiva Del Rosario from
saying in open court the words 'HINDI PO KASI GUSTO KO PO NA MABUO ANG PERA'
does not have any proof as nothing of that sort appears in the transcript of
stenographic notes. Atty. Uy has not even bothered to refute the truth of the
contents of the stenographic notes, all the more bolstering this Office's opinion that
the said notes are accurate and truthful. Sdaad
"Second, the affidavits executed by Primitiva Del Rosario and her son, Fernando Del
Rosario, dated February 16, 1999 and June 7, 1999, respectively, attesting to Atty.
Uy's averment that his act of personally keeping the subject P16,500.00 was with
and at their request cannot be given much credence to outweigh the arguments of
Judge Angeles. The said affidavits, both executed after February 10, 1999, are
suspect. Caught by surprise when Judge Angeles inquired of the whereabouts of his
client's money, Atty. Uy x x x resorted to seeking the help of his client to
corroborate his defense. Being the clients of Atty. Uy, Primitiva Del Rosario and her
son could have been persuaded to help extricate their counsel from the latter's
predicament.
"In the absence of any contradicting evidence to dispute the allegation that Atty. Uy
failed to immediately remit to his client the money due the latter, it is safe to
conclude that Atty. Uy has violated his sworn duty to uphold, at all times, the trust
and confidence reposed in him by his client(s).
xxxxxxxxx
"In the instant case, Atty. Uy, upon receipt of the P16,500.00 from the accused in
the criminal case, should have promptly remitted the same to his client, Primitiva
Del Rosario. Had Judge Angeles not inquired of the whereabouts of the money, the
same would have remained with Atty. Uy, to the prejudice of the latter's client." [4]
This Court's Ruling
We agree with the findings and the recommendation of the Office of the Bar
Confidant. Scs daad
Administrative Liability of Respondent
The relationship between a lawyer and a client is highly fiduciary; it requires a high
degree of fidelity and good faith. It is designed "to remove all such temptation and
to prevent everything of that kind from being done for the protection of the
client."[5]
Thus, Canon 16 of the Code of Professional Responsibility provides that "a lawyer
shall hold in trust all moneys and properties of his client that may come into his
possession." Furthermore, Rule 16.01 of the Code also states that "a lawyer shall
account for all money or property collected or received for or from the client." The
Canons of Professional Ethics is even more explicit:
"The lawyer should refrain from any action whereby for his personal benefit or gain
he abuses or takes advantage of the confidence reposed in him by his client. Sup
rema
"Money of the client collected for the client or other trust property coming into the
possession of the lawyer should be reported and accounted for promptly and should
not under any circumstances be commingled with his own or be used by him." [6]
In the present case, it is clear that respondent failed to promptly report and account
for the P16,500 he had received from Norma Trajano on behalf of his client, Primitiva
Del Rosario. Although the amount had been entrusted to respondent on December
14, 1998, his client revealed during the February 10, 1999 hearing that she had not
yet received it. Worse, she did not even know where it was.
Respondent maintains that on December 15, 1998 he informed Mrs. Del Rosario
about the payment. He further avers that he kept the money up n her instruction, as
she had allegedly wanted "future payments x x [to] be saved in whole and for them
to avoid spending the same as what had happened to the past installment
payments x x x."[7] This assertion allegedly finds support in her answer to the
question of Judge Angeles, who had asked her whether she had received the
disputed payment: "Hindi po, kasi gusto [ko] po na mabuo ang pera."
The Court is not persuaded. Respondent's assertions are contradicted by the
following transcript of stenographic notes:
"Court: This P16,500, did you turn it over to the private complainant?
Atty. Uy: No your Honor, because she wanted the full amount of the settlement.
Court: Private complainant, is it true that you did not want to accept the money?
Mrs. Del Rosario: Hindi po, sila po ang nagbigayan. Juris
Court: Hindi po ibinibigay sa inyo ni Atty. Uy?
Mrs. Del Rosario: Hindi po.
xxxxxxxxx
Court: Nasaan iyong P16,500? Huwag kayong matakot.
Mrs. Del Rosario: Aywan ko po sa kanilang dalawa."[8]
If it were true that Mrs. Del Rosario was informed about the payment and that she
entrusted it to respondent, she would have known its whereabouts. That she did not
know it showed the falsity of his claim.
