A.C. No. 12298 - Dissenting and Concurring Opinion

A.C. No. 12298, September 1, 2020,
♦ Decision, Per Curiam
♦ Concurring Opinion, Leonen, [J]
♦ Dissenting and Concurring Opinion, Caguioa, [J]
♦ Concurring and Dissenting Opinion, J. Reyes, Jr., [J]

The majority holds respondent administratively liable for allegedly (1) deceiving and strong-arming his clients, herein complainant and his wife, into signing a compromise agreement where they effectively waived their rights and interests over a parcel of land1; and (2) selling out his client's cause in order to gain personal benefits.2 These are the acts on which the majority imposes the supreme penalty of disbarment. I submit, however, that respondent may only be held administratively liable for representing conflicting interests and for disobeying the lawful orders of the Integrated Bar of the Philippines (IBP). In this regard, I further submit that it should suffice that respondent be meted the penalty of suspension from the practice of law for two years and a fine of P5,000.00.

In the narration of facts, the ponencia makes reference to a compromise agreement between complainant and his wife, on the one hand, and complainant's cousin, Azucena Laurel-Velez (Azucena), on the other, over their legal dispute over a parcel of land. Complainant makes the following allegations surrounding the circumstances which led to the execution of the said instrument:

Based on the foregoing allegations, the majority agrees with complainant that respondent employed deceit against him and his wife into giving their consent to the compromise agreement. It is my view, however, that the Court cannot delve into the validity of the surrounding circumstances in the execution of the compromise agreement in resolving this administrative complaint. Resolving these factual issues alleged by complainant in this administrative proceeding would be improper as the resolution would, as a matter of course, venture into the issue of the validity of the compromise agreement which is purely between private parties. This issue is best threshed out in an appropriate judicial case other than the present disbarment proceeding.8

Indeed, the Court has consistently held that administrative suits against lawyers are sui generis. This principle can be traced back to the 1970 case of In Re Almacen,9 where the Court debunked the claim that its members were being "complainants, prosecutors and judges" all rolled into one. In clarifying this misapprehension, the Court expounded that a disbarment proceeding is neither purely civil nor purely criminal, and does not involve a trial of an action or a suit. It is rather an investigation by the Court into the conduct of its officers.

Over the years, in a long line of cases, the principle enunciated in In Re Almacen evolved with the further view that disbarment proceedings can proceed independently of civil and criminal cases. Evidently, however, in these cases, the other civil and criminal cases referred to therein implead the respondent-lawyers or are concerned with the determination of their civil and criminal liabilities. As such, in ruling that all three proceedings may proceed simultaneously and independently, the Court distinguished that disbarment proceedings are not concerned with the civil or criminal liabilities of the respondent-lawyer but only with his or her fitness to continue his or her membership in the Bar. The Court further held that disbarment proceedings do not have any material bearing on any other judicial action which the parties (the complainant and the lawyer) may choose to file against each other.10

However , the Court has, as well, drawn a bright line in disbarment cases where other legal rights and judicial matters which are related to the questionable acts of the lawyer are present but do not apparently involve the lawyer's civil or criminal liability. In these cases, the civil and criminal cases referred to are between parties that do not include the respondent-lawyer. In other words, the legal rights, interests, and liabilities of other parties are principally at stake and not those of the respondent-lawyer. Thus, in these cases, the Court has limited the issue on whether the respondent-lawyer committed transgressions that would question his fitness to practice law, refraining, at the same time, from discussing issues that are judicial in nature.11

To specifically illustrate, in Espanto v. Belleza12 (Espanto), Atty. Belleza was charged with deliberate falsehood when he facilitated the demolition of a house belonging to complainant therein on a property subject of a case for recovery of possession that Atty. Belleza was handling. In the interim, complainant agreed to sell the house to Atty. Belleza's client and receive partial payment therefor, with an assurance that the subsequent sale of the house and lot would be relayed to him. The house and lot were subsequently sold to another, and the house of complainant was eventually demolished without his knowledge. In weighing in on Atty. Belleza's guilt, the Court made the following pronouncement:

Well-established is the rule that administrative cases against lawyers belong to a class of their own. These cases are distinct from and proceed independently of civil and criminal cases. Public interest is its primary objective, and the real question for determination is whether or not the attorney is still a fit person to be allowed the privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal profession and the proper and honest administration of justice by purging the profession of members who by their misconduct have proven themselves no longer worthy to be entrusted with the duties and' responsibilities pertaining to the office of an attorney. Corollarily, We will limit the issue on whether Atty. Belleza committed transgressions that would question his fitness to practice law, and thus, refrain from discussing issues that are judicial in nature.

Given the facts of the case, we find that Atty. Belleza failed to exercise the good faith required of a lawyer in handling the legal affairs of his client. Even without touching the issue of the subject properties' ownership, Atty. Belleza cannot deny that the subject property sold by Nelia to Irene was still pending litigation due to the alleged encroachment of Junielito's house on the property of Nelia. It was precisely the reason why they filed a complaint for recovery of possession against Junielito's relatives. Moreover, when Atty. Belleza sent a notice to vacate Nelia's property to Junielito on November 22, 2010, the civil case was still pending litigation.

As noted by the IBP-CBD, the acknowledgment receipt of P50,000.00 issued by Nelia as witnessed and signed by Atty. Belleza is an evidence by itself that he had knowledge of Junielito's interest on the property even if he disputes the latter's ownership of the subject property. x x x

Upon review of the foregoing acknowledgment receipt, it can be inferred that Junielito acknowledged that he received P50,000.00 as partial payment and that he will receive the final percentage of sale price when house and lot by Nelia is sold. It likewise stated therein that Junielito has the right to be informed of the final sale price and other details related to the sale. Considering that Junielito was in fact paid albeit partial and was given the right to be informed of the final sale details, it clearly shows that Nelia and Atty. Belleza recognized Junielito's interest as an owner although it pertains only to a portion of Nelia's property where his house sits. Why else would they agree on informing Junielito of such material information if they knew that he has no right whatsoever with the property being sold.

It should also be pointed out that Atty. Belleza neither denied the existence of the acknowledgment receipt nor the fact that he signed the same. Thus, given the foregoing circumstances, it can be presumed that Atty. Belleza knew that the sale of the property will necessarily affect Junielito. Consequently, when they sold the property of Nelia without informing Junielito despite their agreement to such effect, Atty. Belleza not only breached their agreement and betrayed Junielito's trust; he also instigated a malicious and unlawful transaction to the prejudice of Junielito.13 (Emphasis and underscoring supplied)

In cases such as Espanto, the issues against the conduct of the lawyer are susceptible of bifurcation from other related legal issues at hand over which the Court could not exercise its disciplining authority. This, to my mind, does not mean shirking or conceding responsibility, but is done as a matter of prudence and fairness.14 This delimitation is, in fact, attuned to the oft-cited principle that "[disciplinary proceedings involve no private interest and afford no redress for private grievance."15 As Espanto powerfully illustrates, the exercise does not prevent the Court from examining the allegations in the complaint and the evidence available to determine whether it may still rule on the administrative liability of the lawyer. As will be shown below, this finds application here, too.

Thus, where the questionable conduct of the lawyer is so inextricably linked to a judicial issue between other private parties that ought to be threshed out or is already the subject of a pending litigation, then I submit that the Court is required to refrain from delving into such issue as doing so would be unfairly pre-empting any appropriate action that would be taken by the court or the parties-in-interest.

