FOSTER V AGTANG

ERLINDA FOSTER, Complainant, v. ATTY. JAIME V. AGTANG, Respondent.

DECISION

PER CURIAM:

This refers to the Resolution1 of the Board of Governors (BOG), Integrated Bar of the Philippines (IBP), dated
March 23, 2014, affirming with modification the findings of the Investigating Commissioner, who recommended
the suspension of respondent Atty. Jaime V. Agtang (respondent) from the practice of law for one (1) year for
ethical impropriety and ordered the payment of his unpaid obligations to complainant.

From the records, it appears that the IBP, thru its Commission on Bar Discipline (CBD), received a complaint2,
dated May 31, 2011, filed by Erlinda Foster (complainant) against respondent for “unlawful, dishonest, immoral
and deceitful”3 acts as a lawyer.

In its July 1, 2011 Order,4 the IBP-CBD directed respondent to file his Answer within 15 days from receipt of
the order. Respondent failed to do so and complainant sent a query as to the status of her complaint. On
October 10, 2011, the Investigating Commissioner issued the Order5 setting the case for mandatory
conference/hearing on November 16, 2011. It was only on November 11, 2011, or five (5) days before the
scheduled conference when respondent filed his verified Answer.6

During the conference, only the complainant together with her husband appeared. She submitted a set of
documents contained in a folder, copies of which were furnished the respondent. The Investigating
Commissioner7 indicated that the said documents would be reviewed and the parties would be informed if
there was a need for clarificatory questioning; otherwise, the case would be submitted for resolution based on
the documents on file. The Minutes8 of the mandatory conference showed that respondent arrived at 11:10
o’clock in the morning or after the proceeding was terminated.

On December 12, 2011, the complainant filed her Reply to respondent’s Answer.

On April 18, 2012, complainant submitted copies of the January 24, 2012 Decisions9 of the Municipal Trial
Court in Small Claims Case Nos. 2011-0077 and 2011-0079, ordering respondent [defendant therein] to pay
complainant and her husband the sum of P100,000.00 and P22,000.00, respectively, with interest at the rate of
12% per annum from December 8, 2011 until fully paid, plus cost of suit.10

Complainant’s Position

From the records, it appears that complainant was referred to respondent in connection with her legal problem
regarding a deed of absolute sale she entered into with Tierra Realty, which respondent had notarized. After
their discussion, complainant agreed to engage his legal services for the filing of the appropriate case in court,
for which they signed a contract. Complainant paid respondent P20,000.00 as acceptance fee and P5,000.00
for incidental expenses.11

On September 28, 2009, respondent wrote a letter12 to Tropical Villas Subdivision in relation to the legal
problem referred by complainant. He then visited the latter in her home and asked for a loan of P100,000.00,
payable in sixty (60) days, for the repair of his car. Complainant, having trust and confidence on respondent
being her lawyer, agreed to lend the amount without interest. A promissory note13 evidenced the loan.

In November 2009, complainant became aware that Tierra Realty was attempting to transfer to its name a lot
she had previously purchased. She referred the matter to respondent who recommended the immediate filing
of a case for reformation of contract with damages. On November 8, 2009, respondent requested and
thereafter received from complainant the amount of P150,000.00, as filing fee.14 When asked about the
exorbitant amount, respondent cited the high value of the land and the sheriffs’ travel expenses and
accommodations in Manila, for the service of the summons to the defendant corporation. Later, complainant
confirmed that the fees paid for the filing of Civil Case No. 14791-65, entitled Erlinda Foster v. Tierra Realty
and Development Corporation, only amounted to P22,410.00 per trial court records.15

During a conversation with the Registrar of Deeds, complainant also discovered that respondent was the one
who notarized the document being questioned in the civil case she filed. When asked about this, respondent
merely replied that he would take a collaborating counsel to handle complainant’s case. Upon reading a copy
of the complaint filed by respondent with the trial court, complainant noticed that: 1] the major differences in the
documents issued by Tierra Realty were not alleged; 2] the contract to buy and sell and the deed of conditional
sale were not attached thereto; 3] the complaint discussed the method of payment which was not the point of
contention in the case; and 4] the very anomalies she complained of were not mentioned. Respondent,
however, assured her that those matters could be brought up during the hearings.

