San Beda College Alabang

School of Law

Problems Areas in Legal Ethics

Group 2
3-E

Written Report

Submitted By:
Ajas, Marnelli Joy
Asistio, Maritoni Luise
Balleza, Niel
Briones, Fatima Dennise
Lacson, Jeric
Manuel, Andrei
Santiago, Emily
Valdez, Marcus

Submitted to:
Atty. Paulino Ungos III

Submitted on:
February 07, 2018
Outline:

I. Conflict of Interest in a Regular Lawyer-Client

Relationship
a. What is conflict of interest?
b. Test in determining conflicting interests
c. Rule 15.03
i. Lim Jr. VS Villarosa
ii. Pormento Sr. Pontevedra
iii. Samson VS Era
iv. Nakpil VS Valdez

II. Conflict of Interest of Corporate Lawyers

a. Rule 15.03
b. Derivative Suit
i. Hornilla VS Salunat
ii. Hocorma Foundation VS Funk
iii. Pacana VS Pascual Lopez
iv. Palm VS Iledan

III. Limitations/ Restrictions of Government Lawyers in the

Practice of Law
a. Canon 6
b. Canon 6.01
i. Public Prosecutor
c. Canon 6.02
i. Applicability of Rule
ii. Prohibitions of Public Officials and Employees
during their Incumbency
1. Ali VS Bubong
2. Olazo VS Tinga
iii. Canon 6.03
1. Olazo VS Tinga
2. PCGG VS Sandiganbayan
d. Public Officials Who Cannot Practice Law in the
Philippines
e. Public Officials with Restrictions
f. Restrictions in the Practice of Law by Sanggunian
Members
g. RA 7160 Section 90
h. Canon 15, Rule 15,06
i. Influence Peddling
1. Maderada VS Mediodea
2. Samonte VS Gatdula

IV. Notarial Law Violations

a. Basic Concepts
i. Spouses Villanueva VS Beradio
 ii. Tupal VS Rojo
b. The Notary Public
i. Caalim-Verzonilla VS Pascua
ii. Villarin VS Sabate
iii. Pantoja Mumas VS Flores
c. Disciplinary Sanctions
i. Lee VS Tambago

V. Lawyer and Money or Properties of a Client

a. Canon 16
i. Fiduciary Relationship
1. Angeles VS Uy
b. Canon 16.01
i. Duties and Obligations of a Lawyer
1. Bayonla VS Reyes
c. Canon 16.02
i. Reason
1. Tarog VS Ricafort
d. 16.03
i. Dalisay VS Mauricio
e. 16.04
i. Prohibitions and Exceptions
1. Linsangan VS Tolentino
f. Rules of Court Rule 138 Sec 24, 25 and 27
1. Almendarez VS Langit
2. Attorney’s Lien Defined
3. Charging Lien Defined

VI. Acquisition of Properties Subject of Litigation

a. Elements of Prohibition
i. Fornilda VS Branch
ii. Ordonio VS Eduarte
b. Other Instances Where Prohibition is Applicable
i. Mananquil VS Villegas
c. Where the Prohibition is Inapplicable
i. Guevara Vs Calalang
ii. Macariola VS Asuncion
iii. Fabillo VS IAC
 I. Conflict of Interest in a Regular Lawyer-Client
Relationship

What is conflict of interest?

There is conflict of Interest if there is inconsistency in the interests of

two or more opposing parties.

Tests in determining conflicting interests (Pineda, 2009):

1. Whether the acceptance of a new relation would prevent the full
discharge of a lawyer’s duty of undivided fidelity and loyalty to
the client
2. Whether the lawyer would be called upon in the new relation to
use again a former client any confidential information acquired
through their connection or previous employment
3. Whether the lawyer’s argument for one client has to be
opposed by that same lawyer in arguing for the other client

Rule 15.03 of the Code of Professional Responsibility states:

A lawyer shall not represent conflicting interests except by a
written consent of all concerned given after a full disclosure of
the facts.

Lim Jr. v. Villarosa

Facts:

 Humberto C. Lim Jr. filed a verified complaint for disbarment

against respondent Atty. Nicanor V. Villarosa
 On February 19, 2002, respondent moved for the consolidation
of the said complaint with the following substantially interrelated
cases earlier filed with the First Division of this Court:
o 1. Administrative Case No. 5463: Sandra F. Vaflor v. Atty.
Adoniram P. Pamplona and Atty. Nicanor V. Villarosa;
o 2. Administrative Case No. 5502: Daniel A. Jalandoni v.
Atty. Nicanor V. Villarosa.
 In a resolution dated February 24, 2003, this Court
considered Administrative Case No. 5463 closed and
terminated. On February 4, 2004, considering the pleadings
filed in Administrative Case No. 5502, the Court resolved:
o (a) to NOTE the notice of the resolution dated September
27, 2003 of the Integrated Bar of the Philippines
dismissing the case against respondent for lack of merit;
and
o (b) to DENY, for lack of merit, the petition filed by
complainant praying that the resolution of the Integrated
Bar of the Philippines dismissing the instant case be
 reviewed and that proper sanctions be imposed upon
respondent
 No motion for reconsideration of the aforesaid denial in
Administrative Case No. 5502 appears in the records. The
Court is now called upon to determine the merits of this
remaining case (A.C. No. 5303) against respondent:
 That respondent is a practicing lawyer and a member of the
Integrated Bar of the Philippines, Bacolod City, Negros
Occidental Chapter…. That sometime on September 19, 1997,
Lumot A. Jalandoni, Chairman/President of PRC was sued
before RTC, Branch 52 in Civil Case No. 97-9865
 The latter engaged the legal services of herein respondent who
formally entered his appearance on October 2, 1997 as counsel
for the defendants Lumot A. Jalandoni/Totti Anlap Gargoles
 Respondent as a consequence of said Attorney-Client
relationship represented Lumot A. Jalandoni et al in the entire
proceedings of said case. Utmost trust and confidence was
reposed on said counsel, hence delicate and confidential
matters involving all the personal circumstances of his client
were entrusted to the respondent.
 That it was respondent who exclusively handled the entire
proceedings of afore-cited Civil Case No. 97-9865 [and]
presented Lumot A. Jalandoni as his witness prior to formally
resting his case. However, on April 27, 1999 respondent,
without due notice prior to a scheduled hearing, surprisingly
filed a Motion to withdraw as counsel, one day before its
scheduled hearing on April 28, 1999…. A careful perusal of
said Motion to Withdraw as Counsel will conclusively show that
no copy thereof was furnished to Lumot A. Jalandoni, neither
does it bear her conformity
 The far reaching effects of the untimely and unauthorized
withdrawal by respondent caused irreparable damage and
injury to Lumot A. Jalandoni, et al; a highly meritorious case in
favor of his client suddenly [suffered] unexpected defeat.
 That the grounds alleged by respondent for his withdrawal as
counsel of Lumot A. Jalandoni, et al. was that he is [a] retained
counsel of Dennis G. Jalbuena and the Fernando F. Gonzaga,
Inc. It was Dennis G. Jalbuena who recommended him to be
the counsel of Lumot A. Jalandoni, et al.
 It is worthy to note that from the outset, respondent already
knew that Dennis G. Jalbuena is the son-in-law of Lumot A.
Jalandoni being married to her eldest daughter, Carmen J.
Jalbuena.
 Respondent further stated that he cannot refuse to represent
Dennis G. Jalbuena in the case filed against the latter before
the City Prosecutors Office by PRC/Lumot A. Jalandoni due to
 an alleged retainership agreement with said Dennis G.
Jalbuena.
 On April 06, 1999, twenty-one (21) days prior to respondent’s
filing of his Motion to Withdraw as Counsel of Lumot A.
Jalandoni, et al., respondent entered his appearance with
Bacolod City Prosecutor OIC-Vicente C. Acupan, through a
letter expressly stating that effective said date he was
appearing as counsel for both Dennis G. Jalbuena and Carmen
J. Jalbuena and Vicente Delfin in the “Estafa” case filed by the
corporation (PRC) against them
 Simply stated, as early as April 6, 1999 respondent already
appeared for and in behalf of the Sps. Carmen and Dennis
Jalbuena/Vicente Delfin while concurrently representing Lumot
A. Jalandoni, et al. in Civil Case No. 97-9865
 The corporation’s complaint for estafa (P3,183,5525.00) was
filed against the Sps. Dennis and Carmen J. Jalbuena together
with UCPB bank manager Vicente Delfin. Succeeding events
will show that respondent instead of desisting from further
violation of his [lawyer’s] oath regarding fidelity to his client, with
extreme arrogance, blatantly ignored our laws on Legal Ethics,
by palpably and despicably defending the Sps. Dennis and
Carmen J. Jalbuena in all the cases filed against them by PRC
through its duly authorized representatives, before the Public
Prosecutors Office, Bacolod City
 There is no dispute that respondent was able to acquire vast
resources of confidential and delicate information on the facts
and circumstances of [Civil Case No. 97-9865] when Lumot A.
Jalandoni was his client … which knowledge and information
was acquired by virtue of lawyer-client relationship between
respondent and his clients.
 Using the said classified information which should have been
closely guarded … respondent did then and there, willfully,
unlawfully, feloniously conspired and confabulated with the Sps.
Dennis and Carmen J. Jalbuena in concocting the despicable
and fabricated charges against his former clients
 Were it not for said fiduciary relation between client and lawyer,
respondent will not be in a position to furnish his conspirator
spouses with confidential information on Lumot A.
Jalandoni/PRC, operator of Alhambra Hotel.
 Adding insult to injury, respondent opted to deliberately
withhold the entire case file including the marked exhibits of the
Cabiles case for more than three (3) months after his untimely
unilateral withdrawal therefrom, despite repeated demands
from [his] client.
 Respondent discredited Lim’s claim that he deliberately
withheld the records of the cited civil case. He insisted that it
 took him just a few days, not three months, to turn over the
records of the case to Lim
 While he admitted an oversight in addressing the notice of the
motion to withdraw as counsel to Mrs. Totti Anlap Gargoles
instead of Mrs. Jalandoni at Hotel Alhambra, he maintained that
it was the height of hypocrisy to allege that Mrs. Jalandoni was
not aware of his motion to withdraw since Mrs. Gargoles is Mrs.
Jalandoni’s sister and Hotel Alhambra is owned by PRC which,
in turn, actually belongs to Mrs. Jalandoni.
 Respondent also argued that no prejudice was suffered by Mrs.
Jalandoni because she was already represented by Atty.
Lorenzo S. Alminaza from the first hearing date

Issue:

 Whether there existed a conflict of interest in the cases

represented and handled by respondent
 Whether or not respondent is guilty of violating Canon 15 of the
Code of Professional Responsibility

Ruling:

 Petitioners alleged that as an offshoot of representing

conflicting interests, breach of attorney-client confidentiality and
deliberate withholding of records were committed by
respondent. To effectively unravel the alleged conflict of
interest, we must look into the cases involved.
 In Civil Case No. 97-9865, respondent represented Lumot A.
Jalandoni and Totti Anlap Gargoles. This was a case for the
recovery of possession of property involving Hotel Alhambra, a
hotel owned by PRC.
 In BC I.S. No. 99-2192, Lim v. Vicente Delfin, Spouses Dennis
and Carmen Jalbuena, respondent was counsel for Delfin and
the spouses Jalbuena. In this case, plaintiff Cristina Lim sued
the spouses Jalbuena and Delfin on the basis of two checks
issued by PRC for the construction of Hotel Alhambra. The
corporate records allegedly reflected that the contractor, AAQ
Sales and Construction (AAQSC), was already paid in full yet
Amy Albert Que of AAQSC still filed a collection case against
PRC for an unpaid balance
 Canon 15 of the Code of Professional Responsibility (CPR)
highlights the need for candor, fairness and loyalty in all the
dealings of lawyers with their clients. Rule 15.03 of the CPR
aptly provides:
o Rule 15.03 – A lawyer shall not represent conflicting
interests except by written consent of all concerned given
after a full disclosure of the facts.
  Conflict of interest may be determined in this manner:
o There is representation of conflicting interests if the
acceptance of the new retainer will require the
attorney to do anything which will injuriously affect
his first client in any matter in which he represents him
and also whether he will be called upon in his new
relation, to use against his first client any knowledge
acquired through their connection
 The rule on conflict of interests covers not only cases in which
confidential communications have been confided but also those
in which no confidence has been bestowed or will be used
 Another test of the inconsistency of interests is whether the
acceptance of a new relation will prevent an attorney from the
full discharge of his duty of undivided fidelity and loyalty to his
client or invite suspicion of unfaithfulness or double-dealing in
the performance thereof, and also whether he will be called
upon in his new relation to use against his first client any
knowledge acquire in the previous employment. The first part
of the rule refers to cases in which the opposing parties are
present clients either in the same action or in a totally
unrelated case; the second part pertains to those in which the
adverse party against whom the attorney appears is his former
client in a matter which is related, directly or indirectly, to
the present controversy
 The rule prohibits a lawyer from representing new clients whose
interests oppose those of a former client in any manner,
whether or not they are parties in the same action or in totally
unrelated cases. The cases here directly or indirectly involved
the parties’ connection to PRC, even if neither PRC nor Lumot
A. Jalandoni was specifically named as party-litigant in some of
the cases mentioned.
 Respondent Atty. Nicanor V. Villarosa is hereby
found GUILTY of violating Canon 15 of the Code of
Professional Responsibility and is SUSPENDED from the
practice of law for one (1) year, effective upon receipt of this
decision, with a STERN WARNING that a repetition of the
same or similar acts will be dealt with more severely.

Pormento Sr. vs. Pontevedra

Facts:

 In a verified Complaint dated August 7, 1999, Elesio C.

Pormento, Sr. charged Atty. Elias A. Pontevedra with
malpractice and misconduct, praying that on the basis of the
facts alleged therein, respondent be disbarred.
 Complainant alleges that between 1964 and 1994, respondent
is his family's legal counsel having represented him and
members of his family in all legal proceedings in which they are
involved. Complainant also claims that his family's relationship
with respondent extends beyond mere lawyer-client relations as
they gave respondent moral, spiritual, physical and financial
support in his different endeavors.
 Based on the allegations in the complaint, the rift between
complainant and respondent began when complainant's
counterclaim in Civil Case No. 1648 filed with the Regional Trial
Court of Bacolod City was dismissed. Complainant claims that
respondent, who was his lawyer in the said case, deliberately
failed to inform him of the dismissal of his counterclaim despite
receipt of the order of dismissal by the trial court, as a result of
which, complainant was deprived of his right to appeal said
order.
 Complainant asserts that he only came to know of the
existence of the trial court's order when the adverse party in the
said case extrajudicially foreclosed the mortgage executed over
the parcel of land which is the subject matter of the suit.
 In order to recover his ownership over the said parcel of land,
complainant was constrained to hire a new lawyer as Atty.
Pontevedra refused to institute an action for the recovery of the
subject property.
 Complainant also claims that in order to further protect his
rights and interests over the said parcel of land, he was forced
to initiate a criminal case for qualified theft against the relatives
of the alleged new owner of the said land. Respondent is the
counsel of the accused in said case. Complainant claims that
as part of his defense in said criminal case, respondent utilized
pieces of confidential information he obtained from complainant
while the latter is still his client.
 In a separate incident, complainant claims that in 1967, he
bought a parcel of land located at Escalante, Negros
Occidental. The Deed of Declaration of Heirship and Sale of
said land was prepared and notarized by respondent. Since
there was another person who claims ownership of the
property, complainant alleges that he heeded respondent's
advice to build a small house on the property and to allow his
(complainant's) nephew and his family to occupy the house in
order for complainant to establish his possession of the said
property.
 Subsequently, complainant's nephew refused to vacate the
property prompting the former to file an ejectment case with the
Municipal Trial Court of Escalante, Negros Occidental,
docketed as Civil Case No. 528. Respondent acted as the
counsel of complainant's nephew.
  In his Comment, respondent contends that he was never a
direct recipient of any monetary support coming from the
complainant. Respondent denies complainant's allegation that
he (respondent) did not inform complainant of the trial court's
order dismissing the latter's counterclaim in Civil Case No.
1648. Respondent claims that within two days upon his receipt
of the trial court's order of dismissal, he delivered to
complainant a copy of the said order, apprising him of its
contents.
 As to his representation of the persons against whom
complainant filed criminal cases for theft, respondent argues
that he honestly believes that there exists no conflict between
his present and former clients' interests as the cases he
handled for these clients are separate and distinct from each
other.
 He further contends that he took up the cause of the accused in
the criminal cases filed by complainant for humanitarian
considerations since said accused are poor and needy and
because there is a dearth of lawyers in their community.
 With respect to the case for ejectment filed by complainant
against his nephew, respondent admits that it was he who
notarized the deed of sale of the parcel of land sold to
complainant. However, he contends that what is being
contested in the said case is not the ownership of the subject
land but the ownership of the house built on the said land.

