x lawyer_s fiduciary relationf

8/12/2019 X Lawyer_s Fiduciary Relationf

1/11

1

Angeles vs. Uy, Jr.

Facts:Judge Adoracion G. Angeles of the RTC of CaloocanCity charged Atty. Thomas C. Uy with the violationof Canon 16 of the Code of ProfessionalResponsibility.

Atty. Thomas C. Uy is the lawyer of Primitiva

Malansing who was awarded a sum of money in acivil case against Norma Trajano. In a hearing,Norma Trajano manifested that she had alreadysettled in full the civil aspect in the criminal caseinvolving herself and Primitiva Malansing. Shealleged that she paid P20,000.00 directly toMalansing, while the balance of P16,500 shedelivered to Atty. Uy. She even had a receipt signedby Atty. Uy himself.

Malansing however manifested that she did notreceive the amount of P16,500.00. Atty. Uy argued

that Malansing did not want to accept the money, butthis was disputed by Malansing who manifested herwillingness to accept the money. The Court thusdirected Atty. Uy to produce the money, who said itwas in his office. The Court suspended theproceedings to enable Atty. Uy to get the moneyfrom his law office which is located only at thesecond floor of the same building where this court islocated. Afterwards, he never returned.

For his part, Atty. Uy alleges that despite severaloffers to Malansing to get the money, Malansing

declined and insisted that the money be kept in hisoffice; and that on the day of the trial when Judge

Angeles ordered for the money to be produced,Jamisola, his staff who had the key, did not arrive ontime, thus his failure to produce the money.

Issue:WON Atty. Uys actions merit a sanction

Ruling:

The Bar Confidant recommended Atty. Uy besuspended for a month. The Supreme Court upheld

this recommendation.

The relationship between a lawyer and a client ishighly fiduciary; it requires a high degree of fidelityand good faith. It is designed "to remove all suchtemptation and to prevent everything of that kindfrom being done for the protection of the client."[5]

Thus, Canon 16 of the Code of ProfessionaResponsibility provides that "a lawyer shall hold intrust all moneys and properties of his client that maycome into his possession." Furthermore, Rule 16.01of the Code also states that "a lawyer shall accountfor all money or property collected or received for orfrom the client." The Canons of Professional Ethicsis even more explicit:

"The lawyer should refrain from any action wherebyfor his personal benefit or gain he abuses or takesadvantage of the confidence reposed in him by hisclient.

"Money of the client collected for the client or othetrust property coming into the possession of thelawyer should be reported and accounted forpromptly and should not under any circumstancesbe 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 hehad received from Norma Trajano on behalf of hisclient, Primitiva Del Rosario. Although the amounthad been entrusted to respondent on December 141998, his client revealed during the February 101999 hearing that she had not yet received it. Worseshe did not even know where it was.

Verily, the question is not necessarily whether therights of the clients have been prejudiced, butwhether the lawyer has adhered to the ethicastandards of the bar.[11] In this case, responden

has not done so. Indeed, we agree with the followingobservation of the Office of the Bar Confidant:

"Keeping the money in his possession without hisclient's knowledge only provided Atty. Uy thetempting opportunity to appropriate for himself themoney belonging to his client. This situation shouldat all times, be avoided by members of the bar. Like

judges, lawyers must not only be clean; they musalso appear clean. This way, the people's faith in the

justice system would remain undisturbed."


2/11

2

Cruz vs. Jacinto

Facts:

Spouses Fernando C. Cruz and Amelia ManimboCruz seek the disbarment of Atty. Ernesto C.Jacinto.

Atty. Ernesto Jacinto, lawyer of the couple in an

unrelated case, requested the Cruz spouses for aloan in behalf of a certain Concepcion G. Padilla,who he claimed to be an old friend as she wasallegedly in need of money. The loan requested wasfor PhP 285,000.00 payable after 100 days for PhP360,000 to be secured by a real estate mortgage ona parcel of land located at Quezon City. Thespouses, believing Atty. Jacinto was a good risk,agreed to lend him money.

Upon maturity of the loan on 15 October 1990, thespouses demanded payment from Concepcion G.

Padilla by going to the address given by therespondent but there proved to be no person by thatname living therein. When the complainants verifiedthe genuineness of the land title with Register ofDeeds of Quezon City, it was certified by the saidoffice to be a fake and spurious title. Further effortsto locate the debtor-mortgagor likewise proved futile.

