A.C. No. 4807 - Camacho vs. Pangulayan

Complainant: Atty. Manuel N. Camacho, retained counsel for several expelled students of AMA Computer College (“AMACC”) involved in a civil case (Civil Case No. Q-97-30549) seeking a writ of preliminary mandatory injunction and damages.
Respondents: Attorneys Luis Meinrado C. Pangulayan, Regina D. Balmores, Catherine V. Laurel, and Hubert Joaquin P. Bustos of Pangulayan and Associates Law Offices.

The complaint charges that the respondent lawyers violated Canon 9 of the Code of Professional Ethics, which mandates that a lawyer should not communicate or negotiate the terms of controversy with a party represented by counsel.
Specifically, Atty. Camacho alleged that despite being the counsel of record for his clients, the respondents negotiated and executed separate compromise agreements (Re-Admission Agreements) with four of his clients without his knowledge.

The agreements purportedly required the expelled students to waive any claims against AMACC and to terminate all pending civil, criminal, and administrative proceedings against it.
Execution Details:

Multiple letters of apology and corresponding Re-Admission Agreements were executed, with specific dates and signatories, including:

Neil Jason Salcedo: Letter of Apology dated 27 May 1997 and a Re-Admission Agreement dated 22 June 1997.
Melyda B. De Leon (assisted by her mother): Letter of Apology dated 31 March 1997 and a Re-Admission Agreement dated 09 May 1997.
Leila Joven (assisted by her mother): Letter of Apology dated 22 May 1997 and a Re-Admission Agreement dated 22 May 1997.
Cleo Villareiz: Letter of Apology dated 22 September 1997 and a Re-Admission Agreement dated 10 October 1997.
Michael Ejercito (assisted by his parents): Letter of Apology dated 20 January 1997 and a Re-Admission Agreement dated 23 January 1997.

The disputes over the actions leading to the execution of these agreements arose during the pendency of Civil Case No. Q-97-30549 before the Regional Trial Court, Branch 78, Quezon City.
The agreements and related letters of apology were linked to an administrative case concerning nine expelled students, later culminating in a manifestation filed by Atty. Regina D. Balmores on behalf of defendant AMACC.
The civil case was eventually dismissed by Judge Lopez on 14 June 1997.

On 19 June 1999, the Board of Governors of the Integrated Bar of the Philippines (IBP) passed Resolution No. XIII-99-163, recommending a six-month suspension for Atty. Pangulayan.
The IBP found that, due to his direct involvement in the unauthorized negotiations, he was remiss in his duty as a lawyer, while dismissing the case against the other respondents for lack of evidence and direct participation.
Despite Atty. Pangulayan’s explanation that the agreements were intended solely to settle an administrative case and that his co-respondents were not involved, the evidence (notably the content of the Manifestation) contradicted his account.

Whether the act of negotiating and executing the Re-Admission Agreements with clients represented by another counsel constitutes a violation of Canon 9 of the Code of Professional Ethics.
Whether initiating such negotiations, despite being aware that the clients were already represented by complainant counsel, is an inexcusable breach of ethical standards.

Whether the context of the agreements being part of an administrative matter can excuse the direct involvement in disposing of claims that extend to civil, criminal, and administrative proceedings.
Whether separating the administrative aspect from the pending litigation is legally tenable.

Whether the recommended six-month suspension by the IBP was justified based on the gravity of the ethical violation.
If mitigation factors (such as the explanation offered by Atty. Pangulayan and non-participation of his co-respondents) warrant a lesser penalty.