Issue:

 Whether or not there was conflict of interest

Ruling:

 Yes. respondent Atty. Elias A. Pontevedra is found GUILTY of

representing conflicting interests and is hereby FINED in the
amount of Ten Thousand (P10,000.00) Pesos. He is WARNED
that a repetition of the same or similar acts will be dealt with
more severely.
 Jurisprudence instructs that there is a representation of
conflicting interests if the acceptance of the new retainer will
require the attorney to do anything which will injuriously affect
his first client in any matter in which he represents him and also
whether he will be called upon in his new relation, to use
against his first client any knowledge acquired through their
connection.
 Another test to determine if there is a representation of
conflicting interests is whether the acceptance of a new relation
will prevent an attorney from the full discharge of his duty of
 undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof.
 A lawyer is forbidden from representing a subsequent client
against a former client when the subject matter of the present
controversy is related, directly or indirectly, to the subject matter
of the previous litigation in which he appeared for the former
client.
 Conversely, he may properly act as counsel for a new client,
with full disclosure to the latter, against a former client in a
matter wholly unrelated to that of the previous employment,
there being in that instance no conflict of interests.
 Where, however, the subject matter of the present suit between
the lawyer's new client and his former client is in some way
connected with that of the former client's action, the lawyer may
have to contend for his new client that which he previously
opposed as counsel for the former client or to use against the
latter information confided to him as his counsel.
o The reason for the prohibition is found in the relation of
attorney and client, which is one of trust and confidence
of the highest degree.
o A lawyer becomes familiar with all the facts connected
with his client's case.
o He learns from his client the weak points of the action as
well as the strong ones.
o Such knowledge must be considered sacred and guarded
with care.
o No opportunity must be given him to take advantage of
the client's secrets.
o A lawyer must have the fullest confidence of his client.
o For if the confidence is abused, the profession will suffer
by the loss thereof.
 In the present case, we find no conflict of interests when
respondent represented herein complainant's nephew and
other members of his family in the ejectment case, docketed as
Civil Case No. 528, and in the criminal complaint, denominated
as I.S. Case No. 99-188, filed by herein complainant against
them. The only established participation respondent had with
respect to the parcel of land purchased by complainant, is that
he was the one who notarized the deed of sale of the said land.
On that basis alone, it does not necessarily follow that
respondent obtained any information from herein complainant
that can be used to the detriment of the latter in the ejectment
case he filed.
 While complainant alleges that it was respondent who advised
him to allow his nephew to temporarily occupy the property in
order to establish complainant's possession of said property as
against another claimant, no corroborating evidence was
presented to prove this allegation. Defendant, in his answer to
 the complaint for ejectment, raised the issue as to the right of
the vendor to sell the said land in favor of complainant.
 However, we find this immaterial because what is actually in
issue in the ejectment case is not the ownership of the subject
lot but the ownership of the house built on the said lot.
Furthermore, the subject matter of I.S. Case No. 99-188 filed by
complainant against his nephew and other members of his
family involves several parts of trucks owned by herein
complainant.
 This case is not in any way connected with the controversy
involving said parcel of land. In fine, with respect to Civil Case
No. 528 and I.S. Case No. 99-188, complainant failed to
present substantial evidence to hold respondent liable for
violating the prohibition against representation of conflicting
interests.
 However, we find conflict of interests in respondent's
representation of herein complainant in Civil Case No. 1648
and his subsequent employment as counsel of the accused in
Criminal Case No. 3159.
 The subject matter in Civil Case No. 1648 is Lot 609 located at
Escalante, Negros Occidental, the same parcel of land involved
in Criminal Case No. 3159 filed by herein complainant against
several persons, accusing them of theft for allegedly cutting and
stealing coconut trees within the premises of the said lot.
Complainant contends that it is in this criminal case that
respondent used confidential information which the latter
obtained from the former in Civil Case No. 1648.

Samson vs. Era

Facts:

 The complainant and his relatives were among the investors

who fell prey to the pyramiding scam perpetrated by ICS
Corporation led by Emilia Sison and several others.
 They engaged the services of Atty. Era to represent and assist
him and his relatives in the prosecution of criminal case against
Sison and her group.
 Pursuant to the engagement, Atty. Era prepared the demand
letter demanding the return or refund of the money subject of
their complaints.
 He also prepared the complaint-affidavit that Samson signed
and swore to and subsequently presented to the Office of the
City Prosecutor of Quezon City (OCPQC). After the preliminary
investigation, the OCPQC formally charged Sison and the
others with several counts of estafa in the Regional Trial Court,
Branch 96 (RTC), in Quezon City.
  In April 2003, Atty. Era called a meeting with Samson and his
relatives to discuss the possibility of an amicable settlement
with Sison and her cohorts.
 He told Samson and the others that undergoing a trial of the
cases would just be a waste of time, money and effort for them,
and that they could settle the cases with Sison and her group,
with him guaranteeing the turnover to them of a certain property
located in Antipolo City belonging to ICS Corporation in
exchange for their desistance.
 They acceded and executed the affidavit of desistance he
prepared, and in turn they received a deed of assignment
covering land registered under Transfer Certificate of Title No.
R-4475 executed by Sison in behalf of ICS Corporation.
 After an amicable settlement and several negotiations with
Sison and her cohorts, Atty. Era expressed that he already
accomplished his professional responsibility towards Samson.
 They also later found out that they could not liquidate the
property subject to the amicable settlement.
 During the hearings in the RTC, Atty. Era did not anymore
appear for Samson and his group. They found out that Atty. Era
had already been entering his appearance as the counsel
for Sison in her other criminal cases involving the same
pyramiding scam.
 On January 20, 2005, Samson executed an affidavit alleging
the foregoing antecedents and prayed for Atty. Era’s
disbarment on the ground of his violation of the trust,
confidence and respect reposed in him as their counsel.
 Atty. Era was required to file his Comment. After several
extensions, Atty. Era finally filed his Comment on April 11, 2006
in the OBC.
 He alleged that the lawyer-client relationship ended when
Samson and his group entered into the compromise
settlement.
 The case was referred to IBP for investigation, report and
recommendation.

Issue:

 Whether or not there was conflict of interest

Ruling:

 YES. The Supreme Court affirmed the findings of the IBP.

 The lawyer-client relationship did not terminate when the
parties entered into a compromise settlement, for the fact
remained that he still needed to oversee the implementation of
the settlement as well as to proceed with the criminal cases
 until they were dismissed or otherwise concluded by the trial
court.
 It is also relevant to indicate that the execution of a compromise
settlement in the criminal cases did not ipso facto cause the
termination of the cases not only because the approval of the
compromise by the trial court was still required, but also
because the compromise would have applied only to the civil
aspect, and excluded the criminal aspect pursuant to Article
2034 of the Civil Code.
 Rule 15.03, Canon 15 of the Code of Professional
Responsibility provides that: "A lawyer shall not represent
conflicting interests except by written consent of all concerned
given after a full disclosure of the facts."
 Atty. Era thus owed to Samson and his group entire devotion to
their genuine interest, and warm zeal in the maintenance and
defense of their rights. He was expected to exert his best efforts
and ability to preserve the clients’ cause, for the unwavering
loyalty displayed to his clients likewise served the ends of
justice.
 Contrary to Atty. Era’s ill-conceived attempt to explain his
disloyalty to Samson and his group, the termination of the
attorney-client relationship does not justify a lawyer to represent
an interest adverse to or in conflict with that of the former client.
 The spirit behind this rule is that the client’s confidence once
given should not be stripped by the mere expiration of the
professional employment. Even after the severance of the
relation, a lawyer should not do anything that will injuriously
affect his former client in any matter in which the lawyer
previously represented the client.
 Nor should the lawyer disclose or use any of the client’s
confidences acquired in the previous relation. In this regard,
Canon 17 of the Code of Professional Responsibility expressly
declares that: "A lawyer owes fidelity to the cause of his client
and he shall be mindful of the trust and confidence reposed in
him."
 The lawyer’s highest and most unquestioned duty is to protect
the client at all hazards and costs even to himself.
 The protection given to the client is perpetual and does not
cease with the termination of the litigation, nor is it affected by
the client’s ceasing to employ the attorney and retaining
another, or by any other change of relation between them. It
even survives the death of the client.
 In the absence of the express consent from Samson and his
group after full disclosure to them of the conflict of interest,
therefore, the most ethical thing for Atty. Era to have done was
either to outrightly decline representing and entering his
appearance as counsel for Sison, or to advice Sison to engage
 another lawyer for herself. Unfortunately, he did neither, and
should now suffer the proper sanction.
 WHEREFORE, the Court FINDS and PRONOUNCES Atty.
EDGARDO O. ERA guilty of violating Rule 15.03 of Canon 15,
and Canon 17 of the Code of Professional Responsibility; and
SUSPENDS him from the practice of law for two years
effective upon his receipt of this decision, with a warning that
his commission of a similar offense will be dealt with more
severely.

Nakpil vs. Valdez

Facts:

 Valdes is Jose Nakpil’s accountant, consultant and lawyer.

 Nakpil got interested in the purchase of a summer residence in
Baguio but due to lack of funds, he asked Valdes to buy it for
him and hold it in trust.
 Valdes obtained 2 loans (65k and 75k), then he bought the land
and had the title issued in his name.
 When Jose Nakpil died, Imelda, his wife, became the
administratrix of Jose’s estate. And, Valdes’ law firm filed for
the settlement of Jose’s estate.
 Baguio property became an issue because the property was
not included in Jose’s inventory of estate, but the loans used to
purchase the property were charged under his name.
 The title to the property was transferred from Valdes to Caval
Realty, Valdes’ family realty corp.
 Valdes’ accounting firm handled the inventory of Jose’s estate
but also, handled the claims of Jose’s creditors- Angel Nakpil
and ENORN, INC.

Issue:

 Whether or not there was conflict of interest

Ruling:

 Yes. The proscription applies no matter how slight the adverse

interest is.
 Representation of conflicting interests may be allowed only
upon full disclosure of the facts among all concerned parties, as
to the extent of conflict and probable adverse outcome.
 The preparation of claims of the creditors against the estate is
obviously improper because he had to fight for one side, the
claims he was defending against for the other side.
 The defense that he had already resigned from the law firm was
not supported by evidence.
 His resignation from the accounting firm only shows that he was
absent for quite some time but returned to work during the
tenure of the litigation of claims. Thus, he cannot claim
ignorance of the case.
 The test of impropriety of representation of conflicting interests
is not the certainty of such existence but mere probability for it
to exist.
 Even though he could have committed such misconduct not as
a lawyer but as an accountant, the court is not divested of
jurisdiction to punish a lawyer for misconduct committed outside
the legal field, as the good moral character requirement is not
only a requisite for entrance to the bar but a continuing
requirement for the practice of law.
 A lawyer should always act to promote public confidence to the
legal profession.
 II. Conflict of Interest of Corporate Lawyers

Pertinent Provisions of Law:

RULE 15.03. – A lawyer shall not represent conflicting interests

except by written consent of all concerned given after a full
disclosure of the facts.

There is conflict of interest when a lawyer represents inconsistent

interests of two or more opposing parties. The test is “whether or not
in behalf of one client, it is the lawyer’s duty to fight for an issue or
claim, but it is his duty to oppose it for the other client. In brief, if he
argues for one client, this argument will be opposed by him when he
argues for the other client.”5 This rule covers not only cases in which
confidential communications have been confided, but also those in
which no confidence has been bestowed or will be used.6 Also, there
is conflict of interests if the acceptance of the new retainer will require
the attorney to perform an act which will injuriously affect his first
client in any matter in which he represents him and also whether he
will be called upon in his new relation to use against his first client
any knowledge acquired through their connection.7 Another test of
the inconsistency of interests is whether the acceptance of a new
relation will prevent an attorney from the full discharge of his duty of
undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof

Derivative Suit
In this jurisdiction, a corporation’s board of directors is understood to
be that body which (1) exercises all powers provided for under the
Corporation Code; (2) conducts all business of the corporation; and
(3) controls and holds all property of the corporation. Its members
have been characterized as trustees or directors clothed with a
fiduciary character. It is clearly separate and distinct from the
corporate entity itself.

Where corporate directors have committed a breach of trust either by

their frauds, ultra vires acts, or negligence, and the corporation is
unable or unwilling to institute suit to remedy the wrong, a stockholder
may sue on behalf of himself and other stockholders and for the
benefit of the corporation, to bring about a redress of the wrong done
directly to the corporation and indirectly to the stockholders.11 This is
what is known as a derivative suit, and settled is the doctrine that in a
derivative suit, the corporation is the real party in interest while the
stockholder filing suit for the corporation’s behalf is only nominal
party. The corporation should be included as a party in the suit.
(Hornilla v. Salunat)

Hornilla v. Salunat
Doctrine:
A lawyer engaged as counsel for a corporation cannot represent
members of the same corporation's board of directors in a derivative
suit brought against them. To do so would be tantamount to
representing conflicting interests, which is prohibited by the Code of
Professional Responsibility
There is conflict of interest when a lawyer represents inconsistent
interests of two or more opposing parties. The test is "whether or not
in behalf of one client, it is the lawyer's duty to fight for an issue or
claim, but it is his duty to oppose it for the other client. In brief, if he
argues for one client, this argument will be opposed by him when he
argues for the other client." This rule covers not only cases in which
confidential communications have been confided, but also those in
which no confidence has been bestowed or will be used. Also, there
is conflict of interests if the acceptance of the new retainer will require
the attorney to perform an act which will injuriously affect his first
client in any matter in which he represents him and also whether he
will be called upon in his new relation to use against his first client
any knowledge acquired through their connection. Another test of the
inconsistency of interests is whether the acceptance of a new relation
will prevent an attorney from the full discharge of his duty of
undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof.
FACTS and Ruling:
Complainants, who are members of the PPSTA, filed an intra
corporate case against its members of the Board of Directors before
the SEC. PPSTA retained as counsel, the ASSA Law Firm, of which
respondent attorney is the managing partner. Respondent attorney
subsequently acted as counsel of record for the respondent Board of
Directors of the PPSTA in the said case.
The Supreme Court held that a lawyer engaged as counsel for a
corporation cannot represent members of the same corporation's
board of directors in a derivative suit brought against them. The Court
thus agreed with the IBP finding that respondent was guilty of conflict
of interest, which is prohibited by the Code of Professional
Responsibility, when he represented the parties against whom his
other client, the PPSTA, filed suit. The Court admonished the
respondent to observe a higher degree of fidelity in the practice of his
profession.

SANTOS VENTURA HOCORMA FOUNDATION, INC., represented

by GABRIEL H. ABAD vs. ATTY. RICHARD V. FUNK A.C. No.
9094, 15 August 2012
Doctrine:
Canon 15, Rule 15.03 of the C PR provides that a lawyer cannot
represent conflicting interests except by written consent of all
concerned given after a full disclosure of the facts.
An attorney owes his client undivided allegiance. Because of the
highly fiduciary nature of their relationship, sound public policy
dictates that he be prohibited from representing conflicting interests
or discharging inconsistent duties. An attorney may not, without being
guilty of professional misconduct, act as counsel for a person whose
interest conflicts with that of his present or former client. This rule is
so absolute that good faith and honest intention on the erring lawyer's
part does not make it inoperative.

FACTS and Ruling:

Complainant Santos Ventura Hocorma Foundation, Inc.
(Hocorma Foundation) filed a complaint for disbarment against
respondent Atty. Richard Funk. It alleged that Atty. Funk used to work
as corporate secretary, counsel, chief executive officer, and trustee of
the foundation from 1983 to 1985. He also served as its counsel in
several criminal and civil cases.
Hocorma Foundation further alleged that on November 25, 2006
Atty. Funk filed an action for quieting of title and damages
against Hocorma Foundation on behalf of Mabalacat Institute,Inc.
(Mabalacat Institute), Atty. Funk’s new client. Atty. Funk did so,
according to the foundation, using information that he acquired while
serving as its counsel in violation of the Code of Professional
Responsibility (CPR) and in breach of attorney-client relationship
The Supreme Court ruled that the evidence shows
that Hocorma Foundation availed itself of the legal services of
Atty. Funk in connection with, among others, the transfer of one of the
properties subject of the several suits that the lawyer subsequently
filed against the foundation. Indeed, Atty. Funk collected attorney's
fees from the foundation for such services. Thus, he had an obligation
not to use any knowledge he acquired during that relationship,
including the fact that the property under litigation existed at all, when
he sued the foundation.
The Court finds it fitting to adopt the CBD's recommendation as well as
the IBP Board of Governors' resolution respecting the case.
WHEREFORE, the Court AFFIRMS the resolution of the Board of
Governors of the Integrated Bar of the Philippines dated April 16, 2010
and June 26, 2011 and SUSPENDS Atty. RichardFunk from the
practice of law for one year effective immediately. Serve copies of this
decision upon the Office of the Court Administrator for dissemination,
the Integrated Bar of the Philippines, and the Office of the Bar
Confidant so the latter may attach its copy to his record.

Pacana vs. Pascual Lopez A.C. No. 8243 July 24, 2009
Doctrine:
The absence of a written contract will not preclude the finding that
there was a professional relationship between the
parties. Documentary formalism is not an essential element in the
employment of an attorney; the contract may be express or
implied. To establish the relation, it is sufficient that the advice and
assistance of an attorney is sought and received in any matter
pertinent to his profession.

FACTS and Ruling;

On January 2, 2002, complainant was the Operations Director
for Multitel Communications Corporation (MCC). MCC is an affiliate
company of Multitel International Holdings Corporation (Multitel).
Sometime in July 2002, MCC changed its name to Precedent
Communications Corporation (Precedent).
According to complainant, in mid-2002, Multitel was besieged
by demand letters from its members and investors because of the
failure of its investment schemes. He alleges that he earned the ire
of Multitel investors after becoming the assignee of majority of the
shares of stock of Precedent and after being appointed as trustee
of a fund amounting to Thirty Million Pesos (P30,000,000.00)
deposited at Real Bank.
Distraught, complainant sought the advice of respondent.
From then on, complainant and respondent constantly
communicated, with the former disclosing all his involvement and
interests in Precedent and Precedent's relation with Multitel.
Respondent gave legal advice to complainant and even helped him
prepare standard quitclaims for creditors. In sum, complainant avers
that a lawyer-client relationship was established between him and
respondent although no formal document was executed by them at
that time. A Retainer Agreement dated January 15, 2003 was
proposed by respondent. Complainant, however, did not sign the
said agreement because respondent verbally asked for One
Hundred Thousand Pesos (P100,000.00) as acceptance fee and a
15% contingency fee upon collection of the overpayment made by
Multitel to Benefon, a telecommunications company based in
Finland. Complainant found the proposed fees to be prohibitive and
not within his means. Hence, the retainer agreement remained
unsigned.
After a few weeks, complainant was surprised to receive a
demand letter from respondent asking for the return and immediate
settlement of the funds invested by respondent's clients in Multitel.
When complainant confronted respondent about the demand letter,
the latter explained that she had to send it so that her clients —
defrauded investors of Multitel — would know that she was doing
 something for them and assured complainant that there was nothing
to worry about.
Respondent raises the defense that there was no valid Attorney client
relationship between them. The Court disagreed by upholding the
IBP ruling on the matter. Therein, the IBP held that the absence of a
written contract will not preclude the finding that there was a
professional relationship between the parties. Documentary
formalism is not an essential element in the employment of an
attorney; the contract may be express or implied. To establish the
relation, it is sufficient that the advice and assistance of an attorney
is sought and received in any matter pertinent to his profession.
WHEREFORE, respondent Attorney Maricel Pascual-Lopez is
hereby DISBARRED for representing conflicting interests and for
engaging in unlawful, dishonest and deceitful conduct in violation of
her Lawyer's Oath and the Code of Professional Responsibility.

