Legal Profession - Finals

7/27/2019 Legal Profession - Finals

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1. CARLET V CAIIGO F. CARLET, as Special Administrator of the Estate of Pablo Sevillo and Antonia Palisoc, petitioner, vs.HON. COURT OF APPEALS, VIRGINIA C. ZARATE, JACOBO C. ZARATE, VICTORIA C. ZARATE, HON. CONRADODIZON, Acting Judge of the Municipal Trial Court of Bian, Laguna, and DEPUTY SHERIFF ROGELIO S. MOLINAof Bian, Laguna, respondents.

ROMERO, J.:

The Rules of Court provide litigants with options on what course of action to take in obtaining judicial relief. Once such

option is taken and a case is filed in court, the parties are compelled to ventilate all matters and relevant issues therein.

The losing party who files another action regarding the same controversy will be needlessly squandering time, effort and

financial resources because he is barred by law from litigating the same controversy all over again. Such is the situation

in the case at bar: whether or not there is res judicata or bar by prior judgment. The present controversy is surrounded

by the following facts:

Lot 981 of the Bian Estate in Laguna, with an area of 864 square meters, was purchased by Jose Sevillo in 1910 on

installment. In 1917, Transfer Certificate No. 1599 was issued in his name after payment of the full purchase price. Jose

Sevillos marriage to Severa Bayran produced four sons, Teodoro, Mariano, Vicente and Pablo. Pablo married Antonia

Palisoc in 1920 and they begot four children, Consolacion, Alejandra (Andrea), Samero (Casimiro) and Marin (Martin or

Maltin) Sevillo. In 1949, Pablo Sevillo declared Lot No. 981 for taxation purposes under Tax Declaration Nos. 6125 and

2586 even if the property was still in Jose Sevillos name.

In 1955, Pablo, by then a widower, married Candida Baylo. The union produced no offspring. Candidas daughter, Cirila

Baylo Carolasan, was sired by another man.

In 1965, Pablo Sevillo, with Candida Baylo, filed a petition before the Court of First Instance for reconstitution of title.

Reconstitution was allowed and TCT No. RT-926 was issued in the name of Pablo Sevillo, married to Candida Baylo.

Pablo Sevillo and his wife died in 1967 and in 1974, respectively.

In 1980, the heirs of Cirila Baylo Carolasan,[1] all surnamed Zarate and herein private respondents, filed a case for

annulment of deed of sale over Lot 981 and for partition of property among the surviving heirs of Pablo Sevillo. The casewas docketed as Civil Case No. B-1656 before the Court of First Instance of Bian, Laguna. The Deed of Sale sought to be

annulled was allegedly executed by Candida Baylo, grandmother to the Zarates, in favor of Gregorio, Samero, Martin

and Andrea, surnamed Sevillo and Isidro Zamora. After trial on the merits, the court rendered its Decision on June 15,

1982 with the following dispositive portion:

WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered declaring the deed of sale entitled

Bilihang Patuluyan ngBahagi ng Isang Lupang Panahanan purportedly executed by Candida Baylo on August 25, 1971,

acknowledged before Notary Public Apolinario S. Escueta and entered in his notarial register as Doc. No. 124, Page No.

16, Book No. IV, Series of 1971, as null and void and of no force and effect, and the representative of the estate of the

plaintiff Cirila Baylo Carolasan and the defendants Gregorio Sevillo, Samero Sevillo, Maltin Sevillo, Andrea Sevillo and

Isidro Zamora, as the surviving spouse of Consolacion Sevillo, are hereby ordered to partition Lot No. 981 of the BianEstate, situated in Tubigan, Bian, Laguna if they are able to agree among themselves by proper instruments of

conveyance, within 30 days from the finality of this decision, which shall be confirmed by this Court, otherwise,

commissioners will be appointed to make the partition.

The defendants Gregorio Sevillo and Samero Sevillo are hereby jointly and severally ordered to pay plaintiffs substituted

heirs of the late Cirila Baylo Carolasan, namely, Virginia C. Zarate, of Brgy. Real, Calamba, Laguna, Jacobo C. Zarate,

Victoria C. Zarate, Nemesio C. Zarate, Dominador C. Zarate and Elvira C. Zarate, all of Brgy. Tubigan, Bian, Laguna, the

sum of P3,000.00 for attorneys fees and the sum of P2,000.00 for litigation expenses aside from costs of suit.

The decision having become final and executory, a writ of execution was issued on November 10, 1982. Lot 981 was

surveyed and subdivided into six lots, one lot having an area of 452.04 square meters, four lots with 86.49 square

meters each and one lot with 66 square meters as footpath or concession to a right of way.[2] By virtue of thisadjudication, private respondents Zarate procured TCT Nos. T-163388 and T-163393 over their share in the property.

The losing parties in that case, the Sevillos, filed a case to annul the aforesaid decision of the trial court in Civil Case No.

B-1656 before the then Intermediate Appellate Court (CA-G.R. SP No. 07657) alleging lack of jurisdiction based on

service of summons on unauthorized counsel. On March 31, 1986, the appellate court granted the Zarates motion to

dismiss the case on the ground of res judicata. The Supreme Court denied the petition for review filed by the Sevillos for

lack of merit on September 8, 1986 in G.R. No. 74505.[3]

On May 6, 1983, private respondents, the Zarates, filed Civil Case No. 2375, an ejectment suit against the Sevillos before

the Municipal Trial Court of Bian.[4] The municipal court ruled in favor of plaintiffs and ordered defendants below, to

immediately vacate the subject property and remove their houses thereon and to pay rental in arrears, damages,attorneys fees and litigation expenses.[5] Writs of execution and demolition were issued by the court. Defendants filed

a motion for reconsideration but before said motion could be heard, they filed a petition for certiorari with the Regional

Trial Court of Laguna (Civil Case No. B-3106). The Sevillos alleged that the inferior court did not have jurisdiction over


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the case which was filed more than a year after the alleged unlawful entry. The Regional Trial Court held that the

municipal court had no jurisdiction over the complaint for ejectment. On appeal, the Court of Appeals reversed the

Regional Trial Courts decision on July 11, 1990 in CA-G.R. SP No. 18806. Affirming the appellate courts decision, the

Supreme Court denied the Sevillos petition for review in G.R. No. 94382 on April 10, 1991.[6]

On July 10, 1991, petitioner Iigo F. Carlet, as special administrator of the estate of Pablo and Antonia Sevillo, filed the

case at bar, an action for reconveyance of property, docketed as Civil Case No. B-3582, against the heirs of Cirila namely,

Virginia, Jacobo, Victoria and Elvira, all surnamed Zarate. Plaintiff therein prayed for a declaration of ownership over

the entire 864-square-meter lot in the name of the estate of Jose Sevillo and/ or the estate of Teodoro, Mariano,Vicente and Pablo Sevillo; that TCT Nos. T-163393 and T-163388 be annulled and a new one be issued in favor of said

estate; and that defendants be ordered to pay P20,000.00, attorneys fees in the amount of P50,000.00 and expenses of

litigation.[7]

Defendants Zarate moved to dismiss the case on the ground of res judicata, claiming that the facts alleged in the

complaint had already been pleaded and passed upon by the lower court in Civil Case No. B-1656, the Court of Appeals

in CA-G.R. SP No. 07657 and by the Supreme Court in G.R. No. 74505. They also opposed the motion for preliminary

injunction saying it was meant to delay and that the grounds relied upon had previously been passed upon by the lower

court in Civil Case Nos. B-1656 and 2375, the Court of Appeals in CA-G.R. SP No. 18806 and the Supreme Court in G.R.

No. 94382.

On October 8, 1991, the trial court issued an Order granting the motion to dismiss Civil Case No. B-3582, stating that the

issue of ownership had been threshed out in the cases cited and that, as held by the Court of Appeals in CA-G.R. SP No.

07657, plaintiff below merely tried to obtain the same relief by way of a different action. The dispositive portion of said

Order reads:

WHEREFORE, finding merit in the motion to dismiss, the same is hereby granted and the above case is hereby ordered

dismissed. As a consequence, the motion for preliminary injunction is hereby denied.

Pursuant to well-settled pronouncements of the Supreme Court, the plaintiff and her counsel are hereby ordered to

explain within five (5) days from receipt hereof why they should not be cited in contempt of court for forum-shopping.

Let a copy of this order be furnished the local IBP Chapter where Atty. Modesto Jimenez belongs so that he may be

administratively dealt with in accordance with law.

SO ORDERED.

Carlets appeal to respondent court (CA-G.R. CV No. 36129) was dismissed on January 11, 1994, with the Court of

Appeals affirming the questioned Order of the trial court in toto and ordering appellants and counsel to pay treble

costs.[8]

Hence, the instant petition for review where the issue to be resolved is whether or not the adjudication in Civil Case No.

B-1656 (including CA-G.R. SP No. 07657 and SC-G.R. No. 74505) constitutes res judicata to the case at bar (Civil Case No.

B-3582).