It is noteworthy that respondent did not dispute the foregoing transcript although it
belied his allegation that Mrs. Del Rosario's express wish was to have the payments
in full. Sc juris
Neither are we convinced by the affidavits of Mrs. Del Rosario and her son, both of
whom affirmed their intention to have their money in the safekeeping of
respondent. It should be stressed that he was her counsel and the compadre of her
son. Moreover, the affidavits were executed after the filing of this Complaint. As the
Office of the Bar Confidant observed, these considerations militate against the
credibility of the affiants. In any event, their affidavits fail to explain adequately why
Mrs. Del Rosario, during the hearing on February 10, 1999, did not know where her
money was.
The records do not clearly show whether Attorney Uy had in fact appropriated the
said amount; in fact, Mrs, Del Rosario acknowledge that she had received it on
February 12, 1999. They do show, however, that respondent failed to promptly
report that amount to her. This is clearly a violation of his professional responsibility.
Indeed, in Aya v. Bigornia,[9] the Court ruled that money collected by a lawyer in
favor of his clients must be immediately turned over to them. In Daroy v. Legaspi,
[10]
the Court held that "lawyers are bound to promptly account for money or
property received by them on behalf of their clients and failure to do so constitutes
professional misconduct."
Verily, the question is not necessarily whether the rights of the clients have been
prejudiced, but whether the lawyer has adhered to the ethical standards of the bar.
[11]
In this case, respondent has not done so. Indeed, we agree with the following
observation of the Office of the Bar Confidant:
"Keeping the money in his possession without his client's knowledge only provided
Atty. Uy the tempting opportunity to appropriate for himself the money belonging to
his client. This situation should, at all times, be avoided by members of the bar. Like
judges, lawyers must not only be clean; they must also appear clean. This way, the
people's faith in the justice system would remain undisturbed." [12]Juris sc
In this light, the Court must stress that it has the duty to look into dealings between
attorneys and their clients and to guard the latter from any undue consequences
resulting from a situation in which they may stand unequal. [13] The present situation
calls for the exercise of this duty.
For misappropriating and failing to promptly report and deliver money they received
on behalf of their clients, some lawyers have been disbarred [14] and others have
been suspended for six months.[15] In the present case, the records merely show
that respondent did not promptly report that he received money on behalf of his
client. There is no clear evidence of misappropriation. Under the circumstances, we
rule that he should be suspended for one month.
WHEREFORE, Atty. Thomas C. Uy Jr .is hereby SUSPENDED for one month. He is
warned that a repetition of the same or similar acts will be dealt with more severely.
Let copies of this Decision be served on Atty. Thomas C. Uy Jr. at his given address
or any other known one. Copies of this Decision shall also be entered in his record
as attorney and served on the IBP, as well as the Court Administrator who shall
circulate them to all the courts in the country for their information and guidance.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur. Misj uris

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-35702 May 29, 1973

DOMINGO D. RUBIAS, plaintiff-appellant,
vs.
ISAIAS BATILLER, defendant-appellee.
Gregorio M. Rubias for plaintiff-appellant.
Vicente R. Acsay for defendant-appellee.

TEEHANKEE, J.:
In this appeal certified by the Court of Appeals to this Court as involving purely legal
questions, we affirm the dismissal order rendered by the Iloilo court of first instance
after pre-trial and submittal of the pertinent documentary exhibits.
Such dismissal was proper, plaintiff having no cause of action, since it was duly
established in the record that the application for registration of the land in question
filed by Francisco Militante, plaintiff's vendor and predecessor interest, had been
dismissed by decision of 1952 of the land registration court as affirmed by final
judgment in 1958 of the Court of Appeals and hence, there was no title or right to
the land that could be transmitted by the purported sale to plaintiff.
As late as 1964, the Iloilo court of first instance had in another case of ejectment
likewise upheld by final judgment defendant's "better right to possess the land in
question . having been in the actual possession thereof under a claim of title many
years before Francisco Militante sold the land to the plaintiff."
Furthermore, even assuming that Militante had anything to sell, the deed of sale
executed in 1956 by him in favor of plaintiff at a time when plaintiff was concededly
his counsel of record in the land registration case involving the very land in dispute
(ultimately decided adversely against Militante by the Court of Appeals' 1958
judgment affirming the lower court's dismissal of Militante's application for
registration) was properly declared inexistent and void by the lower court, as
decreed by Article 1409 in relation to Article 1491 of the Civil Code.
