CASES UNDER CHAPTER 8 – LAWYER’SFIDUCIARY OBLIGATIONS 1. Judge ADORACION G. ANGELES, complainant, vs. Atty. THOMAS C. UY, JR., respondent. Jr. A.C. No. 5019. April 6, 2000 Key phrase: “spendthrift client” Doctrines: 1. 2. 3. 4. 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.” Same; Same; Professional Misconduct; 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.—The records do not clearly show whether Attorney Uy had in fact appropriated the said amount; in fact, Mrs. Del Rosario acknowledged 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, 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, 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.” Same; Same; The Supreme Court 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.—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. The present situation calls for the exercise of this duty. Same; Same; In the absence of clear evidence of misappropriation, the failure of a lawyer to promptly report that he received money on behalf of his client will warrant suspension for one month.—For misappropriating and failing to promptly report and deliver money they received on behalf of their clients, some lawyers have been disbarred and others have been suspended for six months. In the present case, the records Encarnacion / Recinto / San Diego 3B PALE 2015-2016 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. NATURE OF CASE: ADMINISTRATIVE MATTER in the Supreme Court. Violation of Canon 16, Code of Professional Responsibility. FACTS: In a letter dated February 11, 1999 addressed to the Office of the Chief Justice, Judge Adoracion G. Angeles of the Regional Trial Court of Caloocan City (Branch 121) charged Atty. Thomas C. Uy, Jr. with violation of Canon 16 of the Code of Professional Responsibility. In open court, accused Norma Trajano manifested that she had alreadv settled in full the civil aspect in Crim. Case No. C-54177 (98) in the total amount P36,500.00. 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 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 her willingness to accept the money. Consequently, the Court suspended the proceedings to enable Atty. Uy to get the money from his law office. Unfortunately, it is already 12:15 o’clock past noon but Atty. Uy did not show up anymore and not even his shadow appeared in Court. Stripped of unnecessary verbiage, the Comment contends that the respondent kept the money in his office because that was the alleged wish of both his client and her son. He allegedly informed them of such money and tried to give it to them, but they insisted that he retain it. He further maintained that it was only after Judge Angeles issued the February 10, 1999 Order that his client relented and accepted the money on February 12, 1999. Bar Confidant’ s Report and Recommendation: That Atty. Thomas C. Uy, Jr. be suspended from the practice of law for one month. “Atty. Uy’s allegation that Judge Angeles prevented Primitiva Del Rosario from saying in open court the words ‘HINDI PO KASI GUSTO KO PO NA MABUO ANG PERA does not have any proof as nothing of that sort appears in the transcript of stenographic notes. Atty. The present situation calls for the exercise of this duty. as well as the Court Administrator who shall circulate them to all the courts in the country for their information and guidance. That she did not know it showed the falsity of his claim. Atty.C.” In this light. Primitiva Del Rosario. she would have known its whereabouts. The relationship between a lawyer and a client is highly fiduciary. There is no clear evidence of misappropriation. He is warned that a repetition of the same or similar acts will be dealt with more severely. Verily. they must also appear clean.Uy has not even bothered to refute the truth of the contents of the stenographic notes. respondent's law firm. 1998) Key phrase: CPA lawyer bought Baguio property FACTS: The friendship of JOSE NAKPIL and respondent CARLOS J. IMELDA A. Fernando Del Rosario. Uy the tempting opportunity to appropriate for himself the money belonging to his client. It is designed “to remove all such temptation and to prevent everything of that kind from being done for the protection of the client. respectively. respondent. Copies of this Decision shall also be entered in his record as attorney and served on the IBP. Under the circumstances.” ISSUE: Whether or not Atty. be avoided by members of the bar.” In the present case.500 he had received from Norma Trajano on behalf of his client. handled the proceeding for the settlement of Jose's estate. 1999. 1976. complainant IMELDA NAKPIL. Like judges. The ownership of the Moran property became an issue in the intestate proceedings. Neither are we convinced by the affidavits of Mrs. at all times. he requested respondent to purchase the Moran property for him. Uy. On the first charge. lawyers must not only be clean. Uy’s averment that his act of personally keeping the subject P16. They agreed that respondent would keep the property in trust for the Nakpils until the latter could buy it back. NAKPIL. During the pendency of the action for reconveyance.” Thus. Encarnacion / Recinto / San Diego 3B PALE 2015-2016 This way. In 1965. For lack of funds. Uy.” Furthermore. This situation should. the question is not necessarily whether the rights of the clients have been prejudiced. complainant. Although the amount had been entrusted to respondent on December 14. CARLOS J. It is noteworthy that respondent did not dispute the foregoing transcript although it belied his allegation that Mrs. Jr. at his given address or any other known one. Jose Nakpil became interested in purchasing a summer residence in Moran Street. 2. No. 1999 hearing that she had not yet received it. complainant alleged that she accepted respondent's offer to serve as lawyer and . she did not even know where it was. 1973. Carlos J. it is clear that respondent failed to promptly report and account for the P16. On March 9. vs. complainant filed this administrative case to disbar the respondent. Rule 16. Thomas C. respondent acted as the legal counsel and accountant of his widow. It was the Nakpils who occupied the Moran summer house. 1999 and June 7. ATTY. Jr. (A. It should be stressed that he was her counsel and the compadre of her son. but whether the lawyer has adhered to the ethical standards of the bar. the people’s faith in the justice system would remain undisturbed. his client revealed during the February 10. we rule that he should be suspended for one month. Del Rosario and her son. If it were true that Mrs. the records merely show that respondent did not promptly report that he received money on behalf of his client. Uy should be suspended? HELD: YES.00 was with and at their request cannot be given much credence to outweigh the arguments of Judge Angeles. In this case. some lawyers have been disbarred and others have been suspended for six months. all the more bolstering this Office’s opinion that the said notes are accurate and truthful. Worse. VALDES. both of whom affirmed their intention to have their money in the safekeeping of respondent. For misappropriating and failing to promptly report and deliver money they received on behalf of their clients. Valdes & Associates. is hereby SUSPENDED for one month. 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. Baguio City. VALDES dates back to the '50s during their school days in De La Salle and the Philippine Law School. 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. attesting to Atty. Del Rosario’s express wish was to have the payments in full.01 of the Code also states that “a lawyer shall account for all money or property collected or received for or from the client. In the present case. it requires a high degree of fidelity and good faith. Del Rosario was informed about the payment and that she entrusted it to respondent.500. When Jose Nakpil died on July 8. 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. 