EN BANC A. PACITA CAALIM-VERZONILLA, A.C. No. 6655 Complainant, Present: CORONA, C.J., CARPIO, - versus - VELASCO, JR., LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN,* DEL CASTILLO,** ABAD, VILLARAMA, JR., PEREZ,* MENDOZA, SERENO, REYES, and PERLAS-BERNABE, JJ. ATTY. VICTORIANO PASCUA,Respondent. G. Promulgated: October 11, 2011 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION VILLARAMA, JR., J.: Before the Court is the verified affidavit-complaint[1] of Pacita Caalim-Verzonilla seeking the disbarment of respondent Atty. Victoriano G. Pascua for allegedly falsifying a public document and evading the payment of correct taxes through the use of falsified documents. Complainant alleges that on September 15, 2001, respondent prepared and notarized two Deeds of ExtraJudicial Settlement of the Estate of Deceased Lope Caalim with Sale. The first deed[2] was for a consideration of P250,000 and appears to have been executed and signed by Lopes surviving spouse, Caridad Tabarrejos, and her children (complainant, Virginia Caalim-Inong and Marivinia Caalim) in favor of spouses Madki and 1 Shirley Mipanga. The second deed[3]was for a consideration of P1,000,000 and appears to have been executed by and for the benefit of the same parties as the first deed. The two deeds have identical registration numbers, page numbers and book numbers in the notarial portion. Complainant avers that both deeds are spurious because all the heirs signatures were falsified. She contends that her sister Marivinia does not know how to sign her name and was confined at the Cagayan Valley Medical Center, Tuguegarao City, at the time the deeds were allegedly signed by her, as shown by a certification[4]from said hospital. The certification, dated February 6, 2004 and signed by Dr. Alice Anghad, Medical Officer IV, attested that Marivinia has been confined at the Psychiatry Ward of the Cagayan Valley Medical Center since May 3, 1999 after being diagnosed of Substance Induced Psychosis and Schizophrenia, Undifferentiated Type. Complainant further alleges that the two deeds were not presented to any of them and they came to know of their existence only recently. She further claims that the Community Tax Certificates[5] (CTCs) in her name and in the names of her mother and her sister Marivinia were procured only by the vendee Shirley and not by them. Complainant submits the affidavit[6] executed by Edwin Gawayon, Barangay Treasurer of C-8, Claveria, Cagayan, on August 3, 2002, attesting that the CTCs were procured at the instance of Shirley and were paid without the complainant and her co-heirs personally appearing before him. Gawayon stated that the signatures and thumbmarks appearing on the CTCs are not genuine and authentic because it can be seen with the naked eyes that the signatures are similar in all three CTCs. Lastly, complainant alleges that the two deeds were used by respondent and Shirley to annul a previously simulated deed of sale[7]dated June 20, 1979 purportedly executed by Lope in favor of the spouses Madki and Shirley Mipanga. Said deed was likewise a complete nullity because at that time Shirley Mipanga was only sixteen years old and still single. In his comment,[8] respondent admits having prepared and notarized the two disputed Deeds of Extra-Judicial Settlement of the Estate with Sale (subject deeds), but denies any irregularity in their execution. He claims that the preparation and notarization of the subject deeds were made under the following circumstances: In the morning of September 15, 2001, complainant, Caridad, Virginia and Shirley Mipanga went to his house and requested him to prepare a deed of sale of a residential lot located in Claveria, Cagayan. He was informed by the parties that the agreed purchase price is P1,000,000 and was presented the certificate of title to the property. Upon finding that the registered owner is Lope Caalim, married to Caridad Tabarrejos and knowing that Lope already died sometime in the 1980s, he asked for, and was given, the names and personal circumstances of Lopes surviving children. He asked where Marivinia was, but Caridad told him that Marivinia remained home as she was not feeling well. As Caridad assured him that they will fetch Marivinia after the deed of conveyance is prepared, he proceeded to ask the parties to present their CTCs. Caridad and Pacita, however, told him that they have not secured their CTCs while Virginia forgot to bring hers. So he instructed them to get CTCs from Claveria. An hour later, Caridad and Shirley came back with the CTCs of Caridad, Virginia, complainant and Marivinia. After he finished typing the deed and the details of the CTCs, Caridad said that she will bring the deed with her to Claveria for her daughters to sign. He then told them that it was necessary for him to meet them all in one place for them to acknowledge the deed before him as notary public. It was agreed upon that they will all meet at the house of the Mipangas between 11:00 a.m. and 12:00 noon on that same day. Respondent arrived at the Mipanga residence shortly before 12:00 noon. There he saw Shirley, Caridad, complainant, Pacita and Marivinia with two other persons whom he later learned were the instrumental witnesses to the execution of the document. Upon being informed that the parties have already affixed their signatures on the deed, he examined the document then inquired from the heirs if the signatures appearing therein were theirs and if they were truly selling the property for P1,000,000. The heirs answered in the affirmative, thereby ratifying and acknowledging the instrument and its contents as their own free and voluntary act and deed. Thus, he notarized the document and then gave the original and two carbon copies to Shirley while leaving two in his possession. 2 Respondent adds that Shirley thereafter asked him what steps were needed to effect registration of the deed and transfer of the title in her and her husbands name. He replied that all the unpaid land taxes should be paid including the capital gains tax, documentary stamp taxes and estate tax to the Bureau of Internal Revenue (BIR) which will then issue the necessary clearance for registration. When asked how much taxes are payable, he replied that it depends on the assessment of the BIR examiner which will be based on the zonal value or selling price stated in the deed of sale. He added that the estate taxes due, with interests and surcharges, would also have to be paid. Since the consideration for the sale is P1,000,000, the taxes payable was quite enormous. Shirley asked him who between the vendor and the vendee should pay the taxes, and he replied that under the law, it is the obligation of the vendors to pay said taxes but it still depends upon the agreement of the parties. He asked if there was already an agreement on the matter, but the parties replied in the negative. Shirley then told the vendors that they should shoulder the payment of taxes. Caridad and her co-vendors, however, refused and said that a big portion of the P1,000,000 paid to them was already used by them to pay and settle their other obligations. Shirley then offered to pay one-half of whatever amount the BIR will assess, but Caridad insisted that another document be prepared stating a reduced selling price of only P250,000 so that they need not contribute to the payment of taxes since Shirley was anyway already willing to pay one-half of the taxes based on the selling price stated in the first deed. This resulted in a heated discussion between the parties, which was, however, later resolved by an agreement to execute a second deed. The prospect of preparing an additional deed, however, irritated respondent as it meant additional work for him. Thus, respondent went home. Later, the parties visited respondent at his house and pleaded with him to prepare the second deed with the reduced selling price. Moved by his humane and compassionate disposition, respondent gave in to the parties plea. In the presence of all the heirs, the vendees and the instrumental witnesses, respondent prepared and notarized the second deed providing for the lower consideration of only P250,000. He used the same document number, page number and book number in the notarial portion as the first deed because according to him, the second deed was intended by the parties to supplant the first. Respondent denies complainants assertions that the two deeds are simulated and falsified, averring that as stated above, all the parties acknowledged the same before him. Likewise, he and his clients, the spouses Madki and Shirley Mipanga, presented the subject deeds as exhibits in Civil Case No. 2761-S also pending before the Regional Trial Court (RTC), Branch 12, of Sanchez Mira, Cagayan. As to the allegation that Marivinia did not appear before him as she was allegedly under confinement at the Cagayan Valley Medical Center on September 15, 2001, respondent cites a medical certificate[9]stating that Marivinia was confined in said hospital from May 3, 1999 to August 10, 1999. He also points out that Marivinia is one of the plaintiffs in Civil Case No. 2836-S pending before the RTC, Branch 12, Sanchez Mira, Cagayan, for the annulment of the subject deeds, and nothing in the complaint states that she is mentally or physically incapacitated. Otherwise, her co-plaintiffs would have asked the appointment of a guardian for her. By Resolution[10] dated August 10, 2005, this Court referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. In a Report and Recommendation[11] dated May 3, 2007, Commissioner Jose Roderick F. Fernando found respondent administratively liable on account of his indispensable participation in an act designed to defraud the government. He recommended that respondent be suspended from the practice of law for three months and that his notarial commission, if still existing, be revoked and that respondent be prohibited from being commissioned as a notary public for two years. According to Commissioner Fernando, respondent did not offer any tenable defense to justify his actions. As a notary, it was his responsibility to ensure that the solemnities of the act of notarization were followed. As a lawyer, it was likewise incumbent upon him that the document he drafted and subsequently notarized was neither unlawful nor fraudulent. Commissioner Fernando ruled that respondent failed on both counts since he 3 drafted a document that reflected an untruthful consideration that served to reduce unlawfully the tax due to the government. Then he completed the act by likewise notarizing and thus converting the document into a public document. On June 26, 2007, the IBP Board of Governors adopted and approved Commissioner Fernandos report and recommendation but imposed a higher penalty on respondent. Its Resolution No. XVII-2007-285 reads: RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of 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 Respondents violation of Notarial Law and for his participation to a transaction that effectively defrauded the government, Atty. Victoriano G. Pascua is hereby SUSPENDED from the practice of law for two (2) years and SUSPENSION of his Notarial Commission for two (2) years with Warning that a similar violation in the future will be dealt with severely.[12] The above resolution is well taken. By respondents own account of the circumstances surrounding the execution and notarization of the subject deeds of sale, there is a clear basis for disciplining him as a member of the bar and as notary public. Respondent did not deny preparing and notarizing the subject deeds. He avers that the true consideration for the transaction is P1,000,000 as allegedly agreed upon by the parties when they appeared before him for the preparation of the first document as well as the notarization thereof. He then claimed to have been moved by his humane and compassionate disposition when he acceded to the parties plea that he prepare and notarize the second deed with a lower consideration of P250,000 in order to reduce the corresponding tax liability. However, as noted by Commissioner Fernando, the two deeds were used by respondent and his client as evidence in a judicial proceeding (Civil Case No. 2671-S), which only meant that both documents still subsist and hence contrary to respondents contention that the second deed reflecting a lower consideration was intended to supersede the first deed. As to the charge of falsification, the Court finds that the documents annexed to the present complaint are insufficient for us to conclude that the subject deeds were indeed falsified and absolutely simulated. We have previously ruled that a deed of sale that allegedly states a price lower than the true consideration is nonetheless binding between the parties and their successors in interest.[13] Complainant, however, firmly maintains that she and her co-heirs had no participation whatsoever in the execution of the subject deeds. In any event, the issues of forgery, simulation and fraud raised by the complainant in this proceeding apparently are still to be resolved in the pending suit filed by the complainant and her co-heirs for annulment of the said documents (Civil Case No. 2836-S). With his admission that he drafted and notarized another instrument that did not state the true consideration of the sale so as to reduce the capital gains and other taxes due on the transaction, respondent cannot escape liability for making an untruthful statement in a public document for an unlawful purpose. As the second deed indicated an amount much lower than the actual price paid for the property sold, respondent abetted in depriving the Government of the right to collect the correct taxes due. His act clearly violated Rule 1.02, Canon 1 of the Code of Professional Responsibility which reads: CANON 1 A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES. Xxxx Rule 1.02. A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system. Not only did respondent assist the contracting parties in an activity aimed at defiance of the law, he likewise displayed lack of respect for and made a mockery of the solemnity of the oath in an Acknowledgment. By 4 notarizing such illegal and fraudulent document, he is entitling it full faith and credit upon its face, which it obviously does not deserve considering its nature and purpose. In Gonzales v. Ramos,[14] we elucidated on how important and sacrosanct the notarial act is: By affixing his notarial seal on the instrument, the respondent converted the Deed of Absolute Sale, from a private document into a public document. Such act is no empty gesture. The principal function of a notary public is to authenticate documents. When a notary public certifies to the due execution and delivery of a document under his hand and seal, he gives the document the force of evidence. Indeed, one of the purposes of requiring documents to be acknowledged before a notary public, in addition to the solemnity which should surround the execution and delivery of documents, is to authorize such documents to be given without further proof of their execution and delivery. A notarial document is by law entitled to full faith and credit upon its face. Courts, administrative agencies and the public at large must be able to rely upon the acknowledgement executed before a notary public and appended to a private instrument. Hence, a notary public must discharge his powers and duties, which are impressed with public interest, with accuracy and fidelity.[15] Moreover, while respondents duty as a notary public is principally to ascertain the identity of the affiant and the voluntariness of the declaration, it is nevertheless incumbent upon him to guard against any illegal or immoral arrangement or at least refrain from being a party to its consummation.[16]Rule IV, Section 4 of the 2004 Rules on Notarial Practice in fact proscribes notaries public from performing any notarial act for transactions similar to the herein document of sale, to wit: SEC. 4. Refusal to Notarize. A notary public shall not perform any notarial act described in these Rules for any person requesting such an act even if he tenders the appropriate fee specified by these Rules if: (a) the notary knows or has good reason to believe that the notarial act or transaction is unlawful or immoral; xxxx In this case, respondent proceeded to notarize the second deed despite knowledge of its illegal purpose. His purported desire to accommodate the request of his client will not absolve respondent who, as a member of the legal profession, should have stood his ground and not yielded to the importunings of his clients. Respondent should have been more prudent and remained steadfast in his solemn oath not to commit falsehood nor consent to the doing of any.[17] As a lawyer, respondent is expected at all times to uphold the integrity and dignity of the legal profession and refrain from any act or omission which might lessen the trust and confidence reposed by the public in the integrity of the legal profession.[18] Respondent also failed to comply with Section 2, Rule VI of the 2004Rules on Notarial Practice when he gavethe second document the same document number, page number and book number as the first: SEC. 2. Entries in the Notarial Register. x x x xxxx (e) The notary public shall give to each instrument or document executed, sworn to, or acknowledged before him a number corresponding to the one in his register, and shall also state on the instrument or document the page/s of his register on which the same is recorded. No blank line shall be left between entries. Xxxx Respondent admitted having given the second deed the same document number, page number and book number as in the first deed, reasoning that the second deed was intended to supplant and cancel the first deed. He therefore knowingly violated the above rule, in furtherance of his clients intention of concealing the actual purchase price so as to avoid paying the taxes rightly due to the Government. Even assuming that the second deed was really intended to reflect the true agreement of the parties and hence superseding the first deed they had executed, respondent remains liable under the afore-cited Section 5 2(e) which requires that each instrument or document, executed, sworn to, or acknowledged before the notary public shall be given a number corresponding to the one in his register. Said rule is not concerned with the validity or efficacy of the document or instrument recorded but merely to ensure the accuracy and integrity of the entries in the notarial register. A lawyer may be suspended or disbarred for any misconduct showing any fault or deficiency in his moral character, honesty, probity or good demeanor.[19] Section 27, Rule 138 of the Revised Rules of Court provides: SEC. 27. Disbarment or suspension of attorneys by Supreme Court, grounds _herefore. A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, of for any violation of the oath which he is required to take before admission to practice, or for a willful disobedience appearing as an attorney for a party to a case without authority so to do.The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice. Xxxx In Gonzales, the notary public who notarized the document despite the non-appearance of one of the signatories was meted the penalties of revocation of his notarial commission and disqualification from reappointment for two years. The notary in Gonzales was likewise suspended from the practice of law for one year. Said penalty was in accord with the cases of Bon v. Ziga,[20]Serzo v. Flores,[21]Zaballero v. Montalvan[22] and Tabas v. Mangibin.[23] The Court found that by notarizing the questioned deed, the respondent in Gonzales engaged in unlawful, dishonest, immoral or deceitful conduct.[24] In the instant case, we hold that respondent should similarly be meted the penalty of suspension and revocation of his notarial commission for having violated the 2004 Rules on Notarial Practice. In line withcurrent jurisprudence, and as recommended by the IBP Board of Governors, the revocation of his notarial commission and disqualification from re-appointment as notary public for two years is in order. With respect, however, to his suspension from the practice of law, we hold that the one-year suspension imposed in Gonzalesand the other cases is not applicable considering that respondent not only failed to faithfully comply with the rules on notarial practice, he also violated his oath when he prepared and notarized the second deed for the purpose of avoiding the payment of correct amount of taxes, thus abetting an activity aimed at defiance of the law. Under these circumstances, we find the two-year suspension recommended by the IBP Board of Governors as proper and commensurate to the infraction committed by respondent. WHEREFORE, respondent ATTY. VICTORIANO G. PASCUA is hereby SUSPENDED from the practice of law for a period of two (2) years. In addition, his present notarial commission, if any, is hereby REVOKED, and he is DISQUALIFIED from reappointment as a notary public for a period of two (2) years. He is further WARNED that any similar act or infraction in the future shall be dealt with more severely. Let copies of this Decision be furnished all the courts of the land through the Office of the Court Administrator, as well as the Integrated Bar of the Philippines, and the Office of the Bar Confidant, and recorded in the personal records of the respondent. SO ORDERED. 6 B. SECOND [A.C. PERFECTO Manuel DIVISION No. 1129. MENDOZA, Complainant, V. July v. Chico 27, ALBERTO B. for 1992.] MALA, Respondent. complainant. Miguel P. Pineda for Respondent. SYLLABUS 1. LEGAL ETHICS; ADMINISTRATIVE COMPLAINT; GROSS AND SCANDALOUS IMMORAL CONDUCT; PENALTY OF SUSPENSION IMPOSED UPON LAWYER FOUND GUILTY OF GRAVE MISCONDUCT; AN AFFIDAVIT OF DESISTANCE DOES NOT EXONERATE ERRING LAWYER. — The court approves and adopts the conclusions of the IBP Board of Governor that the conclusions of the IBP Board of Governor that the adulterous relation of respondent and the wife of complainant is clearly proven; and that even if complainant and his wife had reconciled and an affidavit of desistance had been executed, respondent should not be totally exonerated, otherwise, the IBP’s duty to police the ranks and the Supreme Court to punish the erring will be negated. Thus, respondent is suspended from the practice of law for six months with the warning that a repetition by him of the same or similar misconduct will be dealt with more severely. NARVASA, C.J.: The complaint which initiated the administrative case at bar, filed in 1972 by Perfecto Mendoza, charged Atty. Alberto B. Mala with serious misconduct consisting of grossly and scandalously immoral acts. The complaint alleged, more particularly, that sometime in 1971, respondent Mala being then detailed in the Office of the Agrarian Counsel in Baliwag, Bulacan, and being then a boarder in the conjugal dwelling of complainant Mendoza and his wife, Leticia Manalastas -- and during the complainant's sojourn in Camarines Sur which lasted for some two (2) years -- respondent Mala and said Leticia Manalastas had and maintained illicit sexual relations and cohabited openly, notoriously and scandalously; and that as a result of said relations Leticia Manalastas bore a child who was thereafter baptized in the parish church of San Miguel and given the name of Alberto Mala, Jr., with the consent of respondent Mala. Atty. Mala was required to answer the complaint but despite notice of that requirement, failed to do so within the time appointed. The case was then referred by the Court to the Office of the Solicitor General in 1973, which proceeded to receive the evidence of the complainant ex parte. It was not until after the complainant had finished presenting his proofs and rested his case that Mala finally appeared. He filed a motion for admission of his answer in July, 1974; and although his explanation for the long delay in answering the complaint was inconsistent with an earlier one set forth in a motion for admission of a "motion to dismiss," the Solicitor General's Office admitted his answer "upon broad grounds of justice and equity," and, while denying his request to cross-examine the complainant's witnesses, allowed him to present his own evidence. The case was subsequently transferred by the Office of the Solicitor General to the Integrated Bar of the Philippines; and the respondent completed the presentation of his testimonial and documentary evidence 7 before the Commission on Bar Discipline in May, 1990. The evidence was in due course considered, analyzed and assessed by the IBP Board of Governors which thereafter promulgated a Resolution on November 11, 1991, signed by all but one of its members, finding respondent Mala guilty as charged -- this, notwithstanding the complainant's retraction of his complaint -- and recommending the imposition on him of the penalty of suspension for a period of six (6) months and a warning of more severe sanction to be imposed for a repetition "of his immoral failings as a responsible member of the bar." This Court's own review of the evidence satisfies it that the same does indeed establish the material allegations of the complaint, that respondent Mala has in truth committed the immoral acts imputed to him; that Mala's proffered defenses are in fact untenable; and that no error of sufficient gravity is disclosed in the record to warrant rejection of the report and recommendation of the IBP Board of Governors. The Court therefore approves and adopts the following conclusions of the IBP Board of Governors, to wit: "From the evidence adduced, the adulterous relation of Atty. Alberto Mala with Leticia Manalastas Mala is clearly proven which, considering his position as an attorney for the Agrarian Office of the locality when these immoral acts were committed at his situs of service, caused public scorn and scandal *** (taking account of) the moral norms of our society *** " 'In Mortel v. Aspiras (100 Phil. 586) this Court, following the rule in the United States, held that "the continued possession *** of a good moral character is a requisite condition for the rightful continuance in the practice of the law *** and its loss requires suspension or disbarment, even though the statutes do not specify that as a ground for disbarment. It is important to note that the lack of moral character that we here refer to as essential is not limited to good moral character relating to the discharge of the duties and responsibilities of an attorney at law. The moral delinquency that affects the fitness of a member of the bar to continue as such includes conduct that outrages the generally accepted moral standards of the community, conduct for instance, which makes "a mockery of the inviolable social institution of marriage. In Mortel, the respondent being already married, wooed and won the heart of a single, 21-year old teacher who subsequently cohabited with him and bore him a son. Because respondent's conduct in Mortel was particularly morally repulsive, involving the marrying of his mistress to his own son and thereafter cohabiting with the wife of his own son after the marriage he had himself arranged, respondent was disbarred.' (Cited in Cordova v. Cordova, Adm. Case 3249, November 29, 1989). "It is evident, however, that the complainant and his wife reconciled and more children were born to them. The unfortunate episode with the respondent apparently ended, hence the complainant executed an affidavit of desistance exonerating the respondent, and this story has a happy ending. Be that as it is, to exonerate totally the respondent and not give to him some lesson for scandalizing the noble profession to which he belongs will negate the IBP's duty to police its ranks and the Supreme Court to punish the erring. The mitigating circumstances above considered, a suspension from the practice of law for a period of six (6) months is recommended *** (with) a warning ***." WHEREFORE, the Court DECLARES the respondent, Atty. Alberto B. Mala GUILTY of grave misconduct and imposes on him the penalty of SUSPENSION from the practice of law for six (6) months with the warning that a repetition by him of the same or similar misconduct will be dealt with more severely. Let notice of this decision be spread in respondent's record as an attorney in this Court, and notice of the same served on the Integrated Bar of the Philippines and on the Office of the Court Administrator for circulation to all the Courts concerned. SO ORDERED. 8 C. Republic SUPREME Manila of the Philippines COURT THIRD DIVISION A.C. No. 2029 December 7, 1993 LUIS G. vs. ATTY. PRUDENCIO G. SALUDARES, respondent. CONSTANTINO, complainant, RESOLUTION BIDIN, J.: In an Affidavit-Complaint dated April 21, 1978, complainant Luis G. Constantino charges respondent Atty. Prudencio S. Saludares with conduct unbecoming of a lawyer for the non-payment of a loan which the latter obtained from complainant's son Luis Constantino, Jr. It appears that sometime in August 1977, respondent borrowed money in the amount of P1,000.00 from complainant's son Luis, Jr. Respondent procured the loan purportedly for an urgent personal obligation promising to pay it back promptly the following day. Respondent failed to comply with his promise. Subsequent demands for payment were then made by Luis, Jr. but to no avail. In the interim, Luis, Jr. left the country and afterwards wrote his father, authorizing the latter to collect the sum of money owed by respondent. Despite complainant's repeated demands however, respondent persistently refused to pay back the said amount, prompting the former to seek assistance from the Civil Relations Office of the Armed Forces of the Philippines (AFP) through an affidavit-complaint. The Civil Relations Office in turn endorsed the affidavitcomplaint to this Court on April 24, 1978. (Rollo, p. 4). The complaint alleges that respondent lawyer, by abusing the trust and confidence of complainant's son, was able to obtain a loan in the amount of P1,000.00 which he unjustifiably refused and still refuses to pay despite repeated demands. This act, complainant alleges, constitutes conduct unbecoming an officer of the court and is a clear violation of respondent's oath of office. In compliance with this Court's resolution dated May, 25, 1979, respondent filed his comment on the affidavitcomplaint alleging among other things that the complaint was without basis and malicious in nature. He however, categorically admits having borrowed money from complainant's son, Luis, Jr. He reasons out that he was unable to repay the loan because Luis, Jr. failed to appear at the appointed place of the payment. Respondent further cites the fact of Luis Jr.'s absence from the country to justify such act of non-payment. Complainant, in his reply, challenged the veracity of respondent's contentions and reiterated his previous allegation of respondent's unjustified refusal to settle his indebtness despite repeated demands. On October 15, 1979, the case was duly referred to the Office of the Solicitor General for investigation, report and recommendation pursuant to Section 3 of Rule 139 of the Rules of Court and was assigned to the Office 9 of Solicitor Jesus G. Bersamira. After the investigation conducted by said Solicitor, wherein respondent failed to appear despite due notice, the case was deemed submitted for report and recommendation. Solicitor Bersamira, however, was appointed to the Bench and no report nor recommendation was made by him. On November 8, 1984 the case was re-assigned to another Solicitor. On March 12, 1990, the Solicitor General rendered its report, the dispositive portion of which reads: WHEREFORE, it is respectfully recommended that Atty. Prudencio S. Saludares be charged with violation of Section 27, Rule 138 of the Rules of Court of the Philippines and his Lawyer's Oath and that he be suspended for 1 year from the practice of law. Attached is a copy of the complaint for suspension. (Solicitor General's Report and Recommendation, p. 3) The Solicitor General found that respondent's unjustified refusal to settle his debt was apparent from the averments in the affidavit-complaint and this fact was sufficiently established during the proceedings before the investigating Solicitor. The Solicitor General further add that respondent's refusal to pay the debt constitutes a violation of his lawyer's oath under Section 27 of Rule 138 of the Rules of Court, and is therefore a proper subject for disciplinary action. There is no doubt that respondent, borrowed P1,000.00 from Luis Constantino, Jr. purportedly for an urgent personal need, promising to pay it back the following day. As a matter of fact, the respondent admits said indebtness but has not given any just and valid reason for his refusal to pay this debt. It has been held that when a lawyer's integrity is challenged by evidence, it is not enough that he denies the charges against him, he must meet the issues and overcome the evidence for the relator and show proof that he still maintains the highest degree of morality and integrity which is at all times expected of him (Quingwa vs. Puno, 19 SCRA 439 [1967] ). By his failure to present convincing evidence to justify his non-payment of the debt, not to mention his seeming indifference to the complaint brought against him made apparent by his unreasonable absence from the proceedings before the Solicitor General, respondent failed to demonstrate that he still possessed the integrity and morality demanded of a member of the Bar. Granting arguendo that he failed to meet Luis, Jr. at the appointed place of payment, respondent does not deny the fact that he has refused and still refuses to repay the P1,000.00 loan despite repeated demands by complainant who was duly authorized to collect the same. Had respondent intended to settle his indebtness, he could have done so in several instances repayment was demanded of him. It is clear from the records that after Luis, Jr. left the country, complainant and his wife took turns in trying to recover the debt from respondent, only to be repeatedly turned away empty-handed. This prompted Luis, Jr. to write respondent a letter dated February 3, 1978 reminding the latter of the P1,000.00 loan extended to him and at the same time demanding payment thereof. (Rollo, p. 19) This however, like the other demands, was left unheeded. The foregoing factual antecedents compel Us to conclude that from the very beginning, respondent had no intention to honor and/or pay his just debt. We cannot simply close our eyes to the unwarranted obstinacy displayed by respondent in evading payment of a debt validly incurred. Such a conduct, to say the least, is unbecoming and does not speak well of a member of the Bar. A lawyer's professional and personal conduct must at all times be kept beyond reproach and above suspicion. He must perform his duties to the Bar, to the courts, to his clients, and to society with honor and dignity (Marcelo vs. Javier, 214 SCRA 1 [1992] ). The facts and evidence obtaining in this case indubitably establish respondent's failure to live up to his duties as a lawyer in consonance with the strictures of the lawyer's oath, the Code of Professional Responsibility and the Canons of Professional Ethics, thereby degrading not only his person but his profession as well. 10 Rule 1.01 of the Code of Professional Responsibility clearly provides that a lawyer must not engage in unlawful, immoral or deceitful conduct. A member of the Bar must act with integrity, honesty and professional decorum. He must comport himself in a manner which will secure and preserve respect and confidence of the public. Both his professional and personal conduct must be kept beyond reproach and above suspicion. He is required not only in fact to be possessed of good moral character, but must also be perceived to be leading a life in accordance with the highest moral standards of the community. His conduct should be characterized by candor, competence and fairness (Roque vs. Clemencio, 212 SCRA 618 [1992] ). It bears stressing that a lawyer can do honor to the legal profession by faithfully performing his duties to society, to the bar, to the courts and to his clients. No moral qualification for bar membership is more important that truthfulness and candor. (Fellner vs. Bar Association of Baltimore City, 131 A. 2d 729 as cited in Tan vs. Sabandal, 206 SCRA 473 [1992]). To this end nothing should be done by any member of the legal fraternity which might tend to lessen in any degree the confidence of the public in the fidelity, honesty and integrity of the profession (Lyons vs. Hall [LQ App] 90 so2d 519, 60 ALR 2d 1003 as cited in Marcelo vs. Javier, supra). While it is true that there was no attorney-client relationship between respondent and complainant, it is wellsettled that an attorney may be removed or otherwise disciplined not only for malpractice and dishonesty in the profession, but also for gross misconduct not connected with his professional duties, showing him to be unfit for the office and unworthy of the privileges which his license and the law confer upon him (Lizaso vs. Amante, 198 SCRA 1 [1991] ). In the case at bar, it is clear to the Court that the conduct of respondent Saludares in failing to honor his just debt to complainant's son constituted dishonest and immoral conduct. This dishonest conduct was compounded by respondent's act of interjecting paltry excuses for his unwarranted refusal to pay a valid and just debt. WHEREFORE, the Court hereby ORDERS the Suspension of Attorney Prudencio S. Saludares from the practice of law for a period of three (3) months from notice, with the warning that a repetition of the same or any other misconduct will be dealt with more severely. Let a copy of this resolution be spread on the records of said respondent, with copies thereof furnished to the Integrated Bar of the Philippines and duly circularized to all courts. SO ORDERED. 