On April 23, 2010, respondent wrote to complainant, requesting that the latter extend to him the amount of
P70,000.00 or P50,000.00 “in the moment of urgency or emergency.”16 Complainant obliged the request and
gave respondent the sum of P22,000.00.

On August 31, 2010, respondent came to complainant’s house and demanded the sum of P50,000.00,
purportedly to be given to the judge in exchange for a favorable ruling. Complainant expressed her misgivings
on this proposition but she eventually gave the amount of P25,000.00 which was covered by a receipt,17 stating
that “it is understood that the balance of P25,000.00 shall be paid later after favorable judgment for plaintiff
Erlinda Foster.” On November 2, 2010, respondent insisted that the remaining amount be given by
complainant prior to the next hearing of the case, because the judge was allegedly asking for the balance. Yet
again, complainant handed to respondent the amount of P25,000.00.18

On September 29, 2010, complainant’s case was dismissed. Not having been notified by respondent,
complainant learned of the dismissal on December 14, 2010, when she personally checked the status of the
case with the court. She went to the office of respondent, but he was not there. Instead, one of the office staff
gave her a copy of the order of dismissal.

On December 15, 2010, respondent visited complainant and gave her a copy of the motion for reconsideration.
On January 15, 2011, complainant went to see respondent and requested him to prepare a reply to the
comment filed by Tierra Realty on the motion for reconsideration; to include additional facts because the Land
Registration Authority would not accept the documents unless these were amended; and to make the
additional averment that the defendant was using false documents.

On January 18, 2011, respondent’s driver delivered to complainant a copy of the reply with a message from
him that the matters she requested to be included were mentioned therein. Upon reading the same, however,
complainant discovered that these matters were not so included. On the same occasion, the driver also asked
for P2,500.00 on respondent’s directive for the reimbursement of the value of a bottle of wine given to the
judge as a present. Complainant was also told that oral arguments on the case had been set the following
month.19

On February 2, 2011, complainant decided to terminate the services of respondent as her counsel and wrote
him a letter of termination,20 after her friend gave her copies of documents showing that respondent had been
acquainted with Tierra Realty since December 2007. Subsequently, complainant wrote to respondent,
requesting him to pay her the amounts he received from her less the contract fee and the actual cost of the
filing fees. Respondent never replied.

Respondent’s Position

In his Answer,21 respondent alleged that he was 72 years old and had been engaged in the practice of law
since March 1972, and was President of the IBP Ilocos Norte Chapter from 1998 to 1999. He admitted the fact
that he notarized the Deed of Absolute Sale subject of complainant’s case, but he qualified that he was not
paid his notarial fees therefor. He likewise admitted acting as counsel for complainant for which he claimed to
have received P10,000.00 as acceptance fee and P5,000.00 for incidental fees. Anent the loan of
P100,000.00, respondent averred that it was complainant, at the behest of her husband, who willingly offered
the amount to him for his patience in visiting them at home and for his services. The transaction was declared
as “no loan” and he was told not to worry about its payment. As regards the amount of P150,000.00 he
received for filing fees, respondent claimed that the said amount was suggested by the complainant herself
who was persistent in covering the incidental expenses in the handling of the case. He denied having said that
the sheriffs of the court would need the money for their hotel accommodations. Complainant’s husband
approved of the amount. In the same vein, respondent denied having asked for a loan of P50,000.00 and
having received P22,000.00 from complainant. He also denied having told her that the case would be
discussed with the judge who would rule in their favor at the very next hearing. Instead, it was complainant who
was bothered by the possibility that the other party would befriend the judge. He never said that he would
personally present a bottle of wine to the judge.

