Legal Ethics Cases (Alimurung) KOMATSU INDUSTRIES INC. V.

CA
Facts:

2D 2012

National Investment and Development Corp. (NIDC) granted Komatsu Industries (Phils.), Inc. (KIPI) a direct loan of P8,000,000 and a P2,000,000 guarantee to secure PNB. As security thereof, a Deed of Real Estate Mortgage was executed by KIPI in favour of NIDC covering a parcel of land with all its improvements embraced in TCT No. 469737. KIPI then executed an Amendment of Mortgage Deed covering the same parcel of land regarding letters of credit by PNB in favour of KIPI with foreign suppliers worth US$1,564,826. Upon full payment of KIPIs account with NIDC and the 2,000,000 credit line with PNB, NIDC executed a Deed of Release and Cancellation of Mortgage. By virtue of this release, NIDC returned the owners copy of the TCT to KIPI and registered the Deed of Release with the Registry of Deed. However, PNB requested the return of the TCT due to unsettled accounts based on the subsequent amendment of the mortgage. The return was made but after a year, PNB filed for extrajudicial foreclosure of the property. KIPI contests the foreclosure saying that the release by NIDC had the effect of releasing the real estate mortgage.

Issue: W/N NIDCs Deed of Release is binding on PNB?

Held: NO. PNB was not a signatory to such agreement. It is a separate and distinct personality from NIDC. NIDC was in no position to state that Komatsus direct obligation PNB has been fully paid.

In relation to Legal Ethics: The Court reprimanded KIPI for insinuating that Padilla Law Offices used the friendship and connection of retired Justice Teodoro Padilla with the ponente of the CA decision for disposing the case in their favour as a birthday and parting gift. When the said ponente declined and unloaded case, it was still allegedly raffled to another good friend of Justice Padilla. However, based on the records, the case was directly raffled to the Second Division and there was no prior ponente to whom it was assigned.

The Court said that it should prove its charges and refrain from conduct tending to create mistrust our judicial system through innuendos on which no evidence is offered or indicated to be proffered.

HEIRS OF HERMAN REY ROMERO V. REYES

FACTS: The Heirs of the late Herman Rey Romero (Heirs) were interveners in a civil case. The subject matter is a property subject of multiply sale, in fact, sold thrice over. It was concluded when the judge rendered the decision based on a compromise agreement. Essentially, the compromise agreement ceded possession of the subject property to V.R. Gonzales Credit Enterprises Inc., (V.R. Credit ) in exchange for the Heirs and Elizabeth Reyes receiving certain sum of money. Unfortunately, the building housing the branch of RTC Bulacan was gutted by fire. Thus, the case records were burned. The Heirs filed a motion for reconstitution of the records of the case. After it was granted, the copy of the compromise agreement was submitted, bearing only on the part of Reyes. After 2 years, V.R. Credit has not complied its obligations with the complainants. They filed a motion for issuance of writ of execution. V.R. Credit moved to dismiss on the ground that it was premature and Veronica Gonzales did not sign the compromise agreement and has not been duly authorized to sign in behalf of V.R. Credit. Due to this, RTC denied the motion for execution and declared the compromise agreement to be unenforceable. Thus, the Heirs charge Atty. Venancio Reyes (counsel of V.R. Credit) of willful and intentional falsehood. Atty. Reyes denied the charge, stating that it was a valid defense in favor of his client. In addition, he cannot assert based on his personal knowledge that Gonzales actually signed the agreement. The IBP found Atty. Reyes guilty.

Legal Ethics Cases (Alimurung)

I SSUE: W/N Atty. Reyes is guilty for willful and intentional falsehood

2D 2012

RULING: Yes, he is guilty. Lawyers are guardians of truth and rule of law. When they appear before a tribunal, they must act as officers of the court. In all their dealings, they may not resort to the use of deception. The Code of Professional Responsibility bars them from committing any falsehood or misleading the court. Atty. Reyess contention that it was a valid defense in favor of his clients is untenable. Records show that Atty. Reyes participated in the negotiation of the Agreement. On several occasions, he vouched for its existence and validity. he used it as a ground to support his motion to dismiss the forcible entry case against his clients. When the Heirs submitted a copy of the Agreement, he never raised any objection. His initial defense to the writ of execution was that it was premature, implying he acceded to the Agreement. It was suspicious of him to raise the defense that Gonzales never signed the Agreement when he had no other recourse. Lawyers are obliged to protect their clients. However, their fidelity to their causes must always be within the parameters of the law. Atty. Reyes is suspended for 1 year from the practice of law.