Palm v. Iledan
Doctrine:
Canon 21. A lawyer shall preserve the confidence and secrets of his
client even after the attorney-client relationship is terminated.
-It is settled that the mere relation of attorney and client does not raise
a presumption of confidentiality. The client must intend the
communication to be confidential.

Rule 15.03 — A lawyer shall not represent conflicting interest except

by written consent of all concerned given after a full disclosure of the
facts.

- One test of inconsistency of interests is whether the lawyer will be

asked to use against his former client any confidential information
acquired through their connection or previous employment.
FACTS:
Complainant is the President of Comtech, a corporation engaged in
the business of computer software development. From February 2003
to November 2003, respondent served as Comtech's retained
corporate counsel for the amount of P6,000 per month as retainer fee.
From September to October 2003, complainant personally met with
respondent to review corporate matters, including potential
amendments to the corporate by-laws. In a meeting held on 1 October
2003, respondent suggested that Comtech amend its corporate by-
laws to allow participation during board meetings, through
teleconference, of members of the Board of Directors who were
outside the Philippines.
Prior to the completion of the amendments of the corporate by-laws,
complainant became uncomfortable with the close relationship
between respondent and Elda Soledad (Soledad), a former officer and
director of Comtech, who resigned and who was suspected of
releasing unauthorized disbursements of corporate funds. Thus,
Comtech decided to terminate its retainer agreement with respondent
effective November 2003. AcSHCD
In a stockholders' meeting held on 10 January 2004, respondent
attended as proxy for Gary Harrison (Harrison). Steven
C. Palm (Steven) and Deanna L. Palm, members of the Board of
Directors, were present through teleconference. When the meeting
was called to order, respondent objected to the meeting for lack of
quorum. Respondent asserted that Steven and Deanna Palm could
not participate in the meeting because the corporate by-laws had not
yet been amended to allow teleconferencing.
On 24 March 2004, Comtech's new counsel sent a demand letter to
Soledad to return or account for the amount of P90,466.10
representing her unauthorized disbursements when she was the
Corporate Treasurer of Comtech. On 22 April 2004, Comtech received
Soledad's reply, signed by respondent. In July 2004, due to Soledad's
failure to comply with Comtech's written demands, Comtech filed a
complaint for Estafa against Soledad before the Makati Prosecutor's
Office. In the proceedings before the City Prosecution Office of Makati,
respondent appeared as Soledad's counsel.

RULING:
The Court cannot sustain the findings of the IBP and imposing upon
the respondent a penalty of suspension for 1 year.
DOCTRINE 1:
Although the information about the necessity to amend the corporate
by-laws may have been given to respondent, it could not be considered
a confidential information. The amendment, repeal or adoption of new
by-laws may be effected by "the board of directors or trustees, by a
majority vote thereof, and the owners of at least a majority of the
outstanding capital stock, or at least a majority of members of a non-
stock corporation". It means the stockholders are aware of the
proposed amendments to the by-laws. While the power may be
delegated to the board of directors or trustees, there is nothing in the
records to show that a delegation was made in the present case.
Further, whenever any amendment or adoption of new by-laws is
made, copies of the amendments or the new by-laws are filed with the
Securities and Exchange Commission (SEC) and attached to the
original articles of incorporation and by-laws. The documents are
public records and could not be considered confidential.
It is settled that the mere relation of attorney and client does not raise
a presumption of confidentiality. The client must intend the
communication to be confidential.
Doctrine 2:
In Quiambao v. Bamba, the Court enumerated various tests to
determine conflict of interests. One test of inconsistency of interests is
whether the lawyer will be asked to use against his former client any
confidential information acquired through their connection or previous
employment. The Court has ruled that what a lawyer owes his former
client is to maintain inviolate the client's confidence or to refrain from
doing anything which will injuriously affect him in any matter in which
he previously represented him.
We find no conflict of interest when respondent represented Soledad
in a case filed by Comtech. The case where respondent represents
Soledad is an Estafa case filed by Comtech against its former
officer. There was nothing in the records that would show that
respondent used against Comtech any confidential information
acquired while he was still Comtech's retained counsel. Further,
respondent made the representation after the termination of his
retainer agreement with Comtech. A lawyer's immutable duty to a
former client does not cover transactions that occurred beyond the
lawyer's employment with the client. The intent of the law is to impose
upon the lawyer the duty to protect the client's interests only on matters
that he previously handled for the former client and not for matters that
arose after the lawyer-client relationship has terminated.
III. Limitations/Restrictions of Government Lawyers in the
Practice of Law

Canon 6: THESE CANONS SHALL APPLY TO LAWYERS IN

GOVERNMENT SERVICES IN THE DISCHARGE OF THEIR TASKS.

Reason: A lawyer does not shed his professional obligations upon

assumption of public office.

The term “public officials” includes elective and appointive officials and
employees, permanent or temporary, whether in the career or
noncareer service, including military and police personnel whether or
not they receive compensation regardless of amount.

Generally speaking, a lawyer who holds a government office may not

be disciplined as a member of the Bar for misconduct in the discharge
of his duties as a government official. However, if said misconduct as
a government official also constitutes a violation of his oath as a lawyer,
then he may be disciplined by this Court as a member of the Bar.

Rule 6.01 - The primary duty of a lawyer engaged in public

prosecution is not to convict but to see that justice is done. The
suppression of facts or the concealment of witnesses capable of
establishing the innocence of the accused is highly reprehensible
and is cause for disciplinary action.

Public Prosecutor
He is a quasi-judicial officer and as such, he should seek equal and
impartial justice. He should be concerned with seeing that no innocent
man suffers as in seeing that no guilty man escapes.

Note: The interest of a prosecutor in a criminal prosecution is not to

win a case but to see that justice is done. If the prosecutor has
subsequently acquired information, which should have lead to the
acquittal of the convicted accused, the prosecutor should duly relay
such information to the proper authorities. Such is the meaning of the
duty to see that justice is done.

He should see to it that the accused is given fair and impartial trial and
not deprived of any of his statutory or constitutional rights. He should
recommend the acquittal of the accused whose conviction is on
appeal, if he finds no legal basis to sustain the conviction.

Restrictions against Using Public Office to Promote Private Interest

Rule 6.02 - A lawyer in the government service shall not use his
public position to promote or advance his private interests, nor
allow the latter to interfere with his public duties.
Applicability of the Rule:

1. Lawyers in government service allowed by law to engage in

private practice concurrently; and
2. Those, who, though prohibited from engaging in the practice of
law, have friends, former associates and relatives who are in the
active practice of law.

Public Officials and Employees during their incumbency shall not:

1. Own, control, manageor accept employment as officer,

employee, consultant, counsel, broker, agent, trustee or
nominee in any private enterprise regulated, supervised or
licensed by their office unless expressly allowed by law;
2. Engage in the private practice of their profession unless
authorized by the Constitution or law, provided that such practice
will not conflict or tend to conflict with their official functions;
3. Recommend any person to any position in a private enterprise
which has a regular or pending official transaction with their
office; and
4. Use or divulge confidential or classified information officially
known to them by reason of their office and not available to the
public.

 Ali v. Bubong, A.C. No. 4018, [March 8, 2005], 493 PHIL 172-
185

Facts:
This is a verified petition for disbarment filed against Atty. Mosib Ali
Bubong for having been found guilty of grave misconduct while holding
the position of Register of Deeds of Marawi City.

It appears that this disbarment proceeding is an off-shoot of the

administrative case earlier filed by complainant against respondent. In
said case, which was initially investigated by the Land Registration
Authority (LRA), complainant charged respondent with illegal exaction;
indiscriminate issuance of Transfer Certificate of Title (TCT) No. T-
2821 in the names of Lawan Bauduli Datu, Mona Abdullah, Ambobae
Bauduli Datu, Matabae Bauduli Datu, Mooamadali Bauduli Datu, and
Amenola Bauduli Datu; and manipulating the criminal complaint filed
against Hadji Serad Bauduli Datu and others for violation of the Anti-
Squatting Law. It appears from the records that the Baudali Datus are
relatives of respondent.

The initial inquiry by the LRA was resolved in favor of respondent.

The case was then forwarded to the Department of Justice for review
and in a report dated 08 September 1992, then Secretary of Justice
Franklin Drilon exonerated respondent of the charges of illegal
exaction and infidelity in the custody of documents. He, however, found
respondent guilty of grave misconduct for his imprudent issuance of
TCT No. T-2821 and manipulating the criminal case for violation of the
Anti-Squatting Law instituted against Hadji Serad Bauduli Datu and the
latters co-accused. As a result of this finding, Secretary Drilon
recommended respondents dismissal from service.

On 26 February 1993, former President Fidel V. Ramos issued

Administrative Order No. 41 adopting in toto the conclusion reached
by Secretary Drilon and ordering respondents dismissal from
government service. Respondent subsequently questioned said
administrative order before this Court through a petition for certiorari,
mandamus, and prohibition claiming that the Office of the President did
not have the authority and jurisdiction to remove him from office. He
also insisted that respondents in that petition violated the laws on
security of tenure and that respondent Reynaldo V. Maulit, then the
administrator of the LRA committed a breach of Civil Service Rules
when he abdicated his authority to resolve the administrative complaint
against him (herein respondent).

In a Resolution dated 15 September 1994, we dismissed the petition

for failure on the part of petitioner to sufficiently show that public
respondent committed grave abuse of discretion in issuing the
questioned order. Respondent thereafter filed a motion for
reconsideration which was denied with finality in our Resolution of 15
November 1994.

On the basis of the outcome of the administrative case, complainant is

now before us, seeking the disbarment of respondent. Complainant
claims that it has become obvious that respondent had proven himself
unfit to be further entrusted with the duties of an attorney and that he
poses a serious threat to the integrity of the legal profession.

In his Comment, respondent maintains that there was nothing irregular

with his issuance of TCT No. T-2821 in the name of the Bauduli Datus.
According to him, both law and jurisprudence support his stance that it
was his ministerial duty, as the Register of Deeds of Marawi City, to
act on applications for land registration on the basis only of the
documents presented by the applicants. In the case of the Bauduli
Datus, nothing in the documents they presented to his office warranted
suspicion, hence, he was duty-bound to issue TCT No. T-2821 in their
favor.

Respondent also insists that he had nothing to do with the dismissal of

criminal complaint for violation of the Anti-Squatting Law allegedly
committed by Hadji Serad Abdullah and the latters co-defendants.
Respondent explains that his participation in said case was a result of
the two subpoenas duces tecum issued by the investigating prosecutor
who required him to produce the various land titles involved in said
dispute. He further claims that the dismissal of said criminal case by
the Secretary of Justice was based solely on the evidence presented
by the parties. Complainants allegation, therefore, that he influenced
the outcome of the case is totally unjustified.

Through a resolution dated 26 June 1995, this Court referred this

matter to the Integrated Bar of the Philippines (IBP) for investigation,
report, and recommendation. Acting on this resolution, the IBP
commenced the investigation of this disbarment suit.

Issue/s: Whether respondent may be disbarred for grave misconduct

committed while he was in the employ of the government.

Ruling: We resolve this question in the affirmative.

The Code of Professional Responsibility does not cease to apply to a

lawyer simply because he has joined the government service. In fact,
by the express provision of Canon 6 thereof, the rules governing the
conduct of lawyers shall apply to lawyers in government service in the
discharge of their official tasks. Thus, where a lawyers misconduct as
a government official is of such nature as to affect his qualification as
a lawyer or to show moral delinquency, then he may be disciplined as
a member of the bar on such grounds. Although the general rule is that
a lawyer who holds a government office may not be disciplined as a
member of the bar for infractions he committed as a government
official, he may, however, be disciplined as a lawyer if his misconduct
constitutes a violation of his oath a member of the legal profession.

In the case at bar, respondents grave misconduct, as established by

the Office of the President and subsequently affirmed by this Court,
deals with his qualification as a lawyer. By taking advantage of his
office as the Register of Deeds of Marawi City and employing his
knowledge of the rules governing land registration for the benefit of his
relatives, respondent had clearly demonstrated his unfitness not only
to perform the functions of a civil servant but also to retain his
membership in the bar. Rule 6.02 of the Code of Professional
Responsibility is explicit on this matter. It reads:

Rule 6.02 A lawyer in the government service shall not use his public
position to promote or advance his private interests, nor allow the latter
to interfere with his public duties.

Respondents conduct manifestly undermined the peoples confidence

in the public office he used to occupy and cast doubt on the integrity of
the legal profession. The ill-conceived use of his knowledge of the
intricacies of the law calls for nothing less than the withdrawal of his
privilege to practice law.

As for the letter sent by Bainar Ali, the deceased complainants

daughter, requesting for the withdrawal of this case, we cannot
possibly favorably act on the same as proceedings of this nature
cannot be interrupted or terminated by reason of desistance,
settlement, compromise, restitution, withdrawal of the charges or
failure of the complainant to prosecute the same. As we have
previously explained in the case of Irene Rayos-Ombac v. Atty.
Orlando A. Rayos:

A case of suspension or disbarment may proceed regardless of

interest or lack of interest of the complainant. What matters is whether,
on the basis of the facts borne out by the record, the charge of deceit
and grossly immoral conduct has been duly proven. This rule is
premised on the nature of disciplinary proceedings. A proceeding for
suspension or disbarment is not in any sense a civil action where the
complainant is a plaintiff and the respondent lawyer is a defendant.
Disciplinary proceedings involve no private interest and afford no
redress for private grievance. They are undertaken and prosecuted
solely for the public welfare. They are undertaken for the purpose of
preserving courts of justice from the official ministration of persons unfit
to practice in them. The attorney is called to answer to the court for his
conduct as an officer of the court. The complainant or the person who
called the attention of the court to the attorneys alleged misconduct is
in no sense a party, and has generally no interest in the outcome
except as all good citizens may have in the proper administrative of
justice.

Olazo v. Tinga, A.M. No. 10-5-7-SC, [December 7, 2010], 651 PHIL

290-308


Facts:

A disbarment case was filed against retired Supreme Court Associate

Justice Dante O. Tinga filed by Mr. Jovito S. Olazo. He is charged the
Code of Professional Responsibility.

The First Charge: Violation of Rule 6.02

In the complaint, the complainant claimed that the respondent abused
his position as Congressman and as a member of the Committee on
Awards when he unduly interfered with the complainant’s sales
application because of his personal interest over the subject land.

The Second Charge: Violation of Rule 6.03

The second charge involves another parcel of land within the
proclaimed areas belonging to Manuel Olazo, the complainant’s
brother. The complainant alleged that the respondent persuaded
Miguel Olazo to direct Manuel to convey his rights over the land to
Joseph Jeffrey Rodriguez.

The Third Charge: Violation of Rule 1.01

The complainant alleged that the respondent engaged in unlawful
conductconsidering his knowledge that Joseph Jeffrey Rodriguez was
not a qualifiedbeneficiary under Memorandum No. 119. The
complainant averred that Joseph Jeffrey Rodriguez is not a bona fide
resident of the proclaimed areas and does not qualify for an award.

The complainant also alleged that the respondent violated Section

7(b)(2) of the Code of Conduct and Ethical Standards for Public
Officials and Employees or Republic Act (R.A.) No. 6713 since he
engaged in the practice of law, within the one-year prohibition period,
when he appeared as a lawyer for Ramon Lee and Joseph Jeffrey
Rodriguez before the Committee on Awards.

The respondent cannot be held liable under Rule 6.02 of the Code of
Professional Responsibility since the provision applies to lawyers in
the government service who are allowed by law to engage in private
law practice and to those who, though prohibited from engaging in the
practice of law, have friends, former associates and relatives who are
in the active practice of law. In this regard, the respondent had already
completed his third term in Congress and his stint in the Committee on
Awards when he represented Joseph Jeffrey Rodriguez on May 24,
1999.

Lastly, the respondent claimed that he canot be held liable under Rule
6.03 of the Code of Professional Responsibility since he did not
intervene in the disposition of the conflicting applications of the
complainant and Joseph Jeffrey Rodriguez because the applications
were not submitted to the Committee on Awards when he was still a
member.

Issue/s:
Whether rule 6.02 and 6.03 of the Code of Professional Responsibility
were violated

Ruling:

Accountability of a government lawyer in public office

Canon 6 of the Code of Professional Responsibility highlights the

continuing standard of ethical conduct to be observed by government
lawyers in the discharge of their official tasks. In addition to the
standard of conduct laid down under R.A. No. 6713 for government
employees, a lawyer in the government service is obliged to observe
the standard of conduct under the Code of Professional Responsibility.

Since public office is a public trust, the ethical conduct demanded

upon lawyers in the government service is more exacting than the
standards for those in private practice. Lawyers in the government
service are subject to constant public scrutiny under norms of public
accountability. They also bear the heavy burden of having to put aside
their private interest in favor of the interest of the public; their private
activities should not interfere with the discharge of their official
functions.

The first charge involves a violation of Rule 6.02 of the Code of

Professional Responsibility. It imposes the following restrictions in the
conduct of a government lawyer:

A lawyer in the government service shall not use his public

position to promote or advance his private interests,
nor allow the latter to interfere with his public duties.

The above provision prohibits a lawyer from using his

or her public position to: (1) promote private interests;
(2) advance private interests; or (3) allow private
interest to interfere with his or her public duties. We
previously held that the restriction extends to all
government lawyers who use their public offices to
promote their private interests.

Applying these legal precepts to the facts of the case, we find

the absence of any concrete proof that the respondent abused
his position as a Congressman and as a member of the
Committee on Awards in the manner defined under Rule 6.02
of the Code of Professional Responsibility.

First, the records do not clearly show if the complainant’s

sales application was ever brought before the Committee on
Awards.

These circumstances do not show that the respondent

did in any way promote, advance or use his private interests in
the discharge of his official duties.

