THIRD DIVISION

[A.C. No. 12663. July 8, 2020.]

ATTY. GILBERTO C. ALFAFARA, complainant,vs. ATTYS. ANTONIO T. VILAR and ALEJANDRO JOSE C. PALLUGNA, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated July 8, 2020, which reads as follows:

"A.C. No. 12663 (Atty. Gilberto C. Alfafara, Complainant, v.Attys.Antonio T. Vilar and Alejandro Jose C. Pallugna, Respondents). — Through this Administrative Complaint, 1 Atty. Gilberto C. Alfafara (complainant) seeks to hold respondents Atty. Antonio Vilar (Vilar) and Atty. Alejandro Pallugna (Pallugna) (respondents, collectively) liable for conspiring to deprive him of his professional fees as Vilar's counsel. CAIHTE

Antecedents

On 17 September 2010, Vilar hired complainant to represent him in Civil Case No. 59439, entitled, Eduardo Santiago (Santiago) v. Government Service Insurance System (GSIS), then pending before Branch 71, Regional Trial Court (RTC) of Pasig City. 2 Vilar intended to claim 90% of the judgment award given to Santiago as purported transferee pendentelite of 90% of the properties subject of that case. 3 Thus, complainant filed for Vilar an Omnibus Motion (For Substitution of Party Plaintiff with Authority to Implement Writ of Execution Until Full Satisfaction of the Final Judgment of the Court). 4

In an Order dated 08 December 2010, the RTC merely noted without action Vilar's motion. Hence, complainant filed before the Court of Appeals (CA) a Petition for Certiorari, docketed as CA-G.R. SP No. 117439, to question the RTC's inaction on the omnibus motion. 5

Aside from Civil Case No. 59439, complainant alleged that he also represented Vilar in six (6) other related cases. 6

In a Memorandum of Agreement (MOA) dated 18 March 2013, complainant and Vilar agreed on the payment of an acceptance fee of Php50,000.00 and contingent fee of 20% of any gross amount Vilar may obtain in the cases handled by complainant. 7 The MOA also provided that either party may terminate the contract before settlement or recovery subject to the provisions of the Code of Professional Responsibility (CPR), and the court's approval in case of litigation. 8 In the event of such termination, Vilar undertook to pay complainant his regular hourly rate of Php10,000.00 for the time he spent in handling Vilar's affairs, plus the costs he had advanced. 9

On 10 February 2014, the CA, in CA-G.R. SP No. 117439, granted the petition and ordered Vilar's substitution as plaintiff in Civil Case No. 59439. It also ordered payment to Vilar of 90% of the share of Santiago in the case.

Complainant alleged that, in an act of greed and betrayal, and in order to deprive him of his fees just several days prior to the Decision dated 10 February 2014 of the CA, Vilar terminated complainant as his counsel through a Notice of Discharge of Counsel dated 07 February 2014, sent through registered mail. Complainant also alleged that Pallugna conspired with Vilar as the former entered his appearance in CA-G.R. SP No. 117439 purportedly on the same day. 10

Further, complainant claimed that his termination was done in bad faith since he met with Vilar on 09 February 2014, but the latter never mentioned any intent to terminate him. 11 He protested the timing of his termination just days before the promulgation of the CA Decision, when the case was submitted for decision as early as 11 June 2013, and there was nothing left for Pallugna to do. 12

Complainant also argued that Vilar's intent to avoid payment of the 20% contingent fee was manifest when he filed in Civil Case No. 59439 a Motion to Enforce the Alias Writ of Execution dated 23 February 2014, seeking to implement the CA's 10 February 2014 Decision. 13

As for Pallugna, complainant claimed that the former encroached on his professional employment when he filed his entry of appearance in CA-G.R. SP No. 117439 days before the CA released its decision, and only after complainant had already performed all necessary legal actions to advocate for Vilar's cause. 14

Complainant contended that Vilar and Pallugna's acts were violations of Canon 1, 15 Rule 1.01, 16 Canon 8, 17 Canon 10 18 and Rule 10.01 19 of the Code of Professional Responsibility. 20 Hence, he prayed that Vilar and Pallugna be administratively held liable and/or disbarred. 21

