Spouses Yu vs Palana

Facts: Complainants met a certain Mr. Mark Anthony U. Uy (Mr.

Uy) who introduced himself as the Division Manager of Wealth
Marketing and General Services Corporation (Wealth Marketing).
Mr. Uy persuaded the complainants, together with other investors,
to invest a minimum amount of P100,000.00 or its dollar
equivalent with said company. They were made to believe that
the said company had the so-called "stop-loss mechanism". It
turned out, however, that Wealth Marketings promises were false
and fraudulent. They discovered that Wealth Marketing had
already ceased its operation and a new corporation was formed
named Ur-Link Corporation (Ur-Link) which supposedly assumed
the rights and obligations of the former. Complainants proceeded
to Ur-Link office where they met the respondent. As Wealth
Marketings Chairman of the Board of Directors, respondent
assured the complainants that Ur-Link would assume the
obligations of the former company. To put a semblance of validity
to such representation, respondent signed an Agreement to that
effect which, again, turned out to be another ploy to further
deceive the investors. This prompted the complainants to send
demand letters to Wealth Marketings officers and directors which
remained unheeded. They likewise lodged a criminal complaint for
syndicated estafa against the respondent and his co-accused.
Despite the standing warrant for his arrest, respondent went into
hiding and has been successful in defying the law, to this date
Issues W/N respondent should be disbarred
Held: Yes. The fact that the criminal case against the respondent
involving the same set of facts is still pending in court is of no
moment. Respondent, being a member of the bar, should note
that administrative cases against lawyers belong to a class of
their own. They are distinct from and they may proceed
independently of criminal cases. A criminal prosecution will not

constitute a prejudicial question even if the same facts and

circumstances are attendant in the administrative proceedings.
Section 27, Rule 138 of the Rules of Court provides:
A member of the bar may be disbarred or suspended from his
office as attorney by the Supreme Court for any deceit,
malpractice, or other gross misconduct in such office, grossly
immoral conduct, or by reason of his conviction of a crime
involving moral turpitude, or for any violation of the oath which he
is required to take before admission to practice, or for a willful
disobedience of any lawful order of a superior court, or for
corruptly or willfully appearing as an attorney for a party to a case
without authority to do so
The Court notes that this is not the first time that respondent is
facing an administrative case, for he had been previously
suspended from the practice of law in Samala v. Palaa and Sps.
Amador and Rosita Tejada v. Palaa. In Samala, respondent also
played an important role in a corporation known as First Imperial
Resources Incorporated (FIRI), being its legal officer. As in this
case, respondent committed the same offense by making himself
part of the money trading business when, in fact, said business
was not among the purposes for which FIRI was created.
Respondent was thus meted the penalty of suspension for three
(3) years with a warning that a repetition of the same or similar
acts would be dealt with more severely. Likewise, in Tejada, he
was suspended for six (6) months for his continued refusal to
settle his loan obligations
Samala vs Palana
Facts: Complainant was looking for a company where he could
invest his dollar savings. Respondent assured him that through
FIRI he would be directly putting his investment with Eastern
Vanguard Forex Limited, a reputable company based in the Virgin
Islands which has been in the foreign exchange business for 13

years. Due to the personal representations and assurances of

respondent, Agustin, and Bernal, complainant was convinced and
he invested his dollar savings. Subsequently, complainant
decided to pull out his investment. On April 15, 2001,
complainant asked Agustin when his money would be returned.
Agustin told him that the request was sent to Thomas Yiu of
Eastern Vanguard at Ortigas Center. Complainant went to see
Thomas Yiu at his office. Yiu was surprised when he saw the
documents involving complainant's investment. Yiu phoned
Agustin and demanded an explanation as to where the money
was. Agustin said that he would return complainant's investment
at FIRI's office in Makati. On the same day, in the presence of
respondent, Agustin delivered to complainant a check in the
amount of P574,045.09, as the peso equivalent of complainant's
investment with FIRI. On May 2, 2001, the said check was
dishonored because it was drawn against insufficient funds.
Complainant informed respondent of the dishonor of the check.
Respondent assured him that the check would be replaced. On
June 1, 2001, respondent, as legal officer of FIRI, gave
complainant P250,000 in cash and a check in the amount
of P329,045.09. Respondent told complainant that the check was
signed by FIRI President Paul Desiderio in his (respondent's)
presence and assured complainant that the check would be
funded. But on June 28, 2001, the check was dishonored because
it was drawn against insufficient fund. In an Order dated January
27, 2003, Director for Bar Discipline Victor C. Fernandez required
respondent to submit his Answer to the Complaint within 15 days
from receipt thereof. Despite receipt of said order as evidenced by
a registry return receipt dated February 3, 2003, respondent did
not submit an Answer. The case was referred to Commissioner
Lydia A. Navarro of the Commission on Bar Discipline for
investigation. Respondent failed to appear when the case was set
for hearing on April 8, 2003, despite due notice. Hence,

