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

While I concur that Atty. Reymelio M. Delute (respondent) should be held administratively liable in this case, I am unable to join the majority in imposing upon him the supreme penalty of disbarment.

I maintain the view that in this case, the Court should refrain from passing upon the allegation of whether respondent manipulated and/or deceived the complainant into signing the Compromise Agreement. In Medina v. Lizardo,1 the Court similarly declined to pass upon the issue of whether the respondent lawyer therein was guilty of deceit in inducing the complainant to sell her interests in certain parcels of land, to wit:

x x x 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.2

The ponencia pronounces that Medina and other cases3 where this Court refrained from passing upon issues deemed proper subjects of a judicial action run counter to the Court's exclusive and plenary power to discipline members of the Bar and established jurisprudence that disbarment proceedings proceed independently from civil and/or criminal cases despite involving the same set of facts and circumstances.4 I submit, however, that rather than being in conflict with these well-established rule and precedents, the line of jurisprudence wherein the Court exercised restraint in fact recognizes the rule that the proper scope of inquiry in disbarment proceedings is to determine the lawyer's fitness to continue as a member of the Bar.5 Such cases are representative of instances when the Court recognized that it cannot determine whether the respondent lawyer indeed committed the imputed wrongdoing without delving into issues which were deemed proper to be threshed out in a more appropriate proceeding and not in the disbarment proceeding itself.

I am of the view that such similar stance of restraint is more prudent in this case. Accordingly, I submit that the allegation of manipulation or deceit should be threshed out in the appropriate proceeding where the issue of the validity of the Compromise Agreement will be properly resolved. For one, the matter of whether respondent misled or deceived complainant cannot be easily separated from the issue of the validity of the Compromise Agreement which should be properly resolved in a judicial action rather than in this disbarment proceeding since this goes into the matter of whether complainant gave valid consent in entering the same. Stated differently, whether complainant was misled into signing the Compromise Agreement not only calls for a determination of whether respondent really uttered a statement which caused fear and confusion on the part of complainant and his wife, but also of the complainant's capacity to understand the import of what he was signing. Furthermore, the allegation of manipulation against respondent is also connected with the alleged actuations of other parties who are not involved in this proceeding before the Court.

In fact, complainant instituted Civil Case No. T-2497 before the RTC of Toledo City, Cebu precisely to declare as void and inexistent the Compromise Agreement for being contrary to law and for want of consent on account of respondent's alleged fraudulent representations as to the nature of the documents he was signing. The case, however, was dismissed by the Regional Trial Court (RTC) for lack of jurisdiction over the subject matter in an Order dated January 8, 2018,6 and complainant's motion for reconsideration was denied in an Order dated June 13, 2018.7 The ponencia holds that the dismissal of Civil Case No. T-2497 should not preclude the Court from adjudging respondent's administrative liability in connection , with his acts relative to the execution of the Compromise Agreement, and neither should such determination be made dependent on whether complainant would want to re-file the action considering that the dismissal was based on lack of jurisdiction over the subject matter and is thus not barred by res judicata. While these points are well-taken, I find that the ponencia may have in fact pre-empted certain factual findings which should be better threshed out in the appropriate proceedings – which to my mind, is the very essence of the line of jurisprudence which the ponencia revisited.

In not only passing upon but also lending credence to complainant's allegation that he was misled into signing documents that effectively waived all his rights and interests over Lot 4-C, the ponencia adjudged respondent liable for breaching ethical standards "when he personally profited from the signing of the Compromise Agreement by his client, and even resorted to manipulation in conspiracy with Azucena [Laurel-Velez], the other party."8 The inequity against Azucena becomes manifest when this Court pronounced her as party to an alleged scheme against the complainant without giving her the opportunity to defend herself as she is not a party in this disbarment case. It is inconsistent to insist that the Court should pass upon the allegation of manipulation, if only to determine respondent's fitness as a member of the Bar, but at the same time impute wrongdoing against someone who is not even a party here, and who was not given the opportunity to be heard and to present evidence in her behalf.