The complainants evidence included the swornstatements of Estrella Ermino-Palipada, thesecretary of the Atty. Jacinto at the Neri Law Office,and Avegail Payos, a housemaid of Atty. Jacinto.

Ms. Palipada stated that:1. she was the one who prepared the Real EstateMortgage Contract and the Receipt of the loan uponthe instruction of the respondents;2. she was a witness to the transaction and neveronce saw the person of Concepcion G. Padilla, thealleged mortgagor; and that3. she was instructed by Atty. Jacinto to notarizethe said contract by signing the name of oneAtty. Ricardo Neri.

Avegail Payos, the housemaid of the respondent, inturn stated that she was the one who simulated thesignature of one Emmanuel Gimarino, the DeputyRegister of Deeds of Quezon City upon theinstruction of Atty. Jacinto to make it appear that thereal estate mortgage was registered and theannotation to appear at the back of the TCT as anencumbrance.

In his version of the facts, Atty. Jacinto averred thatwhile he indeed facilitated the loan agreemenbetween the Cruz spouses and Concepcion GPadilla, he had no idea that the latter would give afalsified Certificate of Title and use it to obtain a loanHe claimed that he himself was a victim under thecircumstances.

Issue: WON Atty. Jacinto, as per the IBPs

recommendation, should be suspended for 6 mos.

Ruling:The Court adopted the recommendation of theBoard of Governors of the IBP.

Undeniably, respondent represented complainantsin the loan transaction. By his own admission, hewas the one who negotiated with the borrower, hislong-time friend and a former client. He acted notmerely as an agent but as a lawyer of complaintsthus, the execution of the real estate mortgage

contract, as well as its registration and annotation onthe title were entrusted to him. In fact, respondenteven received his share in the interest earningswhich complainants realized from the transactionHis refusal to recognize any wrongdoing ocarelessness by claiming that he is likewise a victimwhen it was shown that the title to the property, theregistration of the real estate mortgage contract, andthe annotation thereon were all feigned, will not at alexonerate him.

As a rule, a lawyer is not barred from dealing with his

client but the business transaction must becharacterized with utmost honesty and good faithHowever, the measure of good faith which anattorney is required to exercise in his dealings withthis client is a much higher standard than is requiredin business dealings where the parties trade at armslength. Business transactions between an attorneyand his client are disfavored and discouraged by thepolicy of the law. Hence, courts carefully watch thesetransactions to be sure that no advantage is takenby a lawyer over his client. This rule is founded onpublic policy for, by virtue of his office, an attorney is

in an easy position to take advantage of the credulityand ignorance of his client. Thus, no presumption ofinnocence or improbability of wrongdoing isconsidered in an attorneys favor. Further, his fidelityto the cause of his client requires him to be evermindful of the responsibilities that should beexpected of him.


3/11

3

Diaz vs. Kapunan

Facts:In 1917, Vicente Diaz and Secundino de Mendezonaformed a partnership and entered into extensivebusiness transactions in the Province of Leyte. Thecapital of the partnership was P380,000.Unfortunately, however, the business failed toprosper, with the result that on liquidation, it was

found to have suffered a loss of P67,000. When Diazand Mendezona came to settle up their affairs, theyeventually formulated a document of sale andmortgage in which Mendezona recognized a debt infavor of Diaz in the sum of P80,000 and an additionalsum of P10,000 owing to Diaz, laid upon thehacienda "Mapuyo," and to be paid within the termof one year. When the year had expired Mendezonawas not to be found and his family was unable tomeet the payment. There followed the usualproceedings for foreclosure and sale, which, afterconsiderable delay, resulted in the hacienda's being

offered for sale at public auction.

At the time fixed for the sale, December 23, 1922,there appeared Vicente Diaz, accompanied by hislawyer Emilio Benitez, and Attorney RupertoKapunan. Luis Velarde, the deputy sheriff of Leyte,is authority for the statement that Kapunan told himthat he, Kapunan, was ready to bid on the propertyup to P16,000 in order to assist the Mendezonafamily which was in financial straits. At any rate, thebidding was opened by Kapunan offering P12,000for the property and with Diaz and Kapunan raising

the bids until finally Diaz offered P12,500. There thebids stopped on account of Diaz and Kapunanentering into the agreement, of decisive importance,wherein Kapunan agreed to withdraw his bid inconsideration of P1,000.

Prior to the disbarment proceedings, Kapunan fileda motion to the court to allow him to retain P500 ashis professional fees. Later on, after the filing of thedisbarment proceedings, Kapunan filed anothermotion to return the money to Diaz. While the judgerefused the motion, Kapunan nevertheless returned

the money.