respondent was declared in default and the case was heard ex

parte.
Issue: W/N respondent should be suspended from the practice of
law
Held: Yes. The Code of Professional Responsibility mandates that
"a lawyer shall at all times uphold the integrity and dignity of the
legal profession. To this end, nothing should be done by any
member of the legal fraternity which might tend to lessen in any
degree the confidence of the public in the fidelity, honesty and
integrity of the profession. In this case, respondent assured
complainant that by investing his dollar savings with FIRI, his
investment was in a stable company, even if, as it was later
discovered, the by-laws of FIRI prohibited it from engaging in
investment or foreign exchange business and its primary purpose
is "to act as consultant in providing professional expertise and
reliable data analysis related to partnership and so on."
When complainant decided to withdraw his investment from FIRI,
the first check given to him in the amount of his total investment
bounced. Thereafter, respondent, as legal officer of FIRI, gave
complainant P250,000 in cash and a check for P329,045.09.
Respondent assured complainant that the second check was a
"good check" and that it was signed by Paul Desiderio, the alleged
president of FIRI. However, the said check bounced because it
was drawn against insufficient funds, and the drawer of the check,
Paul Desiderio, could not be located when sought to be served a
warrant of arrest since his identity was unknown and his
residential address was found to be non-existent.
Hence, it is clear that the representations of respondent as legal
officer of FIRI caused material damage to complainant. In so
doing, respondent failed to uphold the integrity and dignity of the
legal profession and lessened the confidence of the public in the
honesty and integrity of the same.

Spouses Tejada vs Palana

Facts: Respondent lawyer Antoniutti K. Palana taking advantage
of his special knowledge as a lawyer represented to the
petitioners that he has an alleged parcel of land covered by
Transfer Certificate of Title No. (73196) 16789 and that he needs
an amount of One Hundred Thousand Pesos (P100,000.00) so that
he could reconstitute the torrens title on the same. Respondent
then induced by sweet promises and assurances petitioners
spouses to finance such undertaking with a solemn commitment
on his part that after he has already reconstituted such torrens
title, he will deliver the same to the petitioners spouses as
security for the amount they had financed. However, after
respondent lawyer, Antoniutti K. Palana had gotten the
P100,000.00 amount from the petitioner spouses, respondent
from that time on up to the present had intentionally evaded the
performance of his due, just, legal and demandable obligations to
petitioner spouses.It turned out that all his assurances that he
had a torrens title, he will reconstitute the same and deliver an
amount of P170,000.00 to petitioner spouses were all fraudulent
representations on his part or else were only fictitious in character
to defraud petitioner spouses of their hard owned monies. Despite
due notice, respondent failed to file his answer to the complaint
as required by the Commission on Bar Discipline of the IBP.
Respondent likewise failed to appear on the scheduled date of the
mandatory conference despite due notice
Issue: W/N respondent should be suspended
Held: Yes. Respondent, like all other members of the bar, is
expected to always live up to the standards embodied in the Code
of Professional Responsibility, particularly the following Canons,
viz:

CANON 1 A lawyer shall uphold the constitution, obey the laws

of the land and promote respect for law and for legal processes.
Rule 1.01 A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
Rule 1.02 A lawyer shall not counsel or abet activities aimed at
defiance of the law or at lessening confidence in the legal system.
CANON 7 A lawyer shall at all times uphold the integrity and
dignity of the legal profession, and support the activities of the
Integrated Bar.
Rule 7.03 A lawyer shall not engage in conduct that adversely
reflects on his fitness to practice law, nor should he, whether in
public or private life, behave in a scandalous manner to the
discredit of the legal profession.
Membership in the bar is a privilege burdened with conditions. A
high sense of morality, honesty, and fair dealing is expected and
required of a member of the bar. Rule 1.01 of the Code of
Professional Responsibility provides that "a lawyer shall not
engage in unlawful, dishonest, immoral or deceitful conduct." The
nature of the office of a lawyer requires that s/he shall be of good
moral character. This qualification is not only a condition
precedent to the admission to the legal profession, but its
continued possession is essential to maintain ones good standing
in the profession. In the instant case, respondents unjustified
withholding of petitioners money years after it became due and
demandable demonstrates his lack of integrity and fairness, and
this is further highlighted by his lack of regard for the charges
brought against him. Instead of meeting the charges head on,
respondent did not bother to file an answer nor did he participate
in the proceedings to offer a valid explanation for his conduct.

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

BLANDINA GAMBOA HILADO, petitioner,
vs.
JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB
ASSAD and SELIM JACOB ASSAD, respondents.
Facts: Petitioner alleged that she and the counsel for the
defendant had an attorney-client relationship with her when,
before the trial of the case, she went to defendants counsel, gave
him the papers of the case and other information relevant
thereto, although she was not able to pay him legal fees. That
respondents law firm mailed to the plaintiff a written opinion over
his signature on the merits of her case; that this opinion was
reached on the basis of papers she had submitted at his office;
that Mrs. Hilado's purpose in submitting those papers was to
secure Attorney Francisco's professional services. Atty. Francisco
appeared as counsel for defendant and plaintiff did not object to it
until (4) months after. Then, plaintiff moved to dismiss the case
between her and defendant.
Issue: Was there an attorney-client relationship between plaintiff
and Atty. Francisco?
Held: YES. In order to constitute the relation a professional one
and not merely one of principal and agent, the attorneys must be
employed either to give advice upon a legal point, to prosecute or
defend an action in court of justice, or to prepare and draft, in
legal form such papers as deeds, bills, contracts and the like.
To constitute professional employment it is not essential that the
client should have employed the attorney professionally on any
previous occasion. It is not necessary that any retainer should
have been paid, promised, or charged for; neither is it material
that the attorney consulted did not afterward undertake the case

about which the consultation was had. If a person, in respect to

his business affairs or troubles of any kind, consults with his
attorney in his professional capacity with the view to obtaining
professional advice or assistance, and the attorney voluntarily
permits or acquiesces in such consultation, then the professional
employment must be regarded as established.
An attorney is employed-that is, he is engaged in his professional
capacity as a lawyer or counselor-when he is listening to his
client's preliminary statement of his case, or when he is giving
advice thereon, just as truly as when he is drawing his client's
pleadings, or advocating his client's cause in open court. An
acceptance of the relation is implied on the part of the attorney
from his acting in behalf of his client in pursuance of a request by
the latter.
That only copies of pleadings already filed in court were furnished
to Attorney Agrava and that, this being so, no secret
communication was transmitted to him by the plaintiff, would not
vary the situation even if we should discard Mrs. Hilado's
statement that other papers, personal and private in character,
were turned in by her. Precedents are at hand to support the
doctrine that the mere relation of attorney and client ought to
preclude the attorney from accepting the opposite party's retainer
in the same litigation regardless of what information was received
by him from his first client.
An attorney, on terminating his employment, cannot thereafter
act as counsel against his client in the same general matter, even
though, while acting for his former client, he acquired no
knowledge which could operate to his client's disadvantage in the
subsequent adverse employment
"A retaining fee is a preliminary fee given to an attorney or
counsel to insure and secure his future services, and induce him

to act for the client. It is intended to remunerate counsel for being

deprived, by being retained by one party, of the opportunity of
rendering services to the other and of receiving pay from him,
and the payment of such fee, in the absence of an express
understanding to the contrary, is neither made nor received in
payment of the services contemplated; its payment has no
relation to the obligation of the client to pay his attorney for the
services which he has retained him to perform."

Junio v Grupo
Facts:
Rosario Junio entrusted to Atty. Salvador Grupo, P25,000 to be
used in the redemption of a property in Bohol. For no reason at
all, Atty. Grupo did not redeem the property so the property was
forfeited. Because of this, Junio wanted the money back but
Grupo refused to refund. Instead, Grupo requested that he use the
money to help defray his childrens educational expenses. It was a
personal request to which Grupo executed a PN. He maintains
that the family of the Junio and Grupo were very close since
Junios sisters served as Grupos household helpers for many
years. Grupo also stated that the basis of his rendering legal
services was purely gratuitous or an act of a friend for a friend
with consideration involved. He concluded that there was no
atty-client relationship existing between them.
The case was referred to the IBP and found Grupo liable for
violation of Rule 16.04 of the Code of Profesisonal Responsibility
which forbids lawyers from borrowing money from their clients.
The IBP Board of Governors recommended that he be suspended
indefinitely from the practice of law. Grupo filed a motion for
reconsideration.

