Guillen v. Arnado

SECOND DIVISION

[A.C. No. 10547. April 11, 2018.]

FREDDIE A. GUILLEN, petitioner,vs. ATTY. AUDIE ARNADO, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Second Division, issued a Resolution dated11 April 2018which reads as follows: HTcADC

"A.C. No. 10547 [Formerly CBD Case No. 08-2269] (Freddie A. Guillen v. Atty. Audie Arnado). — The Court resolves Atty. Audie Arnado's motion for reconsideration of the Court's November 8, 2017 Decision on the administrative complaint which Freddie Guillen filed against him for a supposed violation of the Code of Professional Responsibility (CPR).

Complainant Freddie Guillen is the registered owner of the City Grill Restaurant. He then invited respondent Atty. Audie Arnado and a certain Cedric Ebo to join the restaurant business. Each of them had to shell out P200,000.00 to make up a total capital of P600,000.00. A Memorandum of Agreement (MOA) was therefore executed and the business was formally launched in May 2003. At first, everything went smoothly, until Arnado's sister-in-law and Ebo's son participated in the management, causing complications in the business operations, which later forced Guillen and his wife to step down as general manager and operations manager, respectively. Because of the disagreements among the parties, Guillen offered that he would waive his claims for profits, provided that Arnado would return the P200,000.00 that he paid as capital. Arnado allegedly claimed that said refund would still be subject to the billings of the Arnado and Associate Law Firm. Thereafter, Guillen was surprised to find out that Arnado had already caused the incorporation of the restaurant with the Securities and Exchange Commission (SEC), which was approved on February 16, 2004. Guillen was likewise excluded from the business without the aforementioned refund of his capital. He was further charged with Estafa before the Office of the City Prosecutor of Cebu. Thus, Guillen initiated the present administrative case.

For his part, Arnado admitted the existence and the contents of the MOA. He also admitted that he caused the incorporation of City Grill-Sutukil Food Corporation. However, he insisted that the same was done in accordance with the requirements under the law. Guillen could not validly claim for a refund, and if he was really entitled, he should simply file an action to that effect. Arnado, likewise, contended that Guillen's refund would still be subject to the legal compensation claim of his law firm.

On November 2, 2011, the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) recommended the censure of Arnado, thus: 1

WHEREFORE, Taking into consideration the foregoing premises, it is with deep regret to recommend to the Board of Governors that ATTY. AUDIE ARNADO OF Cebu City be CENSURED for his deceitful and dishonest act in violation of Rule 1.01 of the Code of Professional Responsibility which provides that — A lawyer shall not engage in an unlawful, dishonest, immoral and deceitful conduct.

So Ordered.

RESPECTFULLY RECOMMENDED.

On January 3, 2013, the IBP Board of Governors passed Resolution No. XX-2013-47, 2 which adopted and approved the aforementioned recommendation, hence:

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, and considering Respondent's violation of Rule 1.01 of the Code of Professional Responsibility, Atty. Audie Arnado is hereby CENSURED.

Thereafter, Arnado moved for reconsideration of said Resolution. On March, 23, 2014, the IBP Board of Governors passed another resolution, Resolution No. XXI-2014-180, 3 which denied said motion for reconsideration and approved its 2013 Resolution, with modification, to wit:

RESOLVED to DENY Respondent's Motion for Reconsideration, there being no cogent reason to reverse the findings of the Commission and it being a mere reiteration of the matters which had already been threshed out and taken into consideration. Further, for taking advantage of his knowledge of the law and for his deceitful conduct of easing out Complainant from their restaurant business partnership without his knowledge by registering a corporation under a different name and style but doing the same line of business and using the same complements and trade secrets, Resolution No. XX-2013-47 dated January 3, 2013 is hereby AFFIRMED,with modification, and accordingly the penalty imposed on Atty. Audie Arnado increased from Censure to SUSPENSION from the practice of law for three (3) months.

On November 8, 2017, the Court sustained the recommendation of suspension from the practice of law of the IBP Board of Governors, thus:

WHEREFORE, IN VIEW OF THE FOREGOING, the Court SUSPENDS Atty. Audie Arnado from the practice of law for a period of one (1) year and WARNS him that a repetition of the same or similar offense shall be dealt with more severely.

Let copies of this decision be included in the personal records of Atty. Audie Arnado and entered in his file in the Office of the Bar Confidant.

Let copies of this decision be disseminated to all lower courts by the Office of the Court Administrator, as well as to the Integrated Bar of the Philippines, for their information and guidance.

SO ORDERED.