While I acknowledge that Esquivias v. Court of Appeals9 is authority for the proposition that findings in a disbarment case are not conclusive or binding in another action which involves the same act of the lawyer subject of the former, I submit that this would neither afford comfort nor justification for the ponencia's declaration that respondent acted in conspiracy with Azucena on the basis of complainant's allegation without affording Azucena due process in this proceeding.

On this score, I cannot agree as well with the ponencia's finding that there is substantial evidence to support the complainant's allegation that he was misled into signing the documents and that respondent took P100,000.00 out of the P300,000.00 given by Azucena Laurel-Velez (Azucena). In particular, the Decision states that "the straightforwardness and believability of the allegations in the complaint, as buttressed by the' benefits received by respondent appearing on the Compromise Agreement, when taken together with respondent's failure to rebut the same despite due notice, already constitute substantial evidence to hold him administratively liable."10

It is true that on certain occasions, the failure of the respondent lawyer to file his Answer and position paper was taken "not only as lack of responsibility but also lack of interest on the part of the respondent in clearing his name which is constitutive of an implied admission of the charges leveled against him."11 However, it must be emphasized that such failure should not dispense with the burden of the complainant to establish the case against the respondent lawyer12 with the evidentiary threshold of substantial evidence.13 As aptly pointed out by Associate Justice Alfredo Benjamin S. Caguioa (Justice Caguioa) during the deliberations of this case, the failure of respondent to file his Answer and position paper should not be taken as an implied admission of the allegations against him nor a signal for the Court that such allegations have been effectively proven.

After all, it is well-settled that an attorney enjoys the legal presumption that he or she is innocent of charges against him or her until the contrary is proved and that as an officer of the court, he or she is presumed to have performed his duties in accordance with his oath.14 In fact, in Robiñol v. Bassig,15 where the respondent lawyer also failed to file his Answer and to attend the scheduled mandatory conference, the Court held such failure cannot be deemed as an admission of the allegations in the complaint, which the complainant has the burden of proving, but may subject said respondent lawyer to administrative liability for failure to obey the IBP's lawful orders.

From the foregoing, I have reservations in taking against the respondent the allegation that he obtained P100,000.00 from the complainant before they parted ways, an allegation which the IBP-CBD considered as uncontroverted for respondent's failure to file his Answer and his position paper, and taken as evidence that he benefited from the transaction. A reading of complainant's Affidavit-Complaint16 as well as Position Paper17 shows that he merely alleged that respondent obtained P100,000.00 out of P300,000.00. Although respondent appears to have not squarely addressed this in his Motion to Lift Suspension from The Practice of Law18 and in his Comment19 to the complainant's Opposition,20 complainant did not even allege any impropriety or irregularity about the alleged amount that respondent took as payment for attorney's fees. At any rate, from the records available to the Court, there was no sufficient proof that such amount was indeed obtained by respondent.

The foregoing reservations notwithstanding, I find that respondent must be held administratively liable for acquiring an interest over Lot 4-C under paragraph 3 of the Compromise Agreement, the existence of such stipulation of which is not seriously disputed, and where it is provided that he will be given a perpetual right of way by Azucena, to wit:

3. The oppositor and Gamaliel Casas shall grant to Atty. Reymelio M. Delute, his heirs and assigns, a three-meter wide perpetual road right of way on the subject Lot 4-C, from Atty. Delute's adjoining lot to the nearest public road, which road right of way shall be made into accessible road at the sole expense of the oppositor;21

"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.'"22 Also, considering that complainant's consent was necessary for the Compromise Agreement which contained a grant of benefit in favor of the respondent, the Court's previous ruling that dealings between a lawyer and his client must be greatly scrutinized in order to ensure that the former does not take advantage of the latter. As stated in Nakpil v. Valdes:23

As a rule, a lawyer is not barred from dealing with his client but the business transaction must be characterized with utmost honesty and good faith. 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 "arm's length." Business transactions between an attorney and his client are disfavored and discouraged by the policy of the law. Hence, courts carefully watch these transactions to assure that no advantage is taken by a lawyer over his client. This rule is founded on public policy for, by virtue of his office, an attorney is in an easy position to take advantage of the credulity and ignorance of his client. Thus, no presumption of innocence or improbability of wrongdoing is considered in an attorney's favor.24