IN RE:1989 ELECTION OF THE IBP

FACTS National Officers of the IBP were elected and were set to take their oath of office. However this was disturbed by the widespread reports received by some of the members of the court from lawyers who had witnessed or participated in the proceeding and the adverse comments published in the columns of some newspaper about the intensive electioneering and overspending by the candidates especially those running for president of the IBP (Drilon, Paculdo and Nisce). The Sc en banc decided to suspend the oath taking of the IBP officers elect and to inquire to the veracity of the reports. The court is concerned about the reported electioneering and extravagance of the campaigns of the 3 candidates for president which was in direct violation of the by-laws of the IBP. ISSUE Whether or not the candidates were in violation of the IBP by laws HELD YES IBP by-laws strict in holding that the elections of the national officers should be non-political this was not respected in the previous elections. The setting up of campaign headquarters, island hopping to solicit votes, procurement of written commitments and distribution of nomination forms, reservation of rooms, formation of tickets, slates or line ups of candidates, printing and distribution of tickets and bio-data and other acts made a political circus of the proceeding and tainted the whole election process. The candidates not only violated the IBP by-laws but also the ethics of the legal profession which imposes on all lawyers to promote respect for law and legal processes and to abstain from activities aimed at defiance of law or at lessening confidence in the legal system. The actuations of the candidates did not uphold the honor of the profession nor elevate the public esteem. Hence the court ordered to annul the previous IBP elections and amended the by-laws. The original IBP by-laws was restored giving the right to automatic succession by the Executive VP to the presidency upon expiration of the two-year term.

BERENGUER V. CARRANZA
Atty. Pedro carranza is being charged with deception; It is said that he introduced as evidence in a cadastral case an "affidavit of adjudication and transfer" executed by the mother of his client, which said that her own mother (mother of the mother of her client) had no other descendant except her, when in fact she had 5 other kids. Carranza raises the defense that he had nothing to do with the preparation of the affidavit. The report of the solicitor general confirmed that Carranza had nothing to do with it. However, respondent testified as to his being not very meticulous about the petition because there was neither private nor government opposition thereto; "actually, respondent's failure to read the affidavit proves that he did not properly inform himself of the evidence he was going to present in court, thereby exhibiting an indifference to proof inconsistent with facts he definitely knows. Thus, respondent has contributed to confusion and the prolongation of the cadastral suit, which pends as a petition for Relief...." (Solgen's report). "There is something unique in this proceeding then. With the finding of the then Solicitor General Barredo that there was nothing wilful in the conduct pursued by respondent in thus introducing in evidence the Affidavit of Adjudication and Transfer which turned out to be false, in the preparation of which, however, he had nothing to do, the charge of deliberate deception obviously cannot be sustained." But..."(w)ould that of itself entirely exculpate him from any responsibility? The answer must be in the negative. As was correctly pointed out in the complaint, his failure to exercise greater care did result in the "confusion and prolongation of the cadastral suit." Under the circumstances, it would be to err on, the side of undue leniency if he would be held blameless. He had incurred liability. His fidelity to his oath as attorney was less than entire." Even if there be no intent to deceive, therefore, a lawyer whose conduct, as in this case, betrays inattention or carelessness should not be allowed to free himself from a charge thereafter instituted against him by the mere plea that his conduct was not wilful and that he has not consented to the doing

Legal Ethics Cases (Alimurung)

of the falsity. REPRIMANDED and WARNED.

2D 2012

MUNOZ V. PEOPLE
This case is a Supreme Court Resolution of an administrative charge against Atty. Delia Sutton.

Respondent, Delia T. Sutton, a member of the Philippine Bar, connected with the law firm of Salonga, Ordoez, Yap, Parlade, and Associates, must be held accountable for failure to live up to that exacting standard expected of counsel, more specifically with reference to a duty owing this Tribunal. She failed to meet the test of candor and honesty required of pleaders when, in a petition for certiorari prepared by her to review a Court of Appeals decision, she attributed to it a finding of facts in reckless disregard, to say the least, of what in truth was its version as to what transpired. When given an opportunity to make proper amends, both in her appearance before us and thereafter in her memorandum, there was lacking any showing of regret for a misconduct so obvious and so inexcusable. Such an attitude of intransigence hardly commends itself. Her liability is clear.