Second, the complainants allegation that the respondent

orchestrated the efforts to get the subject land does not specify how
the orchestration was undertaken. What appears clear in the records
is the uncorroborated Sinumpaang Salaysay of Miguel Olazo, dated
May 25, 2003, categorically stating that the respondent had no interest
in the subject land, and neither was he a contracting party in the
transfer of his rights over the subject land. In the absence of any
specific charge, Olazos disclaimer is the nearest relevant statement on
the respondents alleged participation, and we find it to be in the
respondents favor.

Third, the other documents executed by Miguel Olazo, that the

complainant presented to support his claim that the respondent
exerted undue pressure and influence over his father (namely: the
letter, dated June 22, 1996, to the DENR Regional Director-NCR; the
Sinumpaang Salaysay dated July 12, 1996; and the Sinumpaang
Salaysay dated July 17, 1996), do not contain any reference to the
alleged pressure or force exerted by the respondent over Miguel
Olazo. The documents merely showed that the respondent helped
Miguel Olazo in having his farm lots (covered by the proclaimed areas)
surveyed. They also showed that the respondent merely acted as a
witness in the Sinumpaang Salaysay dated July 17, 1996. We note that
Manuel had no personal knowledge, other than what Miguel Olazo told
him, of the force allegedly exerted by the respondent against Miguel
Olazo.

Restrictions against Former Official from Accepting Certain

Employment

Rule 6.03 - A lawyer shall not, after leaving government service,

accept engagement or employment in connection with any matter
in which he had intervened while in said service.

Reason: To avoid conflict of interests, preclude the lawyer from using

secrets or information learned in his official capacity, or prevent the
appearance of impropriety.

Any matter
Refers to any discreet, isolatable act, as well as identifiable transaction
or conduct involving a particular situation and specific party, and not
merely an act of drafting, enforcing or interpreting government or
agency proceeding, regulations, or laws or briefing abstract principles
of laws.

Intervene
It only includes an act of a person who has the power to influence the
subject proceedings.

Related laws:
R.A. No. 3019, Section 3(d)
Accepting or having any member of his family accept employment in a
private enterprise which has pending official business with him during
the pendency thereof or within one year after its termination constitutes
corrupt practice of a public officer and is unlawful.

R.A. No. 6713, Section 7(b)

Any former public official or employee for a period of 1 year after
retirement or separation from office may not practice his profession in
connection with any other matter before the office he used to be with.

Note: Violation of restriction is tantamount to representing conflicting

interests.

Forbidden Office
A member of the legislature may not accept an appointment in an office
which was created nor had its emolument increased during the
lawmaker’s term of office.

• Olazo v. Tinga, A.M. No. 10-5-7-SC, [December 7, 2010], 651 PHIL

290-308


Facts:

A disbarment case was filed against retired Supreme Court Associate

Justice Dante O. Tinga filed by Mr. Jovito S. Olazo. He is charged the
Code of Professional Responsibility.

The First Charge: Violation of Rule 6.02

In the complaint, the complainant claimed that the respondent abused
his position as Congressman and as a member of the Committee on
Awards when he unduly interfered with the complainant’s sales
application because of his personal interest over the subject land.

The Second Charge: Violation of Rule 6.03

The second charge involves another parcel of land within the
proclaimed areas belonging to Manuel Olazo, the complainant’s
brother. The complainant alleged that the respondent persuaded
Miguel Olazo to direct Manuel to convey his rights over the land to
Joseph Jeffrey Rodriguez.
The Third Charge: Violation of Rule 1.01
The complainant alleged that the respondent engaged in unlawful
conduct considering his knowledge that Joseph Jeffrey Rodriguez was
not a qualified beneficiary under Memorandum No. 119. The
complainant averred that Joseph Jeffrey Rodriguez is not a bona fide
resident of the proclaimed areas and does not qualify for an award.

The complainant also alleged that the respondent violated Section

7(b)(2) of the Code of Conduct and Ethical Standards for Public
Officials and Employees or Republic Act (R.A.) No. 6713 since he
engaged in the practice of law, within the one-year prohibition period,
when he appeared as a lawyer for Ramon Lee and Joseph Jeffrey
Rodriguez before the Committee on Awards.

The respondent cannot be held liable under Rule 6.02 of the Code of
Professional Responsibility since the provision applies to lawyers in
the government service who are allowed by law to engage in private
law practice and to those who, though prohibited from engaging in the
practice of law, have friends, former associates and relatives who are
in the active practice of law. In this regard, the respondent had already
completed his third term in Congress and his stint in the Committee on
Awards when he represented Joseph Jeffrey Rodriguez on May 24,
1999.

Lastly, the respondent claimed that he canot be held liable under Rule
6.03 of the Code of Professional Responsibility since he did not
intervene in the disposition of the conflicting applications of the
complainant and Joseph Jeffrey Rodriguez because the applications
were not submitted to the Committee on Awards when he was still a
member.

Issue/s:
Whether rule 6.02 and 6.03 of the Code of Professional Responsibility
were violated

Ruling: As a rule, government lawyers are not allowed to

engage in the private practice of their profession during their
incumbency. By way of exception, a government lawyer can engage in
the practice of his or her profession under the following conditions: first,
the private practice is authorized by the Constitution or by the law; and
second, the practice will not conflict or tend to conflict with his or her
official functions. The last paragraph of Section 7 provides an
exception to the exception. In case of lawyers separated from the
government service who are covered under subparagraph (b) (2) of
Section 7 of R.A. No. 6713, a one-year prohibition is imposed to
practice law in connection with any matter before the office he used to
be with.
 Rule 6.03 of the Code of Professional Responsibility echoes
this restriction and prohibits lawyers, after leaving the government
service, to accept engagement or employment in connection with any
matter in which he had intervened while in the said service. The
keyword in Rule 6.03 of the Code of Professional Responsibility is the
term intervene which we previously interpreted to include an act of a
person who has the power to influence the proceedings. Otherwise
stated, to fall within the ambit of Rule 6.03 of the Code of Professional
Responsibility, the respondent must have accepted engagement or
employment in a matter which, by virtue of his public office, he had
previously exercised power to influence the outcome of the
proceedings.

As the records show, no evidence exists showing that the

respondent previously interfered with the sales application covering
Manuels land when the former was still a member of the Committee on
Awards. The complainant, too, failed to sufficiently establish that the
respondent was engaged in the practice of law. At face value, the legal
service rendered by the respondent was limited only in the preparation
of a single document. In Borja, Sr. v. Sulyap, Inc., we specifically
described private practice of law as one that contemplates a
succession of acts of the same nature habitually or customarily holding
ones self to the public as a lawyer.

In any event, even granting that respondents act fell within the
definition of practice of law, the available pieces of evidence are
insufficient to show that the legal representation was made before the
Committee on Awards, or that the Assurance was intended to be
presented before it. These are matters for the complainant to prove
and we cannot consider any uncertainty in this regard against the
respondents favor.

 Presidential Commission on Good Government v.

Sandiganbayan, G.R. Nos. 151809-12, [April 12, 2005], 495
PHIL 485-619

Facts:
A public bidding of GENBANKs assets was held from March 26 to
28, 1977, wherein the Lucio Tan group submitted the winning bid.

In February 1986, the EDSA I revolution toppled the Marcos

government. One of the first acts of President Corazon C. Aquino was
to establish the Presidential Commission on Good Government
(PCGG) to recover the alleged ill-gotten wealth of former President
Ferdinand Marcos, his family and his cronies. Pursuant to this
mandate, the PCGG, on July 17, 1987, filed with the Sandiganbayan
a complaint for reversion, reconveyance, restitution, accounting
and damages against respondents.

In connection therewith, the PCGG issued several writs of

sequestration on properties allegedly acquired by the respondents by
taking advantage of their close relationship and influence with former
President Marcos.

Respondents Tan, et al. repaired to this Court and filed petitions for
certiorari, prohibition and injunction to nullify, among others, the writs
of sequestration issued by the PCGG. After the filing of the parties
comments, this Court referred the cases to the Sandiganbayan for
proper disposition. In all these cases, respondents Tan, et al. were
represented by their counsel, former Solicitor General Estelito P.
Mendoza, who has then resumed his private practice of law.

On February 5, 1991, the PCGG filed motions to disqualify

respondent Mendoza as counsel for respondents Tan, et al. The
motions alleged that respondent Mendoza, as then Solicitor General
and counsel to Central Bank, actively intervened in the liquidation of
GENBANK, which was subsequently acquired by respondents Tan, et
al. and became Allied Banking Corporation. Respondent Mendoza
allegedly intervened in the acquisition of GENBANK by respondents
Tan, et al. when, in his capacity as then Solicitor General, he advised
the Central Banks officials on the procedure to bring about
GENBANKs liquidation and appeared as counsel for the Central Bank
in connection with its petition for assistance in the liquidation of
GENBANK which he filed with the Court of First Instance (now
Regional Trial Court) of Manila and was docketed as Special
Proceeding No. 107812. The motions to disqualify invoked Rule 6.03
of the Code of Professional Responsibility. Rule 6.03 prohibits
former government lawyers from accepting engagement or
employment in connection with any matter in which he had intervened
while in said service.

The motions were denied.

Issue/s:
Whether Rule 6.03 of the Code of Professional Responsibility applies
to respondent Mendoza

Ruling:
The key to unlock Rule 6.03 lies in comprehending first, the meaning
of matter referred to in the rule and, second, the metes and bounds of
the intervention made by the former government lawyer on the matter.
The American Bar Association in its Formal Opinion 342, defined
matter as any discrete, isolatable act as well as identifiable transaction
or conduct involving a particular situation and specific party, and not
merely an act of drafting, enforcing or interpreting government or
agency procedures, regulations or laws, or briefing abstract principles
of law.

Firstly, it is critical that we pinpoint the matter which was the subject
of intervention by respondent Mendoza while he was the Solicitor
General.

Beyond doubt, therefore, the matter or the act of respondent Mendoza

as Solicitor General involved in the case at bar is advising the Central
Bank, on how to proceed with the said banks liquidation and even
filing the petition for its liquidation with the CFI of Manila. In fine, the
Court should resolve whether his act of advising the Central Bank on
the legal procedure to liquidate GENBANK is included within the
concept of matter under Rule 6.03.

We hold that this advice given by respondent Mendoza on the

procedure to liquidate GENBANK is not the matter contemplated by
Rule 6.03 of the Code of Professional Responsibility. ABA Formal
Opinion No. 342 is clear as daylight in stressing that the drafting,
enforcing or interpreting government or agency procedures,
regulations or laws, or briefing abstract principles of law are acts which
do not fall within the scope of the term matter and cannot disqualify.

Secondly, it can even be conceded for the sake of argument that the
above act of respondent Mendoza falls within the definition of matter
per ABA Formal Opinion No. 342. Be that as it may, the said act of
respondent Mendoza which is the matter involved in Sp. Proc. No.
107812 is entirely different from the matter involved in Civil Case No.
0096. Again, the plain facts speak for themselves. It is given that
respondent Mendoza had nothing to do with the decision of the Central
Bank to liquidate GENBANK. It is also given that he did not participate
in the sale of GENBANK to Allied Bank. The matter where he got
himself involved was in informing Central Bank on the procedure
provided by law to liquidate GENBANK thru the courts and in filing the
necessary petition in Sp. Proc. No. 107812 in the then Court of First
Instance. The subject matter of Sp. Proc. No. 107812, therefore, is
not the same nor is related to but is different from the subject
matter in Civil Case No. 0096. Civil Case No. 0096 involves the
sequestration of the stocks owned by respondents Tan, et al., in
Allied Bank on the alleged ground that they are ill-gotten. The case
does not involve the liquidation of GENBANK. Nor does it involve the
sale of GENBANK to Allied Bank. Whether the shares of stock of the
reorganized Allied Bank are ill-gotten is far removed from the issue of
the dissolution and liquidation of GENBANK. GENBANK was
liquidated by the Central Bank due, among others, to the alleged
banking malpractices of its owners and officers. In other words, the
legality of the liquidation of GENBANK is not an issue in the
sequestration cases. Indeed, the jurisdiction of the PCGG does not
include the dissolution and liquidation of banks. It goes without saying
that Code 6.03 of the Code of Professional Responsibility cannot
apply to respondent Mendoza because his alleged intervention
while a Solicitor General in Sp. Proc. No. 107812 is an intervention
on a matter different from the matter involved in Civil Case No.
0096.

Thirdly, we now slide to the metes and bounds of the intervention

contemplated by Rule 6.03. Intervene means, viz.:
1: to enter or appear as an irrelevant or extraneous feature or
circumstance . . . 2: to occur, fall, or come in between points of time or
events . . . 3: to come in or between by way of hindrance or
modification: INTERPOSE . . . 4: to occur or lie between two things
(Paris, where the same city lay on both sides of an intervening river . .
.)

On the other hand, intervention is defined as:

1: the act or fact of intervening: INTERPOSITION; 2: interference that
may affect the interests of others.

There are, therefore, two possible interpretations of the word

intervene. Under the first interpretation, intervene includes
participation in a proceeding even if the intervention is irrelevant or has
no effect or little influence.[43] Under the second interpretation,
intervene only includes an act of a person who has the power to
influence the subject proceedings. We hold that this second meaning
is more appropriate to give to the word intervention under Rule 6.03 of
the Code of Professional Responsibility in light of its history. The evils
sought to be remedied by the Rule do not exist where the government
lawyer does an act which can be considered as innocuous such as x x
x drafting, enforcing or interpreting government or agency procedures,
regulations or laws, or briefing abstract principles of law.

In fine, the intervention cannot be insubstantial and insignificant.

Originally, Canon 36 provided that a former government lawyer should
not, after his retirement, accept employment in connection with any
matter which he has investigated or passed upon while in such
office or employ. As aforediscussed, the broad sweep of the phrase
which he has investigated or passed upon resulted in unjust
disqualification of former government lawyers. The 1969 Code
restricted its latitude, hence, in DR 9-101(b), the prohibition extended
only to a matter in which the lawyer, while in the government service,
had substantial responsibility. The 1983 Model Rules further
constricted the reach of the rule. MR 1.11(a) provides that a lawyer
shall not represent a private client in connection with a matter in which
the lawyer participated personally and substantially as a public
officer or employee.

It is, however, alleged that the intervention of respondent Mendoza in

Sp. Proc. No. 107812 is significant and substantial. We disagree. For
one, the petition in the special proceedings is an initiatory pleading,
hence, it has to be signed by respondent Mendoza as the then sitting
Solicitor General. For another, the record is arid as to the actual
participation of respondent Mendoza in the subsequent proceedings.
Indeed, the case was in slumberville for a long number of years. None
of the parties pushed for its early termination. Moreover, we note that
the petition filed merely seeks the assistance of the court in the
liquidation of GENBANK. The principal role of the court in this type of
proceedings is to assist the Central Bank in determining claims of
creditors against the GENBANK. The role of the court is not strictly as
a court of justice but as an agent to assist the Central Bank in
determining the claims of creditors. In such a proceeding, the
participation of the Office of the Solicitor General is not that of the usual
court litigator protecting the interest of government.

Rule 3.03 - Where a partner accepts public office, he shall withdrawal

from the firm and his name shall be dropped from the firm name unless
the law allows him to practice law currently.

Reason: To prevent the law firm or partners from making use of the
name of the public official to attract business and to avoid suspicion of
undue influence.

If a partner of a law firm had been appointed as a judge, his name in

the firm should be dropped because he is no longer allowed to practice
law. The public will be misled if his name will be retained.

Restrictions in the practice of law on members of the legislature

1. A lawyer-member of the legislature is prohibited from appearing

as counsel before any courts of justice, electoral tribunals or
quasi-judicial and administrative bodies. The prohibition includes
the mere filing of a motion or any pleading.

2. Neither can he allow his name to appear in such pleading by itself

or as part of a firm name under the signature of another qualified
lawyer because the signature of an agent amounts to a signing
of a non qualified senator or congressman, the office of an
attorney being originally of agency and because he will, by such
act, be appearing in court or quasi-judicial agency or
administrative body in violation of the constitutional restriction.
Limitations/Restrictions of government lawyers in the practice of
law

Public officials who cannot practice law in the Philippines

The following cannot practice law in the Philippines:

1. Judges and other officials or employees of the superior court

(Sec 35, rule 138, Rules of Court);
2. Officials and employees of the Office of the Solicitor General
(Sec 35, rule 138, Rules of Court);
3. Government prosecutors;
4. President, Vice President, members of the cabinet, their
deputies and assistant (Sec 13, Art VII, 1987 Constitution);
5. Chairmen and members of the Constitutional Commissions
(Sec 2, Art IX, Constitution);
6. Ombudsman and his deputies;
7. Governors, city and municipal mayors; and
8. Those who by special law are prohibited from engaging in the
practice of the legal profession.

Public officials with restrictions in the practice of law

1. Senators and members of the House of Representatives (Sec

14, Art VI, 1987 Constitution);
2. Sanggunian members;
3. Retired justice or judge – within one year from the date of
retirement, the magistrate cannot practice law in the particular
court where he performed his official duties; and
4. Civil Service officers or employees without permit from their
respective department heads.

Restrictions in the Practice of law by sanggunian members

Under the Local Government Code, Sanggunian members shall not:

1 Appear as counsel before any court in any civil case wherein a

local government unit or any office, agency or instrumentality of
the government is the adverse party;
 2 Appear as counsel in any criminal case wherein an officer or
employee of the national or local government is accused of an
offense committed in relation to his office;
3 Collect any fee for their appearance in administrative
proceedings involving the local government unit of which he is
an official; and
4 Use property and personnel of the government except when the
Sanggunian member concerned is defending the interest of the
government.

Section 90 of RA 7160 governs the practice of profession of

elective local officials

Unlike Governors, city mayors and municipal mayors, members of the

sangguniang panlalawigan, sangguniang panglungsod or
sangguniang bayan are required to hold regular sessions only at least
once a week, and since the law itself grants them the authority to
practice their professions, engage in any occupation or teach in
schools outside session hours, there is no longer any need for them
to secure prior permission or authorization from any other person or
office for any of these purposes.

Punong Barangay
On the other hand, a punong barangay is not forbidden to practice his
profession but he should procure prior permission or authorization
from the head of his department, as required by civil service
regulations.