During much of the time here mentioned, Kapunanwas the attorney of Mendezona. Kapunan was givenextensive authority by the letter of Mendezona of

April 12, 1919. When Kapunan took part in the sale,it must be assumed that he was bidding inrepresentation of his client and for the benefit of theclient.

Issue: WoN Atty. Kapunan is guilty of malpractice

Ruling:

Article 1459 of the Civil Code was held in force in thecase of Hernandez vs. Villanueva ([1920], 40 Phil.775). It provides that the following persons, namingthem, "cannot take by purchase, even at a public or

judicial auction, either in person or through themediation of another." The provision contained in thelast paragraph of said article is made to includelawyers, with respect to any property or rightsinvolved in any litigation in which they may take partyby virtue of their profession and office. This articlehas not been infringed by the respondent becausehe has not purchased property at a public or judiciaauction and because his participation in the auctionwas in representation of his client. It has been heldthat an execution sale to the attorney of thedefendant is not unlawful if made in good faith, with

the consent of the client, and without any purpose ofdefrauding the latter's creditors.

Kapunan appears to have been acting in good faithfor his client, although adopting an irregularprocedure, and although attempting to make tardyrestitution of the money received by him.

Our judgment is that Attorney Ruperto Kapunanshall stand reprimanded and that the complainantVicente Diaz, shall immediately return to the clerk ofthe Court of First Instance of Leyte the P500

received by Diaz from the clerk and receipted for byDiaz, and the clerk of court shall transmit the P500to Secundino de Mendezona or, in case of hisabsence, to Miss Carmen de Mendezona.


4/11

4

Gonato vs. Adaza

Facts:

Sometime in February, 1993, complainants engagedtheservices of respondent as their counsel in CivilCase No. 92-263 entitled Goking vs. Yacapin, et al."Complainants among others alleged that respondentdemanded from them the sum of P15,980.00 to be

used in paying the docket fee and other court fees inconnection with the aforementioned case.Complainants asked for theofficial receipts evidencing the amount of court feespurportedly paid by respondent. However,only photocopies was provided to them. Dissatisfied,complainant personally went to respondent's lawoffice at least three times, and asked forthe original copies of thereceipts, but to no avail. Itwas discovered that the triplicate originalcopies ofthe receipts did not reflect the same amountcontained on the photocopies of the receipts given

by respondent. to conform to the amount paid bycomplainant which was P15,980.00. Complainantsdemanded the return of P15,980.00 but respondentrefused to do so. Thus, in April, 1993, complainantsurged respondent to withdraw as counsel due to lossof trust and confidence. Respondent on the otherhand, after a careful study contest that thecounterclaim is compulsory and not permissive, andso, applied instead the aforesaid sum of P15,690.00to his acceptance and appearance fees.

Issue:

Whether or not respondent Atty. Adaza is guilty ofmalpractice and violation of trust.

Held:Respondent Atty. Cesilo A. Adaza is herebysuspended from the practice of law for a period ofsix (6) months from notice, with the warning that arepetition of the same or similar acts will be dealtwith more severely.

Canon 7 of the Code of Professional Responsibilitymandates that "a lawyer shall at all times uphold the

integrity and dignity of the legal profession." Thetrust and confidence necessarily reposed by clientsrequire in the lawyer a high standard andappreciation of his duty to them. To this end, nothingshould be done by any member of the legal fraternitywhich might tend to lessen in any degree theconfidence of the public in the fidelity, honesty, andintegrity of the profession.

The facts and evidence obtaining in this caseglaringly reveal respondent's failure to live up to hisduties as a lawyer in consonance with the stricturesof his oath and the Code of ProfessionaResponsibility, particularly Canon 16 which providesthat "a lawyer shall hold in trust all moneys andproperties of his client that may come into hispossession." As a member of the Bar, respondentwas and is expected to always live up to the

standards embodied in said Code particularlyCanons 15, 16, 17 and 20, for the relationshipbetween an attorney and his client is highly fiduciaryin nature and demands utmost fidelity and goodfaith. The Court believes that a longer period ofsuspension than that recommended by the IBP iscalled for under the circumstances.


5/11

5

Celaje vs. Soriano

Facts:This is a disbarment case filed against Atty. SantiagoC. Soriano (respondent) for gross misconduct.