Petitioner in the main contends that respondent court erred, because there is no identity of cause of action between the

case at bar (Civil Case No. B-3582) and the cases cited, particularly Civil Case No. B-1656. The former is an entirely

different case which seeks the annulment of TCT No. 1599 and the derivative titles issued in the name of private

respondents Zarate. There is likewise no identity of parties. According to petitioner, the plaintiff in Civil Case No. 3582

is the Special Administrator representing the estate of Jose Sevillo and Severa Bayran, who does not represent any of

the private respondents herein.[9]

We affirm the contested decision of the Court of Appeals.

When material facts or questions which were in issue in a former action and were admitted or judicially determined

there are conclusively settled by a judgment rendered therein, such facts or questions become res judicata and may not

again be litigated in a subsequent action between the same parties or their privies regardless of the form of the latter.This is the essence of res judicata or bar by prior judgment.[10]

There are four requisites to successfully invoke res judicata: (a) finality of the former judgment; (b) the court which

rendered it had jurisdiction over the subject matter and the parties; (c) it must be a judgment on the merits; and (d)

there must be between the first and second actions identity of parties, subject matter and cause of action.[11] A

judgment on the merits rendered in the first case constitutes an absolute bar to the subsequent action when the three

identities are present.[12]

The attendance of the first three elements for the application of res judicata is not disputed by petitioner. What needs

to be determined is the existence of identity in parties, subject matter and cause of action between Civil Case Nos. B-

1656 and B-3582.

Respondent court correctly concluded that there is identity of parties between the case at bar (Civil Case No. B-3582), an

action for reconveyance of Lot No. 981, and Civil Case No. B-1656 for annulment of deed of sale and partition involving


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the same Lot 981. Although Civil Case No. B-3582 was initiated by petitioner as administrator of the estate of Pablo and

Antonia Sevillo, the fact remains that he represents the same heirs of Pablo Sevillo, namely Martin, Alejandra, Casimiro

(or Samero) and Consolacion Sevillo who were defendants in Civil Case No. B-1656, as the latter or their heirs would

eventually benefit should petitioner succeed in this case. Petitioners allegation that he represents the heirs ofJose

Sevillo and Severa Bayran Sevillo and, therefore, including Pablo Sevillos three brothers, is belied by the very title of the

instant petition that he is the special administrator of the estate of Pablo Sevillo and Antonia Palisoc, having been

appointed as such on July 10, 1991.[13]

It should further be stressed that absolute identity of parties is not required for the principle of res judicata to beapplicable.[14] A shared identity of interest is sufficient to invoke the coverage of this principle.[15] While it is true that

the heirs of Pablo and Antonia Sevillo will still be judicially determined at the intestate proceedings in which petitioner

was named estate special administrator, it is equally true that the defendants in Civil Case No. B-1656, namely

Consolacion, Alejandra, Samero and Martin Sevillo, are the children and heirs of Pablo and Antonia Sevillo.

There is no dispute as regards the identity of subject matter since the center of controversy in the instant case and in

Civil Case No. B-1656 is Lot No. 981 of the Bian Estate.

As regards identity of causes of action, the test often used in determining whether causes of action are identical is to

ascertain whether the same evidence which is necessary to sustain the second action would have been sufficient to

authorize a recovery in the first, even if the forms or nature of the two actions be different. If the same facts or

evidence would sustain both actions, the two actions are considered the same within the rule that the judgment in the

former is a bar to the subsequent action; otherwise, it is not.[16]

The instant case (Civil Case No. B-3582), which is an action for the reconveyance of Lot No. 981, is premised on the claim

that TCT Nos. T-163388 and T-163393, belonging to private respondents as heirs of Candida Baylo and Cirila Baylo

Carolasan, are null and void.[17] To succeed entails presenting evidence that the title acquired by the Zarates, upon

which they founded their complaint for partition in Civil Case No. B-1656, is in fact null and void.

In Civil Case No. B-1656, the Zarates prayer for partition of Lot No. 981 was anchored on the authenticity of their title

thereto. Consequently, the case provided the defendants, heirs of Pablo and Antonia Sevillo, the opportunity to prove

otherwise, i.e. that the Zarates title was null and void. However, they failed to contest the matter before the trial court,

the Court of Appeals and the Supreme Court.[18] Inasmuch as the same evidence was needed in prosecuting Civil CaseNo. B-1656 and the case at bar, there is identity of causes of action. The additional fact alleged by petitioner - that

Candida Baylo was not in fact married to Pablo Sevillo and the reconstituted title in their name reflects a

misrepresentation is, under the circumstances, immaterial. Said allegation could have been presented and heard in Civil

Case No. B-1656.[19] The parties are bound not only as regards every matter offered and received to sustain or defeat

their claims or demand but as to any other admissible matter which might have been offered for that purpose and of all

other matters that could have been adjudged in that case.[20]

Neither does the fact that Civil Case No. B-1656 was an action for annulment of deed of sale and partition while Civil

Case No. B-3582 is for reconveyance of property alter the fact that both cases have an identical cause of action. A

change in the form of the action or in the relief sought does not remove a proper case from the application of res

judicata.[21]

Moreover, as early as March 31, 1986 in the original action for annulment of judgment case, the then Intermediate

Appellate Court immediately recognized that:

Clearly, the relief sought in this action for annulment of judgment beyond nullity of the decision in Civil Case No. B-

1656, is an adjudication that herein defendants are not entitled to Lot 981 of the Bian Estate or any part thereof, on

the stated grounds that said property in the name of Pablo Sevillo and Candida Baylo under T.C.T. No. RT-926 was in fact

owned by Pablo Sevillo and Antonia Palisoc, and that in any event, Candida Baylo had ceded her interest therein to

plaintiffs and/or their predecessors in interest on March 31, 1969.

The self-same issue of ownership of Lot 981 was squarely raised in Civil Case No. B-1656, herein defendants interest in

said property having therein been traversed by invoking instead an alleged sale of Lot 981 to Gregorio Sevillo on August25, 1971.

This amounts to employment of different forms of action to obtain identical relief, in violation of the principle that one

and the same cause of action shall not twice be litigated (Yusingco v. Ong Hian, 42 SCRA 589).[22]

It is to the interest of the public that there should be an end to litigation by the parties over a subject fully and fairly

adjudicated - republicae ut sit finis litium. And an individual should not be vexed twice for the same cause - nemo debet

bis vexari pro eadem causa. As this Court has had occasion to rule:

The foundation principle upon which the doctrine of res judicata rests is that parties ought not to be permitted to

litigate the same issue more than once; that, when a right or fact has been judicially tried and determined by a court ofcompetent jurisdiction, or an opportunity for such trial has been given, the judgment of the court, so long as it remains

unreversed, should be conclusive upon the parties and those in privity with them in law or estate.[23]


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With respect to the issue of forum-shopping for which the trial court ordered counsel for petitioners, Atty. Modesto

Jimenez, to explain why he should not be cited in contempt,[24] this applies only when the two (or more) cases are still

pending.[25]

Clearly, despite knowledge of final judgments in Civil Case No. B-1656, CA-G.R. CV No. 07657 and SC-G.R. No. 74505, as

well as in G.R. No. 94382 (the ejectment case), counsel persisted in filing the case at bar for reconveyance. Since this

case is barred by the judgment in Civil Case No. B-1656, there was no other pending case to speak of when it was filed in

July 1991. Thus, the non-forum-shopping rule is not violated.

What counsel for petitioners did, however, in filing this present action to relitigate the title to and partition over Lot No.

981, violates Canon 10 of the Code of Professional Responsibility for lawyers which states that a lawyer owes candor,

fairness and good faith to the court. Rule 10.01 of the same Canon states that (a) lawyer shall not do any falsehood x

x x nor shall he mislead or allow the court to be misled by any artifice. Counsels act of filing a new case involving

essentially the same cause of action is likewise abusive of the courts processes and may be viewed as improper

conduct tending to directly impede, obstruct and degrade the administration of justice.[26]

WHEREFORE, the petition is hereby DENIED. The Decision of the Court of Appeals dated January 11, 1994 is hereby

AFFIRMED. Treble costs against petitioner.

SO ORDERED.

Regalado, (Chairman), and Mendoza, JJ., concur.

Puno, and Torres, Jr., JJ., on leave.


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ROMERO,J.:

The Rules of Court provide litigants with options on what course of action to take in obtaining judicial relief.

Once such option is taken and a case is filed in court, the parties are compelled to ventilate all matters and

relevant issues therein. The losing party who files another action regarding the same controversy will be

needlessly squandering time, effort and financial resources because he is barred by law from litigating the

same controversy all over again. Such is the situation in the case at bar: whether or not there is res judicata or

bar by prior judgment. The present controversy is surrounded by the following facts:

Lot 981 of the Bian Estate in Laguna, with an area of 864 square meters, was purchased by Jose Sevillo in

1910 on installment. In 1917, Transfer Certificate No. 1599 was issued in his name after payment of the full

purchase price. Jose Sevillos marriage to Severa Bayran produced four sons, Teodoro, Mariano, Vicente and

Pablo. Pablo married Antonia Palisoc in 1920 and they begot four children, Consolacion, Alejandra (Andrea),

Samero (Casimiro) and Marin (Martin or Maltin) Sevillo. In 1949, Pablo Sevillo declared Lot No. 981 for

taxation purposes under Tax Declaration Nos. 6125 and 2586 even if the property was still in Jose Sevillos

name.