Issue:
Whether or not there was an atty-client relationship.
Held:
Yes. If a person, in respect to his business affairs, consults with an
attorney in his professional capacity and the attorney voluntarily
permits in such consultation, then the professional employment
must be regarded as established.
Having gained dominance over Junio by virtue of such long
relation of master and servant, Grupo took advantage of his
influence by not returning the money. Grupo has committed an
act which falls short of the standard conduct of an attorney. If an
ordinary borrower of money is required by law to repay his loan, it
is more so in the case of a lawyer whose conduct serves as an
example.
*SC orders Grupo suspended from the practice of law for a month
and to pay Junio within 30 days with interest at the legal rate.
* Note: 5 yrs. has already passed since the loan.

Paras v. Paras
Facts: On May 21, 1964, petitioner Rosa Yap married respondent
Justo J. Paras in Bindoy, Negros Oriental. They begot four (4)
children, namely: Raoul (deceased), Cindy Rose (deceased),
Dahlia, and Reuel. Twenty-nine (29) years thereafter, or on May
27, 1993,Rosa filed with the Regional Trial Court (RTC), Branch 31,
Dumaguete City, a complaint for annulment of her marriage with
Justo,under Article 36 of the Family Code, docketed as Civil Case
No. 10613. She alleged that Justo is psychologically incapacitated
to exercise the essential obligations of marriage as shown by the

following circumstances: (a) he dissipated her business assets

and forged her signature in one mortgage transaction; (b) he lived
with a concubine and sired a child with her; (c) he did not give
financial support to his children; and (d) he has been remiss in his
duties both as a husband and as a father. She met Justo in 1961 in
Bindoy. She was then a student of San Carlos University, Cebu
City. He courted her, frequently spending time at her "Botica."
Eventually, in1964 convinced that he loved her, she agreed to
marry him. Their wedding was considered one of the "most
celebrated" marriages in Bindoy. Sometime in 1975, their
daughter Cindy Rose was afflicted with leukemia. It was her family
who paid for her medication. Also, in 1984, their son Raoul was
electrocuted while Justo was in their rest house with his
"barkadas." He did not heed her earlier advice to bring Raoul in
the rest house as the latter has the habit of climbing the rooftop.
To cope with the death of the children, the entire family went to
the United States. However, after three months, Justo abandoned
them and left for the Philippines. Upon her return to the
Philippines, she was shocked to find her "Botica" and other
businesses heavy in debt and he disposed without her consent a
conjugal piece of land. At other times, he permitted the municipal
government to take gasoline from their gas station free of charge.
His act of maintaining a mistress and siring an illegitimate child
was the last straw that prompted her to file the present case. She
found that after leaving their conjugal house in 1988, Justo lived
with Jocelyn Ching. Their cohabitation resulted in the birth of a
baby girl, Cyndee Rose, obviously named after her (Rosa) and
Justos deceased daughter Cindy Rose Paras. He also denied
forging her signature in one mortgage transaction. He maintained
that he did not dispose of a conjugal property and that he and
Rosa personally signed the renewal of a sugar crop loan before
the banks authorized employee. He did not abandon his family in
the United States. For his part, he was granted only three (3)
months leave as municipal mayor of Bindoy, thus, he immediately

returned to the Philippines. He spent for his childrens education.

