THIRD DIVISION
[A.C. No. 11811. September 15, 2021.]
BONIFACIO C. SUMBILLA, complainant,vs. ATTY. ERIC GENE C. PILAPIL, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedSeptember 15, 2021, which reads as follows:
"A.C. No. 11811 (Bonifacio C. Sumbilla, Complainant, v. Atty. Eric Gene C. Pilapil,Respondent.) — The instant administrative case stemmed from a complaint 1 for disbarment filed by complainant Bonifacio C. Sumbilla (complainant) against respondent Atty. Eric Gene C. Pilapil (respondent) before the Integrated Bar of the Philippines (IBP).
Antecedents
Complainant is the president of BCA International Corporation (BCA) while respondent was elected Corporate Secretary thereof from 1998 up to 2004. Respondent was also appointed Corporate Secretary of the other corporations incorporated by complainant together with the other incorporators Aderito Z. Yuhuico (Yuhuico) and Cezar T Quiambao, as follows: Strategic Alliance Development Corporation (STRADEC), Stradcom International Holdings, Inc., and Philippine Passport Corporation (Philpass). 2
Sometime before August 2003, respondent accepted the invitation of Francisco Paredes & Morales Law Offices ("firm") to be its counsel. Subsequently, in a Retainer Agreement dated 19 August 2003, 3 BCA, through complainant, formally engaged the services of the firm as its retainer counsel. 4 As BCA was not diligent in paying the fees for the services duly rendered by the firm, the latter terminated the Retainer Agreement in a letter dated 18 May 2004. 5 In the same termination letter, the firm, along with respondent, exercised its attorneys' lien until full settlement of BCA's obligations. 6
Upon separation of respondent from BCA and appointment of another corporate secretary in his stead, request was made for respondent to turn over all the corporate records and books in his custody to the new board secretary. Respondent refused the said demands, insisting that the firm is retaining lien over the said corporate records and books until its fees are paid. 7
To complainant, respondent's obstinate refusal to deliver the corporate records in his possession to the BCA's new Corporate Secretary is not a valid exercise of his attorney's retaining lien but simply motivated by a desire to inconvenience and sabotage BCA and its stockholders. 8 Complainant added that it is not the first time that respondent misused his fiduciary position to withhold corporate books from the stockholders that he serves. CAIHTE
Allegedly, respondent, in a case involving Gregorio Araneta III (Araneta) and Philpass (Civil Case No. 06-208), took a position prejudicial to the representations and defenses of Philpass which was against the planned investment of Araneta to the latter. Being a corporate secretary and a member of the bar, respondent knows the effects of the admission that he made to the said case which was adverse to Philpass. Such an act according to complainant, speaks of respondent's deceitful, dishonest and immoral conduct. 9
Respondent was likewise charged for violation of Section 144 of the Corporation Code (Crim. Case No. 89724) for refusing to allow the inspection of corporate records and books of STRADEC. Said act according to complainant constitutes deceitful conduct, violative of Canon 1, Rule 1.01 10 of the Code of Professional Responsibility (CPR).
Respondent denied the allegations against him. He averred that despite the exercise of his retaining lien, he has dutifully accommodated complainant's request for copies of corporate documents. He even notified the Securities and Exchange Commission that BCA's stock and transfer book was under his custody. He further stressed that he was well within his rights in exercising his retaining lien over all the documents, and books of BCA delivered to him, until the value of the professional services he has rendered as corporate secretary has been finally fixed and fully paid. 11
As for the Philpass issue, he claimed that he was acting for the interest of Philpass when he chose to acknowledge and take notice of the injunctive writ issued in Civil Case No. 06-208 which enjoined Mr. Yuhuico and complainant, and their heirs and assigns from transferring their shares in Philpass. Criminal Case No. 89724, however, had been ordered dismissed for lack of probable cause. 12
Recommendation of the IBP
In his Report and Recommendation 13 dated 21 November 2014, the Investigating Commissioner held that respondent was holding on to the books of the BCA without justification. Thus, he recommended that respondent be admonished. The Investigating Commissioner no longer touched the issue of Philpass, holding that the same could find solution in another fora. 14
In a resolution 15 dated 06 June 2015, the IBP Board of Governors adopted and approved the Investigating Commissioner's report and recommendation that respondent be admonished to be a bit more circumspect in the performance of his role as counsel and/or corporate secretary, with warning that a repetition of similar acts shall be dealt with more severe sanction. The resolution was rendered without prejudice to the filing of appropriate action in court for the recovery of the records. 16
Respondent filed a Motion for Reconsideration, which the IBP Board of Governors denied in a Resolution dated 27 January 2017, with a directive for respondent to return the books of account of his client. On 21 July 2017, respondent filed a petition for review on certiorari17 under Rule 45 of the Rules of Court (Rules).