Further, respondent belied the Registrar’s comment as to his representation of Tierra Realty in the past.
Respondent saw nothing wrong in this situation since complainant was fully aware that another counsel was
assisting him in the handling of cases. Having been fully informed of the nature of her cause of action and the
consequences of the suit, complainant was aware of the applicable law on reformation of contracts. Finally, by
way of counterclaim, respondent demanded just compensation for the services he had rendered in other cases
for the complainant.

Reply of Complainant

In her Reply,22 complainant mainly countered respondent’s defenses by making reference to the receipts in her
possession, all evidencing that respondent accepted the amounts mentioned in the complaint. Complainant
also emphasized that respondent and Tierra Realty had relations long before she met him. While respondent
was employed as Provincial Legal Officer of the Provincial Government of Ilocos Norte, he was involved in the
preparation of several documents involving Flying V, an oil company owned by Ernest Villavicencio, who
likewise owned Tierra Realty. Complainant insisted that the amount of P100,000.00 she extended to
respondent was never considered as “no loan.”

On June 26, 2012, complainant furnished the Investigating Commissioner copies of the Resolution, dated June
20, 2012, issued by the Office of the City Prosecutor of Laoag City, finding probable cause against respondent
for estafa.23

Findings and Recommendation of the IBP

In its July 3, 2012 Report and Recommendation,24 the Investigating Commissioner found respondent guilty of
ethical impropriety and recommended his suspension from the practice of law for one (1) year.

In its September 28, 2013 Resolution, the IBP-BOG adopted and approved with modification the
recommendation of suspension by the Investigating Commissioner and ordered respondent to return to
complainant: 1) his loan of P122,000.00; and 2) the balance of the filing fee amounting to P127,590.00.

Respondent received a copy of the said resolution on January 16, 2014 to which he filed a motion for
reconsideration.25 Complainant filed her opposition thereto, informing the IBP-BOG that an information
charging respondent for estafa had already been filed in court and that a corresponding order for his arrest had
been issued.26

In its March 23, 2014 Resolution, the IBP-BOG denied respondent’s motion for reconsideration but modified
the penalty of his suspension from the practice of law by reducing it from one (1) year to three (3) months.
Respondent was likewise ordered to return the balance of the filing fee received from complainant amounting
to P127,590.00.

No petition for review was filed with the Court.

The only issue in this case is whether respondent violated the Code of Professional Responsibility (CPR).

The Court’s Ruling

Rule 1.0, Canon 1 of the CPR, provides that “[a] lawyer shall not engage in unlawful, dishonest, immoral or
deceitful conduct.” It is well-established that a lawyer’s conduct is “not confined to the performance of his
professional duties. A lawyer may be disciplined for misconduct committed either in his professional or private
capacity. The test is whether his conduct shows him to be wanting in moral character, honesty, probity, and
good demeanor, or whether it renders him unworthy to continue as an officer of the court.”27

In this case, respondent is guilty of engaging in dishonest and deceitful conduct, both in his professional and
private capacity. As a lawyer, he clearly misled complainant into believing that the filing fees for her case were
worth more than the prescribed amount in the rules, due to feigned reasons such as the high value of the land
involved and the extra expenses to be incurred by court employees. In other words, he resorted to overpricing,
an act customarily related to depravity and dishonesty. He demanded the amount of P150,000.00 as filing fee,
when in truth, the same amounted only to P22,410.00. His defense that it was complainant who suggested that
amount deserves no iota of credence. For one, it is highly improbable that complainant, who was then plagued
with the rigors of litigation, would propose such amount that would further burden her financial resources.
Assuming that the complainant was more than willing to shell out an exorbitant amount just to initiate her
complaint with the trial court, still, respondent should not have accepted the excessive amount. As a lawyer, he
is not only expected to be knowledgeable in the matter of filing fees, but he is likewise duty-bound to disclose
to his client the actual amount due, consistent with the values of honesty and good faith expected of all
members of the legal profession.

