Bautista v Gonzales

In a verified complaint led by Angel L. Bautista on May 19, 1976, respondent Ramon A. Gonzales was
charged with malpractice, deceit, gross misconduct and violation of lawyer's oath. Required by the court to
answer the charges against him. Complainant submitted an amended complaint for disbarment alleging
that respondent committed the following acts:

1. Accepting the case where he agreed with his clients Alfaro Fortunado to pay all expenses including
court fees for a contingent fee of 50% of the value of the property litigation.
2. Acting as counsel for the Fortunados wherein Eusebio Lopez is one of the defendants and without
said case being terminated acting as counsel for Eusebio Lopez.
3. Transferring to him ½ of the properties of the Fortunados which properties were subject of the
litigation while the case was still pending
4. Inducing complainant who was his former client to enter into a contract with him for the development
into a residential subdv of the land involved claiming 50% interest as attorneys fees
5. Submitting falsified documents purporting to be true copies of “Addendum to the Land Development
Agreement” and submitting it to the Fiscals Office of QC in connection with the complaint for estafa
filed by the respondent
6. Committing acts of treachery and disloyalty to complainant who was his client
7. Harassing the complainant by filing several charges without legal basis
8. Deliberately misleading the CFI by making false assertions of facts in his pleadings
9. Filing a petition clearly prepared so that he does not intentionally tell a lie he is does not tell the
truth either.

Respondent filed an answer denying the accusations against him. Complainant filed a reply. The court
referred the case to the OSG for investigation. During the investigation in the OSG, complainant presented
himself as a witness. Respondent filed a motion to dismiss claiming that the long delay in the resolution
violates his due process and speedy disposition of cases.

The Solicitor General submitted his report with the recommendation that Atty. Ramon A. Gonzales be
suspended for six (6) months. The Solicitor General found that respondent committed the following acts of
misconduct:

a. transferring to himself one-half of the properties of his clients during the pendency of the case
where the properties were involved;

b. concealing from complainant 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 xed their
signatures.

Respondent filed a motion to refer the case to the IBP for investigation pursuant to Rule 139-B.

Issue:

Whether or not the OSG has jurisdiction to hear the case?

Whether or not purchase by a lawyer of his client's property or interest in litigation is a breach of professional
ethics and constitutes malpractice?
Held:

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 [Ibid]. 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 of 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.
The Court shall base its final action on the case on the report and recommendation submitted by the
investigating official and the evidence presented by the parties during the investigation.

There is no need for further investigation since the Office of the Solicitor General already made a thorough
and comprehensive investigation of the case. To refer the case to the IBP, as prayed for by the respondent,
will result not only in duplication of the proceedings conducted by the Solicitor General but also to further
delay in the disposition of the present case which has lasted for more than thirteen (13) years.

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". Moreover, 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. In
the instant case, respondent, having violated Art. 1491 of the Civil Code, must be held accountable both to
his client and to society.

It should be noted that the 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. And it cannot be claimed that the new
Code of Professional Responsibility has failed to emphasize the nature and consequences of such
relationship. 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." On the other hand, Canon 16 provides that "a lawyer shall hold
in trust all moneys and properties of his client that may come into his possession." Hence, notwithstanding
the absence of a speci c provision on the matter in the new Code, the Court, considering the above quoted
provisions of the new Code in relation to Art. 1491 of the Civil Code, as well as the prevailing jurisprudence,
holds that the 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. Another misconduct committed by
respondent was his failure to disclose to complainant, at the time the land development agreement was
entered into, that the land covered by TCT No. T-1929 had already been sold at a public auction. The land
development agreement was executed on August 31, 1977 while the public auction was held on June 30,
1971. 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. The fact that complainant was not a former client
of respondent does not exempt respondent from his duty to inform complainant of an important fact
pertaining to the land which is subject of their negotiation. Since he was a party to the land development
agreement, respondent should have warned the complainant of the sale of the land at a public auction so
that the latter 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.

The Court, finds that the agreement between the respondent and the Fortunados, which provides in part
that: [the Fortunados] agree on the 50% contingent fee, provided, [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.].
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. Such agreements are against
public policy especially where, as in this case, the attorney has agreed to carry on the action at his own
expense in consideration of some bargain to have part of the thing in The execution of these contracts
violates the fiduciary relationship between the lawyer and his client, for which the former must incur
administrative sanctions.