A punong barangay who is also a lawyer should obtain the prior

written permission of the DILG Secretary before he enters his
appearance as counsel for any party and his failure to comply with
Section 12, rule XVIII of the Revised Civil Service Rules constitutes a
violation of his oath as a lawyer to obey the laws.

Restrictions in the practice of law by retired justices and judges

As a condition of the pension provided under RA 910, no retiring

justice or judge of a court of record or any city or municipal judge
during the time that he is receiving said pension shall appear as
counsel before any court in:

1. Any civil case wherein the government or any subdivision or

instrumentality thereof is the adverse party;
2. Any criminal case wherein an officer or an employee of the
government is accused of an offense committed in relation to
his office; or
 3. Collect any fees for his appearance in any administrative
proceedings to maintain an interest adverse to the government,
provincial or municipal, or to any of its legally constituted
officers (Sec 1, RA 910)

Canon 15 – A LAWYER SHALL OBSERVE CANDOR, FAIRNESS,

AND LOYALTY IN ALL HIS DEALINGS AND TRANSACTIONS
WITH HIS CLIENTS.

Canon 15, Rule 15.06 – A lawyer shall not state or imply that he
is able to influence any public official, tribunal or legislative
body.

Influence-Peddling
It is improper for a lawyer to show in any way that he has connections
and can influence any tribunal or public official, judge prosecutor
congressman and others, specially so if the purpose is to enhance his
legal standing and to entrench the confidence of the client that his
case or cases are assured of victory. (PINEDA)

Illustrative Cases:
Maderada vs Mediodea

Facts :

Petitioner Imelda Y. Maderada, the Clerk of Court in 12th MCTC,

charged against Judge Ernesto Mediodea of the MCTC with gross
ignorance of the law amounting to grave misconduct for failing to
observe and apply the Revised Rules on Summary Procedure in a
civil case. On September 7, 2001, a criminal case for forcible entry
was charged against maderada and was presided over by Judge
Erlinda Tersol. Due to Maderada’s occupation as clerk of court,
Tersol inhibited herself. During the case, the opposing party
questions the appearance of Maderada as the counsel of herself and
her co plaintiff in the criminal case. Respondent judge Mediodea
refutes maderada’s assertion that she appeared as counsel on her
own behalf because she could not afford the services of a lawyer and
that it does not follow that her occupation as Clerk of Court is not
enough to pay for the services of a lawyer. Furthermore, Mediodea
alleges that Maderada did not secure authority from this court to
appear as counsel, and that she failed to file her leave of absence
every time she appeared in court. OCA recommended that
responded judge be fined. However, maderada was said to also be at
fault for not seeking the approval of the court to appear as counsel.

Issue:
Whether or not the appearance of Maderada as counsel was valid.

Held:

Yes, the appearance of Maderada as counsel was valid. A party’s

right to conduct litigation personally is recognized by law. Section 34
of Rule 138 of the Rules of Court provides that when an individual
litigates in his own behalf, he is not considered to be in the practice of
law. Maderada appeared for herself not for the public and did not
demand payment for it. Therefore, in doing so, she cannot be said to
have been engaged in the practice of law. What is prohibited is
appearing as counsel for her co plaintiff. It no longer follows the
raison de etre of protecting ones own rights.
Slide 11

Samonte vs Gatdula

Facts:

Complainant Samonte was the authorized representative of her sister

Borromeo in an ejectment case with the MTC of QC Branch 37. A
decision was later rendered in favor of the plaintiff, BOromeo, who
thereafter filed a motion for execution. Thereafer, Complainant
Samonte received a temporary restraining order signed by Judge
Castillo of Branch 220, RTC Quezon City where Gatdula was the
branch clerk of court, which enjoined the execution of the MTC’s
decision in the ejectment case. Complainant Samonte alleges that she
went to Branch 220, RTC QC to inquire about the TRO. Atty. Gatdula,
then said that Complainant’s lawyer was to blame as the wrong
address was written in the complaint for ejectment (although this was
true, the same was rectified by the filing of an amended complaint with
the correct address prior to the decision in the ejectment case).
Complainant Samonte then stated that Atty. Gatdula said that if
Complainant Samonte wanted the execution to Proceed she should
change her lawyer to the law firm of BALIGOD, GATDULA,
TACARDON, DIMAILIG and CLERA (“Gatdula Firm”) otherwise they
would not be able to eject the Defendant Knope (in the ejectment
case).

Respondent Atty. Gatdula claims that it was Complainant Samonte that

wanted to change counsel and that a friend recommended the Gatdula
Firm. Respondent claimed that he was invited to join but remained in
the judiciary.

Issue:
Whether or not there was grave misconduct consisting in engaging in
private practice of law in conflict with his official functions as Branch
Clerk of Court.

Held:

Respondent Gatdula was found guilty of an infraction (not of grave

misconduct). During the course of the hearing, Complainant Samonte
failed to appear and substantiate her allegations that it was
Respondent Gatdula that gave her the calling card and tried to
convince her to change counsels.
IV. NOTARIAL LAW VIOLATIONS
LEGAL BASIS
Supreme Court A.M. No. 02-8-13-SC (August 1, 2004)

PART I
BASIC CONCEPTS
1. What are the purposes of Notarial law?
(a) To promote, serve, and protect public interest;
(b) To simplify, clarify, and modernize the rules governing notaries
public; and
(c) To foster ethical conduct among notaries’public. (Sec 2, Rule I)

 Notarization should not be treated as an empty, meaningless,

routinary act. It is invested with substantive public interest, such that
only those who are qualified or authorized may act as notaries
public. (Heirs of Spouses Villanueva vs. Beradio, 2000)

2. What is the meaning of “acknowledgement”?

It refers to an act in which an individual on a single occasion:
(a) Appears in person before the notary public and presents an
integrally complete instrument or document;
(b) Is attested to be personally known to the notary public or
identified by the notary public through competent evidence of
identity as defined by the Rules;
(c) Represents to the notary public that the signature on the
instrument or document was voluntarily affixed by him for the
purposes stated in the instrument or document as his free and
voluntary act and deed, and, if he acts in a particular
representative capacity, that he has the authority to sign in that
capacity. (Sec. 1, Rule II)

3. What is a Jurat?
“Jurat” refers to an act in which an individual on a single occasion:
Appears in person before the notary public and presents an instrument
of document;
Is personally known to the notary public or identified by the notary
public through competent evidence of identity as defined by the Rules;
Signs the instrument or document or document in the presence of the
notary; and
Takes an oath or affirmation before the notary public as to such
instrument or document. (Sec. 6, Rule II)
4. What is a Notarial Certificate?
A notarial certificate refers to the part of, or attachment to, a notarized
instrument or document that is completed by the notary public, bears
the notary’s signature and seal, and states the facts attested to by the
notary public in a particular notarization as provided for by the rules.
(Sec. 8, Rule II)

The Notarial Certificate shall include the following:

(a) The name of the notary public as exactly indicated in the
commission;
(b) The serial number of the commission of the notary public;
(c) The words “Notary Public” and the province or city where the
notary public is commissioned, the expiration date of the
commission, the office address of the notary public; and
(d) The roll of attorney’s number, the professional tax receipt number
and the place and date of issuance thereof, and the IBP
membership number. (Sec. 2, Rule VIII)

5. What is a notarial register?

“Notarial register” refers to a permanently bound book with numbered
pages containing a chronological record of notarial acts performed by
a notary public. (Sec. 5, Rule II)

6. What is the meaning of official seal?

“Official seal refers to circular metal device, two inches in diameter
containing the mark, image or impression of the name of the
city/province where the commission is issued and the word Philippines
and notary public’s name on the margin and the roll of attorney’s
number on the face thereof, with the words “notary public” across the
center, affixed on all papers officially signed by the notary public. (Sec.
13, Rule II)

7. Who is a principal?
Principal refers to a person appearing before the notary public whose
act is subject of the notarization. (Sec. 10, Rule II)

8. What is considered competent evidence of identity?

Identification of an individual based on:
(a) At least one current identification document issued by an official
agency bearing the photograph and signature of the individual;
or
 (b) The oath or affirmation of one credible witness not privy to the
instrument, document or transaction who each personally knows
the individual and shows to the notary public documentary
identification. (Sec. 12, Rule II)

 A competent evidence of identity guarantees that the person

appearing before the notary public is the signatory to the
instrument or document to be notarized. If the notary public does
not personally know the signatory, he must require the signatory to
present a competent evidence of identity. (Tupal vs. Rojo, 2014)

PART II
The Notary Public
 A notary public is an individual authorized by state or local
government to officially witness signatures on legal documents,
collect sworn statements and administer oaths.
 The principal function of a notary public is to authenticate
documents. When a notary public certifies to the due execution and
delivery of a document under his hand and seal, he gives the
document the force of evidence. Indeed, one of the purposes of
requiring documents to be acknowledged before a notary public, in
addition to the solemnity which should surround the execution and
delivery of documents, is to authorize such documents to be given
without further proof of their execution and delivery. A NOTARIAL
DOCUMENT IS BY LAW ENTITLED TO FULL FAITH AND CREDIT
UPON ITS FACE. (Caalim-Verzonilla v. Atty. Pascua, 2011)
 The function of a notary public is, among others, to guard against
any illegal or immoral arrangements. That function would be
defeated if the notary public were one of the signatories to the
instrument. For then, he would be interested in sustaining the
validity thereof as it directly involves himself and the validity of his
own act. It would place him in an inconsistent position, and the very
purpose of the acknowledgment, which is to minimize fraud, would
be thwarted. (Villarin vs. Sabate, 2000)

9. What are the qualifications to be commissioned notary public?

(1) Must be a citizen of the Philippines;
(2) Must be over twenty-one (21) years of age;
(3) Must be a resident in the Philippines for at least one (1) year and
maintains a regular place of work or business in the city or
province where the commission is to be issued;
 (4) Must be a member of the Philippine Bar in good standing with
clearances from the Office of the Bar Confidant of the Supreme
Court and the Integrated Bar of the Philippines; and
(5) Must not have been convicted in the first instance of any crime
involving moral turpitude. (Sec. 1, Rule III)

10. Jurisdiction and Term (Sec. 11, Rule III)

What is the territorial jurisdiction and term of a notarial
commission?
A person commissioned as notary public may perform notarial acts in
any place within the territorial jurisdiction of the commissioning court for
a period of two (2) years commencing the first day of January of the
year in which the commissioning is made, unless earlier revoked or the
notary public has resigned under these Rules and the Rules of Court.
(Sec. 11, Rule III)

May the term be renewed?

YES.
A notary public may file a written application with the Executive Judge
for the renewal of his commission within forty-five (45) days before the
expiration thereof. Failure to file said application will result in the
deletion of the name of the notary public in the register of notaries
public.
The notary public thus removed from the Register of Notaries Public
may only be reinstated therein after he is issued a new commission in
accordance with these Rules. (section 13, Rule 3, ibid.)

11. Powers and Limitations of Notaries Public (Sec. 1, Rule IV)

(a) A notary public is empowered to perform the following notarial
acts:
(1) Acknowledgements;
(2) Oaths and affirmations;
(3) Jurats;
(4) Signature witnessing;
(5) Copy certifications; and
(6) Any other act authorized by the Rules.
(b) A notary public is authorized to certify the affixing of a signature
by thumb or other mark on an instrument or document presented
for notarization if:
(1) The thumb or other mark is affixed in the presence of the
notary public and of two (2) disinterested and unaffected
witnesses to the instrument or document;
 (2) Both witnesses sign their own names in addition to the thumb
or other mark;
(3) The notary public writes below the thumb or other mark:
“Thumb or other mark affixed by (name of signatory by mark)
in the presence of (names and addresses of witnesses) and
undersigned notary public”; and
(4) The notary public notarizes the signature by thumb or other
mark through an acknowledgement, jurat, or signature
witnessing.
(c) A notary public is authorized to sign on behalf of a person who is
physically unable to sign or make a mark on an instrument or
document if:
(1) The notary public is directed by the person unable to sign or
make a mark to sign on his behalf;
(2) The signature of the notary public is affixed in the presence of
two disinterested and unaffected witnesses to the instrument
or document;
(3) Both witnesses sign their own names;
(4) The notary public writes below his signature: “Signature affixed
by notary in presence of (names and addresses of person and
two [2] witnesses)”; and
(5) The notary public notarizes his signature by acknowledgement
or jurat (Sec. 1, Rule IV)

12. Prohibitions (Sec. 2, Rule IV)

What are the prohibitions imposed by law on the
performance of notarial commission and what are the exceptions?
A notary public shall not perform a notarial act outside his regular place
of work or business; provided, however, that on certain exceptional
occasions or situations, a notarial act may be performed at the request
of the parties in the following sites located within his territorial
jurisdiction:
(1) public offices, convention halls, and similar places where
oaths of office may be administered;
(2) public function areas in hotels and similar places for the
signing of instruments or documents requiring notarization;
(3) hospitals and other medical institutions where a party to an
instrument or document is confined for treatment; and
(4) any place where a party to an instrument or document
requiring notarization is under detention.
A person shall not perform a notarial act if the person involved as
signatory to the instrument or document -
(1) is not in the notary's presence personally at the time of the
notarization; and
(2) is not personally known to the notary public or otherwise
identified by the notary public through competent evidence of
identity as defined by these Rules.

 A notary public should not notarize a document unless the persons

who signed the same are the very same persons who executed and
personally appeared before him to attest to the contents and truth
of what are stated therein. A notary public is duty-bound to require
the person executing a document to be personally present, to swear
before him that he is that person and ask the latter if he has
voluntarily and freely executed the same. (Pantoja Mumar vs.
Flores, 2007)

13. Disqualifications (Sec. 3, Rule IV)

When is a notary public disqualified from performing a
notarial act?
A notary public is disqualified from performing a notarial act if he:
(1) is a party to the instrument or document that is to be
notarized; chan robles virtual law library
(2) will receive, as a direct or indirect result, any commission, fee,
advantage, right, title, interest, cash, property, or other
consideration, except as provided by these Rules and by law;
or
(3) is a spouse, common-law partner, ancestor, descendant, or
relative by affinity or consanguinity of the principal within the
fourth civil degree.

14. Instances when a notary public can legally refuse to notarize

documents (Sec. 4, 5, and 6, Rule IV)
SEC. 4. Refusal to Notarize – A notary public shall not
perform any notarial act described in these Rules for any person
requesting such an act even if he tenders the appropriate fee
specified by these Rules if:
(a) the notary knows or has good reason to believe that the
notarial act or transaction is unlawful or immoral;
(b) the signatory shows a demeanor which engenders in the mind
of the notary public reasonable doubt as to the former's
 knowledge of the consequences of the transaction requiring a
notarial act; and
(c) in the notary's judgment, the signatory is not acting of his or
her own free will.
SEC. 5. False or Incomplete Certificate. - A notary public shall
not:
(a) execute a certificate containing information known or believed
by the notary to be false.
(b) affix an official signature or seal on a notarial certificate that is
incomplete.
SEC. 6. Improper Instruments or Documents. - A notary public
shall not notarize:
(a) a blank or incomplete instrument or document; or
(b) an instrument or document without appropriate notarial
certification.

15. Fees – (Sections 1,2,3,4, and 5, Rule V)

Is there a limit on the fee that a notary public may charge?
For performing a notarial act, a notary public may charge the maximum
fee as prescribed by the Supreme Court unless he waives the fee in
whole or in part. (Sec. 1, Rule V)

Under Sec. 12, Rule 141 of the Rules of Court as amended by A.M. No.
04-2-04-SC, effective August 16, 2004 the following are the prescribed
schedule of fees:
(a) For protest for drafts, bills of exchange, or promissory notes for
non-acceptance or non-payment, and for notice thereof, ONE
HUNDRED (P100) PESOS;
(b) For the registration of such protest and filing or safekeeping of
the same, ONE HUNDRED (P100) PESOS;
(c) For authenticating powers of attorney, ONE HUNDRED (P100)
PESOS;
(d) For sworn statement concerning correctness of any account or
other document, ONE HUNDRED (P100) PESOS;
(e) For each oath of affirmation, ONE HUNDRED (P100) PESOS;
(f) For receiving evidence of indebtedness to be sent outside, ONE
HUNDRED (P100) PESOS;
(g) For issuing a certified copy of all or part of his notarial register or
notarial records, for each page, ONE HUNDRED (P100) PESOS;
(h) For taking depositions, for each page, ONE HUNDRED (P100)
PESOS; and
 (i) For acknowledging other documents not enumerated in this
section, ONE HUNDRED (P100) PESOS.

16. Notarial Register and Entries (Rule 1, 2, & 3)

16.1. Form. What is a Notarial Register?
It is a permanently bound book with numbered pages containing the
chronological official notarial register notarial register of notarial acts
which a notary public shall keep, maintain, protect and provide for lawful
inspection. (Sec. 1, [a] par. 1, Rule VI)

17.2 Where can you obtain a notarial register?

At the Office of the Solicitor General upon request and upon payment
of the cost thereof. The register shall be duly paged, and on the first
page, the Solicitor General shall certify the number of pages of which
the book consists. (Sec. 1, Par. 2, Rule VI)

17.3 How many notarial register can a notary public keep?

A notary public shall keep only one active notarial register at any given
time. (Sec. 1[b], Rule VI)

17.4. Entries in the Notarial Register (Sec. 2, Rule VI; Sec. 3, Rule
IV)
What notarial acts are required to be recorded in the notarial
register?