Andrea Balce Celaje alleged that Atty. Sorianoasked for money to be put up as an injunction bond,which she found out later, however, to be

unnecessary as the application for the writ wasdenied by the trial court. Atty. Soriano also asked formoney on several occasions allegedly to be given tothe judge handling their case, Judge MilagrosQuijano, of the Regional Trial Court, Iriga City,Branch 36. When complainant approached JudgeQuijano and asked whether what respondent wassaying was true, Judge Quijano outrightly denied theallegations and advised her to file an administrativecase against respondent.

Atty. Soriano denied the charges against him and

averred that the same were merely concocted bycomplainant to destroy his character. He alsocontended that it was Celaje who boasted that sheis a professional fixer in administrative agencies aswell as in the judiciary; and that Celaje promised topay him large amounts of attorney's fees whichCelaje however did not keep.

The case was heard before the IBP-Commission onBar Discipline. During the hearing it was found thatCelaje alleged to have paid respondent amountstotaling to P270,000. These amounts were

undocumented and not acknowledged in writing.There were however some documents made inwriting for the P14,800 intended for the injunction.

Due credence must be given to Complainant'sallegations especially over the amount ofP14,800.00 intended for the injunction.Unfortunately, none of the P270,000.00 given byComplainant to Respondent was ever documentedand therefore accuracy of the amounts could not beestablished and substantiated.

What has been documented only pertains to theunpaid P5,800.00 intended for the injunction bond.However, it has been established that indeed anaccumulated amount of P9,000.00 has beenremitted and only the unpaid P5,800.00 remainsunaccounted for.

Issue: WoN Atty. Soriano should be disbarred

Ruling:The Supreme Court affirmed the IBPrecommendation that Atty. Soriano be suspendedfor two years.

The Code of Professional Responsibility (CPR)particularly Canon 16 thereof, mandates that alawyer shall hold in trust all moneys and properties

of his client that may come into his possession. Heshall account for all money or property collected orreceived from his clientand shall deliver the fundsand property of his client when due or upon demand

Respondent's failure to return the money tocomplainant upon demand gave rise to thepresumption that he misappropriated it for his ownuse to the prejudice of, and in violation of the trusreposed in him by his client. It is a gross violation ofgeneral morality and of professional ethics andimpairs public confidence in the legal profession

which deserves punishment.

As the Court has pronounced, when a lawyereceives money from the client for a particularpurpose, the lawyer is bound to render anaccounting to the client showing that the money wasspent for a particular purpose. And if he does not usethe money for the intended purpose, the lawyer mustimmediately return the money to his client.

The Court has been exacting in its demand fointegrity and good moral character of members of

the Bar who are expected at all times to uphold theintegrity and dignity of the legal profession andrefrain from any act or omission which might lessenthe trust and confidence reposed by the public in thefidelity, honesty, and integrity of the legal professionIndeed, membership in the legal profession is aprivilege. The attorney-client relationship is highlyfiduciary in nature. As such, it requires utmost goodfaith, loyalty, fidelity and disinterestedness on thepart of the lawyer.


6/11

6

Penticostes vs. Ibanez

Facts:Encarnacion Pascual, the sister-in-law of Atty.Prudencio Penticostes was sued for non-remittanceof SSS payments. The complaint was assigned toProsecutor Dioasdado Ibanez.

During the investigation, Pascual gave P1,804.00 to

Ibanez as payment of her SSS contribution. Ibanezhowever did not remit the amount to the system.

A year later, Penticostes f iled a complaint againstIbanez for failure to remit the contributions of hissister-in-law. Seven days later, Ibanez paid P1,804to SSS in behalf of Pascual.

In his defense, Ibanez claimed that his act ofaccommodating Pascuals request to pay to the SSSwas not a professional misconduct but an act ofChristian charity. He claimed that the complaint

against him was moot and academic as he hadalready paid the amount. He lastly disclaimedliability, arguing that the acts were not done by himin his capacity as a lawyer but as a prosecutor.

Issue: WoN Atty. Ibanez should be disciplined

Ruling:The Supreme Court adopted the IBPsrecommendation that he be reprimanded.

While it may be true that Atty. Ibanez remitted the

payment, it is clear that the same was made onlyafter a complaint had been filed against him.Furthermore, the duties of prosecutor do not includereceiving money from persons with officialtransactions with his office.

This Court has repeatedly admonished lawyers thata high sense of morality, honesty and fair dealing isexpected and required of a member of the bar. Rule1.01 of the Code of Professional Responsibilityprovides that [a] lawyer shall not engage inunlawful, dishonest, immoral or deceitful conduct.