2040 March 4. Indeed. Let copies of this Decision be served on Atty. dated February 16. Complainant sought to recover the Moran property by filing with the then Court of First Instance (CFI) of Baguio City an action for reconveyance with damages against respondent and his corporation. Thomas C. 1998. WHEREFORE. respondent has not done so. “The affidavits executed by Primitiva Del Rosario and her son. Defense On first charge. Valdes & Co. It ought to follow that respondent's act of excluding the Moran property from the estate which his law firm was representing evinces a lack of fidelity to the cause of his client. courts carefully watch these transactions to assure that no advantage is taken by a lawyer over his client. Claimant Angel Nakpil is a brother of the late Nakpil who. respondent denied there was a conflict of interest when his law firm represented the estate in the intestate proceedings while his accounting firm (C. Valdes & Co. If they could not agree on its ownership. Encarnacion / Recinto / San Diego 3B PALE 2015-2016 The OSG recommended the dismissal of the administrative case. Inc. after said loans were obtained by respondent for the purchase and renovation of the property which he claimed for himself. charged the two loans of P65. As to the third charge.000. The OSG relied heavily on the decision of the Court of Appeals then pending review by this Court. Claimant ENORN. therefore should be held administratively liable? HELD: NO. his alleged representation of conflicting interests was with the knowledge and consent of complainant as administratrix. by virtue of his office. As to the first two charges. we further ruled that complainant's documentary evidence. Baguio City. In the said reconveyance case.J.auditor to settle her husband's estate. If respondent truly believed that the said property belonged to him. ISSUE: Whether or not respondent lawyer violated his client’s trust.000. The OSG found that respondent was not put on notice of complainant's claim over the property. respondent should have formally presented his claim in the intestate proceedings instead of transferring the property to his own corporation and concealing it from complainant and the judge in the estate proceedings. it upheld respondent's right to transfer title to his family corporation.00 for the purchase and renovation of the Moran property. became the President of ENORN. The measure of good faith which an attorney is required to exercise in his dealings with his client is a much higher standard than is required in business dealings where the parties trade at "arms length. there was no conflict of interests between the estate and the claimants for they had forged a modus vivendi. he should have at least informed complainant of his adverse claim. To place the property beyond the reach of complainant and the intestate court. we hold that respondent is . Respondent violated Canon 17 of the Code of Professional Responsibility which provides that a lawyer owes fidelity to his client's cause and enjoins him to be mindful of the trust and confidence reposed on him.00 as liability of the estate. She reposed her complete trust in respondent who was the lawyer. Hence.000.000.J. Respondent's misuse of his legal expertise to deprive his client of the Moran property is clearly unethical. should estop respondent from claiming that he bought the Moran property for himself." Business transactions between an attorney and his client are disfavored and discouraged by the policy of the law. respondent transferred the property to his corporation. Inc. respondent later transferred it to his corporation. Third. Caval Realty Corporation. a lawyer is not barred from dealing with his client but the business transaction must be characterized with utmost honesty and good faith. CPAs) served as accountant of the estate and prepared the claims of creditors Angel Nakpil and ENORN.. yet included in the claims against the estate the amounts of P65. respondent. As regards the third charge. CPAs) excluded the Moran property from the inventory of her husband's estate. Valdes & Co. respondent reiterated his defense in the reconveyance case that he did not hold the Moran property in trust for the Nakpils as he is its absolute owner. against the estate.. through his accounting firm.. and not merely in trust for Jose Nakpil.00.000. to make matters worse. On the second charge. Inc.000. an attorney is in an easy position to take advantage of the credulity and ignorance of his client. while respondent's auditing firm (C. complainant alleged that respondent's law firm (Carlos J. As a rule. Valdes and Associates) filed the petition for the settlement of her husband's estate in court. In the second complaint.00 and P75.00 and P75. Second. It also found no conflict of interests as the claimants were related to the late Jose Nakpil. Respondent's law firm then filed a petition for settlement of the estate of the deceased Nakpil but did not include the Moran property in the estate's inventory. CPAs) acted as accountant of both the estate and two of its creditors. complainant alleged that respondent's auditing firm (C. which respondent represented as her husband's loans applied "probably for the purchase of a house and lot in Moran Street. This rule is founded on public policy for. upon the latter's death. and title was issued in its name. no presumption of innocence or improbability of wrongdoing is considered in an attorney's favor. it is well. As to the second charge. J. Thus.established that respondent offered to the complainant the services of his law and accounting firms by reason of their close relationship dating as far back as the '50s." As to the third charge. respondent denied preparing the list of claims against the estate which included his loans of P65. It opined that there was no trust agreement created over the property and that respondent was the absolute owner thereof. accountant and business consultant of her late husband. Thus. which she also adduced in this administrative case. is a family corporation of the Nakpils of which the late Nakpil was the President.00 and P75. These two claimants had been clients of his law and accounting firms even during the lifetime of Jose Nakpil. Instead. The respondent did not actually file any complaint. Gilberto Neri. 3. or. respondent undoubtedly placed his law firm in a position where his loyalty to his client could be doubted. the duty of respondent's law firm was to contest the claims of these two creditors but which claims were prepared by respondent's accounting firm.00 as the filing fee for the necessary complaint. In the estate proceedings. It is highly improper to represent both sides of an issue. The test to determine whether there is a conflict of interest in the representation is probability. It was respondent's duty to inhibit either of his firms from said proceedings to avoid the probability of conflict of interest. although he informed the complainant that he had already done so. IN VIEW WHEREOF. the NARIC enforced the bond against the Manila Surety and Fidelity Company and the latter in turn collected from the complainant. but to collect from the Pinedas the amount owed. The proscription against representation of conflicting interests finds application where the conflicting interests arise with respect to the same general matter and is applicable however slight such adverse interest may be. 1960 Doctrine: ATTORNEY-AT-LAW. who admitted their indebtedness and pleaded for time to pay the same. in other words. after full disclosure of facts. fairness and loyalty in his dealings and transactions with his clients. CONTENTION: It is an established fact that the respondent had received from the complainant P30. the set-up is still undesirable. if she had a claim against her husband's estate. CARLOS J. Even if the claims were valid and did not prejudice the estate. There is clearly a conflict between the interest of the estate which stands as the debtor. Gervacio L. In the case at bar. Held: The respondent was guilty of a breach of professional ethics. As they were his neighbors. Members of the Bar are expected to always live up to the standards embodied in the Code of Professional Responsibility as the relationship between an attorney and his client is highly fiduciary in nature and demands utmost fidelity and good faith. with a warning that a similar infraction shall be dealt with more severely in the future. He is suspended from the practice of law for a period of one (1) year effective from receipt of this Decision. FACTS: The complainant. his interest is per se adverse to the estate. GILBERTO NERI. threatening to take judicial action if the Pinedas would still not meet their obligation. spouses Enrique and Ursula Pineda requested the complainant to act as counter-indemnitor with the Manila Surety & Fidelity Company in a bond posted for said spouses in favor of the National Rice and Corn Corporation (NARIC). BREACH OF PROFESSIONAL ETHICS. It applies although the attorney's intentions and motives were honest and he acted in good faith. When no payment had been made. the respondent. Atty. The lawyer must explain to his clients the nature and extent of the conflict and the possible adverse effect must be thoroughly understood by his clients. that the respondent was given full discretion as to the means for accomplishing the assignment. Respondent's accounting firm prepared the list of assets and liabilities of the estate and. 275.