SEC. 2. Entries in the Notarial Register. –

(a) For every notarial act, the notary shall record in the notarial
register at the time of the notarization the following:
(1) The entry number and page number;
(2) The date and time of day of the notarial act;
(3) The type of notarial act;
(4) The title or description of the instrument, document or
proceeding;
(5) The name and address of each principal;
(6) The competent evidence of identity as defined by these
Rules if the signatory is not personally known to the notary;
(7) The name and address of each credible witness swearing
to or affirming the person’s identity;
(8) The fee charged for the notarial act;
(9) The address where the notarization was performed if not in
the notary’s regular place of work or business; and
 (10) Any other circumstance the notary public may deem
of significance or relevance.
(b) A notary public shall record in the notarial register the reasons
and circumstances for not completing a notarial act.
(c) A notary public shall record in the notarial register the
circumstances of any request to inspect or copy an entry in the
notarial register, including the requester’s name, address,
signature, thumbmark or other recognized identifier, and
evidence of identity. The reasons of refusal to allow inspection or
copying of a journal entry shall also be recorded.
(d) When the instrument or document is a contract, the notary public
shall keep an original copy thereof as part of his records and
enter in said records a brief description of the substance thereof
and shall give to each entry a consecutive number, beginning
with number one in each calendar year. He shall also retain a
duplicate original copy for the Clerk of Court.
(e) The notary public shall give to each instrument or document
executed, sworn to, or acknowledged before him a number
corresponding to the one in his register, and shall also state on
the instrument or document the page/s of his register on which
the same is recorded. No blank line shall be left between entries.
(f) In case of a protest of any draft, bill of exchange or promissory
note, the notary public shall make a full and true record of all
proceedings in relation thereto and shall note therein whether the
demand for the sum of money was made, by whom, when, and
where; whether he presented such draft, bill or note; whether
notices were given, to whom and in what manner; where the
same was made, when and to whom and where directed; and of
every other fact touching the same.
(g) At the end of each week, the notary public shall certify in his
notarial register the number of instruments or documents
executed, sworn to, acknowledged, or protested before him; or if
none, this certificate shall show this fact.
(h) A certified copy of each month's entries and a duplicate original
copy of any instrument acknowledged before the notary public
shall, within the first ten (10) days of the month following, be
forwarded to the Clerk of Court and shall be under the
responsibility of such officer. If there is no entry to certify for the
month, the notary shall forward a statement to this effect in lieu
of certified copies herein required.

18. Official Signature

 How and when shall a notary public sign an instrument or
document?
In notarizing a paper instrument or document, a notary public shall:
(a) sign by hand on the notarial certificate only the name indicated
and as appearing on the notary's commission;
(b) not sign using a facsimile stamp or printing device; and
(c) affix his official signature only at the time the notarial act is
performed.

19. Official Seal

Every person commissioned as notary public shall have only one official
seal of office in accordance with the Rules (Sec. 2, Rule VII)

19.1. When Official Seal can be affixed?

The official seal shall be affixed only at the time the notarial act is
performed and shall be clearly impressed by the notary public on every
page of the instrument or document notarized. (Sec. 2 [b], Rule VII)

19.2. What should the notary public do if his official seal is stolen,
lost, damaged or otherwise rendered unserviceable?
Within five (5) days after the official seal of a notary public is stolen,
lost, damaged or other otherwise rendered unserviceable in affixing a
legible image, the notary public, after informing the appropriate law
enforcement agency, shall notify the Executive Judge in writing,
providing proper receipt or acknowledgment, including registered mail,
and in the event of a crime committed, provide a copy or entry number
of the appropriate police record. Upon receipt of such notice, if found
in order by the Executive Judge, the latter shall order the notary public
to cause notice of such loss or damage to be published, once a week
for three (3) consecutive weeks, in a newspaper of general circulation
in the city or province where the notary public is commissioned.
Thereafter, the Executive Judge shall issue to the notary public a new
Certificate of Authorization to Purchase a Notarial Seal. (Sec. 2 [d],
Rule VII)

20. Notarial Certificates

20.1. What should be stated in a notarial certificate?

The notarial certificate shall include the following:
(a) the name of the notary public as exactly indicated in the
commission;
(b) the serial number of the commission of the notary public;
 (c) the words "Notary Public" and the province or city where the
notary public is commissioned, the expiration date of the
commission, the office address of the notary public; and
(d) the roll of attorney's number, the professional tax receipt number
and the place and date of issuance thereof, and the IBP
membership number. (Sec. 2, Rule VIII)

20.2 What are the prohibitions imposed by law regarding notarial

certificate?
A notary public shall not:
(a) Execute a certificate containing information known or believed by
the notary to be false;
(b) Affix an official signature or seal on a notarial certificate that is
incomplete. (Sec. 5, Rule IV)

PART III
DISCIPLINARY SANCTIONS
21. What are the grounds to revoke notarial commission and
administrative sanctions?
(a) The Executive Judge shall revoke a notarial commission for any
ground on which an application for a commission may be
denied.
(b) In addition, the Executive Judge may revoke the commission of,
or impose appropriate administrative sanctions upon, any notary
public who:
(1) fails to keep a notarial register;
(2) fails to make the proper entry or entries in his notarial
register concerning his notarial acts;
(3) fails to send the copy of the entries to the Executive Judge
within the first ten (10) days of the month following;
(4) fails to affix to acknowledgments the date of expiration of
his commission;
(5) fails to submit his notarial register, when filled, to the
Executive Judge;
(6) fails to make his report, within a reasonable time, to the
Executive Judge concerning the performance of his duties,
as may be required by the judge;
(7) fails to require the presence of a principal at the time of the
notarial act;
(8) fails to identify a principal on the basis of personal
knowledge or competent evidence;
 (9) executes a false or incomplete certificate under Section 5,
Rule IV;
(10) knowingly performs or fails to perform any other act
prohibited or mandated by these Rules; and
(11) commits any other dereliction or act which in the
judgment of the Executive Judge constitutes good cause
for revocation of commission or imposition of
administrative sanction.
(c) Upon verified complaint by an interested, affected or aggrieved
person, the notary public shall be required to file a verified
answer to the complaint. If the answer of the notary public is not
satisfactory, the Executive Judge shall conduct a summary
hearing. If the allegations of the complaint are not proven, the
complaint shall be dismissed. If the charges are duly established,
the Executive Judge shall impose the appropriate administrative
sanctions. In either case, the aggrieved party may appeal the
decision to the Supreme Court for review. Pending the appeal,
an order imposing disciplinary sanctions shall be immediately
executory, unless otherwise ordered by the Supreme Court.
(d) The Executive Judge may motu proprio initiate administrative
proceedings against a notary public, subject to the procedures
prescribed in paragraph (c) above and impose the appropriate
administrative sanctions on the grounds mentioned in the
preceding paragraphs (a) and (b). (Sec. 1, Rule XI)

 Notaries public must observe with utmost care and utmost fidelity
the basic requirements in the performance of their duties,
otherwise, the confidence of the public in the integrity of notarized
deeds will be undermined. (Lee vs. Tambago, 2008)
V. Lawyer and Money Property of Client

THE LAWYER AND MONEY OR PROPERTIES OF A CLIENT

I. Code of Professional Responsibility, Canon 16

CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL
MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY
COME INTO HIS PROFESSION.

FIDUCIARY RELATION – The position of an attorney enables

him to put in his power, and opens him to the temptation to avail
himself, not only of the necessity of his client, but of his good
natre, liberality and credulity, to obtain undue advantages,
bargains and gratuities. Dealings with clients are thus scrutinized
in order to make sure that the attorney derives no advantage
whatsoever from his client for personal gain.

Angeles v. Uy, Jr., A.C. No. 5019, [April 6, 2000], 386 PHIL
221-23
Facts: In a letter 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.

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.

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.

RESPONDENT’S CONTENTION: 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.

BAR CONFIDANT: Recommending that Atty. Thomas C. Uy

Jr .be suspended from the practice of law for one month

[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.

Issue: Whether or not the Bar Confidant’s recommendation

is correct

Held: YES. 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."[
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.
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.

Rule 16.01 - A lawyer shall account for all money or property

collected or received for or from the client.

- The duty of the lawyer is generally derived from the Law of

Agency, which imposes the duties of separation, accounting,
notification and delivery on all agents possessing the
principal’s property (Funa, Ethichs)
- The highly fiduciary character and confidential relation of an
attorney and client requires that the attorney should promptly
account for all funds received and held by him for the client’s
benefit. A lawyer who fails to account his client’s money or
return the same may be disciplined which may range from
suspension to disbarment depending upon the surrounding
circumstances of each case.

Obligations of a Lawyer
1. When a lawyer collects or receives money from his client for
a particular purpose, he should promptly account to the
client how the money was spent.
2. If he does not use the money for its intended purpose, he
must immediately return it to the client.
3. A lawyer has the duty to deliver his client’s funds or
properties as they fell due or upon demand.
 - The failure to return the money gives rise to the presumption
that he misappropriated for his own use to the prejudice of
and in violation of the trust reposed in him by his client
(Agpalo, Ethics)

Bayonlav. Reyes, A.C. No. 4808, [November 22, 2011], 676 PHIL
500-517

Facts: Petra Durban and Paz Durban were sisters who had
jointly owned a parcel of land situated in Butuan City in their
lifetimes.

They died without leaving a will. Their land was thereafter

expropriated in connection with the construction of the
Bancasi Airport

An expropriation compensation was to be paid to their heirs.

Bayonla and her uncle, Alfredo Tabada (Alfredo), were the
compulsory heirs of Paz, being, respectively, Pazs
granddaughter and son.

Bayonla charged Atty. Reyes with gross dishonesty, deceit,

conversion, and breach of trust. Bayonla alleged that she
and Alfredo had engaged the legal services of Atty. Reyes to
collect their share in the expropriation compensation from
the Air Transportation Office (ATO), Cagayan De Oro City
agreeing to her attorneys fees of 10% of whatever amount
would be collected;

Atty. Reyes had collected P1 million from the ATO; that

Bayonlas share, after deducting Atty. Reyes attorneys fees,
would be P75,000.00, but Atty. Reyes had delivered to her
only P23,000.00, and had failed to deliver the balance
of P52,000.00 despite repeated demands; that on June 5,
1995, Atty. Reyes had collected the amount of P121,119.11
from the ATO; that Bayonlas share, after deducting Atty.
Reyes attorneys fees, would be P109,007.20, but Atty.
Reyes had handed her only P56,500.00, and had failed to
deliver the balance of P52,507.20; and that Atty. Reyes
should be disbarred for depriving her of her just share.

RESPONDENT’S CONTENTION: Atty. Reyes admitted that

Bayonla and Alfredo had engaged her legal services for the
purpose of collecting their share in the expropriation
compensation; that as consideration for her services,
Bayonla and Alfredo had agreed upon a 40% contingent fee
for her; that she had given to Bayonla more than what had
been due to her; that Alfredo had received from the ATO the
check for the second release corresponding to the share of
both Bayonla and Alfredo; that Alfredo had gotten more than
Bayonla out of the second release; that on June 5, 1995 she
had received out of the second release by the ATO only her
40% contingent fee; that Bayonla and Alfredo had agreed to
bear the expenses for the collection of their share; that she
had incurred travel and other expenses in collecting such
share; and that she should be absolved from liability arising
from the complaint.

IBP recommendation- suspended the respondent stating As

counsel for the heirs of Paz Durban, complainant herein
should have been advised by the respondent and given a
breakdown of whatever amount was received or came to her
knowledge as complainants counsel. Short of the foregoing,
respondent violated Rule 16.01 Canon 16 Chapter III of the
Code of Professional Responsibility

Recommendation was approved.

Atty. Reyes stated in the manifestation that the IBP Board of

Governors did not accord to her the right to confront Bayonla
during the investigation conducted by the IBP Board of
Governors; that Bayonlas counsel had induced Bayonla to
file the estafa charge against her; and that this had prompted
her to initiate a disbarment complaint against Bayonlas
counsel.

Issue: Whether or not the finding of the IBP is proper.

Held: YES. Canon 16 of the Code of Professional

Responsibility requires that a lawyer shall hold in trust all
moneys and properties of her client that may come into her
possession. Rule 16.01 of Canon 16 imposes on the lawyer
the duty to account for all money or property collected or
received for or from the client. Rule 16.03 of Canon
16 demands that the lawyer shall deliver the funds and
property of his client when due or upon demand, subject to
the lawyers lien over the funds, or the lawyers option to
apply so much of the funds as may be necessary to satisfy
the lawful fees and disbursements, giving notice promptly
thereafter to the client.

The canons are appropriate considering that the

relationship between a lawyer and her client is highly
fiduciary, and prescribes on a lawyer a great degree of
fidelity and good faith. There is no question that the
money or property received by a lawyer for her client
 properly belongs to the latter.[17] Conformably with these
canons of professional responsibility, we have held that
a lawyer is obliged to render an accounting of all the
property and money she has collected for her client.
This obligation includes the prompt reporting and
accounting of the money collected by the lawyer by
reason of a favorable judgment to his client.[18]

Rule 16.02 - A lawyer shall keep the funds of each client

separate and apart from his own and those of others kept by
him.

REASON: To prevent confusion and possible misappropriation of

funds and properties, appearance of impropriety. If the funds are
kept on a separate account, the temptation to convert them to
personal use is one step removed (Report of IBP Committee)

A lawyer should not COMMINGLE a client’s money with that of

other clients and with his private funds. He should maintain a
reputation for honesty and fidelity.

Tarog v. Ricafort, A.C. No. 8253, [March 15, 2011]

In 1992, the Tarogs sought the advice of Atty. Jaime L.

Miralles regarding their bank-foreclosed property located in
the Bicol Region. Atty. Miralles advised them to engage a
Bicol-based attorney for that purpose. Thus, they went to
see Atty. Ricafort accompanied by Vidal Miralles, their friend
who was a brother of Atty. Miralles.1 They ultimately
engaged Atty. Ricafort as their attorney on account of his
being well-known in the community, and being also the Dean
of the College of Law of Aquinas University where their son
was then studying.

Atty. Ricafort convinced them to pay P65,000 to beat the

P60,000 filed by the opposition. To raise the ₱65,000.00 for
the Tarogs, therefore, Vidal solicited a loan from one Sia
with the guarantee of his brother Atty. Miralles. Sia issued a
check in that amount in the name of Arnulfo. Atty. Ricafort
persuaded them to entrust the check to him instead so that
he (Atty. Ricafort) would be the one to encash it and then
deposit the amount in court.

After some time, the Tarogs visited Atty. Ricafort to verify the
status of the consignation. Atty. Ricafort informed them that
he had not deposited the amount in court, but in his own
account. He promised to return the money, plus interest.
Despite several inquiries about when the amount would be
returned, however, the Tarogs received mere assurances
from Atty. Ricafort that the money was in good hands.

The Tarogs were then required by the RTC to file a

memorandum, in which they paid Atty. Ricafort 15,000 but
no memorandum was filed. Arnulfo demanded the return of
the P65,000 check and the P15000 for the memorandum,
but Atty, Ricafort did not reply

Respondent's Contention
In his defense, Atty. Ricafort denied that the ₱65,000.00 was
intended to be deposited in court, insisting that the amount
was payment for his legal services under a "package deal,"
that is, the amount included his acceptance fee, attorney’s
fee, and appearance fees from the filing of the complaint for
annulment of sale until judgment, but excluding appeal. Atty.
Ricafort explained that he had no copies of the receipts for
the ₱65,000.00 and ₱15,000.00 issued to the Tarogs
because "the practice of lawyers in most instances is that
receipt is issued without duplicate as it behooves upon the
client to demand for a receipt."

Issue: whether or not Atty. Ricafort is liable for gross

misconduct in the handling of complainant's money

Held: Undoubtedly, Atty. Ricafort was required to hold in

trust any money and property of his clients that came into his
possession,26 and he needed to be always mindful of the
trust and confidence his clients reposed in him.27 Thus,
having obtained the funds from the Tarogs in the course of
his professional employment, he had the obligation to deliver
such funds to his clients (a) when they became due, or (b)
upon demand.281avvphi1

Furthermore, Rule 16.02 of the Code of Professional

Responsibility, imposes on an attorney the positive
obligation to keep all funds of his client separate and apart
from his own and from those of others kept by him, to wit:

Rule 16.02 - A lawyer shall keep the funds of each client

separate and apart from his own and those of others kept by
him.

Atty. Ricafort’s act of obtaining ₱65,000.00 and ₱15,000.00

from the Tarogs under the respective pretexts that the
amount would be deposited in court and that he would
 prepare and file the memorandum for the Tarogs erected a
responsibility to account for and to use the amounts in
accordance with the particular purposes intended. For him to
deposit the amount of ₱65,000.00 in his personal account
without the consent of the Tarogs and not return it upon
demand, and for him to fail to file the memorandum and yet
not return the amount of ₱15,000.00 upon demand
constituted a serious breach of his fiduciary duties as their
attorney. He reneged on his duty to render an accounting to
his clients showing that he had spent the amounts for the
particular purposes intended.29 He was thereby presumed
to have misappropriated the moneys for his own use to the
prejudice of his clients and in violation of the clients’ trust
reposed in him.30 He could not escape liability, for upon
failing to use the moneys for the purposes intended, he
should have immediately returned the moneys to his
clients.31

Atty. Ricafort’s plain abuse of the confidence reposed in him

by his clients rendered him liable for violation of Canon
16,32 particularly Rule 16.01, supra, and Canon 17,33 all of
the Code of Professional Responsibility. His acts and
actuations constituted a gross violation of general morality
and of professional ethics that impaired public confidence in
the legal profession and deserved punishment.

Rule 16.03 - A lawyer shall deliver the funds and property of

his client when due or upon demand. However, he shall have
a lien over the funds and may apply so much thereof as may
be necessary to satisfy his lawful fees and disbursements,
giving notice promptly thereafter to his client. He shall also
have a lien to the same extent on all judgments and
executions he has secured for his client as provided for in
the Rules of Court.

- The failure of a lawyer to return the client’s money upon the

demand gives rise to the presumption that he has
misappropriated it for his own use to the prejudice of and in
gross violation of the trust imposed by him. The provision
grants the lawyer a lien over the client’s funds in his
possession as well as on all judgements and executions he
has secured for his client to satisfy his lawful fees and
disbursements.
- A charging lien may be assigned because it is a property right.
Also, the charging lien survives the death of the client
(Pineda)
 Dalisay v. Mauricio, Jr., A.C. No. 5655, [January 23,
2006], 515 PHIL 283-295

On October 13, 2001, Valeriana U. Dalisay, complainant,

engaged respondents services as counsel in "Lucio De
Guzman, etc., complainants, v. Dalisay U. Valeriana,
respondent, pending before the Municipal Trial Court of
Rizal. Notwithstanding his receipt of documents and
attorneys fees in the total amount of P56,000.00 from
complainant, respondent never rendered legal services for
her. As a result, she terminated the attorney-client
relationship and demanded the return of her money and
documents, but respondent refused.