In 1955, Pablo, by then a widower, married Candida Baylo. The union produced no offspring. Candidas

daughter, Cirila Baylo Carolasan, was sired by another man.

In 1965, Pablo Sevillo, with Candida Baylo, filed a petition before the Court of First Instance for reconstitution

of title. Reconstitution was allowed and TCT No. RT-926 was issued in the name of Pablo Sevillo, married to

Candida Baylo. Pablo Sevillo and his wife died in 1967 and in 1974, respectively.In 1980, the heirs of Cirila Baylo Carolasan,i[1] all surnamed Zarate and herein private respondents, filed a case

for annulment of deed of sale over Lot 981 and for partition of property among the surviving heirs of PabloSevillo. The case was docketed as Civil Case No. B-1656 before the Court of First Instance of Bian, Laguna.The Deed of Sale sought to be annulled was allegedly executed by Candida Baylo, grandmother to the Zarates,

in favor of Gregorio, Samero, Martin and Andrea, surnamed Sevillo and Isidro Zamora. After trial on the

merits, the court rendered its Decision on June 15, 1982 with the following dispositive portion:

WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered declaring the deed ofsaleentitled Bilihang Patuluyan ng Bahagi ng Isang Lupang Panahanan purportedly executed by CandidaBaylo on August 25, 1971, acknowledged before Notary Public Apolinario S. Escueta and entered in his notarial

register as Doc. No. 124, Page No. 16, Book No. IV, Series of 1971, as null and void and of no force and effect,and the representative of the estate of the plaintiff Cirila Baylo Carolasan and the defendants GregorioSevillo, Samero Sevillo, Maltin Sevillo, Andrea Sevillo and Isidro Zamora, as the surviving spouse ofConsolacion Sevillo, are hereby ordered to partition Lot No. 981 of the Bian Estate, situated in Tubigan,Bian, Laguna if they are able to agree among themselves by proper instruments of conveyance, within 30

days from the finality of this decision, which shall be confirmed by this Court, otherwise, commissioners will

be appointed to make the partition.

The defendants Gregorio Sevillo and Samero Sevillo are hereby jointly and severally ordered to pay plaintiffs

substituted heirs of the late Cirila Baylo Carolasan, namely, Virginia C. Zarate, of Brgy. Real, Calamba, Laguna,

Jacobo C. Zarate, Victoria C. Zarate, Nemesio C. Zarate, Dominador C. Zarate and Elvira C. Zarate, all of Brgy.

Tubigan, Bian, Laguna, the sum of P3,000.00 for attorneys fees and the sum ofP2,000.00 for litigation

expenses aside from costs of suit.The decision having become final and executory, a writ of execution was issued on November 10, 1982. Lot

981 was surveyed and subdivided into six lots, one lot having an area of 452.04 square meters, four lots with

86.49 square meters each and one lot with 66 square meters as footpath or concession to a right of way.ii[2]

By virtue of this adjudication, private respondents Zarate procured TCT Nos. T-163388 and T-163393 over their

share in the property.

The losing parties in that case, the Sevillos, filed a case to annul the aforesaid decision of the trial court in Civil

Case No. B-1656 before the then Intermediate Appellate Court (CA-G.R. SP No. 07657) alleging lack of

jurisdiction based on service of summons on unauthorized counsel. On March 31, 1986, the appellate court

granted the Zarates motion to dismiss the case on the ground ofres judicata. The Supreme Court denied the

petition for review filed by the Sevillos for lack of merit on September 8, 1986 in G.R. No. 74505. iii[3]On May 6, 1983, private respondents, the Zarates, filed Civil Case No. 2375, an ejectment suit against the

Sevillos before the Municipal Trial Court of Bian.iv[4] The municipal court ruled in favor of plaintiffs and

ordered defendants below, to immediately vacate the subject property and remove their houses thereon and

to pay rental in arrears, damages, attorneys fees and litigation expenses.v[5] Writs of execution and demolition

were issued by the court. Defendants filed a motion for reconsideration but before said motion could be

heard, they filed a petition for certiorariwith the Regional Trial Court of Laguna (Civil Case No. B-3106). The

Sevillos alleged that the inferior court did not have jurisdiction over the case which was filed more than a year

after the alleged unlawful entry. The Regional Trial Court held that the municipal court had no jurisdiction

over the complaint for ejectment. On appeal, the Court of Appeals reversed the Regional Trial Courts decision

on July 11, 1990 in CA-G.R. SP No. 18806. Affirming the appellate courts decision, the Supreme Court denied

the Sevillos petition for review in G.R. No. 94382 on April 10, 1991.vi[6]

On July 10, 1991, petitioner Iigo F. Carlet, as special administrator of the estate of Pablo and Antonia Sevillo,

filed the case at bar, an action for reconveyance of property, docketed as Civil Case No. B-3582, against the


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heirs of Cirila namely, Virginia, Jacobo, Victoria and Elvira, all surnamed Zarate. Plaintiff therein prayed for a

declaration of ownership over the entire 864-square-meter lot in the name of the estate of Jose Sevillo and/

or the estate of Teodoro, Mariano, Vicente and Pablo Sevillo; that TCT Nos. T-163393 and T-163388 be

annulled and a new one be issued in favor of said estate; and that defendants be ordered to pay P20,000.00,

attorneys fees in the amount of P50,000.00 and expenses of litigation.vii[7]

Defendants Zarate moved to dismiss the case on the ground ofres judicata, claiming that the facts alleged in

the complaint had already been pleaded and passed upon by the lower court in Civil Case No. B-1656, theCourt of Appeals in CA-G.R. SP No. 07657 and by the Supreme Court in G.R. No. 74505. They also opposed the

motion for preliminary injunction saying it was meant to delay and that the grounds relied upon had

previously been passed upon by the lower court in Civil Case Nos. B-1656 and 2375, the Court of Appeals inCA-G.R. SP No. 18806 and the Supreme Court in G.R. No. 94382.

On October 8, 1991, the trial court issued an Order granting the motion to dismiss Civil Case No. B-3582,

stating that the issue of ownership had been threshed out in the cases cited and that, as held by the Court of

Appeals in CA-G.R. SP No. 07657, plaintiff below merely tried to obtain the same relief by way of a different

action. The dispositive portion of said Order reads:

WHEREFORE, finding merit in the motion to dismiss, the same is hereby granted and the above case is hereby

ordered dismissed. As a consequence, the motion for preliminary injunction is hereby denied.

Pursuant to well-settled pronouncements of the Supreme Court, the plaintiff and her counsel are hereby

ordered to explain within five (5) days from receipt hereof why they should not be cited in contempt of courtfor forum-shopping. Let a copy of this order be furnished the local IBP Chapter where Atty. Modesto Jimenez

belongs so that he may be administratively dealt with in accordance with law.

SO ORDERED.

Carlets appeal to respondent court (CA-G.R. CV No. 36129) was dismissed on January 11, 1994, with the Court

of Appeals affirming the questioned Order of the trial court in toto and ordering appellants and counsel to pay

treble costs.viii[8]

Hence, the instant petition for review where the issue to be resolved is whether or not the adjudication in Civil

Case No. B-1656 (including CA-G.R. SP No. 07657 and SC-G.R. No. 74505) constitutes res judicata to the case at

bar (Civil Case No. B-3582).

Petitioner in the main contends that respondent court erred, because there is no identity of cause of actionbetween the case at bar (Civil Case No. B-3582) and the cases cited, particularly Civil Case No. B-1656. The

former is an entirely different case which seeks the annulment of TCT No. 1599 and the derivative titles issued

in the name of private respondents Zarate. There is likewise no identity of parties. According to petitioner,

the plaintiff in Civil Case No. 3582 is the Special Administrator representing the estate of Jose Sevillo and

Severa Bayran, who does not represent any of the private respondents herein. ix[9]

We affirm the contested decision of the Court of Appeals.

When material facts or questions which were in issue in a former action and were admitted or judicially

determined there are conclusively settled by a judgment rendered therein, such facts or questions become res

judicata and may not again be litigated in a subsequent action between the same parties or their privies

regardless of the form of the latter. This is the essence of res judicata or bar by prior judgment.x[10]

There are four requisites to successfully invoke res judicata: (a) finality of the former judgment; (b) the courtwhich rendered it had jurisdiction over the subject matter and the parties; (c) it must be a judgment on the

merits; and (d) there must be between the first and second actions identity of parties, subject matter and

cause of action.xi[11] A judgment on the merits rendered in the first case constitutes an absolute bar to the

subsequent action when the three identities are present.xii[12]

The attendance of the first three elements for the application ofres judicata is not disputed by petitioner.

What needs to be determined is the existence of identity in parties, subject matter and cause of action

between Civil Case Nos. B-1656 and B-3582.

Respondent court correctly concluded that there is identity of parties between the case at bar (Civil Case No.