11 D. BAN HUA U. FLORES, complainant, vs. ATTY. ENRIQUE S. CHUA, respondent. DECISION PER CURIAM: In its Resolution No. XIII-98-288 in this Administrative Case, the Board of Governors of the Integrated Bar of the Philippines RESOLVED as follows: to ADOPT and APPROVE the Report and Recommendation of the Investigating Commissioner in the aboveentitled case, herein made part of this Resolution/Decision as Annex A, and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, respondent Atty. Enrique S. Chua is SUSPENDED from the practice of law for three (3) years. We quote the 21-page report of the Investigating Commissioner, Atty. Jaime M. Vibar: THE FACTS AND THE CASE Complainant Ban Hua U. Flores seeks the disbarment of respondent Atty. Enrique S. Chua, a practicing lawyer in the City of Bacolod (Complaint dated October 11, 1995) for various offenses amounting to malpractice, gross misconduct, violation of his lawyers oath, the Code of Professional Conduct and Responsibility, as well as the provisions of the laws of the Republic of the Philippines, to wit: I.FRAUD AGAINST A DEFENSELESS WIDOW BY THE DEATHBED OF HER DECEASED SPOUSE THROUGH FALSIFICATION AND FORGERY OF PUBLIC DOCUMENT. II.FOISTING FALSEHOOD AND FABRICATED PUBLIC DOCUMENT TO MOLEST AND HARASS PARTIES CONCERNED AND DEPRIVED THEM OF THEIR PROPERTY RIGHTS TO THEIR PREJUDICE AND DETRIMENT. III.LIBEL, MISPRESENTATION AND UNLAWFUL ADVERTISEMENT THROUGH THE PREMATURE PUBLICATION OF PORTION OF A QUESTIONABLE DECISION WHICH IS PENDING APPEAL. IV.BRIBERY AND CORRUPTION AND BLACKMAIL OF THE JUDICIARY AMOUNTING TO MALPRACTICE. V.ILLEGAL TAPPING OF CONVERSATIONS IN VIOLATION OF REPUBLIC ACT NO. 4200. VI.COMMISSION OF PERJURY, FORUM SHOPPING, MISPRESENTATION, FILLING A FALSE SUIT AND MISLEADING THE CLERK OF COURT TO EVADE PAYMENT OF DOCKET FEES. Respondent filed his comment on the complaint with a countercharge against complainant and counsel, dated January 24, 1996.Respondent denies the charges and alleges that: 1. Grounds I and II, referring to the forgery of the signature on a Deed of Sale notarized by respondent Chua, are presently the subject of an on-going litigation (Crim. Case No. 12036 or Annex A Complaint and SEC Case No. 3328 or Annex F or Sec Case No. 520 or Annex P, Complaint) whose termination or conclusion is far from over, thus it would be premature to impose now any sanction upon the respondent xxxx 12 2. Grounds III, III-A and III-B are presently litigated in the Libel Complaint docketed as BC-I.S. No. 93-2801 filed by complainant against the respondent and her (Complainants) brother xxx and is still awaiting resolution. Said grounds are also intertwined with other pending cases. 3. Grounds IV, IV-A. IV-B and IV-C are absolutely baseless and false. 4. Other grounds mentioned are not valid and sufficient basis for respondents disbarment for the issues raised therein are still the subject of pending cases. Such grounds are flimsy and frivolous. Respondent claims that the cases he is handling and subject of the complaint involve disputes between family members. As he represents the brother of complainant, the present administrative complaint has apparently been filed by complainant to vent her ire for failing to attain what she sought in the pending litigations against respondents client. In the trial of the case, complainant presented testimonial and documentary evidence, including decisions of courts and pleadings filed therein while respondent opted to submit the case for decision only on the basis of documents. He submitted resolutions, pleadings and orders issued in other pending cases adverted to in the complaint, to prove that the issues raised in the disbarment case are still the subject of pending actions, or that the complaint has no legal and factual basis. Let us examine the facts as established by the evidence adduced by the parties. GROUND I. On the charge that respondent Chua was guilty of falsification and criminal activities in connection with his office as lawyer and notary public. Complainant presented evidence on the notarization by respondent Chua of a Deed of Sale allegedly executed on December 5, 1989 (Exhibit E), or one (1) day before the death of Chua Beng, one of the owners of the property. In the transcript of stenographic notes taken in Criminal Case Nos. 12037 and 12036, a proceeding against respondent Chua for falsification and notarization of a falsified document, RTC-Bacolod City, Branch 53, it is revealed that during the wake of Chua Beng, Silvina Chua, the wife of the deceased, asked to sign a document by Yu Seng, her husbands helper or assistant, who represented to her that said document she signed was a deed of sale which conveyed a property of her husband located in Nandalagan, Bacolod City, containing 344 square meters and evidenced by Transfer Certificate of Title No. 151706. She also found out that her husbands signature was forged. The deed of sale purportedly transferred their property to Yu Seng and Benjamin Laudio. Silvina Chua gave testimony that her husband Chua Beng could not have signed the deed of sale as they were together all the time prior to his death and she did not see him sign any document (Exhibit G at pages 39, et seg.) The forgery of the signature of her husband was reported to authorities (Exhibit G at page 55) and a fingerprint expert in the person of Police Superintendent Rodolfo Castillo attested to such forgery (Exhibit F at page 48 et. seq.) The forgery and notarization of the document containing the said forged signature of Chua Beng became the basis of a criminal prosecution for falsification of notarial document against Atty. Chua, the above-mentioned Criminal Case Nos. 12037 and 12036. Respondent Chua has not rebutted evidence presented on his role in notarizing a deed of sale where the signatory did not appear before him as, in fact, the signature was a forgery. The Acknowledgment in the deed of sale states that Chua Beng appeared and signed the deed personally before respondent. In his defense, respondent claims that there is a criminal case still pending against him for his participation in the notarization and alleged falsification of the document so the administrative case cannot proceed until the decision is rendered in the criminal case. GROUND II. On the charge that respondent foisted falsehood and falsification to molest and harass parties concerned to their prejudice and detriment. 13 The charge relates to the filing of a notice of lis pendens in connection with a case filed before the Securitie [sic] and Exchange Commission (SEC). It appears that a petition, dated April 6, 1988, was filed by the lawyers Ramon Encarnacion and Alberto de Joya in behalf of UBS Marketing Corporation and Johnny K.H. Uy. Complainant herein and other family members were the respondents. The action was for the turn over of Books of Accounts, Sums of Money and Damages with Writ of Preliminary Mandatory Injunction. Subsequently, or on April 26, 1995, a notice of lis pendens was sent to the Register of Deed of Bacolod City, informing of the filing of a SEC petition, docketed as Case No. 3328. The first page of the petition was altered by obliterating the entry pertaining to the nature of the suit appearing at the upper right hand portion of the caption of the case just below the case number. The complainant testified that the erasure was made to conceal the true nature of the suit and lack of basis of the notice so as to mislead the Register of Deeds into annotating the notice of lis pendens. The notice sent to the Register of Deeds, Exhibit J, Annex F, Disbarment Complaint, was signed for Ramon Encarnacion and Associates. It is further charged that the notice was unlawful and baseless as the owner (SK Realty, Inc.) of the properties subject thereof was not even a party to the SEC petition. The application for the annotation of the notice of lis pendens was denied by the Register of Deeds in a letter dated May 5, 1995, addressed to UBS Marketing Corp. and Johnny KH Uy c/o Atty. Enrique Chua on the ground that the ownership of the titles was never an issue in the case and the registered owner was not a party thereto. Respondent Chua, this time acting for the applicants, appealed the denial to the Land Registration Commission (LRC) en consulta. However, the LRC Administrator, in a Resolution dated September 21, 1995, denied the appeal, sustaining the ground stated by the Register of Deeds that the notice was not registrable as the registered owner of the affected properties was not a party to the SEC case. No contrary evidence was presented by respondent. GROUND III. On the third charge that respondent was guilty of libel, misrepresentation and unlawful conduct by causing the publication and advertisement of a portion of the SEC decision in a newspaper of general and wide circulation in the province, evidence is not disputed that indeed an advertisement/notice and news report came out in the Visayan Daily Star, in its issues of June 6, 1995 ad June 9, 1995 (Exhibits Q and R, Annexes L and M) respectively, relating to the decision of the hearing officer in the SEC Case No. 3328 holding complainant and other liable for P68 million. The decision as published included, among others, the cancellation of titles of SK Realty, Inc. and New Challenge Resources, Inc. In these publications, respondent was always in the forefront, claiming to be the lawyer of the winning parties and paying for the advertisement/notice of the SEC decision. (Annexes N and O). Complainant testified (TSN February 19, 1997 at page 54 et seq.) before this Commission and affirmed tat the decision of the hearing officer in SEC Case No. 3328 declared her and others in default and held liable for P68 million. Thereafter, Atty. Chua, who was not the counsel of petitioners in the proceedings, caused damage and embarrassment to the [sic] them when said respondent instigated and initiated the publication in a newspaper of general and wide circulation in the Visayas, the Visayan Daily Star issue of June 6, 1995, the issuance of the decision with the caption BUSINESSMEN ORDERED TO PAY P68 MILLION PESOS BY THE SECURITIES AND EXCHANGE COMMISSION. The publication reported that Atty. Chua was the counsel of the petitioners. Not content with the news report, respondent Chua himself caused and paid for the publication of a two (2) page notice/advertisement in the Visayan Daily Star in its issue of June 9, 1995, informing the public about the decision of the SEC finding the complainant and others liable for P68 million. Even non-parties, SK Realty, Inc. and New Challenge Resources were mentioned in the publication (Exhibit Q, Annex L, Complaint). The SEC decision adverted to in the publications had been appealed to the Commission en banc. A copy of 14 the notice of appeal was sent by mail to the counsel of record on June 9, 1995. (Exhibit V, Annex P). While the SEC case was pending appeal, respondent Chua filed a case against SK Realty, complainant herein and others with the Regional Trial Court of Bacolod City, Case No. 95-9051 for Reconveyance of Property and Cancellation of Titles and/or Recovery of Ownership and Possession of Real Estate with Damages and Accounting. (Annex Q). In defense, respondent Chua submitted evidence to show that a complaint for libel filed by Ban Hua Flores against respondent, arising from the publication/advertisement of the decision in SEC No. 3328, was dismissed by the prosecutors office of Bacolod (Annex 1, Respondents Manifestation and Submission of Evidence dated February 15, 1997). He further alleged that while complainant filed an administrative complaint against the prosecutors, the said complaint was likewise dismissed for the acts complained of amounted merely to errors of judgment correctible by appeal or a petition for review and not by an administrative proceedings (Annex 3, Ibid). Respondent maintains that the complaint on the publication is, therefore, baseless. GROUND IV. On the charge that respondent was guilty of bribery, corruption and blackmail of the judiciary, as well as harassment of the prosecution arm through the filing of administrative and criminal cases against them, complainant presented evidence that respondent testified in Administrative Matter No. RTJ-92-863 and Administrative Matter No. RTJ No. 92-880, involving Judge Renato Abastillas and Judge Bethel Moscardon, respectively, whereat respondent Chua allegedly admitted having bribed and/or conspired to bribe then RTC Judge Abastillas in order to obtain a favorable ruling for his clients in Crim. Case Nos. 10009 and 10010. Failing to get a favorable action, respondent Chua squealed/fabricated Administrative Matter No. RTJ92-863 against ex-Judge Abastillas. Complainant further charges respondent of having conspired to bribe Judge Moscardon, which illegal act he admitted in A.M. RTJ-92-880.Complainant also makes the sweeping accusation that respondent Chua has the propensity to either bribe or sue the judges and prosecutors. He is charged of having harassed Provincial Prosecutor Bartolome Facual. Respondent denies the accusation but admits that he has already been proceeded against and, in fact sternly warned for his misconduct in giving Judge Abastillas P20,000.00 for a case he was handling and for which acts he has already expressed rancor (A.M. No. RTJ-92-863).He emphasizes that the charges he acted irresponsibly by indiscriminately suing of harassing judges and others, while serious, are false and untrue. His actions, in fact, resulted in the dismissal of judges. Evidence adduced indeed prove that respondent Chua was previously found guilty for misconduct as a lawyer in Administrative Matter No. RTJ-92-863/Administrative Case No. 3815, and where Judge Renato Abastillas was ordered dismissed (Annex C, Complaint for Disbarment). Respondent was found to have bribed Judge Abastillas and sternly warned that a repetition of similar act or acts or violation committed by him in the future will be dealt with more severely. In Administrative Matter RTJ-92-880 (In re: Judge Bethel Moscardon), the Honorable Supreme Court directed the Bar Confidant to investigate Atty. Chuas conduct in negotiating with a judge for an increase in rent for his client and further noted that: Thus is not the first time that Atty. Chua was involved in a similar incident. In A.C. No. 3815 Atty. Chua admitted giving P20,000.00 bribe to another judge who was ordered dismissed. Atty. Chua was spared from prosecution but he was sternly warned that a repetition of a similar acts or acts or violation committed by him in the future would be dealt with more severely. The Honorable Supreme Court furnished the Department of Justice with a copy of the decision in A.M. RTJ92-880 for investigation and possible criminal prosecution of persons concerned including respondent herein. A copy of said decision was also endorsed to the Bar Confidant for possible investigation and 15 disciplinary action against respondent. Complainant further alleges that there is a pattern of conduct on the part of respondent that tends towards the frustration of justice. While not specifically alleged in the complaint, evidence was adduced that respondent resorted to dilatory tactics in the handling of his cases. The attempts to delay and impeded the natural course of justice has not remained unnoticed. In a Comment of the Office of the Solicitor General (Exhibit Z) filed in CA-G.R. No. 41329, a petition to question an order of the trial court which denied the accused petitioners Motion to Suspend Further Proceedings in a criminal case for Estafa filed in 1988, the Solicitor General revealed that the petitioner therein, who was assisted by Atty. Chua, filed (6) Motions to Disqualify Private Prosecutor/law firm, three (3) Motion for Reinvestigation, five (5) Motions to Quash/Dismiss/Suspend Proceedings, four (4) Motions to Recall Warrant of Arrest and several motions to inhibit the judges. These motions were all denied or dismissed. Aside from the motions, the accused succeeded in seeking the postponement of the arraignment twenty three (23) times. The filling of the petition in the Court of Appeals was part of the ploy to further delay the proceedings. The dilatory tactics of respondent Chua has not escaped the attention of the Court of Appeals in a petition for certiorari docketed as CA-G.R. No. 38798 (Exhibit A). This petition was filed by respondent Chua to seek the annulment of an Order of the trial court dated August 21, 1995 setting the case for further proceedings on various dates and the annulment of the April 27, 1998 Order which directs Atty. Reyanaldo Depasucat, counsel for the plaintiff, to put in writing his oral manifestation that respondent Chuas client has not honored a subpoena ad testificandum and subpoena duces tecum previously issued by the court. Petitioner likewise seeks to compel the trial court to dismiss and/or suspend the proceedings in Civil Case No. 7675. The Court of Appeals dismissed the petition but noted that: The petition is utterly without merit and is obviously intended to delay proceedings in the aforesaid civil case. The court looks with disfavor at the clear dilatory tactics employed by herein petitioner in delaying the proceedings in Civil Case No. 7635 by bringing the instant petition before this court when private respondent is merely being required to put in writing his oral manifestation that Sy Seng Cho refused to honor the subpoena duces tecum requiring him to produce the original of the minutes of the reconciliation meeting of the feuding Uy family of which he is the custodian. Quite obvious is the fact that herein petitioner is merely employing this petition to delay the case and thus delay likewise the motion to cite him for contempt. We will not be a part to the unreasonable and unnecessary delay of the proceedings in Civil Case No. 7635 which has dragged on since 1993 to the detriment of the proper administration of justice and has prolonged the long standing feud of the Uy family. We see that there is no valid issues that could arise from the order of the public respondent since the order merely directs counsel for the plaintiff (private respondent) to put in writing his oral manifestation as to the reason for the dishonor by the petitioner of the subpoena xxxx. Respondent claims that he has not caused a delay in the proceedings much less in Case No. 95-9597 or in Criminal Case Nos. 12037 and 12036. V. On the charge that respondent admitted in the administrative cases as aforesaid that he and his client tapped private conversations and that said acts allegedly violated the Anti-Wiretapping Act. RA No. 4200, no evidence was adduced, independent of what has been stated in the administrative cases, had been adduced by the complainant. VI. Respondent is further charged of forum shopping for his role as counsel for certain parties in instituting various actions in different judicial and quasi-judicial fora. These case have the same or similar causes of action and were allegedly instituted to defeat the ends of justice. 16 The decision of the Regional Trial Court on a motion to dismiss the case entitled Johnny K.H. Uy & UBS vs. Sk Realty, et al. Civil Case No. 95-9051, RTC-Bacolod City, Branch 43 gives a summary of the cases instituted by respondent Chua in behalf of his clients and finds that there was forum shopping committed, thus: xxx defendants alleged that there are three pending case involving practically the same parties, subject matter and issues. The first is SEC AC Case No. 520 entitled UBS Marketing Corporation and Johnny K.H. Uy vs. Ban Hua U Flores, et al. which is an appeal from the decision of the Hearing Officer of the Securities and Exchange Commission (SEC Case No. 3528) to the SEC En Banc. The dispositive portion of the appealed decision ordered, among others, the cancellation and annulment of all Certificates of Title in the name of herein defendant S.K. Realty Inc. The present case, likewise, asks for the annulment and cancellation of transfer certificates of title in the name of defendant S.K. Realty, Inc. which properties are the very same properties covered by SEC AC No. 520. The second case, entitled S.K. Realty, Inc. et al. vs. Securities and Exchange Commission, UBS Marketing Corporation and Johnny K.H. Uy is CA-G.R. No. 37451 pending in the Court of Appeals. The issue raised thereto refers to the nullity of the decision rendered in SEC Case No. 3328 which awarded the real properties of S.K. Realty, Inc., to the herein plaintiffs. These properties are the very same subject matter of the present action between the same parties. The third case, Civil Case No. 95-8978 entitled SK Realty, Inc. vs. Johnny K.H. Uy and UBS Marketing Corporation pending in Branch 41 of this Court, is an action for damages due to the Notices of Lis Pendens effected by the herein plaintiffs on the real properties of the defendant SK Realty, Inc. xxx Finally it is the contention of plaintiffs that there is no forum shopping in the present case as the defendants even vehemently declared that defendant SK Realty is not and has never been a party to SEC Case Nos. 3318, 520 and 3328, therefore, is a total stranger to the said case. Neither can there be a similarity of causes in the petition with the Court of Appeals and Civil Case No. 95-8975, for the causes of action in these cases are distinct and the reliefs prayed for are different from the present case. The denial of defendants motion to dismiss is what plaintiffs seek for. A judicious scrutiny of the evidence on record led this Court to hold that defendants' position, as a whole, is impressed with merit. A perusal of the plaintiffs complaint in the instant case and SEC Case No. 5328 xxx which is now the subject of appeal docketed as SEC Case No. 520, disclosed that the plaintiffs in both instances assert rights founded on substantially the same set of facts giving to the same basic issues breach, on the defendants part, of the Family Agreement reached during the Family Reconciliation Meeting held on February 10, 11 and 12, 1987; and the validity of nullity of the Deed of Sale involving several parcels of land, executed by and between the defendants, to the prejudice of the rights and interest of the plaintiffs. While the case at bar is for the recovery of ownership and possession of real properties and on the other hand SEC Case No. 3328 (now pending appeal) involves, inter alia, an action for accounting and damages, ostensibly the cause of action in one is different from the other but in the final analysis the same aforementioned basic issues confront these cases. One must bear in mind that a party cannot, by varying the form of action or adopting a different method of presenting this case, escape the operation of the principle that one and the same cause of action shall not be twice litigated. (Aldez Realty, Inc. vs. Court of Appeals, 212 SCRA 623) 17 It is evident that the aforementioned cases hinges on the same essential facts and circumstances. Though the parties impleaded in one are not entirely the same to that (sic) in the other, nevertheless, the same parties represent the same interest in both actions. What we have before us is a clear case of forum shopping. Respondent is thus accused of perjury in falsely certifying in his Complaint, Civil Case No. 95-9051 (Annex Q), that there are no pending cases with the same subject matter and cause of action. Likewise, it is charged that respondent, in not specifying the value of the real properties involved in the suit, misled the clerk of court in accepting the complaint without the correct filing fee being paid. FINDING AND RECOMMENDATION I. On the first charge (GROUND I) that respondent was guilty of fraud against a person in his deathbed by falsification and forgery of a deed of sale, there is no evidence that he actively conspired with any party, or actively participated, in the forgery of the signature of one Chua Beng, a purported party to the contract. However, complainants evidence supports the conclusion that the signature of Chua Beng on a Deed of Sale (Exhibit E) was forged. While the wife, Silvina Chua, admits that she signed a document during the wake of her husband, she denies that her husband signed a Deed of Sale (ANNEX E) on 5 December 1989, or one (1) day before her husbands death, concerning a property covered by TCT No. T-151706. We find the testimony of the wife on the forgery, which is supported by a handwriting expert, as truthful and credible. We cannot ignore the circumstances of the execution of the said deed of sale which purports to have been signed by Chua Beng before a Notary Public one day before his death. We find the statement in the Acknowledgment appearing on the second page of the deed stating that Chua Beng personally appeared before the Notary Public is an untruthful statement that amounts to falsification. While we note that there is a criminal case of falsification pending against respondent (Criminal Case No. 12036), the lack of a decision from the trial court on the matter should not dissuade us from making a finding of liability in this administrative proceedings against respondent, as, in fact, we find respondent Chua failed to exercise the required diligence and fealty to his office by attending to the fact that the alleged party, Chua Beng, appeared before him and signed the deed when in truth and in fact said person did not so participate in the execution thereof. Emphatically, this finding does not in any way preempt the trial court on whatever decision it will issue on the criminal cases against respondent Chua. II. We shall jointly discuss the second ground (Ground II) together with Ground VI, VI-A, VI-B, and VI-C, as said charges emanate from, or is related to, the filing of a case with the Securities and Exchange Commission (SEC Case No. 3328), involving the Uy family members and another case with the civil court (Case No. 959051) involving their properties. Complainant charges respondent Chua, under the second ground of her complaint, of foisting falsehood and falsified a document to obtain a notice of lis pendens. We find documentary evidence to sustain the conclusion that indeed a Notice of Lis Pendens was filed in relation to SEC Case No. 3328 (Exhibit J, Annex F, Complaint), to which was attached a copy of the Petition with page one thereof containing an apparent erasure to omit the statement that it is For: Turn over of Books of Account, Sums of Money and Damages with Writ of Preliminary Mandatory Injunction. However, the Petition and the Notice of Lis Pendens have been prepared and executed by Ramon Encarnacion or his law firm. It does not appear from the documents, neither is there credible testimonial evidence, that respondent Chua directly participated in the unlawful acts complained of. The fact that respondent Chua was not the lawyer for the petitioners in the said SEC case is even admitted by complainant in her complaint (Complaint, paragraph 15, page 11). However, there is evidence that respondent Chua subsequently took action to appeal the denial by the Registry of Deeds of the application for the registration of the Notice of Lis Pendens to the Land Registration Commission, which eventually sustained the decision of the former, in a Resolution dated September 21, 18 1995, which denied the application on the ground that the real party in interest in the SEC case, the registered property owner SK Realty, Inc., was not impleaded in the suit. It also appears that respondent Chua filed a similar action in the civil court while the SEC case was pending adjudication, an action claimed to amount to forum shopping, intended to enable respondents clients to annotate a notice of lis pendens on the titles of the properties which were the same subject of an earlier SEC petition and application for a notice of lis pendens. Respondent Chua cannot deny the institution of the civil complaint (Annex Q, Complaint for Disbarment). The civil complaint, Civil Case No. 95-9051, shows that SK Realty, Inc., which was not a party in the SEC case, was impleaded this time as partly plaintiff. The causes of action and the reliefs sought therein seem to differ from those stated in the SEC case. In the civil case, the plaintiffs seek judgment specifically as follows: 1. Declaring null and void the Deed of Absolute Sale (Annex A) and annulling and cancelling Transfer Certificates of Titles Nos. T-141057; 141059; 141060; 141061; 141062; 141063; 141064, standing in the name of defendant SK and reverting their ownership and possession to either of the plaintiffs; 2) Directing the defendants to render full and accurate account of income and revenues on the eight (8) parcels of land; 3) finding defendants, jointly and severally, liable for a) attorneys fees x x x x b) Moral Damages x x x c) Exemplary Damages x x x d) Nominal Damages x x x x x and e) Moderate Damages x x x. The controversy over the sale of, or the titles to, the real properties of the Uy family was, to respondent Chuas thinking, cognizable by the civil court and on the face of the SEC petition filed by another lawyer, it is not indicated that a relief for the annulment of titles was being sought. As admitted by complainant herself, SK Realty, Inc. was not a party litigant in the SEC case, while she is now a party in the civil case and perhaps rightly so considering that an owner of property is an indispensable party. We cannot, however, ignore the resolution of the trial court in Civil Case No. 95-9051, dated November 9, 1995, which found that while ostensibly the causes of action in the civil action is different from the SEC Case, it held that in the final analysis the same x x x issues confront these cases. (Exhibit P at page 5) and it, therefore, concluded that respondents clients were guilty of forum shopping. Indeed, while it would appear that respondent Chua was not the counsel of the petitioners in SEC CASE No. 3328, his action to have a notice of lis pendens annotated at the Register of Deeds and his appeal to the LRC indicate his clear knowledge of the pending action.Clearly, while there is no sufficient basis to hold respondent liable for the charge of committing fraud in the filing of notice of lis pendens in relation to the SEC case, or for falsification of page one of the SEC petition as attached to the notice, respondent not being privy thereto, we are not prepared, however, to say that he is off the hook on the forum shopping charge. As we have earlier pointed out, the pleadings in the SEC case and in Civil Case No. 95-9051, may appear to have different causes of action and parties. But here is the catch. The SEC rendered a decision, dated May 3, 1995, which directed, among others, the cancellation and annulment of the transfer certificate of titles in the name of Soon Kee Commercial, Inc. if any, the certificate of titles in the name of SK Realty, Inc., if any, and the certificate of titles in the name of New Challenge Resources, if still there is, and all the properties formerly belonging to and in the name of UBS, presently totalling eight (8) lots TCT No. 141057, TCT No. 141058. TCT No. 141059, TCT No. 141060, TCT No. 141061, TCT No. 141062, TCT No. 141063, TCT No. 14106 and reverting them back to UBS Marketing Corporation. The Decision was published and even quoted in the Visayan daily Star, the issue of June 6, 1995, at respondent Chuas behest and expense. The decision was later appealed to the SEC Commission en banc. Respondent Chua was undoubtedly aware that while the SEC petition did not make any references to the real properties, the decision of the SEC gave reliefs in relation thereto. Therefore, when respondent filed a complaint, Civil Case No. 95-9051 (Annex Q, Disbarment complaint), on September 18, 1995, he was aware that the forum shopping prohibition could be violated and yet he submitted a Verification in his civil complaint, which was for reconveyance and cancellation of titles, that there is no prior action or proceedings involving the same issues, as herein raised, has been filed with the Court of Appeals or Supreme Court or any other tribunal or agency. He knew that the controversy on the properties was pending with the SEC, or was pending appeal, initiated by SK Realty and New Challenge Resources, Inc., with the Court of Appeals (CA-G.R. No. 37541) and SEC Case No. 520). The fact that the relief granted by the SEC 19 gearing officer has not yet been set aside when respondent instituted the civil case and that he was aware of this fact should be enough reason for him to be made answerable for making false representation and forum shopping. It is also worth noting the fact that when the civil complaint was filed on September 18, 1995, the appeal in Consulta No. 2334, with respect to the Notice of Lis Pendens, was still unresolved. The decision of the LRC Administrator came only on September 21, 1995 (Annex K, Disbarment Case). Ignorance of a pending action on the properties subject of the SEC case cannot, therefore, be invoked by respondent. Respondent is answerable for misconduct under Canon 12.02. III. On the third ground (Ground III, III-A and III-B) that respondent Chua caused the publication of new reports and paid advertisement/notice about the issuance of a decision by the Securities ad Exchange Commission, there is sufficient evidence to sustain complainant's charges. Undeniably, respondent Chua did not act as counsel for any of the parties in the SEC case, although it is safe to say that he represented some of the protagonist in other matters or cases. It is likewise undenied that the decision of the SEC hearing officer in Case No. 3328 was favorable to respondent Chuas clients. Respondent Chua, being a lawyer, should have known that the said decision was appealable. When he published the decision, he courted a possible sanction for contempt. Here, we cannot excuse him from such misconduct for it behooves him to even exert earnest efforts towards the settlement of family disputes and certainly he should be the last to exacerbate and complicate the controversial situation in which family members are embroiled. By his publication, respondents has violated the canons of professional ethics and professional responsibility, particularly Canon 19, 27, 3.01, 13.02, 1.03 and 1.04. IV. The charges alleged in Ground IV, IV-A IV-B and IV-C, which imputes to respondent acts of blackmail, harassment of the judiciary, arbitrary filing of administrative and criminal cases, and the charges alleged in Ground V, which attributes to represent the crime of wire tapping private conversations in violation of RA No. 4200 should be dismissed for lack of evidence and for being without basis. Besides, the acts complained of were the subject of Administrative Case No. 92-863 and A.M. No. RTJ 92-880. The decision in said administrative matters will have a bearing on the imposition of the penalty on respondent who has been warned of a stiffer penalty in case another misconduct is committed. V. The charge alleged in Ground VI-D which assails the allegation of respondent in the civil complaint, paragraph 4 of Annex Q, Complaint for Disbarment, as a brazen lie should be dismissed for lack of merit. A reading of paragraph 4 of the Complaint shows that