The appellate court, in its resolution of certification of 25 July 1972, gave the
following backgrounder of the appeal at bar:
On August 31, 1964, plaintiff Domingo D. Rubias, a lawyer, filed a suit to recover the
ownership and possession of certain portions of lot under Psu-99791 located in
Barrio General Luna, Barotac Viejo, Iloilo which he bought from his father-in-law,
Francisco Militante in 1956 against its present occupant defendant, Isaias Batiller,
who illegally entered said portions of the lot on two occasions in 1945 and in
1959. Plaintiff prayed also for damages and attorneys fees. (pp. 1-7, Record on
Appeal). In his answer with counter-claim defendant claims the complaint of the
plaintiff does not state a cause of action, the truth of the matter being that he and
his predecessors-in-interest have always been in actual, open and continuous
possession since time immemorial under claim of ownership of the portions of the
lot in question and for the alleged malicious institution of the complaint he claims
he has suffered moral damages in the amount of P 2,000.00, as well as the sum of
P500.00 for attorney's fees. ...
On December 9, 1964, the trial court issued a pre-trial order, after a pre-trial
conference between the parties and their counsel which order reads as follows..
'When this case was called for a pre-trial conference today, the plaintiff appeared
assisted by himself and Atty. Gregorio M. Rubias. The defendant also appeared,
assisted by his counsel Atty. Vicente R. Acsay.
A. During the pre-trial conference, the parties have agreed that the following facts
are attendant in this case and that they will no longer introduced any evidence,
testimonial or documentary to prove them:
1. That Francisco Militante claimed ownership of a parcel of land located in the
Barrio of General Luna, municipality of Barotac Viejo province of Iloilo, which he
caused to be surveyed on July 18-31, 1934, whereby he was issued a plan Psu-
99791 (Exhibit "B"). (The land claimed contained an area of 171:3561 hectares.)
2. Before the war with Japan, Francisco Militante filed with the Court of First Instance
of Iloilo an application for the registration of the title of the land technically
described in psu-99791 (Exh. "B") opposed by the Director of Lands, the Director of
Forestry and other oppositors. However, during the war with Japan, the record of the
case was lost before it was heard, so after the war Francisco Militante petitioned this
court to reconstitute the record of the case. The record was reconstituted on the
Court of the First Instance of Iloilo and docketed as Land Case No. R-695, GLRO Rec.
No. 54852. The Court of First Instance heard the land registration case on November
14, 1952, and after the trial this court dismissed the application for registration. The
appellant, Francisco Militante, appealed from the decision of this Court to the Court
of Appeals where the case was docketed as CA-GR No. 13497-R..
3. Pending the disposal of the appeal in CA-GR No. 13497-R and more particularly
on June 18, 1956, Francisco Militante sold to the plaintiff, Domingo Rubias the
land technically described in psu-99791 (Exh. "A"). The sale was duly recorded in
the Office of the Register of Deeds for the province of Iloilo as Entry No. 13609 on
July 11, 1960 (Exh. "A-1").
(NOTE: As per deed of sale, Exh. A, what Militante purportedly sold to plaintiff-
appellant, his son-in-law, for the sum of P2,000.00 was "a parcel of untitled land
having an area Of 144.9072 hectares ... surveyed under Psu 99791 ... (and) subject
to the exclusions made by me, under (case) CA-i3497, Land Registration Case No.
R-695, G.L.R.O. No. 54852, Court of First Instance of the province of Iloilo. These
exclusions referred to portions of the original area of over 171 hectares originally
claimed by Militante as applicant, but which he expressly recognized during the trial
to pertain to some oppositors, such as the Bureau of Public Works and Bureau of
Forestry and several other individual occupants and accordingly withdrew his
application over the same. This is expressly made of record in Exh. A, which is
the Court of Appeals' decision of 22 September 1958 confirming the land
registration court's dismissal of Militante's application for registration.)
4. On September 22,1958 the Court of appeals in CA-G.R. No. 13497-R promulgated
its judgment confirming the decision of this Court in Land Case No. R-695, GLRO
Rec. No. 54852 which dismissed the application for Registration filed by Francisco
Militante (Exh. "I").
5. Domingo Rubias declared the land described in Exh. 'B' for taxation purposes
under Tax Dec. No. 8585 (Exh. "C") for 1957; Tax Dec. Nos. 9533 (Exh. "C-1") and
10019 (Exh. "C-3")for the year 1961; Tax Dec. No. 9868 (Exh. "C-2") for the year
1964, paying the land taxes under Tax Dec. No. 8585 and 9533 (Exh. "D", "D-1", "G-
6").
6. Francisco Militante immediate predecessor-in-interest of the plaintiff, has also
declared the land for taxation purposes under Tax Dec. No. 5172 in 1940 (Exh. "E")
for 1945; under Tax Dec. No. T-86 (Exh. "E-1") for 1948; under Tax Dec. No. 7122
(Exh. "2"), and paid the land taxes for 1940 (Exhs. "G" and "G-7"), for 1945 46 (Exh.