It is glaringly clear that respondents non-remittancefor over one year of the funds coming fromEncarnacion Pascual constitutes conduct in grossviolation of the above canon. The belated paymentof the same to the SSS does not excuse hismisconduct. While Pascual may not strictly beconsidered a client of respondent, the rules relatingto a lawyers handling of funds of a client isapplicable. In Daroy v. Legaspi,[1]this court held that

(t)he relation between an attorney and his client ishighly fiduciary in nature...[thus] lawyers are boundto promptly account for money or property receivedby them on behalf of their clients and failure to do soconstitutes professional misconduct. The failure ofrespondent to immediately remit the amount to theSSS gives rise to the presumption that he hasmisappropriated it for his own use. This is a grossviolation of general morality as well as professiona

ethics; it impairs public confidence in the legaprofession and deserves punishment.

Respondents claim that he may not be held liablebecause he committed such acts, not in his capacityas a private lawyer, but as a prosecutor isunavailing. Canon 6 of the Code of ProfessionaResponsibility provides:

These canons shall apply to lawyers in governmentservice in the discharge of their official tasks.

As stated by the IBP Committee that drafted theCode, a lawyer does not shed his professionaobligations upon assuming public office. In fact, hispublic office should make him more sensitive to hisprofessional obligations because a lawyersdisreputable conduct is more likely to be magnifiedin the publics eye. Want of moral integrity is to bemore severely condemned in a lawyer who holds aresponsible public office.
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7/11

7

Rubias vs. Batiller

Facts:This case concerns a land dispute between Atty.Domingo Rubias and Isaias Batiller.

Francisco Militante claimed ownership of a parcel ofland in General Luna, Iloilo, which he caused to besurveyed. Before the war with Japan, Militante filed

with the Court of First Instance an application for theregistration of the title of the land. However, duringthe war, the record of the case was lost, so after thewar Militante petitioned the court to reconstitute therecord of the case. His application was dismissed.Pending his appeal, Militante sold to Atty. Rubias theland, which sale was recorded in the Register ofDeeds in Iloilo.

Atty. Rubias declared the land for tax purposes. OnApril 22, 1960, the plaintiff f iled forcible Entry andDetainer case against Isaias Batiller to which the

defendant Isaias Batiller filed his answer. TheMunicipal Court of Barotac Viejo after trial, decidedthe case on May 10, 1961 in favor of Batiller.

On August 17, 1965, defendant's counselmanifested in open court that before any trial on themerit of the case could proceed he would filea motion to dismiss plaintiff's complaint which he did,alleging thatplaintiff does not have cause of actionagainst him because the property in dispute whichhe (plaintiff) allegedly bought from his father-in-law,Francisco Militante was the subject matter of LRC

No. 695 filed in the CFI of Iloilo, which case wasbrought on appeal to this Court and docketed as CA-G.R. No. 13497-R in which aforesaid case plaintiffwas the counsel on record of his father-in-law,Francisco Militante.

Issue: WoN the sale was valid

Ruling:No. The sale is void from the beginning, thus theappeal by Atty. Rubias is dismissed.

Article 1491 of our Civil Code (like Article 1459 of theSpanish Civil Code) prohibits in its six paragraphscertain persons, by reason of the relation of trust ortheir peculiar control over the property, fromacquiring such property in their trust or control eitherdirectly or indirectly and "even at a public or judicialauction," as follows: (1) guardians; (2) agents; (3)administrators; (4) public officers and employees;

judicial officers and employees, prosecutingattorneys, and lawyers; and (6) others especiallydisqualified by law.

The reason thus given by Manresa in consideringsuch prohibited acquisitions under Article 1459 ofthe Spanish Civil Code as merely voidable at theinstance and option of the vendor and not void "that the Code does not recognize such nullity depleno derecho" is no longer true and applicable toour own Philippine Civil Code which does recognizethe absolute nullity of contracts "whose causeobject, or purpose is contrary to law, morals, goodcustoms, public order or public policy" or which are"expressly prohibited or declared void by law" anddeclares such contracts "inexistent and void from thebeginning."

