SECOND DIVISION
[A.C. No. 8592. April 18, 2016.][Formerly CBD Case No. 10-2856]
MARIA BELLA C. BORJA REPRESENTED BY FERNANDO ANESLAGON, complainant, vs. ATTY. ERWIN B. VERGARA, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Second Division, issued a Resolution dated 18 April 2016 which reads as follows:
"A.C. No. 8592 [Formerly CBD Case No. 10-2856] — Maria Bella C. Borja represented by Fernando Aneslagon v. Atty. Erwin B. Vergara
For Resolution is this administrative complaint 1 filed by complainant Maria Bella C. Borja (Borja), represented by Fernando Aneslagon, against respondent, Atty. Erwin B. Vergara (Atty. Vergara), for violation of Canons 15, 16 and 17 of the Code of Professional Responsibility (CPR).
The Complaint:
Borja alleged that: sometime in 2009, Atty. Vergara, a provincial attorney of the Province of Negros Oriental, volunteered to process the transfer of the title of a real property which she had purchased in Bacong, Negros Oriental, to her name; Atty. Vergara charged her Twenty Thousand Pesos (P20,000.00) for his legal services and Fifty Three Thousand Pesos (P53,000.00) for the capital gains tax, documentary stamps, transfer tax, and other incidental expenses; upon payment of the said amount, all pertinent documents, such as the deed of absolute sale, title, tax declaration, tax clearance, were surrendered to Atty. Vergara for processing; at the end of the agreed period, the title of the property had not yet been transferred under Borja's name; in December of that same year, Atty. Vergara informed her that she and her common-law husband, a certain Heinz Hiltbrand, had standing warrants of arrest for estafa and carnapping relating to a Strada Mitsubishi vehicle allegedly filed by its registered owner Burkhard Rickert (Rickert), a business partner and stockholder of Miracle Asia Farm Corporation (Miracle Asia); Miracle Asia was a business venture established by Borja and her common-law spouse along with other investors; although she claimed that the vehicle had been given to her as compensation for services rendered for Miracle Asia, Atty. Vergara advised them to hide until he could secure a lawyer to defend them and convinced them to turn over the subject vehicle to the police in Bacong, Negros; Borja later discovered that there was no pending criminal case against them and that Burkhard Rickert was actually Atty. Vergara's client and their opponent in another legal dispute; and on January 13, 2010, Atty. Vergara, together with two other foreign nationals and two security guards, forcibly entered their iron gate, destroyed the door of their house and took their personal belongings, including a motorbike, bicycle with a side car, and corporate documents of Miracle Asia.
Position of Atty. Vergara
In his Comment, 2 Atty. Vergara denied that a lawyer-client relationship was formed between him and the complainant. He claimed that their relationship, at best, was between a public servant and his customer/stakeholder that he was serving. He also denied that he volunteered to process the transfer of title into Borja's name. Atty. Vergara explained that he merely informed Borja of the need to secure a tax identification number for the vendor and vendee, as well as the release of mortgage from the mortgagee. He admitted that the documents that Borja gave to him were still in his possession for safekeeping as instructed by the principal investor of Miracle Asia. He averred that, contrary to Borja's allegations, he merely discussed the possibility of being charged with estafa and/or carnapping if they would continue to keep the vehicle in question, but he never mentioned any warrant of arrest against her. He likewise stressed that he was merely a "go-between" between the feuding business partners, namely Rickert and Martin Bretzke (Bretzke) on one hand and Borja and her husband on the other. Borja also denied unlawfully entering Borja's house as it was already empty when she transferred to Bohol. He clarified that he was already in private practice of law as of July 1, 2010. IAETDc
First Resolution of the IBP-BOG
In Resolution No. XX-2012-414, 3 the IBP Board of Governors (IBP-BOG) resolved to adopt and approve the recommendation of the Investigating Commissioner to dismiss the complaint against Atty. Vergara. The decretal portion reads:
RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED the Report and Recommendation of the Investigating Commissioner in the above-entitled case, herein made part of this Resolution as Annex "A," and finding the recommendation fully supported by the evidence on record and the applicable laws and rules, the case is hereby DISMISSED with Warning that considering respondent is a government employee similar infraction shall be dealt with more severely.
Not in conformity, Borja moved that the said ruling be reconsidered by the IBP-BOG 4 arguing that Atty. Vergara committed four major violations when he: (1) breached his contract to provide legal services to Borja, which was to process the transfer of the title of a house and lot to her name; (2) fabricated a story of the existence of carnapping and estafa cases against her and her husband to have access to, and take possession of, her service vehicle; (3) illegally entered, together with other individuals, her house and unlawfully took their personal belongings therein; and (4) breached confidentiality on matters relayed to him.