Moreover, the “fiduciary nature of the relationship between the counsel and his client imposes on the lawyer
the duty to account for the money or property collected or received for or from his client.”28 Money entrusted to
a lawyer for a specific purpose but not used for the purpose should be immediately returned. A lawyer’s failure
to return upon demand the funds held by him on behalf of his client gives rise to the presumption that he has
appropriated the same for his own use in violation of the trust reposed in him by his client. Such act is a gross
violation of general morality as well as of professional ethics. It impairs public confidence in the legal
profession and deserves punishment.29

It is clear that respondent failed to fulfill this duty. As pointed out, he received various amounts from
complainant but he could not account for all of them. Worse, he could not deny the authenticity of the receipts
presented by complainant. Upon demand, he failed to return the excess money from the alleged filing fees and
other expenses. His possession gives rise to the presumption that he has misappropriated it for his own use to
the prejudice of, and in violation of the trust reposed in him by, the client.30 When a lawyer receives money
from the client for a particular purpose, the lawyer is bound to render an accounting to the client showing that
the money was spent for the intended purpose. Consequently, if the lawyer does not use the money for the
intended purpose, the lawyer must immediately return the money to the client.31

Somewhat showing a propensity to demand excessive and unwarranted amounts from his client, respondent
displayed a reprehensible conduct when he asked for the amount of P50,000.00 as “representation expenses”
allegedly for the benefit of the judge handling the case, in exchange for a favorable decision. Respondent
himself signed a receipt showing that he initially took the amount of P 25,000.00 and, worse, he subsequently
demanded and received the other half of the amount at the time the case had already been dismissed.
Undoubtedly, this act is tantamount to gross misconduct that necessarily warrants the supreme penalty of
disbarment. The act of demanding a sum of money from his client, purportedly to be used as a bribe to ensure
a positive outcome of a case, is not only an abuse of his client’s trust but an overt act of undermining the trust
and faith of the public in the legal profession and the entire Judiciary. This is the height of indecency. As
officers of the court, lawyers owe their utmost fidelity to public service and the administration of justice. In no
way should a lawyer indulge in any act that would damage the image of judges, lest the public’s perception of
the dispensation of justice be overshadowed by iniquitous doubts. The denial of respondent and his claim that
the amount was given gratuitously would not excuse him from any liability. The absence of proof that the said
amount was indeed used as a bribe is of no moment. To tolerate respondent’s actuations would seriously
erode the public’s trust in the courts.

As it turned out, complainant’s case was dismissed as early as September 29, 2010. At this juncture,
respondent proved himself to be negligent in his duty as he failed to inform his client of the status of the case,
and left the client to personally inquire with the court. Surely, respondent was not only guilty of misconduct but
was also remiss in his duty to his client.

Respondent’s unbecoming conduct towards complainant did not stop here. Records reveal that he likewise
violated Rule 16.04, Canon 16 of the CPR, which states that “[a] lawyer shall not borrow money from his client
unless the client’s interests are fully protected by the nature of the case or by independent advice. Neither shall
a lawyer lend money to a client except, when in the interest of justice, he has to advance necessary expenses
in a legal matter he is handling for the client.” In his private capacity, he requested from his client, not just one,
but two loans of considerable amounts. The first time, he visited his client in her home and borrowed
P100,000.00 for the repair of his car; and the next time, he implored her to extend to him a loan of P70,000.00
or P50,000.00 “in the moment of urgency or emergency” but was only given P22,000.00 by complainant.
These transactions were evidenced by promissory notes and receipts, the authenticity of which was never
questioned by respondent. These acts were committed by respondent in his private capacity, seemingly
unrelated to his relationship with complainant, but were indubitably acquiesced to by complainant because of
the trust and confidence reposed in him as a lawyer. Nowhere in the records, particularly in the defenses
raised by respondent, was it implied that these loans fell within the exceptions provided by the rules. The loans
of P100,000.00 and P22,000.00 were surely not protected by the nature of the case or by independent advice.
Respondent’s assertion that the amounts were given to him out of the liberality of complainant and were, thus,
considered as “no loan,” does not justify his inappropriate behavior. The acts of requesting and receiving
money as loans from his client and thereafter failing to pay the same are indicative of his lack of integrity and
sense of fair dealing. Up to the present, respondent has not yet paid his obligations to complainant.