Again, to illustrate further, the Court in Virgo v. Amorin16 dismissed without prejudice the disbarment case against the lawyer on the ground of the pendency of several civil cases between private parties related to the disbarment case. The Court elaborated in this manner:

Second, Atty. Amorin has pointed out and complainant does not deny, the existence of other cases related to the present disbarment case. Civil Case No. 01-45798, pending before RTC-QC Branch 221, a case for Annulment of Real Estate Mortgage and Foreclosure Proceedings with Damages, Temporary Restraining Order and/or Preliminary Injunction and Preliminary Attachment, filed by LEDI against BPI Leasing and Finance Corp., its officers, the Registrar of Quezon City and the Virgos, assail the foreclosure by BPI of the Virgo Mansion which LEDI claims to have already been sold by the Virgos to them. In claiming ownership of the property, LEDI necessarily has to raise factual matters pertaining to the sale by the Virgos of the property to them, such as the actual selling price, the validity of the deeds of sale, and the terms of payment, which are inextricably intertwined with the present disbarment case.

LRC Case No. Q-15382 (02), a petition for the issuance of writ of possession filed by the BPI before RTC QC Br. 216 seeks to foreclose the Virgo Mansion, which complainant and her husband mortgaged to BPI in 1998, while CA-GR SP. No. 77986 is a petition for certiorari and prohibition asking the CA to stop the judge therein from enforcing the writ of possession issued pursuant to LRC Case No. Q-15382.

While it is true that disbarment proceedings look into the worthiness of a respondent to remain as a member of the bar, and need not delve into the merits of a related case, the Court, in this instance, however, cannot ascertain whether Atty. Amorin indeed committed acts in violation of his oath as a lawyer concerning the sale and conveyance of the Virgo Mansion without going through the factual matters that are subject of the aforementioned civil cases, particularly Civil Case No. 01-45798. As a matter of prudence and so as not to preempt the conclusions that will be drawn by the court where the case is pending, the Court deems it wise to dismiss the present case without prejudice to the filing of another one, depending on the final outcome of the civil case.17 (Emphasis and underscoring supplied)

Likewise, in Felipe v. Macapagal18 the Court refused to rule on the allegation of dishonesty against the respondent-lawyer therein because of the presence of other issues which were already brought before a court in a civil case by and between private parties. The Court held that these issues cannot be appropriately settled in the administrative case against the respondent therein. Thus:

At the outset, we note that in order to determine whether respondent is guilty of dishonesty, we will have to delve into the issue of whether the complainants are indeed related to the defendants in Civil Case No. A-95-22906 being half-brothers and half-sisters. We would also be tasked to make an assessment on the authenticity of the Certificate of Marriage which respondent submitted in the proceedings in Civil Case No. A-95-22906. Similarly, we will have to make a ruling on whether the Urgent Motion to Recall Writ of Execution of the Writ of Preliminary Injunction which respondent filed was indeed baseless and irrelevant to the proceedings in Civil Case No. A-95-22906. Clearly, these prerequisites cannot be accomplished in this administrative case.

The resolution of whether the parties are related to each other appears to be one of the issues brought up in Civil Case No. A-95-22906 which is a complaint for Partition, Reconveyance, Declaration of Nullity of Documents and Damages. The complainants claimed that they are the legitimate children of the late Gregorio V. Felipe, Sr. This was rebutted by the defendants therein, as represented by the respondent, who denied their filiation with the complainants. Clearly, the issue of filiation must be settled in those proceedings, and not in this administrative case. The same is true with regard to the issue of authenticity of the Marriage Certificate which was submitted in evidence as well as the relevance of the Urgent Motion to Recall Writ of Execution of the Writ of Preliminary Injunction. x x x19

Similarly in this case, a finding for disbarment against respondent would be hinged on the question of whether he indeed manipulated complainant and his wife into signing the compromise agreement. To answer this question would necessarily entail delving into factual matters that would, in turn, confront the issue between complainant and Azucena as to whether the consent of the complainant and his wife in the compromise agreement was vitiated. In other words, the argument about the validity of the compromise agreement between complainant and Azucena stands heavily, if not entirely, on the very participation of respondent in its execution. Significantly, the issue of vitiated consent is not brought up before the Court and is not clearly a proper subject for disposition in this administrative proceeding.