Second Resolution of the IBP-BOG
In Resolution No. XXI-2014-125 passed on March 22, 2014, 5 the IBP-BOG resolved to grant the motion for reconsideration and set aside its earlier resolution. The IBP-BOG suspended Atty. Vergara from the practice of law for three (3) months with a warning that repetition of the same acts shall be dealt with more severely. Thus:
RESOLVED to GRANT Complainant's Motion for Reconsideration. Thus, Resolution No. XIX-2012-414 (sic) dated September 20, 2012 is hereby SET ASIDE considering that (first) there is a lawyer-client relationship between Complainant and Respondent while Respondent was the Provincial Attorney of Negros Oriental; (second) Respondent failed to perform his legal obligation to Complainant instead defraud her; and (third) breach of confidentiality. Thus, Atty. Erwin B. Vergara is hereby SUSPENDED from the practice of law for three (3) months with Warning that repetition of the same acts shall be dealt with more severely.
The IBP-BOG forwarded the case to this Court as provided under Section 12 (b), Rule 139-B 6 of the Rules of Court.
The Court's Ruling
The Court sustains the second resolution of the IBP-BOG and adopts its recommendation except as to the penalty proposed.
There is no doubt that a lawyer-client relationship was created between Borja and Atty. Vergara. The relationship was established the moment the former sought legal advice from the latter regarding the procedure involved in transferring the title of a property to her name. The handwritten note of acceptance of P20,000.00 in Atty. Vergara's office letterhead was marked as "advance attorney's fees" with his signature. This is the very proof of their lawyer-client relationship. 7 His failure either to render an accounting or to return the money (if the intended purpose of the money would not materialize) constituted a patent violation of Rule 16.01 of the CPR, viz.: CTIEac
CANON 16 A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.
RULE 16.01. A lawyer shall account for all money or property collected or received for or from the client.
Indeed, Atty. Vergara accepted money as fees for the transfer of the title to Borja's name. Instead of processing the papers, however, Atty. Vergara deliberately withheld the same to preserve the interests of another opposing party.
Canon 15 of the CPR stresses the need for candor, fairness and loyalty in all the dealings of lawyers with their clients. Rule 15.03 thereof specifically mandates:
Rule 15.03 A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.
The rule prohibits a lawyer from representing new clients whose interests oppose those of a former client in any manner, whether they are parties in the same action or in totally unrelated cases. It is expected from lawyers not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing for only then can litigants be encouraged to entrust their secrets which is of paramount importance in the administration of justice to their lawyers. 8 Hence, Atty. Vergara's excuse that he was merely a neutral party or a "go-between" between the feuding stockholders/investors of Miracle Asia will not sufficed. As held in Hornilla v. Atty. Salunat: 9
There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The test is whether or not in behalf of one client, it is the lawyers duty to fight for an issue or claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when he argues for the other client. 10 This rule covers not only cases in which confidential communications have been confided, but also those in which no confidence has been bestowed or will be used. 11 Also, there is conflict of interests if the acceptance of the new retainer will require the attorney to perform an act which will injuriously affect his first client in any matter in which he represents him and also whether he will be called upon in his new relation to use against his first client any knowledge acquired through their connection. 12 Another test of the inconsistency of interests is whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance thereof. 13
Here, Atty. Vergara admitted having received the documents pertaining to the house and lot, but did not process the same. Instead, he kept them to protect the interests of Rickert and Bretzke in violation of his assurance to Borja. Atty. Vergara likewise employed deception to convince Borja to give up the vehicle in her possession so that the other party could take hold of it again. His actions belie his assertion that he was merely a facilitator for both parties. Evidently, Atty. Vergara was serving two masters at the same time with two inconsistent interests. He broke Borja's trust and confidence who relied upon his every word believing that he was looking out for their interests. This runs contrary to Canon 17 of CPR, to wit:
CANON 17 A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE MINDFUL OF THE TRUST AND CONFIDENCE REPOSED IN HIM.