On January 13, 2004, Investigating Commissioner Lydia A.

Navarro of the Integrated Bar of the Philippines (IBP)
Commission on Bar Discipline, found that for the amount of
P56,000.00 paid by the complainant x x x, no action had
been taken nor any pleadings prepared by the respondent
except his alleged conferences and opinions rendered when
complainant frequented his law office. She recommended
that respondent be required to refund the amount of
P56,000.00 to the complainant, and surprisingly, that the
complaint be dismissed.

Incidentally, upon learning of our Decision, respondent went

to the MTC, Branch I, Binangonan, Rizal to verify the status
of Civil Case No. 00-044. There, he learned of the trial courts
Decision dated December 6, 2001 holding that the tax
declarations and title submitted by complainant are not
official records of the Municipal Assessor and the Registry of
Deed. Thereupon, respondent filed a Sworn Affidavit
Complaint[1] against complainant charging her with
violations of Article 171[2] and 172,[3] and/or Article 182[4]
of the Revised Penal Code. He alleged that complainant
offered tampered evidence.

Respondent's contention:
First, complainant did not engage his services as counsel in
the case. She hired him for the purpose of filing two new
petitions, a petition for declaration of nullity of title and a
petition for review of a decree. Second, the civil case was
considered submitted for decision as early as August 6,
2001, or more than two months prior to October 13, 2001,
the date he was engaged as counsel, hence, he could not
have done anything anymore about it. Third, complainant
refused to provide him with documents related to the case,
preventing him from doing his job. And fourth, complainant
offered tampered evidence in the civil case, prompting him to
file falsification cases against her.

Complainant's Contention:
(1) Respondent violated the principle of confidentiality
between a lawyer and his client when he filed falsification
charges against her; (2) respondent should have returned
her money; (3) respondent should have verified the
authenticity of her documents earlier if he really believed that
they are falsified; and (4) his refusal to return her money
despite this Courts directive constitutes contempt.

Issue: Whether or not respondent lawyer is liable for gross

misconduct for not returning filing fees

Held:
Yes. There is nothing in the records to show that he filed any
petition. The ethics of the profession demands that, in such a
case, he should immediately return the filing fees to
complainant. In Parias v. Paguinto,[10] we held that a lawyer
shall account for all money or property collected from the
client. Money entrusted to a lawyer for a specific purpose,
such as for filing fee, but not used for failure to file the case
must immediately be returned to the client on demand. Per
records, complainant made repeated demands, but
respondent is yet to return the money.

The fact that Civil Case No. 00-044 was already submitted
for decision does not justify his inaction. After agreeing to
handle Civil Case No. 00-044, his duty is, first and foremost,
to enter his appearance. Sadly, he failed to do this simple
task. He should have returned complainants money. Surely,
he cannot expect to be paid for doing nothing.

In fine, let it be stressed that the authority of an attorney

begins with his or her retainer.[12] It gives rise to a
relationship between an attorney and a client that is highly
fiduciary in nature and of a very delicate, exacting, and
confidential character, requiring a high degree of fidelity and
good faith.[13] If much is demanded from an attorney, it is
because the entrusted privilege to practice law carries with it
the correlative duties not only to the client but also to the
court, to the bar, and to the public. A lawyer who performs
his duty with diligence and candor not only protects the
interest of his client; he also serves the ends of justice, does
honor to the bar, and helps maintain the respect of the
community to the legal profession.[14] Indeed, law is an
 exacting goddess demanding of her votaries not only
intellectual but also moral discipline.

Rule 16.04 - A lawyer shall not borrow money from his client
unless the client's interest are fully protected by the nature
of the case or by independent advice. Neither shall a lawyer
lend money to a client except, when in the interest of justice,
he has to advance necessary expenses in a legal matter he
is handling for the client.

Prohibitions under Rule 16.04

1. Lawyer borrowing money from client
Reason: To prevent lawyer from taking advantage of his
influence over the client.
Except: provided that the interest of the client is fully protected
by the nature of the case or by independent advice

2. Lawyer lending money to client

Reason: to assure the lawyer’s independent professional
judgment (Comments of IBP Committee)
Except: when it is necessary in the interest of justice to
advance necessary expenses in a legal matter he is handling
for the client subject to reimbursement

Linsangan v. Tolentino, A.C. No. 6672 (Resolution),

[September 4, 2009], 614 PHIL 327-337
Respondent Atty. Nicomedes Tolentino, with the help of
paralegal Fe Marie Labiano, convinced his clients[2] to
transfer legal representation. Respondent promised them
financial assistance[3] and expeditious collection on their
claims.[4] To induce them to hire his services, he persistently
called them and sent them text messages.

To support his allegations, complainant presented the sworn

affidavit[5] of James Gregorio attesting that Labiano tried to
prevail upon him to sever his lawyer-client relations with
complainant and utilize respondents services instead, in
exchange for a loan of P50,000.

Issue: Whether or not act of engaging in a money-lending

venture is violative of the duty of a lawyer

Held:
Yes. Rule 16.04 states that A lawyer shall not borrow money
from his client unless the clients interests are fully protected
by the nature of the case or by independent advice. Neither
shall a lawyer lend money to a client except, when in the
 interest of justice, he has to advance necessary expenses in
a legal matter he is handling for the client.

The rule is that a lawyer shall not lend money to his client.
The only exception is, when in the interest of justice, he has
to advance necessary expenses (such as filing fees,
stenographers fees for transcript of stenographic notes, cash
bond or premium for surety bond, etc.) for a matter that he is
handling for the client.

The rule is intended to safeguard the lawyers independence

of mind so that the free exercise of his judgment may not be
adversely affected.[22] It seeks to ensure his undivided
attention to the case he is handling as well as his entire
devotion and fidelity to the clients cause. If the lawyer lends
money to the client in connection with the clients case, the
lawyer in effect acquires an interest in the subject matter of
the case or an additional stake in its outcome.[23] Either of
these circumstances may lead the lawyer to consider his
own recovery rather than that of his client, or to accept a
settlement which may take care of his interest in the verdict
to the prejudice of the client in violation of his duty of
undivided fidelity to the clients cause.[24]

As previously mentioned, any act of solicitation constitutes

malpractice[25] which calls for the exercise of the Courts
disciplinary powers. Violation of anti-solicitation statutes
warrants serious sanctions for initiating contact with a
prospective client for the purpose of obtaining
employment.[26] Thus, in this jurisdiction, we adhere to the
rule to protect the public from the Machiavellian
machinations of unscrupulous lawyers and to uphold the
nobility of the legal profession.

II. Rules of Court, Rule 138,Sections 24, 25, and 37

Section 24. Compensation of attorneys; agreement as to
fees. — An attorney shall be entitled to have and recover from
his client no more than a reasonable compensation for his
services, with a view to the importance of the subject matter of
the controversy, the extent of the services rendered, and the
professional standing of the attorney. No court shall be bound by
the opinion of attorneys as expert witnesses as to the proper
compensation, but may disregard such testimony and base its
conclusion on its own professional knowledge. A written contract
for services shall control the amount to be paid therefor unless
found by the court to be unconscionable or unreasonable.
- No more than a reasonable compensation for his services
 - A written contract for services shall control the amount to
be paid unless it is unconscionable or unreasonable

Section 25. Unlawful retention of client's funds; contempt. —

When an attorney unjustly retains in his hands money of his
client after it has been demanded, he may be punished for
contempt as an officer of the Court who has misbehaved in his
official transactions; but proceedings under this section shall not
be a bar to a criminal prosecution.

Almendarez, Jr. v. Langit, A.C. No. 7057, [July 25, 2006],

528 PHIL 814-822
Complainant, as attorney-in-fact of his mother Pura Lioanag
Vda. de Almendarez, was the plaintiff in an ejectment case
before the Municipal Trial Court of Dagupan City.
Respondent served as complainant's counsel. While the
case was pending, defendant Roger Bumanlag ("Bumanlag")
deposited monthly rentals for the property in dispute to the
Branch Clerk of Court.

Sometime in May 2003, complainant learned that

respondent was able to withdraw the rentals deposited by
Bumanlag. Felicidad Daroy ("Daroy"), Officer-in-Charge
Clerk of Court, confirmed this to complainant who received
from Daroy copies of the two withdrawal slips drawn from the
trial court's savings account. Respondent received a total of
P255,000, as evidenced by two receipts5 signed by him. The
withdrawals were made through Daroy's authorized
representative Antonia Macaraeg, but Daroy personally
delivered the money to respondent. Respondent did not
inform complainant of these transactions.

Complainant, through his new counsel Atty. Miguel D.

Larida, sent respondent on 30 June 2003 a final demand
letter for the accounting and return of the P255,000.6
Respondent failed to reply.

Hence, complainant filed this case for disbarment against

respondent for failing to account for complainant's funds.
Complainant further accuses respondent of neglecting to
pursue the implementation of the writ of execution issued in
the ejectment case. Respondent did not file an answer
despite receipt of the notice.

Issue: Whether or not respondent violated his oath when he

mishandled the money
 Held: Respondent's failure to turn over the money to
complainant despite the latter's demands gives rise to the
presumption that he had converted the money for his
personal use and benefit. This is a gross violation of general
morality as well as of professional ethics, impairing public
confidence in the legal profession.11 More specifically, it
renders respondent liable not only for violating the Code but
also for contempt, as stated in Section 25, Rule 138 of the
Rules of Court:

SEC. 25. Unlawful retention of client's funds; contempt —

When an attorney unjustly retains in his hands money of his
client after it has been demanded he may be punished for
contempt as an officer of the Court who has misbehaved in
his official transactions; but proceedings under this section
shall not be a bar to a criminal prosecution.

The relation of attorney and client is highly fiduciary,

requiring utmost good faith, loyalty, and fidelity on the part of
the attorney. Respondent miserably failed in this regard.
Instead, he demonstrated a lack of integrity, care, and
devotion required by the legal profession from its members.
Whenever a lawyer is no longer worthy of the trust and
confidence of the public, this Court has the right and duty to
withdraw his privilege as officer of the Court and member of
the Bar.

Section 37. Attorneys' liens. — An attorney shall have a lien

upon the funds, documents and papers of his client which have
lawfully come into his possession and may retain the same until
his lawful fees and disbursements have been paid, and may
apply such funds to the satisfaction thereof. He shall also have a
lien to the same extent upon all judgments for the payment of
money, and executions issued in pursuance of such judgments,
which he has secured in a litigation of his client, from and after
the time when he shall have the caused a statement of his claim
of such lien to be entered upon the records of the court rendering
such judgment, or issuing such execution, and shall have the
caused written notice thereof to be delivered to his client and to
the adverse paty; and he shall have the same right and power
over such judgments and executions as his client would have to
enforce his lien and secure the payment of his just fees and
disbursements.

Attorney’s Lien Defined

It is a lien evidencing the lawyer’s right to retain all papers,
money or property belonging to his client as insurance that he
will be paid for his legal services.
Charging Lien Defined
It is the right of the lawyer to have his interest secured upon all
judgements for the payment of money and executions issued in
pursuance of such judgements, which he has secured in a
litigation of his client from and after the time when he shall have
caused a statement of his claim of such lien to be entered upon
the records of the court rendering such judgement or issuing
such execution.
VI. ACQUISITION OF PROPERTIES SUBJECT OF LITIGATION

The general rule in the acquisition of properties subject of litigation is

embodied in the Civil Code. The law provides;

(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 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 by 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;

- The law requires utmost observance of this prohibition specially

to lawyers who are stewards of justice. However, there are
instances when a lawyer is not bound of this prohibition. The
following cases illustrate such instances and further elaborate on
the application of the prohibition abovementioned.

Elements of prohibition:

1. There is Attorney- Client privilege

Fornilda VS Branch
FACTS: The Petition entitled "Petisiyung Makapagpasuri
Taglay ang Pagpapapigil ng Utos", translated as one for
certiorari with Preliminary Injunction, was filed on 27
September 1985 by three (3) petitioners, namely David P.
Fornilda, Emilia P. Fornilda-Olili and Angela P. Fornilda-
Gutierrez. They seek the reversal of the Order of
respondent Trial Court, dated 25 July 1985, granting a Writ
of Possession, as well as its Orders, dated 25 April 1986
and 16 May 1986 (p. 241, Rollo), directing and authorizing
respondent Sheriff to demolish the houses of petitioners
Angela and Leocadia Fornilda (who is listed as a petitioner
but who did not sign the Petition). Neither is Juan P.
Fornilda a signatory. Julio M. Catolos formerly owned six
(6) parcels of land located in Tanay, Rizal, which are the
controverted properties in the present litigation. His estate
was the subject of settlement in Special Proceedings No.
3103 of the then Court of First Instance of Rizal, at Pasig,
Branch 1. Francesca Catolos Agnes Catolos Alfonso I.
ForniIda and Asuncion M. Pasamba were some of the legal
heirs and were represented in the case by Atty. Sergio
Amonoy (hereinafter referred to as Respondent Amonoy).
A Project of Partition was filed in the Intestate Court
whereby the Controverted Parcels were adjudicated to
Alfonso I. Fornilda and Asuncion M. Pasamba. The Court
approved the Project of Partition. It was not until 6 August
1969, however, that the estate was declared closed and
terminated after estate and inheritance taxes had been
paid, the claims against the estate settled and all properties
adjudicated. Fornilda and Asuncion M. Pasamba executed
a Contract of Mortgage wherein they mortgaged the
Controverted Parcels to Respondent Amonoy as security
for the payment of his attorney's fees for services rendered
in the aforementioned intestate proceedings, in the amount
of P27,600.00. Since the mortgage indebtedness was not
paid, on 21 January 1970, Respondent Amonoy instituted
foreclosure proceedings before the Court of First Instance
of Rizal. Court Ruled in favor of respondent. In a separate
action, plaintiffs question the judgment of the court. It was
dismissed and affirmed by the CA.
Petiioner’s Contention: Petitioners alleged that the
amount agreed upon as attorney's fees was only Pll,695.92
and that the sum of P27,600.00 was unconscionable and
unreasonable. They contend mortgage and the Sheriffs
sales were null and void as contrary to the positive
statutory injunction in Article 1491 (5) of the Civil Code,
which prohibits attorneys from purchasing, even at a public
or judicial auction, properties and rights in litigation, and
that the Trial Court, in the Foreclosure Case, had never
acquired jurisdiction over the subject matter of the action,
i.e., the Controverted Parcels.
Respondent’s Contention: Respondent Amonoy
denies that he had acquired the Controverted Parcels
through immoral and illegal means contending that "the
question of attorney's fees, the mortgage to secure the
same, the sale of the mortgaged properties at public
auction, which was confirmed by the Court, and ultimately,
the ownership and possession over them, have all been
judicially adjudicated.

ISSUE: WHETHER OR NOT THE MORTGAGE

CONSTITUTED ON THE CONTROVERTED PARCELS IN
FAVOR OF RESPONDENT AMONOY COMES WITHIN
THE SCOPE OF THE PROHIBITION IN ARTICLE 1491
OF THE CIVIL CODE.

HELD: Yes, it is within the scope of the law. In the instant

case, it is undisputed that the Controverted Parcels were
part of the estate of the late Julio M. Catolos subject of
intestate estate proceedings, wherein Respondent
Amonoy acted as counsel for some of the heirs from 1959
until 1968 by his own admission (Comment, p. 145, Rollo);
 that these properties were adjudicated to Alfonso Fornilda
and Asuncion M. Pasamba in the Project of Partition
approved by the Court on 12 January 1965; that on 20
January 1965, or only eight (8) days thereafter, and while
he was still intervening in the case as counsel, these
properties were mortgaged by petitioners' predecessor-in-
interest to Respondent Amonoy to secure payment of the
latter's attorney's fees in the amount of P27,600.00; that
since the mortgage indebtedness was not paid,
Respondent Amonoy instituted an action for judicial
foreclosure of mortgage on 21 January 1970; that the
mortgage was subsequently ordered foreclosed and
auction sale followed where Respondent Amonoy was the
sole bidder for P23,600.00; and that being short of the
mortgage indebtedness, he applied for and further
obtained a deficiency judgment. The fact that the
transaction involved falls squarely within the prohibition
against any acquisition by a lawyer of properties belonging
to parties they represent which are still in suit. While the
Project of Partition was approved on 12 January 1965, it
was not until 6 August 1969 that the estate was declared
closed and terminated (Record on Appeal, Civil Case No.
3103, p. 44). At the time the mortgage was executed,
therefore, the relationship of lawyer and client still existed,
the very relation of trust and confidence sought to be
protected by the prohibition, when a lawyer occupies a
vantage position to press upon or dictate terms to an
harassed client. What is more, the mortgage was executed
only eight (8) days after approval of the Project of Partition
thereby evincing a clear intention on Respondent
Amonoy's part to protect his own interests and ride
roughshod over that of his clients. From the time of the
execution of the mortgage in his favor, Respondent
Amonoy had already asserted a title adverse to his clients'
interests at a time when the relationship of lawyer and
client had not yet been severed.

The fact that the properties were first mortgaged and only
subsequently acquired in an auction sale long after the
termination of the intestate proceedings will not remove it
from the scope of the prohibition. To rule otherwise would
be to countenance indirectly what cannot be done directly.