It appears that the ponencia is aware of what a finding on the liability of respondent based on the validity of the compromise agreement would occasion. As such, the ponencia refrains from discussing the manner by which respondent supposedly deceived and strong-armed complainant and his wife into signing the compromise agreement. Rather, it draws the conclusion based on the "straightforwardness and believability of the allegations in the complaint, as buttressed by the benefits received by respondent appearing on the Compromise Agreement."20 It further concludes that all these circumstances, "when taken together with respondent's failure to rebut the same despite due notice, already constitute substantial evidence to hold him administratively liable."21 This conclusion, I submit, does not meet the threshold of substantial evidence as it is sweeping and rests essentially on the bare assertions of complainant. Substantial evidence is more than a mere scintilla.22 It must be real and substantial, and not merely apparent.23 The presence of a provision in the compromise agreement which grants a right of way in favor of respondent does not unequivocally prove or lend support to the allegation that respondent had used machinations against his clients or had been motivated to act against their interests. Likewise, the fact that respondent obtained P100,000.00 from complainant does not conclusively indicate any impropriety on the part of respondent. In the same vein, respondent's silence during the proceedings before the IBP should neither be taken as his effective admission of any wrongdoing, nor a signal to the Court that the allegations in the complaint have been effectively proven. Even if respondent has chosen to be silent during the proceedings before the IBP, the complainant is not discharged of his burden to prove his allegations against respondent.

All in all, I find no real comfort in the proffered justification that a different set of facts may properly exist in different cases that involve a different set of parties on the ground, among others, that the purposes in each case may be different. The purposes of an administrative case and a civil case are, indeed, fundamentally different. But, again, in order to resolve the very issue of dishonesty and deceit on the part of herein respondent in this proceeding would mean tackling the issue on the due execution of the instrument. There is no roundabout way to do it. It is incorrect, therefore, to reduce the allegation of manipulation against respondent as a mere incidental or collateral issue.

In the same manner, to maintain that the resolution of the alleged manipulation of respondent in this administrative case would nonetheless be inconclusive in another related action and be limited to the purposes of this proceeding seems, in my view, essentially implausible.

Facts are facts. There simply cannot be two versions of the same truth. To allow a resolution in this disbarment proceeding of the alleged manipulation of respondent against his client in the execution of the compromise agreement would create a situation where the "facts" as already established before Civil Case No. T-2497 would now be different from the "facts" established here. This would be unacceptable. The ineluctable consequence in such situation would mean having conflicting or contradictory "findings of facts," that would cast a cloud of uncertainty over Civil Case No. T-2497.

As it stands, Civil Case No. T-2497 was dismissed by the Regional Trial Court (RTC) of Toledo City, Cebu on the ground of lack of jurisdiction on the subject matter. True, the dismissal may have been without prejudice and does not operate as res judicata, but even so, it cannot be denied that for the Court now to lend credence to the allegations of complainant in this administrative proceeding would undermine the judicial basis for the dismissal of the civil case. To my mind, regardless of the kind of dismissal which attended Civil Case No. T-2497, the fact remains that the validity of the compromise agreement is no longer in dispute. It can now only be viewed by the Court as valid.

Moreover, it should likewise be noted that the notarized compromise agreement appears to have already been approved by the Department of Agrarian Reform Regional Office (DARRO) in its July 15, 2003 Order in DARRO Case No. A-0700-060-2002, an administrative case between complainant and Azucena over the disputed property.24 As a result the case was amicably settled in 2003, or nine years before the present disbarment suit against respondent was instituted.25

Similar to my view as regards the dismissal of Civil Case No. T-2497, to make contrary "factual findings" in this administrative case will also undermine the abovementioned July 15, 2003 Order issued by the DARRO and would amount to a collateral attack on the validity of the compromise agreement.