B-3582), an action for reconveyance of Lot No. 981, and Civil Case No. B-1656 for annulment of deed of sale

and partition involving the same Lot 981. Although Civil Case No. B-3582 was initiated by petitioner asadministrator of the estate of Pablo and Antonia Sevillo, the fact remains that he represents the same heirs of

Pablo Sevillo, namely Martin, Alejandra, Casimiro (or Samero) and Consolacion Sevillo who were defendants in

Civil Case No. B-1656, as the latter or their heirs would eventually benefit should petitioner succeed in this

case. Petitioners allegation that he represents the heirs of Jose Sevillo and Severa Bayran Sevillo and,

therefore, including Pablo Sevillos three brothers, is belied by the very title of the instant petition that he is

the special administrator of the estate of Pablo Sevillo and Antonia Palisoc, having been appointed as such on

July 10, 1991.xiii[13]

It should further be stressed that absolute identity of parties is not required for the principle ofres judicata to

be applicable.xiv[14] A shared identity of interest is sufficient to invoke the coverage of this principle.xv[15] While

it is true that the heirs of Pablo and Antonia Sevillo will still be judicially determined at the intestate

proceedings in which petitioner was named estate special administrator, it is equally true that the defendants

in Civil Case No. B-1656, namely Consolacion, Alejandra, Samero and Martin Sevillo, are the children and heirs

of Pablo and Antonia Sevillo.


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There is no dispute as regards the identity of subject matter since the center of controversy in the instant

case and in Civil Case No. B-1656 is Lot No. 981 of the Bian Estate.

As regards identity of causes of action, the test often used in determining whether causes of action are

identical is to ascertain whether the same evidence which is necessary to sustain the second action would

have been sufficient to authorize a recovery in the first, even if the forms or nature of the two actions be

different. If the same facts or evidence would sustain both actions, the two actions are considered the same

within the rule that the judgment in the former is a bar to the subsequent action; otherwise, it is not.xvi[16]

The instant case (Civil Case No. B-3582), which is an action for the reconveyance of Lot No. 981, is premised on

the claim that TCT Nos. T-163388 and T-163393, belonging to private respondents as heirs of Candida Baylo

and Cirila Baylo Carolasan, are null and void.xvii[17] To succeed entails presenting evidence that the title

acquired by the Zarates, upon which they founded their complaint for partition in Civil Case No. B-1656, is in

fact null and void.

In Civil Case No. B-1656, the Zarates prayer for partition of Lot No. 981 was anchored on the authenticity of

their title thereto. Consequently, the case provided the defendants, heirs of Pablo and Antonia Sevillo, the

opportunity to prove otherwise, i.e. that the Zarates title was null and void. However, they failed to contest

the matter before the trial court, the Court of Appeals and the Supreme Court.xviii[18] Inasmuch as the same

evidence was needed in prosecuting Civil Case No. B-1656 and the case at bar, there is identity of causes of

action. The additional fact alleged by petitioner - that Candida Baylo was not in fact married to Pablo

Sevillo and the reconstituted title in their name reflects a misrepresentation is, under the circumstances,immaterial. Said allegation could have been presented and heard in Civil Case No. B-1656.xix[19] The parties are

bound not only as regards every matter offered and received to sustain or defeat their claims or demand but

as to any other admissible matter which might have been offered for that purpose and of all other matters

that could have been adjudged in that case.xx[20]

Neither does the fact that Civil Case No. B-1656 was an action for annulment of deed of sale and partition

while Civil Case No. B-3582 is for reconveyance of property alter the fact that both cases have an identical

cause of action. A change in the form of the action or in the relief sought does not remove a proper case from

the application ofres judicata.xxi[21]

Moreover, as early as March 31, 1986 in the original action for annulment of judgment case, the then

Intermediate Appellate Court immediately recognized that:Clearly, the relief sought in this action for annulment of judgment beyond nullity of the decision in Civil Case

No. B-1656, is an adjudication that herein defendants are not entitled to Lot 981 of the Bian Estate or any

part thereof, on the stated grounds that said property in the name of Pablo Sevillo and Candida Baylo under

T.C.T. No. RT-926 was in fact owned by Pablo Sevillo and Antonia Palisoc, and that in any event, Candida Baylo

had ceded her interest therein to plaintiffs and/or their predecessors in interest on March 31, 1969.

The self-same issue of ownership of Lot 981 was squarely raised in Civil Case No. B-1656, herein defendants

interest in said property having therein been traversed by invoking instead an alleged sale of Lot 981 to

Gregorio Sevillo on August 25, 1971.

This amounts to employment of different forms of action to obtain identical relief, in violation of the principle

that one and the same cause of action shall not twice be litigated (Yusingco v. Ong Hian, 42 SCRA 589).xxii[22]

It is to the interest of the public that there should be an end to litigation by the parties over a subject fully andfairly adjudicated - republicae ut sit finis litium. And an individual should not be vexed twice for the same

cause - nemo debet bis vexari pro eadem causa. As this Court has had occasion to rule:

The foundation principle upon which the doctrine ofres judicata rests is that parties ought not to be

permitted to litigate the same issue more than once; that, when a right or fact has been judicially tried and

determined by a court of competent jurisdiction, or an opportunity for such trial has been given, the judgment

of the court, so long as it remains unreversed, should be conclusive upon the parties and those in privity with

them in law or estate.xxiii[23]

With respect to the issue of forum-shopping for which the trial court ordered counsel for petitioners, Atty.

Modesto Jimenez, to explain why he should not be cited in contempt,xxiv[24] this applies only when the two (or

more) cases are still pending.xxv[25]Clearly, despite knowledge of final judgments in Civil Case No. B-1656, CA-G.R. CV No. 07657 and SC-G.R. No.

74505, as well as in G.R. No. 94382 (the ejectment case), counsel persisted in filing the case at bar for

reconveyance. Since this case is barred by the judgment in Civil Case No. B-1656, there was no other pending

case to speak of when it was filed in July 1991. Thus, the non-forum-shopping rule is not violated.

What counsel for petitioners did, however, in filing this present action to relitigate the title to and partition

over Lot No. 981, violates Canon 10 of the Code of Professional Responsibility for lawyers which states that a

lawyer owes candor, fairness and good faith to the court. Rule 10.01 of the same Canon states that (a)

lawyer shall not do any falsehood x x x nor shall he mislead or allow the court to be misled by any artifice.

Counsels act of filing a new case involving essentially the same cause of action is likewise abusive of the

courts processes and may be viewed as improper conduct tending to directly impede, obstruct and degrade

the administration of justice.xxvi[26]

WHEREFORE, the petition is hereby DENIED. The Decision of the Court of Appeals dated January 11, 1994 ishereby AFFIRMED. Treble costs against petitioner.


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SO ORDERED.

Regalado, (Chairman), and Mendoza, JJ., concur.

Puno, and Torres, Jr., JJ., on leave.

2. BAUTISTA V. GONZALES

A.M. No. 1625 February 12, 1990

ANGEL L. BAUTISTA, complainant,

vs.

ATTY. RAMON A. GONZALES, respondent.

R E S O L U T I O N

PER CURIAM:

In a verified complaint filed by Angel L. Bautista on May 19, 1976, respondent Ramon A. Gonzales was charged with

malpractice, deceit, gross misconduct and violation of lawyer's oath. Required by this Court to answer the charges

against him, respondent filed on June 19, 1976 a motion for a bill of particulars asking this Court to order complainant to

amend his complaint by making his charges more definite. In a resolution dated June 28, 1976, the Court grantedrespondent's motion and required complainant to file an amended complaint. On July 15, 1976, complainant submitted

an amended complaint for disbarment, alleging that respondent committed the following acts:

1. Accepting a case wherein he agreed with his clients, namely, Alfaro Fortunado, Nestor Fortunado and Editha

Fortunado [hereinafter referred to as the Fortunados] to pay all expenses, including court fees, for a contingent fee of

fifty percent (50%) of the value of the property in litigation.

2. Acting as counsel for the Fortunados in Civil Case No. Q-15143, wherein Eusebio Lopez, Jr. is one of the defendants

and, without said case being terminated, acting as counsel for Eusebio Lopez, Jr. in Civil Case No. Q-15490;

3. Transferring to himself one-half of the properties of the Fortunados, which properties are the subject of the litigation

in Civil Case No. Q-15143, while the case was still pending;

4. Inducing complainant, who was his former client, to enter into a contract with him on August 30, 1971 for the

development into a residential subdivision of the land involved in Civil Case No. Q-15143, covered by TCT No. T-1929,

claiming that he acquired fifty percent (50%) interest thereof as attorney's fees from the Fortunados, while knowing fully

well that the said property was already sold at a public auction on June 30, 1971, by the Provincial Sheriff of Lanao del

Norte and registered with the Register of Deeds of Iligan City;

5. Submitting to the Court of First Instance of Quezon City falsified documents purporting to be true copies of

"Addendum to the Land Development Agreement dated August 30, 1971" and submitting the same document to the

Fiscal's Office of Quezon City, in connection with the complaint for estafa filed by respondent against complainant

designated as I.S. No. 7512936;

6. Committing acts of treachery and disloyalty to complainant who was his client;

7. Harassing the complainant by filing several complaints without legal basis before the Court of First Instance and the

Fiscal's Office of Quezon City;

8. Deliberately misleading the Court of First Instance and the Fiscal's Office by making false assertion of facts in his

pleadings;

9. Filing petitions "cleverly prepared (so) that while he does not intentionally tell a he, he does not tell the truth either."