—Respondent attorney received from the complainant the sum of P30. the respondent wrote a letter of demand.00 as filing fee. Having failed to recover extra-judicially said amount from the Pinedas. Case No. computed the claims of two creditors of the estate. that an attorney cannot represent adverse interests. In the case at bar. However. Considering. a lawyer should determine his conduct by acting in a manner that would promote public confidence in the integrity of the legal profession. based on sound public policy. the court merely reprimanded him. her claim is still adverse and must be filed in the intestate proceedings. acting slowly. for the alleged reason that debtor spouses had given assurances to pay. April 29. that the respondent had not yet received anything for his services and the complainant had subsequently been paid. The respondent did not actually file the complaint for the alleged reason that the debtors had given assurances to pay. at the same time. Prescinding from these premises. REPRIMAND. Adm. GERVACIO L. however. VALDES guilty of misconduct. It is generally the rule. Public confidence in law and lawyers may be eroded by the irresponsible and improper conduct of a member of the bar. the complainant delivered to the respondent the amount of P30. the Court finds respondent Encarnacion / Recinto / San Diego 3B PALE 2015-2016 ATTY. there is no question that the interests of the estate and that of its creditors are adverse to each other. LIWAG. Liwag. and did not return the filing fee. respondent exhibited less than full fidelity to his duty to observe candor. When a creditor files a claim against an estate. vs. Disclosure alone is not enough for the clients must give their informed consent to such representation. When the Pinedas had failed to liquidate their obligation. respondent. tried to talk to the Pinedas. ATTY. representation of conflicting interests may be allowed where the parties consent to the representation. We also hold that the relationship of the claimants to the late Nakpil does not negate the conflict of interest. and that of the two claimants who are creditors of the estate. The respondent argues that his services were not engaged solely "for the purpose of filing the corresponding collection complaint". seeks to disbar the respondent.00 for the purpose of filing a collection complaint. ISSUE: WON respondent professional ethics? committed breach of .guilty of representing conflicting interests. On the same date. complainant. not certainty of conflict. As correctly pointed out by complainant. the complainant engaged the services of the respondent who agreed to handle the matter on a contingent fee of forty per cent. Thus. the law officer of the Government finds not substantiated. complainant." and to be paid within the term of one year. they eventually formulated a document of sale and mortgage in which Mendezona recognized a debt in favor of Diaz in the sum of P80.000 owing to Diaz. 1922. 2098. When Diaz and Mendezona came to settle up their affairs. It provides that the following persons. it was found to have suffered a loss of P67. which covered the amount of the mortgage with its accumulated interest and with the judicial expenses. and particularly relates to the conduct of Attorney Kapunan in civil case No. disbarment or even suspension of the respondent from the practice of his profession would be too harsh and unkind. 1923 FACTS: This action for malpractice brought by Vicente Diaz against Attorney Ruperto Kapunan. the clerk of the Court of First Instance of Leyte handed the P500 to Diaz who." The crime is consummated by the mere act of soliciting a gift or promise for the purpose of abstaining from taking part in the auction. laid upon the hacienda "Mapuyo. Three charges seem to have been considered. and Attorney Ruperto Kapunan. he filed another motion. that the respondent has not yet received anything for his services and that the complainant has subsequently been paid. relating to Kapunan's attempt to represent both parties in the case. accompanied by his lawyer Emilio Benitez. Although it was on December 23. We do not believe this article has been infringed by the respondent because he has not purchased property at a public or judicial auction and because his participation in the auction was in representation of his client. even at a public or judicial auction." The provision contained in the last paragraph of said article is made to include lawyers. and to molest and disturb Diaz by frivolous motions. and with this conclusion we fully agree. for that matter. Vicente Diaz and Secundino de Mendezona formed a partnership and entered into extensive business transactions in the Province of Leyte. naming them. in turn. Diaz gave Kapunan P500 of the P1. in part payment of his professional fees. The first two. We only hereby reprimand him for the offense. Undoubtedly. The courts will consider an agreement between a judgment creditor and one claiming an interest in the thing about to be sold under an execution. and without any purpose of defrauding the latter's creditors. vs. that neither shall bid against the other. December 8. This article punishes "any person who shall solicit any gift or promise as a consideration for agreeing to refrain from taking part in any public auction. Public policy discountenances combinations or agreements on the part of bidders at execution sales. contrary to the fact. the business failed to prosper. 4.000 and an additional sum of P10. When the year had expired Mendezona was not to be found and his family was unable to meet the payment. respondent. he presented a motion in the Court of First Instance of Leyte asking that he be permitted to retain the P500 in question. 1923. Respondent has committed a breach of professional ethics when. VICENTE DIAZ. Vicente Diaz. the objects and effects of which are to stifle competition. to lay before this court charges against Attorney Kapunan for alleged unprofessional conduct. The bidding was opened by Kapunan offering P12. with the warning that a repetition of similar misconduct or. as void. unless all parties concerned know of the arrangement and consent . The third charge is more serious and has to do with Kapunan having intervened in the manner in which he did in the sale of the property of his client Mendezona.000 mentioned in the above quoted document. 1923. receipted for that amount. So ordered. RUPERTO KAPUNAN. following.000. has to do with the conduct of Attorney Kapunan during the legal proceedings which followed the business troubles of Vicente Diaz and Secundino de Mendezona. he made the complainant believe that the Pineda spouses had already been sued in court and did not return the amount intended for the filing fee. any violation of his oath will be dealt with more drastically. with respect to any property or rights involved in any litigation in which they may take part by virtue of their profession and office. It has been held that an execution sale to the attorney of the defendant is not unlawful if made in good faith.Encarnacion / Recinto / San Diego 3B PALE 2015-2016 HELD: YES. Kapunan is guilty of misconduct? HELD: YES. The more puzzling question relates to the alleged violation by Attorney Kapunan of article 542 of the Penal Code. Considering however.500. that Diaz and Kapunan entered into the agreement. on July 10. with the result that on liquidation. Nevertheless. There the bids stopped on account of Diaz and Kapunan entering into the agreement. When Kapunan must have had knowledge of the disbarment proceedings. "cannot take by purchase.000 for the property and with Diaz and Kapunan raising the bids until finally Diaz offered P12. Diaz could only wait until January 4. however. either in person or through the mediation of another. Diaz further f ollowed the usual procedure to take over the property of Mendezona pursuant to his bid of P12. with the consent of the client.500. withdrawing his f ormer motion and asking the court to permit him to turn over the P500 to Diaz. before Kapunan had knowledge of the disbarment proceedings. ISSUE: WON Atty. The fact that the properties subject thereof commanded quite handsome prices in the market should not be a measure of the importance or non-importance of the case. and FRANCISCO HERRERA. To begin with. 5. In the case at bar. after all. He then filed a suit for Annulment of Judgment in the CA. much less the right of redemption.” 