Indeed, the nullity of such prohibited contracts isdefinite and permanent and cannot be cured byratification. The public interest and public policy

remain paramount and do not permit of compromiseor ratification. In his aspect, the permanendisqualification of public and judicial officers andlawyers grounded on public policy differs from thefirst three cases of guardians, agents andadministrators (Article 1491, Civil Code), as towhose transactions it had been opined that they maybe "ratified" by means of and in "the form of a newcontact, in which cases its validity shall bedetermined only by the circumstances at the time theexecution of such new contract. The causes of nullitywhich have ceased to exist cannot impair the validity

of the new contract. Thus, the object which wasillegal at the time of the first contract, may havealready become lawful at the time of the ratificationor second contract; or the service which wasimpossible may have become possible; or theintention which could not be ascertained may havebeen clarified by the parties. The ratification orsecond contract would then be valid from itsexecution; however, it does not retroact to the dateof the first contract."


8/11

8

Laig vs. Court of Appeals

Facts:Galero obtained from the Bureau of LandsHomestead a parcel of land covering 219,949square meters at Barrio Pinagtambangan, Labo,Camarines Norte, for which Original Certificate ofTitle No. 1097 was issued in Galero's name.

On June 25, 1940, Galero sold the land to a certainMario Escuta for P300.00. Escuta in turn, sold thesame land to Florencio Caramoan in December,1942. Later, however, Petre Galero, through propercourt action, and with Atty. Benito K. Laig thedeceased husband of herein petitioner Rosario Vda.de Laig as counsel recovered the land, the courthaving been convinced that its alienation violatedSection 118 of the Public Land Act.

On June 1, 1948, a deed of sale was executed byand between Petre Galero as vendor and Atty.

Benito K. Laig as vendee, whereby the former soldto the latter the land in question with itsimprovements, for P1,500.00 plus attorney's feesdue Atty. Laig for his legal services as counsel forGalero in the successful reconveyance case.Original Certificate of Title No. 1097 was deliveredby Galero to Atty. Laig.Unfortunately, vendee Atty.Benito K. Laig failed to solicit the approval of theSecretary of Agriculture and Natural Resources asrequired by Section 118 of the Public Land Act, asamended. It was only after Atty. Laig's death in 1951that his wife, herein petitioner Rosario, noticed the

deficiency.

On March 29, 1952,petitioner Vda. de Laig filed withthe Bureau of Lands an affidavit together with copyof the deed of sale in her husband's favor. Saidaffidavit stated that she wanted to have theownership over the land transferred to her husband'sname.

On August 14, 1952, the Bureau of Lands forwardedthe said affidavit of Vda. de Laig, together with thedeed of sale, to the Office of the Secretary of

Agriculture and Natural Resources with arecommendation that the said deed of sale beapproved as the same does not violate any pertinentprovisions of the Public Land Act or thecorresponding rules and regulations thereunderpromulgated. On the same day, the Office of theSecretary of Agriculture and Natural Resources, thruthen Undersecretary Jose S. Camus, approved thedeed of sale.

Meanwhile however, Galero, after having acquired aduplicate copy of the title, sold the same to CarmenVerzo.

Issues: Who between petitioner Vda. de Laig andrespondent Carmen Verzo should be considered asthe rightful owner of the land in question?

Should the respondents register of deeds, Directorof Lands and the Secretary of Agriculture andNatural Resources, together with respondentCarmen Verzo, be held liable for damages foapproving the sale of one and the same piece of landin favor of two different persons?

Ruling:The sale made between Atty. Laig and Galero washeld to be valid. Carmen Verzo was held to be abuyer in bad faith.

Atty. Benito K. Laig, as Verzos boarder, must havementioned to Carmen Verzo, his landlady, the landsold to him by Galero. By the same token, CarmenVerzo must have known such sale; becausetransactions of this sort in the rural areas do notescape the knowledge of persons living under oneroof with a party to the document, more especiallywhen there exists between such persons and partythe peculiarly intimate relationship of landlady andboarder in a small town. Furthermore, her sister-in-law was witness to the sale.

Petre Galero was able to procure another copy ofthe duplicate of Original Certificate of Title No. 1097covering the disputed land through the aid of AttyJose Lapak who is the son of the respondent registerof deeds, Baldomero Lapak, under clearly dubiouscircumstances. For one, it was done withoutobserving the required formalities of notice andhearing. Secondly, it was an over in a record-settingperiod of ONLY four days.

Moreover, the expeditious disposal of the land inlitigation by Petre Galero to Carmen Verzo was done

immediately after the death of Atty. Benito Laig, andduring the time that his wife Rosario Vda. de Laigwho was residing in faraway Manila, was seeking allegal means to have the title over the propertytransferred to her name.

