418 SUPREME COURT REPORTS ANNOTATED

Legarda vs. Court of Appeals

*
G.R. No. 94457. March 18, 1991.

VICTORIA LEGARDA, petitioner, vs. THE HONORABLE

COURT OF APPEALS, NEW CATHAY HOUSE, INC., THE
HONORABLE REGIONAL TRIAL COURT OF QUEZON CITY,
BRANCH 94, respondents.

Lawyers; A lawyer should present every remedy or defense authorized

by the law in support of his client’s cause, regardless of his own personal
views.—A lawyer owes entire devotion to the interest of his client, warmth
and zeal in the maintenance and defense of his rights and the exertion of his
utmost learning and ability, to the end that nothing can be taken or withheld
from his client except in accordance with the law. He should present every
remedy or defense authorized by the law in support of his client’s cause,
regardless of his own personal views. In the full discharge of his duties to
his client, the lawyer should not be afraid of the possibility that he may
displease the judge or the general public.
Same; Same; The rule that mistakes of counsel bind his client should
not be applied, when as a result of counsel’s reckless and gross negligence,
the client was deprived of his property without due process of law.—Judged
by the actuations of said counsel in this case, he has miserably failed in his
duty to exercise his utmost learning and ability in maintaining his client’s
cause. It is not only a case of simple negligence as found by the appellate
court, but of reckless and gross

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* FIRST DIVISION.

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VOL. 195, MARCH 18, 1991 419

Legarda vs. Court of Appeals

negligence, so much so that his client was deprived of her property without
due process of law. In People’s Homesite & Housing Corp. vs. Tiongco and
Escasa, this Court ruled as follows: “Procedural technicality should not be
made a bar to the vindication of a legitimate grievance. When such
technicality deserts from being an aid to justice, the courts are justified in
excepting from its operation a particular case. Where there was something
fishy and suspicious about the actuations of the former counsel of petitioner
in the case at bar, in that he did not give any significance at all to the
processes of the court, which has proven prejudicial to the rights of said
clients, under a lame and flimsy explanation that the court’s processes just
escaped his attention, it is held that said lawyer deprived his clients of their
day in court, thus entitling said clients to petition for relief from judgment
despite the lapse of the reglementary period for filing said period for filing
said petition.”
Same; Same; Same; A practicing lawyer should accept only so many
cases he can afford to handle.—This is the reason why a practicing lawyer
should accept only so many cases he can afford to handle. And once he
agrees to handle a case, he should undertake the task with dedication and
care. If he should do any less, then he is not true to his oath as a lawyer.

PETITION to review the decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Singson, Valdez & Associates for petitioner.
Lenito T. Serrano for private respondent.

GANCAYCO, J.:

Nothing is more settled than the rule that the mistake of a counsel
binds the client. It is only in case of gross or palpable negligence of
counsel when the courts must step in and accord relief to a client
who suffered thereby.
The present case is a typical example of such rare exception.
Petitioner Victoria Legarda was the owner of a parcel of land and
the improvements thereon located at 123 West Avenue, Quezon City.
On January 11, 1985 respondent New Cathay House, Inc. filed a
complaint against the petitioner for specific performance with
preliminary injunction and damages in the Regional Trial Court
(RTC) for Quezon City alleging, among others, that petitioner
entered into a lease agreement with the

420

420 SUPREME COURT REPORTS ANNOTATED

Legarda vs. Court of Appeals

private respondent through its representative, Roberto V. Cabrera,

Jr., of the aforestated property of petitioner effective January 1, 1985
until December 31, 1989 or for a period of five (5) years; that the
rental is P25,000.00 per month with 5% escalation per year; that on
November 23, 1984, private respondent deposited the amount of
P72,000.00 with petitioner as down payment of rentals; that
respondent drew up the written contract and sent it to petitioner; that
petitioner failed and refused to execute and sign the same despite
demands of respondent; and that the respondent suffered damages
due to the delay in the renovation and opening of its restaurant
business. The private respondent prayed that pending the resolution
of the case a restraining order be issued against petitioner or her
agents enjoining them from stopping the renovation and use of the
premises by private respondent. It was also prayed that after due
hearing the petitioner be ordered to execute the lease contract; to pay
actual compensatory, exemplary and other damages in such amount
as may be proved during the trial including P30,000.00 attorney’s
fees plus P300.00 per 1
appearance of counsel, and to pay the
expenses of litigation.
Petitioner engaged the services of counsel to handle her case.
Said counsel filed his appearance with an urgent motion for
extension of time 2 to file the answer within ten (10) days from
February 26, 1985. However, said counsel failed to file the answer
within the extended period prayed for. Counsel for private
respondent filed an ex-parte motion to declare petitioner in default.
This was granted by the trial court on March 25, 1985 and private
respondent was allowed to present evidence ex-parte. Thereafter, on
March 25, 1985, the trial court rendered its decision, the dispositive
part of which reads as follows:

“WHEREFORE, judgment is hereby rendered ordering defendant Victoria

G. Legarda to execute and sign Exhibit “D”:, the lease contract for the
premises at 123 West Avenue, Quezon City. Accordingly, the preliminary
injunction earlier issued on January 31, 1985 is hereby made permanent.

_______________

1 Annex A to petition.
2 Annex B to petition.

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VOL. 195, MARCH 18, 1991 421

Legarda vs. Court of Appeals

Judgment is likewise rendered ordering defendant to pay exemplary

damages in the sum of P100,000.00 to serve as example and deterrent for
others, and actual and compensatory damages as follows:
 1. For loss and destroyed goodwill and reputation in the amount of
P100,000.00;
2. The sum of P61,704.40 as adjustments in the costs of labor and
materials for the renovation of the premises;
3. The sum of P50,000.00 as unearned income for the delay of
plaintiff’s operations from January 1, 1985 up to February 25, 1985
or a period of almost two (2) months;
4. The sum of P16,635.57 and P50,424.40 as additional compensatory
damages incurred by plaintiff for the extension of the lease of its
premises at Makati and salaries of idle employees, respectively;
5. The sum of P10,000.00 as and by way of attorney’s fees; and
3
6. The costs of suit.”

Copy of said decision was duly served on counsel for the petitioner
but he did not take any action. Thus, the judgment became final and
executory. On May 8, 1985, upon motion of private respondent, 4
a
writ of execution of the judgment was issued by the trial court.
At public auction, the sheriff sold the aforestated property of
petitioner to Roberto V. Cabrera, Jr. for the sum of P376,500.00 to
satisfy the judgment. The sheriff issued a certificate
5
of sale dated
June 8, 1985 covering the said property. After the one-year
redemption period expired without the petitioner redeeming the
property, ownership was consolidated in the name of Roberto V.
Cabrera, Jr. The sheriff issued a final deed of sale on July 8, 1986 in
his favor. Cabrera registered the same in the office of the Register of
Deeds on July 11, 1986.
Upon learning of this unfortunate turn of events, petitioner
prevailed upon her counsel, to seek the appropriate relief. On
November 6, 1986 said counsel filed in the Court of Appeals a
petition for annulment of judgment calling attention to the unjust
enrichment of private respondent in securing the transfer in its name
of the property valued at P2.5 million without

_______________

3 Page 46, Rollo.

4 Annex E to the petition.
5 Annex F to the petition.

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422 SUPREME COURT REPORTS ANNOTATED

Legarda vs. Court of Appeals

justification; that when the complaint was filed in court by private

respondent against the petitioner, the parties came to an agreement
to settle their differences, the private respondent assuring petitioner
that the complaint it filed shall be withdrawn so petitioner advised
her lawyer that there was no longer any need to file an answer to the
complaint; that on February 22, 1985, private respondent
nevertheless filed an ex-parte motion to declare the petitioner in
default; that petitioner was deprived of the right to present her
defense through false pretenses, misrepresentation and fraud
practiced upon her by private respondent warranting the annulment
of the judgment; that the documentary evidence presented by private
respondent, which served as the basis of the decision, is falsified and
tampered with; that as an example, the voucher filed by petitioner,
contains typewritten entries to the effect that the term of the lease is
for five (5) years to which petitioner never agreed, and that the
option to buy the property was given to the private respondent; that
the fact that the property worth P2 million was sold at public auction
at a shockingly and questionably low price of P376,500.00 is by
itself a sufficient basis for annulling the sale for being grossly
inadequate to shock the conscience 6and understanding of men,
giving rise to a presumption of fraud. Thus, it was prayed that a
preliminary mandatory injunction issue ordering the private
respondent to surrender the property to petitioner and to enjoin the
former from further harassing and threatening the peaceful
possession of petitioner; and that after hearing, the decision of the
trial7 court in Civil Case No. Q-43811 and the sheriff’s certificate of
sale be likewise annulled; that private respondent be adjudged to
pay petitioner no less than P500,000.00 actual and moral damages,
as well as exemplary damages and attorney’s
8
fees in the amount of
P50,000.00, plus the costs of the suit.
On February 2, 1987 an amended petition was filed by counsel
for petitioner in the Court of Appeals raising the additional issue that
the decision is not supported by the allegations in the