3. Respondent’s bankruptcy should have tempered petitioner’s demand for his fees.000. respondents. Upon failure to pay. or undue influence. Execution sales should be open to free and full competition. Procedural rules. In this case. By virtue of such a subsequent agreement. CANLAS. Pending redemption. petitioner.thereto. The attorney’s fees should be commensurate to the extent of services rendered. Sarmiento. At any rate. 2) W/N petitioner validly imposed and executed the amount of his attorney’s fees.” It is futile to invoke the rule granting attorneys a lien upon the things won in litigation similar to that vested upon redemptioners. as we said. L-77691. is not subject to the injunction of Article 1491 of the Civil Code. G. Petitioner moved for execution as to his fees. August 8. and various criminal complaints. fraud. Lawyering is not a moneymaking venture and lawyers are not merchants. executing a “Deed of Sale and Transfer of Rights of Redemption and /or to redeem. Petitioner and respondent came to an agreement that Atty. It is actually a new contract—not one in pursuance of what had been agreed upon on compromise—in which. the transfer.” which enabled petitioner to redeem and register the same in his name. this is the clear tenor of his petition for annulment in the Appellate Court. As security. But like all voidable contracts. Facts: Respondent Herrera was the registered owner of 8 parcels of land in QC. in order to secure the maximum benefit for the debtor. Encarnacion / Recinto / San Diego 3B PALE 2015-2016 Held: 1) No. redemption was decreed by agreement (on compromise) between the mortgagor and mortgagee. Execution sales should be open to free and f ull competition. so we hold. HON. Respondent remained in financial straits. It did not give the petitioner any right to the properties themselves. the rule refers to realty sold as a result of execution in satisfaction of judgment. Respondent alleged that the deed was falsified and filed an action for reconveyance and reformation of document.000 is unreasonable. It appearing. it is open to annulment on the ground of mistake. Issue: 1) W/N respondent’s action is a petition for certiorari. however. but the court ruled otherwise. and should be used to discourage the stifling of bids at judicial sales. Canlas would redeem the property in favor of the latter. Petitioner argues that the petition for annulment was actually a petition for certiorari and should be dismissed. COURT OF APPEALS. that . A lawyer should not exploit his mastery of procedural law to score a “technical knock-out” over his own client. PATERNO R. however. which are “the object of any litigation. The Court observed that the “Deed of Sale and Transfer of Rights of Equity of Redemption and/or to Redeem” was executed following the finality of the decision approving the compromise agreement. stating that it did not change the meaning of the contract. acquired absolute ownership thereof).000 as attorney’s fees. the lands had ceased to be properties. in order to secure the maximum benefit for the debtor. which is in turn subject to the right of innocent purchasers for value . No. the respondent through petitioner counsel filed a complaint for injunction against L & R. causing the parcels of land to be sold at public auction. and inexpensive determination of every action and proceeding. he executed deeds of mortgage in favor of the corp. the petitioner purportedly assumed redemption rights over the disputed properties (but in reality. Article 542 of the Penal Code is. in opposition to his oath “to conduct himself as a lawyer with all good fidelity to his clients. 3) W/N redemption and sale of respondent’s properties by petitioner was valid. The court approved the compromise. have for their object assistance unto parties “in obtaining just. No. to enjoin consolidation of title in its name.” 2) We conclude that Attorney Kapunan has been guilty of a technical violation of article 542 of the Penal Code. L&R extrajudicially foreclosed the mortgage. 1988. therefore. which was granted but not collected. vs. J. failing to acquire the funds to repay the loans and the attorney’s fees. parties entered into a compromise agreement whereby respondent was allowed another year to redeem the property and that Atty. speedy. The case itself moreover did not involve complex questions of fact or law that would have required substantial effort as to research or leg work for the petitioner to warrant his demands. although provisions for his compensation were purportedly provided. over the parcels of land. petitioner’s claim for attorney’s fees in the sum of P100. with L&R as highest bidder. (financing institution) equal to P420. Yes. Canlas shall be entitled to P100. disbarment proceedings. He placed his interests over and above those of his client.For this reason we invalidate the transfer in question specifically for undue influence as earlier detailed. He obtained several loans from the L&R Corp. 2 years later. While the respondent Herrera has not specifically prayed for invalidation. in which he succeeded in obtaining preliminary injunctive relief.R. a wise provision even though rarely invoked. To hold Atty. Respondent claims that he was authorized to exercise his judgment in determining whether he should prosecute the appeal. the private respondent. The Provincial Fiscal of Nueva Ecija. the complaint herein was filed. for the specific purpose of applying the same to the payment of the "appellate" docket fees (P24). in effect.J.00 as and for attorney’s fees. in the sum of P654. which. Alino is DISBARRED. the petitioner. to pay the respondent Herrera the amount of P1. he did not introduce any. Respondent’s failure to return the money to complainant upon demand gave rise to the presumption that he . must be held liable. Had complainants authorized him to decide whether or not to prosecute their appeal or desist therefrom. to make said payment and deposit. in the latter alternative. but they were all undocumented. respondent said he would do so. Atty. if his failure to pay said docket fees and to deposit the estimated cost of printing of the record on appeal was due to his decision — pursuant to the aforementioned authority he had allegedly been given — to desist from prosecuting the appeal and to apply the money to the payment of his professional fees. ISSUE:W/N Atty. Respondent also asked for money on several occasions allegedly to spend for or to be given to the judge handling their case. Concepcion. as deputized by the SolGen. Encarnacion / Recinto / San Diego 3B PALE 2015-2016 HELD: NO. should he consider it advisable to desist from appeal.” Respondent received from complainants the sum of P298.000. complainant. complainants' counsel contacted respondent and advised him to settle the matter with them. vs. No. We order Atty. respondent (A. which complainant found out later to be unnecessary as the application for the writ was denied by the trial court. When the case was also set for oral argument. He shall account for all money or property collected or received from his client and shall deliver the funds and property of his client when due or upon demand. why is it that he filed a motion for reconsideration of the resolution of the Court of Appeals dismissing the appeal in consequence of said failure. we hold Francisco Herrera. 