Every case a lawyer accepts deserves his full attention, diligence, skill and competence, regardless of its importance and whether he accepts it for a fee or for free. Bear in mind that a lawyer's negligence in the discharge of his obligations arising from a lawyer-client relationship may adversely affect his client. Thus, from the perspective of the ethics of the legal profession, a lawyer's lethargy in carrying out his duties to his client is both unprofessional and unethical. 14
To emphasize, the practice of law is a privilege given to lawyers who meet the high standards of legal proficiency and morality, including honesty, integrity and fair dealing. They must perform their fourfold duty to society, the legal profession, the courts and their clients, in accordance with the values and norms of the legal profession as embodied in the CPR. 15 Falling short of this standard, the Court will not hesitate to discipline an erring lawyer by imposing an appropriate penalty based on the exercise of sound judicial discretion in consideration of the surrounding facts. 16
In de Guzman Buado and Lising v. Layag, 17 which involved violations of Canons 15, 16 and 17, the Court En Banc imposed a much heavier penalty of indefinite suspension.
In that case, Atty. Eufracio Layag (Atty. Layag), the lawyer of the complainants Lising and de Guzman, won a case over Inland Trailways, Inc. (Inland). In compliance with the judgment, Inland issued three checks, one payable to Atty. Layag, one payable to Lising and one payable to de Guzman who had already passed away by then. Atty. Layag accepted all three checks from the deputy sheriff, but did not report it to the complainants. He then instructed one Marie Paz Gonzales to encash the said checks using a special power of attorney (SPA) purportedly executed by the late de Guzman appointing her as his attorney-in-fact. This SPA authorized Gonzales to encash the checks received in settlement of the case for their own gain. Two years later, complainants learned of the issuance of the checks and demanded delivery of the proceeds, but Atty. Layag failed to comply.
In imposing upon Atty. Layag the penalty of indefinite suspension, the Court En Banc considered his years of experience as a lawyer, his ignorance of the law, specifically the Civil Code, and his violation of not one but three Canons. SaCIDT
In the case at bench, Atty. Vergara's actions violated Borja's trust and confidence reposed in him as a member of the Bar and an officer of the court. His conduct was tainted with deceit and bad faith. Thus, a heavier penalty than a mere three-month suspension is appropriate under the circumstances. Taking into account that it is his first infraction, suspension from the practice of law for one (1) year is warranted. 18
WHEREFORE, finding respondent Atty. Erwin B. Vergara GUILTY of violating Canons 15, 16 and 17 of the Code of Professional Responsibility, the Court SUSPENDS him from the practice of law for a period of one (1) year effective upon finality of this Resolution with a WARNING that a repetition of the same or similar offense will warrant a more severe penalty.
Let copies of this Resolution be furnished the Office of the Bar Confidant, the Integrated Bar of the Philippines and all courts all over the country. Let a copy of this Resolution be attached to the personal records of respondent.
SO ORDERED.''
Very truly yours,
(SGD.) MA. LOURDES C. PERFECTODivision Clerk of Court
Footnotes
1. Rollo, pp. 1-7.
2. Id. at 22-38.
3. Id. at 257.
4. Id. at 265-288.
5. Id. at 292-293.
6. Sec. 12 (b). If the Board, by the vote of a majority of its total membership, determines that the respondent should be suspended from the practice of law or disbarred, it shall issue a resolution setting forth its findings and recommendations which, together with the whole record of the case, shall forthwith be transmitted to the Supreme Court for final action.
7. Rollo, p. 9.
8. Hilado v. David, 84 Phil. 569, 579 (1949).
9. 453 Phil. 108 (2003).
10. Hornilla v. Atty. Salunat, 453 Phil. 108, 111 (2003) citing PINEDA, Legal and Judicial Ethics, p. 199 [1999 ed.].
11. Id., citing Hilado v. David, 84 Phil. 569 (1949); Nombrado v. Hernandez, A.C. No. 555, November 25, 1968, 26 SCRA 13; Bautista v. Barrios, A.C. No. 258, December 21, 1963, 9 SCRA 695.
12. Id. at 111-112, citing PINEDA, Legal and Judicial Ethics, p. 199, citing Pierce v. Palmer, 31 R.I. 432.
13. Id. at 112, citing AGPALO, Legal Ethics, p. 220, citing in Re De la Rosa, 27 Phil. 258 [1914]; Grievance Committee v. Rottner, 152 Conn. 59, 203 A 2d 82 (1954) and Tiania v. Ocampo, A.C. No. 2285, August 12, 1991, 200 SCRA 472.
14. Villaflores v. Limos, 563 Phil. 453, 461 (2007).
15. Nemesio Floran and Caridad Floran v. Atty. Roy Prule Ediza, 675 Phil. 443, 450 (2011).
16. Ruthie Lim-Santiago v. Atty. Carlos B. Sagucio, 520 Phil. 538, 552 (2006).
17. 479 Phil. 808 (2004).
18. Castro-Justo v. Atty. Rodolfo T. Galing, 676 Phil. 139, 146 (2011).