Bautista v.

Gonzales
A.M. No. 1625, February 12, 1990

Recit-Ready Pointers:

 Who filed disbarment case: Angel Bautista

Doctrine:

Facts: In a verified complaint filed by Angel L. Bautista, respondent Ramon A. Gonzales was charged with
malpractice, deceit, gross misconduct and violation of lawyer’s oath. As an answer to the charges, Atty.
Gonzales filed a motion for a bill of particulars – asking Bautista to make his charges more definite. The
amended complaint alleged that Atty. Gonzales committed the following acts:

1. Accepting a case wherein he agreed with his clients, the Fortunados, to pay all expenses, including
court fees, for a contingent fee of fifty percent (50%) of the value of the property in litigation

2. Acting as counsel for the Fortunados in a civil case wherein Eusebio Lopez, Jr. is one of the
defendants and, without said case being terminated acting as counsel for Eusebio Lopez, Jr. in
another civil case.

3. Transferring to himself one-half of the properties of the Fortunados, which properties are the subject
of the pending civil case he’s handling.

4. Inducing Bautista, who was his former client, to enter into a contract with him on August 30, 1971
for the development into a residential subdivision of the land of the Fortunados, claiming that he
acquired fifty percent (50%) interest thereof as attorney's fees from the Fortunados, while knowing
fully well that such property was already sold previously at a public auction and registered with the
Register of Deeds.

5. Submitting to the CFI of Quezon City falsified documents purporting to be true copies of "Addendum
to the Land Development Agreement dated August 30, 1971" and submitting the same document
to the Fiscal's Office of QC, in connection with the complaint for estafa filed by Atty. Gonzales
against Bautista.

6. Committing acts of treachery and disloyalty to complainant who was his client;

7. Harassing the complainant by filing several complaints without legal basis before the CFI and the
Fiscal's Office of QC;

8. Deliberately misleading the CFI and the Fiscal's Office by making false assertion of facts in his
pleadings;

9. Filing petitions "cleverly prepared so that while he does not intentionally tell a lie, he does not tell
the truth either."

The Court referred the case to the OSG for resolution. The Solicitor General found that respondent
committed the following acts of misconduct:

a. transferring to himself ½ of the properties of his clients during the pendency of the
case where the properties were involved;
 b. concealing from Bautista the fact that the property subject of their land development
agreement had already been sold at a public auction prior to the execution of said
agreement; and

c. misleading the court by submitting alleged true copies of a document where two
signatories who had not signed the original (or even the xerox copy) were made to
appear as having fixed their signatures

Atty. Gonzales asked that the case be referred to the IBP where he will submit more evidence.

Issue: Did Atty. Gonzales commit acts of misconduct?

Held: Yes

Violation 1: In executing the document transferring one-half (1/2) of the subject properties to himself, Atty.
Gonzales violated the law expressly prohibiting a lawyer from acquiring his client's property or interest
involved in any litigation in which he may take part by virtue of his profession [Article 1491, New Civil Code.]
This Court has held that the purchase by a lawyer of his client's property or interest in litigation is a breach
of professional ethics and constitutes malpractice.

Defense of Atty. Gonzales: Canon 10 of the old Canons of Professional Ethics, which states that "[t]he
lawyer should not purchase any interests in the subject-matter of the litigation which he is conducting," does
not appear anymore in the new Code of Professional Responsibility. He therefore concludes that while a
purchase by a lawyer of property in litigation is void under Art. 1491 of the Civil Code, such purchase is no
longer a ground for disciplinary action under the new Code of Professional Responsibility.

IBP’s take on this: This contention is without merit. The very first Canon of the new Code states that "a
lawyer shall uphold the Constitution, obey the laws of the land and promote respect for law and legal
process". Rule 138, Sec. 3 of the Revised Rules of Court requires every lawyer to take an oath to "obey
the laws [of the Republic of the Philippines] as well as the legal orders of the duly constituted authorities
therein." And for any violation of this oath, a lawyer may be suspended or disbarred by the Supreme Court
(Rule 138, Sec. 27, Revised Rules of Court.] All of these underscore the role of the lawyer as the vanguard
of our legal system. The transgression of any provision of law by a lawyer is a repulsive and reprehensible
act which the Court will not countenance.

Art. 1491 of the Civil Code

Persons mentioned in Art. 1491 of the Civil Code are prohibited from purchasing the property mentioned
therein because of their existing trust relationship with the latter. A lawyer is disqualified from acquiring by
purchase the property and rights in litigation because of his fiduciary relationship with such property and
rights, as well as with the client.