Respondent filed an answer on September 29, 1976 and an amended answer on November 18, 1976, denying the

accusations against him. Complainant filed a reply to respondent's answer on December 29, 1976 and on March 24,

1977 respondent filed a rejoinder.


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In a resolution dated March 16, 1983, the Court referred the case to the Office of the Solicitor General for investigation,

report and recommendation. In the investigation conducted by the Solicitor General, complainant presented himself as

a witness and submitted Exhibits "A" to "PP", while respondent appeared both as witness and counsel and submitted

Exhibits "1" to "11". The parties were required to submit their respective memoranda.

On May 16, 1988 respondent filed a motion to dismiss the complaint against him, claiming that the long delay in the

resolution of the complaint against him constitutes a violation of his constitutional right to due process and speedydisposition of cases. Upon order of the Court, the Solicitor General filed a comment to the motion to dismiss on August

8, 1988, explaining that the delay in the investigation of the case was due to the numerous requests for postponement

of scheduled hearings filed by both parties and the motions for extension of time to file their respective memoranda."

[Comment of the Solicitor General, p. 2; Record, p. 365]. Respondent filed a reply to the Solicitor General's comment on

October 26, 1988. In a resolution dated January 16, 1989 the Court required the Solicitor General to submit his report

and recommendation within thirty (30) days from notice.

On April 11, 1989, the Solicitor General submitted his report with the recommendation that Atty. Ramon A. Gonzales be

suspended for six (6) months. The Solicitor General found that respondent committed the following acts of misconduct:

a. transferring to himself one-half of the properties of his clients during the pendency of the case where the properties

were involved;

b. concealing from complainant the fact that the property subject of their land development agreement had already

been sold at a public auction prior to the execution of said agreement; and

c. misleading the court by submitting alleged true copies of a document where two signatories who had not signed the

original (or even the xerox copy) were made to appear as having fixed their signatures [Report and Recommendation of

the Solicitor General, pp. 17-18; Rollo, pp. 403-404].

Respondent then filed on April 14, 1989 a motion to refer the case to the Integrated Bar of the Philippines (IBP) for

investigation and disposition pursuant to Rule 139-B of the Revised Rules of Court. Respondent manifested that he

intends to submit more evidence before the IBP. Finally, on November 27, 1989, respondent filed a supplementalmotion to refer this case to the IBP, containing additional arguments to bolster his contentions in his previous pleadings.

I.

Preliminarily, the Court will dispose of the procedural issue raised by respondent. It is respondent's contention that the

preliminary investigation conducted by the Solicitor General was limited to the determination of whether or not there is

sufficient ground to proceed with the case and that under Rule 139 the Solicitor General still has to file an administrative

complaint against him. Respondent claims that the case should be referred to the IBP since Section 20 of Rule 139-B

provides that:

This Rule shall take effect on June 1, 1988 and shall supersede the present Rule 139 entitled DISBARMENT ORSUSPENSION OF ATTORNEYS. All cases pending investigation by the Office of the Solicitor General shall be transferred to

the Integrated Bar of the Philippines Board of Governors for investigation and disposition as provided in this Rule except

those cases where the investigation has been substantially completed.

The above contention of respondent is untenable. In the first place, contrary to respondent's claim, reference to the IBP

of complaints against lawyers is not mandatory upon the Court [Zaldivar v. Sandiganbayan, G.R. Nos. 79690-707;

Zaldivar v. Gonzales, G.R. No. 80578, October 7, 1988]. Reference of complaints to the IBP is not an exclusive procedure

under the terms of Rule 139-B of the Revised Rules of Court [Ibid]. Under Sections 13 and 14 of Rule 139-B, the Supreme

Court may conduct disciplinary proceedings without the intervention of the IBP by referring cases for investigation to

the Solicitor General or to any officer of the Supreme Court or judge of a lower court. In such a case, the report and

recommendation of the investigating official shall be reviewed directly by the Supreme Court. The Court shall base its

final action on the case on the report and recommendation submitted by the investigating official and the evidencepresented by the parties during the investigation.

Secondly, there is no need to refer the case to the IBP since at the time of the effectivity of Rule 139-B [June 1, 1988] the

investigation conducted by the Office of the Solicitor General had been substantially completed. Section 20 of Rule 139-

B provides that only pending cases, the investigation of which has not been substantially completed by the Office of the

Solicitor General, shall be transferred to the IBP. In this case the investigation by the Solicitor General was terminated

even before the effectivity of Rule 139-B. Respondent himself admitted in his motion to dismiss that the Solicitor

General terminated the investigation on November 26, 1986, the date when respondent submitted his reply

memorandum [Motion to Dismiss, p. 1; Record, p. 353].

Thirdly, there is no need for further investigation since the Office of the Solicitor General already made a thorough andcomprehensive investigation of the case. To refer the case to the IBP, as prayed for by the respondent, will result not

only in duplication of the proceedings conducted by the Solicitor General but also to further delay in the disposition of

the present case which has lasted for more than thirteen (13) years.


10/29

Respondent's assertion that he still has some evidence to present does not warrant the referral of the case to the IBP.

Considering that in the investigation conducted by the Solicitor General respondent was given ample opportunity to

present evidence, his failure to adduce additional evidence is entirely his own fault. There was therefore no denial of

procedural due process. The record shows that respondent appeared as witness for himself and presented no less than

eleven (11) documents to support his contentions. He was also allowed to cross-examine the complainant who

appeared as a witness against him.

II.

The Court will now address the substantive issue of whether or not respondent committed the acts of misconduct

alleged by complainant Bautista.

After a careful review of the record of the case and the report and recommendation of the Solicitor General, the Court

finds that respondent committed acts of misconduct which warrant the exercise by this Court of its disciplinary power.

The record shows that respondent prepared a document entitled "Transfer of Rights" which was signed by the

Fortunados on August 31, 1971. The document assigned to respondent one-half (1/2) of the properties of the

Fortunados covered by TCT No. T-1929, with an area of 239.650 sq. mm., and TCT No. T-3041, with an area of 72.907 sq.

m., for and in consideration of his legal services to the latter. At the time the document was executed, respondent knew

that the abovementioned properties were the subject of a civil case [Civil Case No. Q-15143] pending before the Court

of First Instance of Quezon City since he was acting as counsel for the Fortunados in said case [See Annex "B" of Original

Complaint, p. 12; Rollo, p. 16]. In executing the document transferring one-half (1/2) of the subject properties to

himself, respondent violated the law expressly prohibiting a lawyer from acquiring his client's property or interest

involved in any litigation in which he may take part by virtue of his profession [Article 1491, New Civil Code]. This Court

has held that the purchase by a lawyer of his client's property or interest in litigation is a breach of professional ethics

and constitutes malpractice [Hernandez v. Villanueva, 40 Phil. 774 (1920); Go Beltran v. Fernandez, 70 Phil. 248 (1940)].

However, respondent notes that Canon 10 of the old Canons of Professional Ethics, which states that "[t]he lawyer

should not purchase any interests in the subject matter of the litigation which he is conducting," does not appear

anymore in the new Code of Professional Responsibility. He therefore concludes that while a purchase by a lawyer ofproperty in litigation is void under Art. 1491 of the Civil Code, such purchase is no longer a ground for disciplinary action

under the new Code of Professional Responsibility.

This contention is without merit. The very first Canon of the new Code states that "a lawyer shall uphold the

Constitution, obey the laws of the land and promote respect for law and legal process" (Emphasis supplied), Moreover,

Rule 138, Sec. 3 of the Revised Rules of Court requires every lawyer to take an oath to 44 obey the laws [of the Republic

of the Philippines] as well as the legal orders of the duly constituted authorities therein." And for any violation of this

oath, a lawyer may be suspended or disbarred by the Supreme Court [Rule 138, Sec. 27, Revised Rules of Court]. All of

these underscore the role of the lawyer as the vanguard of our legal system. The transgression of any provision of law by

a lawyer is a repulsive and reprehensible act which the Court will not countenance. In the instant case, respondent,

having violated Art. 1491 of the Civil Code, must be held accountable both to his client and to society.

Parenthetically, it should be noted that the persons mentioned in Art. 1491 of the Civil Code are prohibited from

purchasing the property mentioned therein because of their existing trust relationship with the latter. A lawyer is

disqualified from acquiring by purchase the property and rights in litigation because of his fiduciary relationship with

such property and rights, as well as with the client. And it cannot be claimed that the new Code of Professional

Responsibility has failed to emphasize the nature and consequences of such relationship. Canon 17 states that "a lawyer

owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him." On the other

hand, Canon 16 provides that "a lawyer shall hold in trust all moneys and properties of his client that may come into his

possession." Hence, notwithstanding the absence of a specific provision on the matter in the new Code, the Court,

considering the abovequoted provisions of the new Code in relation to Art. 1491 of the Civil Code, as well as the

prevailing jurisprudence, holds that the purchase by a lawyer of his client's property in litigation constitutes a breach of

professional ethics for which a disciplinary action may be brought against him.