Such bad faith on the part of respondent CarmenVerzo and Baldomero Lapak is further underscoredby the fact that Atty. Jose Lapak himself (a) was the


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9

notary public before whom the deed of sale executedby and between Petre Galero and Carmen Verzowas acknowledged, and (b) was the same lawyerwho assisted Carmen Verzo in writing the Director ofLands and the Secretary of Agriculture and NaturalResources, enclosing therewith an affidavit alsosworn before said Atty. Lapak, praying that the deedof sale be approved.

As heretofore indicated, the malicious participationof respondent register of deeds Baldomero Lapakand his son Atty. Lapak is evident.

Knowing of the existence in his records of theoriginal of OCT No. 1097, Baldomero Lapak effectedthe issuance of the second duplicate of OCT No.1097 to Petre Galero in just four (4) days, dispensingwith the requirements of notice and hearing tointerested parties.

For his malicious involvement, WE find Baldomero

Lapak liable under the following provision of theLand Registration Act:

Whoever fraudulently procures, or assists infraudulently procuring or is privy to the fraudulentprocurement of any certificate of title or owner'sduplicate certificate, shall be fined not exceeding fivethousand dollars (ten thousand pesos) orimprisoned not exceeding five years, or both, in thediscretion of the court.

WE also find Atty. Jose L. Lapak liable under the

abovequoted Section 117 of Act No. 496 (LandRegistration Act), for which he should be, not onlyprosecuted but also, disciplined as a member of theBar.


10/11

10

Mananquil vs. Villegas

Villegas was the counsel of record of Felix Leong,the administrator for the testate estate of FelominaZerna.

In 1963, Leong, as administrator of Zernas estate,entered into a lease contract with the partnership ofHijos de Villegas over several lots included in

Zernas estate. The said lease contract wasrenewed several times.

Villegas was bothcounsel of Leong and a partner inthe partnership of HIJOS DE VILLEGAS.

After Leongs death, this disbarment suit was filed byMananquil, the appointed administrator for Leongsestate. He alleged that the lease contracts weremade under iniquitous terms and conditions. Also,Mananquil alleged that Villegas should have firstnotified and secured the approval of the probate

court in Zernas estate before the contracts wererenewed, Villegas being counsel of that estatesadministrator.

In his defense, respondent claims that he wasneither aware of, nor participated in, the execution ofthe original lease contract entered into between hisclient and his family partnership, which was thenrepresented by his brother-in-law Marcelo Pastrano.

And although he admits that he participated in theexecution of subsequent renewals of the leasecontract as managing partner of HIJOS DE JOSE

VILLEGAS, he argues that he acted in good faithconsidering that the heirs of Filomena Zernaconsented or acquiesced to the terms andconditions stipulated in the original lease contract.

Issues: Whether VILLEGAS should have firstsecured the probate courts approval regarding thelease

Whether VILLEGAS should be disbarred.

Ruling:

The Supreme Court held that Villegas should besuspended for four months for his participation in therenewals of the lease agreement involvingproperties of the estate in favor of the partnershipHIJOS DE JOSE VILLEGAS, of which respondent isa member and in 1968 was appointed managingpartner.

Pursuant to Section 3 of Rule 84 of the RevisedRules of Court, a judicial executor or administratorhas the right to the possession and management ofthe real as well as the personal estate of thedeceased so long as it is necessary for the paymenof the debts and the expenses of administration. Hemay, therefore, exercise acts of administrationwithout special authority from the court having

jurisdiction of the estate. For instance, it has long

been settled that an administrator has the power toenter into lease contracts involving the properties ofthe estate even without prior judicial authority andapproval.

Thus, considering that administrator Leong was norequired under the law and prevailing jurisprudenceto seek prior authority from the probate court in orderto validly lease real properties of the estate, Villegasas counsel of Leong, cannot be taken to task fofailing to notify the probate court of the various leasecontracts involved herein and to secure its judicia

approval thereto.

There is no evidence as well to warrant disbarmentalthough Villegas should be suspended frompractice of law because he participated in therenewals of the lease contracts involving propertiesof Zernas estate in favor of the partnership of Hijosde Villegas. Under Art. 1646 of the Civil Codelawyers, with respect to the property and rightswhich may be the object of any litigation in whichthey may take part by virtue of their profession areprohibited from leasing, either in person or through

the mediation of another, the properties or thingsmentioned. Such act constituted gross misconducthence, suspension for four months.