Position of the Respondent

Vilar did not file any comment to the complaint. 22

Meanwhile, respondent Pallugna alleged that the complaint lacks factual and legal basis. He argued that complainant failed to prove ill motive or bad faith on his part as he merely entered his appearance as Vilar's counsel only after complainant was terminated. 23 Finally, he alleged that he had never defamed, maligned, or in any way, cast aspersion upon complainant's integrity. 24

Report and Recommendation

The Integrated Bar of the Philippines-Commission on Bar Discipline (IBP-CBD), through Commissioner Rico A. Limpingco (Commissioner Limpingco), recommended that both respondents be reprimanded for the undue termination of complainant as Vilar's lawyer. 25

Commissioner Limpingco found that complainant's termination was done in bad faith because Vilar did not inform complainant of his termination despite meeting him on 09 February 2014. 26 He concluded that complainant's termination was for the purpose of depriving him of the 20% contingent fee. 27

Commissioner Limpingco also found that Pallugna acted in bad faith because of the timing of his entry of appearance, and the fact that he did not secure complainant's consent to the substitution of counsel. 28 DETACa

In a Resolution dated 22 February 2018, the IBP Board of Governors adopted the finding of Commissioner Limpingco, but increased the penalty imposed on both respondents Vilar and Pallugna from reprimand to suspension from the practice of law for two (2) years. The Board of Governors opined that all the parties are lawyers who should have treated each other with utmost professionalism. 29

On 13 September 2018, Pallugna filed a motion for reconsideration. 30 He alleged that he could not have conspired with Vilar in depriving complainant of attorney's fees considering that Vilar eventually obtained nothing from Civil Case No. 59439 based on the Supreme Court decision in G.R. Nos. 225309 and 225546. He claimed that Vilar terminated complainant's services as he was negligent in handling the case of Vilar. 31

He contended that the penalty of suspension is too harsh, considering that his liability stems from his attempts to revive, cure, and remedy complainant's shortcomings. 32 He also alleged that he did not gain a single peso because Vilar lost in Civil Case No. 59439. 33 He likewise claimed that he would be unduly deprived of his source of income if he would be suspended from the practice of law for two (2) years, and would affect the education or his two (2) children who are still in school. 34

Issue

The lone issue in this case is whether or not Vilar and Pallugna deprived complainant of attorney's fees and should be held administratively liable for it.

Ruling of the Court

We concur with the findings and recommended penalty of the IBP Commissioner.

While a client has the absolute right to terminate the attorney-client relationship anytime with or without cause, such right must be exercised in good faith and subject to the counsel's right to due compensation. 35 An attorney who has acted in good faith and honesty in representing and serving the interests of the client should be reasonable compensated for his service. 36

In this case, this Court finds that there was substantial evidence to hold respondents liable for complainant's untimely dismissal as Vilar's counsel.

At the outset, it remains uncontroverted that complainant was not forewarned or confronted about any cause for his discharge as Vilar's counsel prior to his receipt of the notice of discharge and Pallugna's entry of appearance. Vilar, who chose not to file his comment to the complaint, or Pallugna, as his counsel, did not endeavor to explain or elaborate on the cause for complainant's termination other than purported "differences in legal approach." 37 Verily, disagreement in legal opinion is but a normal, if not essential, form of interaction among members of the legal community. 38 In this case, the parties are all lawyers who are presumed to be knowledgeable about the law. There should be no problem for respondents to elaborate on the nexus of their purported disagreements in legal approach and the decision to terminate complainant's services. To this Court's mind, Vilar and Pallugna's failure to elaborate on such disagreements on legal strategy casts doubt on the true intention behind complainant's unexpected termination.

Aside from the vagueness of the cause, the timing of complainant's termination is telling. As complainant had pointed out, Vilar terminated his services after he had already filed various pleadings in the CA and the case was already submitted for decision. Moreover, there is nothing in the records which would indicate that Vilar·adopted a different legal approach after Pallugna had entered his appearance as Vilar's counsel. On the contrary, after winning in the CA, Vilar sought to immediately benefit therefrom by asking for the immediate execution of the judgment. Indeed, these circumstances support complainant's claim that respondents intended to case him out of the case.