"G-1") for 1947 (Exh. "G-2"), for 1947 & 1948 (Exh. "G-3"), for 1948 (Exh. "G-4"),
and for 1948 and 1949 (Exh. "G-5").
7. Tax Declaration No. 2434 in the name of Liberato Demontao for the land
described therein (Exh. "F") was cancelled by Tax. Dec. No. 5172 of Francisco
Militante (Exh. "E"). Liberato Demontao paid the land tax under Tax Dec. No. 2434
on Dec. 20, 1939 for the years 1938 (50%) and 1959 (Exh. "H").
8. The defendant had declared for taxation purposes Lot No. 2 of the Psu-155241
under Tax Dec. Not. 8583 for 1957 and a portion of Lot No. 2, Psu-155241, for 1945
under Tax Dec. No. 8584 (Exh. "2-A" Tax No. 8583 (Exh. "2") was revised by Tax Dec.
No. 9498 in the name of the defendant (Exh. "2-B") and Tax Dec. No. 8584 (Exh. "2-
A") was cancelled by Tax Dec. No. 9584 also in the name of the defendant (Exh. "2-
C"). The defendant paid the land taxes for Lot 2, Psu-155241, on Nov. 9, 1960 for
the years 1945 and 1946, for the year 1950, and for the year 1960 as shown by the
certificate of the treasurer (Exh. "3"). The defendant may present to the Court other
land taxes receipts for the payment of taxes for this lot.
9. The land claimed by the defendant as his own was surveyed on June 6 and
7,1956, and a plan approved by Director of Land on November 15, 1956 was issued,
identified as Psu 155241 (Exh. "5").
10. On April 22, 1960, the plaintiff filed forcible Entry and Detainer case against
Isaias Batiller in the Justice of the Peace Court of Barotac Viejo Province of Iloilo
(Exh. "4") to which the defendant Isaias Batiller riled his answer on August 29, 1960
(Exh. "4-A"). The Municipal Court of Barotac Viejo after trial, decided the case on
May 10, 1961 in favor of the defendant and against the plaintiff (Exh. "4-B"). The
plaintiff appealed from the decision of the Municipal Court of Barotac Viejo which
was docketed in this Court as Civil Case No. 5750 on June 3, 1961, to which the
defendant, Isaias Batiller, on June 13, 1961 filed his answer (Exh. "4-C"). And this
Court after the trial. decided the case on November 26, 1964, in favor of the
defendant, Isaias Batiller and against the plaintiff (Exh. "4-D").
(NOTE: As per Exh. 4-B, which is the Iloilo court of first instance decision of 26
November 1964 dismissing plaintiff's therein complaint for ejectment against
defendant, the iloilo court expressly found "that plaintiff's complaint is unjustified,
intended to harass the defendant" and "that the defendant, Isaias Batiller, has a
better right to possess the land in question described in Psu 155241 (Exh. "3"),
Isaias Batiller having been in the actual physical possession thereof under a claim of
title many years before Francisco Militante sold the land to the plaintiff-hereby
dismissing plaintiff's complaint and ordering the plaintiff to pay the defendant
attorney's fees ....")
B. During the trial of this case on the merit, the plaintiff will prove by competent
evidence the following:
1. That the land he purchased from Francisco Militante under Exh. "A" was formerly
owned and possessed by Liberato Demontao but that on September 6, 1919 the
land was sold at public auction by virtue of a judgment in a Civil Case entitled "Edw
J. Pflieder plaintiff vs. Liberato Demontao Francisco Balladeros and Gregorio Yulo,
defendants", of which Yap Pongco was the purchaser (Exh. "1-3"). The sale was
registered in the Office of the Register of Deeds of Iloilo on August 4, 1920, under
Primary Entry No. 69 (Exh. "1"), and a definite Deed of Sale was executed by
Constantino A. Canto, provincial Sheriff of Iloilo, on Jan. 19, 1934 in favor of Yap
Pongco (Exh. "I"), the sale having been registered in the Office of the Register of
Deeds of Iloilo on February 10, 1934 (Exh. "1-1").
2. On September 22, 1934, Yap Pongco sold this land to Francisco Militante as
evidenced by a notarial deed (Exh. "J") which was registered in the Registry of
Deeds on May 13, 1940 (Exh. "J-1").