7418. and to regard the sum as compensation for his services in connection with the case. Paterno Canlas. the petitioner. the appeal bond and the (printing) of their brief. October 9.000. However.800 of such amount remained unaccounted for.000 intended for an injunction bod was supported by documents. due to respondent’s failure to pay the docket fees and deposit the costs of printing. to keep the P298. Canon 16 of the CPR mandates that a lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Soriano violated the Code of Professional Responsibility when he misappropriated the funds given by his client.the properties have been conveyed to third persons whom we presume to be innocent purchasers for value. Only P5. in addition to the sum of P20. (printing of) the record on appeal (P150) and appellants' brief (P100).000. C. 7. He stated that he intended to introduce additional evidence.000 was given to respondent. No. SORIANO. eventually. but did not file a memorandum in his favor. Complainant alleged that an amount of more or less P270. and that it was the complainant herself that boasted that she was a professional fixer in administrative agencies as well as in the judiciary. thereby securing.00 representing the redemption price of the properties. Said judge denied the allegation and advised her to file an administrative complaint. after securing 4 postponements of the date. Canlas alone liable for damages is to enrich said respondent at the expense of his lawyer. and. be indebted to his client in the sum of P326. but actually did nothing about it. Manuel ALIÑO A. 6. SANTIAGO C. Atty. after proper adjustments. Prior to the commencement of this administrative proceedings. HELD: YES. liable to Atty. respondent would have retrieved the receipt issued by him for said sum. February 10. he moved for the postponement. Canlas. Emilio and Cirila CAPULONG vs. recommended the disciplinary action against respondent after reception of evidence. Facts: Atty. However. 2007) Facts: Complainant alleged that respondent asked for money to be put up as an injunction bond. To obviate debate as the actual amounts owing by one to the other. Issue: W/N respondent’s act of appropriating the money for himself without notifying or giving an account to his clients was valid. the foregoing acts and omissions indicate the high degree of irresponsibility of respondent herein and his unworthiness to continue as a member of the legal profession. Moreover. for such a loss of properties.00 in question as his fees. ANDREA BALCE CELAJE. he did not make? Apart from suggesting a misappropriation of funds held by him in trust for his clients and a breach of such trust. The parties must then set off their obligations against the other.M. the record on appeal. Respondent denied the charges and averred that they were merely to destroy his character. such that he shall.000. stating specifically that it would be used for docket fees. the sum he earned from the resale thereof. 381. However. by way of actual damages. Paterno Canlas. Atty. an extension of over five (5) months.00 as and for damages. No motion for reconsideration was filed by either party. the appeal was dismissed.00. Alino was charged by his former clients with “gross negligence tantamount to malpractice and betrayal of his clients’ trust and confidence. ATTY. the amount of P14. in turn. IBP Commissioner Funa found respondent guilty for Gross Misconduct and recommended his suspension for 3 years for misappropriating his client’s funds and for deceiving and abusing his client’s confidence.000.C. Hence. appeal bond (P15). 1968. As such. Doctrine: The relation between an attorney and his client is highly fiduciary in nature . was sued for non-remittance of SSS payments. March 9. Respondent did not remit the amount.” The failure of respondent to immediately remit the amount to the SSS gives rise to the presumption that he has misappropriated it for his own use. He is also ordered to restitute to his client the amount of P5. ISSUE: Whether the prosecutor should be reprimanded by reason of his non-payment of the SSS fees. his public office should make him more sensitive to his professional obligations because a lawyer’s disreputable conduct is more likely to be magnified in the public’s eye. Legaspi. The belated payment of the same to the SSS does not excuse his misconduct. it requires utmost good faith. PENTICOSTES. respondent paid the amount to the SSS. but as a prosecutor is unavailing. dishonest. . FACTS:Encarnacion Pascual. respondent Encarnacion / Recinto / San Diego 3B PALE 2015-2016 alleged in his defense tdhat his act of accommodating the request for payment was merely and act of Christian charity. A. While Pascual may not strictly be considered a client of respondent. membership in the legal profession is a privilege. complainant filed with the RTC a complaint for professional misconduct against respondent for the failure to remit the amount. IBAÑEZ. and integrity of the legal profession.800. Prosecutor Ibanez is REPRIMANDED and given a STERN WARNING that the commission of the same will be dealt more severely in the future. The duties of a provincial prosecutor do not include receiving money from persons with official transactions with his office. In fact.804 to respondent as payment of her SSS contributions in arrears. that the action was moot and academic as the amount was paid. respondent. Legaspi. This is a gross violation of general morality as well as professional ethics. it impairs public confidence in the legal profession and deserves punishment. PROSECUTOR DIOSDADO S. loyalty. Over a year later. Rule 1.01 of the Code of Professional Responsibility provides that “[a] lawyer shall not engage in unlawful. this court held that “(t)he relation between an attorney and his client is highly fiduciary in nature . the lawyer is bound to render an accounting to the client showing that the money was spent for a particular purpose.C.—It is glaringly clear that respondent’s non-remittance for over one year of the funds coming from Encarnacion Pascual constitutes conduct in gross violation of the above canon. this court held that “(t)he relation between an attorney and his client is highly fiduciary in nature . Canon 6 of the Code of Professional Responsibility provides: “These canons shall apply to lawyers in government service in the discharge of their official tasks. wherein Pascual gave P1. ATTY. PRUDENCIO S. respondent. 8. which deserves punishment. ATTORNEY RAMON CHAVES LEGASPI. it impairs public confidence in the legal profession and deserves punishment. In Daroy v. [thus] 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. fidelity and disinterestedness on the part of the lawyer. (ALREADY DISCUSSED UNDER CHAP VI – NATURE AND . 9. . Penticostes. the lawyer must immediately return the money to his client. honesty. The case was assigned for preliminary Investigation to Prosecutor Ibanez. as certified by the SSS. the rules relating to a lawyer’s handling of funds of a client is applicable. . Upon referral to the IBP. not in his capacity as a private lawyer. and in violation of the trust reposed in him by his client. In Daroy v. (thus) 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. . vs. Romero. sister-in-law of Atty. complainants. . HELD: YES. stating that it was a violation of his oath as a lawyer. Indeed. CBD No. the rules relating to a lawyer’s handling of funds of a client is applicable. and that he was not liable as the acts done by him was not in the capacity as a practicing lawyer but as a prosecutor. When a lawyer receives money from the client for a particular purpose. 1999. honesty and fair dealing is expected and required of a member of the bar. Atty. J. While Pascual may not strictly be considered a client of respondent.” Respondent’s nonremittance for over one year of the funds coming from Pascual constitutes conduct in gross violation of the above canon. LYDIA LEGASPI and AGRIPINO LEGASPI. immoral or deceitful conduct.misappropriated it for his own use to the prejudice of. Soriano is SUSPENDED for 2 years with a STERN WARNING that a repetition of the same shall be dealt with more severely. complainant. 