when respondent made a statement that these facts are within the judicial notice of the Court being a settled litigation passed upon with finality by the Supreme Court, he made a reference to a case docketed as Securities and Exchange Commission vs. Court of Appeals and JBS vs. Court of Appeals reported in 201 SCRA 124. The term these facts should not, therefore, be interpreted by complainant as referring to the facts alleged in the complainant or that there was an intention to mislead the trial court by invoking judicial notice of a court decision. VI. The charge against respondent, stated under Ground VI-E of the complaint, of allegedly misleading the Clerk of Court into accepting the filing of a civil complaint without the proper filing fee being paid should be dismissed for lack of merit. The insufficiency in the payment of filing should be better be threshed in the civil case rather than before the Commission. The intent to mislead the Clerk of Court cannot be deduced from the mere fact of filing, although real properties are involved in the case. We think that the charge lacks factual and legal basis. Finally, the Commission does not wish to see lawyers deeply involving themselves in a fractious and divisive family feud, nay aggravating a controversy by reckless resort to unnecessary legal actions that only tend to frustrate the ends of justice. Instead of working for the amicable settlement or a friendly end to the dispute, lawyers file pleadings, perhaps with the clients cheers and approval, that only cause delay and impede the normal course of justice until the solution to the family imbroglio has become unreachable. Under Rule 1.04, it is mandated that lawyers shall encourage (their) clients to avoid, end or settle a controversy if it will admit of a fair settlement. It appears that in the family conflicts in which the lawyers involved herein are also active participants, no earnest efforts have been exerted by said lawyers towards that end. It is pathetic that years 20 have been wasted without any end in sight. While a lawyer has the solemn duty to defend his clients rights and is expected to display the utmost zeal in defense of a clients cause, the conduct must never be at the expense of truth. (People v. Susano Blancas, 45 SCRA 405; Caballero vs. Deiparine , 60 SCRA 136; Muoz v. People, 53 SCRA 190) A lawyer may be disbarred or suspended for any misconduct when he is wanting in moral character, in honesty, probity and good demeanor or unworthy to continue as an officer of the court. (Nadayag vs. Grageda, 237 SCRA 202). In view of our observation and finding that the charges against respondent for forum shopping, committing falsehood, injurious, willful and unprofessional conduct of publishing, or causing the publication, in a newspaper of general circulation, of a pending case, causing undue delay in the court proceedings and for notarizing a document without the party being present, to be supported by evidence and meritorious, it is hereby recommended that respondent be suspended for a total of three (3) years for all his acts of misconduct. Respondent Chua has, by his unprofessional conduct, violated Rule 10.01, 12.02, 12.04 (foisting or commission of false hood, forum shopping and causing delay in court proceedings), Canon 19 (failing to resort to lawful means in representing client), 27, 3.01, 13.02 (causing undue publication of pending action). Having been previously found guilty of misconduct by the Hon. Supreme Court and warned of a more stern penalty should he commit another breach of the Canons of Professional Responsibility, respondents penalty would even seem light. While the counsel for the complainant is not recommended for any disciplinary action, he is, however, advised to take note of the Rules of Professional Conduct (Rule 1.01) which requires him to take the necessary steps aimed at encouraging a fair amicable settlement of the long-running family disputes, brought to light in this administrative proceedings, where he is actively and deeply involved. We fully agree with the Investigating Commissioner in his findings of facts and conclusion of culpability, and even in his own lament that the recommended penalty would even seem light. Indeed, the misconduct of respondent, which this case has unfolded, is grave and serious that brings dishonor to the legal profession. Committed in succession and within a short time, the misconduct exposes a habit, attitude, and mindset not only to abuse ones legal knowledge or training, but also to deliberately defy or ignore known virtues and values which the legal profession demands from its members. In respondents notarization of a forged deed of sale, we see not just an act of generosity lavishly extended. We see his active role to perpetuate a fraud, a deceitful act to prejudice a party. He did not deny knowing the supposed vendor. As a matter of fact, he certified in the acknowledgment that he knew the vendor and knew him to be the same person who executed the document. When he then solemnly declared that such vendor appeared before him and acknowledged to him that the document was the vendors free act and deed despite the fact that the vendor did not do so as his signature was forged, respondent deliberately made false representations. It must be stressed that under Section 1 of Public Act No. 2103,[1] a notary public, like herein respondent, shall certify that the person acknowledging or document is known to him and that he is the same person who executed it, and acknowledged that the same is his free act and deed. The purpose of the requirement of personal appearance by the acknowledging party before the notary public is to enable the latter to verify the genuineness of the signature of the former.[2] It may be added, too, that only by such personal appearance may the notary public be able to ascertain from the acknowledging party himself that the instrument or document is his own free act and deed. Needless to state, the personal appearances and acknowledgement by the party to the document are the core of the ritual that effectively convert a private document into a public document, making it admissible in court without further proof of its authenticity.[3] The role then of the notary public in this ritual cannot be taken lightly. Where the notary public is a lawyer, a graver responsibility is placed upon his shoulder by reason of his solemn oath to obey the laws and to do no falsehood or consent tot he doing of any. The Code of Professional Responsibility also commands him not to engage in unlawful, dishonest, immoral or deceitful conduct and to uphold at all times the integrity and dignity of the legal profession. In Maligsa v. Cabanting, we emphatically pronounced: 21 As a lawyer commissioned as notary public, respondent is mandated to subscribe to the sacred duties appertaining to his office, such duties being dictated by public policy impressed with public interest. Faithful observance and utmost respect of the legal solemnity of the oath in an acknowledgment or jurat is sacrosanct. Simply put, such responsibility is incumbent upon and failing therein, he must now accept the commensurate consequences of his professional indiscretion. By his effrontery of notarizing a fictitious or spurious document, he has made a mockery of the legal solemnity of the oath in an Acknowledgment.[4] In said case, respondent Cabanting notarized a forged deed of quitclaim. Considering also his previous misconduct for which he was suspended from the practice of law for six months, we ordered him disbarred from the practice of law. In the instant case, respondent Enrique S. Chua also notarized a forged deed of sale. it must be recalled that in Lee v. Abastillas and Abastillas v. Chua,[5] we held respondent Enrique Chua administratively liable for violation of Rule 1.01 of the Code of Professional Responsibility for allegedly bribing Judge Abastillas; and, accordingly, we STERNLY WARNED [him] that a repetition of similar act or acts or violation committed by him in the future [would] be dealt with more severely. Respondent Chua should, on this score alone, deserve a similar deal with Cabanting. But, considering the other items of his misconduct enumerated in the Report of the Investigating Commissioner, which in their totality brought dishonor to the legal profession, for more reasons must we visit upon respondent the most severe permissible penalty. What we said in Maligsa v. Cabanting bears repeating: A lawyer shall at all times uphold the integrity and dignity of the legal profession. The bar should maintain a high standard of legal proficiency as well as honesty and fair dealing. A lawyer brings honor to the legal profession by faithfully performing his duties to society, to the bar, to the courts and to his clients. To this end a member of the legal fraternity should refrain from doing any act which might lessen in any degree the confidence and trust reposed by the public in the fidelity, honesty and integrity of the legal profession. IN VIEW OF ALL THE FOREGOING, we find respondent ENRIQUE S. CHUA guilty of grave misconduct rendering him unworthy of continuing membership in the legal profession. He is thus ordered DISBARRED from the practice of law and his name stricken off of the Roll of Attorneys, effective immediately. Let copies of this Resolution be furnished the Office of the Bar Confidant, which shall forthwith record it in the personal filed of respondent; all the Courts of the Philippines; the Integrated Bar of the Philippines, which shall disseminate copies thereof to all its Chapters; and all administrative and quasi-judicial agencies of the republic of the Philippines. SO ORDERED. 22 E. Republic SUPREME Manila of the Philippines COURT FIRST DIVISION G.R. No. L-28546 July 30, 1975 VENANCIO CASTANEDA and NICETAS HENSON, petitioners, vs. PASTOR D. AGO, LOURDES YU AGO and THE COURT OF APPEALS, respondents. Quijano and Arroyo for petitioners. Jose M. Luison for respondents. CASTRO, J.: The parties in this case, except Lourdes Yu Ago, have been commuting to this Court for more than a decade. In 1955 the petitioners Venancio Castañeda and Nicetas Henson filed a replevin suit against Pastor Ago in the Court of First Instance of Manila to recover certain machineries (civil case 27251). In 1957 judgment was rendered in favor of the plaintiffs, ordering Ago to return the machineries or pay definite sums of money. Ago appealed, and on June 30, 1961 this Court, in Ago vs. Castañeda, L-14066, affirmed the judgment. After remand, the trial court issued on August 25, 1961 a writ of execution for the sum of P172,923.87. Ago moved for a stay of execution but his motion was denied, and levy was made on Ago's house and lots located in Quezon City. The sheriff then advertised them for auction sale on October 25, 1961. Ago moved to stop the auction sale, failing in which he filed a petition for certiorari with the Court of Appeals. The appellate court dismissed the petition and Ago appealed. On January 31,1966 this Court, in Ago vs. Court of Appeals, et al., L-19718, affirmed the dismissal. Ago thrice attempted to obtain a writ of preliminary injunction to restrain the sheriff from enforcing the writ of execution "to save his family house and lot;" his motions were denied, and the sheriff sold the house and lots on March 9, 1963 to the highest bidders, the petitioners Castañeda and Henson. Ago failed to redeem, and on April 17, 1964 the sheriff executed the final deed of sale in favor of the vendees Castañeda and Henson. Upon their petition, the Court of First Instance of Manila issued a writ of possession to the properties. However, on May 2, 1964 Pastor Ago, now joined by his wife, Lourdes Yu Ago, as his co-plaintiff, filed a complaint in the Court of First Instance of Quezon City (civil case Q-7986) to annul the sheriff's sale on the 23 ground that the obligation of Pastor Ago upon which judgment was rendered against him in the replevin suit was his personal obligation, and that Lourdes Yu Ago's one-half share in their conjugal residential house and lots which were levied upon and sold by the sheriff could not legally be reached for the satisfaction of the judgment. They alleged in their complaint that wife Lourdes was not a party in the replevin suit, that the judgment was rendered and the writ of execution was issued only against husband Pastor, and that wife Lourdes was not a party to her husband's venture in the logging business which failed and resulted in the replevin suit and which did not benefit the conjugal partnership. The Court of First Instance of Quezon City issued an ex parte writ of preliminary injunction restraining the petitioners, the Register of Deeds and the sheriff of Quezon City, from registering the latter's final deed of sale, from cancelling the respondents' certificates of title and issuing new ones to the petitioners and from carrying out any writ of possession. A situation thus arose where what the Manila court had ordered to be done, the Quezon City court countermanded. On November 1, 1965, however, the latter court lifted the preliminary injunction it had previously issued, and the Register of deeds of Quezon City cancelled the respondents' certificates of title and issued new ones in favor of the petitioners. But enforcement of the writ of possession was again thwarted as the Quezon City court again issued a temporary restraining order which it later lifted but then re-restored. On May 3, 1967 the court finally, and for the third time, lifted the restraining order. While the battle on the matter of the lifting and restoring of the restraining order was being fought in the Quezon City court, the Agos filed a petition for certiorari and prohibition with this Court under date of May 26, 1966, docketed as L-26116, praying for a writ of preliminary injunction to enjoin the sheriff from enforcing the writ of possession. This Court found no merit in the petition and dismissed it in a minute resolution on June 3, 1966; reconsideration was denied on July 18, 1966. The respondents then filed on August 2, 1966 a similar petition for certiorari and prohibition with the Court of Appeals (CA-G.R. 37830-R), praying for the same preliminary injunction. The Court of Appeals also dismissed the petition. The respondents then appealed to this Court (L-27140).1äwphï1.ñët We dismissed the petition in a minute resolution on February 8, 1967. The Ago spouses repaired once more to the Court of Appeals where they filed another petition for certiorari and prohibition with preliminary injunction (CA-G.R. 39438-R). The said court gave due course to the petition and granted preliminary injunction. After hearing, it rendered decision, the dispositive portion of which reads: WHEREFORE, writ of preliminary injunction from enforcement of the writ of possession on and ejectment from the one-half share in the properties involved belonging to Lourdes Yu Ago dated June 15, 1967 is made permanent pending decision on the merits in Civil Case No. Q7986 and ordering respondent Court to proceed with the trial of Civil Case No. Q-7986 on the merits without unnecessary delay. No pronouncement as to costs. Failing to obtain reconsideration, the petitioners Castañeda and Henson filed the present petition for review of the aforesaid decision. 1. We do not see how the doctrine that a court may not interfere with the orders of a co-equal court can apply in the case at bar. The Court of First Instance of Manila, which issued the writ of possession, ultimately was not interfered with by its co-equal court, the Court of First Instance of Quezon City as the latter lifted the restraining order it had previously issued against the enforcement of the Manila court's writ of possession; it is the Court of Appeals that enjoined, in part, the enforcement of the writ. 2. Invoking Comilang vs. Buendia, et al.,1 where the wife was a party in one case and the husband was a party in another case and a levy on their conjugal properties was upheld, the petitioners would have Lourdes Yu Ago similarly bound by the replevin judgment against her husband for which their conjugal properties would be answerable. The case invoked is not at par with the present case. In Comilang the actions were admittedly instituted for the protection of the common interest of the spouses; in the present case, the Agos 24 deny that their conjugal partnership benefited from the husband's business venture. 3. Relying upon Omnas vs. Rivera, 67 Phil. 419, the Court of Appeals held that a writ of possession may not issue until the claim of a third person to half-interest in the property is adversely determined, the said appellate court assuming that Lourdes Yu Ago was a "stranger" or a "third-party" to her husband. The assumption is of course obviously wrong, for, besides living with her husband Pastor, she does not claim ignorance of his business that failed, of the relevant cases in which he got embroiled, and of the auction sale made by the sheriff of their conjugal properties. Even then, the ruling in Omnas is not that a writ of possession may not issue until the claim of a third person is adversely determined, but that the writ of possession being a complement of the writ of execution, a judge with jurisdiction to issue the latter also has jurisdiction to issue the former, unless in the interval between the judicial sale and the issuance of the writ of possession, the rights of third parties to the property sold have supervened. The ruling in Omnas is clearly inapplicable in the present case, for, here, there has been no change in the ownership of the properties or of any interest therein from the time the writ of execution was issued up to the time writ of possession was issued, and even up to the present. 4. We agree with the trial court (then presided by Judge Lourdes P. San Diego) that it is much too late in the day for the respondents Agos to raise the question that part of the property is unleviable because it belongs to Lourdes Yu Ago, considering that (1) a wife is normally privy to her husband's activities; (2) the levy was made and the properties advertised for auction sale in 1961; (3) she lives in the very properties in question; (4) her husband had moved to stop the auction sale; (5) the properties were sold at auction in 1963; (6) her husband had thrice attempted to obtain a preliminary injunction to restrain the sheriff from enforcing the writ of execution; (7) the sheriff executed the deed of final sale on April 17, 1964 when Pastor failed to redeem; (8) Pastor had impliedly admitted that the conjugal properties could be levied upon by his pleas "to save his family house and lot" in his efforts to prevent execution; and (9) it was only on May 2, 1964 when he and his wife filed the complaint for annulment of the sheriff's sale upon the issue that the wife's share in the properties cannot be levied upon on the ground that she was not a party to the logging business and not a party to the replevin suit. The spouses Ago had every opportunity to raise the issue in the various proceedings hereinbefore discussed but did not; laches now effectively bars them from raising it. Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.2 5. The decision of the appellate court under review suffers from two fatal infirmities. (a) It enjoined the enforcement of the writ of possession to and ejectment from the one-half share in the properties involved belonging to Lourdes Yu Ago. This half-share is not in esse, but is merely an inchoate interest, a mere expectancy, constituting neither legal nor equitable estate, and will ripen into title when only upon liquidation and settlement there appears to be assets of the community. 3 The decision sets at naught the well-settled rule that injunction does not issue to protect a right not in esse and which may never arise.4 (b) The decision did not foresee the absurdity, or even the impossibility, of its enforcement. The Ago spouses admittedly live together in the same house5 which is conjugal property. By the Manila court's writ of possession Pastor could be ousted from the house, but the decision under review would prevent the ejectment of Lourdes. Now, which part of the house would be vacated by Pastor and which part would Lourdes continue to stay in? The absurdity does not stop here; the decision would actually separate husband and wife, prevent them from living together, and in effect divide their conjugal properties during coverture and before the dissolution of the conjugal union. 6. Despite the pendency in the trial court of the complaint for the annulment of the sheriff's sale (civil case Q7986), elementary justice demands that the petitioners, long denied the fruits of their victory in the replevin suit, must now enjoy them, for, the respondents Agos, abetted by their lawyer Jose M. Luison, have misused 25 legal remedies and prostituted the judicial process to thwart the satisfaction of the judgment, to the extended prejudice of the petitioners. The respondents, with the assistance of counsel, maneuvered for fourteen (14) years to doggedly resist execution of the judgment thru manifold tactics in and from one court to another (5 times in the Supreme Court). We condemn the attitude of the respondents and their counsel who, far from viewing courts as sanctuaries for those who seek justice, have tried to use them to subvert the very ends of justice.6 Forgetting his sacred mission as a sworn public servant and his exalted position as an officer of the court, Atty. Luison has allowed himself to become an instigator of controversy and a predator of conflict instead of a mediator for concord and a conciliator for compromise, a virtuoso of technicality in the conduct of litigation instead of a true exponent of the primacy of truth and moral justice. A counsel's assertiveness in espousing with candour and honesty his client's cause must be encouraged and is to be commended; what we do not and cannot countenance is a lawyer's insistence despite the patent futility of his client's position, as in the case at bar. It is the duty of a counsel to advise his client, ordinarily a layman to the intricacies and vagaries of the law, on the merit or lack of merit of his case. If he finds that his client's cause is defenseless, then it is his bounden duty to advise the latter to acquiesce and submit, rather than traverse the incontrovertible. A lawyer must resist the whims and caprices of his client, and temper his clients propensity to litigate. A lawyer's oath to uphold the cause of justice is superior to his duty to his client; its primacy is indisputable.7 7. In view of the private respondents' propensity to use the courts for purposes other than to seek justice, and in order to obviate further delay in the disposition of the case below which might again come up to the appellate courts but only to fail in the end, we have motu proprio examined the record of civil case Q-7986 (the mother case of the present case). We find that (a) the complaint was filed on May 2, 1964 (more than 11 years ago) but trial on the merits has not even started; (b) after the defendants Castañedas had filed their answer with a counterclaim, the plaintiffs Agos filed a supplemental complaint where they impleaded new parties-defendants; (c) after the admission of the supplemental complaint, the Agos filed a motion to admit an amended supplemental complaint, which impleads an additional new party-defendant (no action has yet been taken on this motion); (d) the defendants have not filed an answer to the admitted supplemental complaint; and (e) the last order of the Court of First Instance, dated April 20, 1974, grants an extension to the suspension of time to file answer. (Expediente, p. 815) We also find that the alleged causes of action in the complaint, supplemental complaint and amended supplemental complaint are all untenable, for the reasons hereunder stated. The Complaint Upon the first cause of action, it is alleged that the sheriff levied upon conjugal properties of the spouses Ago despite the fact that the judgment to be satisfied was personal only to Pastor Ago, and the business venture that he entered into, which resulted in the replevin suit, did not redound to the benefit of the conjugal partnership. The issue here, which is whether or not the wife's inchoate share in the conjugal property is 26 leviable, is the same issue that we have already resolved, as barred by laches, in striking down the decision of the Court of Appeals granting preliminary injunction, the dispositive portion of which was herein-before quoted. This ruling applies as well to the first cause of action of the complaint. Upon the second cause of action, the Agos allege that on January 5, 1959 the Castañedas and the sheriff, pursuant to an alias writ of seizure, seized and took possession of certain machineries, depriving the Agos of the use thereof, to their damage in the sum of P256,000 up to May 5, 1964. This second cause of action fails to state a valid cause of action for it fails to allege that the order of seizure is invalid or illegal. It is averred as a third cause of action that the sheriff's sale of the conjugal properties was irregular, illegal and unlawful because the sheriff did not require the Castañeda spouses to pay or liquidate the sum of P141,750 (the amount for which they bought the properties at the auction sale) despite the fact that there was annotated at the back of the certificates of title a mortgage of P75,000 in favor of the Philippine National Bank; moreover, the sheriff sold the properties for P141,750 despite the pendency of L-19718 where Pastor Ago contested the amount of P99,877.08 out of the judgment value of P172,923.37 in civil case 27251; and because of said acts, the Agos suffered P174,877.08 in damages. Anent this third cause of action, the sheriff was under no obligation to require payment of the purchase price in the auction sale because "when the purchaser is the judgment creditor, and no third-party claim has been filed, he need not pay the amount of the bid if it does not exceed the amount of his judgment." (Sec. 23, Rule 39, Rules of Court) The annotated mortgage in favor of the PNB is the concern of the vendees Castañedas but did not affect the sheriff's sale; the cancellation of the annotation is of no moment to the Agoo. Case L-19718 where Pastor Ago contested the sum of P99,877.08 out of the amount of the judgment was dismissed by this Court on January 31, 1966. This third cause of action, therefore, actually states no valid cause of action and is moreover barred by prior judgment. The fourth cause of action pertains to moral damages allegedly suffered by the Agos on account of the acts complained of in the preceding causes of action. As the fourth cause of action derives its life from the preceding causes of action, which, as shown, are baseless, the said fourth cause of action must necessarily fail. The Counterclaim As a counterclaim against the Agos, the Castañedas aver that the action was unfounded and as a consequence of its filing they were compelled to retain the services of counsel for not less than P7,500; that because the Agos obtained a preliminary injunction enjoining the transfer of titles and possession of the properties to the Castañedas, they were unlawfully deprived of the use of the properties from April 17, 1964, the value of such deprived use being 20% annually of their actual value; and that the filing of the unfounded action besmirched their feelings, the pecuniary worth of which is for the court to assess. The Supplemental Complaint Upon the first cause of action, it is alleged that after the filing of the complaint, the defendants, taking advantage of the dissolution of the preliminary injunction, in conspiracy and with gross bad faith and evident intent to cause damage to the plaintiffs, caused the registration of the sheriff's final deed of sale; that, to cause more damage, the defendants sold to their lawyer and his wife two of the parcels of land in question; that the purchasers acquired the properties in bad faith; that the defendants mortgaged the two other parcels to the Rizal Commercial Banking Corporation while the defendants' lawyer and his wife also mortgaged the 27 parcels bought by them to the Rizal Commercial Bank; and that the bank also acted in bad faith. The second cause of action consists of an allegation of additional damages caused by the defendants' bad faith in entering into the aforesaid agreements and transactions. The Amended Supplemental Complaint The amendment made pertains to the first cause of action of the supplemental complaint, which is, the inclusion of a paragraph averring that, still to cause damage and prejudice to the plaintiffs, Atty. & Mrs. Juan Quijano, in bad faith sold the two parcels of land they had previously bought to Eloy Ocampo who acquired them also in bad faith, while Venancio Castañeda and Nicetas Henson in bad faith sold the two other parcels to Juan Quijano (60%) and Eloy Ocampo (40%) who acquired them in bad faith and with knowledge that the properties are the subject of a pending litigation. Discussion on of The The Amended Supplemental Complaint The Supplemental Causes of Complaint Action And Assuming hypothetically as true the allegations in the first cause of action of the supplemental complaint and the amended supplemental complaint, the validity of the cause of action would depend upon the validity of the first cause of action of the original complaint, for, the Agos would suffer no transgression upon their rights of ownership and possession of the properties by reason of the agreements subsequently entered into by the Castañedas and their lawyer if the sheriff's levy and sale are valid. The reverse is also true: if the sheriff's levy and sale are invalid on the ground that the conjugal properties could not be levied upon, then the transactions would perhaps prejudice the Agos, but, we have already indicated that the issue in the first cause of action of the original complaint is barred by laches, and it must therefore follow that the first cause of action of the supplemental complaint and the amended supplemental complaint is also barred. For the same reason, the same holding applies to the remaining cause of action in the supplemental complaint and the amended supplemental complaint. ACCORDINGLY, the decision of the Court of Appeals under review is set aside. Civil case Q-7986 of the Court of First Instance of Rizal is ordered dismissed, without prejudice to the re-filing of the petitioners' counterclaim in a new and independent action. Treble costs are assessed against the spouses Pastor Ago and Lourdes Yu Ago, which shall be paid by their lawyer, Atty. Jose M. Luison. Let a copy of this decision be made a part of the personal file of Atty. Luison in the custody of the Clerk of Court. 28 F. Republic SUPREME Manila of the Philippines COURT SECOND DIVISION G.R. No. 104599 March 11, 1994 JON DE YSASI III, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (FOURTH DIVISION), CEBU CITY, and JON DE YSASI, respondents. F.B. Santiago, Nalus & Associates for petitioner. Ismael A. Serfino for private respondent. REGALADO, J.: The adage that blood is thicker than water obviously stood for naught in this case, notwithstanding the vinculum of paternity and filiation between the parties. It would indeed have been the better part of reason if herein petitioner and private respondent had reconciled their differences in an extrajudicial atmosphere of familial amity and with the grace of reciprocal concessions. Father and son opted instead for judicial intervention despite the inevitable acrimony and negative publicity. Albeit with distaste, the Court cannot proceed elsewise but to resolve their dispute with the same reasoned detachment accorded any judicial proceeding before it. The records of this case reveal that petitioner was employed by his father, herein private respondent, as farm administrator of Hacienda Manucao in Hinigaran, Negros Occidental sometime in April, 1980. Prior thereto, he was successively employed as sales manager of Triumph International (Phil.), Inc. and later as operations manager of Top Form Manufacturing (Phil.), Inc. His employment as farm administrator was on a fixed salary, with other allowances covering housing, food, light, power, telephone, gasoline, medical and dental expenses. As farm administrator, petitioner was responsible for the supervision of daily activities and operations of the sugarcane farm such as land preparation, planting, weeding, fertilizing, harvesting, dealing with third persons in all matters relating to the hacienda and attending to such other tasks as may be assigned to him by private 29 respondent. For this purpose, he lived on the farm, occupying the upper floor of the house there. Following his marriage on June 6, 1982, petitioner moved to Bacolod City with his wife and commuted to work daily. He suffered various ailments and was hospitalized on two separate occasions in June and August, 1982. In November, 1982, he underwent fistulectomy, or the surgical removal of the fistula, a deep sinuous ulcer. During his recuperation which lasted over four months, he was under the care of Dr. Patricio Tan. In June, 1983, he was confined for acute gastroenteritis and, thereafter, for infectious hepatitis from December, 1983 to January, 1984. During the entire periods of petitioner's illnesses, private respondent took care of his medical expenses and petitioner continued to receive compensation. However, in April, 1984, without due notice, private respondent ceased to pay the latter's salary. Petitioner made oral and written demands for an explanation for the sudden withholding of his salary from Atty. Apolonio Sumbingco, private respondent's auditor and legal adviser, as well as for the remittance of his salary. Both demands, however, were not acted upon. Petitioner then filed an action with the National Labor Relations Commission (NLRC, for brevity), Regional Arbitration Branch No. VI, Bacolod City, on October 17, 1984, docketed therein as RAB Case No. 0452-84, against private respondent for illegal dismissal with prayer for reinstatement without loss of seniority rights and payment of full back wages, thirteenth month pay for 1983, consequential, moral and exemplary damages, as well as attorney's fees. On July 31, 1991, said complaint for illegal dismissal was dismissed by the NLRC, 1 holding that petitioner abandoned his work and that the termination of his employment was for a valid cause, but ordering private respondent to pay petitioner the amount of P5,000.00 as penalty for his failure to serve notice of said termination of employment to the Department of Labor and Employment as required by Batas Pambansa Blg. 130 and consonant with this Court's ruling in Wenphil Corporation vs. National Labor Relations Commission, et al.2 On appeal to the Fourth Division of the NLRC, Cebu City, said decision was affirmed in toto.3 His motion for reconsideration4 of said decision having been denied for lack of merit,5 petitioner filed this petition presenting the following issues for resolution: (1) whether or not the petitioner was illegally dismissed; (2) whether or not he is entitled to reinstatement, payment of back wages, thirteenth month pay and other benefits; and (3) whether or not he is entitled to payment of moral and exemplary damages and attorney's fees because of illegal dismissal. The discussion of these issues will necessarily subsume the corollary questions presented by private respondent, such as the exact date when petitioner ceased to function as farm administrator, the character of the pecuniary amounts received by petitioner from private respondent, that is, whether the same are in the nature of salaries or pensions, and whether or not there was abandonment by petitioner of his functions as farm administrator. In his manifestation dated September 14, 1992, the Solicitor General recommended a modification of the decision of herein public respondent sustaining the findings and conclusions of the Executive Labor Arbiter in RAB Case No. 0452-84,6 for which reason the NLRC was required to submit its own comment on the petition. In compliance with the Court's resolution of November 16, 1992,7 NLRC filed its comment on February 12, 1992 largely reiterating its earlier position in support of the findings of the Executive Labor Arbiter. 