3. That plaintiff suffered damages alleged in his complaint.
C. Defendants, on the other hand will prove by competent evidence during the trial
of this case the following facts:
1. That lot No. 2 of the Psu-1552 it (Exh. '5') was originally owned and possessed by
Felipe Batiller, grandfather of the defendant Basilio Batiller, on the death of the
former in 1920, as his sole heir. Isaias Batiller succeeded his father , Basilio Batiller,
in the ownership and possession of the land in the year 1930, and since then up to
the present, the land remains in the possession of the defendant, his possession
being actual, open, public, peaceful and continuous in the concept of an owner,
exclusive of any other rights and adverse to all other claimants.
2. That the alleged predecessors in interest of the plaintiff have never been in the
actual possession of the land and that they never had any title thereto.
3. That Lot No. 2, Psu 155241, the subject of Free Patent application of the
defendant has been approved.
4. The damages suffered by the defendant, as alleged in his counterclaim."' 1
The appellate court further related the developments of the case, as follows:
On August 17, 1965, defendant's counsel manifested in open court that before any
trial on the merit of the case could proceed he would file a motion to
dismiss plaintiff's complaint which he did, alleging that plaintiff does not have cause
of action against him because the property in dispute which he (plaintiff) allegedly
bought from his father-in-law, Francisco Militante was the subject matter of LRC No.
695 filed in the CFI of Iloilo, which case was brought on appeal to this Court and
docketed as CA-G.R. No. 13497-R in which aforesaid case plaintiff was the counsel
on record of his father-in-law, Francisco Militante. Invoking Arts. 1409 and 1491 of
the Civil Code which reads:
'Art. 1409. The following contracts are inexistent and void from the beginning:
xxx xxx xxx
(7) Those expressly prohibited by law.
'ART. 1491. The following persons cannot acquire any purchase, even at a public
auction, either in person of through the mediation of another: .
xxx xxx xxx
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts,
and other officers and employees connected with the administration of justice, the
property and rights of in litigation or levied upon an execution before the court
within whose jurisdiction or territory they exercise their respective functions; this
prohibition includes the act of acquiring an assignment and shall apply to lawyers,
with respect to the property and rights which may be the object of any litigation in
which they may take part by virtue of their profession.'
defendant claims that plaintiff could not have acquired any interest in the property
in dispute as the contract he (plaintiff) had with Francisco Militante was inexistent
and void. (See pp. 22-31, Record on Appeal). Plaintiff strongly opposed defendant's
motion to dismiss claiming that defendant can not invoke Articles 1409 and 1491 of
the Civil Code as Article 1422 of the same Code provides that 'The defense of
illegality of contracts is not available to third persons whose interests are not
directly affected' (See pp. 32-35 Record on Appeal).
On October 18, 1965, the lower court issued an order disclaiming plaintiffs
complaint (pp. 42-49, Record on Appeal.) In the aforesaid order of dismissal the
lower court practically agreed with defendant's contention that the contract (Exh. A)
between plaintiff and Francism Militante was null and void. In due season plaintiff
filed a motion for reconsideration (pp. 50-56 Record on Appeal) which was denied by
the lower court on January 14, 1966 (p. 57, Record on Appeal).
Hence, this appeal by plaintiff from the orders of October 18, 1965 and January 14,
1966.
Plaintiff-appellant imputes to the lower court the following errors:
'1. The lower court erred in holding that the contract of sale between the plaintiff-
appellant and his father-in-law, Francisco Militante, Sr., now deceased, of the
property covered by Plan Psu-99791, (Exh. "A") was void, not voidable because it
was made when plaintiff-appellant was the counsel of the latter in the Land
Registration case.
'2. The lower court erred in holding that the defendant-appellee is an interested
person to question the validity of the contract of sale between plaintiff-appellant
and the deceased, Francisco Militante, Sr.
'3. The lower court erred in entertaining the motion to dismiss of the defendant-
appellee after he had already filed his answer, and after the termination of the pre-
trial, when the said motion to dismiss raised a collateral question.
'4. The lower court erred in dismissing the complaint of the plaintiff-appellant.'
The appellate court concluded that plaintiffs "assignment of errors gives rise to two
(2) legal posers (1) whether or not the contract of sale between appellant and his
father-in-law, the late Francisco Militante over the property subject of Plan Psu-
99791 was void because it was made when plaintiff was counsel of his father-in-law
in a land registration case involving the property in dispute; and (2) whether or not
the lower court was correct in entertaining defendant-appellee's motion to dismiss
after the latter had already filed his answer and after he (defendant) and plaintiff-
appellant had agreed on some matters in a pre-trial conference. Hence, its elevation
of the appeal to this Court as involving pure questions of law.