Hearing was held on the same year. A "Joint Apology to the Supreme Court" was filed on December 1, 1971, signed jointly by Sedfrey A. Ordoez (supervisor of Sutton) and Delia Sutton.

The Court found that the "Joint Apology" thus offered did mitigate to some extent the liability of respondent Sutton. Some members of the Court feel, however, that it does not go far enough. While expressing regret and offering apology, there was lacking that free admission that what was done by her should not characterized merely as "errors" consisting as they do of "inaccurate statements." If there were a greater sincerity on her part, the offense should have been acknowledged as the submission of deliberate misstatements. There ought to be, for the apology to gain significance, no further attempt at minimizing the enormity of the misdeed.

Even with due recognition then that counsel is expected to display the utmost zeal in defense of a client's cause, it must never be at the expense of deviation from the truth. As set forth in the applicable Canon of Legal Ethics: "Nothing operates more certainly to create or to foster popular prejudice against lawyers as a class, and to deprive the profession of that full measure of public esteem and confidence which belongs to the proper discharge of its duties than does the false claim, often set up by the unscrupulous in defense of questionable transactions, that it is the duty of the lawyer to do whatever may enable him to succeed in winning his client's cause." What is more, the obligation to the bench, especially to this Court, for candor and honesty takes precedence. It is by virtue of such considerations that punishment that must fit the offense has to be meted out to respondent Delia T. Sutton.

ARTIAGA JR. V. VILLANUEVA

Facts: This case is about the disbarment case filed by Artiaga against Villanueva for alleged unethical practices. The case started with the controversy over 2 parcel of lands with revocable permit applications, originally the permits belong to a certain Malabayabas and Suyo, which was later on sold to the client of Artiaga. However on a later date, when the client of Villanueva filed for revocable permit application it was found out that the area being claimed has already been titled to the client of Artiaga. Hence the dispute was brought to the Bureau of Lands for decision. Initially the Director of Lands rendered a decision in favour of the client of Artiaga, however it was appealed by Villanueva and the decision was change, after another appeal the final decision was in favour of the client of Artiaga. The decision being final and executory an order of execution was issued however the client of Villanueva remained in possession of the said parcel of lands. Thereafter a series of motions and case where filed by Villanueva as a dilatory tactics to seek a favourable ruling.

Legal Ethics Cases (Alimurung)

Issue: Whether or not the acts of Villanueva is considered unethical. Ruling:

2D 2012

The court ruled that acts of Atty. Villanueva is in violation of his oath that he wll do no falsehood nor consent to doing of any in court. According to the court it was clear that atty. Villanueva caused his client to commit perjury so that the forceful entry case will fall under the jurisdiction of the court, this is shown by the intentional amendment to the original complaint par 5, wherein under the original complaint the time line was 1960, while on the amended complaint the time stated is 1973, the court state that the reason for such change is so that the action may still be filed or entertained by the court, since the action prescribes one year after accrual of cause of action. The court further states that it is expected that a lawyer will defend the clients cause with zeal, however in doing so it should not disregard its duty to the court and the truth. Due to his actions the client was in another case charged with perjury, which is detrimental to the client. The court also found that atty. Villanueva is guilty of lack of condor and respect for the court and the rights of his adversary, as shown in the case, the client of Artiaga has already won the case, however Villanueva filed urgent ex-parte motions and instead of waiting for the result of such, he perfected his appeal, thus further delaying the implementation of the first lawful order of the court. Furthermore when his appeal was denied, Villanueva turned to other venues such as CAR for positive results, in doing so he did not disclose of the prior proceedings that was held in the court thus securing an ex-parte proceeding. In this case the court found Villanueva guilty of forum shopping.