8 Before proceeding with a discussion of the issues, the observation of the labor arbiter is worth noting: This case is truly unique. What makes this case unique is the fact that because of the special relationship of the parties and the nature of the action involved, this case could very well go down (in) the annals of the Commission as perhaps the first of its kind. For this case is an action filed by an only son, his father's namesake, the only child and therefore the only heir against his own father.9 30 Additionally, the Solicitor General remarked: . . . After an exhaustive reading of the records, two (2) observations were noted that may justify why this labor case deserves special considerations. First, most of the complaints that petitioner and private respondent had with each other, were personal matters affecting father and son relationship. And secondly, if any of the complaints pertain to their work, they allow their personal relationship to come in the way.10 I. Petitioner maintains that his dismissal from employment was illegal because of want of just cause therefor and non-observance of the requirements of due process. He also charges the NLRC with grave abuse of discretion in relying upon the findings of the executive labor arbiter who decided the case but did not conduct the hearings thereof. Private respondent, in refutation, avers that there was abandonment by petitioner of his functions as farm administrator, thereby arming private respondent with a ground to terminate his employment at Hacienda Manucao. It is also contended that it is wrong for petitioner to question the factual findings of the executive labor arbiter and the NLRC as only questions of law may be appealed for resolution by this Court. Furthermore, in seeking the dismissal of the instant petition, private respondent faults herein petitioner for failure to refer to the corresponding pages of the transcripts of stenographic notes, erroneously citing Sections 15(d) and 16(d), Rule 44 (should be Section 16[c] and [d], Rule 46 and Section 1[g], Rule 50) of the Rules of Court, which provide that want of page references to the records is a ground for dismissal of an appeal. Prefatorily, we take advertence of the provisions of Article 221 of the Labor Code that technical rules of evidence prevailing in courts of law and equity shall not be controlling, and that every and all reasonable means to speedily and objectively ascertain the facts in each case shall be availed of, without regard to technicalities of law or procedure in the interest of due process. It is settled that it is not procedurally objectionable for the decision in a case to be rendered by a judge, or a labor arbiter for that matter, other than the one who conducted the hearing. The fact that the judge who heard the case was not the judge who penned the decision does not impair the validity of the judgment, 11 provided that he draws up his decision and resolution with due care and makes certain that they truly and accurately reflect conclusions and final dispositions on the bases of the facts of and evidence submitted in the case. 12 Thus, the mere fact that the case was initially assigned to Labor Arbiter Ricardo T. Octavio, who conducted the hearings therein from December 5, 1984 to July 11, 1985, and was later transferred to Executive Labor Arbiter Oscar S. Uy, who eventually decided the case, presents no procedural infirmity, especially considering that there is a presumption of regularity in the performance of a public officer's functions, 13 which petitioner has not successfully rebutted. We are constrained to heed the underlying policy in the Labor Code relaxing the application of technical rules of procedure in labor cases in the interest of due process, ever mindful of the long-standing legal precept that rules of procedure must be interpreted to help secure, not defeat, justice. For this reason, we cannot indulge private respondent in his tendency to nitpick on trivial technicalities to boost his arguments. The strength of one's position cannot be hinged on mere procedural niceties but on solid bases in law and jurisprudence. The fundamental guarantees of security of tenure and due process dictate that no worker shall be dismissed except for just and authorized cause provided by law and after due process.14 Article 282 of the Labor Code enumerates the causes for which an employer may validly terminate an employment, to wit: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) commission of a crime or offense by the employee against the person of his employer or 31 any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing. The employer may also terminate the services of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking, unless the closing is for the purpose of circumventing the pertinent provisions of the Labor Code, by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof, with due entitlement to the corresponding separation pay rates provided by law.15Suffering from a disease by reason whereof the continued employment of the employee is prohibited by law or is prejudicial to his and his co-employee's health, is also a ground for termination of his services provided he receives the prescribed separation pay.16 On the other hand, it is well-settled that abandonment by an employee of his work authorizes the employer to effect the former's dismissal from employment.17 After a careful review of the records of this case, we find that public respondent gravely erred in affirming the decision of the executive labor arbiter holding that petitioner abandoned his employment and was not illegally dismissed from such employment. For want of substantial bases, in fact or in law, we cannot give the stamp of finality and conclusiveness normally accorded to the factual findings of an administrative agency, such as herein public respondent NLRC,18 as even decisions of administrative agencies which are declared "final" by law are not exempt from judicial review when so warranted. 19 The following perceptive disquisitions of the Solicitor General on this point deserve acceptance: It is submitted that the absences of petitioner in his work from October 1982 to December 1982, cannot be construed as abandonment of work because he has a justifiable excuse. Petitioner was suffering from perennial abscess in the peri-anal around the anus and fistula under the medical attention of Dr. Patricio Tan of Riverside Medical Center, Inc., Bacolod City (Tsn, Vol. III, Dr. Tan, February 19, 1986 at 20-44). This fact (was) duly communicated to private respondent by medical bills sent to Hacienda Manucao (Tsn, Vol. III, Dr. Tan, January 22, 1987 at 49-50). During the period of his illness and recovery, petitioner stayed in Bacolod City upon the instruction(s) of private respondent to recuperate thereat and to handle only administrative matters of the hacienda in that city. As a manager, petitioner is not really obliged to live and stay 24 hours a day inside Hacienda Manucao. xxx xxx xxx After evaluating the evidence within the context of the special circumstances involved and basic human experience, petitioner's illness and strained family relation with respondent Jon de Ysasi II may be considered as justifiable reason for petitioner Jon de Ysasi III's absence from work during the period of October 1982 to December 1982. In any event, such absence does not warrant outright dismissal without notice and hearing. xxx xxx xxx The elements of abandonment as a ground for dismissal of an employee are as follows: (1) failure to report for work or absence without valid or justifiable reason; and (2) clear intention to sever the employer-employee tie (Samson Alcantara, Reviewer in Labor and Social Legislation, 1989 edition, p. 133). 32 This Honorable Court, in several cases, illustrates what constitute abandonment. In Dagupan Bus Company v. NLRC (191 SCRA 328), the Court rules that for abandonment to arise, there must be a concurrence of the intention to abandon and some overt act from which it may be inferred that the employee has no more interest to work. Similarly, in Nueva Ecija I Electric Cooperative, Inc. v. NLRC (184 SCRA 25), for abandonment to constitute a valid cause for termination of employment, there must be a deliberate, unjustified refusal of the employee to resume his employment. . . Mere absence is not sufficient; it must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. There are significant indications in this case, that there is no abandonment. First, petitioner's absence and his decision to leave his residence inside Hacienda Manucao, is justified by his illness and strained family relations. Second he has some medical certificates to show his frail health. Third, once able to work, petitioner wrote a letter (Annex "J") informing private respondent of his intention to assume again his employment. Last, but not the least, he at once instituted a complaint for illegal dismissal when he realized he was unjustly dismissed. All these are indications that petitioner had no intention to abandon his employment.20 The records show that the parties herein do not dispute the fact of petitioner's confinement in the hospital for his various afflictions which required medical treatment. Neither can it be denied that private respondent was well aware of petitioner's state of health as the former admittedly shouldered part of the medical and hospital bills and even advised the latter to stay in Bacolod City until he was fit to work again. The disagreement as to whether or not petitioner's ailments were so serious as to necessitate hospitalization and corresponding periods for recuperation is beside the point. The fact remains that on account of said illnesses, the details of which were amply substantiated by the attending physician,21 and as the records are bereft of any suggestion of malingering on the part of petitioner, there was justifiable cause for petitioner's absence from work. We repeat, it is clear, deliberate and unjustified refusal to resume employment and not mere absence that is required to constitute abandonment as a valid ground for termination of employment.22 With his position as farm administrator of Hacienda Manucao, petitioner unmistakably may be classified as a managerial employee23 to whom the law grants an amount of discretion in the discharge of his duties. This is why when petitioner stated that "I assigned myself where I want to go,"24 he was simply being candid about what he could do within the sphere of his authority. His duties as farm administrator did not strictly require him to keep regular hours or to be at the office premises at all times, or to be subjected to specific control from his employer in every aspect of his work. What is essential only is that he runs the farm as efficiently and effectively as possible and, while petitioner may definitely not qualify as a model employee, in this regard he proved to be quite successful, as there was at least a showing of increased production during the time that petitioner was in charge of farm operations. If, as private respondent contends, he had no control over petitioner during the years 1983 to 1984, this is because that was the period when petitioner was recuperating from illness and on account of which his attendance and direct involvement in farm operations were irregular and minimal, hence the supervision and control exercisable by private respondent as employer was necessarily limited. It goes without saying that the control contemplated refers only to matters relating to his functions as farm administrator and could not extend to petitioner's personal affairs and activities. While it was taken for granted that for purposes of discharging his duties as farm administrator, petitioner would be staying at the house in the farm, there really was no explicit contractual stipulation (as there was no formal employment contract to begin with) requiring him to stay therein for the duration of his employment or that any transfer of residence would justify the termination of his employment. That petitioner changed his residence should not be taken against him, as this is undeniably among his basic rights, nor can such fact of transfer of residence per se be a valid ground to terminate an employer-employee relationship. Private respondent, in his pleadings, asserted that as he was yet uncertain of his son's intention of returning to work after his confinement in the hospital, he kept petitioner on the payroll, reported him as an employee of 33 the haciendafor social security purposes, and paid his salaries and benefits with the mandated deductions therefrom until the end of December, 1982. It was only in January, 1983 when he became convinced that petitioner would no longer return to work that he considered the latter to have abandoned his work and, for this reason, no longer listed him as an employee. According to private respondent, whatever amount of money was given to petitioner from that time until April, 1984 was in the nature of a pension or an allowance or mere gratuitous doles from a father to a son, and not salaries as, in fact, none of the usual deductions were made therefrom. It was only in April, 1984 that private respondent completely stopped giving said pension or allowance when he was angered by what he heard petitioner had been saying about sending him to jail. Private respondent capitalizes on the testimony of one Manolo Gomez taken on oral deposition regarding petitioner's alleged statement to him, "(h)e quemado los (p)ue(n)tes de Manucao" ("I have burned my bridges with Manucao") as expressive of petitioner's intention to abandon his job. In addition to insinuations of sinister motives on the part of petitioner in working at the farm and thereafter abandoning the job upon accomplishment of his objectives, private respondent takes the novel position that the agreement to support his son after the latter abandoned the administration of the farm legally converts the initial abandonment to implied voluntary resignation.25 As earlier mentioned, petitioner ripostes that private respondent undoubtedly knew about petitioner's illness and even paid for his hospital and other medical bills. The assertion regarding abandonment of work, petitioner argues, is further belied by his continued performance of various services related to the operations of the farm from May to the last quarter of 1983, his persistent inquiries from his father's accountant and legal adviser about the reason why his pension or allowance was discontinued since April, 1984, and his indication of having recovered and his willingness and capability to resume his work at the farm as expressed in a letter dated September 14, 1984.26 With these, petitioner contends that it is immaterial how the monthly pecuniary amounts are designated, whether as salary, pension or allowance, with or without deductions, as he was entitled thereto in view of his continued service as farm administrator.27 To stress what was earlier mentioned, in order that a finding of abandonment may justly be made there must be a concurrence of two elements, viz.: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. Such intent we find dismally wanting in this case. It will be recalled that private respondent himself admitted being unsure of his son's plans of returning to work. The absence of petitioner from work since mid-1982, prolonged though it may have been, was not without valid causes of which private respondent had full knowledge. As to what convinced or led him to believe that petitioner was no longer returning to work, private respondent neither explains nor substantiates by any reasonable basis how he arrived at such a conclusion. Moreover, private respondent's claim of abandonment cannot be given credence as even after January, 1983, when private respondent supposedly "became convinced" that petitioner would no longer work at the farm, the latter continued to perform services directly required by his position as farm administrator. These are duly and correspondingly evidenced by such acts as picking up some farm machinery/equipment from G.A. Machineries, Inc.,28 claiming and paying for additional farm equipment and machinery shipped by said firm from Manila to Bacolod through Zip Forwarders,29 getting the payment of the additional cash advances for molasses for crop year 1983-1984 from Agrotex Commodities, Inc.,30 and remitting to private respondent through Atty. Sumbingco the sums collected along with receipts for medicine and oil.31 It will be observed that all of these chores, which petitioner took care of, relate to the normal activities and operations of the farm. True, it is a father's prerogative to request or even command his child to run errands for him. In the present case, however, considering the nature of these transactions, as well as the property values and monetary sums involved, it is unlikely that private respondent would leave the matter to just 34 anyone. Prudence dictates that these matters be handled by someone who can be trusted or at least be held accountable therefor, and who is familiar with the terms, specifications and other details relative thereto, such as an employee. If indeed petitioner had abandoned his job or was considered to have done so by private respondent, it would be awkward, or even out of place, to expect or to oblige petitioner to concern himself with matters relating to or expected of him with respect to what would then be his past and terminated employment. It is hard to imagine what further authority an employer can have over a dismissed employee so as to compel him to continue to perform work-related tasks: It is also significant that the special power of by private respondent on June 26, 1980 in favor of petitioner, specifically stating — attorney32 executed xxx xxx xxx That I, JON de YSASI, Filipino, of legal age, married, and a resident of Hda. Manucao, hereinafter called and referred to as PRINCIPAL, am a sugarcane planter, BISCOM Mill District, and a duly accredited planter-member of the BINALBAGAN-ISABELA PLANTERS' ASSOCIATION, INC.; That as such planter-member of BIPA, I have check/checks with BIPA representing payment for all checks and papers to which I am entitled to (sic) as such planter-member; That I have named, appointed and constituted as by these presents I HEREBY NAME, APPOINT AND CONSTITUTE as my true and lawful ATTORNEY-IN-FACT JON de YSASI III whose specimen signature is hereunder affixed, TO GET FOR ME and in my name, place and stead, my check/checks aforementioned, said ATTORNEY-IN-FACT being herein given the power and authority to sign for me and in my name, place and stead, the receipt or receipts or payroll for the said check/checks. PROVIDED, HOWEVER, that my said ATTORNEY-IN-FACT cannot cash the said check/checks, but to turn the same over to me for my proper disposition. That I HEREBY RATIFY AND CONFIRM the acts Attorney-in-Fact in getting the said check/checks and signing the receipts therefor. of my That I further request that my said check/checks be made a "CROSSED CHECK". xxx xxx xxx remained in force even after petitioner's employment was supposed to have been terminated by reason of abandonment. Furthermore, petitioner's numerous requests for an explanation regarding the stoppage of his salaries and benefits,33 the issuance of withholding tax reports,34 as well as correspondence reporting his full recovery and readiness to go back to work,35 and, specifically, his filing of the complaint for illegal dismissal are hardly the acts of one who has abandoned his work. We are likewise not impressed by the deposition of Manolo Gomez, as witness for private respondent, ascribing statements to petitioner supposedly indicative of the latter's intention to abandon his work. We perceive the irregularity in the taking of such deposition without the presence of petitioner's counsel, and the failure of private respondent to serve reasonably advance notice of its taking to said counsel, thereby foreclosing his opportunity to cross-examine the deponent. Private respondent also failed to serve notice thereof on the Regional Arbitration Branch No. VI of the NLRC, as certified to by Administrative Assistant Celestina G. Ovejera of said office.36 Fair play dictates that at such an important stage of the proceedings, which involves the taking of 35 testimony, both parties must be afforded equal opportunity to examine and cross-examine a witness. As to the monthly monetary amounts given to petitioner, whether denominated as salary, pension, allowance or ex gratia handout, there is no question as to petitioner's entitlement thereto inasmuch as he continued to perform services in his capacity as farm administrator. The change in description of said amounts contained in the pay slips or in the receipts prepared by private respondent cannot be deemed to be determinative of petitioner's employment status in view of the peculiar circumstances above set out. Besides, if such amounts were truly in the nature of allowances given by a parent out of concern for his child's welfare, it is rather unusual that receipts therefor37 should be necessary and required as if they were ordinary business expenditures. Neither can we subscribe to private respondent's theory that petitioner's alleged abandonment was converted into an implied voluntary resignation on account of the father's agreement to support his son after the latter abandoned his work. As we have determined that no abandonment took place in this case, the monthly sums received by petitioner, regardless of designation, were in consideration for services rendered emanating from an employer-employee relationship and were not of a character that can qualify them as mere civil support given out of parental duty and solicitude. We are also hard put to imagine how abandonment can be impliedly converted into a voluntary resignation without any positive act on the part of the employee conveying a desire to terminate his employment. The very concept of resignation as a ground for termination by the employee of his employment38 does not square with the elements constitutive of abandonment. On procedural considerations, petitioner posits that there was a violation by private respondent of the due process requirements under the Labor Code for want of notice and hearing. 39 Private respondent, in opposition, argues that Section 2, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code applies only to cases where the employer seeks to terminate the services of an employee on any of the grounds enumerated under Article 282 of the Labor Code, but not to the situation obtaining in this case where private respondent did not dismiss petitioner on any ground since it was petitioner who allegedly abandoned his employment.40 The due process requirements of notice and hearing applicable to labor cases are set out in Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code in this wise: Sec. 2. Notice of Dismissal. — Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission(s) constituting the grounds for his dismissal. In cases of abandonment of work, notice shall be served at the worker's last known address. xxx xxx xxx Sec. 5. Answer and hearing. — The worker may answer the allegations as stated against him in the notice of dismissal within a reasonable period from receipt of such notice. The employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires. Sec. 6. Decision to dismiss. — The employer shall immediately notify a worker in writing of a decision to dismiss him stating clearly the reasons therefor. Sec. 7. Right to contest dismissal. — Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the Regional Branch of the Commission. xxx xxx xxx 36 Sec. 11. Report of dismissal. — The employer shall submit a monthly report to the Regional Office having jurisdiction over the place of work at all dismissals effected by him during the month, specifying therein the names of the dismissed workers, the reasons for their dismissal, the dates of commencement and termination of employment, the positions last held by them and such other information as may be required by the Ministry for policy guidance and statistical purposes. Private respondent's argument is without merit as there can be no question that petitioner was denied his right to due process since he was never given any notice about his impending dismissal and the grounds therefor, much less a chance to be heard. Even as private respondent controverts the applicability of the mandatory twin requirements of procedural due process in this particular case, he in effect admits that no notice was served by him on petitioner. This fact is corroborated by the certification issued on September 5, 1984 by the Regional Director for Region VI of the Department of Labor that no notice of termination of the employment of petitioner was submitted thereto.41 Granting arguendo that there was abandonment in this case, it nonetheless cannot be denied that notice still had to be served upon the employee sought to be dismissed, as the second sentence of Section 2 of the pertinent implementing rules explicitly requires service thereof at the employee's last known address, by way of substantial compliance. While it is conceded that it is the employer's prerogative to terminate an employee, especially when there is just cause therefor, the requirements of due process cannot be lightly taken. The law does not countenance the arbitrary exercise of such a power or prerogative when it has the effect of undermining the fundamental guarantee of security of tenure in favor of the employee.42 On the executive labor arbiter's misplaced reliance on the Wenphil case, the Solicitor General rejoins as follows: The Labor Arbiter held thus: While we are in full agreement with the respondent as to his defense of implied resignation and/or abandonment, records somehow showed that he failed to notify the Department of Labor and Employment for his sons' (sic)/complainants' (sic) aba(n)donment as required by BP 130. And for this failure, the other requisite for a valid termination by an employer was not complied with. This however, would not work to invalidate the otherwise (sic) existence of a valid cause for dismissal. The validity of the cause of dismissal must be upheld at all times provided however that sanctions must be imposed on the respondent for his failure to observe the notice on due process requirement. (Wenphil Corp. v. NLRC, G.R. No. 80587). (Decision Labor Arbiter, at 11-12, Annex "C" Petition), . . . This is thus a very different case from Wenphil Corporation v. NLRC, 170 SCRA 69. In Wenphil, the rule applied to the facts is: once an employee is dismissed for just cause, he must not be rewarded re-employment and backwages for failure of his employer to observe procedural due process. The public policy behind this is that, it may encourage the employee to do even worse and render a mockery of the rules of discipline required to be observed. However, the employer must be penalized for his infraction of due process. In the present case, however, not only was petitioner dismissed without due process, but his dismissal is without just cause. Petitioner did not abandon his employment because he has a justifiable excuse.43 II. Petitioner avers that the executive labor arbiter erred in disregarding the mandatory provisions of Article 279 of the Labor Code which entitles an illegally dismissed employee to reinstatement and back wages and, instead, affirmed the imposition of the penalty of P5,000.00 on private respondent for violation of the due process requirements. Private respondent, for his part, maintains that there was error in imposing the fine 37 because that penalty contemplates the failure to submit the employer's report on dismissed employees to the DOLE regional office, as required under Section 5 (now, Section 11), Rule XIV of the implementing rules, and not the failure to serve notice upon the employee sought to be dismissed by the employer. Both the Constitution and the Labor Code enunciate in no uncertain terms the right of every worker to security of tenure.44 To give teeth to this constitutional and statutory mandates, the Labor Code spells out the relief available to an employee in case of its denial: Art. 279. Security of Tenure. — In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits of their monetary equivalent computed from the time his compensation was withheld from him up to the time of actual reinstatement. Clearly, therefore, an employee is entitled to reinstatement with full back wages in the absence of just cause for dismissal.45 The Court, however, on numerous occasions has tempered the rigid application of said provision of the Labor Code, recognizing that in some cases certain events may have transpired as would militate against the practicability of granting the relief thereunder provided, and declares that where there are strained relations between the employer and the employee, payment of back wages and severance pay may be awarded instead of reinstatement,46 and more particularly when managerial employees are concerned.47 Thus, where reinstatement is no longer possible, it is therefore appropriate that the dismissed employee be given his fair and just share of what the law accords him.48 We note with favor and give our imprimatur to the Solicitor General's ratiocination, to wit: As a general rule, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and to his backwages computed from the time his compensation was withheld up to the time of his reinstatement. (Morales vs. NLRC, 188 SCRA 295). But in Pacific Cement Company, Inc. vs. NLRC, 173 SCRA 192, this Honorable Court held that when it comes to reinstatement, differences should be made between managers and the ordinary workingmen. The Court concluded that a company which no longer trusts its managers cannot operate freely in a competitive and profitable manner. The NLRC should know the difference between managers and ordinary workingmen. It cannot imprudently order the reinstatement of managers with the same ease and liberality as that of rank and file workers who had been terminated. Similarly, a reinstatement may not be appropriate or feasible in case of antipathy or antagonism between the parties (Morales, vs. NLRC, 188 SCRA 295). In the present case, it is submitted that petitioner should not be reinstated as farm administrator of Hacienda Manucao. The present relationship of petitioner and private respondent (is) so strained that a harmonious and peaceful employee-employer relationship is hardly possible.49 III. Finally, petitioner insists on an award of moral damages, arguing that his dismissal from employment was attended by bad faith or fraud, or constituted oppression, or was contrary to morals, good customs or public policy. He further prays for exemplary damages to serve as a deterrent against similar acts of unjust dismissal by other employers. Moral damages, under Article 2217 of the Civil Code, may be awarded to compensate one for diverse injuries such as mental anguish, besmirched reputation, wounded feelings, and social humiliation, provided that such injuries spring from a wrongful act or omission of the defendant which was the proximate cause thereof.50 Exemplary damages, under Article 2229, are imposed by way of example or correction for the public 38 good, in addition to moral, temperate, liquidated or compensatory damages. They are not recoverable as a matter of right, it being left to the court to decide whether or not they should be adjudicated. 51 We are well aware of the Court's rulings in a number of cases in the past allowing recovery of moral damages where the dismissal of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy, 52 and of exemplary damages if the dismissal was effected in a wanton, oppressive or malevolent manner.53 We do not feel, however, that an award of the damages prayed for in this petition would be proper even if, seemingly, the facts of the case justify their allowance. In the aforestated cases of illegal dismissal where moral and exemplary damages were awarded, the dismissed employees were genuinely without fault and were undoubtedly victims of the erring employers' capricious exercise of power. In the present case, we find that both petitioner and private respondent can equally be faulted for fanning the flames which gave rise to and ultimately aggravated this controversy, instead of sincerely negotiating a peaceful settlement of their disparate claims. The records reveal how their actuations seethed with mutual antagonism and the undeniable enmity between them negates the likelihood that either of them acted in good faith. It is apparent that each one has a cause for damages against the other. For this reason, we hold that no moral or exemplary damages can rightfully be awarded to petitioner. On this score, we are once again persuaded by the validity of the following recommendation of the Solicitor General: The Labor Arbiter's decision in RAB Case No. 0452-84 should be modified. There was no voluntary abandonment in this case because petitioner has a justifiable excuse for his absence, or such absence does not warrant outright dismissal without notice and hearing. Private respondent, therefore, is guilty of illegal dismissal. He should be ordered to pay backwages for a period not exceeding three years from date of dismissal. And in lieu of reinstatement, petitioner may be paid separation pay equivalent to one (1) month('s) salary for every year of service, a fraction of six months being considered as one (1) year in accordance with recent jurisprudence (Tan, Jr. vs. NLRC, 183 SCRA 651). But all claims for damages should be dismissed, for both parties are equally at fault.54 The conduct of the respective counsel of the parties, as revealed by the records, sorely disappoints the Court and invites reproof. Both counsel may well be reminded that their ethical duty as lawyers to represent their clients with zeal55 goes beyond merely presenting their clients' respective causes in court. It is just as much their responsibility, if not more importantly, to exert all reasonable efforts to smooth over legal conflicts, preferably out of court and especially in consideration of the direct and immediate consanguineous ties between their clients. Once again, we reiterate that the useful function of a lawyer is not only to conduct litigation but to avoid it whenever possible by advising settlement or withholding suit. He is often called upon less for dramatic forensic exploits than for wise counsel in every phase of life. He should be a mediator for concord and a conciliator for compromise, rather than a virtuoso of technicality in the conduct of litigation. 56 Rule 1.04 of the Code of Professional Responsibility explicitly provides that "(a) lawyer shall encourage his client to avoid, end or settle the controversy if it will admit of a fair settlement." On this point, we find that both counsel herein fell short of what was expected of them, despite their avowed duties as officers of the court. The records do not show that they took pains to initiate steps geared toward effecting a rapprochement between their clients. On the contrary, their acerbic and protracted exchanges could not but have exacerbated the situation even as they may have found favor in the equally hostile eyes of their respective clients. In the same manner, we find that the labor arbiter who handled this regrettable case has been less than faithful to the letter and spirit of the Labor Code mandating that a labor arbiter "shall exert all efforts towards the amicable settlement of a labor dispute within his jurisdiction."57 If he ever did so, or at least entertained the 39 thought, the copious records of the proceedings in this controversy are barren of any reflection of the same. One final word. This is one decision we do not particularly relish having been obliged to make. The task of resolving cases involving disputes among members of a family leaves a bad taste in the mouth and an aversion in the mind, for no truly meaningful and enduring resolution is really achieved in such situations. While we are convinced that we have adjudicated the legal issues herein squarely on the bases of law and jurisprudence, sans sentimentality, we are saddened by the thought that we may have failed to bring about the reconciliation of the father and son who figured as parties to this dispute, and that our adherence here to law and duty may unwittingly contribute to the breaking, instead of the strengthening, of familial bonds. In fine, neither of the parties herein actually emerges victorious. It is the Court's earnest hope, therefore, that with the impartial exposition and extended explanation of their respective rights in this decision, the parties may eventually see their way clear to an ultimate resolution of their differences on more convivial terms. WHEREFORE, the decision of respondent National Labor Relations Commission is hereby SET ASIDE. Private respondent is ORDERED to pay petitioner back wages for a period not exceeding three (3) years, without qualification or deduction,58 and, in lieu of reinstatement, separation pay equivalent to one (1) month for every year of service, a fraction of six (6) months being considered as one (1) whole year. SO ORDERED. 