Respondent's next contention that the transfer of the properties was not really implemented, because the land

development agreement on which the transfer depended was later rescinded, is untenable. Nowhere is it provided in

the Transfer of Rights that the assignment of the properties of the Fortunados to respondent was subject to the

implementation of the land development agreement. The last paragraph of the Transfer of Rights provides that:

... for and in consideration of the legal services of ATTY. RAMON A. GONZALES, Filipino, married to Lilia Yusay, and a

resident of 23 Sunrise Hill, New Manila, Quezon City, rendered to our entire satisfaction, we hereby, by these presents,

do transfer and convey to the said ATTY. RAMON A. GONZALES, his heirs, successor, and assigns, one-half (1/2) of our

rights and interests in the abovedescribed property, together with all the improvements found therein [Annex D of the

Complaint, Record, p. 28; Emphasis supplied].

It is clear from the foregoing that the parties intended the transfer of the properties to respondent to be absolute and

unconditional, and irrespective of whether or not the land development agreement was implemented.


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Another misconduct committed by respondent was his failure to disclose to complainant, at the time the land

development agreement was entered into, that the land covered by TCT No. T-1929 had already been sold at a public

auction. The land development agreement was executed on August 31, 1977 while the public auction was held on June

30, 1971.

Respondent denies that complainant was his former client, claiming that his appearance for the complainant in an anti-

graft case filed by the latter against a certain Gilbert Teodoro was upon the request of complainant and was understoodto be only provisional. Respondent claims that since complainant was not his client, he had no duty to warn complainant

of the fact that the land involved in their land development agreement had been sold at a public auction. Moreover, the

sale was duly annotated at the back of TCT No. T-1929 and this, respondent argues, serves as constructive notice to

complainant so that there was no concealment on his part.

The above contentions are unmeritorious. Even assuming that the certificate of sale was annotated at the back of TCT

No. T-1929, the fact remains that respondent failed to inform the complainant of the sale of the land to Samauna during

the negotiations for the land development agreement. In so doing, respondent failed to live up to the rigorous standards

of ethics of the law profession which place a premium on honesty and condemn duplicitous conduct. The fact that

complainant was not a former client of respondent does not exempt respondent from his duty to inform complainant of

an important fact pertaining to the land which is subject of their negotiation. Since he was a party to the land

development agreement, respondent should have warned the complainant of the sale of the land at a public auction so

that the latter could make a proper assessment of the viability of the project they were jointly undertaking. This Court

has held that a lawyer should observe honesty and fairness even in his private dealings and failure to do so is a ground

for disciplinary action against him [Custodio v. Esto, Adm. Case No. 1113, February 22, 1978, 81 SCRA 517].

Complainant also charges respondent with submitting to the court falsified documents purporting to be true copies of

an addendum to the land development agreement.

Based on evidence submitted by the parties, the Solicitor General found that in the document filed by respondent with

the Court of First Instance of Quezon City, the signatories to the addendum to the land development agreement namely,

Ramon A. Gonzales, Alfaro T. Fortunado, Editha T. Fortunado, Nestor T. Fortunado, and Angel L. Bautistawere made to

appear as having signed the original document on December 9, 1972, as indicated by the letters (SGD.) before each oftheir names. However, it was only respondent Alfaro Fortunado and complainant who signed the original and duplicate

original (Exh. 2) and the two other parties, Edith Fortunado and Nestor Fortunado, never did. Even respondent himself

admitted that Edith and Nestor Fortunado only signed the xerox copy (Exh. 2-A) after respondent wrote them on May

24, 1973, asking them to sign the said xerox copy attached to the letter and to send it back to him after signing

[Rejoinder to Complainant's Reply, pp. 4-6; Rollo, pp. 327-329]. Moreover, respondent acknowledged that Edith and

Nestor Fortunado had merely agreed by phone to sign, but had not actually signed, the alleged true copy of the

addendum as of May 23, 1973 [Respondent's Supplemental Motion to Refer this Case to the Integrated Bar of the

Philippines, p. 16]. Thus, when respondent submitted the alleged true copy of the addendum on May 23, 1973 as Annex

"A" of his Manifestation filed with the Court of First Instance of Quezon City, he knowingly misled the Court into

believing that the original addendum was signed by Edith Fortunado and Nestor Fortunado. Such conduct constitutes

willful disregard of his solemn duty as a lawyer to act at all times in a manner consistent with the truth. A lawyer shouldnever seek to mislead the court by an artifice or false statement of fact or law [Section 20 (d), Rule 138, Revised Rules of

Court; Canon 22, Canons of Professional Ethics; Canon 10, Rule 10.01, Code of Professional Responsibility].

Anent the first charge of complainant, the Solicitor General found that no impropriety was committed by respondent in

entering into a contingent fee contract with the Fortunados [Report and Recommendation, p. 8; Record, p. 394]. The

Court, however, finds that the agreement between the respondent and the Fortunados, which provides in part that:

We the [Fortunados] agree on the 50% contingent fee, provided, you [respondent Ramon Gonzales] defray all expenses,

for the suit, including court fees.

Alfaro T. Fortunado [signed]

Editha T. Fortunado [signed]Nestor T. Fortunado [signed]

CONFORME

Ramon A. Gonzales [signed]

[Annex A to the Complaint, Record, p. 4].

is contrary to Canon 42 of the Canons of Professional Ethics which provides that a lawyer may not properly agree with a

client to pay or bear the expenses of litigation. [See also Rule 16.04, Code of Professional Responsibility]. Although a

lawyer may in good faith, advance the expenses of litigation, the same should be subject to reimbursement. Theagreement between respondent and the Fortunados, however, does not provide for reimbursement to respondent of

litigation expenses paid by him. An agreement whereby an attorney agrees to pay expenses of proceedings to enforce

the client's rights is champertous [JBP Holding Corp. v. U.S. 166 F. Supp. 324 (1958)]. Such agreements are against public


12/29

policy especially where, as in this case, the attorney has agreed to carry on the action at his own expense in

consideration of some bargain to have part of the thing in dispute [See Sampliner v. Motion Pictures Patents Co., et al.,

255 F. 242 (1918)]. The execution of these contracts violates the fiduciary relationship between the lawyer and his client,

for which the former must incur administrative sanctions.

The Solicitor General next concludes that respondent cannot be held liable for acting as counsel for Eusebio Lopez, Jr. in

Civil Case No. Q-15490 while acting as counsel for the Fortunados against the same Eusebio Lopez, Jr. in Civil Case No. Q-

15143. The Court, after considering the record, agrees with the Solicitor General's findings on the matter. The evidencepresented by respondent shows that his acceptance of Civil Case No. Q-15490 was with the knowledge and consent of

the Fortunados. The affidavit executed by the Fortunados on June 23, 1976 clearly states that they gave their consent

when respondent accepted the case of Eusebio Lopez, Jr. [Affidavit of Fortunados, dated June 23, 1976; Rollo, p. 198].

One of the recognized exceptions to the rule against representation of conflicting interests is where the clients

knowingly consent to the dual representation after full disclosure of the facts by counsel [Canon 6, Canons of

Professional Ethics; Canon 15, Rule 15.03, Code of Professional Responsibility].

Complainant also claims that respondent filed several complaints against him before the Court of First Instance and the

Fiscal's Office of Quezon City for the sole purpose of harassing him.

The record shows that at the time of the Solicitor General's investigation of this case, Civil Case No. Q-18060 was still

pending before the Court of First Instance of Quezon City, while the complaints for libel (I.S. No. 76-5912) and perjury

(I.S. No. 5913) were already dismissed by the City Fiscal for insufficiency of evidence and lack of interest, respectively

[Report and Recommendation, pp. 16-17; Rollo, pp. 402-403]. The Solicitor General found no basis for holding that the

complaints for libel and perjury were used by respondent to harass complainant. As to Civil Case No. Q-18060,

considering that it was still pending resolution, the Solicitor General made no finding on complainants claim that it was a

mere ploy by respondent to harass him. The determination of the validity of the complaint in Civil Case No. Q-18060 was

left to the Court of First Instance of Quezon City where the case was pending resolution.

The Court agrees with the above findings of the Solicitor General, and accordingly holds that there is no basis for holding

that the respondent's sole purpose in filing the aforementioned cases was to harass complainant.

Grounds 6, 8 and 9 alleged in the complaint need not be discussed separately since the above discussion on the othergrounds sufficiently cover these remaining grounds.

The Court finds clearly established in this case that on four counts the respondent violated the law and the rules

governing the conduct of a member of the legal profession. Sworn to assist in the administration of justice and to uphold

the rule of law, he has "miserably failed to live up to the standards expected of a member of the Bar." [Artiaga v.