Ruling of the Court
As a preliminary procedural matter, it bears noting that respondent's filing of the instant petition for review does not conform with the standing procedure for the investigation of administrative complaints against lawyers. 18 Bar Matter No. 1645 (B.M. No. 1645) 19 provides that the IBP Board of Governor's resolution on the report and recommendation of the IBP Investigator should be automatically transmitted to the Court, together with the entire records and evidence of the parties, for final action within ten (10) days from the issuance thereof. B.M. No. 1645 did away with the procedure of filing a motion for reconsideration as well as a petition for review of the resolution of the IBP Board of Governors. 20
Corollarily, respondent's filing of the present petition is unnecessary. Any final action on a lawyer's administrative liability shall be done by the Court based on the entire records of the case, including the IBP Board of Governor's recommendation, without need for the lawyer-respondent to file any additional pleading. 21 This is in line with the principle that only the Court has the power to impose disciplinary action on members of the bar, and the factual findings and recommendations of the IBP are, therefore, merely recommendatory. 22
After a review of the arguments and evidence submitted by the parties, this Court concurs with and adopts the findings and conclusion of the IBP Board of Governors in its Resolutions dated 06 June 2015 and 27 January 2017.
An attorney shall have a lien upon the funds, documents and papers of his client which have lawfully come into his possession and may retain the same until his lawful fees and disbursement have been paid, and may apply such funds to the satisfaction thereof. 23 The Court fully recognizes the attorney's lien, provided the following elements concur: (1) lawyer-client relationship; (2) lawful possession of the client's funds, documents and papers; and (3) unsatisfied claim for attorney's fees. Further, the attorney's retaining lien is a general lien for the balance of the account between the attorney and his client, and applies to the documents and funds of the client which may come into the attorney's possession in the course of his employment. 24
It is undisputed that the firm, to which respondent is a counsel, and BCA, to which respondent is also a corporate secretary, have a lawyer-client relationship. There is no showing, however, that the BCA documents and books withheld by respondent were solely obtained in the course of his employment as counsel of the firm. As a corporate secretary of BCA, it was respondent's duty to keep the BCA's books and records, including the minutes of the meeting and company's stock and transfer books. As such, the books and records of BCA were also obtained by respondent in his capacity as corporate secretary thereof. As for the alleged unsatisfied claim for attorney's fees, it is also noted that respondent exercised his lien thereof not only for the recovery of his fees as counsel of the firm but also his professional fees as corporate secretary of BCA. 25
We therefore see no justifiable reason for respondent to hold on to the books and documents of BCA as he failed to satisfy all the elements of a valid retaining lien. Respondent failed to present any proof that he obtained the same in his sole capacity as counsel of the firm and that he is withholding the same for unpaid attorney's fees of the firm alone. However, while respondent is not justified in withholding BCA's documents and books, such fault, nonetheless, does not warrant respondent's suspension, much less disbarment. Respondent kept the books and documents of BCA in the seeming exercise of his attorney's lien which was however unsubstantiated. An admonition should suffice as respondent's act neither affect nor erode his moral character as a lawyer which warrants a lesser sanction. 26 Anent the Philpass case, We find that respondent cannot be held administratively liable therefor, as he merely complied with the lawful writ of the court. DETACa
In Roa v. Moreno, 27 the Court held that disciplinary proceedings against lawyers are only confined to the issue of whether or not the respondent-lawyer is still fit to be allowed to continue as member of the Bar and that the only concern is his administrative liability. This does not preclude the Court, however to order the return the documents and books unjustly withheld by respondent, without prejudice to the filing of a collection case for retainer's fee against BCA.
WHEREFORE, premises considered, respondent ATTY. ERIC GENE C. PILAPIL is hereby ADMONISHED to be more circumspect in the performance of his role as counsel and/or corporate secretary. He is likewise ORDERED to return BCA's books and documents immediately upon receipt of this Resolution, without prejudice to the filing of a collection case for retainer's fee against it. He is STERNLYWARNED that a repetition of the same or similar act shall be dealt with more severely.
Let a copy of this Resolution be furnished the Office of the Bar Confidant, to be appended to the personal record of Atty. Eric Gene C. Pilapil as a member of the Bar; the Integrated Bar of the Philippines; and the Office of the Court Administrator for circulation to all courts in the country for their information and guidance.
SO ORDERED."
By authority of the Court:
(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court
Footnotes
1.Rollo, pp. 2-8.
2.Id. at 5.
3.Id. at 65-67.
4.Id. at 50.
5.Id. at 72.
6.Id. at 3.
7.Id. at 3-4.
8.Id. at 4.
9.Id. at 5-7.
10. CANON 1 — A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES.
Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral, or deceitful conduct.
11.Rollo, pp. 58-59.
12.Id. at 55-56.
13.Id. at 304-308; signed by Commissioner Hector B. Almeyda.
14.Id. at 307-308.
15.Id. at 303.
16.Id.
17.Id. at 684-698.
18.Festin v. Zubiri, 811 Phil. 01 (2017).
19. Amendment of Rule 139-B, 13 October 2015.
20.Rico v. Madrazo, Jr., A.C. No. 7231, 01 October 2019.
21.Festin v. Zubiri, 811 Phil. 01 (2017).
22.Rico v. Madrazo, Jr., A.C. No. 7231, 01 October 2019.
23. Section 37, Rules 138 of the Rules of Court.
24.Sps. San Pedro v. Mendoza, 749 Phil. 540 (2014).
25.Rollo, p. 59.
26. Dela Fuente Torres v. Dalangin, A.C. No. 10758, 05 December 2017.
27. 633 Phil. 01 (2010).