Canon 17 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." Canon 16 provides that "a lawyer shall hold in trust all moneys and
properties of his client that may come into his possession." Hence, purchase by a lawyer of his client's
property in litigation constitutes a breach of professional ethics for which a disciplinary action may be
brought against him.

Violation 2: Another misconduct committed by respondent was his failure to disclose to Bautista, at the
time the land development agreement was entered into, that the land had already been sold at a public
auction.

Defense: denies that Bautista was his former client, claiming that his appearance for the complainant in an
anti-graft case filed by the Bautista was understood to be only provisional. Atty. claims that since
complainant was not his client, he had no duty to warn complainant of the fact that the land involved in their
land development agreement had been sold at a public auction. Moreover, the sale was duly annotated at
the back of TCT and this, respondent argues, serves as constructive notice to complainant so that there
was no concealment on his part.

IBP’s take on this: Atty. failed to inform Batutista of the sale of the land during the negotiations for the land
development agreement. In so doing, respondent failed to live up to the rigorous standards of ethics of the
law profession which place a premium on honesty and condemn duplicitous conduct. As a party to the land
development agreement, Bautista should have been warned of the sale of the land so he could make a
proper assessment of the viability of the project they were jointly undertaking. This Court has held that a
lawyer should observe honesty and fairness even in his private dealings and failure to do so is a ground for
disciplinary action against him.

Violation 3: Document submitted to the Court was made to show that the Fortunados also signed the
original document where in reality they only signed the xerox copy of the land development agreement
between Bautista and Atty. Gonzales. Moreover, Atty. acknowledged that Fortunados had merely agreed
by phone to sign, but had not actually signed, the alleged true copy of the addendum. Such conduct
constitutes willful disregard of his solemn duty as a lawyer to act at all times in a manner consistent with
the truth. A lawyer should never seek to mislead the court by an artifice or false statement of fact or law
[Section 20 (d), Rule 138, Revised Rules of Court; Canon 22, Canons of Professional Ethics; Canon 10,
Rule 10.01, Code of Professional Responsibility.]

Violation 4: Regarding the contingent fees, the IBP found that no impropriety was committed by respondent
in entering into a contingent fee contract with the Fortunados. However, the agreement which states that:

We [the Fortunados] agree on the 50% contingent fee, provided, you [respondent Ramon
Gonzales] defray all expenses, for the suit, including court fees.

is contrary to Canon 42 of the Canons of Professional Ethics which provides that a lawyer may not properly
agree with a client to pay or bear the expenses of litigation. [See also Rule 16.04, Code of Professional
Responsibility.] Although a lawyer may in good faith, advance the expenses of litigation, the same should
be subject to reimbursement. The agreement between respondent and the Fortunados, however, does not
provide for reimbursement to respondent of litigation expenses paid by him. An agreement whereby an
attorney agrees to pay expenses of proceedings to enforce the client's rights is champertous.

Violation 5: The evidence presented by Atty. Gonzales shows that his acceptance of Eusebio’s case was
with the knowledge and consent of the Fortunados as evinced by an affidavit that the Fortunados executed.
One of the recognized exceptions to the rule against representation of conflicting interests is where the
clients knowingly consent to the dual representation after full disclosure of the facts by counsel [Canon 6,
Canons of Professional Ethics; Canon 15, Rule 15.03, Code of Professional Responsibility.]

Violation 6: The Solicitor General found no basis for holding that the complaints for libel and perjury were
used by respondent to harass complainant.

Extra Notes:

Procedural Issue

It is Atty. Gonzales’s contention that the preliminary investigation conducted by the Solicitor General was
limited to the determination of whether or not there is sufficient ground to proceed with the case and that
under Rule 139 the Solicitor General still has to file an administrative complaint against him. Respondent
claims that the case should be referred to the IBP since Section 20 of Rule 139-B provides that:

“This Rule shall take effect on June 1, 1988 and shall supersede the present Rule 139 entitled
"DISBARMENT OR SUSPENSION OF ATTORNEYS." All cases pending investigation by the
Office of the Solicitor General shall be transferred to the Integrated Bar of the Philippines
 Board of Governors for investigation and disposition as provided in this Rule except those
cases where the investigation has been substantially completed.”

Contrary to respondent's claim, reference to the IBP of complaints against lawyers is not mandatory upon
the Court. Reference of complaints to the IBP is not an exclusive procedure under the terms of Rule 139-
B of the Revised Rules of Court.

Under Sections 13 and 14 of Rule 139-B, the Supreme Court may conduct disciplinary proceedings without
the intervention of the IBP by referring cases for investigation to the Solicitor General or to any officer of
the Supreme Court or judge of a lower court. In such a case, the report and recommendation of the
investigating official shall be reviewed directly by the Supreme Court.