40 G. [G.R. No. 125766. October 19, 1998] FELICIDAD L. ORONCE and ROSITA L. FLAMINIANO, petitioners, vs. HON. COURT OF APPEALS and PRICILIANO B. GONZALES DEVELOPMENT CORPORATION, respondents. DECISION ROMERO, J.: The issue of whether or not a Metropolitan or Municipal Trial Court may resolve the issue of ownership of the property involved in an unlawful detainer case has been discussed by this Court in a number of cases, the more recent of which is that of Hilario v. Court of Appeals.[1] Jurisprudence on the matter has in fact been reflected in the 1997 Rules of Civil Procedure under Rule 70, to wit: SEC. 16. Resolving defense of ownership. When the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. (4a) These developments in the law notwithstanding, there remains some misconceptions on the issue of jurisdiction of inferior courts in ejectment cases where ownership is raised as a defense that the Court deems proper to clarify in this petition. Private respondent Priciliano B. Gonzales Development Corporation was the registered owner of a parcel of land with an area of 2,000 square meters.The land with improvements, covered by Transfer Certificate of Title No. RT-54556 (383917), is situated at No. 52 Gilmore Street, New Manila, Quezon City. In June 1988, private respondent obtained a four million peso - (P4,000,000.00) loan from the China Banking Corporation. To guarantee payment of the loan, private respondent mortgaged the Gilmore property and all its improvements to said bank. Due to irregular payment of amortization, interests and penalties on the loan accumulated through the years. On April 13, 1992, private respondent, through its president, Antonio B. Gonzales, signed and executed a Deed of Sale with Assumption of Mortgage covering the Gilmore property and its improvements, in favor of petitioners Rosita Flaminiano and Felicidad L. Oronce.[2] The deed, which states that the sale was in consideration of the sum of P5,400,000.00,[3] provided inter alia that x x x the VENDOR (PBGDC) also guarantees the right of the VENDEES (petitioners) to the possession of the 41 property subject of this contract without the need of judicial action; and possession of said premises shall be delivered to the VENDEES by the VENDOR at the expiration of one (1) year from the date of the signing and execution of this Deed of Sale with Assumption of Mortgage. On the other hand, petitioners bound themselves to pay private respondents indebtedness with China Banking Corporation. In fulfillment of the terms and conditions embodied in the Deed of Sale with Assumption of Mortgage, petitioners paid private respondents indebtedness with the bank. However, private respondent reneged on its obligation to deliver possession of the premises to petitioners upon the expiration of the one-year period from April 13, 1992. Almost six months later since the execution of the instrument or on October 2, 1992, petitioners caused the registration of the Deed of Sale with Assumption of Mortgage with the Register of Deeds. Simultaneously, they obtained a new title, TCT No. 67990, consistent with the fact that they are the new owners of the property.[4] Sometime in July 1993, they paid the real estate taxes on the property for which they were issued Tax Declarations Nos. C-061-02815 and C-061-02816.[5] On November 12, 1993, petitioners sent private respondent a demand letter asking it to vacate the premises. Said letter, just like three other consecutive notices sent through the Quezon City post office, was unclaimed. Hence, on April 11, 1994, petitioners filed before the Metropolitan Trial Court of Quezon City, a complaint for unlawful detainer against private respondent. The complaint, docketed as Civil Case No. 8638 was raffled to Branch 41. Petitioners alleged that by virtue of the Deed of Sale with Assumption of Mortgage, they acquired from private respondent the Gilmore property and its improvements, for which reason they were issued TCT No. 67990. However, they added, in violation of the terms of that document, specifically Sec. 3 (c) thereof, private respondent refused to surrender possession of the premises. Consequently, they demanded that private respondent vacate the premises through notices sent by registered mail that were, however, returned to them unclaimed. In its answer to the complaint, private respondent raised the issue of ownership over the property. It impugned petitioners right to eject, alleging that petitioners had no cause of action against it because it was merely a mortgagee of the property. It argued that when the parties executed the Deed of Sale with Assumption of Mortgage, its real intention was to forge an equitable mortgage and not a sale. It pointed out three circumstances indicative of an equitable mortgage, namely: inadequacy of the purchase price, continued possession by private respondent of the premises, and petitioners retention of a portion of the purchase price. During the preliminary conference on the case, the parties agreed to stipulate on the following: (a) the existence and due execution of the Deed of Sale with Assumption of Mortgage, and (b) the issue of whether or not the premises in litis are being unlawfully detained by private respondent.[6] On March 24, 1995, the MTC[7] decided the case in favor of petitioners. It ruled that petitioners are the owners of the Gilmore property on account of the following pieces of evidence: (a) TCT No. 67990; (b) petitioners payment to the China Banking Corporation of P8,500,000.00, the amount of the mortgage entered into between private respondent and said bank; (c) payment of real estate taxes for 1993, and (d) Tax Declaration No. 02816 in petitioners names. The MTC further held that private respondents possession of the premises was merely tolerated by petitioners and because it refused to vacate the premises despite demand to do so, then its possession of the same premises had become illegal. Thus, the MTC decreed as follows: WHEREFORE, premises considered, judgment is hereby rendered ordering defendant and all persons claiming rights under it to vacate the premises-in-litis located at No. 52 Gilmore St., New Manila, Quezon City, and to peacefully surrender possession thereof to the plaintiffs; to pay plaintiffs the sum of P20,000.00 a month as compensation for the unjust occupation of the same from April 11, 1994 (the date of filing of this case) until defendant fully vacates the said premises; to pay plaintiffs the amount of P20,000.00 as and for attorneys fees plus costs of suit. Counterclaim is dismissed for lack of merit. 42 SO ORDERED.[8] On April 25, 1995, private respondent interposed an appeal to the Regional Trial Court, Branch 219, of Quezon City that docketed it as Civil Case No. Q-95-23697. Private respondent stressed in its appeal that it was not unlawfully withholding possession of the premises from petitioners because the latters basis for evicting it was the Deed of Sale with Assumption of Mortgage that did not reflect the true intention of the parties to enter into an equitable mortgage. Clearly in pursuance of that allegation, private respondent filed a motion questioning the jurisdiction of the RTC to entertain its appeal. On the other hand, petitioners filed a motion for the immediate execution of the appealed decision. The RTC granted the motion on September 21, 1995 and the corresponding writ of execution was issued on September 25, 1995. The following day, the sheriff served upon private respondent the writ of execution and a notice to vacate the premises within five (5) days from receipt thereof. Meanwhile, during the pendency of its appeal, private respondent filed an action for reformation of instrument with the RTC. It was docketed as Civil Case No. Q-95-24927 and assigned to Branch 227. In a resolution dated December 7, 1995, RTC Branch 219 asserted jurisdiction over the appeal. It ruled that the issue of whether or not an action for reformation of a deed of sale and an unlawful detainer case can proceed independently of each other has been resolved by this Court in Judith v. Abragan.[9] In said case, this Court held that the fact that defendants had previously filed a separate action for the reformation of a deed of absolute sale into one of pacto de retro sale or equitable mortgage in the same Court of First Instance is not a valid reason to frustrate the summary remedy of ejectment afforded by law to the plaintiff. On December 12, 1995, private respondent filed in the Court of Appeals a petition for certiorari with prayer for a temporary restraining order and writ of preliminary injunction against petitioners and RTC Branch 219. It assailed the September 21, 1995 order granting the issuance of a writ of execution pending appeal, the writ of execution and the notice to vacate served upon private respondent (CA-G.R. SP-39227). On December 13, 1995, RTC Branch 219[10] rendered the decision affirming in toto that of the Metropolitan Trial Court. Stating that in ejectment proceedings, the only issue for resolution is who is entitled to physical or material possession of the premises involved, RTC Branch 219 held that: x x x the plaintiffs (petitioners herein) are vendees of the defendant (PBGDC) by virtue of a deed of sale where the extent of its right to continue holding possession was stipulated. In the agreement, the existence and due execution of which the defendant had admitted (Order, December 16, 1994, Rollo, p. 111), it was clearly stated that the defendant shall deliver the possession of the subject premises to the plaintiffs at the expiration of one (1) year from the execution thereof, April 12, 1992. The defendant failed to do so. From then on, it could be said that the defendant has been unlawfully withholding possession of the premises from the plaintiffs. In any case, this ruling on the matter of possession de facto is without prejudice to the action for reformation. This is because `the judgment rendered in an action for forcible entry or detainer shall be effective with respect to the possession only and in no wise bind the title or effect the ownership of the land or building nor shall it be held conclusive of the facts therein found in a case between the same parties upon a different cause of action not involving possession (Ang Ping v. Regional Trial Court, 154 SCRA 153; Section 7, Rule 70, Rules of Court).[11] On that same date, December 13, 1995, the Court of Appeals issued a temporary restraining order enjoining RTC Branch 219 from enforcing the writ of execution and the notice to vacate the premises and on January 15, 1996, the same court granted private respondents application for a writ of preliminary injunction enjoining the implementation of both the writ of execution pending appeal and the decision of RTC Branch 219. Around six months later or on July 2, 1996, RTC Branch 227[12] issued an order declaring private respondent non-suited for failure to appear at the pre-trial and, therefore, dismissing the action for reformation of instrument in Civil Case No. Q-95-24927. Private respondent, not having sought reconsideration of said 43 order, the same court issued a resolution on August 15, 1996 directing the entry of judgment in the case.[13] The Clerk of Court accordingly issued the final entry of judgment thereon.[14] In the meantime, on July 24, 1996, the Court of Appeals rendered the herein questioned Decision. [15] It set aside the December 13, 1995 decision of RTC Branch 219 and declared as null and void for want of jurisdiction, the March 24, 1995 decision of the Metropolitan Trial Court of Quezon City, Branch 41. It made permanent the writ of preliminary injunction enjoining petitioners from implementing the decision of RTC Branch 219, the writ of execution and the notice to vacate. In so holding, the Court of Appeals said: It is quite evident that, upon the pleadings, the dispute between the parties extended beyond the ordinary issues in ejectment cases. The resolution of the dispute hinged on the question of ownership and for that reason was not cognizable by the MTC. (See: General Insurance and Surety Corporation v. Castelo, 13 SCRA 652 [1965]). Respondent judge was not unaware of the pendency of the action for reformation. However, despite such knowledge, he proceeded to discuss the merits of the appeal and rendered judgment in favor of respondents on the basis of the deed of sale with assumption of mortgage which was precisely the subject of the action for reformation pending before another branch of the court. Prudence dictated that respondent judge should have refused to be drawn into a discussion as to the merits of the respective contentions of the parties and deferred to the action of the court before whom the issue was directly raised for resolution. On whether or not private respondent was in estoppel from questioning the jurisdiction of the MTC since it voluntarily submitted thereto the question of the validity of its title to the property, the Court of Appeals said: This is not so. As earlier pointed out, petitioner (private respondent here) had, in its answer to the complaint for unlawful detainer, promptly raised the issue of jurisdiction by alleging that what was entered into by the parties was just an equitable mortgage and not a sale. Assuming the truth of this allegation, it is fairly evident that respondents would not have had a cause of action for ejectment. In other words, petitioner, since the start of the case, presented a serious challenge to the MTCs jurisdiction but, unfortunately, the court ignored such challenge and proceeded to decide the case simply on the basis of possession. `The operation of the principle of estoppel on the question of jurisdiction seemingly depends upon whether the lower court actually had jurisdiction or not, if it had no jurisdiction, but the case was tried and decided upon the theory that it had jurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same must exist as a matter of law, and may not be conferred by consent of the parties or by estoppel (5 C.J.S., 861-863). (La Naval Drug Corporation v. Court of Appeals, 236 SCRA 78 [1994]). Contrary to respondents pretense, the filing by petitioner of an action for the reformation of contract may not really be an afterthought. As we understand it, petitioner, to support its allegation that the contract was a mere equitable mortgage, cites the fact that the price was inadequate; it remained in possession of the premises; it has retained a part of the purchase price; and, in any case, the real intention of the parties was that the transaction shall secure the payment by petitioner of its loan, adverting to Article 1602 of the Civil Code. Under Article 1604 of the same code, it is provided that the presence of only one circumstance defined in Article 1602, such as those cited above, is sufficient for a contract of sale with right to repurchase to be presumed an equitable mortgage. Without in any way preempting the decision of the court in the action for reformation, it is our considered view that, under the factual milieu, the action was initiated for the proper determination of the rights of the parties under the contract, and not just an afterthought. No derogatory inference can arise from petitioners admission of the existence of the deed of sale with assumption of mortgage. The admission does not necessarily dilute its claim that the same does not express the true intent of the parties. Verily, since the case at bench involves a controverted right, the parties are required to preserve the status quo and await the decision of the proper court on the true nature of the contract. It is but just that the person 44 who has first acquired possession should remain in possession pending decision on said case, and the parties cannot be permitted meanwhile to engage in petty warfare over possession of property which is the subject of dispute. To permit this will be highly dangerous to individual security and disturbing to the social order. (Manlapaz v. Court of Appeals, 191 SCRA 795 [1990]).[16] Hence, the present petition for review on certiorari where petitioners raise the following assigned errors allegedly committed by respondent Court of Appeals: I. THE DECISION OF THE RESPONDENT COURT OF APPEALS IS CONTRARY TO THE PROVISIONS OF SEC. 33 (2) OF THE JUDICIARY REORGANIZATION ACT OF 1980 CONFERRING EXCLUSIVE ORIGINAL JURISDICTION ON THE METROPOLITAN TRIAL COURT IN EJECTMENT CASES AND VESTING IT WITH AUTHORITY, INDEED MANDATORILY, TO RESOLVE ISSUES OF OWNERSHIP TO DETERMINE ISSUES OF POSSESSION. II. THE DECISION OF THE RESPONDENT COURT IS CONTRARY TO CURRENT AND PREVAILING DOCTRINE AS ENUNCIATED IN WILMON AUTO SUPPLY CORP. VS. COURT OF APPEALS, 208 SCRA 108; SY VS. COURT OF APPEALS, 200 SCRA 117; AND ASSET PRIVATIZATION TRUST VS. COURT OF APPEALS, 229 SCRA 627. III. THE FILING OF THE REFORMATION CASE CONFIRMS THE JURISDICTION OF THE METROPOLITAN TRIAL COURT OVER THE EJECTMENT CASE; THE DISMISSAL OF THE REFORMATION CASE CONFIRMS THE FACT THAT IT WAS FILED MERELY AS A PLOY TO DELAY DISPOSITION OF EJECTMENT PROCEEDINGS, AND BARES NOT JUST THE ERROR BUT THE UTTER INEQUITY OF THE RESPONDENT COURTS DECISION ANNULLING THE EJECTMENT DECREE AND SETTING ASIDE THE REGIONAL TRIAL COURT DECISION OF AFFIRMANCE. Petitioners argue that the precedent laid down in Ching v. Malaya[17] relied upon by the Court of Appeals, was based on the old law, Republic Act No. 296 (Judiciary Act of 1948), as amended, which vested in the city courts original jurisdiction over forcible entry and unlawful detainer proceedings and the corresponding power to receive evidence upon the question of ownership for the only purpose of determining the character and extent of possession.[18] They claim that since the original complaint for unlawful detainer was filed on April 13, 1992, then the applicable law should have been Section 33 (2) of the Judiciary Reorganization Act of 1980 (Batas Pambansa Blg. 129). That law vests in the city courts exclusive original jurisdiction over forcible entry and unlawful detainer cases and the corresponding power to receive evidence upon questions of ownership and to resolve the issue of ownership to determine the issue of possession.[19] The history of the law vesting Municipal and Metropolitan Trial Courts with jurisdiction over ejectment cases has invariably revolved upon the assumption that the question of ownership may be considered only if necessary for the determination of the issue as to who of the parties shall have the right to possess the property in litigation.[20] Thus, under the Judiciary Act of 1948, as amended, Section 88 vested municipal and city courts with authority to receive evidence upon the question of title therein, whatever may be the value of the property, solely for the purpose of determining the character and extent of possession and damages for detention. Section 3 of Republic Act No. 5967 that was enacted on June 21, 1969, provided that city courts shall have concurrent jurisdiction with Courts of First Instance over ejection cases where the question of ownership is brought in issue in the pleadings and that the issue of ownership shall be resolved in conjunction with the issue of possession. Expounding on that provision of law, in Pelaez v. Reyes,[21] this Court said: x x x We are of the considered opinion that the evident import of Section 3 above is to precisely grant to the 45 city courts concurrent original jurisdiction with the courts of first instance over the cases enumerated therein, which include `ejection cases where the question of ownership is brought in issue in the pleadings. To sustain petitioners contention about the meaning of the last phrase of paragraph (c) of said section regarding the resolution of the issue of ownership `in conjunction with the issue of possession is to disregard the very language of the main part of the section which denotes unmistakably a conferment upon the city courts of concurrent jurisdiction with the courts of first instance over ejection cases in which ownership is brought in issue in the pleadings. It is to Us quite clear that the fact that the issue of ownership is to be resolved `in conjunction with the issue of possession simply means that both the issues of possession and ownership are to be resolved by the city courts. And the jurisdiction is concurrent with the Courts of First Instance precisely because usually questions of title are supposed to be resolved by superior courts. In other words, this grant of special jurisdiction to city courts is to be distinguished from the power ordinarily accorded to municipal courts to receive evidence of title only for the purpose of determining the extent of the possession in dispute. Upon the approval on August 14, 1981 of Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 1980, however, the power of inferior courts, including city courts, to resolve the issue of ownership in forcible entry and unlawful detainer cases was modified. Resolution of the issue of ownership became subject to the qualification that it shall be only for the purpose of determining the issue of possession. In effect, therefore, the city courts lost the jurisdiction to determine the issue of ownership per se that was theretofore concurrent with the then Courts of First Instance. Thus, Section 33 of B.P. Blg. 129 provides that Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise: Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That when in such cases, the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. Accordingly, the Interim Rules and Guidelines in the implementation of Batas Pambansa Blg. 129 provides as follows: 10. Jurisdiction in ejectment cases. Metropolitan trial courts, municipal trial courts, and municipal circuit trial courts, without distinction, may try cases of forcible entry and detainer even if the question of ownership is raised in the pleadings and the question of possession could not be resolved without deciding the issue of ownership, but the question of ownership shall be resolved only to determine the issue of possession. Explaining these provisions of law, in Sps. Refugia v. Court of Appeals,[22] the Court said: These issuances changed the former rule under Republic Act No. 296 which merely allowed inferior courts to receive evidence upon the question of title solely for the purpose of determining the extent and character of possession and damages for detention, which thereby resulted in previous rulings of this Court to the effect that if it appears during the trial that the principal issue relates to the ownership of the property in dispute and any question of possession which may be involved necessarily depends upon the result of the inquiry into the title, then the jurisdiction of the municipal or city courts is lost and the action should be dismissed. With the enactment of Batas Pambansa Blg. 129, the inferior courts now retain jurisdiction over an ejectment case even if the question of possession cannot be resolved without passing upon the issue of ownership, with the express qualification that such issue of ownership shall be resolved only for the purpose of determining the issue of possession. In other words, the fact that the issues of ownership and possession de facto are intricately interwoven will not cause the dismissal of the case for forcible entry and unlawful detainer on jurisdictional grounds. Another development in the law has emphasized the fact that inferior courts shall not lose jurisdiction over ejectment cases solely because the issue of ownership is interwoven with the issue of possession. Under the 1983 Rules on Summary Procedure, as amended by a resolution of this Court that took effect on November 15, 1991, all forcible entry and unlawful detainer cases shall be tried pursuant to the Revised Rules on Summary Procedure, regardless of whether or not the issue of ownership of the subject 46 property is alleged by a party.[23] In other words, even if there is a need to resolve the issue of ownership, such fact will not deprive the inferior courts of jurisdiction over ejectment cases [24] that shall be tried summarily. When the jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts was expanded, thereby amending Batas Pambansa Blg. 129, by virtue of Republic Act No. 7691 that took effect on April 15, 1994, the jurisdiction of said courts over ejectment cases was retained. Thus, in Hilario v. Court of Appeals this Court said: x x x. As the law now stands, inferior courts retain jurisdiction over ejectment cases even if the question of possession cannot be resolved without passing upon the issue of ownership; but this is subject to the same caveat that the issue posed as to ownership could be resolved by the court for the sole purpose of determining the issue of possession. Thus, an adjudication made therein regarding the issue of ownership should be regarded as merely provisional and, therefore, would not bar or prejudice an action between the same parties involving title to the land. The foregoing doctrine is a necessary consequence of the nature of forcible entry and unlawful detainer cases where the only issue to be settled is the physical or material possession over the real property, that is, possession de facto and not possession de jure. In other words, inferior courts are now conditionally vested with adjudicatory power over the issue of title or ownership raised by the parties in an ejectment suit.[25] These courts shall resolve the question of ownership raised as an incident in an ejectment case where a determination thereof is necessary for a proper and complete adjudication of the issue of possession. Considering the difficulties that are usually encountered by inferior courts as regards the extent of their power in determining the issue of ownership, in Sps. Refugia v. Court of Appeals, the Court set out guidelines to be observed in the implementation of the law which, as stated at the outset, has recently been restated in the 1997 Rules of Civil Procedure. The guidelines pertinent to this case state: 1. The primal rule is that the principal issue must be that of possession, and that ownership is merely ancillary thereto, in which case the issue of ownership may be resolved but only for the purpose of determining the issue of possession. Thus, x x x, the legal provision under consideration applies only where the inferior court believes and the preponderance of evidence shows that a resolution of the issue of possession is dependent upon the resolution of the question of ownership. 2. It must sufficiently appear from the allegations in the complaint that what the plaintiff really and primarily seeks is the restoration of possession. Consequently, where the allegations of the complaint as well as the reliefs prayed for clearly establish a case for the recovery of ownership, and not merely one for the recovery of possession de facto, or where the averments plead the claim of material possession as a mere elemental attribute of such claim for ownership, or where the issue of ownership is the principal question to be resolved, the action is not one for forcible entry but one for title to real property. x x x x x x x x x, 5. Where the question of who has the prior possession hinges on the question of who the real owner of the disputed portion is, the inferior court may resolve the issue of ownership and make a declaration as to who among the contending parties is the real owner. In the same vein, where the resolution of the issue of possession hinges on a determination of the validity and interpretation of the document of title or any other contract on which the claim of possession is premised, the inferior court may likewise pass upon these issues. This is because, and it must be so understood, that any such pronouncement made affecting ownership of the disputed portion is to be regarded merely as provisional, hence, does not bar nor prejudice an action between the same parties involving title to the land. Moreover, Section 7, Rule 70 of the Rules of Court expressly provides that the judgment rendered in an action for forcible entry or unlawful detainer shall be effective with respect to the possession only and in no wise bind the title or affect the ownership of the land 47 or building.[26] (Emphasis supplied.) In the case at bar, petitioners clearly intended recovery of possession over the Gilmore property. They alleged in their complaint for unlawful detainer that their claim for possession is buttressed by the execution of the Deed of Sale with Assumption of Mortgage, a copy of which was attached as Annex A to the complaint and by the issuance of TCT No. 67990 that evidenced the transfer of ownership over the property.[27] Because metropolitan trial courts are authorized to look into the ownership of the property in controversy in ejectment cases, it behooved MTC Branch 41 to examine the bases for petitioners claim of ownership that entailed interpretation of the Deed of Sale with Assumption of Mortgage. However, while it quoted paragraph (c) of the Deed of Sale with Assumption of Mortgage that embodies the agreement of the parties that possession of the Gilmore property and its improvements shall remain with the vendor that was obliged to transfer possession only after the expiration of one year, [28] MTC Branch 41 apparently did not examine the terms of the deed of sale. Instead, it erroneously held that the issue of whether or not the document was in fact an equitable mortgage should not be properly raised in this case. Had it examined the terms of the deed of sale, which, after all is considered part of the allegations of the complaint having been annexed thereto, that court would have found that, even on its face, the document was actually one of equitable mortgage and not of sale. The inferior court appears to have forgotten that all documents attached to a complaint, the due execution and genuineness of which are not denied under oath by the defendant, must be considered as part of the complaint without need of introducing evidence thereon.[29] Article 1602 of the Civil Code provides that a contract shall be presumed to be an equitable mortgage by the presence of any of the following: (1) When the price of a sale with right to repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold; (6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation. Article 1604 of the same Code provides that the provisions of Article 1602 shall also apply to a contract purporting to be an absolute sale. The presence of even one of the circumstances in Article 1602 is sufficient basis to declare a contract as one of equitable mortgage.[30] The explicit provision of Article 1602 that any of those circumstances would suffice to construe a contract of sale to be one of equitable mortgage is in consonance with the rule that the law favors the least transmission of property rights. The Deed of Sale with Assumption of Mortgage covering the 2,000-square-meter lot located at No. 52 Gilmore Street, New Manila, Quezon City provides as follows: 3. That the total consideration for the sale of the above-described property by the VENDOR to the VENDEES is FOURTEEN MILLION (P14,000,000.00) PESOS, in Philippine currency, payable as follows: a) The VENDOR shall be paid by the VENDEE the sum of FIVE MILLION FOUR HUNDRED THOUSAND (P5,400,000.00) PESOS upon the signing and execution of this Deed of Sale With Assumption of Mortgage after computation of the mortgage obligation of the VENDOR with CHINA BANKING CORPORATION in the amount of ______________________ which the VENDEES agree to assume as part of the consideration of 48 this sale. The VENDEES hereby assume the mortgage obligation of the VENDOR with the CHINA BANKING CORPORATION in the total amount of ___________________. b) The VENDOR hereby undertakes and agrees with the VENDEES that the first-named party shall warrant and defend the title of said real property hereby conveyed in favor of the VENDEES, their heirs, successors or assigns, against all just claims of all persons or entities; that the VENDOR also guarantees the right of the VENDEES to the possession of the property subject of this contract without the need of judicial action; and furthermore, the VENDOR binds itself to execute any additional documents to complete the title of the VENDEES to the above-described property so that it may be registered in the name of the VENDEES in accordance with the provisions of the Land Registration Act. c) It is hereby expressly agreed and understood by and between the VENDOR and the VENDEES that the house and other improvements found in the premises are included in this sale and that possession of said premises shall be delivered to the VENDEES by the VENDOR at the expiration of one (1) year from the date of the signing and execution of this Deed of Sale with Assumption of Mortgage. d) It is furthermore expressly provided and agreed by and between the VENDOR and the VENDEES that the capital gains tax shall be paid by the VENDOR while any and all fees and expenses incident to the registration and transfer of the title to the aforementioned property shall be defrayed and borne by the VENDEES. e) Attached to this Deed of Sale with Assumption of Mortgage as Annex `A thereof is the Certificate of ROSANA FLORES, Corporate Secretary of PRICILIANO B. DEVELOPMENT CORPORATION, a corporation duly organized and existing under Philippine Laws who certified that at a special meeting of the Board of Directors of said corporation held on December 3, 1991 at which meeting a quorum was present, the following resolution was adopted and passed, to wit: `RESOLVED, AS IT IS HEREBY RESOLVED, that the company, PRICILIANO B. GONZALES DEVELOPMENT is (sic) hereby authorized the President, Mr. Antonio B. Gonzales to enter into and/or negotiate for the sale of a property described as Transfer Certificate of Title No. 383917 with an area of TWO THOUSAND (2,000) SQUARE METERS under the Registry of Deeds of Quezon City; `RESOLVED FURTHER, that Mr. ANTONIO B. GONZALES, is hereby authorized to sign, execute any and all documents relative thereto. That aforesaid resolution is in full force and effect. (sgd.) ROSANA FLORES Corporate Secretary (SGD.) f) Full title and possession over the above-described property shall vest upon the VENDEES upon the full compliance by them with all the terms and conditions herein set forth.[31] (Underscoring supplied.) That under the agreement the private respondent as vendor shall remain in possession of the property for only one year, did not detract from the fact that possession of the property, an indicium of ownership, was retained by private respondent as the alleged vendor. That period of time may be deemed as actually the time allotted to private respondent for fulfilling its part of the agreement by paying its indebtedness to petitioners. This may be gleaned from paragraph (f) that states that full title and possession of the property shall vest upon the VENDEES upon the full compliance by them with all the terms and conditions herein set forth. Paragraph (f) of the contract also evidences the fact that the agreed purchase price of fourteen million pesos (P14,000,000.00) was not handed over by petitioners to private respondent upon the execution of the 49 agreement. Only P5,400,000.00 was given by petitioners to private respondent, as the balance thereof was to be dependent upon the private respondents satisfaction of its mortgage obligation to China Banking Corporation. Notably, the MTC found that petitioners gave private respondent the amount of P8,500,000.00 that should be paid to the bank to cover the latters obligation, thereby leaving the amount of P100,000.00 (P5,400,000.00 + P8,500,000.00 = P13,900,000.00) of the purchase price still unpaid and in the hands of petitioners, the alleged vendees. Hence, two of the circumstances enumerated in Article 1602 are manifest in the Deed of Sale with Assumption of Mortgage, namely: (a) the vendor would remain in possession of the property (no. 2), and (b) the vendees retained a part of the purchase price (no. 4). On its face, therefore, the document subject of controversy, is actually a contract of equitable mortgage. The denomination of the contract as a deed of sale is not binding as to its nature. The decisive factor in evaluating such an agreement is the intention of the parties, as shown, not necessarily by the terminology used in the contract, but by their conduct, words, actions and deeds prior to, during and immediately after executing the agreement.