2. The property is in litigation

Ordonio VS Eduarte
FACTS: This is a complaint for the disbarment of
respondent Atty. Josephine Palogan-Eduarte originally
filed with this Court on April 18, 1988. On August 10,
1989, the Commission on Bar Discipline of the Integrated
Bar of the Philippines, to which the case was referred for
investigation, submitted a report confirming in substance
the charge of violation of Art. 1491 of the Civil Code and
part of the Oath of Office of a lawyer and recommending
the suspension of herein respondent. Antonia Ulibari filed
with the RTC, Branch XXII, Cabagan, Isabela, Civil Case
No. 391 for annulment of a document (known as Affidavit
of Adjudication of the Estate of Felicisimo Velasco and
Quitclaim Thereof) against her children. The case was
handled by Atty. Henedino Eduarte, herein respondent's
husband, until his appointment as RTC judge on October
26, 1984. His wife, Atty. Josephine Palogan-Eduarte, took
over. On August 22, 1985, decision in Civil Case No. 391
was rendered in favor of Antonia Ulibari. Except for
Dominga Velasco-Ordonio, one of the children of Antonia
Ulibari and complainant in the instant case, the rest of the
defendants did not appeal. Antonia Ulibari conveyed 20
hectares of land to herein respondent and her husband as
their Attorney's fees for legal services rendered. All the
titles of the lands subject of the deeds of absolute sale
and the deed of conveyance however remained in the
name of Antonia Ulibari. Dominga Velasco-Ordonio filed
this complaint for disbarment against herein respondent.
Petitioner’s Contention: The petitioner presented an
affidavit executed by her mother Antonia Ulibari on March
2, 1988 stating that affiant never conveyed the subject
parcel of land to respondent as her attorney's fees and that
the deeds of absolute sale executed in favor of her children
were not known to her (and that she received no
consideration therefor).
Respondent’s Contention: Respondent admitted that
Antonia Ulibari did not actually sell the parcels of land to
her children for the considerations stated in the deeds of
sale and that she (respondent) "utilized the form of deed of
sale as the most convenient and appropriate document to
effect the transfer of the parcels of land to Antonia Ulibari's
children in accordance with her wish that said parcels of
land be given to them.
ISSUE: WHETHER OR NOT RESPONDENT VIOLATED
ARTICLE 1491 OF THE CIVIL CODE AND THE CODE OF
ETHICS?
HELD: Yes, respondent both violated both laws. In causing
the execution of the Deed of Conveyance during the
pendency of the appeal of the case involving the said
property, he has violated Art. 1491 of the Civil Code which
prohibits lawyers from "acquiring by assignment property
and rights which may be the object of any litigation in which
 they may take part by virtue of their profession." For having
improperly acquired the subject property, under the
foregoing circumstances, respondent has violated not only
Art. 1491 of the Civil Code but also Rule 10 of the Canons
of Professional Ethics which provides that "the lawyer
should not purchase any interest in the subject matter of
the litigation which he is conducting." In so doing,
respondent has manifestly violated that part of her oath as
a lawyer that she shall not do any falsehood. Not only that.
In preparing the documents which do not reflect the true
transaction, respondent has likewise violated Rule 10.01 of
the Code of Professional Responsibility which provides:
Rule 10.01. A lawyer shall not do any falsehood, nor
consent to the doing of any in court; nor shall be mislead
or allow the court to be mislead by any artifice.

3. The attorney is the counsel of record in the case and

4. The Attorney, by himself or through an agent, purchases such
property during pendency of the case

Other Instances Where Prohibition is Applicable

1. Redemption, compromise and renunciation of the subject in

litigation
2. Lease of the subject in litigation
Mananquil VS Villegas
FACTS: In a verified complaint for disbarment dated July
5, 1982, Mauro P. Mananquil charged respondent Atty.
Crisostomo C. Villegas with gross misconduct or
malpractice committed while acting as counsel of record of
one Felix Leong in the latter's capacity as administrator of
the Testate Estate of the late Felomina Zerna in Special
Proceedings No. 460 before then Court of First Instance of
Negros Occidental. The complainant was appointed
special administrator after Felix Leong died.In the
pleadings submitted before the Court and the Office of the
Solicitor General, complainant alleges that over a period of
20 years, respondent allowed lease contracts to be
executed between his client Felix Leong and a partnership
HIJOS DE JOSE VILLEGAS, of which respondent is one
of the partners, covering several parcels of land of the
estate, i.e. Lots Nos. 1124, 1228, 2221, 2402, 3939, 3942
and 3957 of the Tanjay Cadastre, under iniquitous terms
and conditions. That as early as March 21, 1961,
respondent was retained as counsel of record for Felix
Leong, one of the heirs of the late Felomina Zerna, who
was appointed as administrator of the Testate Estate of the
Felomina Zerna in Special No. 460 on May 22, 1961. A
lease contract dated August 13, 1963 was executed
between Felix Leong and the "Heirs of Jose Villegas"
represented by respondent's brother-in-law Marcelo
Pastrano involving, among others, sugar lands of the
estate designated as Lot Nos. 1124, 1228, 2221, 2402,
3939, 3942 and 3957 of the Tanjay Cadastre. On October
18, 1965, another lease contract was executed between
Felix Leong and the partnership HIJOS DE JOSE
VILLEGAS, containing basically the same terms and
conditions as the first contract, with Marcelo Pastrano
signing once again as representative of the lessee. After
the demise of Marcelo Pastrano, respondent was
appointed manager of HIJOS DE JOSE VILLEGAS by the
majority of partners and renewals of the lease contract
were executed between Felix Leong and HIJOS DE JOSE
VILLEGAS on January 13, 1975 and on December 4,
1978, with respondent signing therein as representative of
the lessee.
Petitioner’s Contention: Such contracts entered by
respondent were made without the approval of the probate
court and in violation of Articles 1491 and 1646 of the new
Civil Code.
Respondent’s Contention: Respondent claims that he was
neither aware of, nor participated in, the execution of the
original lease contract entered into between his client and
his family partnership, which was then represented by his
brother-in-law Marcelo Pastrano. And although he admits
that he participated in the execution of subsequent
renewals of the lease contract as managing partner of
HIJOS DE JOSE VILLEGAS, he argues that he acted in
good faith considering that the heirs of Filomena Zerna
consented or acquiesced to the terms and conditions
stipulated in the original lease contract. He further
contends that pursuant to the ruling of the Court in Tuason
v. Tuason [88 Phil. 428 (1951)] the renewal contracts do
not fall within the prohibition of Articles 1491 and 1646
since he signed the same as a mere agent of the
partnership. Further, It cannot be inferred from the
statements made by the Court in that case that contracts
of sale or lease where the vendee or lessee is a
partnership, of which a lawyer is a member, over a property
involved in a litigation in which he takes part by virtue of his
profession, are not covered by the prohibition under
Articles 1491 and 1646.

ISSUE: WHETHER OR NOT RESPONDENT VIOLATED

ARTICLE 1491 OF THE CIVIL CODE?
 HELD: Yes, respondent violated the said law. The claim
that the heirs of Filomena Zerna have acquiesced and
consented to the assailed lease contracts does not militate
against respondent's liability under the rules of
professional ethics. The prohibition referred to in Articles
1491 and 1646 of the new Civil Code, as far as lawyers are
concerned, is intended to curtail any undue influence of the
lawyer upon his client on account of his fiduciary and
confidential association [Sotto v. Samson, G.R. No. L-
16917, July 31, 1962, 5 SCRA 733]. Thus, the law makes
the prohibition absolute and permanent [Rubias v.
Batiller, supra]. And in view of Canon 1 of the new Code of
Professional Responsibility and Sections 3 & 27 of Rule
138 of the Revised Rules of Court, whereby lawyers are
duty-bound to obey and uphold the laws of the land,
participation in the execution of the prohibited contracts
such as those referred to in Articles 1491 and 1646 of the
new Civil Code has been held to constitute breach of
professional ethics on the part of the lawyer for which
disciplinary action may be brought against him [See
Bautista v. Gonzalez, Adm. Matter No. 1625, February 12,
1990). Accordingly, the Court must reiterate the rule that
the claim of good faith is no defense to a lawyer who has
failed to adhere faithfully to the legal disqualifications
imposed upon him, designed to protect the interests of his
client [See In re Ruste, 70 Phil. 243 (1940); Also, Severino
v. Severino, 44 Phil. 343 (1923)].

Where the Prohibition is INAPPLICABLE

1. Where the property purchased by the lawyer was not involved in

litigation

Guevara VS Calalang

FACTS: In a complaint for malpractice filed by complainant

Eliseo Guevara, the respondent Atty. Maximo Calalang
was charged with having acquired by transfer or
assignment a parcel of land in violation of Article 1491 of
the Civil Code. Respondent Maximo Calalang died on
August 8, 1978. His death rendered the case moot and
academic. However, the investigation of the charges
conducted during the respondent's lifetime indicates that
the charges filed against him have no merit. The report and
recommendation of the Solicitor General states that
respondent was not guilty of professional misconduct or
unethical practice.
 Petitioner’s Contention: That the acquisition by Calalang
through transfer or assignment of a parcel of land is in
violation of Article 1491 of the Civil Code and constitutes
as malpractice.

Respondent’s Contention: The agreement of respondent

and Bernabe Flores is a contract for contingent fee. It has
already been held that contingent fee is not prohibited in
the Philippines and is impliedly sanctioned by the Canons
of Professional Ethics (Recto vs. Harden, 100 Phil. 427
[1956]. In the absence of a prohibiting statute, a contingent
fee agreement between an attorney and his client, under
which the attorney is to have a portion of the thing in
litigation in the event of a successful prosecution or
defense of an action, is generally recognized as valid (14
Am Jur 2d 41, p. 845), if not attended by fraud, mistake,
undue influence, or suppression of facts

ISSUE: WHETHER OR NOT SUCH ACT BY CALALANG

IS VIOLATIVE OF ARTICLE 1491 OF THE CIVIL CODE?

HELD: No, the act of Calalang is not violative of said

provision. It was not professional misconduct or unethical
practice for the respondent to acquire the rights and
interests of his client to the 439 square meter parcel of land
subject of the administrative charges because the land was
not involved in the litigation he was handling. The land was
acquired by Bernabe Flores in an execution sale
conducted to satisfy the judgment secured in the course of
Civil Case No. 2171. The case handled by the respondent
was for damages. In some jurisdictions, a contract for
contingent fee is even deemed to create a equitable pro
tanto equitable assignment, or to transfer an equitable
interest in favor of the attorney in the judgment or the
proceeds of settlement, or to give him a lien on the
judgment or its proceeds (7 Am Jur 2d. 218, p. 173). Even
if the assignment of rights in question is considered an
outright purchase by the respondent of the subject lot or of
the rights therein, still respondent was not guilty of breach
of professional ethics, misconduct or malpractice by
reason of said transaction.

2. Where the sale took place BEFORE it became involved in the

suit
3. Where the attorney at the time of the purchase was not the
counsel of the case
4. Where the purchaser of the property in litigation was a
corporation even though the attorney was an officer
5. Where the sale took place after the termination of the litigation
Macariola VS Asuncion

FACTS: On June 8, 1963, respondent Judge Elias

Asuncion rendered a decision in Civil Case 3010 which
became final based on lack of an appeal. On October 16,
1963, a project of partition was submitted to Judge
Asuncion. The project of partition of lots was not signed by
the parties themselves but only by the respective counsel
of plaintiffs and petitioner Bernardita R. Macariola. The
Judge approved it in his order dated October 23, 1963.

One of the lots in the project of partition was Lot 1184,

which was subdivided into 5 lots denominated as Lot 1184
A – E. Dr. Arcadio Galapon bought Lot 1184-E on July 31,
1964, which was issued transfer of certificate of Title No,
2338 of the Register of Deeds of Tacloban City. On March
6, 1965, Galapon sold a portion of the lot to Judge
Asuncion and his wife. On August 31, 1966, spouses
Asuncion and Galapon conveyed their respective shares
and interest in Lot 1184-E to the Traders Manufacturing &
Fishing Industries Inc. Judge Asuncion was the President
and his wife Victoria was the Secretary. The Asuncions and
Galapons were also the stockholder of the corporation.
Respondent Macariola charged Judge Asuncion with "Acts
unbecoming a Judge" for violating the following provisions:
Article 1491, par. 5 of the New Civil Code, Article 14, par.
1 & 5 of the Code of Commerce, Sec. 3 par H of RA 3019
also known as the Anti-Graft & Corrupt Practice Act., Sec.
12, Rule XVIII of the Civil Service Rules and Canon 25 of
the Canons of Judicial Ethics. On November 2, 1970 a
certain Judge Jose D. Nepomuceno dismissed the
complaints filed against Asuncion.

Petitioner’s Contention: The petitioner contends that

respondent Judge Asuncion violated Article 1491,
paragraph 5, of the New Civil Code in acquiring by
purchase a portion of Lot No. 1184-E which was one of
those properties involved in Civil Case No. 3010 decided
by him. Likewise they violated Article 14, paragraphs I and
5 of the Code of Commerce, Section 3, paragraph H, of
R.A. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, Section 12, Rule XVIII of the Civil Service
Rules, and Canon 25 of the Canons of Judicial Ethics, by
associating himself with the Traders Manufacturing and
Fishing Industries, Inc., as a stockholder and a ranking
officer while he was a judge of the Court of First Instance
of Leyte and that there was a culpable defiance of the law
and utter disregard for ethics by respondent Judge

Respondent’s Contention: Respondent vehemently

denies any interest or participation in the transactions
between the Reyeses and the Galapons concerning Lot
1184-E, and he insists that there is no evidence
whatsoever to show that Dr. Galapon had acted, in the
purchase of Lot 1184-E, in mediation for him and his wife.
Issue: WHETHER OR NOT JUDGE ASUNCION
VIOLATED THE PROHIBITION IN ARTICLE 1491 OF
THE CIVIL CODE?

HELD: No. Judge Asuncion did not violate the said

provision. Respondent Judge did not buy the lot 1184-E
directly on the plaintiffs in Civil Case No. 3010 but from Dr.
Galapon who earlier purchased the lot from 3 of the
plaintiffs. When the Asuncion bought the lot on March 6,
1965 from Dr. Galapon after the finality of the decision
which he rendered on June 8, 1963 in Civil Case No 3010
and his two orders dated October and November, 1963.
The said property was no longer the subject of litigation.In
the case at bar, Article 14 of Code of Commerce has no
legal and binding effect and cannot apply to the
respondent. Upon the sovereignty from the Spain to the US
and to the Republic of the Philippines, Art. 14 of this Code
of Commerce, which sourced from the Spanish Code of
Commerce, appears to have been abrogated because
whenever there is a change in the sovereignty, political
laws of the former sovereign are automatically abrogated,
unless they are reenacted by Affirmative Act of the New
Sovereign.

Asuncion cannot also be held liable under the par. H, Sec.

3 of RA 3019, citing that the public officers cannot partake
in any business in connection with this office, or intervened
or take part in his official capacity. The Judge and his wife
had withdrawn on January 31, 1967 from the corporation
and sold their respective shares to 3rd parties, and it
appears that the corporation did not benefit in any case
filed by or against it in court as there was no case filed in
the different branches of the Court of First Instance from
the time of the drafting of the Articles of Incorporation of the
corporation on March 12, 1966 up to its incorporation on
January 9, 1967. The Judge realized early that their
interest in the corporation contravenes against Canon 25.
6. A lawyer may accept an assignment from his client of a money
judgment rendered in the latter’s favor in a case in which he was
not counsel, in payment of his professional services performed
in another case
7. In a contract for Attorney’s fees which is contingent upon the
outcome of the litigation

Fabillo VS IAC

FACTS: Justina Fabillo left with her brother, Florencio, a

house and lot in San Salvador Street, Palo, Leyte which
was covered by tax declaration No. 19335, and to her
husband, Gregorio D. Brioso, a piece of land in
Pugahanay, Palo, Leyte.1 After Justina's death, Florencio
filed a petition for the probate of said will. On June 2, 1962,
the probate court approved the project of partition "with the
reservation that the ownership of the land declared under
Tax Declaration No. 19335 and the house erected thereon
be litigated and determined in a separate proceedings."
Two years later, Florencio sought the assistance of lawyer
Alfredo M. Murillo in recovering the San Salvador property.
Murillo wrote a letter stating “Considering that Atty. Montilla
lost this case and the present action is a revival of a lost
case, I trust that you will gladly give me 40% of the money
value of the house and lot as a contingent fee in case of a
success.” They entered into a Contract of Service. The
case was filed and by way of what appears a compromise,
Fabillo was deemed owner of both properties. Atty. Murillo
implemented the stipulations in the contract. Fabillo
refused thus Murillo filed a complaint. The court ruled
ownership for spouses but maintained the contingent fee
in favor of Murillo. The Intermediate Appellate Court
affirmed in toto the decision of the lower court. Thus, this
petition for review on certiorari by the heirs of Fabillo.

Petitioner’s Contention: Petitioner seeks to implement the

provisions of the Contract entered into by parties.

Respondent’s Contention: The defendants contend in their

answer that the consent to the contract of services of the
Fabillo spouses was vitiated by old age and ailment; that
Murillo misled them into believing that Special Proceedings
No. 843 on the probate of Justina's will was already
terminated when actually it was still pending resolution;
and that the contingent fee of 40% of the value of the San
Salvador property was excessive, unfair and
unconscionable considering the nature of the case, the
length of time spent for it, the efforts exerted by Murillo, and
his professional standing.

ISSUE: WHETHER OR NOT ATTY. MURILLO IS

ENTITILED TO A CONTINGENT FEE WITHOUT AND
WHETHER OR NOT IT VIOLATES ARTICLE 1491 OF
THE CIVIL CODE?

HELD: Yes, Atty. Murillo is entitled to a contingent fee for

his services. Such contingent fee is not violative of the
prohibition in Article 1491. The contract of services did not
violate said provision of law. Article 1491 of the Civil Code,
specifically paragraph 5 thereof, prohibits lawyers from
acquiring by purchase even at a public or judicial auction,
properties and rights which are the objects of litigation in
which they may take part by virtue of their profession. The
said prohibition, however, applies only if the sale or
assignment of the property takes place during the
pendency of the litigation involving the client's property.
Hence, a contract between a lawyer and his client
stipulating a contingent fee is not covered by said
prohibition under Article 1491 (5) of the Civil Code because
the payment of said fee is not made during the pendency
of the litigation but only after judgment has been rendered
in the case handled by the lawyer. In fact, under the 1988
Code of Professional Responsibility, a lawyer may have a
lien over funds and property of his client and may apply so
much thereof as may be necessary to satisfy his lawful fees
and disbursements. As long as the lawyer does not exert
undue influence on his client, that no fraud is committed or
imposition applied, or that the compensation is clearly not
excessive as to amount to extortion, a contract for
contingent fee is valid and enforceable.