Villanueva, Adm. Matter No. 1892, July 29, 1988, 163 SCRA 638, 647]. The Court agrees with the Solicitor General that,

considering the nature of the offenses committed by respondent and the facts and circumstances of the case,

respondent lawyer should be suspended from the practice of law for a period of six (6) months.

WHEREFORE, finding that respondent Attorney Ramon A. Gonzales committed serious misconduct, the Court Resolved

to SUSPEND respondent from the practice of law for SIX (6) months effective from the date of his receipt of thisResolution. Let copies of this Resolution be circulated to all courts of the country for their information and guidance, and

spread in the personal record of Atty. Gonzales.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin and Cortes, JJ., concur.

Gutierrez, Jr., Sarmiento, Grio-Aquino, Medialdea, Regalado, JJ., took no part.


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3. The Insular Life Assurance Co. Employees Association v Insular Life Assurance Co

IIGO F. CARLET, as Special Administrator of the Estate of Pablo Sevillo and Antonia Palisoc, petitioner, vs. HON.COURT OF APPEALS, VIRGINIA C. ZARATE, JACOBO C. ZARATE, VICTORIA C. ZARATE, HON. CONRADO DIZON, ActingJudge of the Municipal Trial Court of Bian, Laguna, and DEPUTY SHERIFF ROGELIO S. MOLINA of Bian, Laguna,respondents.

Lacsina, Lontok and Perez and Luis F. Aquino for petitioners.

Francisco de los Reyes for respondent Court of Industrial Relations.

Araneta, Mendoza and Papa for other respondents.

CASTRO, J.:

Appeal, by certiorari to review a decision and a resolution en banc of the Court of Industrial Relations dated August 17,

1965 and October 20, 1965, respectively, in Case 1698-ULP.

The Insular Life Assurance Co., Ltd., Employees Association-NATU, FGU Insurance Group Workers & Employees

Association-NATU, and Insular Life Building Employees Association-NATU (hereinafter referred to as the Unions), while

still members of the Federation of Free Workers (FFW), entered into separate collective bargaining agreements with the

Insular Life Assurance Co., Ltd. and the FGU Insurance Group (hereinafter referred to as the Companies).

Two of the lawyers of the Unions then were Felipe Enaje and Ramon Garcia; the latter was formerly the secretary-

treasurer of the FFW and acting president of the Insular Life/FGU unions and the Insular Life Building Employees

Association. Garcia, as such acting president, in a circular issued in his name and signed by him, tried to dissuade the

members of the Unions from disaffiliating with the FFW and joining the National Association of Trade Unions (NATU), tono avail.

Enaje and Garcia soon left the FFW and secured employment with the Anti-Dummy Board of the Department of Justice.

Thereafter, the Companies hired Garcia in the latter part of 1956 as assistant corporate secretary and legal assistant in

their Legal Department, and he was soon receiving P900 a month, or P600 more than he was receiving from the FFW.

Enaje was hired on or about February 19, 1957 as personnel manager of the Companies, and was likewise made

chairman of the negotiating panel for the Companies in the collective bargaining with the Unions.

In a letter dated September 16, 1957, the Unions jointly submitted proposals to the Companies for a modified renewal

of their respective collective bargaining contracts which were then due to expire on September 30, 1957. The parties

mutually agreed and to make whatever benefits could be agreed upon retroactively effective October 1, 1957.

Thereafter, in the months of September and October 1957 negotiations were conducted on the Union's proposals, but

these were snagged by a deadlock on the issue of union shop, as a result of which the Unions filed on January 27, 1958 a

notice of strike for "deadlock on collective bargaining." Several conciliation conferences were held under the auspices of

the Department of Labor wherein the conciliators urged the Companies to make reply to the Unions' proposals en toto

so that the said Unions might consider the feasibility of dropping their demand for union security in exchange for other

benefits. However, the Companies did not make any counter-proposals but, instead, insisted that the Unions first drop

their demand for union security, promising money benefits if this was done. Thereupon, and prior to April 15, 1958, the

petitioner Insular Life Building Employees Association-NATU dropped this particular demand, and requested the

Companies to answer its demands, point by point, en toto. But the respondent Insular Life Assurance Co. still refused to

make any counter-proposals. In a letter addressed to the two other Unions by the joint management of the Companies,

the former were also asked to drop their union security demand, otherwise the Companies "would no longer considerthemselves bound by the commitment to make money benefits retroactive to October 1, 1957." By a letter dated April

17, 1958, the remaining two petitioner unions likewise dropped their demand for union shop. April 25, 1958 then was

set by the parties to meet and discuss the remaining demands.

From April 25 to May 6, 1958, the parties negotiated on the labor demands but with no satisfactory result due to a

stalemate on the matter of salary increases. On May 13, 1958 the Unions demanded from the Companies final counter-

proposals on their economic demands, particularly on salary increases. Instead of giving counter-proposals, the

Companies on May 15, 1958 presented facts and figures and requested the Unions to submit a workable formula which

would justify their own proposals, taking into account the financial position of the former. Forthwith the Unions voted to

declare a strike in protest against what they considered the Companies' unfair labor practices.

Meanwhile, eighty-seven (87) unionists were reclassified as supervisors without increase in salary nor in responsibility

while negotiations were going on in the Department of Labor after the notice to strike was served on the Companies.

These employees resigned from the Unions.


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On May 20, 1958 the Unions went on strike and picketed the offices of the Insular Life Building at Plaza Moraga.

On May 21, 1958 the Companies through their acting manager and president, the respondent Jose M. Olbes (hereinafter

referred to as the respondent Olbes), sent to each of the strikers a letter (exhibit A) quoted verbatim as follows:

We recognize it is your privilege both to strike and to conduct picketing.

However, if any of you would like to come back to work voluntarily, you may:

1. Advise the nearest police officer or security guard of your intention to do so.

2. Take your meals within the office.

3. Make a choice whether to go home at the end of the day or to sleep nights at the office where comfortable cots have

been prepared.

4. Enjoy free coffee and occasional movies.

5. Be paid overtime for work performed in excess of eight hours.

6. Be sure arrangements will be made for your families.

The decision to make is yours whether you still believe in the motives of the strike or in the fairness of the

Management.

The Unions, however, continued on strike, with the exception of a few unionists who were convinced to desist by the

aforesaid letter of May 21, 1958.

From the date the strike was called on May 21, 1958, until it was called off on May 31, 1958, some management men

tried to break thru the Unions' picket lines. Thus, on May 21, 1958 Garcia, assistant corporate secretary, and VicenteAbella, chief of the personnel records section, respectively of the Companies, tried to penetrate the picket lines in front

of the Insular Life Building. Garcia, upon approaching the picket line, tossed aside the placard of a picketer, one Paulino

Bugay; a fight ensued between them, in which both suffered injuries. The Companies organized three bus-loads of

employees, including a photographer, who with the said respondent Olbes, succeeded in penetrating the picket lines in

front of the Insular Life Building, thus causing injuries to the picketers and also to the strike-breakers due to the

resistance offered by some picketers.

Alleging that some non-strikers were injured and with the use of photographs as evidence, the Companies then filed

criminal charges against the strikers with the City Fiscal's Office of Manila. During the pendency of the said cases in the

fiscal's office, the Companies likewise filed a petition for injunction with damages with the Court of First Instance of

Manila which, on the basis of the pendency of the various criminal cases against striking members of the Unions, issuedon May 31, 1958 an order restraining the strikers, until further orders of the said court, from stopping, impeding,

obstructing, etc. the free and peaceful use of the Companies' gates, entrance and driveway and the free movement of

persons and vehicles to and from, out and in, of the Companies' building.

On the same date, the Companies, again through the respondent Olbes, sent individually to the strikers a letter (exhibit

B), quoted hereunder in its entirety:

The first day of the strike was last 21 May 1958.

Our position remains unchanged and the strike has made us even more convinced of our decision.

We do not know how long you intend to stay out, but we cannot hold your positions open for long. We have continuedto operate and will continue to do so with or without you.

If you are still interested in continuing in the employ of the Group Companies, and if there are no criminal charges

pending against you, we are giving you until 2 June 1958 to report for work at the home office. If by this date you have

not yet reported, we may be forced to obtain your replacement.

Before, the decisions was yours to make.

So it is now.

Incidentally, all of the more than 120 criminal charges filed against the members of the Unions, except three (3), weredismissed by the fiscal's office and by the courts. These three cases involved "slight physical injuries" against one striker

and "light coercion" against two others.


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At any rate, because of the issuance of the writ of preliminary injunction against them as well as the ultimatum of the

Companies giving them until June 2, 1958 to return to their jobs or else be replaced, the striking employees decided to

call off their strike and to report back to work on June 2, 1958.