7 days later. This court has repeatedly admonished lawyers that a high sense of morality. And if he does not use the money for the intended purpose.” The failure of respondent to immediately remit the misappropriated it for his own use. 167. This is a gross violation of general morality as well as professional ethics. [thus] 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. Respondent’s claim that he may not be held liable because he committed such acts. The commission recommended that he should be reprimanded with a warning.” “A lawyer does not shed his professional obligations upon assuming public office. The belated payment of the same to the SSS does not excuse his misconduct. FERMINA LEGASPI DAROY. It is a gross violation of general morality and of professional ethics and impairs public confidence in the legal profession. vs. . The Court has been exacting in its demand for integrity and good moral character of members of the Bar who are expected at all times to uphold the integrity and dignity of the legal profession and refrain from any act or omission which might lessen the trust and confidence reposed by the public in the fidelity. The attorney-client relationship is highly fiduciary in nature. Want of moral integrity is to be more severely condemned in a lawyer who holds a responsible public office. distortions and fabrications. Adm. The document casts a reflection on his competency and integrity as a lawyer and on the competency and integrity of the notary before whom it was acknowledged. 1969. all the six being described in the document as "the legitimate children and sole heirs of Consuelo Gonzaga. wherein he stated "that the money we have deposited may be withdrawn on December 8. Version of Legaspi: Teofilo Legaspi supposedly went to see him on October 21. However. 1969. Legaspi signed as counsel for the complainants. Daroy received a note wherein Atty. and that. 1969 – in a joint petition dated which Atty. He was tempted to concoct a story as to his alleged payments to Teofilo Legaspi because the latter is dead and could not refute him. 84 Phil. First week of November 1969 Teofilo got from him the share of Vivencio. overwhelmingly belie his fabricated theory that he conferred with Teofilo Legaspi at the end of October or in the first week of November. 57 Phil. Teofilo Legaspi.300 divided by six gives a quotient of P550 not P412). Teofilo Legaspi and by the respondent. The attorney. being a daughter of the spouses.000 to cover the expenses which he described as "expenses involved from the parties litigants. Fernando Rodrigo. Not alone has he degraded himself but as an unfaithful lawyer he has besmirched the fair name of an honorable profession (In re Paraiso. Rule 138 of the Rules of Court provides that when an attorney unjustly retains in his hands money of his client after it has been demanded.000. were adjudged as one of the six groups of heirs of the late Gonzaga spouses. Legaspi repeatedly broke his promise and as such a complaint for his disbarment was filed. 1965. Legaspi paid the money to Teofilo Legaspi? NO note of Atty. He said that he could deliver that amount of P476 to the complainants. He did not present any receipt to prove the alleged payment of P2. 15 SCRA 131. 1941". Legaspi the complainants "refused consistently to receive" the said balance from him because they wanted the full amount of P4. According to Atty. that under such division each participant would receive P412 each (P3. SAME DIGEST) Doctrines applicable: 1. that the administrator be authorized to sell the land. Legaspi would participate like an heir in the partition. Same. He said that he had already paid to them the sum of P2. April 11.300 would be divided into six equal parts (six because of the four Legaspi children. Reyes. agreed that the coconut land left by the decedents would be divided into six equal parts. Legaspi.000. and that the balance of P3. Atty.CREATION OF ATTORNEY-CLIENT RELATIONSHIP. No receipt was presented. The land was sold. In re David. 1969 to her father. 627. by her surviving husband. obviously. betrays the confidence reposed in him by a client and practises deceit cannot be permitted to continue as a law practitioner. 25. Legaspi advised Teofilo Legaspi to see him on that date so that the money could be withdrawn. WON Atty. Consuelo Gonzaga-Legaspi. after payment of the obligations of the estate. pledges himself not to delay any man for money or malice and is bound to conduct .476. the net proceeds would be distributed among the six groups of heirs. Money left with him amounted to P2. malpractice and gross misconduct. Same.000 and that only the sum of P476 was left in his custody. and that he gave Teofilo the sum of P412. Vivencio. 1969 at 9:00 o'clock". See Cabigao and Yzquierdo vs. under his oath. Complainants made several demands for payment buy Atty. who died on March 12. 11). their deceased mother. complainants' documentary evidence refutes his prevarications. who violates his oath of office. Atty. Manaloto vs. 2. The complainants. 20). ISSUE: WON Atty. Legaspi is guilty of malpractice? HELD: YES. Attorney’s conversion of his clients money constitutes deceit. malpractice and gross misconduct in his office of lawyer. Attorney is bound to turn over funds belonging to his client— Money collected by a lawyer in pursuance of a judgment in favor of his clients is held in trust and must be immediately turned over to them (Aya vs. the father Teofilo Legaspi and the lawyer Ramon C. 503. 1969 – Mrs. 41 Phil. Mrs. 8. Bigornia. he did not possess that status. Daroy stated that there was no agreement that Atty. Legaspi wrote a note dated November 28. Carbon copy of a supposed extrajudicial partition executed in 1968 by the four children of Consuelo Gonzaga. Atty. Complainants were not able to withdraw the money. 1969 and at their conference they supposedly agreed that the sum of P700 would be deducted from the P4. It was made to appear herein that respondent Legaspi was an heir of Consuelo Gonzaga when. Section 25. Lydia Legaspi and Agripino Legaspi hired the Ramon Legaspi in May. FACTS: Fermina Daroy. together with their brother. who was abroad.—A member of the bar who converts the money of his client to his own benefit through false pretenses is guilty of deceit. Legaspi to Mrs. Fermina Daroy came to know of the sale only when Atty. Case No. expenses seeking evidence and other expenses relevant to the case" and "major expenses" in the case and that his attorney's fees would be equivalent "to a share of the petitioners". Legaspi). Legaspi Informed them that he used their Encarnacion / Recinto / San Diego 3B PALE 2015-2016 money to solve his problems and that he would pay the. 24. as soon as he receives the proceeds of his jeep. he may be punished for contempt as an officer of the court who has misbehaved in his official transactions and he is liable to a criminal prosecution. 57 Phil. Legaspi is not a legitimate heir and he did not explain why he is referred to as one. A lawyer. Daroy dated December 9. 1962 to represent them in the intestate proceeding for the settlement of the estate of the spouses Aquilino Gonzaga and Paz VelezGonzaga. December 9. October 29. judges. Sotto appealed to the Supreme Court but later withdrew the appeal after the Philippine Legislature enacted Act No. he may be punished for contempt as an officer of the court who has misbehaved in his official transactions and he is liable to a criminal prosecution. 872 of the Cadastral Survey of Cebu with the Encarnacion / Recinto / San Diego 3B PALE 2015-2016 improvements existing therein. x x x The prohibition contained in this fifth paragraph shall include lawyers and solicitors with respect to any property rights involved in any litigation in which they may take part by virtue of their profession and office. Indeed. Prohibition against counsel to buy client's property. Sotto gave appellee an option to repurchase the property within two years. vs. Holding: Atty. The Court declared that on May 11. 10. and obtained a writ of injunction forbidding both appellee Samson and Atty. the Cebu Court decided in favor of appellee's husband. Atty. He is obligated to report promptly the money of his clients that has come into his possession. Sotto was disqualified to buy under article 1459 of the Civil Code. Justices. 1926 when this sale was first agreed upon. A member of the bar who converts the money of his client to his own benefit through false pretenses is guilty of deceit. appellee was able to obtain a judicial authority to dispose of her paraphernal property. not only to sell the lot to him but also to accept terms less favorable to her. Manuel Carratala filed a petition. Vicente Sotto was appellee Samson’s counsel in several cases in which the adverse party was her husband.himself with all good fidelity to his clients. Sotto. 