The fear that generating conflicting "findings of facts" will unnecessarily and unwarrantedly foment more litigation between the contending parties (i.e., between complainant and Azucena) and hence, defeat — rather than promote — the tenets of the orderly administration of justice, is legitimate. It is truly not hard to imagine that any "findings of facts" the Court makes in this disbarment proceeding can and will be used by complainant in another civil litigation against Azucena as basis for having the compromise agreement annulled. In fact, in Esquivias v. CA,26 while the Court held that the factual findings in a disbarment case are conclusive only in said proceedings and not to a related action, it acknowledged, nevertheless, that the judgment in the disbarment case may, at best, be given weight when introduced as evidence in another case. This, in my view, is recognition that the outcome of a disbarment case which involves a crucial issue between other parties may urge any of them to bring an action in court to settle a controversy that rests closely on the said issue.

At the same time, should a subsequent case proceed and the trial court arrive at factual findings that are diametrically opposed to that which the Court has come up with to support its decision in disbarring a lawyer in a disciplinary proceeding, the unfairness against the lawyer is, at once, palpable. In that given scenario, a lawyer would suffer the stinging effects of disbarment on the basis of factual findings that run entirely different from a version in another case — which, I hasten to add, would be more "truthful" if arrived at through a trial with the right of cross-examination being available.

Thus, I respectfully submit that while the Court should not hesitate to discipline errant lawyers, this duty must likewise be exercised carefully, in that an examination of the issues at hand should be had. The general notion that an administrative case is different from a criminal or civil case as enough justification for the Court to wield its disciplining authority should be disabused. When the basis to impose discipline is grounded on a fact or issue that cannot be easily divorced from another, whose resolution requires a full-fledged trial, and which affects the interest of parties outside of the disbarment case, the Court should be mindful to stay its hand.

The Court, in fact, has been prudent in earlier cases. In Medina v. Lizardo27 (Medina), the Court refused to rule on the alleged fraud of the respondent therein even without a pending case impugning the validity of the extrajudicial settlement in question. The pertinent text in Medina reads:

As previously mentioned, the Investigating Commissioner found that Atty. Lizardo allowed himself to be used by Martinez to supposedly defraud Silvestra and the heirs of Alicia and therefore, held that Atty. Lizardo also violated Canon 1, Rule 1.01 and Canon 7, Rule 7.03 of the Code of Professional Responsibility. However, we refrain from passing upon the finding of the Investigating Commissioner that Atty. Lizardo was guilty of deceit in allegedly inducing Silvestra and the heirs of Alicia into selling their interest in all three lots covered by the subject TCTs in the Extrajudicial Settlement with Sale when their purported intention was to sell only the parcels covered by TCT No. 13866. The matter of fraud in the execution of said agreement which will have implications on its validity and legal effects must be first threshed out by the parties in the appropriate proceedings.28 (Emphasis and underscoring supplied)

Also, in Spouses Williams v. Enriquez,29 the Court refused to rule on the alleged dishonesty committed by the respondent therein in a pleading he submitted in an ejectment case in defense of a client. The Court dismissed the case on the ground that it could not determine his fitness to remain a member of the Bar without delving into the issue of who really owned the subject property. Notwithstanding the fact that the ejectment case was already concluded and there was no other pending case, the Court still refused to rule on the complaint against respondent therein because the allegation of his dishonesty was inextricably connected with the issue of ownership between the parties-in-interest, but which issue had not been judicially settled in any case. Thus:

On its face, the 12 September 2006 complaint filed by the Spouses Williams against Atty. Enriquez does not merit an administrative case. In order for the Court to determine whether Atty. Enriquez is guilty of dishonesty, the issue of ownership must first be settled. The Spouses Williams alleged that Verar was the owner of the property and that she sold a portion of it to them. On the other hand, Atty. Enriquez alleged that Desiderio, Francisco, Ramon, Umbac and Briones were the real owners of the property and that Verar was only a trustee. This was precisely the issue in Civil Case No. 390. Unfortunately, the MCTC was not able to make a definite ruling because the Spouses Williams failed to file their answer within the prescribed period.