However, before readmitting the strikers, the Companies required them not only to secure clearances from the City

Fiscal's Office of Manila but also to be screened by a management committee among the members of which were Enage

and Garcia. The screening committee initially rejected 83 strikers with pending criminal charges. However, all non-

strikers with pending criminal charges which arose from the breakthrough incident were readmitted immediately by theCompanies without being required to secure clearances from the fiscal's office. Subsequently, when practically all the

strikers had secured clearances from the fiscal's office, the Companies readmitted only some but adamantly refused

readmission to 34 officials and members of the Unions who were most active in the strike, on the ground that they

committed "acts inimical to the interest of the respondents," without however stating the specific acts allegedly

committed. Among those who were refused readmission are Emiliano Tabasondra, vice president of the Insular Life

Building Employees' Association-NATU; Florencio Ibarra, president of the FGU Insurance Group Workers & Employees

Association-NATU; and Isagani Du Timbol, acting president of the Insular Life Assurance Co., Ltd. Employees Association-

NATU. Some 24 of the above number were ultimately notified months later that they were being dismissed retroactively

as of June 2, 1958 and given separation pay checks computed under Rep. Act 1787, while others (ten in number) up to

now have not been readmitted although there have been no formal dismissal notices given to them.

On July 29, 1958 the CIR prosecutor filed a complaint for unfair labor practice against the Companies under Republic Act

875. The complaint specifically charged the Companies with (1) interfering with the members of the Unions in the

exercise of their right to concerted action, by sending out individual letters to them urging them to abandon their strike

and return to work, with a promise of comfortable cots, free coffee and movies, and paid overtime, and, subsequently,

by warning them that if they did not return to work on or before June 2, 1958, they might be replaced; and (2)

discriminating against the members of the Unions as regards readmission to work after the strike on the basis of their

union membership and degree of participation in the strike.

On August 4, 1958 the Companies filed their answer denying all the material allegations of the complaint, stating special

defenses therein, and asking for the dismissal of the complaint.

After trial on the merits, the Court of Industrial Relations, through Presiding Judge Arsenio Martinez, rendered on August17, 1965 a decision dismissing the Unions' complaint for lack of merit. On August 31, 1965 the Unions seasonably filed

their motion for reconsideration of the said decision, and their supporting memorandum on September 10, 1965. This

was denied by the Court of Industrial Relations en banc in a resolution promulgated on October 20, 1965.

Hence, this petition for review, the Unions contending that the lower court erred:

1. In not finding the Companies guilty of unfair labor practice in sending out individually to the strikers the letters

marked Exhibits A and B;

2. In not finding the Companies guilty of unfair labor practice for discriminating against the striking members of the

Unions in the matter of readmission of employees after the strike;

3. In not finding the Companies guilty of unfair labor practice for dismissing officials and members of the Unions without

giving them the benefit of investigation and the opportunity to present their side in regard to activities undertaken by

them in the legitimate exercise of their right to strike; and

4. In not ordering the reinstatement of officials and members of the Unions, with full back wages, from June 2, 1958 to

the date of their actual reinstatement to their usual employment.

I. The respondents contend that the sending of the letters, exhibits A and B, constituted a legitimate exercise of their

freedom of speech. We do not agree. The said letters were directed to the striking employees individually by

registered special delivery mail at that without being coursed through the Unions which were representing the

employees in the collective bargaining.

The act of an employer in notifying absent employees individually during a strike following unproductive efforts at

collective bargaining that the plant would be operated the next day and that their jobs were open for them should they

want to come in has been held to be an unfair labor practice, as an active interference with the right of collective

bargaining through dealing with the employees individually instead of through their collective bargaining

representatives. (31 Am. Jur. 563, citing NLRB v. Montgomery Ward & Co. [CA 9th] 133 F2d 676, 146 ALR 1045)

Indeed, it is an unfair labor practice for an employer operating under a collective bargaining agreement to negotiate or

to attempt to negotiate with his employees individually in connection with changes in the agreement. And the basis of

the prohibition regarding individual bargaining with the strikers is that although the union is on strike, the employer is

still under obligation to bargain with the union as the employees' bargaining representative (Melo Photo SupplyCorporation vs. National Labor Relations Board, 321 U.S. 332).


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Indeed, some such similar actions are illegal as constituting unwarranted acts of interference. Thus, the act of a

company president in writing letters to the strikers, urging their return to work on terms inconsistent with their union

membership, was adjudged as constituting interference with the exercise of his employees' right to collective bargaining

(Lighter Publishing, CCA 7th, 133 F2d 621). It is likewise an act of interference for the employer to send a letter to all

employees notifying them to return to work at a time specified therein, otherwise new employees would be engaged to

perform their jobs. Individual solicitation of the employees or visiting their homes, with the employer or his

representative urging the employees to cease union activity or cease striking, constitutes unfair labor practice. All the

above-detailed activities are unfair labor practices because they tend to undermine the concerted activity of theemployees, an activity to which they are entitled free from the employer's molestation.1

Moreover, since exhibit A is a letter containing promises of benefits to the employees in order to entice them to return

to work, it is not protected by the free speech provisions of the Constitution (NLRB v. Clearfield Cheese Co., Inc., 213 F2d

70). The same is true with exhibit B since it contained threats to obtain replacements for the striking employees in the

event they did not report for work on June 2, 1958. The free speech protection under the Constitution is inapplicable

where the expression of opinion by the employer or his agent contains a promise of benefit, or threats, or reprisal (31

Am. Jur. 544; NLRB vs. Clearfield Cheese Co., Inc., 213 F2d 70; NLRB vs. Goigy Co., 211 F2d 533, 35 ALR 2d 422).

Indeed, when the respondents offered reinstatement and attempted to "bribe" the strikers with "comfortable cots,"

"free coffee and occasional movies," "overtime" pay for "work performed in excess of eight hours," and "arrangements"

for their families, so they would abandon the strike and return to work, they were guilty of strike-breaking and/or union-

busting and, consequently, of unfair labor practice. It is equivalent to an attempt to break a strike for an employer to

offer reinstatement to striking employees individually, when they are represented by a union, since the employees thus

offered reinstatement are unable to determine what the consequences of returning to work would be.

Likewise violative of the right to organize, form and join labor organizations are the following acts: the offer of a

Christmas bonus to all "loyal" employees of a company shortly after the making of a request by the union to bargain;

wage increases given for the purpose of mollifying employees after the employer has refused to bargain with the union,

or for the purpose of inducing striking employees to return to work; the employer's promises of benefits in return for

the strikers' abandonment of their strike in support of their union; and the employer's statement, made about 6 weeks

after the strike started, to a group of strikers in a restaurant to the effect that if the strikers returned to work, they

would receive new benefits in the form of hospitalization, accident insurance, profit-sharing, and a new building to workin.2

Citing paragraph 5 of the complaint filed by the acting prosecutor of the lower court which states that "the officers and

members of the complainant unions decided to call off the strike and return to work on June 2, 1958 by reason of the

injunction issued by the Manila Court of First Instance," the respondents contend that this was the main cause why the

strikers returned to work and not the letters, exhibits A and B. This assertion is without merit. The circumstance that the

strikers later decided to return to work ostensibly on account of the injunctive writ issued by the Court of First Instance

of Manila cannot alter the intrinsic quality of the letters, which were calculated, or which tended, to interfere with the

employees' right to engage in lawful concerted activity in the form of a strike. Interference constituting unfair labor

practice will not cease to be such simply because it was susceptible of being thwarted or resisted, or that it did not

proximately cause the result intended. For success of purpose is not, and should not, be the criterion in determiningwhether or not a prohibited act constitutes unfair labor practice.

The test of whether an employer has interfered with and coerced employees within the meaning of subsection (a) (1) is

whether the employer has engaged in conduct which it may reasonably be said tends to interfere with the free exercise

of employees' rights under section 3 of the Act, and it is not necessary that there be direct evidence that any employee

was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable inference that anti-

union conduct of the employer does have an adverse effect on self-organization and collective bargaining. (Francisco,

Labor Laws 1956, Vol. II, p. 323, citing NLRB v. Ford, C.A., 1948, 170 F2d 735).

Besides, the letters, exhibits A and B, should not be considered by themselves alone but should be read in the light of

the preceding and subsequent circumstances surrounding them. The letters should be interpreted according to the

"totality of conduct doctrine,"

... whereby the culpability of an employer's remarks were to be evaluated not only on the basis of their implicit

implications, but were to be appraised against the background of and in conjunction with collateral circumstances.

Under this "doctrine" expressions of opinion by an employer which, though innocent in themselves, frequently were

held to be culpable because of the circumstances under which they were uttered, the history of the particular

employer's labor relations or anti-union bias or because of their connection with an established collateral plan of

coercion or interference. (Rothenberg on Relations, p. 374, and cases cited therein.)

It must be recalled that previous to the petitioners' submission of proposals for an amended renewal of their respective

collective bargaining agreements to the respondents, the latter hired Felipe Enage and Ramon Garcia, former legal

counsels of the petitioners, as personnel manager and assistant corporate secretary, respectively, with attractivecompensations. After the notice to strike was served on the Companies and negotiations were in progress in the

Department of Labor, the respondents reclassified 87 employees as supervisors without increase in salary or in

responsibility, in effect compelling these employees to resign from their unions. And during the negotiations in the


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Department of Labor, despite the fact that the petitioners granted the respondents' demand that the former drop their

demand for union shop and in spite of urgings by the conciliators of the Department of Labor, the respondents

adamantly refused to answer the Unions' demands en toto. Incidentally, Enage was the chairma

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Legal Profession - Finals