Independent of whether there was fraud that vitiated complainant's consent to the Compromise Agreement, the grant of the right of way was highly improper in this particular case. While it may be conceded that the Compromise Agreement is valid unless annulled or declared void in the appropriate proceeding, this does not absolve respondent from any badges of impropriety for acquiring the right of way under paragraph 3 thereof. By the plain reading of the Compromise Agreement, the right of way was for respondent's own benefit and not for the complainant, contrary to what respondent wants to impress upon the Court. Notably, by way of special and affirmative defenses in his Answer25 to the Complaint in Civil Case No. T- 2497, respondent averred that he informed the complainant of Azucena's desire to settle the case amicably, but claimed that he did not meddle in the fixing of the amount of settlement.26 Thereafter, he advised the complainant to retain a 300 sq m-portion of Lot 4-C and for Azucena to grant him (referring to the respondent) a perpetual right of way, to wit:

14. [Respondent] advised Felipe Laurel to retain a 300 square meter portion of Lot 4-C to serve as his future residence in the event he would no longer reside in Cebu City, as well as, the establishment of perpetual road right of way on Lot 4-C at the expense of AZUCENA LAUREL- VELEZ in favor of [respondent]; both offers were accepted by AZUCENA LAUREL-VELEZ and embodied in the Compromise Agreement (Annex "L");27

In this respect, respondent violated Canon 17 of the Code of Professional Responsibility (CPR) which states that "[a] lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him." Regardless of the truthfulness of the allegation that he misled or deceived the complainant into signing the Compromise Agreement, the fact that he stands to benefit from the Compromise Agreement through a person whose interests are adverse to that of his client raises sufficient cause for suspicion that he was protecting his own interest instead of the complainant's interest.

Furthermore, I agree with the ponencia that respondent violated the rule against conflict of interest. Rules 15.01 and 15.03, Canon 15 of the CPR provides:

CANON 15 - A LAWYER SHALL OBSERVE CANDOR, FAIRNESS AND LOYALTY IN ALL HIS DEALINGS AND TRANSACTIONS WITH HIS CLIENTS.

Rule 15.01 - A lawyer, in conferring with a prospective client, shall ascertain as soon as practicable whether the matter would involve a conflict with another client or his own interest, and if so, shall forthwith inform the prospective client.

Rule 15.03 — A lawyer shall not represent conflicting interests except by written consent of all concerned given after full disclosure of the facts.

Although jurisprudence has often applied the rule against conflict of interest in cases involving multiple clients or parties, the rationale behind said rule may likewise be applied in cases where a conflict arises between the client and the lawyer himself. As stated in Samson v. Era,28 the prohibition against conflict of interest rests on five rationales, to wit:

x x x First, the law seeks to assure clients that their lawyers will represent them with undivided loyalty. A client is entitled to be represented by a lawyer whom the client can trust. Instilling such confidence is an objective important in itself. x x x

Second, the prohibition against conflicts of interest seeks to enhance the effectiveness of legal representation. To the extent that a conflict of interest undermines the independence of the lawyer's professional judgment or inhibits a lawyer from working with appropriate vigor in the client's behalf, the client's expectation of effective representation x x x could be compromised.

Third, a client has a legal right to have the lawyer safeguard the client's confidential information x x x Preventing use of confidential client information against the interests of the client, either to benefit the lawyer's personal interest, in aid of some other client, or to foster an assumed public purpose is facilitated through conflicts rules that reduce the opportunity for such abuse.

Fourth, conflicts rules help ensure that lawyers will not exploit clients, such as by inducing a client to make a gift to the lawyer x x x

Finally, some conflict-of-interest rules protect interests of the legal system in obtaining adequate presentations to tribunals. In the absence of such rules, for example, a lawyer might appear on both sides of the litigation, complicating the process of taking proof and compromise adversary argumentation x x x29 (Citations omitted; emphasis supplied)

In Palalan Carp Farmers Multi-Purpose Coop v. Dela Rosa,30 the Court stated that conflict of interest means "[t]he 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." In the same case, the Court recognized that conflicts may arise "because of the lawyer's own financial interests, which could impair client representation and loyalty" such as when "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."