OCCENA V. MARQUEZ
Facts Petitioners, Atty. Jesus V. Occea and Atty. Samuel C. Occea, are the lawyers for the estate executrix, Mrs. Necitas Ogan Occea, and they had been representing the said executrix since 1963, defending the estate against claims and protecting the interests of the estate. In order to expedite the settlement of their deceased father's estate. Petitioners filed a Motion for Partial Payment of Attorneys' Fees, dated November 18, 1965, asking the court to approve payment to them of P30,000.00, as part payment of their fees for their services as counsel for the executrix since 1963, and to authorize the executrix to withdraw the amount from the deposits of the estate and pay petitioners. Respondent Judge issued an order fixing the total fees of petitioners for the period March, 1963 to December, 1965 at P20,000.00. Petitioners moved to reconsider that order. On January 12, 1967, respondent issued an order not only denying petitioners' Motion for Reconsideration but also modifying the original order by fixing petitioners' fees for the entire testate proceedings at P20,000.00. Also, petitioners have filed petitions for indirect contempt of court against intervenor I. V. Binamira charging the latter of having made false averments in this Court. Held The rule is that when a lawyer has rendered legal services to the executor or administrator to assist him in the execution of his trust, his attorney's fees may be allowed as expenses of administration. The estate is, however, not directly liable for his fees, the liability for payment resting primarily on the executor or administrator. If the administrator had paid the fees, he would be entitled to reimbursement from the estate. The procedure to be followed by counsel in order to collect his fees is to request the administrator to make payment, and should the latter fail to pay, either to (a) file an action against him in his personal capacity, and not as administrator, or (b) file a petition in the testate or intestate proceedings asking the court, after notice to all the heirs and interested parties, to direct the payment of his fees as expenses of administration. Whichever course is adopted, the heirs and other persons interested in the estate will have the right to inquire into the value, of the services of the lawyer and on the necessity of his employment. In the case at bar, petitioner filed his petition directly with the probate court. We find no rule of law or of ethics which would justify the conduct of a lawyer in any case, whether civil or criminal, in endeavoring by dishonest means to mislead the court, even if to do so might work to the advantage of his client. The conduct of the lawyer before the court and with other lawyers should be characterized by candor and fairness. It is neither candid nor fair for a lawyer to knowingly make false allegations in a judicial pleading or to misquote the contents of a document, the testimony of a witness, the argument of opposing counsel or the contents of a decision. Before his admission to the practice of law, he took the solemn oath that he will do no falsehood nor consent to the doing of any in court, nor wittingly or willingly promote or sue any false, groundless or

Legal Ethics Cases (Alimurung)

2D 2012

unlawful suit, and conduct himself as a lawyer with all good fidelity to courts as well as to his clients. We find that Atty. Binamira, in having deliberately made these false allegations in his pleadings, has been recreant to his oath. Atty. Isabelo V. Binamira, who appeared as intervenor in this case, is hereby declared guilty of contempt and sentenced to pay to this Court within ten (10) days from notice hereof a fine in the sum of Five Hundred Pesos (P500.00). Costs against intervenor.

QUASHA V. JUAN
FACTS: A sea vessel, MV San Vicente - registered in the Philippines, was chartered by foreigners and foreign companies to deliver cargo from Sweden to Jeddah, Saudi Arabia. The payment scheme was supposed to be by time charter. Payment would have been in the amount of US $ 3,200 a day. However, after two months, the foreigners failed to pay the daily hire. It had docked in Jeddah but did not unload its cargo due to the fact of non-payment. Filipinas Carriers (FILCAR) exercised its lien over the goods transported as per the Charter Party (their contract). FILCAR asked to court for sale of the goods in the ship to satisfy the debt of the foreign companies to them. Later, the law firm of Quasha Asperilla Ancheta Valmonte Pea & Marcos intervened in the case on behalf of the agent of some of the foreign companies/defendants of the case. The agents name was Ahmed Baroom and he was supposedly the agent of AB Charles Thorburn & Co. and some companies in Saudi Arabia. Later, Baroom withdrew from pursuing the case but he failed to pay his lawyers (Quasha). The law firm of Quasha then filed a writ of preliminary attachment in a different CFI (Pasig the original case was in the CFI of Manila) claiming that it has a right to a portion of the goods as payment for its attorneys fees. The goods however have already been sold by the respondent court, the law firm now goes after the proceeds of the sale.

ISSUE: W/N Quasha is entitled to a portion of the goods or its proceeds?

RULING: No. The law firm should have pursued its claim to attorneys fees in the same court as an intervention petition for recovery of attorneys fees. The respondent CFI of Manila had already acquired jurisdiction over the goods as the case pending with it was already deciding upon the question of who the real owner of the cargo was. In filing with another CFI, multiplicity of suits occurred. The charging lien filed in Pasig was erroneous, an intervention petition for recovery of attorneys fees in the CFI of Manila was the proper action that should have been taken. This negligence by the law firm entitles it to no relief, the instant petition must be dismissed. Besides the goods have already been sold and delivered to a foreign buyer, the court has lost jurisdiction over it. Everything is already fait accompli (already done and beyond alteration).