At first, he resented supporting them because he was just starting
his law practice and besides, their conjugal assets were more
than enough to provide for their needs. He admitted though that
there were times he failed to give them financial support because
of his lack of income. What caused the inevitable family break-out
was Rosas act of embarrassing him during his birthday
celebration in 1987. She did not prepare food for the guests.
When confronted, she retorted that she has nothing to do with his
birthday. This convinced him of her lack of concern. This was
further aggravated when she denied his request for engine oil
when his vehicle broke down in a mountainous and NPA-infested
area. As to the charge of concubine, he alleged that Jocelyn Ching
is not his mistress, but her secretary in his Law Office. She was
impregnated by her boyfriend, a certain Grelle Leccioness.
Cyndee Rose Ching Leccioness is not his daughter. After trial or on
February 28, 1995, the RTC rendered a Decision upholding the
validity of the marriage. It found that: (a) Justo did not abandon
the conjugal home as he was forced to leave after Rosa posted
guards at the gates of their house; (b) the conjugal assets were
sufficient to support the family needs, thus, there was no need for
Justo to shell out his limited salary; and (c) the charge of infidelity
is unsubstantiated. The RTC observed that the relationship
between the parties started well, negating the existence of
psychological incapacity on either party at the time of the
celebration of their marriage. And lastly, it ruled that there
appeared to be a collusion between them as both sought the
declaration of nullity of their marriage. On October 18, 2000, this
Court rendered its Decision finding him guilty of falsifying Rosas
signature in bank documents, immorality, and abandonment of
his family. He was suspended from the practice of law, thus: the
respondent is suspended from the practice of law for SIX (6)
MONTHS on the charge of falsifying his wifes signature in bank
documents and other related loan instruments; and for ONE (1)

YEAR from the practice of law on the charges of immorality and

abandonment of his own family, the penalties to be served
simultaneously. Let notice of this Decision be spread in
respondents record as an attorney, and notice of the same
served on the Integrated Bar of the Philippines and on the Office
of the Court Administrator for circulation to all the courts
concerned. On December 8, 2000, the Court of Appeals affirmed
the RTC Decision in the present case, holding that "the evidence
of the plaintiff (Rosa) falls short of the standards required by law
to decree a nullity of marriage." It ruled that Justos alleged
defects or idiosyncrasies "were sufficiently explained by the
evidence," Rosa contends that this Courts factual findings in A.C.
No. 5333 for disbarment are conclusive on the present case.
Consequently, the Court of Appeals erred in rendering contrary
factual findings. Also, she argues that she filed the instant
complaint sometime in May, 1993
Issues: 1) Whether the factual findings of this Court in A.C. No.
5333 are conclusive on the present case; 2) Whether a remand of
this case to the RTC for reception of expert testimony on the root
cause of Justos alleged psychological incapacity is necessary; and
3) Whether the totality of evidence in the case shows
psychological incapacity on the part of Justo
Held: 1) A reading of the Court of Appeals Decision shows that
she has no reason to feel aggrieved. In fact, the appellate court
even assumed that her charges "are true," but concluded that
they are insufficient to declare the marriage void on the ground of
psychological incapacity. Justo's alleged infidelity, failure to
support his family and alleged abandonment of their family home
are true, such traits are at best indicators that he is unfit to
become an ideal husband and father. However, by themselves,
these grounds are insufficient to declare the marriage void due to
an incurable psychological incapacity. These grounds, we must
emphasize, do not manifest that he was truly in cognitive of the

basic marital covenants that he must assume and discharge as a

married person. While they may manifest the "gravity" of his
alleged psychological incapacity, they do not necessarily show
incurability, such that while his acts violated the covenants of
marriage, they do not necessarily show that such acts show an
irreparably hopeless state of psychological incapacity which
prevents him from undertaking the basic obligations of marriage
in the future.
2) The root cause of the psychological incapacity must be (a)
medically or clinically identified, (b) alleged in the complaint, (c)
sufficiently proven by experts, and (d) clearly explained in the
decision. Article 36 of the Family Code requires that the incapacity
must be psychological -- not physical, although its manifestations
and/or symptoms may be physical. The evidence must convince
the court that the parties, or one of them, were mentally or
psychically ill to such an extent that the person could not have
known the obligations he was assuming, or knowing them, could
not have given valid assumption thereof. Although no example of
such incapacity need be given here so as not to limit the
application of the provision under the principle of ejusdem
generis, nevertheless such root cause must be identified as a
psychological illness and its incapacitating nature fully explained.
Expert evidence may be given by qualified psychiatrists and
clinical psychologist
3) ART. 36. A marriage contracted by a party who, at the time of
celebration, was psychologically incapacitated to comply with the
essential marital obligations of marriage shall likewise be void
even if such incapacity becomes manifest only after its
solemnization. Psychological incapacity must be characterized by
(a) gravity; (b) juridical antecedence; and (c) incurability