It cannot be denied that respondent himself hadknowledge of and allowed the subsequent renewalsof the lease contract. In fact, he actively participatedin the lease contracts dated January 13, 1975 andDecember 4, 1978 by signing on behalf of the lesseeHIJOS DE JOSE VILLEGAS.

Moreover, the claim that the heirs of Filomena Zerna

have acquiesced and consented to the assailedlease contracts does not militate againsrespondent's liability under the rules of professionaethics. The prohibition referred to in Articles 1491and 1646 of the new Civil Code, as far as lawyersare concerned, is intended to curtail any undueinfluence of the lawyer upon his client on account ofhis fiduciary and confidential association.


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11

Ordonio vs. Eduarte

Facts:This is a complaint for the disbarment of respondent

Atty. Josephine Palogan-Eduarte.

Antonia Ulibari filed with the RTC, Branch 22,Cabagan, Isabela, a case for annulment of adocument against her children. The case was

handled by Atty. Henedino Eduarte, hereinrespondent's husband, until his appointment as RTC

judge on October 26, 1984. His wife, Atty. JosephinePalogan-Eduarte, took over. On August 22, 1985,decision was rendered in favor of Antonia Ulibari.Except for Dominga Velasco-Ordonio, one of thechildren of Antonia Ulibari and complainant in theinstant case, the rest of the defendants did notappeal. On June 13, 1987, while said case waspending appeal in the Court of Appeals, AntoniaUlibari conveyed some parcels of her land to herchildren in the form of deeds of absolute sale,

prepared and notarized by herein respondent.Significantly, on the same day, Antonia Ulibari alsoconveyed 20 hectares of land to herein respondentand her husband as their Attorney's fees for legalservices rendered. All the titles of the lands subjectof the deeds of absolute sale and the deed ofconveyance however remained in the name of

Antonia Ulibari.

On April 4, 1988, Dominga Velasco-Ordonio filedthis complaint for disbarment against hereinrespondent on the basis of an affidavit executed by

her mother Antonia Ulibari on March 2, 1988 statingthat affiant never conveyed the subject parcel of landto respondent as her attorney's fees and that thedeeds of absolute sale executed in favor of herchildren were not known to her (and that shereceived no consideration therefor).

On August 10, 1989, the InvestigationCommissioner submitted a report finding thecharges to be true and recommending a one-yearsuspension of the respondent from the practice oflaw.

Issue: Whether Antonia Ulibari was defrauded intosigning the Deed of Conveyance transferring to herlawyer (herein respondent) the subject parcel of landcontaining 298,420 square meters as the latter'sattorney's fees

Whether respondent violated any law in preparingand notarizing the deeds of absolute sale in making

it appear that there were considerations, when intruth there were noneRuling:It is clear from Antonia Ulibari's affidavit anddeposition that she never conveyed the said land toher lawyer as attorney's fees.

Respondent is hereby ordered suspended from thepractice of law for a period of six (6) months, and, for

having stated falsehoods in the four (4) deeds ofabsolute sale she prepared and notarized, inviolation of the lawyer's oath and Rule 10.01 of theCode of Professional Responsibility, respondent isalso ordered suspended from the practice or law fora period of another six (6) months, resulting in a totaperiod on one year.

Even granting for the sake argument that AntoniaUlibari knowingly and voluntarily conveyed thesubject property in favor of the respondent and herhusband, the respondent, in causing the execution

of the Deed of Conveyance during the pendency ofthe appeal of the case involving the said propertyhas violated Art. 1491 of the Civil Code whichprohibits lawyers from "acquiring by assignmentproperty and rights which may be the object of anylitigation in which they may take part by virtue of theirprofession."

In the case at bar, the property was already in actualitigation first in the lower court and then in the Courof Appeals. Whether the deed of conveyance wasexecuted at the instance of the client driven by

financial necessity or of the lawyers is of no momentThe act constitutes malpractice, even if the lawyerhad purchased the property in litigation. Theprohibition applies when the lawyer has not paidmoney for it and the property was merely assignedto him in consideration of legal services rendered ata time when the property is still the subject of apending case.

Respondent has manifestly violated that part of heroath as a lawyer that she shall not do any falsehoodNot only that. In preparing the documents which do

not reflect the true transaction, respondent haslikewise violated Rule 10.01 of the Code ofProfessional Responsibility which provides:

Rule 10.01. A lawyer shall not do any falsehood, noconsent to the doing of any in court; nor shall bemislead or allow the court to be mislead by anyartifice.

x lawyer_s fiduciary relationf

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