Time and again, the Court has consistently held that deliberate failure to pay just debts constitutes gross
misconduct, for which a lawyer may be sanctioned with suspension from the practice of law. Lawyers are
instruments for the administration of justice and vanguards of our legal system. They are expected to maintain
not only legal proficiency, but also a high standard of morality, honesty, integrity and fair dealing so that the
people’s faith and confidence in the judicial system is ensured. They must, at all times, faithfully perform their
duties to society, to the bar, the courts and their clients, which include prompt payment of financial
obligations.32

Verily, when the Code or the Rules speaks of “conduct” or “misconduct,” the reference is not confined to one’s
behavior exhibited in connection with the performance of the lawyer’s professional duties, but also covers any
misconduct which, albeit unrelated to the actual practice of his profession, would show him to be unfit for the
office and unworthy of the privileges which his license and the law vest him with. Unfortunately, respondent
must be found guilty of misconduct on both scores.

With respect to respondent’s alleged representation of conflicting interests, the Court finds it proper to modify
the findings of the Investigating Commissioner who concluded that complainant presented insufficient evidence
of respondent’s “lawyering” for the opposing party, Tierra Realty.

Rule 15.03, Canon 15 of the CPR, provides that “[a] lawyer shall not represent conflicting interest except by
written consent of all concerned given after a full disclosure of the facts.” The relationship between a lawyer
and his/her client should ideally be imbued with the highest level of trust and confidence. This is the standard
of confidentiality that must prevail to promote a full disclosure of the client’s most confidential information to
his/her lawyer for an unhampered exchange of information between them. Needless to state, a client can only
entrust confidential information to his/her lawyer based on an expectation from the lawyer of utmost secrecy
and discretion; the lawyer, for his part, is duty-bound to observe candor, fairness and loyalty in all dealings and
transactions with the client. Part of the lawyer’s duty in this regard is to avoid representing conflicting
interests.”33 Thus, even if lucrative fees offered by prospective clients are at stake, a lawyer must decline
professional employment if the same would trigger the violation of the prohibition against conflict of interest.
The only exception provided in the rules is a written consent from all the parties after full disclosure.
The Court deviates from the findings of the IBP. There is substantial evidence to hold respondent liable for
representing conflicting interests in handling the case of complainant against Tierra Realty, a corporation to
which he had rendered services in the past. The Court cannot ignore the fact that respondent admitted to
having notarized the deed of sale, which was the very document being questioned in complainant’s case.
While the Investigating Commissioner found that the complaint in Civil Case No. 14791-65 did not question the
validity of the said contract, and that only the intentions of the parties as to some provisions thereof were
challenged, the Court still finds that the purpose for which the proscription was made exists. The Court cannot
brush aside the dissatisfied observations of the complainant as to the allegations lacking in the complaint
against Tierra Realty and the clear admission of respondent that he was the one who notarized the assailed
document. Regardless of whether it was the validity of the entire document or the intention of the parties as to
some of its provisions raised, respondent fell short of prudence in action when he accepted complainant’s
case, knowing fully that he was involved in the execution of the very transaction under question. Neither his
unpaid notarial fees nor the participation of a collaborating counsel would excuse him from such indiscretion. It
is apparent that respondent was retained by clients who had close dealings with each other. More significantly,
there is no record of any written consent from any of the parties involved.

The representation of conflicting interests is prohibited “not only because the relation of attorney and client is
one of trust and confidence of the highest degree, but also because of the principles of public policy and good
taste. An attorney has the duty to deserve the fullest confidence of his client and represent him with undivided
loyalty. Once this confidence is abused or violated the entire profession suffers.”34

Penalties and Pecuniary Liabilities

A member of the Bar may be penalized, even disbarred or suspended from his office as an attorney, for
violation of the lawyer’s oath and/or for breach of the ethics of the legal profession as embodied in the
CPR.35 For the practice of law is “a profession, a form of public trust, the performance of which is entrusted to
those who are qualified and who possess good moral character.”36 The appropriate penalty for an errant lawyer
depends on the exercise of sound judicial discretion based on the surrounding facts.37