SURIGAO V, CLORIBEL

Facts: Note -- There are two contempt cases here involving two different sets of people First Contempt case: The Supreme Court rendered a decision against MacArthur International Minerals Corp and in their third Motion for Reconsideration, Attys. Vicente Santiago and John Beltran Sotto made use of language that are disrespectful and contemptuous to the Court like "it seems many of our judicial authorities believe they are chosen messengers of God", "corrupt in its face" and insinuating favoritism and partisanship of the members of the Court, notably Chief Justice Concepcion and Justice Castro due to alleged interest in the case (Castro's brother works for one of the parties). Santiago and Castro wanted for the two justices to inhibit themselves in the MR. The Court demanded for Santiago and Sotto to "show cause" why they shouldn't be cited in contempt for the said statements. Santiago insisted that the statements he made were inadvertently included in the copy sent to the Court, and was just intended to be in the MR's rough draft. Second Contempt case:

Legal Ethics Cases (Alimurung)

2D 2012

Counsel for MacArthur drafted a fourth motion for reconsideration, this time with Atty. Juanito M. Caling as counsel, and again contained language which the Court found disrespectful. The MR assailed the decision penned by CJ Concepcion since he was out of town when the decision was written and included seeming threats of elevating the issue to the World Court and allegations of rise of graft and corruption in the judiciary. The Court demanded Caling to also "show cause" and he said that it the motion was already prepared by Santiago when he took the case as was verified by Morton Meads, an employee from MacArthur. Issue:

W/N the lawyers should be cited in contempt? Held: 1st case: YES. The language employed by Santiago and Sotto degrades the administration of justice which trangresses Section 3 (d) of Rule 71 of the Rules of Court as well as Sec. 20 (f) of Rule 138 of the RoC which states that "a lawyer's language should be dignified in keeping with the dignity of the legal profession". They are also expected to observe and maintain the respect due to the courts of justice and judicial officers but their acts resulted in the contrary and are intended to create and atmosphere of distrust. The inadvertence of Santiago's use of words can't be used as a shield to absolve him of any misdeeds. 2nd case: YES. Even if the idea of the language used in the 4th MR came from Meads, both Santiago and Caling should've adhered to Canon 16 of the Code of Legal Ethics wherein "a lawyer should use his best efforts to restrain and to prevent his clients from doing those things which a lawyer himself ought not to do, particularly with reference to their conduct towards courts, judicial officers, jurors, witnesses and suitors. If a client persists in such wrongdoing, the lawyer should terminated their relation". Santiago is also liable here since Caling's represent didn't divest him of his capacity as counsel for MacArthur.

ADEZ REALTY INC. V CA

FACTS: In a petition for reconstitution of title over a parcel of land, Atty. Dacanay cites Section 13 of R.A. 26 which provides that notice should be given to the occupants or persons in possession of the property. Compliance is a material requirement for granting petition for reconstitution of title. However, when he cited the decision of the CA in Adez Realty v. Honorable Judge of RTC Morong Rizal, the phrase without notice to the actual occupants of the property, Adez Realty was omitted. Thus, the court directed Atty. Dacanay to show cause when he should not be disciplined. Atty. Dacanay reasoned that it was a practice for him to dictate to this secretary, Alicia Castro. And if portions of decision have to be quoted, he simply instructs her to copy the particular pages. Basically, he was saying it was the secretarys fault for omitting the phrase. An affidavit of Castro was also given in court, supporting his defense. ISSUE: W/N Atty. Dacanay is guilty of falsification of judicial record. RULING: Yes, he is guilty. Making the law office secretary, clerk or messenger the scapegoat for any mistake is a common alibi of practicing lawyers. Also, it is also suspicious that a secretary could have omitted the phrase without notice to the actual occupants of the property, Adez Realty, without the counsel dictating it word for word and when it is an essential element to the original case. Lawyers are duty-bound to check, review and recheck the allegations in their pleadings, more particularly the quoted portions to ensure their accuracy. If the client is bound by the acts of the counsel, with more reason should the counsel be bound by the acts of his secretary who merely follows his orders. In this case, there was not merely a mere carelessness on Atty. Dacanays part, but also a malicious attempt to gain undue advantage in the original case. Rule 10.02 of the CPR directs that a lawyer shall not knowingly misquote or misrepresent the contents of a paper or the text of a decision or authority. The distortion of the CA ruling is a grave offense and should not be treated lightly because it is an attempt to misguide the last forum for appeal, the SC. Atty. Dacanay is disbarred

Legal Ethics Cases (Alimurung)

2D 2012