[32] Private respondents possession over the property was not denied by petitioners as in fact it was the basis for their complaint for unlawful detainer. Neither does the issuance of a new transfer certificate of title in petitioners favor import conclusive evidence of ownership or that the agreement between the parties was one of sale. [33] In Macapinlac v. Gutierrez Repide, this Court said: x x x it must be borne in mind that the equitable doctrine x x x to the effect that any conveyance intended as security for a debt will be held in effect to be a mortgage, whether so actually expressed in the instrument or not, operates regardless of the form of the agreement chosen by the contracting parties as the repository of their will. Equity looks through the form and considers the substance; and no kind of engagement can be adopted which will enable the parties to escape from the equitable doctrine to which reference is made. In other words, a conveyance of land, accompanied by registration in the name of the transferee and the issuance of a new certificate, is no more secured from the operation of the equitable doctrine than the most informal conveyance that could be devised.[34] A closer look into the allegations of the complaint would therefore show that petitioners failed to make out a case for unlawful detainer. By the allegations in the complaint, private respondent as a mortgagor had the right to posses the property. A mortgage is a real right constituted to secure an obligation upon real property or rights therein to satisfy with the proceeds of the sale thereof such obligation when the same becomes due and has not been paid or fulfilled.[35] The mortgagor generally retains possession of the mortgaged property[36] because by mortgaging a piece of property, a debtor merely subjects it to a lien but ownership thereof is not parted with.[37] In case of the debtors nonpayment of the debt secured by the mortgage, the only right of the mortgagee is to foreclose the mortgage and have the encumbered property sold to satisfy the outstanding indebtedness. The mortgagors default does not operate to vest in the mortgagee the ownership of the encumbered property, for any such effect is against public policy.[38] Even if the property is sold at a foreclosure sale, only upon expiration of the redemption period, without the judgment debtor having made use of his right of redemption, does ownership of the land sold become consolidated in the purchaser. [39] Petitioners tenuous claim for possession of the Gilmore property was emasculated further by private respondents answer to their complaint. The latter claimed ownership of the property, alleging that the agreement was one of mortgage and not of sale. Private respondent alleged therein that in March 1993 (sic), it borrowed money from petitioner Felicidad Oronce alone to redeem the subject property from China Banking Corporation. She agreed to lend it the amount on condition that the Gilmore property should be mortgaged to her to guarantee payment of the loan. However, petitioner Flaminiano took the money from petitioner Oronce and paid the mortgage obligation of private respondent to the China Banking Corporation while claiming that 50% of the amount was hers. Petitioner Flaminianos husband, Atty. Eduardo Flaminiano, forthwith prepared the Deed of Sale with Assumption of Mortgage and, without private respondents knowledge, had it registered for which reason a new certificate of title was issued to petitioners. In claiming that the agreement was one of mortgage, private respondent alleged in its answer, inter alia, that the actual total value of the property was thirty million pesos (P30,000,000.00); that while it had possession of the property, petitioners did not then 50 attempt to repossess the same, notwithstanding the lapse of one year from the execution of the document; that petitioners did not pay the real estate taxes even after the transfer of title in their favor, and that petitioners did not deliver to private respondent the alleged purchase price. Considering these claims of private respondent, MTC Branch 41 should have passed upon the issues raised on the ownership of the Gilmore property for the purpose of determining who had the right to possess the same. As it turned out, it simply accepted the allegations of petitioners without examining the supporting documents. Had it closely analyzed the documents, it would have concluded that petitioners could not have validly ousted private respondent from the property since the basis for its claim of ownership, the Deed of Sale with Assumption of Mortgage, was actually a document evidencing an equitable mortgage. It would have accordingly dismissed the complaint for lack of cause of action. In fine, had the MTC exercised its bounden duty to study the complaint, it would have dismissed the same for lack of cause of action upon a provisional ruling on the issue of ownership based on the allegations and annexes of the complaint. Or, exercising caution in handling the case, considering petitioners bare allegations of ownership, it should have required the filing of an answer to the complaint and, having been alerted by the adverse claim of ownership over the same property, summarily looked into the issue of ownership over the property. As this Court declared in Hilario v. Court of Appeals: It is underscored, however, that the allegations in the complaint for ejectment should sufficiently make out a case for forcible entry or unlawful detainer, as the case may be; otherwise, jurisdiction would not vest in the inferior court. Jurisdiction over the subject matter is, after all, determined by the nature of the action as alleged or pleaded in the complaint. Thus, even where the defendant alleges ownership or title to the property in his or her answer, the inferior court will not be divested of its jurisdiction. A contrary rule would pave the way for the defendant to trifle with the ejectment suit, which is summary in nature, as he could easily defeat the same through the simple expedient of asserting ownership.[40] As discussed above, even a perusal of the complaint without going over the claims of private respondent in his answer would have sufficed to arrive at a provisional determination of the issue of ownership. The importance of such provisional ruling on the issue of ownership is demanded by the fact that, in the event that the claim of the plaintiff in an ejectment case is controverted as in this case, any ruling on the right of possession would be shaky, meaningless and fraught with unsettling consequences on the property rights of the parties. After all, the right of possession must stand on a firm claim of ownership. Had the MTC made a provisional ruling on the issue of ownership, the parties would have availed of other remedies in law early on to thresh out their conflicting claims. Private respondents action for reformation of instrument was in fact a step in the right direction. However, its failure to pursue that action[41] did not imply that private respondent had no other remedy under the law as regards the issue of ownership over the Gilmore property. There are other legal remedies that either party could have availed of. Some of these remedies, such as an action for quieting of title, have been held to coexist with actions for unlawful detainer.[42] There is a policy against multiplicity of suits but under the circumstances, only the institution of proper proceedings could settle the controversy between the parties in a definitive manner. Hence, although the Court of Appeals resolved the appeal under the misconception that the action for reformation of instrument was still viable, it correctly held that the controversy between the parties was beyond the ordinary issues in an ejectment case. Because of the opposing claims of the parties as to the true agreement between them, the issue of ownership was in a sense a prejudicial question that needed determination before the ejectment case should have been filed. To reiterate, a decision reached in the ejectment case in favor of any of the parties would have nonetheless spawned litigation on the issue of ownership. At any rate, proceedings would have been facilitated had the inferior courts made even a provisional ruling on such issue. The contentious circumstances surrounding the case were demonstrated by an occurrence during the pendency of this petition that cries out for the resolution of the issue of ownership over the Gilmore property. After the parties had filed their respective memoranda before this Court, private respondent filed an 51 urgent motion to cite petitioner Rosita L. Flaminiano and her husband, Atty. Eduardo B. Flaminiano, in contempt of court.[43] The motion was founded on an affidavit of Dr. Tadeo Gonzales who resided at the contested property, deriving his right to do so from private respondent corporation that is owned by his family. Gonzales alleged that on September 20, 1997, petitioner Flaminiano and her husband entered the property through craftiness and intimidation. At around 5:30 p.m. on that day, two (2) men knocked at the gate. When the houseboy, Luis R. Fernandez, opened the gate for pedestrians tentatively, the two men told him that they would like to visit Gonzales mother who was ailing. Once inside, the two men identified themselves as policemen and opened the gate for twenty (20) men, two (2) trucks and an L-300 van to enter.When Gonzales went outside the house, he saw thirty (30) to forty (40) men and two (2) trucks entering the driveway. The person he asked regarding the presence of those people inside the property turned out to be the brother of petitioner Flaminiano. That person said, Kami ang may-ari dito. Matagal na kaming nagtitiis, kayo ang dapat sa labas. After Gonzales had told him that the property was still under litigation before this Court, the man said, Walang Supreme Court Supreme Court. When Gonzales asked petitioner Flaminiano, who was inside the premises, to order the people to leave, she said, Papapasukin namin ito dahil sa amin ito. Maglalagay ako ng tao diyan sa loob, sa harap, sa likod. Wala ng pakiusap. When a power generator was brought inside the property and Gonzales pleaded that it be taken out because the noise it would create would disturb his ailing mother, Emiliana Gonzales, petitioner Flaminiano said, Walang awa-awa sa akin. Atty. Flaminiano butted in and, referring to Gonzales mother, said, Ialis mo na, matanda na pala. When Gonzales prevented the switching on of some lights in the house due to faulty wiring, Atty. Flaminiano suggested, Bakit hindi mo ipasunog ito? May insurance pa kayo 5 million, madali lang yan. Short circuit. Since the Flaminianos and their crew were not about to leave the property, Gonzales called up his brother, Atty. Antonio Gonzales, and informed him of what happened. However, instead of confining themselves in the driveway, the Flaminianos and their group entered the terrace, bringing in food. Gonzales was all the while concerned about his 81-year-old mother who had just been discharged from the hospital. However, the Flaminianos stayed until the next day, September 22, 1997, using the kitchen, furniture and other fixtures in the house. Gonzales took pictures of Flaminiano and his companions. When Atty. Flaminiano arrived, he confronted Gonzales and told him, Hindi ako natatakot kahit kanino ka pa magreport, kahit pa sa Supreme Court, gusto ko nga mag-reklamo kayo para matapos ang kaso. Sa September 25, may shooting dito, gagawin ko ang gusto ko dito.[44] The affidavits of Renato C. Mola, driver of Atty. Antonio Gonzales, and that of Luis R. Fernandez, houseboy of Dr. Tadeo Gonzales, as well as the xerox copy of the sworn statement dated September 21, 1997 of Pria B. Gonzales before the Philippine National Police in Camp Crame where she filed a complaint against Atty. Flaminiano for the illegal entry into their house, support the affidavit of Dr. Gonzales. In its supplemental motion[45] to cite petitioner Flaminiano and her husband, Atty. Flaminiano, in contempt of court, private respondent alleged that the Flaminianos committed additional contumacious acts in preventing another member of the family, Mrs. Cipriana Gonzales, from entering the property.In her affidavit, Mrs. Gonzales said that the Flaminianos and their people used the whole house, except the bedrooms, for their filming activities.[46] Thereafter, private respondent filed an urgent motion for the issuance of a temporary restraining order and/or writ of preliminary injunction with this Court to enjoin petitioners, Atty. Flaminiano and their representatives and agents from preventing private respondent, its agents and representatives from entering the property and to cease and desist from occupying the property or from committing further acts of dispossession of the property.[47] On October 13, 1997, this Court issued the temporary restraining order prayed for.[48] In the motion it filed on October 21, 1997,[49] private respondent informed the Court that the TRO could not be served upon petitioners immediately because, Atty. Flaminiano, their counsel of record, had changed address without informing the Court. It was served upon said counsel only on October 15, 1997. However, instead of complying with this Courts order, petitioners continued occupying the property. On October 16, 1997, after receiving a copy of the TRO, petitioners put up a huge billboard in front of the property stating that it is the national headquarters of the Peoples Alliance for National Reconciliation and Unity for Peace and Progress (PANRUPP). 52 In their comment on the motion for contempt, petitioners noticeably did not controvert the facts set forth by private respondent in said motion. Instead, it reasserted its claim of ownership over the property as evidenced by TCT No. 67990. They alleged that they had mortgaged the property to the Far East Bank and Trust Company in the amount of thirty million pesos (P30,000,000.00) for which they are paying a monthly interest of around P675,000.00 without enjoying the material possession of the subject property which has been unlawfully and unjustly detained by private respondent for the last four (4) years as it was used as the residence of the members of the family of its President ANTONIO B. GONZALES without the said private respondent paying rentals thereon for the period from January 1995 up to October 5, 1997 when the said property was voluntarily vacated by the members of the President (sic) of respondent corporation, ANTONIO B. GONZALES, who has since then been a fugitive from justice having been convicted by final judgment of the crime of estafa through falsification of public document and has succeeded in evading his sentence. They averred that Tadeo Gonzales erroneously claimed that the rights of ownership and possession over the property are still under litigation because the issue of ownership is no longer involved in this litigation when the complaint for reformation of instrument with annulment of sale and title filed by private respondent was dismissed with finality by reason of non-suit. Hence, they claimed that they now stand to be the unquestionable registered and lawful owners of the property subject of controversy and that the July 24, 1996 Decision of the Court of Appeals has already lost its virtuality and legal efficacy with the occurrence of a supervening event which is a superior cause superseding the basis of the judgment in CA-G.R. No. 39227 of respondent court. They informed the Court that they are now leasing the property to PANRUPP from October 1, 1997 to September 30, 1998. They alleged, however, that the property is in a deplorable state of decay and deterioration that they saw the need to act swiftly and decisively to prevent further destruction of the property where they invested millions of pesos of their life-time savings to acquire the same. Hence, they sought the assistance of barangay officials in Barangay Mariana, New Manila who helped them effect the peaceful entry into the property of the petitioners without the use of strategy, force and intimidation contrary to what was alleged in the motion for contempt. They peacefully took over possession of the property on September 20, 1997 but allowed the immediate members of the family of private respondents president to stay on. The family finally agreed to vacate the premises on October 5, 1997 upon the offer of the petitioners to shoulder partially the expenses for the hospitalization of the ailing mother at the St. Luke General Hospital where she was brought by an ambulance accompanied by a doctor at petitioners expense. Petitioners questioned the issuance by this Court of the TRO on October 13, 1997, asserting that when it was issued, there were no more acts to restrain the illegal occupants of the subject property (as they) had already peacefully vacated the premises on October 5, 1997 or more than a week after the said TRO was issued by the Third Division of this Court. They prayed that the motion for contempt be denied for lack of merit and that the TRO issued be lifted and set aside for the act or acts sought to be restrained have already been done and have become a fait accompli before the issuance of the TEMPORARY RESTRAINING ORDER on October 13, 1997.[50] As earlier discussed, petitioners claim that the dismissal of the action for reformation of instrument for non-suit had written finis to the issue of ownership over the Gilmore property is totally unfounded in law. Petitioners should be reminded that the instant petition stemmed from an unlawful detainer case, the issue of which is merely possession of the property in question. The issue of ownership has not been definitively resolved for the provisional determination of that issue that should have been done by the MTC at the earliest possible time, would only be for the purpose of determining who has the superior right to possess the property. Inasmuch as this Court has resolved that the rightful possessor should have been private respondent and its representatives and agents, the TRO issued by this Court on October 13, 1997 should not be lifted. That the TRO was issued days before private respondent left the property is immaterial. What is in question here is lawful possession of the property, not possession on the basis of self-proclaimed ownership of the property. For their part, petitioners should cease and desist from further exercising possession of the same property which possession, in the first place, does not legally belong to them. The conduct of petitioner Flaminiano in taking possession over the property as alleged by private respondent through Tadeo Gonzales is deplorably high-handed. On an erroneous assumption that she had 53 been legally vested with ownership of the property, she took steps prior to the present proceedings by illegally taking control and possession of the same property in litigation. Her act of entering the property in defiance of the writ of preliminary injunction issued by the Court of Appeals constituted indirect contempt under Section 3, Rule 71 of the Rules of Court that should be dealt with accordingly. Be that as it may, what is disturbing to the Court is the conduct of her husband, Eduardo Flaminiano, a lawyer[51] whose actuations as an officer of the court should be beyond reproach. His contumacious acts of entering the Gilmore property without the consent of its occupants and in contravention of the existing writ or preliminary injunction issued by the Court of Appeals and making utterances showing disrespect for the law and this Court, are certainly unbecoming of a member of the Philippine Bar. To be sure, he asserted in his comment on the motion for contempt that petitioners peacefully took over the property. Nonetheless, such peaceful take-over cannot justify defiance of the writ of preliminary injunction that he knew was still in force.Notably, he did not comment on nor categorically deny that he committed the contumacious acts alleged by private respondent. Through his acts, Atty. Flaminiano has flouted his duties as a member of the legal profession. Under the Code of Professional Responsibility, he is prohibited from counseling or abetting activities aimed at defiance of the law or at lessening confidence in the legal system.[52] WHEREFORE, the instant petition for review on certiorari is hereby DENIED and the questioned Decision of the Court of Appeals AFFIRMED without prejudice to the filing by either party of an action regarding the ownership of the property involved. The temporary restraining order issued on October 13, 1997 is hereby made permanent. Petitioners and their agents are directed to turn over possession of the property to private respondent. Petitioner Rosita Flaminiano is hereby held guilty of contempt of court for disobeying the writ of injunction issued by the Court of Appeals and accordingly fined P20,000.00 therefor. Her counsel and husband, Atty. Eduardo B. Flaminiano, is ordered to pay a fine of P25,000.00 for committing contumacious acts unbecoming of a member of the Philippine Bar with a stern warning that a repetition of the same acts shall be dealt with more severely.Let a copy of this Decision be attached to his record at the Office of the Bar Confidant. This Decision is immediately executory. Costs against petitioners. SO ORDERED. 54 SECOND DIVISION [A.C. No. 1261. December 29, 1983.] TAN TEK BENG, Complainant, v. TIMOTEO A. DAVID, Respondent. Basilio Lanoria for complainant. Timoteo A. David for and in his own behalf. AQUINO, J.: The issue in this case is whether disciplinary action should be taken against lawyer Timoteo A. David (admitted to the bar in 1945) for not giving Tan Tek Beng, a nonlawyer (alleged missionary of the Seventh Day Adventists), one-half of the attorney's fees received by David from the clients supplied by Tan Tek Beng. Their agreement reads: "December 3, 1970 "Mr. Tan Tek Beng "M a n i l a "Dear Mr. Tan: In compliance with your request, I am now putting into writing our agreement which must be followed in connection with the accounts that you will entrust to me for collection. Our terms and conditions shall be as follows: "1. On all commission or attorney's fees that we shall receive from our clients by virtue of the collection that we shall be able to effect on their accounts, we shall divide fifty-fifty. Likewise you are entitled to commission, 50/50 from domestic, inheritance and commercial from our said clients or in any criminal cases where they are involved. "2. I shall not deal directly with our clients without your consent. "3. You shall take care of collecting our fees as well as advances for expenses for the cases referred to us by our clients and careful in safeguarding our interest. "4. It is understood that legal expenses that we shall recover from the debtors shall be turned over to our clients. Other clients who directly or indirectly have been approached or related (sic) to you as a result of your labor are your clients. "I hereby pledge in the name of God, our Heavenly Father, that I will be sincere, honest and fair with you in 55 connection with our transactions with our clients. Likewise you must be sincere, honest and fair with me. Very truly yours, (Sgd.) Illegible TIMEOTEO A. DAVID P.S. I will be responsible for all documents entrusted me by our clients. (Sgd.) Initial "CONFORME to the above and likewise will reciprocate my sincerity to Atty. David as stated in the last paragraph of this letter. (Sgd.) Tan Tek Beng MR. TAN TEK BENG" The foregoing was a reiteration of an agreement dated August 5, 1969. Note that in said agreement lawyer David not only agreed to give one-half of his professional fees to an intermediary or commission agent but he also bound himself not to deal directly with the clients. The business relationship between David and Tan Tek Beng did not last. There were mutual accusations of doublecross. For allegedly not living up to the agreement, Tan Tek Beng in 1973 denounced David to Presidential Assistant Ronaldo B. Zamora, to the Office of Civil Relations at Camp Crame and to this Court. He did not file any civil action to enforce the agreement. In his 1974 comment, David clarified that the partnership was composed of himself as manager, Tan Tek Beng as assistant manager and lawyer Pedro Jacinto as president and financier. When Jacinto became ill and the costs of office maintenance mounted, David suggested that Tan Tek Beng should also invest some money or shoulder a part of the business expenses but Tan Tek Beng refused. This case was referred to the Solicitor General for investigation, report and recommendation. Hearings were scheduled from 1974 to 1981. It was proposed that respondent should submit a stipulation of facts but that did not materialize because the scheduled hearings were not held due to the nonavailability of Tan Tek Beng and his counsel. On September 16, 1977 Tan Tek Beng died at the Philippine Union Colleges Compound, Baesa, Caloocan City but it was only in the manifestation of his counsel dated August 10, 1981 that the Solicitor General's Office was informed of that fact. A report on this case dated March 21, 1983 was submitted by the Solicitor General to this Court. We hold that the said agreement is void because it was tantamount to malpractice which is "the practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers" (Sec. 27, Rule 138, Rules of Court). Malpractice ordinarily refers to any malfeasance or dereliction of duty committed by a lawyer. Section 27 gives a special and technical meaning to the term "malpractice" (Act No. 2828, amending sec. 21 of Act No. 190). That meaning is in consonance with the elementary notion that the practice of law is a profession, not a business. "The lawyer may not seek or obtain employment by himself or through others for to do so would beunprofessional" (2 R. C. L. 1097 cited in In re Tagorda, 53 Phil. 37, 42; Malcolm, J., Jayme vs. Bualan, 58 Phil. 422; Arce vs. Philippine National Bank, 62 Phil. 569). The commercialization of law practice is condemned in certain canons of professional ethics adopted by the American Bar Association: "34. Division of Fees. - No division of fees for legal services is proper, except with another lawyer, based 56 upon a division of service or responsibility." "35. Intermediaries. - The professional services of a lawyer should not be controlled or exploited by any lay agency, personal or corporate, which intervenes between client and lawyer. A lawyer's responsibilities and qualifications are individual. He should avoid all relations which direct the performance of his duties by or in the interest of such intermediary. A lawyer's relation to his client should be personal, and the responsibility should be direct to the client. x x x" "38. Compensation, Commissions and Rebates. - A lawyer should accept no compensation, commissions, rebates or other advantages from others without the knowledge and consent of his client after full disclosure." (Appendix, Malcolm, Legal Ethics). We censure lawyer David for having entered and acted upon such void and unethical agreement. We discountenance his conduct, not because of the complaint of Tan Tek Beng (who did not know legal ethics) butbecause David should have known better. "Unprofessional conduct in an attorney is that which violates the rules or ethical code of his profession or which is unbecoming a member of that profession" (Note 14, 7 C. J. S. 743). WHEREFORE, respondent is reprimanded for being guilty of malpractice. A copy of this decision should be attached to his record in the Bar Confidant's office. SO ORDERED 57 A. [A.C. No. 5299. August 19, 2003] ATTY. ISMAEL G. KHAN, JR., Assistant Court Administrator and Chief, Public Information Office, complainant, vs. ATTY. RIZALINO T. SIMBILLO, respondent. [G.R. No. 157053. August 19, 2003] ATTY. RIZALINO T. SIMBILLO, petitioner, vs. IBP COMMISSION ON BAR DISCIPLINE and ATTY. ISMAEL G. KHAN, JR., in his capacity as Assistant Court Administrator and Chief, Public Information Office, respondents. RESOLUTION YNARES-SANTIAGO, J.: This administrative complaint arose from a paid advertisement that appeared in the July 5, 2000 issue of the newspaper, Philippine Daily Inquirer, which reads: ANNULMENT OF MARRIAGE Specialist 5324333/521-2667.[1] Ms. Ma. Theresa B. Espeleta, a staff member of the Public Information Office of the Supreme Court, called up the published telephone number and pretended to be an interested party. She spoke to Mrs. Simbillo, who claimed that her husband, Atty. Rizalino Simbillo, was an expert in handling annulment cases and can guarantee a court decree within four to six months, provided the case will not involve separation of property or custody of children. Mrs. Simbillo also said that her husband charges a fee of P48,000.00, half of which is payable at the time of filing of the case and the other half after a decision thereon has been rendered. 58 Further research by the Office of the Court Administrator and the Public Information Office revealed that similar advertisements were published in the August 2 and 6, 2000 issues of the Manila Bulletin and August 5, 2000 issue of The Philippine Star.[2] On September 1, 2000, Atty. Ismael G. Khan, Jr., in his capacity as Assistant Court Administrator and Chief of the Public Information Office, filed an administrative complaint against Atty. Rizalino T. Simbillo for improper advertising and solicitation of his legal services, in violation of Rule 2.03 and Rule 3.01 of the Code of Professional Responsibility and Rule 138, Section 27 of the Rules of Court.[3] In his answer, respondent admitted the acts imputed to him, but argued that advertising and solicitation per se are not prohibited acts; that the time has come to change our views about the prohibition on advertising and solicitation; that the interest of the public is not served by the absolute prohibition on lawyer advertising; that the Court can lift the ban on lawyer advertising; and that the rationale behind the decades-old prohibition should be abandoned. Thus, he prayed that he be exonerated from all the charges against him and that the Court promulgate a ruling that advertisement of legal services offered by a lawyer is not contrary to law, public policy and public order as long as it is dignified.[4] The case was referred to the Integrated Bar of the Philippines for investigation, report and recommendation.[5] On June 29, 2002, the IBP Commission on Bar Discipline passed Resolution No. XV2002-306,[6] finding respondent guilty of violation of Rules 2.03 and 3.01 of the Code of Professional Responsibility and Rule 138, Section 27 of the Rules of Court, and suspended him from the practice of law for one (1) year with the warning that a repetition of similar acts would be dealt with more severely. The IBP Resolution was noted by this Court on November 11, 2002.[7] In the meantime, respondent filed an Urgent Motion for Reconsideration, [8] which was denied by the IBP in Resolution No. XV-2002-606 dated October 19, 2002[9] Hence, the instant petition for certiorari, which was docketed as G.R. No. 157053 entitled, Atty. Rizalino T. Simbillo, Petitioner versus IBP Commission on Bar Discipline, Atty. Ismael G. Khan, Jr., Asst. Court Administrator and Chief, Public Information Office, Respondents.This petition was consolidated with A.C. No. 5299 per the Courts Resolution dated March 4, 2003. In a Resolution dated March 26, 2003, the parties were required to manifest whether or not they were willing to submit the case for resolution on the basis of the pleadings. [10] Complainant filed his Manifestation on April 25, 2003, stating that he is not submitting any additional pleading or evidence and is submitting the case for its early resolution on the basis of pleadings and records thereof. [11]Respondent, on the other hand, filed a Supplemental Memorandum on June 20, 2003. We agree with the IBPs Resolutions Nos. XV-2002-306 and XV-2002-606. Rules 2.03 and 3.01 of the Code of Professional Responsibility read: Rule 2.03. A lawyer shall not do or permit to be done any act designed primarily to solicit legal business. Rule 3.01. A lawyer shall not use or permit the use of any false, fraudulent, misleading, deceptive, undignified, self-laudatory or unfair statement or claim regarding his qualifications or legal services. Rule 138, Section 27 of the Rules of Court states: SEC. 27. Disbarment and suspension of attorneys by Supreme Court, grounds therefor. A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice or other gross misconduct in such office, grossly immoral conduct or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before the admission to practice, or for a willful disobedience appearing as attorney for a party without authority to do so. It has been repeatedly stressed that the practice of law is not a business.[12] It is a profession in which duty to public service, not money, is the primary consideration. Lawyering is not primarily meant to be a 59 money-making venture, and law advocacy is not a capital that necessarily yields profits.[13] The gaining of a livelihood should be a secondary consideration.[14] The duty to public service and to the administration of justice should be the primary consideration of lawyers, who must subordinate their personal interests or what they owe to themselves.[15] The following elements distinguish the legal profession from a business: 1. A duty of public service, of which the emolument is a by-product, and in which one may attain the highest eminence without making much money; 2. A relation as an officer of the court to the administration of justice involving thorough sincerity, integrity and reliability; 3. A relation to clients in the highest degree of fiduciary; 4. A relation to colleagues at the bar characterized by candor, fairness, and unwillingness to resort to current business methods of advertising and encroachment on their practice, or dealing directly with their clients.[16] There is no question that respondent committed the acts complained of. He himself admits that he caused the publication of the advertisements. While he professes repentance and begs for the Courts indulgence, his contrition rings hollow considering the fact that he advertised his legal services again after he pleaded for compassion and after claiming that he had no intention to violate the rules. Eight months after filing his answer, he again advertised his legal services in the August 14, 2001 issue of the Buy & Sell Free Ads Newspaper.[17]Ten months later, he caused the same advertisement to be published in the October 5, 2001 issue of Buy & Sell.[18] Such acts of respondent are a deliberate and contemptuous affront on the Courts authority. What adds to the gravity of respondents acts is that in advertising himself as a self-styled Annulment of Marriage Specialist, he wittingly or unwittingly erodes and undermines not only the stability but also the sanctity of an institution still considered sacrosanct despite the contemporary climate of permissiveness in our society. Indeed, in assuring prospective clients that an annulment may be obtained in four to six months from the time of the filing of the case,[19] he in fact encourages people, who might have otherwise been disinclined and would have refrained from dissolving their marriage bonds, to do so. Nonetheless, the solicitation of legal business is not altogether proscribed. However, for solicitation to be proper, it must be compatible with the dignity of the legal profession. If it is made in a modest and decorous manner, it would bring no injury to the lawyer and to the bar.[20] Thus, the use of simple signs stating the name or names of the lawyers, the office and residence address and fields of practice, as well as advertisement in legal periodicals bearing the same brief data, are permissible. Even the use of calling cards is now acceptable.