Under Section 27, Rule 138 of the Revised Rules of Court, a member of the Bar may be disbarred or
suspended on any of the following grounds: (1) deceit; (2) malpractice or other gross misconduct in office; (3)
grossly immoral conduct; (4) conviction of a crime involving moral turpitude; (5) violation of the lawyer's oath;
(6) willful disobedience of any lawful order of a superior court; and (7) willful appearance as an attorney for a
party without authority. A lawyer may be disbarred or suspended for misconduct, whether in his professional or
private capacity, which shows him to be wanting in moral character, honesty, probity and good demeanor, or
unworthy to continue as an officer of the court.

Here, respondent demonstrated not just a negligent disregard of his duties as a lawyer but a wanton betrayal
of the trust of his client and, in general, the public. Accordingly, the Court finds that the suspension for three (3)
months recommended by the IBP-BOG is not sufficient punishment for the unacceptable acts and omissions of
respondent. The acts of the respondent constitute malpractice and gross misconduct in his office as attorney.
His incompetence and appalling indifference to his duty to his client, the courts and society render him unfit to
continue discharging the trust reposed in him as a member of the Bar.

For taking advantage of the unfortunate situation of the complainant, for engaging in dishonest and deceitful
conduct, for maligning the judge and the Judiciary, for undermining the trust and faith of the public in the legal
profession and the entire judiciary, and for representing conflicting interests, respondent deserves no less than
the penalty of disbarment.38

Notably, the Court cannot order respondent to return the money he borrowed from complainant in his private
capacity. In Tria-Samonte v. Obias,39 the Court held that it cannot order the lawyer to return money to
complainant if he or she acted in a private capacity because its findings in administrative cases have no
bearing on liabilities which have no intrinsic link to the lawyer’s professional engagement. In disciplinary
proceedings against lawyers, the only issue is whether the officer of the court is still fit to be allowed to
continue as a member of the Bar. The only concern of the Court is the determination of respondent’s
administrative liability. Its findings have no material bearing on other judicial actions which the parties may
choose against each other.

To rule otherwise would in effect deprive respondent of his right to appeal since administrative cases are filed
directly with the Court. Furthermore, the quantum of evidence required in civil cases is different from the
quantum of evidence required in administrative cases. In civil cases, preponderance of evidence is required.
Preponderance of evidence is “a phrase which, in the last analysis, means probability of the truth. It is
evidence which is more convincing to the court as worthier of belief than that which is offered in opposition
thereto.”40 In administrative cases, only substantial evidence is needed. Substantial evidence, which is more
than a mere scintilla but is such relevant evidence as a reasonable mind might accept as adequate to support
a conclusion, would suffice to hold one administratively liable.41 Furthermore, the Court has to consider the
prescriptive period applicable to civil cases in contrast to administrative cases which are, as a rule,
imprescriptible.42

Thus, the IBP-BOG was correct in ordering respondent to return the amount of P127,590.00 representing the
balance of the filing fees he received from complainant, as this was intimately related to the lawyer-client
relationship between them. Similar to this is the amount of P50,000.00 which respondent received from
complainant, as representation expenses for the handling of the civil case and for the purported purchase of a
bottle of wine for the judge. These were connected to his professional relationship with the complainant. While
respondent’s deplorable act of requesting the said amount for the benefit of the judge is stained with
mendacity, respondent should be ordered to return the same as it was borne out of their professional
relationship. As to his other obligations, respondent was already adjudged as liable for the personal loans he
contracted with complainant, per the small claims cases filed against him.

All told, 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.”43 The Court likewise aims to ensure 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 of an attorney.”44

WHEREFORE, finding the respondent, Atty. Jaime V. Agtang, GUILTY of gross misconduct in violation of the
Code of Professional Responsibility, the Court hereby DISBARS him from the practice of law
and ORDERS him to pay the complainant, Erlinda Foster, the amounts of P127,590.00, P50,000.00 and
P2,500.00.