_______________

6 Jalandoni vs. Ledesma, 64 Phil. 1058 (1937).

7 Annex E to the petition.
8 Annex F to the petition.

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VOL. 195, MARCH 18, 1991 423

Legarda vs. Court of Appeals
9
pleadings or by the evidence submitted.
In due course, a decision
10
was rendered by the Court of Appeals
on November 29, 1989. The appellate court made the following
observations:
“On the other hand, petitioner’s above allegation of fraud supposedly
practiced upon her by Roberto V. Cabrera, Jr. is so improbable as to inspire
belief. For the Coronel Law Office had already entered its appearance as
petitioner’s counsel by then, so that if it were true that Cabrera had already
agreed to the conditions imposed by petitioner, said law office would have
asked plaintiff to file the proper motion to dismiss or withdraw complaint
with the Court, and if plaintiff had refused to do so, it would have filed
defendant’s answer anyway so that she would not be declared in default. Or
said law office would have prepared a compromise agreement embodying
the conditions imposed by their client in the lease contract in question which
plaintiff had allegedly already accepted, so that the same could have been
submitted to the Court and judgment on a compromise could be entered. All
these, any conscientious lawyer of lesser stature than the Coronel Law
Office, headed by no less than a former law dean, Dean Antonio Coronel, or
even a new member of the bar, would normally have done under the
circumstances to protect the interests of their client, instead of leaving it to
the initiative of plaintiff to withdraw its complaint against defendant, as it
had allegedly promised the latter. Thus, it is our belief that this case is one
of pure and simple negligence on the part of defendant’s counsel who simply
failed to file the answer in behalf of defendant. But counsel’s negligence
does not stop here. For after it had been furnished with copy of the decision
by default against defendant, it should then have appealed therefrom or file
a petition from relief from the order declaring their client in default or from
the judgment by default. [sic] Again, counsel negligently failed to do either.
Hence, defendant is bound by the acts of her counsel in this case and cannot
be heard to complain that the result might have been different if it had
proceeded differently (Pulido v. C.A., 122 SCRA 63; Ayllon v. Sevilla, 156
SCRA 257, among other cases). And the rationale of this rule is obvious and
clear. For ‘if such grounds were to be admitted as reasons for opening cases,
there would never be an end to a suit so long

_______________

9 Annex H to the petition.

10 Annex M to the petition. Justice Alicia Sempio Dy is the ponente, concurred in by
Justices Nathanael P. de Pano, Jr. and Celso L. Magsino.

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424 SUPREME COURT REPORTS ANNOTATED

Legarda vs. Court of Appeals

as new counsel could be employed who could allege and show that the prior
counsel had not been sufficiently diligent, 11or experienced, or learned’
(Fernandez v. Tan Tiong Tick, 1 SCRA 1138).”

Despite these findings, the appellate court nevertheless dismissed

the petition for annulment of judgment with costs against the
petitioner. A copy of the said judgment appears to have been served
on counsel for the petitioner. However, said counsel did not file a
motion for reconsideration or appeal therefrom, so it became final.
It was only in March 1990 when the secretary of counsel for
petitioner informed the latter of the adverse decision against her only
after persistent telephone inquiries of the petitioner.
Hence, petitioner secured the services of another lawyer who
filed this petition for certiorari under Rule 65 of the Rules of Court
wherein it is prayed that the judgment of the Regional Trial Court of
Quezon City in Civil Case No. Q-43811, the decision of the Court of
Appeals in CA-GR. No. 10487 and the sheriff’s sale at public
auction of the property in question be annulled, as the same are
attributable to the gross negligence and inefficiency of petitioner’s
counsel, whose blunder cannot bind the petitioner who was deprived
of due process thereby. It is further prayed that private respondent
Cathay House, Inc. be ordered to reconvey to petitioner the property
covered by TCT No. 270814, which was sold at public auction to
Roberto V. Cabrera, Jr. and in whose favor its ownership was
consolidated, and thereafter ownership appears to have been
transferred to private respondent.
The petition is impressed with merit.
Petitioner’s counsel is a well-known practicing lawyer and dean
of a law school. It is to be expected that he would extend the highest
quality of service as a lawyer to the petitioner. Unfortunately,
counsel appears to have abandoned the cause of petitioner. After
agreeing to defend the petitioner in the civil case filed against her by
private respondent, said counsel did nothing more than enter his
appearance and seek for an extension of time to file the answer.
Nevertheless, he failed to file the answer. Hence, petitioner was
declared in default on motion of