[21]Publication in reputable law lists, in a manner consistent with the standards of conduct imposed by the canon, of brief biographical and informative data is likewise allowable. As explicitly stated in Ulep v. Legal Clinic, Inc.:[22] Such data must not be misleading and may include only a statement of the lawyers name and the names of his professional associates; addresses, telephone numbers, cable addresses; branches of law practiced; date and place of birth and admission to the bar; schools attended with dates of graduation, degrees and other educational distinctions; public or quasi-public offices; posts of honor; legal authorships; legal teaching positions; membership and offices in bar associations and committees thereof, in legal and scientific societies and legal fraternities; the fact of listings in other reputable law lists; the names and addresses of references; and, with their written consent, the names of clients regularly represented. The law list must be a reputable law list published primarily for that purpose; it cannot be a mere supplemental feature of a paper, magazine, trade journal or periodical which is published principally for other purposes. For that reason, a lawyer may not properly publish his brief biographical and informative data in a daily paper, magazine, trade journal or society program. Nor may a lawyer permit his name to be 60 published in a law list the conduct, management, or contents of which are calculated or likely to deceive or injure the public or the bar, or to lower dignity or standing of the profession. The use of an ordinary simple professional card is also permitted. The card may contain only a statement of his name, the name of the law firm which he is connected with, address, telephone number and special branch of law practiced. The publication of a simple announcement of the opening of a law firm or of changes in the partnership, associates, firm name or office address, being for the convenience of the profession, is not objectionable. He may likewise have his name listed in a telephone directory but not under a designation of special branch of law. (emphasis and italics supplied) WHEREFORE, in view of the foregoing, respondent RIZALINO T. SIMBILLO is found GUILTY of violation of Rules 2.03 and 3.01 of the Code of Professional Responsibility and Rule 138, Section 27 of the Rules of Court. He is SUSPENDED from the practice of law for ONE (1) YEAR effective upon receipt of this Resolution. He is likewise STERNLY WARNED that a repetition of the same or similar offense will be dealt with more severely. Let copies of this Resolution be entered in his record as attorney and be furnished the Integrated Bar of the Philippines and all courts in the country for their information and guidance. SO ORDERED. B. Republic of the Philippines SUPREME COURT Manila EN BANC A.C. No. L-1117 March 20, 1944 THE DIRECTOR OF RELIGIOUS AFFAIRS, complainant, vs. ESTANISLAO R. BAYOT, respondent. Office of the Solicitor General De la Costa and Solicitor Feria for complainant. Francisco Claravall for respondent. OZAETA, J.: The respondent, who is an attorney-at-law, is charged with malpractice for having published an advertisement in the Sunday Tribune of June 13, 1943, which reads as follows: Marriage license promptly secured thru our assistance & the annoyance of delay or publicity avoided if desired, and marriage arranged to wishes of parties. Consultation on any matter free for the poor. Everything confidential. Legal assistance 12 Escolta, Manila, Tel. 2-41-60. Room, service 105 61 Appearing in his own behalf, respondent at first denied having published the said advertisement; but subsequently, thru his attorney, he admitted having caused its publication and prayed for "the indulgence and mercy" of the Court, promising "not to repeat such professional misconduct in the future and to abide himself to the strict ethical rules of the law profession." In further mitigation he alleged that the said advertisement was published only once in the Tribune and that he never had any case at law by reason thereof. Upon that plea the case was submitted to the Court for decision. It is undeniable that the advertisement in question was a flagrant violation by the respondent of the ethics of his profession, it being a brazen solicitation of business from the public. Section 25 of Rule 127 expressly provides among other things that "the practice of soliciting cases at law for the purpose of gain, either personally or thru paid agents or brokers, constitutes malpractice." It is highly unethical for an attorney to advertise his talents or skill as a merchant advertises his wares. Law is a profession and not a trade. The lawyer degrades himself and his profession who stoops to and adopts the practices of mercantilism by advertising his services or offering them to the public. As a member of the bar, he defiles the temple of justice with mercenary activities as the money-changers of old defiled the temple of Jehovah. "The most worth and effective advertisement possible, even for a young lawyer, . . . is the establishment of a well-merited reputation for professional capacity and fidelity to trust. This cannot be forced but must be the outcome of character and conduct." (Canon 27, Code of Ethics.) In In re Tagorda, 53 Phil., the respondent attorney was suspended from the practice of law for the period of one month for advertising his services and soliciting work from the public by writing circular letters. That case, however, was more serious than this because there the solicitations were repeatedly made and were more elaborate and insistent. Considering his plea for leniency and his promise not to repeat the misconduct, the Court is of the opinion and so decided that the respondent should be, as he hereby is, reprimanded. 62 C. EN BANC [ BM No. 553, Jun 17, 1993 ] MAURICIO C. ULEP v. LEGAL CLINIC + RESOLUTION B.M. No. 553 REGALADO, J.: Petitioner prays this Court "to order the respondent to cease and desist from Issuing advertisements similar to or of the same tenor as that of Annexes 'A' and 'B' (of said petition) and to perpetually prohibit persons or entities from making advertisements pertaining to the exercise of the law profession other than those allowed by law." The advertisements complained of by herein petitioner are as follows: Annex A SECRET MARRIAGE? P560.00 for a valid marriage. Info on DIVORCE. ABSENCE. ANNULMENT. VISA. 63 THE Please call: 521-0767 LEGAL 5217232, 5222041 CLINIC, INC. 8:30 am - 6:00 pm 7-Flr. Victoria Bldg. UN Ave., Mla. Annex B GUAM DIVORCE DON PARKINSON an Attorney in Guam, is giving FREE BOOKS on Guam Divorce through The Legal Clinic beginning Monday to Friday during office hours. Guam divorce. Annulment of Marriage. Immigration Problems, Visa Ext. Quota/Non-quota Res. & Special Retiree's Visa. Declaration of Absence. Remarriage to Filipina Fiancees. Adoption. Investment in the Phil. US/Foreign Visa for Filipina Spouse/Children. Call Marivic. THE 7F Victoria Bldg. 429 UN Ave. LEGAL Ermita, Manila nr. US Embassy CLINIC, INC. [1] Tel. 521-7232 521-7251 522-2041 521-0767 It is the submission of petitioner that the advertisements above reproduced are champertous, unethical, demeaning of the law profession, and destructive of the confidence of the community in the integrity of the members of the bar and that, as a member of the legal profession, he is ashamed and offended by the said advertisements, hence the reliefs sought in his petition as hereinbefore quoted. In its answer to the petition, respondent admits the fact of publication of said advertisements at its instance, but claims that it is not engaged in the practice of law but in the rendering of "legal support services" through paralegals with the use of modern computers and electronic machines. Respondent further argues that assuming that the services advertised are legal services, the act of advertising these services should be allowed supposedly in the light of the case of John R. Bates and Van O'Steen vs. State Bar of Arizona.[2] reportedly decided by the United States Supreme Court on June 7, 1977. Considering the critical implications on the legal profession of the issues raised herein, we required the .(1) Integrated Bar of the Philippines (IBP), (2) Philippine Bar Association (PBA), (3) Philippine Lawyers' Association (PLA), (4) U.P. Women Lawyers' Circle (WILOCI), (5) Women Lawyers Association of the, Philippines (WLAP), and (6) Federacion International de Abogadas (FIDA) to submit their respective position papers on the controversy and, thereafter, their memoranda.[3] The said bar associations readily responded and extended their valuable services and cooperation of which this Court takes note with appreciation and gratitude. The main issues posed for resolution before the Court are whether or not the services offered by respondent, The Legal Clinic, Inc., as advertised by it constitutes practice of law and, in either case, whether the same can properly be the subject of the advertisements herein complained of. 64 Before proceeding with an in-depth analysis of the merits of this case, we deem it proper and enlightening to present hereunder, excerpts from the respective position papers adopted by the aforementioned bar associations and the memoranda submitted by them on the issues involved in this bar matter. 1. Integrated Bar of the Philippines: XXX Notwithstanding the subtle manner by which respondent endeavored to distinguish the two terms, i.e., "legal support services" vis-a-vis "legal services", common sense would readily dictate that the same are essentially without substantial distinction. For who could deny that document search, evidence gathering, assistance to layman in need of basic institutional services from government or non-government agencies like birth, marriage, property, or business registration, obtaining documents like clearance, passports, local or foreign visas, constitute practice of law? xxx The Integrated Bar of the Philippines (IBP) does not wish to make issue with respondent's foreign citations. Suffice it to state that the IBP has made its position manifest, to wit, that it strongly opposes the view espoused by respondent (to the effect that today it is alright to advertise one's legal services). The IBP accordingly declares in no uncertain terms its opposition to respondent's act of establishing a "legal clinic" and of concomitantly advertising the same through newspaper publications. The IBP would therefore invoke the administrative supervision of this Honorable Court to perpetually restrain respondent from undertaking highly unethical activities in the field of law practice as aforedescribed.[4] XXX A. The use of the name "The Legal Clinic, Inc." gives the impression that respondent corporation is being operated by lawyers and that it renders legal services. While the respondent repeatedly denies that it offers legal services to the public, the advertisements in question give the impression that respondent is offering legal services. The Petition in fact simply assumes this to be so, as earlier mentioned, apparently because this (is) the effect that the advertisements have on the reading public. The impression created by the advertisements in question can be traced, first of all, to the very name being used by respondent - "The Legal Clinic, Inc." Such a name, it is respectfully submitted connotes the rendering of legal services for legal problems, just like a medical clinic connotes medical services for medical problems. More importantly, the term "Legal Clinic" connotes lawyers, as the term medical clinic connotes doctors. Furthermore, the respondent's name, as published in the advertisements subject of the present case, appears with (the) scale(s) of justice, which all the more reinforces the impression that it is being operated by members of the bar and that it offers legal services. In addition, the advertisements in question appear with a picture and name of a person being represented as a lawyer from Guam, and this practically removes whatever doubt may still remain as to the nature of the service or services being offered. It thus becomes irrelevant whether respondent is merely offering "legal support services" as claimed by it, or whether it offers legal services as any lawyer actively engaged in law practice does. And it becomes unnecessary to make a distinction between "legal services" and "legal support services," as the respondent would have it. The advertisements in question leave no room for doubt in the minds of the reading public that legal services are being offered by lawyers, whether true or not. B. The advertisements in question are meant to induce the performance of acts contrary to law, morals, public order and public policy. It may be conceded that, as the respondent claims, the advertisements in question are only meant to inform 65 the general public of the services being offered by it. Said advertisements, however, emphasize a Guam divorce, and any law student ought to know that under the Family Code, there is only one instance when a foreign divorce is recognized, and that is: Article 26. x x x. Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under Philippine Law. It must not be forgotten, too, that the Family Code (defines) a marriage as follows: Article 1. Marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for the establishment of conjugal and family life. It is the foundation of the family and an inviolable social institution whose nature, consequences, and incidents are governed by law and not subject .to stipulation, except that marriage settlements may fix the property relation during the marriage within the limits provided by this Code. By simply reading the questioned advertisements, it is obvious that the message being conveyed is that Filipinos can avoid the legal consequences of a marriage celebrated in accordance with our law, by simply going to Guam for a divorce. This is not only misleading, but encourages, or serves to induce, violation of Philippine law. At the very least, this can be considered "the dark side" of legal practice, where certain defects in Philippine laws are exploited for the sake of profit. At worst, this is outright malpractice. Rule 1.02. - A lawyer, shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system. In addition, it may also be relevant to point out that advertisements such as that shown in Annex "A" of the Petition, which contains a cartoon of a motor vehicle with the words "Just Married" on its bumper and seems to address those planning a "secret marriage," if not suggesting a "secret marriage," makes light of the "special contract of permanent union," the inviolable social institution," which is how the Family Code describes marriage, obviously to emphasize its sanctity and inviolability. Worse, this particular advertisement appears to encourage marriages celebrated in secrecy, which is suggestive of immoral publication of applications for a marriage license. If the article "Rx for Legal Problems" is to be reviewed, it can readily be concluded that the above impressions one may gather from the advertisements in question are accurate. The Sharon CunetaGabby Concepcion example alone confirms what the advertisements suggest. Here it can be seen that criminal acts are being encouraged or committed (a bigamous marriage in Hong Kong or Las Vegas) with impunity simply because the jurisdiction of Philippine courts does not extend to the place where the, crime is committed. Even if it be assumed, arguendo, (that) the "legal support services" respondent offers do not constitute legal services as commonly understood, the advertisements in question give the impression that respondent corporation is being operated by 'lawyers and that it offers legal services, as earlier discussed. Thus, the only logical consequence is that, in the eyes of an ordinary newspaper reader, members of the bar themselves are encouraging or inducing the performance of acts which are contrary to law, morals, good customs and the public good, thereby destroying and demeaning the integrity of the Bar. xxx It is respectfully submitted that respondent should be enjoined from causing the publication of the advertisements in question, or any other advertisements similar thereto. It is also submitted that respondent should be prohibited from further performing or offering some of the services it presently offers, or, at the very least, from offering such services to the public in general. The IBP is aware of the fact that providing computerized legal research, electronic data gathering, storage and retrieval, standardized legal forms, investigators for gathering of evidence, and like services will greatly benefit the legal profession and should not be stifled but instead encouraged. However, when the conduct of 66 such business by non-members of the Bar encroaches upon the practice of law, there can be no choice but to prohibit such business. Admittedly, many of the services involved in the case at bar can be better performed by-specialists in other fields, such as computer experts, who by reason of their having devoted time and effort exclusively to such field cannot fulfill the exacting requirements for admission to the Bar. To prohibit them from "encroaching" upon the legal profession will deny the profession of the great benefits and advantages of modern technology. Indeed, a lawyer using a computer will be doing better than a lawyer using a typewriter, even if both are (equal) in skill. Both the Bench and the Bar, however, should be careful not to allow or tolerate the illegal practice of law in any form, not only for the protection of members of the Bar but also, and more importantly, for the protection of the public. Technological development in the profession may be encouraged without tolerating, but instead ensuring prevention of, illegal practice. There might be nothing objectionable if respondent is allowed to perform all of its services, but only if such services are made available exclusively to members of the Bench and Bar. Respondent would then be offering technical assistance, not legal services. Alternatively, the more difficult task of carefully distinguishing between which service may be offered to the public in general and which should be made available exclusively to members of the Bar may be undertaken. This, however, may require further proceedings because of the factual considerations involved. It must be emphasized, however, that some of respondent's services ought to be prohibited outright, such as acts which tend to suggest or induce celebration abroad of marriages which are bigamous or otherwise illegal and void under Philippine law. While respondent may not be prohibited from simply disseminating information regarding such matters, it must be required to include, in the information given, a disclaimer that it is not authorized to practice law, that certain course of action may be illegal under Philippine law, that it is not authorized or capable of rendering a legal opinion, that a lawyer should be consulted before deciding on which course of action to take, and that it cannot recommend any particular lawyer without subjecting itself to possible sanctions for illegal practice of law. If respondent is allowed to advertise, advertising should be directed exclusively at members of the Bar, with a clear and unmistakable disclaimer that it is not authorized to practice law or perform legal services. The benefits of being assisted by paralegals cannot be ignored. But nobody should be allowed to represent himself as a "paralegal" for profit, without such term being clearly defined by rule or regulation, and without any adequate and effective means of regulating his activities. Also, law practice in a corporate form may prove to be advantageous to the legal profession, but before allowance of such practice may be considered, the corporation's Articles of Incorporation and By-laws must conform to each and every provision of the Code of Professional Responsibility and the Rules of Court.[5] 2. Philippine Bar Association: XXX Respondent asserts that it "is not engaged in the practice of law but engaged in giving legal support services to lawyers and laymen, through experienced paralegals, with the use of modern computers and electronic machines" (pars. 2 and 3, Comment). This is absurd. Unquestionably, respondent's acts of holding out itself to the public under the trade name "The Legal Clinic, Inc.," and soliciting employment for its enumerated services fall within the realm of a practice which thus yields itself to the regulatory powers of the Supreme Court. For respondent to say that it is merely engaged in paralegal work is to ' stretch credulity. Respondent's own commercial advertisement which announces a. certain Atty. Don Parkinson to be handling the fields of law belies its pretense. From all indications, respondent "The Legal Clinic, Inc." is offering and rendering legal services through its reserve of lawyers. It has been held that the practice of law is not limited to the conduct of cases in court, but includes drawing of deeds, incorporation, rendering opinions, and advising clients as to their legal rights and then take them to an attorney and ask the latter to look after their case in court (See Martin, Legal and Judicial Ethics, 1984 ed., P. 39). 67 It is apt to recall that only natural persons can engage in the practice of law, and such limitation cannot be evaded by a corporation employing competent lawyers to practice for it. Obviously, this is the scheme or device by which respondent "The Legal Clinic, Inc." holds out itself to the public and solicits employment of its legal services. It is an odious vehicle for deception, especially so when the public cannot ventilate any grievance for malpracticeagainst the business conduit. Precisely, the limitation of practice of law to persons who have been duly admitted as members of the Bar (Sec. 1, Rule 138, Revised Rules of Court) is to subject the members to the discipline of the Supreme Court. Although respondent uses its business name, the persons and the lawyers who act for it are subject to court discipline. The practice of law is not a profession open to all who wish to engage in it nor can it be assigned to another (See 5 Am. Jur. 270). It is a personal right limited to persons who have qualified themselves under the law. It follows that not only respondent but also all the persons who are acting for respondent are the persons engaged in unethical law practice.[6] 3. Philippine Lawyers" Association: The Philippine Lawyers' Association's position, in answer to the issues stated herein, are, to wit: 1. The Legal Clinic is engaged in the practice of law; 2. Such practice is unauthorized; 3. and The advertisements complained of are not only unethical, but also misleading and patently immoral; 4. The Honorable Supreme Court has the power to suppress and punish the Legal Clinic and its corporate officers for its unauthorized practice of law and for its unethical, misleading and immoral advertising. XXX Respondent posits that it is not engaged in the practice of law. It claims that it merely renders "legal support services" to lawyers, litigants and the general public as enunciated in the Primary Purpose Clause of its Article(s) of Incorporation. (See pages 2 to 5 of Respondent's Comment). But its advertised services, as enumerated above, clearly and convincingly show that it is indeed engaged in law practice, albeit outside of court. As advertised, it offers the general public its advisory services on Persons and Family Relations Law, particularly regarding foreign divorces, annulment of marriages, secret marriages, absence and adoption; Immigration Laws, particularly on visa related problems, immigration problems; the Investment Law of the Philippines and such other related laws. Its advertised services unmistakably require the application of the aforesaid laws, the legal principles and procedures related thereto, the legal advices based thereon and which activities call for legal training, knowledge and experience. Applying the test laid down by the Court in the aforecited Agrava Case, the activities of respondent fall squarely and are embraced in what lawyers and laymen equally term as "the practice of law." [7] 4. U.P. Women Lawyers' Circle: In resolving the issues before this Honorable Court, paramount consideration should be given to the protection of the general public from the danger of being, exploited by unqualified persons or entities who may be engaged in the practice of law. At present, becoming a lawyer requires one to take a rigorous four-year course of study on top of a four-year bachelor of arts or sciences course and then to take and pass the bar examinations. Only then, is a lawyer qualified to practice law. While the use of a paralegal is sanctioned in many jurisdictions as an aid to the administration of justice, there are in those jurisdictions, courses of study and/or standards which would qualify these paralegals to deal with the general public as such. While it may now be the opportune time to establish these courses of study and/or 68 standards, the fact remains that at present, these do not exist in the Philippines. In the meantime, this Honorable Court may decide to take measures to protect the general public from being exploited by those who may be dealing with the general public in the guise of being "paralegals" without being qualified to do so. In the same manner, the general public should also be protected from the dangers which may be brought about by advertising of legal services. While it appears that lawyers are prohibited under the present Code of Professional Responsibility from advertising, it appears in the instant case that legal services are being advertised not by lawyers but, by an entity staffed by "paralegals." Clearly, measures should be taken to protect the general public from falling prey to those who advertise legal services without being qualified to offer such services."[8] A perusal of the questioned advertisements of Respondent, however, seems to give the impression that information regarding validity of marriages, divorce, annulment of marriage, immigration, visa extensions, declaration of absence, adoption and foreign investment, which are in essence, legal matters, will be given to them if they avail of its services. The Respondent's name - The Legal Clinic, Inc. - does not help matters. It gives the impression again that Respondent will or can cure the legal problems brought to them. Assuming that Respondent is, as claimed, staffed purely by paralegals, it also gives the misleading impression that there are lawyers involved in The Legal Clinic, Inc., as there are doctors in any medical clinic, when only "paralegals" are involved in The Legal Clinic, Inc. Respondent's allegations are further belied by the very admissions of its President and majority stockholder, Atty. Nogales, who gave an insight on the structure and main purpose of Respondent corporation in the aforementioned "Starweek" article."[9] 5. Women Lawyer's Association of the Philippines: Annexes "A" and "B" of the petition are clearly advertisements to solicit, cases for the purpose of gain which, as provided for under the above cited law, (are) illegal and against the Code of Professional Responsibility of lawyers in this country. Annex "A" of the petition is not only illegal in that it is an advertisement to solicit cases, but it is illegal in that in bold letters it announces that the Legal Clinic, Inc., could work out/cause the celebration of a secret marriagewhich is not only illegal but immoral in this country. While it is advertised that one has to go to said agency and pay P560 for a valid marriage it is certainly fooling the public for valid marriages in the Philippines are solemnized only by officers authorized to do so under the law. And to employ an agency for said purpose of contracting marriage is not necessary. No amount of reasoning that in the. USA, Canada and other countries the trend is towards allowing lawyers to advertise their special skills to enable people to obtain from qualified practitioners legal services for their particular needs can justify the use of advertisements such as are the subject matter of this petition, for one (cannot) justify an illegal act even by whatever merit the illegal act may serve. The law has yet to be amended so that such as act could become justifiable. We submit further that these advertisements that seem to project that secret marriages and divorce are possible in this country for a fee, when in fact it is not so, are highly reprehensible. It would encourage people to consult this clinic about how they could go about having a secret marriage here, when it cannot nor should ever be attempted, and seek advice on divorce, where in this country there is none, except under the Code of Muslim Personal Laws in the Philippines. It is also against good morals and is deceitful because it falsely represents to the public to be able to do that which by our laws cannot be done (and) by our Code of Morals should not be done. In the case (of) In re Taguda, 53 Phil. 37, the Supreme Court held that solicitation for clients by an attorney by circulars of advertisements, is unprofessional, and offenses of this character justify permanent elimination from the Bar.[10] 6. Federacion Internacional de Abogadas: 69 XXX 1.7 That entities admittedly not engaged in the practice of law, such as management consultancy firms or travel agencies, whether run by lawyers or not, perform the services rendered by Respondent does not necessarily lead to the conclusion that Respondent is not unlawfully practicing law. In the same vein, however, the fact that the business of respondent (assuming it can be engaged in independently of the practice of law) involves knowledge of the law does not necessarily make respondent guilty of unlawful practice of law. "x x x Of necessity, no one x x x acting as a consultant can render effective service unless he is familiar with such statutes and regulations. He must be careful not to suggest a course of conduct which the law forbids. It seems x x x clear that (the consultant's) knowledge of the law, and his use of that knowledge as a factor in determining what measures he shall recommend, do not constitute the practice of law x x x. It is not only presumed that all men know the law, but it is a fact that most men have considerable acquaintance with the broad features of the law x x x. Our knowledge of the law - accurate or inaccurate - moulds our conduct not only when we are acting for ourselves, but when we are serving others. Bankers, liquor dealers and laymen generally possess rather precise knowledge of the laws touching their particular business or profession. A good example is the architect, who must be familiar with zoning, building and fire prevention codes, factory and tenement house statutes, and who draws plans and specifications in harmony with the law. This is not practicing law. "But suppose the architect, asked by his client to omit a fire tower, replies that it is required by the statute. Or the industrial relations expert cites, in support of some measure that he recommends, a decision of the National Labor Relations Board. Are they practicing law? In my opinion, they are not, provided no separate fee is charged for the legal advice or information, and the legal question is subordinate and incidental to a major non-legal problem. "It is largely a matter of degree and of custom. "If it were usual for one intending to erect a building on his land to engage a lawyer to advise him and the architect in respect to the building code and the like, then an architect who performed this function would probably be considered to be trespassing on territory reserved for licensed attorneys. Likewise, if the industrial relations field had been pre-empted by lawyers, or custom placed a lawyer always at the elbow of the lay personnel man. But this is not the case. The most important body of industrial relations experts are the officers and business agents of the labor unions and few of them are lawyers. Among the larger corporate employers, it has been the practice for some years to delegate special responsibility in employee matters to a management group chosen for their practical knowledge and skill in such matters, and without regard to legal training or lack of it. More recently, consultants like the defendant have tendered to the smaller employers the same service that the larger employers get from their own specialized staff. "The handling of industrial relations is growing into a recognized profession for which appropriate courses are offered by our leading universities. The court should be very cautious about declaring [that] a widespread, well-established method of conducting business is unlawful, or that the considerable class of men who customarily perform a certain function have no right to do so, or that the technical education given by our schools cannot be used by the graduates in their business. "In determining whether a man is practicing law we should consider his work for any particular client or customer, as a whole. I can imagine defendant being engaged primarily to advise as to the law defining his client's obligations to his employees, to guide his client along the path charted by law. This, of course, would be the practice of the law. But such is not the fact in the case before me. Defendant's primary efforts are along economic and psychological lines. The law only provides the frame within which he must work, just as the zoning code limits the kind of building the architect may plan. The incidental legal advice or information defendant may give, does not transform his activities into the practice of law. Let me add that if, even as a minor feature of his work, he performed services which are customarily reserved to members of the bar, he would be practicing law. For instance, if as part of a welfare program, he drew employees wills. 70 "Another branch of defendant's work is the representation of the employer in the adjustment of grievances and in collective bargaining, with or without a mediator. This is not per se the practice of law. Anyone may use an agent for negotiations and may select an agent particularly skilled in the subject under discussion, and the person appointed is free to accept the employment whether or not he is a member of the bar. Here, however, there may be an exception where the business turns on a question of law. Most real estate sales are negotiated by brokers who are not lawyers. But if the value of the land depends on a disputed right-of-way and the principal role of the negotiator is to assess the probable outcome of the dispute and persuade the opposite party to the same opinion, then it may be that only a lawyer can accept the assignment. Or if a controversy between an employer and his men grows from differing interpretations of a contract, or of a statute, it is quite likely that defendant should not handle it. But I need not reach a definite conclusion here, since the situation is not presented by the proofs. "Defendant also appears to represent the employer before administrative agencies of the federal government, especially before trial examiners of the National Labor Relations Board. An agency of the federal government, acting by virtue of an authority granted by the Congress, may regulate the representation of parties before such agency. The State of New Jersey is without power to interfere with such determination or to forbid representation before the agency by one whom the agency admits. The rules of the National Labor Relations Board give to a party the right to appear 'in person, or by counsel, or by other representative. Rules and Regulations, September 11th, 1946, S. 203.31. 'Counsel' here means a licensed attorney, and 'other representative' one not a lawyer. In this phase of his work, defendant may lawfully do whatever the Labor Board allows, even arguing questions purely legal." (Auerbacher v. Wood, 53 A. 2d 800, cited in Statsky, Introduction to Paralegalism [1974], at pp. 154-156.) 1.8 From the foregoing, it can be said that a person engaged in a lawful calling (which may involve knowledge of the law) is not engaged in the practice of law provided that: (a) The legal question is subordinate and incidental to a major non-legal problem; (b) The services performed are not customarily reserved to members of the bar; (c) No separate fee is charged for the legal advice or information. All these must be considered in relation to the work for any particular client as a whole. 1.9. If the person involved is both lawyer and non-lawyer, the Code of Professional Responsibility succinctly states the rule of conduct: "Rule 15.08 - A lawyer who is engaged in another profession or occupation concurrently with the practice of law shall make clear to his client whether he is acting as a lawyer or in another capacity." 