Pallugna's contention as to complainant's supposed negligence in handling the case does not convince this Court that complainant's discharge was rightful. Pallugna failed to specify complainant's acts which have led Vilar to ultimately lose the judgment award as the supposed transferee pendente lite of Santiago's interest in the properties subject of Civil Case No. 59439.

A perusal of this Court's Decisions in G.R. Nos. 225309 and 225546, entitled De Santiago v. Vilar, 39 and G.R. Nos. 194814 & 194825, entitled Vda. de Santiago v. Suing, 40 would reveal that Vilar lost the case because he only intervened in Civil Case No. 59439 in 2010, or 20 years, after the execution of the Deeds of Assignment in his favor in 1989 and 1990, and despite the filing of the case as early as 1990. There is nothing in the said cases, nor in the records of the case at bar, which would indicate that complainant neglected handling Vilar's case. On the contrary, the Court notes that complainant was merely hired by Vilar on 17 September 2010, 41 and by October 2010, he immediately filed the motion for Vilar's substitution as plaintiff in Civil Case No. 59439. Evidently, complainant's immediate action in the case is inconsistent with Pallugna's claim of negligence.

Despite respondents' bad faith in terminating complainant as Vilar's counsel, this Court finds the penalty of suspension imposed by the IBP Board of Governors too harsh. While this Court agrees that good faith and delicadeza should have compelled Pallugna to secure complainant's consent, or should, at the very least, have informed him of the substitution of counsel, this Court cannot ignore the fact that Vilar did not obtain any money judgment in Civil Case No. 59439. Neither is there any proof contradicting Pallugna's manifestation that he did not financially benefit from being Vilar's counsel in the said case. Moreover, other than his substitution as Vilar's counsel, complainant did not allege any specific act of Pallugna that would indicate that the latter deliberately sought to replace complainant, or intended to deprive him of professional fees. Without diminishing our finding that Vilar and Pallugna were in bad faith in terminating complainant, this Court finds that the penalty of reprimand suffices. ATICcS

WHEREFORE, the Court hereby imposes a FINE of Ten Thousand Pesos (Php10,000.00) upon respondents Attys. Antonio Vilar and Alejandro Jose Pallugna, with a STERN WARNING that a repetition of the same or similar act or offense shall be dealt with more severely.

Let copies of this Resolution be furnished the Office of the Bar Confidant and noted in Attys. Antonio Vilar and Alejandro Jose Pallugna's record as members of the Bar.

SO ORDERED."

By authority of the Court:

(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court

 

Footnotes

1.Rollo, pp. 2-9.

2.Id. at 35.

3.Id. at 3.

4.Id.

5.Id.

6.Id. at 4.

7.Id. at 36.

8.Id. at 36-37.

9.Id. at 37.

10.Id. at 5.

11.Id.

12.Id.

13.Id. at 6.

14.Id.

15. CANON 1 — A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and for legal processes.

16. RULE 1.01. A 1awyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

17. CANON 8 — A 1awyer shall conduct himself with courtesy, fairness and candor toward his professional colleagues, and shall avoid harassing tactics against opposing counsel.

18. CANON 10 — A 1awyer owes candor, fairness and good faith to the court.

19. RULE 10.01. A lawyer shall not do any falsehood, nor consent to the doing of any in Court; nor shall he mislead or allow the Court to be misled by any artifice.

20.Rollo, p. 7.

21.Id. at 8.

22.Id. at 227.

23.Id. at 194.

24.Id. at 195.

25.Id. at 230.

26.Id. at 229.

27.Id.

28.Id. at 229-230.

29.Id. at 225.

30.Id. at 231-235.

31.Id. at 232-233.

32.Id. at 234.

33.Id.

34.Id.

35.See Malvar v. Kraft Food Phils., Inc., 717 Phil. 427-460; G.R. No. 183952, 09 September 2013, 705 SCRA 242.

36.Id.

37.Rollo, p. 5.

38.Jardeleza v. Sereno, G.R. No. 213181, 19 August 2014, 733 SCRA 279, 336.

39. Promulgated on 06 March 2018.

40. Promulgated on 21 October 2015; 772 Phil. 107-144.

41.Rollo, p. 35.