It is at once evident from the foregoing narration that the pre-trial conference held
by the trial court at which the parties with their counsel agreed and stipulated on
the material and relevant facts and submitted their respective documentary exhibits
as referred to in the pre-trial order, supra, 2 practically amounted to a fulldress trial
which placed on record all the facts and exhibits necessary for adjudication of the
case.
The three points on which plaintiff reserved the presentation of evidence at the-trial
dealing with the source of the alleged right and title of Francisco Militante's
predecessors, supra, 3 actually are already made of record in the stipulated
facts and admitted exhibits. The chain of Militante's alleged title and right to the
land as supposedly traced back to Liberato Demontao was actually asserted by
Militante (and his vendee, lawyer and son-in-law, herein plaintiff) in the land
registration case and rejected by the Iloilo land registration court
which dismissed Militante's application for registration of the land. Such dismissal,
as already stated, was affirmed by the final judgment in 1958 of the Court of
Appeals. 4
The four points on which defendant on his part reserved the presentation of
evidence at the trial dealing with his and his ancestors' continuous, open, public and
peaceful possession in the concept of owner of the land and the Director of Lands'
approval of his survey plan thereof, supra, 5 are likewise already duly established
facts of record, in the land registration case as well as in the ejectment case
wherein the Iloilo court of first instance recognized the superiority of defendant's
right to the land as against plaintiff.
No error was therefore committed by the lower court in dismissing plaintiff's
complaint upon defendant's motion after the pre-trial.
1. The stipulated facts and exhibits of record indisputably established plaintiff's lack
of cause of action and justified the outright dismissal of the complaint. Plaintiff's
claim of ownership to the land in question was predicated on the sale thereof for
P2,000.00 made in 1956 by his father-in- law, Francisco Militante, in his favor, at a
time when Militante's application for registration thereof had already
been dismissed by the Iloilo land registration court and was pending appeal in the
Court of Appeals.
With the Court of Appeals' 1958 final judgment affirming the dismissal of Militante's
application for registration, the lack of any rightful claim or title of Militante to the
land was conclusively and decisively judicially determined. Hence, there was no
right or title to the land that could be transferred or sold by Militante's purported
sale in 1956 in favor of plaintiff.
Manifestly, then plaintiff's complaint against defendant, to be declared absolute
owner of the land and to be restored to possession thereof with damages was bereft
of any factual or legal basis.
2. No error could be attributed either to the lower court's holding that the purchase
by a lawyer of the property in litigation from his client is categorically prohibited by
Article 1491, paragraph (5) of the Philippine Civil Code, reproduced supra; 6 and that
consequently, plaintiff's purchase of the property in litigation from his client
(assuming that his client could sell the same since as already shown above, his
client's claim to the property was defeated and rejected) was void and could
produce no legal effect, by virtue of Article 1409, paragraph (7) of our Civil Code
which provides that contracts "expressly prohibited or declared void by law' are
"inexistent and that "(T)hese contracts cannot be ratified. Neither can the right to
set up the defense of illegality be waived."
The 1911 case of Wolfson vs. Estate of Martinez 7 relied upon by plaintiff as holding
that a sale of property in litigation to the party litigant's lawyer "is not void but
voidable at the election of the vendor" was correctly held by the lower court to have
been superseded by the later 1929 case of Director of Lands vs. Abagat. 8 In this
later case of Abagat, the Court expressly cited two antecedent cases involving the
same transaction of purchase of property in litigation by the lawyer which was
expressly declared invalid under Article 1459 of the Civil Code of Spain (of which
Article 1491 of our Civil Code of the Philippines is the counterpart) upon challenge
thereof not by the vendor-client but by the adverse parties against whom the lawyer
was to enforce his rights as vendee thus acquired.
These two antecedent cases thus cited in Abagat clearly superseded (without so
expressly stating the previous ruling in Wolfson:
The spouses, Juan Soriano and Vicente Macaraeg, were the owners of twelve parcels
of land. Vicenta Macaraeg died in November, 1909, leaving a large number of
collateral heirs but no descendants. Litigation between the surviving husband, Juan
Soriano, and the heirs of Vicenta immediately arose, and the herein appellant
Sisenando Palarca acted as Soriano's lawyer. On May 2, 1918, Soriano executed a
deed for the aforesaid twelve parcels of land in favor of Sisenando Palarca and on
the following day, May 3, 1918, Palarca filed an application for the registration of
the land in the deed. After hearing, the Court of First Instance declared that the
deed was invalid by virtue of the provisions of article 1459 of the Civil Code, which
prohibits lawyers and solicitors from purchasing property rights involved in any
litigation in which they take part by virtue of their profession. The application for
registration was consequently denied, and upon appeal by Palarca to the Supreme
Court, the judgement of the lower court was affirmed by a decision promulgated
November 16,1925. (G.R. No. 24329, Palarca vs. Director of Lands, not reported.)