3922 authorizing a married woman to dispose of her paraphernal property without her husband's consent. and that six days after the passage of said law. On the other hand. Subsequently. Money collected by a lawyer in pursuance of a judgment in favor of his clients is held in trust and must be immediately turned over to them Section 25. clerks of superior and inferior courts and other officers of such courts. (b) Sotto shall also pay rents at the rate of P100 . which according to Fisher's translation—which we deem correct—reads as follows: "ART. the property and rights in litigation before the court within whose jurisdiction or territory they perform their respective duties. who violates his oath of office. This prohibition shall include the acquisition of such property by assignment. The following persons cannot take by purchase. This notwithstanding. Legaspi is disbarred. Atty. Sotto. Sometime in March 1926. State Bar of California: The conversion of funds entrusted to an attorney is a gross violation of general morality as well as professional ethics. Judgment: Wherefore. m. concerning the same lot. because of their client-attorney relationship Sotto probably unduly influences Samson. from whom she was estranged. respondentappellee. Doctrine: Attorney and Client. Not alone has he degraded himself but as an unfaithful lawyer he has besmirched the fair name of an honorable profession Sturr vs. either in person or through the mediation of another: xxx 5. even at a public or judicial auction.—The conveyance of the property in litigation by the litigant to his counsel during the existence of attorney-and-client relationship is void. malpractice and gross misconduct in his office of lawyer. Administrator of the Testate Estate of Vicente Sotto. FACTS: Since 1924. 6448 which was a litigation2 handled by Sotto as the lawyer. on said date there was pending in the Court of First Instance of Cebu Civil Case No. betrays the confidence reposed in him by a client and practices deceit cannot be permitted to continue as a law practitioner. ISSUES: whether or not the sale in favor of Sotto is null and void HELD: YES. thereby declaring null and void the sale of her paraphernal property in favor of her counsel. which was extended to another two years. members of the department of public prosecution. It impairs public confidence in the legal profession. He should maintain a reputation for honesty and fidelity to private trust. that Atty. Atty. the RD of Cebu refused to register the deeds for registration. asking the CFI of Cebu to annul or prevent any conveyance of said paraphernal property. appellee Samson executed a Deed of Sale whereby she sold and conveyed to her counsel. He should not commingle it with his private property or use it for his personal purposes without his client's consent. Therefore. Rule 138 of the Rules of Court provides that when an attorney unjustly retains in his hands money of his client after it has been demanded. In turn. Atty. Sotto had the third ratification deed executed by appellee in his favor. her paraphernal property known as lot No. with these additional directives: (a) In case Sotto cannot return the lot to Samson he shall pay for it (786 sq. The attorney. Sotto from carrying out the sale and registering any conveyance of property with the Register of Deeds. it is our judgment that the decision of the Court of Appeals should be. In the CFI of Manila.1459. and the latter succeeded in the cancellation of the previous OCT and its transfer to his name.) at the price of P70 pesos per square meter. petitioner-appellant. she executed a confirmation deed of the original sale to Atty. Sotto filed a petition with the CFI of Cebu requesting for judicial authority for Samson to sell her paraphernal property without the need of her husband’s consent. Also. Nature of case: REVIEW of a judgment of the Court of Appeals. and is hereby affirmed. Manuel Carratala. "It deserves severe punishment". However. Sotto was Samson's lawyer in a litigation involving the subject of the contract. QUINTILLANA SAMSON (SANSON). Another confirmation deed of the sale was executed in view of a previous reversal of the Supreme Court by the CFI of Manila presided by Judge Diaz. Atty. The statute prohibiting such sale is designed to curtail any undue influence of the lawyer upon his client on account of their confidential association." Certainly. PLARIDEL SOTTO. 1932.00. 1952. petitioners called the attention of the Director of Lands to the existence of two deeds of sale. together with her minor children. 1952.000. as required by Section 118 of the Public Land Act. seeking the former’s required approval. On April 12. 1097 in favor of Galero had already been cancelled and a transfer certificate of title had been issued in favor of another person. have only themselves to blame for losing the land. 17. Respondent Register of Deeds Lapak replied in the affirmative. De Laig wrote the then Register of Deeds of Camarines Norte. Whereupon. petitioners appealed the decision of the lower court to the Court of Appeals. 1953. 17. On March 15. seek their remedy in court as the status of the property at that stage does not anymore fall within the jurisdiction of the Bureau of Lands On November 21. the Bureau of Lands in Camarines Norte reported to the Director of Lands that second vendee Carmen Verzo had already successfully obtained a transfer certificate of title over the land in question. the trial court. requesting that she be informed of any claim of ownership by other parties so that she could take the necessary steps. 1952. ROSARIO VDA. On October 14. 1952—or in a span of only four days—a second owner’s duplicate copy of OCT No. THE REGISTER OF DEEDS OF CAMARINES NORTE. Laig’s death. 577 in the Court of First Instance of Camarines Norte against respondents Carmen Verzo. son of respondent Register of Deeds Baldomero M. docketed as Civil Case No. In no time at all. CARMEN VERZO. declaring. which affirmed . AND THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES. Therefore. Benito K. FACTS: On June 1. by ordering Carmen Verzo to reconvey the land in question to petitioners. (c) Samson shall in turn pay Sotto the amount of P21. COURT OF APPEALS. approved the deed of sale submitted by Vda. petitioners. the Office of the Secretary of Agriculture and Natural Resources. Encarnacion / Recinto / San Diego 3B PALE 2015-2016 through the Director of Lands. Unfortunately. 1961. 1097 was still intact and took note of her letter. Lapak. 1948. Acting Secretary of Agriculture Jose S. on November 5.. as amended On January 26. Benito Laig informing him of the approval of the deed of sale executed by and between him and Petre Galero. 1097 in the same of Petre Galero.00 plus attorney’s fees due Atty. On April 13. 1952. claiming that his first duplicate of said OCT was lost during World War II. On the same day. de Laig. Carmen Verzo addressed a letter to the Secretary of Agrirulture and Natural Resources. On August 14. had been paying the realty taxes thereon. addressed a letter to Atty. after Atty. Benito K. and therefore. and since then. Vda. Lapak. 1097. Lapak in favor of Petre Galero. NATURE OF CASE: APPEAL by certiorari from the decision of the Court of Appeals. 1932. Their Guardian Ad Litem. 1097 was issued by respondent Register of Deeds Baldomero M. Camus. PETRE GALERO. and serving notice of her claim over the said property as surviving spouse of the late Atty. among others.500. and exempted Galero from liability. THE DIRECTOR OF LANDS. not being violative of the pertinent provisions of the Public Land Act nor the rules and regulations promulgated thereunder. On September 12.00 plus legal interest from Sept. Camus approved the sale in favor of Carmen Verzo. all surnamed LAIG. with the recommendation that the heirs of the first vendee. thru then Undersecretary Jose S. On July 19. Petre Galero. ROMEO. whereby the former sold to the latter the land in question with its improvements. Jose L. JR. However. had been sold to her late husband. Laig as vendee.00 by way of damages. Petre Galero. respondent Baldomero M. The OCT was delivered by Galero to Atty. assisted by Rosario Vda. the office of the Director of Lands notified Carmen Verzo of such approval. Laig and as natural guardian of their children. in a decision. 