_______________

11 Pages 139 to 140, rollo. Emphasis supplied.

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VOL. 195, MARCH 18, 1991 425

Legarda vs. Court of Appeals

private respondent’s counsel. After the evidence of private

respondent was received ex-parte, a judgment was rendered by the
trial court.
Said counsel for petitioner received a copy of the judgment but
took no steps to have the same set aside or to appeal therefrom.
Thus, the judgment became final and executory. The property of
petitioner was sold at public auction to satisfy the judgment in favor
of private respondent. The property was sold to Roberto V. Cabrera,
Jr., representative of private respondent, and a certificate of sale was
issued in his favor. The redemption period expired after one year so
a final deed of sale was issued by the sheriff in favor of Cabrera,
who in turn appears to have transferred the same to private
respondent.
During all the time, the petitioner was abroad. When, upon her
return, she learned, to her great shock, what happened to her case
and property, she nevertheless did not lose faith in her counsel. She
still asked Atty. Coronel to take such appropriate action possible
under the circumstances.
As above related, said counsel filed a petition for annulment of
judgment and its amendment in the Court of Appeals. But that was
all he did. After an adverse judgment was rendered against
petitioner, of which counsel was duly notified, said counsel did not
inform the petitioner about it. He did not even ask for a
reconsideration thereof, or file a petition for review before this
Court. Thus, the judgment became final. It was only upon repeated
telephone inquiries of petitioner that she learned from the secretary
of her counsel of the judgment that had unfortunately become final.
A lawyer owes entire devotion to the interest of his client,
warmth and zeal in the maintenance and defense of his rights and the
exertion of his utmost learning and ability, to the end that nothing
can be taken or withheld from his client except in accordance with
the law. He should present every remedy or defense authorized by
the law in support of his client’s cause, regardless of his own
personal views. In the full discharge of his duties to his client, the
lawyer should not be afraid of12the possibility that he may displease
the judge or the general public.

_______________

12 Canon of Professional Ethics 15.

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426 SUPREME COURT REPORTS ANNOTATED

Legarda vs. Court of Appeals

Judged by the actuations of said counsel in this case, he has

miserably failed in his duty to exercise13 his utmost learning and
ability in maintaining his client’s cause. It is not only a case of
simple negligence as found by the appellate court, but of reckless
and gross negligence, so much so that his client was deprived of her
property without due process of law. 14
In People’s Homesite & Housing Corp. vs. Tiongco and Escasa,
this Court ruled as follows:

“Procedural technicality should not be made a bar to the vindication of a

legitimate grievance. When such technicality deserts from being an aid to
justice, the courts are justified in excepting from its operation a particular
case. Where there was something fishy and suspicious about the actuations
of the former counsel of petitioner in the case at bar, in that he did not given
any significance at all to the processes of the court, which has proven
prejudicial to the rights of said clients, under a lame and flimsy explanation
that the court’s processes just escaped his attention, it is held that said
lawyer deprived his clients of their day in court, thus entitling said clients to
petition for relief from judgment despite the lapse of the reglementary
period for filing said period for filing said petition.”
15
In Escudero vs. Judge Dulay, this Court, in holding that the
counsel’s blunder in procedure is an exception to the rule that the
client is bound by the mistakes of counsel, made the following
disquisition:

“Petitioners contend, through their new counsel, that the judgments rendered
against them by the respondent court are null and void, because they were
therein deprived of their day in court and divested of their property without
due process of law, through the gross ignorance, mistake and negligence of
their previous counsel. They acknowledge that, while as a rule, clients are
bound by the mistake of their counsel, the rule should not be applied
automatically to their case, as their trial counsel’s blunder in procedure and
gross ignorance of existing jurisprudence changed their cause of action and
violated their substantial rights.

_______________

13 Annex 14 to the petition.

14 12 SCRA 471 (1964).
15 158 SCRA 69 (1988).