In the meantime cadastral case No. 30 of the Province of Tarlac was instituted, and
on August 21, 1923, Eleuteria Macaraeg, as administratrix of the estate of Vicente
Macaraeg, filed claims for the parcels in question. Buenaventura Lavitoria
administrator of the estate of Juan Soriano, did likewise and so did Sisenando
Palarca. In a decision dated June 21, 1927, the Court of First Instance, Judge
Carballo presiding, rendered judgment in favor of Palarea and ordered the
registration of the land in his name. Upon appeal to this court by the administration
of the estates of Juan Soriano and Vicente Macaraeg, the judgment of the court
below was reversed and the land adjudicated to the two estates as conjugal
property of the deceased spouses. (G.R. No. 28226, Director of Lands vs. Abagat,
promulgated May 21, 1928, not reported.) 9
In the very case of Abagat itself, the Court, again affirming the invalidity and nullity
of the lawyer's purchase of the land in litigation from his client, ordered the
issuance of a writ of possession for the return of the land by the lawyer to the
adverse parties without reimbursement of the price paid by him and other
expenses, and ruled that "the appellant Palarca is a lawyer and is presumed to know
the law. He must, therefore, from the beginning, have been well aware of the defect
in his title and is, consequently, a possessor in bad faith."
As already stated, Wolfson and Abagat were decided with relation to Article 1459 of
the Civil Code of Spain then adopted here, until it was superseded on August 30,
1950 by the Civil Code of the Philippines whose counterpart provision is Article
1491.
Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil Code) prohibits
in its six paragraphs certain persons, by reason of the relation of trust or their
peculiar control over the property, from acquiring such property in their trust or
control either directly or indirectly and "even at a public or judicial auction," as
follows: (1) guardians; (2) agents; (3) administrators; (4) public officers and
employees; judicial officers and employees, prosecuting attorneys, and lawyers; and
(6) others especially disqualified by law.
In Wolfson which involved the sale and assignment of a money judgment by the
client to the lawyer, Wolfson, whose right to so purchase the judgment was being
challenged by the judgment debtor, the Court, through Justice Moreland, then
expressly reserved decision on "whether or not the judgment in question actually
falls within the prohibition of the article" and held only that the sale's "voidability
can not be asserted by one not a party to the transaction or his representative,"
citing from Manresa 10 that "(C)onsidering the question from the point of view of the
civil law, the view taken by the code, we must limit ourselves to classifying as void
all acts done contrary to the express prohibition of the statute. Now then: As the
code does not recognize such nullity by the mere operation of law, the nullity of the
acts hereinbefore referred to must be asserted by the person having the necessary
legal capacity to do so and decreed by a competent
court." 11
The reason thus given by Manresa in considering such prohibited acquisitions under
Article 1459 of the Spanish Civil Code as merely voidable at the instance and option
of the vendor and not void "that the Code does not recognize such nullity de
pleno derecho" is no longer true and applicable to our own Philippine Civil Code
which does recognize the absolute nullity of contracts "whose cause, object, or
purpose is contrary to law, morals, good customs, public order or public policy" or
which are "expressly prohibited or declared void by law" and declares such
contracts "inexistent and void from the beginning." 12
The Supreme Court of Spain and modern authors have likewise veered from
Manresa's view of the Spanish codal provision itself. In its sentencia of 11 June 1966,
the Supreme Court of Spain ruled that the prohibition of Article 1459 of the Spanish
Civil Code is based on public policy, that violation of the prohibition contract cannot
be validated by confirmation or ratification, holding that:
... la prohibicion que el articulo 1459 del C.C. establece respecto a los
administradores y apoderados, la cual tiene conforme a la doctrina de esta Sala,
contendia entre otras, en S. de 27-5-1959, un fundamento de orden moral lugar la
violacion de esta a la nulidad de pleno derecho del acto o negocio celebrado, ... y
prohibicion legal, afectante orden publico, no cabe con efecto alguno la
aludida retification ... 13
The criterion of nullity of such prohibited contracts under Article 1459 of the
Spanish Civil Code (Article 1491 of our Civil Code) as a matter of public order and
policy as applied by the Supreme Court of Spain to administrators and agents in its
above cited decision should certainly apply with greater reason to judges, judicial
officers, fiscals and lawyers under paragraph 5 of the codal article.