1.10. In the present case, the Legal Clinic appears to render wedding services (See Annex "A", Petition). Services on routine, straightforward marriages, like securing a marriage license, and making arrangements with a priest or a judge, may not constitute practice of law. However, if the problem is as complicated as that described in "Rx for Legal Problems" on the Sharon Cuneta-Gabby Concepcion-Richard Gomez case, then what may be involved is actually the practice of law. If a non-lawyer, such as the Legal Clinic, renders such services, then it is engaged in the unauthorized practice of law. 1.11. The Legal Clinic also appears to give information on divorce, absence, annulment of marriage and visas (See Annexes "A" and "B", Petition). Purely giving informational materials may not constitute practice of law. The business is similar to that of a bookstore where the customer buys materials on the subject and determines by himself what courses of action to take. It is not entirely improbable, however, that aside from purely giving information, the Legal Clinic's paralegals may apply the law to the particular problem of the client, and give legal advice. Such would constitute unauthorized practice of law. "It cannot be claimed that the publication of a legal text which purports to say what the law is amounts to legal practice. And the mere fact that the principles or rules stated in the text may be accepted by a particular 71 reader as a solution to his problem does not affect this. x x x Apparently it is urged that the conjoining of these two, that is, the text and the forms, with advice as to how the forms should be filled out, constitutes the unlawful practice of law. But that is the situation with many approved and accepted texts. Dacey's book is sold to the public at large. There is no personal contact or relationship with a particular individual. Nor does there exist that relation of confidence and trust so necessary to the status of attorney and client. THIS IS THE ESSENTIAL OF LEGAL PRACTICE - THE REPRESENTATION AND ADVISING OF A PARTICULAR PERSON IN A PARTICULAR SITUATION. At most the book assumes to offer general advice on common problems, and does not purport to give personal advice on a specific problem peculiar to a designated or readily identified person. Similarly the defendant's publication does not purport to give personal advice on a specific problem peculiar, to a designated or readily identified person in a particular situation - in the publication and sale of the kits, such publication and sale did not constitute the unlawful practice of law x x x. There being no legal impediment under the statute to the sale of the kit, there was no proper basis for the injunction against defendant maintaining an office for the purpose of selling to persons seeking a divorce, separation, annulment or separation agreement any printed material or writings relating to matrimonial law or the prohibition in the memorandum of modification of the judgment against defendant having an interest in any publishing house publishing his manuscript on divorce and against his having any personal contact with any prospective purchaser. The record does fully support, however, the finding that for the charge of $75 or $100 for the kit, the defendant gave legal advice in the course of personal contacts concerning particular problems which might arise in the preparation and presentation of the purchaser's asserted matrimonial cause of action or pursuit of other legal remedies and assistance in the preparation of necessary documents (The injunction therefore sought to) enjoin conduct constituting the practice of law, particularly with reference to the giving of advice and counsel by the defendant, relating to specific problems of particular individuals in connection with a divorce, separation, annulment of separation agreement sought and should be affirmed." (State v. Winder, 348, NYS 2d 270 [1973], cited in Statsky, supra at p. 101.) 1.12. Respondent, of course, states that its services are "strictly non-diagnostic, non-advisory." It is notcontroverted, however, that if the services "involve giving legal advice or counselling," such would constitute practice of law (Comment, par. 6.2). It is in this light that FIDA submits that a factual inquiry may be necessary for the judicious disposition of this case. xxx 2.10. Annex "A" may be ethically objectionable in that it can give the impression (or perpetuate the wrong notion) that there is a secret marriage. With all the solemnities, formalities and other requisites of marriages (See Articles 2, et seq., Family Code), no Philippine marriage can be secret. 2.11. Annex "B" may likewise be ethically objectionable. The second paragraph thereof (which is not necessarily related to the first paragraph) fails to state the limitation that only "paralegal services" or "legal support services", and not legal services, are available."[11] A prefatory discussion on the meaning of the phrase "practice of law" becomes exigent for a proper determination of the issues raised by the petition at bar. On this score, we note that the clause "practice of law" has long been the subject of judicial construction and interpretation. The courts have laid down general principles and doctrines explaining the meaning and scope of the term, some of which we now take into account. Practice of law means any activity, in or out of court, which requires the application of law, legal procedures, knowledge, training and experience. To engage in the practice of law is to perform those acts which are characteristic of the profession. Generally, to practice law is to give advice or render any kind of service that involves legal knowledge or skill.[12] The practice of law is not limited to the conduct of cases in court. It includes legal advice and counsel, and the preparation of legal instruments and contracts by which legal rights are secured, although such matter may or may not be pending in a court.[13] In the practice of his profession, a licensed attorney at law generally engages in three principal types of professional activity: legal advice and instructions to clients to inform them of their rights and obligations, 72 preparation for clients of documents requiring knowledge of legal principles not possessed by ordinary layman, and appearance for clients before public tribunals which possess power and authority to determine rights of life, liberty, and property according to law, in order to assist in proper interpretation and enforcement of law.[14] When a person participates in a trial and advertises himself as a lawyer, he is in the practice of law. [15] One who confers with clients, advises them as to their legal rights and then takes the business to an attorney and asks the latter to look after the case in court, is also practicing law.[16] Giving advice for compensation regarding the legal status and rights of another and the conduct with respect thereto constitutes a practice of law.[17] One who renders an opinion as to the proper interpretation of a statute, and receives pay for it, is, to that extent, practicing law.[18] In the recent case of Cayetano vs. Monsod.[19] after citing the doctrines in several cases, we laid down the test to determine whether certain acts constitute "practice of law," thus: Black defines "practice of law" as: "The rendition of services requiring the knowledge and the application of legal principles and technique to serve the interest of ' another with his consent. It is not limited to appearing in court, or advising and assisting in the conduct of litigation, but embraces the preparation of pleadings, and other papers incident to .actions and special proceedings, conveyancing, the preparation of legal instruments of all kinds, and the giving of all legal advice to clients. It embraces all advice to clients and all actions taken for them in matters connected with the law." The practice of law is not limited to the conduct of cases in court. (Land Title Abstract and Trust Co. v. Dworken,129 Ohio St. 23, 193 N.E. 650). A person is also considered to be in the practice of law when he: "x x x for valuable consideration engages in the business of advising persons, firms, associations or corporations as to their rights under the law, or appears in a representative capacity as an advocate in proceedings, pending or prospective, before any court, commissioner, referee, board, body, committee, or commission constituted by law or authorized to settle controversies and there, in such representative capacity, performs any act or acts for the purpose of obtaining or defending the rights of their clients under the law. Otherwise stated, one who, in a representative capacity, engages in the business of advising clients as to their rights under the law, or while so engaged performs any act or acts either in court or outside of court for that purpose, is engaged in the practice of law. (State ex. rel. Mckittrick v. C.S. Dudley and Co., 102 S.W. 2d 895, 340 Mo. 852)." This Court, in the case of Philippine Lawyers Association v. Agrava (105 Phil. 173, 176-177), stated: "The practice of law is not limited to the conduct of cases or litigation in court; it embraces the preparation of pleadings and other papers incident to actions and special proceedings, the management of such actions and proceedings on behalf of clients before judges and courts, and in addition, conveying. In general, all advice to clients, and all action taken for them in matters connected with the law incorporation services, assessment and condemnation services contemplating an appearance before a judicial body, the foreclosure of a mortgage, enforcement of a creditor's claim in bankruptcy and insolvency proceedings, and conducting proceedings in attachment, and in matters of estate and guardianship have been held to constitute law practice, as do the preparation and drafting of legal instruments, where the work done involves the determination by the trained legal mind of the legal effect of facts and conditions. (5 Am. Jr. p. 262, 263). "Practice of law under modern conditions consists in no small part of work performed outside of any court and having no immediate relation to proceedings in court. It embraces conveyancing, the giving of legal advice on a large variety of subjects, and the preparation and execution of legal instruments covering an extensive field of business and trust relations and other affairs. Although these transactions may have no direct connection with court proceedings, they are always subject to become involved in litigation. They require in many aspects a high degree of legal skill, a wide experience with men and affairs, and great capacity for adaptation to 73 difficult and complex situations. These customary functions of an attorney or counselor at law bear an intimate relation to the administration of justice by the courts. No valid distinction, so far as concerns the question set forth in the order, can be drawn between that part of the work of the lawyer which involves appearance in court and that part which involves advice and drafting of instruments in his office. It is of importance to the welfare of the public that these manifold customary functions be performed by persons possessed of adequate learning and skill, of sound moral character, and acting at all times under the heavy trust obligations to clients which rests upon all attorneys. (Moran, Comments on the Rules of Court, Vol. 3 [1973 ed.], pp. 665666, citing In Re Opinion of the Justices [Mass.], 194 N.E. 313, quoted in Rhode Is. Bar Assoc. v. Automobile Service Assoc. [R.I.] 179 A. 139, 144)." The practice of law, therefore, covers a wide range of activities in and out of court. Applying the aforementioned criteria to the case at bar, we agree with the perceptive findings and observations of the aforestated bar associations that the activities of respondent, as advertised, constitute "practice of law." The contention of respondent that it merely offers legal support services can neither be seriously considered nor sustained. Said proposition is belied by respondent's own description of the services it has been offering, to wit: "Legal support services basically consist of giving ready information by trained paralegals to laymen and lawyers, which are strictly non-diagnostic, non-advisory, through the extensive use of computers and modern information technology in the gathering, processing, storage, transmission and reproduction of information and, communication, such as computerized, legal research; encoding and reproduction of. documents and pleadings prepared by laymen or lawyers; document search; evidence gathering; locating parties or witnesses to a case; fact finding investigations; and assistance to laymen in need of basic institutional services from government or non-government agencies, like birth, marriage, property, or business registrations; educational or employment records or certifications, obtaining documentation like clearances, passports, local or foreign visas; giving information about laws of other countries that they may find useful, like foreign divorce, marriage or adoption laws that they can avail of preparatory to emigration to that foreign country, and other matters that do not involve representation of clients in court; designing and installing computer systems, programs, or software for the efficient management of law offices, corporate legal departments, courts, and other entities engaged in dispensing or administering legal services."[20] While some of the services being offered by respondent corporation merely involve mechanical and technical know-how, such as the installation of computer systems and programs for the efficient management of law offices, or the computerization of research aids and materials, these will not suffice to justify an exception to the general rule. What is palpably clear is that respondent corporation gives out legal information to laymen and lawyers. Its contention that such function is non-advisory and non-diagnostic is more apparent than real. In providing information, for example, about foreign laws on marriage, divorce and adoption, it strains the credulity of this Court that all that respondent corporation will simply do is look for the law, furnish a copy thereof to the client, and stop there as if it were merely a bookstore. With its attorneys and so called paralegals, it will necessarily have to explain to the client the intricacies of the law and advise him or her on the proper course of action to be taken as may be provided for by said law. That is what its advertisements represent and for which services it will consequently charge and be paid. That activity falls squarely within the jurisprudential definition of "practice of law." Such a conclusion will not be altered by the fact that respondent corporation does not represent clients in court since law practice, as the weight of authority holds, is not limited merely to court appearances but extends to legal research, giving legal advice, contract drafting, and so forth. The aforesaid conclusion is further strengthened by an article published in the January 13, 1991 issue of the Starweek/The Sunday Magazine of the Philippine Star, entitled "Rx for Legal Problems," where an insight into the structure, main purpose and operations of respondent corporation was given by its own "proprietor," Atty. Rogelio P. Nogales: This is the kind of business that is transacted everyday at The Legal Clinic, with offices on the seventh floor of theVictoria Building along U.N. Avenue in Manila. No matter what the client's problem, and even if it is as complicated as the Cuneta-Concepcion domestic situation, Atty. Nogales and his staff of lawyers, who, like 74 doctors, are "specialists" in various fields, can take care of it. The Legal Clinic, Inc. has specialists in taxation and criminal law, medico-legal problems, labor, litigation and family law. These specialists are backed up by a battery of paralegals, counsellors and attorneys. Atty. Nogales set up The Legal Clinic in 1984. Inspired by the trend in the medical field toward specialization, it caters to clients who cannot afford the services of the big law firms. The Legal Clinic has regular and walk-in clients. "When they come, we start by analyzing the problem. That's what doctors do also. They ask you how you contracted what's bothering you, they take your temperature, they observe you for the symptoms, and so on. That's how we operate, too. And once the problem has been categorized, then it's referred to one of our specialists." There are cases which do not, in medical terms, require surgery or, follow-up treatment. These The Legal Clinic disposes of in a matter of minutes. "Things like preparing a simple deed of sale or an affidavit of loss can be taken care of by our staff or, if this were a hospital, the residents or the interns. We can take care of these matters on a while you wait basis. Again, kung baga sa ospital, out-patient, hindi kailangang maconfine. It's just like a common cold or diarrhea," explains Atty. Nogales. Those cases which require more extensive "treatment" are dealt with accordingly. "If you had a rich relative who died and named you her sole heir, and you stand to inherit millions of pesos of property, we would refer you to a specialist in taxation. There would be real estate taxes and arrears which would need to be put in order, and your relative is even taxed by the state for the right to transfer her property, and only a specialist in taxation would be properly trained to deal with that problem. Now, if there were other heirs contesting your rich relative's will, then you would need a litigator, who knows how to arrange the problem for presentation in court, and gather evidence to support the case."[21] That fact that the corporation employs paralegals to carry «out its services is not controlling. What is important is that it is engaged in the practice of law by virtue of the nature of the services it renders which thereby brings it within the ambit of the statutory prohibitions against the advertisements which it has caused to be published and are now assailed in this proceeding. Further, as correctly and appropriately pointed out by the U.P. WILOCI, said reported facts, sufficiently establish that the main purpose of respondent is to serve as a one-stop-shop of sorts for various legal problems wherein a client may-avail of legal services from simple documentation to complex litigation and corporate undertakings. Most of these services are undoubtedly beyond the domain of paralegals, but rather, are exclusive functions of lawyers engaged in the practice of law.[22] It should be noted that in our jurisdiction the services being offered by private respondent which constitute practice of law cannot be performed by paralegals. Only a person duly admitted as a member of the bar, or hereafter admitted as such in accordance with the provisions of the Rules of Court, and who is in good and regular standing, is entitled to practice law.[23] Public policy requires that the practice of law be limited to those individuals found duly qualified in education and character. The permissive right conferred on the lawyers is an individual and limited privilege subject to withdrawal if he fails to maintain proper standards of moral and professional conduct. The purpose is to protect the public, the court, the client and the bar from the 'incompetence or dishonesty' of those unlicensed to practice law and not subject to the disciplinary control of the court.[24] The same rule is observed in the American jurisdiction wherefrom respondent would wish to draw support for his thesis. The doctrines there also stress that the practice of law is limited to those who meet the requirements for, and have been admitted to, the bar, and various statutes or rules specifically so provide.[25] The practice of law is not a lawful business except for members of the bar who have complied with all the conditions required by statute and the rules of court. Only those persons are allowed to practice law who, by reason of attainments previously acquired through education and study, have been recognized by the courts as possessing profound knowledge of legal science entitling them to advise, counsel with, protect, or defend the rights, claims, or liabilities of their clients, with respect to the construction, interpretation, operation and effect of law.[26] The justification for excluding from the practice of law those not admitted to the bar is found, not in the protection of the bar from competition, but in the protection of the public from being advised 75 and represented in legal matters by incompetent and unreliable persons over whom the judicial department can exercise little control.[27] We have to necessarily and definitely reject respondent's position that the concept in the United States of paralegals as an occupation separate from the law profession be adopted in this jurisdiction. Whatever may be its merits, respondent cannot but be aware that this should first be a matter for judicial rules or legislative action, and not of unilateral adoption as it has done. Paralegals in the United States are trained professionals. As admitted by respondent, there are schools and universities there which offer studies and degrees in paralegal education, while there are none in the Philippines.[28] As the concept of the "paralegal" or "legal assistant" evolved in the United States, standards and guidelines also evolved to protect the general public. One of the major standards or guidelines was developed by the American Bar Association which set up Guidelines for the Approval of Legal Assistant Education Programs (1973). Legislation has even been proposed to certify legal assistants. There are also associations of paralegals in the United States with their own code of professional ethics, such as the National Association of Legal Assistants, Inc. and the American Paralegal Association.[29] In the Philippines, we still have a restricted concept and limited acceptance of what may be considered as paralegal service. As pointed out by FIDA, some persons not duly licensed to practice law are or have been allowed limited representation in behalf of another or to render .legal services, but such allowable services are limited in scope and extent by the law, rules or regulations granting permission therefor.[30] Accordingly, we have adopted the American judicial policy that, in the absence of constitutional or statutory authority, a person who has not been admitted as an attorney cannot practice law for the proper administration of justice cannot be hindered by the unwarranted intrusion of an unauthorized and unskilled person into the practice of law.[31] That policy should continue to be one of encouraging persons who are unsure of their legal rights and remedies to seek legal assistance only from persons licensed to practice law in the state.[32] Anent the issue on the validity of the questioned advertisements, the Code of Professional Responsibility provides that a lawyer in making known his legal services shall use only true, honest, fair, dignified and objective information or statement of facts.[33] He is not supposed to use or permit the use of any false, fraudulent, misleading, deceptive, undignified, self-laudatory or unfair statement or claim regarding his qualifications or legal services.[34] Nor shall he pay or give something of value to representatives of the mass media in anticipation of, or in return for, publicity to attract legal business. [35] Prior to the adoption of the Code of Professional Responsibility, the Canons of Professional Ethics had also warned that lawyers should not resort to indirect advertisements for professional employment, such as furnishing or inspiring newspaper comments, or procuring his photograph to be published in connection with causes in which the lawyer has been or is engaged or concerning the manner of their conduct, the magnitude of the interest involved, the importance of the lawyer's position, and all other like self-laudation.[36] The standards of the legal profession condemn the lawyer's advertisement, of his talents. A lawyer cannot, without violating the ethics of his profession, advertise his talents or skills as in a manner similar to a merchant advertising his goods.[37] The proscription against advertising of legal services or solicitation of legal business rests on the fundamental postulate that the practice of law is a profession. Thus, in the case of The Director of Religious Affairs vs. Estanislao R. Bayot[38]an advertisement, similar to those of respondent which are involved in the present proceeding,[39] was held to constitute improper advertising or solicitation. The pertinent part of the decision therein reads: It is undeniable that the advertisement in question was a flagrant violation by the respondent of the ethics of his profession, it being a brazen solicitation of business from the public. Section 25 of Rule 127 expressly provides among other things that "the practice of soliciting cases at law for the purpose of gain, either personally or thru paid agents or brokers, constitutes malpractice." It is highly unethical for an attorney to advertise his talents or skill as a merchant advertises his wares. Law is a profession and not a trade. The lawyer degrades himself and his profession who stoops to and adopts the practices of mercantilism by advertising his services or offering them to the public. As a member of the bar, he defiles the temple of justice 76 with mercenary activities as the money-changers of old defiled the temple of Jehovah. "The most worthy and effective advertisement possible, even for a young lawyer, * * * is the establishment of a well-merited reputation for professional capacity and fidelity to trust. This cannot be forced but must be the outcome of character and conduct." (Canon 27, Code of Ethics.) We repeat, the canons of the profession tell us that the best advertising possible for a lawyer is a well-merited reputation for professional capacity and fidelity to trust, which must be earned as the outcome of character and conduct. Good and efficient service to a client as well as to the community has a way of publicizing itself and catching public attention. That publicity is a normal by-product of effective service which is right and proper. A good and reputable lawyer needs no artificial stimulus to generate it and to magnify his success. He easily sees the difference between a normal by-product of able service and the unwholesome result of propaganda.[40] Of course, not all types of advertising or solicitation are prohibited. The canons of the profession enumerate exceptions to the rule against advertising or solicitation and define the extent to which they may be undertaken. The exceptions are of two broad categories, namely, those which are expressly allowed and those which are necessarily implied from the restrictions.[41] The first of such exceptions is the publication in reputable law lists, in a manner consistent, with the standards of conduct imposed by the canons, of brief biographical and informative data. "Such data must not be misleading and may include only a statement of the lawyer's name and the names of his professional associates; addresses, telephone numbers, cable addresses; branches of law practiced; date and place of birth and admission to the bar; schools attended with dates of graduation, degrees and other educational distinction; public or quasi-public offices; posts of honor; legal authorships; legal teaching positions; membership and offices in bar associations and committees thereof, in legal and scientific societies and legal fraternities; the fact of listings in other reputable law lists; the names and addresses of references; and, with their written consent, the names of clients regularly represented."[42] The law list must be a reputable law list published primarily for that purpose; it cannot be a mere supplemental feature of a paper, magazine, trade journal or periodical which is published principally for other purposes. For that reason, a lawyer may not properly publish his brief biographical and informative data in a daily paper, magazine, trade journal or society program. Nor may a lawyer permit his name to be published in a law list the conduct, management or contents of which are calculated or likely to deceive or injure the public or the bar, or to lower the dignity or standing of the profession.[43] The use of an ordinary simple professional card is also permitted. The card may contain only a statement of his name, the name of the law firm which he is connected with, address, telephone number and special branch of law practiced. The publication of a simple announcement of the opening of a law firm or of changes in the partnership, associates, firm name or office address, being for the convenience of the profession, is not objectionable. He may likewise have his name listed in a telephone directory but not under a designation of special branch of law.[44] Verily, taking into consideration the nature and contents of the advertisements for which respondent is being taken to task, which even includes a quotation of the fees charged by said respondent corporation for services rendered, we find and so hold that the same definitely do not and conclusively cannot fall under any of the above-mentioned exceptions. The ruling in the case of Bates, et al. vs. State Bar of Arizona.[45] which is repeatedly invoked and constitutes the justification relied upon by respondent, is obviously not applicable to the case at bar. Foremost is the fact that the disciplinary rule involved in said case explicitly allows a lawyer, as an exception to the prohibition against advertisements by lawyers, to publish a statement of legal fees for an initial consultation or the availability upon request of a written schedule of fees or an estimate of the fee to be charged for the specific services. No such exception is provided for, expressly or impliedly, whether in our former Canons of Professional Ethics or the present Code of Professional Responsibility. Besides, even the disciplinary rule in the Bates case contains a proviso that the exceptions stated therein are "not applicable in any state unless and until it is implemented by such authority in that state."[46] This goes to show that an exception to the general rule, such as that being invoked by herein respondent, can be made only if and when the canons 77 expressly provide for such an exception. Otherwise, the prohibition stands, as in the case at bar. It bears mention that in a survey conducted by the American Bar Association after the decision in Bates, on the attitude of the public about lawyers after viewing television commercials, it was found that public opinion dropped significantly[47] with respect to these characteristics of lawyers: Trustworthy from 71% to 14% Professional from 71% to 14% Honest from 65% to 14% Dignified from 45% to 14% Secondly, it is our firm belief that with the present situation of our legal and judicial systems, to allow the publication of advertisements of the kind used by respondent would only serve to aggravate what is already a deteriorating public opinion of the legal profession whose integrity has consistently been under attack lately by media and the community in general. At this point in time, it is of utmost importance in the face of such negative, even if unfair, criticisms at times, to adopt and maintain that level of professional conduct which is beyond reproach, and to exert all efforts to regain the high esteem formerly accorded to the legal profession. In sum, it is undoubtedly a misbehavior on the part of the lawyer, subject to disciplinary action, to advertise his services except in allowable instances[48] or to aid a layman in the unauthorized practice of law.[49] Considering that Atty. Rogelio P. Nogales, who is the prime incorporator, major stockholder and proprietor of The Legal Clinic, Inc. is a member of the Philippine Bar, he is hereby reprimanded, with a warning that a repetition of the same or similar acts which are involved in this proceeding will be dealt with more severely. While we deem it necessary that the question as to the legality or illegality of the purpose/s for which the Legal Clinic, Inc. was created should be passed upon and determined, we are constrained to refrain from lapsing into anobiter on that aspect since it is clearly not within the adjudicative parameters of the present proceeding which is merely administrative in nature. It is, of course, imperative that this matter be promptly determined, albeit in a different proceeding and forum, since, under the present state of our law and jurisprudence, a corporation cannot be organized for or engage in the practice of law in this country. This interdiction, just like the rule against unethical advertising, cannot be subverted by employing some so-called paralegals supposedly rendering the alleged support services. The remedy for the apparent breach of this prohibition by respondent is the concern and province of the Solicitor General who can institute the corresponding quo warranto action,[50] after due ascertainment of the factual background and basis for the grant of respondent's corporate charter, in light of the putative misuse thereof. That spin-off from the instant bar matter is referred to the Solicitor General for such action as may be necessary under the circumstances. ACCORDINGLY, the Court Resolved to RESTRAIN and ENJOIN herein respondent, The Legal Clinic, Inc., from issuing or causing the publication or dissemination of any advertisement in any form which is of the same or similar tenor and purpose as Annexes "A" and "B" of this petition, and from conducting, directly or indirectly, any activity, operation or transaction proscribed by law or the Code of Professional Ethics as indicated herein. Let copies of this resolution be furnished the Integrated Bar of the Philippines, the Office of the Bar Confidant, and the Office of the Solicitor General for appropriate action in accordance herewith 78 D. Republic of the Philippines SUPREME COURT Manila EN BANC Adm. Case No. 2131 May 10, 1985 ADRIANO E. DACANAY, complainant vs. BAKER & MCKENZIE and JUAN G. COLLAS JR., LUIS MA. GUERRERO, VICENTE A. TORRES, RAFAEL E. EVANGELISTA, JR., ROMEO L. SALONGA, JOSE R. SANDEJAS, LUCAS M. NUNAG, J. CLARO TESORO, NATIVIDAD B. KWAN and JOSE A. CURAMMENG, JR., respondents. Adriano E. Dacanay for and his own behalf. Madrid, Cacho, Angeles, Dominguez & Pecson Law Office for respondents. AQUINO, J.: Lawyer Adriano E. Dacanay, admitted to the bar in 1954, in his 1980 verified complaint, sought to enjoin Juan G. Collas, Jr. and nine other lawyers from practising law under the name of Baker & McKenzie, a law firm 79 organized in Illinois. In a letter dated November 16, 1979 respondent Vicente A. Torres, using the letterhead of Baker & McKenzie, which contains the names of the ten lawyers, asked Rosie Clurman for the release of 87 shares of Cathay Products International, Inc. to H.E. Gabriel, a client. Attorney Dacanay, in his reply dated December 7, 1979, denied any liability of Clurman to Gabriel. He requested that he be informed whether the lawyer of Gabriel is Baker & McKenzie "and if not, what is your purpose in using the letterhead of another law office." Not having received any reply, he filed the instant complaint. We hold that Baker & McKenzie, being an alien law firm, cannot practice law in the Philippines (Sec. 1, Rule 138, Rules of Court). As admitted by the respondents in their memorandum, Baker & McKenzie is a professional partnership organized in 1949 in Chicago, Illinois with members and associates in 30 cities around the world. Respondents, aside from being members of the Philippine bar, practising under the firm name of Guerrero & Torres, are members or associates of Baker & Mckenzie. As pointed out by the Solicitor General, respondents' use of the firm name Baker & McKenzie constitutes a representation that being associated with the firm they could "render legal services of the highest quality to multinational business enterprises and others engaged in foreign trade and investment" (p. 3, respondents' memo). This is unethical because Baker & McKenzie is not authorized to practise law here. (See Ruben E. Agpalo, Legal Ethics, 1983 Ed., p. 115.) WHEREFORE, the respondents are enjoined from practising law under the firm name Baker & McKenzie. SO ORDERED. 80