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VOL. 195, MARCH 18, 1991 427

Legarda vs. Court of Appeals

We are impressed with petitioner’s contentions.

Ordinarily, a special civil action under Rule 65 of the Rules of Court will
not be a substitute or cure for failure to file a timely petition for review on
certiorari (appeal) under Rule 45 of the Rules. Where, however, the
application of the rule will result in a manifest failure or miscarriage of
justice, the rule may be relaxed.
x x x
While this Court is cognizant of the rule that, generally, a client will
suffer the consequences of the negligence, mistake or lack of competence of
his counsel, in the interest of justice and equity, exceptions may be made to
such rule, in accordance with the facts and circumstances of each case.
Adherence to the general rule would, in the instant case, result in the
outright deprivation of their property through a technicality.”

In its questioned decision dated November 19, 1989 the Court of

Appeals found, in no uncertain terms, the negligence of the then
counsel for petitioner when he failed to file the proper motion to
dismiss or to draw a compromise agreement if it was true that they
agreed on a settlement of the case; or in simply filing an answer; and
that after having been furnished a copy of the decision by the court
he failed to appeal therefrom or to file a petition for relief from the
order declaring petitioner in default. In all these instances the
appellate court found said counsel negligent but his acts were held to
bind his client, petitioner herein, nevertheless.
The Court disagrees and finds that the negligence of counsel in
this case appears to be so gross and inexcusable. This was
compounded by the fact, that after petitioner gave said counsel
another chance to make up for his omissions by asking him to file a
petition for annulment of the judgment in the appellate court, again
counsel abandoned the case of petitioner in that after he received a
copy of the adverse judgment of the appellate court, he did not do
anything to save the situation or inform his client of the judgment.
He allowed the judgment to lapse and become final. Such reckless
and gross negligence should not be allowed to bind the petitioner.
Petitioner was thereby effectively deprived of her day in court.
Thus, We have before Us a case where to enforce an alleged lease
agreement of the property of petitioner, private respondent went to
court, and that because of the gross negligence of

428

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Legarda vs. Court of Appeals

the counsel for the petitioner, she lost the case as well as the title and
ownership of the property, which is worth millions. The mere lessee
then now became the owner of the property. Its true owner then, the
petitioner, now is consigned to penury all because her lawyer appear
to have abandoned her case not once but repeatedly.
The Court cannot allow such a grave injustice to prevail. It
cannot tolerate such unjust enrichment of the private respondent at
the expense of the petitioner. The situation is aggravated by the fact
that said counsel is a well-known practicing lawyer and the dean of a
law school as the Court at the beginning of this discourse observed.
His competence should be beyond cavil. Thus, there appears to be
no cogent excuse for his repeated negligence and inaction. His lack
of devotion to duty is so gross and palpable that this Court must
come to the aid of his distraught client, the petitioner herein.
 As member of the Philippine Bar he owes complete fidelity to the
cause of his client. He should give adequate attention, care and time
to his cases. This is the reason why a practicing lawyer should
accept only so many cases he can afford to handle. And once he
agrees to handle a case, he should undertake the task with dedication
and care. If he should do any less, then he is not true to his oath as a
lawyer.
WHEREFORE, the petition is GRANTED and the questioned
decision of the Regional Trial Court of Quezon City dated March 25,
1985 in Civil Case No. Q-43811; the decision of the Court of
Appeals dated November 29, 1989 in CA-G.R. No. SP-10487; the
Sheriff’s Certificate of Sale dated June 27, 1985 of the property in
question; and the subsequent final deed of sale covering the same
property, are all hereby declared null and void. Private respondent
New Cathay House, Inc. is directed to reconvey said property to the
petitioner, and the Register of Deeds is ordered to cancel the
registration of said property in the name of private respondent and to
issue a new one in the name of petitioner. Costs against private
respondent. Said counsel for petitioner is hereby required to show
cause within ten (10) days from notice why he should not be held
administratively liable for his acts and omissions hereinabove
described in this decision.

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VOL. 195, MARCH 20, 1991 429

Balagot vs. Opinion

SO ORDERED.

Narvasa (Chairman), Cruz, Griño-Aquino and Medialdea,

JJ., concur.

Petition granted. Decision null and void.

Notes.—Clients are bound by mistakes and omissions of their

counsel. (Gaba vs. Castro, 120 SCRA 505.)
It is the duty of an attorney to inform her client of developments
of the case. (Tolentio vs. Mangapit, 124 SCRA 741.)

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