In the present case, it is not enough for the respondent to argue that the Compromise Agreement was validly executed. While the possibility that complainant and Azucena would have genuinely desired to amicably settle their dispute cannot be discounted, this does not readily justify the grant of right of way in respondent's favor. Respondent's argument that there was no need for him to deceive the complainant into signing the Compromise Agreement just for him to acquire a right of way is untenable. Again, regardless of whether there was fraud, he could have shown either that he advised the complainant against the grant of the right of way in the said agreement, or accepted only the said grant with full consent of the complainant after explaining the possible legal consequences. Here, there is absence of circumstances indicating that complainant's interests were adequately protected in order to rule out the possibility that he may have been taken advantage of – an evil sought to be avoided by the rule against conflict of interest. As it turned out, respondent put himself in a situation where there is reasonable suspicion that he argues for the validity of the Compromise Agreement, not because of the complainant's desire to have his dispute with Azucena amicably settled, but because his own interest would be served by said agreement.

Going now to the proper penalty, it has been held that the determination of whether an attorney should be disbarred or merely suspended for a period involves the exercise of a sound judicial discretion.31 In Quiambao v. Bamba,32 the Court cited jurisprudence33 providing for the penalty of suspension from the practice of law for one to three years solely for a lawyer's representation of conflicting interests. In this case, I find that under the circumstances, a penalty of two years suspension from the practice of law would suffice.

Moreover, I find in order the recommendation of the IBP in imposing fine insofar as it concerns the respondent's failure to comply with the directives of the IBP-CBD. Aside from failing to file an Answer to the Complaint despite due notice, he also failed to file his verified position paper. In paragraph 9 of his Motion, the respondent states:

9. Regrettably, however, Respondent did not attempt to answer the complaint for his erroneous belief that the complaint must first be referred to the local IBP Chapter for investigation at which investigation Respondent intended to personally and wholeheartedly confront Complainant why he filed the instant complaint alleging twisted facts and fabricated lies calculated to destroy the herein Respondent who defended him with utmost fidelity. With the motion filed by the Complainant that the hearing be held in Cebu City, Respondent had waited for such investigation which unfortunately did not occur or happen[.]34

Respondent's explanation is unsatisfactory considering that the Order35 from the IBP CBD for him to file his Answer was clear enough and his only basis for not even attempting to comply was his erroneous belief that a referral to the local IBP chapter was still necessary. Furthermore, his Motion is silent as to his failure to file his verified position paper, even though it appears that he received the Order36 dated October 20, 2014 reiterating said directive.37

It does not escape attention that for more than six years, respondent did nothing in relation to this case from the time he was required to file an Answer in the Order dated December 5, 2011. Despite the categorical warning in the said Order that failure to file an Answer will result in being considered in default and the case heard ex parte38 respondent was given a new period of 10 days to file an Answer in the Order39 dated March 2, 2012.40 Similarly, although the parties were required to submit position papers in the Order41 dated April 30, 2012, the IBP-CBD gave a new period of 10 days to file said position papers in the Order42 dated October 20, 2014 since there was no proof that the Order dated April 30, 2012 was received by the parties.43 Despite the opportunities given by the IBP-CBD for him to air his side, he chose to ignore its directives.

As a lawyer, respondent "must observe and maintain respect not only to the courts, but also to judicial officers and other duly constituted authorities, including the IBP."44 He must be reminded that orders of the IBP, just like resolutions of this Court, must be complied with promptly and completely as they are not mere requests.45

In Domingo v. Sacdalan,46 the Court, in addition to the penalty of disbarment and the order for the respondent to return to the complainant amounts representing legal deposit to cover expenses related to the expected litigation and cash advance chargeable against his appearance fees and other fees, the Court ordered the respondent to pay a fine of 15,000.00 for his disobedience to the lawful orders of the IBP. In light of the foregoing discussion, the imposition of a fine in the amount of P5,000.00 as recommended by the IBP-BOG is in order.

ACCORDINGLY, I vote to have respondent Arty. Reymelio M. Delute SUSPENDED from the practice of law for two (2) years, with the STERN WARNING that the commission of the same or similar offense in the future will result in the imposition of a more severe penalty, and to be ORDERED to pay a FINE in the amount of Five Thousand Pesos (P5,000.00).