1952. Enclosed in the letter was a copy of the deed of sale in Verzo’s favor. minors. dismissed the complaint and declared that the land described is rightfully owned by Carmen Verzo. and another in favor of Carmen Verzo. De Laig to the Bureau of Lands. petitioner Vda. Lapak. On September 27. de Laig. 1952. on October 13. with the assistance of Atty. de Laig inquired from the Register of Deeds of Camarines Norte if it was true that OCT No. and an affidavit that the land in point was sold to Verzo by homestead grantee Petre Galero. 1953. 1962. Register of Deeds Lapak replied that Original Certificate of Title No. Laig. Laig failed to solicit the approval of the Secretary of Agriculture and Natural Resources (then Secretary of Agriculture and Commerce). the deed of sale in Verzo’s favor was registered. plus P5. vs. 11. 1954. NESTOR and BENITO. and a new TCT was issued in her name.595. DE LAIG. Benito K. On August 30. Assistant Director of Lands Zoilo Castrillo forwarded Verzo’s papers to the Secretary of Agriculture and Natural Resources and recommended that the sale. that plaintiffs-appellants slept on their rights in not having the first deed of sale in favor of Atty. 1951. Laig registered in the Registry of Property. on July 15. petitioner Vda. Galero executed in favor of respondent Carmen Verzo a deed of sale of the land in issue for the sum of P600. JOSE. the Office of the Director of Lands. vendee Atty. filed the present action. 1951. 1952. Laig. sought in court the issuance of a second owner’s duplicate copy of OCT No. Verzo declared the land in her name for taxation purposes. 1952. Benito Laig. Laig for his legal services as counsel for Galero in the successful reconveyance case. for P1. On July 30. On November 12. be approved. one in favor of Atty. the Register of Deeds of Camarines Norte and the Secretary of Agriculture and Natural Resources praying for the annulment of the sale in favor of Carmen Verzo and the cancellation of the second owner’s duplicate of OCT and TCT by declaring the first OCT valid and effective or in the alternative. respondents. stating that the disputed parcel of land covered by original Certificate of Title No. the Director of Lands. a deed of sale was executed by and between Petre Galero as vendor and Atty.pesos a month from Sept. And right on that same day. with his spouse Natividad Ypan. respondent herein is hereby ordered suspended from the practice of law for a period of six months effective as of the date this judgment becomes final. filed.1055. AND THE COSTS. shall be fined not exceeding five thousand dollars (ten thousand pesos) or imprisoned not exceeding five years. lot C in question. 1097 covering the disputed land through the aid of Atty. New Civil Code). 21. respondent Inocentes Fernandez appeared as counsel for the opponents of the complainant herein. As Carmen Verzo was not a purchaser in good faith. because transactions in the rural areas do not escape the knowledge of persons living under one roof with a party to the document. For his malicious involvement. without just cause. respondent FACTS: The evidence discloses that on or about June 13. Jose L. good customs and/or public policy (Art. 775). In accordance with the exemplary punishment we have set forth in Hernandez vs. LAIG. On November 16. Oriental Misamis. The records reveal that respondent Carmen Verso was not in good faith when she facilitated the registration of her deed of sale.00) PESOS AS ATTORNEY’S FEES. EXCEPT THE DIRECTOR OF LANDS AND THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES. Respondent claimed that the property purchased by him was not the one which constitutes the object of the series of litigations between the parties aforementioned.000. in breach of professional conduct. Jose Lapak who is the son of respondent register of deeds. which states: “Any person suffering material or moral loss because a public servant or employee refuses or neglects. the corresponding complaint. under clearly dubious circumstances. New Civil Code) or for wilfully or negligently causing damage to another (Art. ISSUE: whether or not respondent is guilty of misconduct in purchasing the property of his client involved in a pending litigation in which he appeared as counsel? HELD: YES. a member of the Philippine Bar engaged in the practice of law in Talisayan. 1928. 20. Lapak liable under the abovequoted Section 117 of Act No. Baldomero Lapak likewise stands liable under Article 27 of the New Civil Code. and. On November 30. Act No. in the discretion of the court” (Sec. ARE HEREBY ORDERED TO PAY JOINTLY AND SEVERALLY PETITIONERS IN THE AMOUNT OF TEN THOUSAND (P10. SO ORDERED. charging respondent with having purchased a property of his client involved in a pending litigation in which he appeared as counsel. since Atty. to perform his official duty may file an action for damages and other relief against the latter. conveyed to the complainant Gerardo Go Beltran two parcels of land situated in Talisayan. Petre Galero was able to procure another copy of the duplicate of Original Certificate of Title No. to which the case was committed for investigation. 1939. a series of suits. conducted by the provincial fiscal of Oriental Misamis. or both. 117. A misunderstanding thereafter developed between the parties with respect to the identity of the parcels of land so conveyed regarding lot C. which involved a like breach of professional ethics. and the latter must have known such sale. 12. AND ALL THE RESPONDENTS HEREIN. New Civil Code). respondent purchased from his client. she could never have been a registrant in good faith of the deed of sale of said land in her favor. 117 of the Land Registration Act which states as follows: “Whoever fraudulently procures. Villanueva (40 Phil. Oriental Misamis and described in the deed of sale. The Court held that respondent has accordingly violated article 1459 of the Civil Code. Gerardo Go Beltran.00) PESOS AS MORAL DAMAGES. Gerardo GO BELTRAN. 6586 aforementioned was pending appeal in the Court of First Instance of Oriental Misamis. while criminal case No. De Laig as the rightful owner of the land. Consequently. more especially when there exists between such persons and party the peculiarly intimate relationship of landlady and boarder in a small town.the decision of the Court of First Instance of Camarines Norte. AND (B) TO ISSUE IN LIEU THEREOF A NEW TRANSFER CERTIFICATE OF TITLE IN FAVOR OF THE HEIRS Encarnacion / Recinto / San Diego 3B PALE 2015-2016 OF THE LATE BENITO K. for which he should be. 496 (Land Registration Act). respondent admitted that the land which he bought from his client is the same land involved in the civil and criminal cases filed by his client.” For in essence. disciplined as a member of the Bar. civil and criminal were instituted by and between the parties to the deed. Laig was a boarder of Carmen Verzo in her house. one Honorio Pajaron. THE DECISION APPEALED FROM IS HEREBY REVERSED AND THE REGISTER OF DEEDS OF CAMARINES NORTE IS HEREBY DIRECTED (A) TO CANCEL TCT NO. and prayed that appropriate disciplinary action be taken against him. his refusal to follow the directive of law (Act No. both Baldomero Lapak and his son Atty. 1935. ISSUE: Who between petitioner Vda. WHEREFORE. Thus. Jose Lapak are likewise civilly liable for failure to observe honesty and good faith in the performance of their duties as public officer and as a member of the Bar (Art. or for wilfully causing loss or injury to another in a manner that is contrary to morals. Moreover. THE SUM OF FIVE THOUSAND (P5. 496) was a conduct injurious to the petitioner. complainant. the Court of First Instance of Oriental Misamis. submitted a report confirming in substance the charge and reiterating the recommendation of the Solicitor-General. Inocentes FERNANDEZ. not only prosecuted but also. T. Also. WE also find Atty. The Solicitor-General. without prejudice to any disciplinary administrative action that may be taken. or assists in fraudulently procuring or is privy to the fraudulent procurement of any certificate of title or owner’s duplicate certificate. De Laig and respondent Carmen Verzo should be considered as the rightful owner of the land in question? HELD: The Court held petitioner Vda. Exhibit 3. filed with this court a complaint for malpractice against respondent Inocentes Fernandez. in all these suits. after due investigation. Baldomero Lapak. however. 19.000. In the investigation. vs. Natividad Ypan. 496). Baldomero Lapak is liable under Sec. .
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