Citing the same decisions of the Supreme Court of Spain, Gullon Ballesteros, his
"Curso de Derecho Civil, (Contratos Especiales)" (Madrid, 1968) p. 18, affirms that,
with respect to Article 1459, Spanish Civil Code:.
Que caracter tendra la compra que se realice por estas personas? Porsupuesto no
cabe duda de que el caso (art.) 1459, 40 y 50, la nulidad esabsoluta porque el
motivo de la prohibicion es de orden publico. 14
Perez Gonzales in such view, stating that "Dado el caracter prohibitivo delprecepto,
la consequencia de la infraccion es la nulidad radical y ex lege." 15
Castan, quoting Manresa's own observation that.
"El fundamento do esta prohibicion es clarisimo. No sa trata con este precepto tan
solo de guitar la ocasion al fraude; persiguese, ademasel proposito de rodear a las
personas que intervienen en la administrcionde justicia de todos los retigios que
necesitan pora ejercer su ministerio librandolos de toda suspecha, que aunque
fuere in fundada, redundura endescredito de la institucion." 16 arrives at the
contrary and now accepted view that "Puede considerace en nuestro
derecho inexistente 'o radicalmente nulo el contrato en los siguentes cases: a) ...; b)
cuando el contrato se ha celebrado en violacion de una prescripcion 'o prohibicion
legal, fundada sobre motivos de orden publico (hipotesis del art. 4 del codigo) ..." 17
It is noteworthy that Caltan's rationale for his conclusion that fundamental
consideration of public policy render void and inexistent such expressly prohibited
purchase (e.g. by public officers and employees of government property intrusted to
them and by justices, judges, fiscals and lawyers of property and rights in litigation
and submitted to or handled by them, under Article 1491, paragraphs (4) and (5) of
our Civil Code) has been adopted in a new article of our Civil Code, viz, Article 1409
declaring such prohibited contracts as "inexistent and void from the beginning." 18
Indeed, the nullity of such prohibited contracts is definite and permanent and
cannot be cured by ratification. The public interest and public policy remain
paramount and do not permit of compromise or ratification. In his aspect, the
permanent disqualification of public and judicial officers and lawyers grounded
on public policy differs from the first three cases of guardians, agents and
administrators (Article 1491, Civil Code), as to whose transactions it had been
opined that they may be "ratified" by means of and in "the form of a new contact, in
which cases its validity shall be determined only by the circumstances at the time
the execution of such new contract. The causes of nullity which have ceased to exist
cannot impair the validity of the new contract. Thus, the object which was illegal at
the time of the first contract, may have already become lawful at the time of the
ratification or second contract; or the service which was impossible may have
become possible; or the intention which could not be ascertained may have been
clarified by the parties. The ratification or second contract would then be valid from
its execution; however, it does not retroact to the date of the first contract." 19
As applied to the case at bar, the lower court therefore properly acted upon
defendant-appellant's motion to dismiss on the ground of nullity of plaintiff's alleged
purchase of the land, since its juridical effects and plaintiff's alleged cause of action
founded thereon were being asserted against defendant-appellant. The principles
governing the nullity of such prohibited contracts and judicial declaration of their
nullity have been well restated by Tolentino in his treatise on our Civil Code, as
follows:
Parties Affected. Any person may invoke the in existence of the contract
whenever juridical effects founded thereon are asserted against him. Thus, if there
has been a void transfer of property, the transferor can recover it by the accion
reinvindicatoria; and any prossessor may refuse to deliver it to the transferee, who
cannot enforce the contract. Creditors may attach property of the debtor which has
been alienated by the latter under a void contract; a mortgagee can allege the
inexistence of a prior encumbrance; a debtor can assert the nullity of an assignment
of credit as a defense to an action by the assignee.
Action On Contract. Even when the contract is void or inexistent, an action is
necessary to declare its inexistence, when it has already been fulfilled. Nobody can
take the law into his own hands; hence, the intervention of the competent court is
necessary to declare the absolute nullity of the contract and to decree the
restitution of what has been given under it. The judgment, however, will retroact to
the very day when the contract was entered into.
If the void contract is still fully executory, no party need bring an action to declare
its nullity; but if any party should bring an action to enforce it, the other party can
simply set up the nullity as a defense. 20
ACCORDINGLY, the order of dismissal appealed from is hereby affirmed, with costs
in all instances against plaintiff-appellant. So ordered.
Makalintal, Zaldivar, Castro,. Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ.,
concur.