Hence, Arnado filed the present motion for reconsideration. aScITE

The Court's Ruling

After a review of the November 8, 2017 Decision, the Court affirms the findings of the IBP and its recommendation of censure.

As to the registration of the company, it is clear that when Arnado caused the incorporation of City Grill-Sutukil Food Corporation, he was fully aware that City Grill Restaurant was still registered in Guillen's name. The business name City Grill Restaurant registered under Guillen's name was never dissolved in accordance with the law. Arnado himself failed to prove that the City Grill Restaurant business had already been terminated. Although said business name was only used for a short period of time, the same had already acquired goodwill among the residents and customers in the locality. Obviously, he did the same to utilize the goodwill already earned by the name of City Grill Restaurant. Arnado was, likewise, the one who actually notarized some or City Grill-Sutukil Food Corporation's legal documents such as the Treasurer's Affidavit and a letter addressed to the SEC. Here, Arnado had certainly fallen short of the high standard of integrity and fair dealing required of him. He somehow deceived, not only Guillen, but the public as well.

However, Guillen failed to prove that Arnado is guilty of misinforming the employees that the former was no longer a partner of the restaurant business. During the mandatory conference, the following was established:

Atty. Espinoza:

   From the information that the complainant received it [came] from Atty. Audie Arnado, the respondent, telling the employees that the complainant no longer is a party or an owner of the business. So as heard by that allegation.

Comm. De La Rama:

   Was he able to verify that?

Atty. Espinoza:

   He got the information from one of the employees and he wasn't able to get any affidavit to support such information.

xxx xxx xxx

Comm. De La Rama:

   So is that a rumor or what.

Atty. Espinoza:

   Well, we consider it as a rumor or whatever. So that the complainant wrote him considering that lie also put up an amount of money for the business giving the option whether to buy him out or for him to . . . (unintelligible) the two others. 4

As can be gleaned from the records of the case, it was already admitted that the alleged misinformation done by Arnado was merely a rumor. Thus, such claim is only hearsay and should not be given credence. Guillen tried to substantiate said accusation with an affidavit which one Julius Caesar Ramos executed in 2009. It must be noted, however, that said misinformation supposedly transpired in 2003, or already six (6) years before the execution of the affidavit. The Court agrees with the IBP that it is highly unlikely that Ramos would still remember the exact words purportedly uttered by Arnado in 2003.

In administrative proceedings, the quantum of proof necessary for a finding of guilt is substantial evidence, which is that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Further, the complainant has the burden of proving by substantial evidence the allegations in his complaint. The basic rule is that mere allegation is not evidence and is not equivalent to proof. Likewise, charges based on mere suspicion and speculation cannot be given credence. Besides, the evidentiary threshold of substantial evidence — as opposed to preponderance of evidence Z — is more in keeping with the primordial purpose of and essential considerations attending this type of cases. As case law elucidates, disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not involve a trial of an action or a suit, but is rather an investigation by the Court into the conduct of one of its officers. Not being intended to inflict punishment, it is in no sense a criminal prosecution. 5

In view of the foregoing, the Court holds that the penalty of censure, as originally recommended by the IBP and the penalty usually imposed for an isolated act of misconduct of a lesser nature, 6 is sufficient in this case.

WHEREFORE, PREMISES CONSIDERED, the Court GRANTS the motion for reconsideration. Atty. Audie Arnado is CENSURED for his acts and WARNS him that a repetition of the same or similar offense shall be dealt with more severely.

Let copies of this Resolution be included in the personal records of Atty. Audie Arnado and entered in his file in the Office of the Bar Confidant.

Let copies of this Resolution be disseminated to all lower courts by the Office of the Court Administrator, as well as to the Integrated Bar of the Philippines, for their information and guidance.

SO ORDERED." (Carpio, J., Acting Chief Justice per Special Order No. 2539 dated February 28, 2018; Reyes, I, on wellness leave)

Very truly yours,

MA. LOURDES C. PERFECTODivision Clerk of Court

By:(SGD.) TERESITA AQUINO TUAZONDeputy Division Clerk of Court

Footnotes

1. Report and Recommendation submitted by Commissioner Jose I. De La Rama, Jr., dated November 2, 2011; rollo, Vol. II, pp. 377-387.

2.Rollo, Vol. II, p. 376.

3.Id. at 402.

4. TSN, January 23, 2009, pp. 8-10, id. at 381-382.

5.Reyes v. Atty. Nieva, A.C. No. 8560, September 6, 2016, 802 SCRA 196, 220.

6.Teodoro III v. Atty. Gonzales, 702 Phil. 422, 432 (2013).