The issue of ownership of real property must be settled in a judicial, not administrative case. In Virgo v. Amorin, the Court dismissed without prejudice a complaint against a lawyer because it could not determine his fitness to remain a member of the Bar without delving into issues which are proper subjects of judicial action. x x x30

The above statements, notwithstanding, I agree with the findings of the ponencia that respondent should be held administratively liable for acquiring an interest in the form of a right of way over the property subject of the compromise agreement. Aside from this, he should also be held administratively liable for disobeying the orders of the IBP anent the submission of an answer and a position paper.

It is undisputed that respondent benefited from the compromise agreement because he was granted by the parties a perpetual right of way on the property. This is a clear violation against the proscription of representing conflicting interests.

The rule against conflict of interest is expressed in Canon 15,31 Rules 15.0132 and 15.0333 of the Code of Professional Responsibility. It means the existence of a substantial risk that a lawyer's loyalty to or representation of a client would be materially and adversely affected by the lawyer's own interest or the lawyer's duties to another client, a former client, or a third person, during the various stages of the professional relationship.34 The test of conflict of interest among lawyers is "whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double-dealing in the performance thereof."35 The illustration of the Court in Palalan Carp Farmers Multi-Purpose Coop v. Dela Rosa36 is instructive:

Conflicts may also arise because of the lawyer's own financial interests, which could impair client representation and loyalty. This is reasonably obvious where a lawyer is asked to advise the client in respect of a matter in which the lawyer or a family member has a material direct or indirect financial interest. The conflict of interest is exacerbated when the lawyer, without full and honest disclosure to the client of the consequences of appointing him or her as an agent with the power to sell a piece of property, willfully and knowingly accepts such an appointment. When the lawyer engages in conduct consistent with his or her appointment as an agent, this new relationship may obscure the line on whether certain information was acquired in the course of the lawyer- client relationship or by reason of agency, and may jeopardize the client's right to have all information concerning the client's affairs held in strict confidence.

The relationship may in some circumstances permit exploitation of the client by the lawyer as he or she still is, after all, the lawyer from whom the client seeks advice and guidance.37

Hence, lawyers should always be mindful not to put themselves in a position where self-interest tempts, or worse, actually impels them to do less than their best for their clients.38 Respondent went against this reminder when he had his own interest served in a compromise agreement between his own clients and their adversary. His act, as the Court said in Gamilla v. Mariño, Jr.,39 naturally invited suspicion of unfaithfulness or double-dealing and should not be countenanced. In this regard, in consonance with prevailing jurisprudence,40 I submit that the penalty of suspension from the practice of law for two years is commensurate with the infraction committed.

Finally, the failure of respondent to file his answer and position paper constitutes disobedience to the lawful orders of the IBP and should warrant a penalty. Following Domingo v. Sacdalan41 a fine of P5,000.00 is proper:

It must be underscored that respondent owed it to himself and to the entire Legal Profession of the Philippines to exhibit due respect towards the IBP as the national organization of all the members of the Legal Profession. His unexplained disregard of the orders issued to him by the IBP to comment and to appear in the administrative investigation of his misconduct revealed his irresponsibility as well as his disrespect for the IBP and its proceedings. He thereby exposed a character flaw that should not tarnish the nobility of the Legal Profession. He should always bear in mind that his being a lawyer demanded that he conduct himself as a person of the highest moral and professional integrity and probity in his dealings with others. He should never forget that his duty to serve his clients with unwavering loyalty and diligence carried with it the corresponding responsibilities towards the Court, to the Bar, and to the public in general.

For his disobedience to the orders of the IBP Commission, respondent must pay a fine of P5,000.00.42

For these reasons, I dissent from the majority in finding respondent guilty of deceit and in imposing on him the penalty of disbarment. I vote, however, to hold respondent guilty of violating Rule 15.3, Canon 15 of the Code of Professional Responsibility and of disobeying the orders of the IBP. For these violations, respectively, I vote that respondent should be meted with the penalty of suspension from the practice of law for two (2) years and to pay a fine in the amount of P5,000.00.