A.C. No. 9018 - Fajardo vs. Alvarez

Complainant: Teresita P. Fajardo, Municipal Treasurer of San Leonardo, Nueva Ecija, facing criminal and administrative cases before the Office of the Ombudsman arising from dishonesty and alleged violations of Section 3(e), Republic Act No. 3019.
Respondent: Atty. Nicanor C. Alvarez, Legal Officer III of the National Center for Mental Health (NCMH), Department of Health (DOH), assigned to the Legal Section; admitted to engaging in private practice allegedly with written authority from the NCMH Chief pursuant to DOH Administrative Order No. 21, s. 1999.

Around 2009, she hired respondent to handle several Ombudsman cases; respondent demanded P1,400,000.00 as acceptance fee.
Respondent did not enter his appearance nor sign any pleadings in the Ombudsman cases.
Respondent claimed he had “friends” at the Ombudsman who could ensure dismissal of her cases for a fee; he allegedly needed P500,000.00 to pay them.
Two weeks after their discussion, the Ombudsman issued a resolution recommending criminal indictment and a decision dismissing her from service.
She demanded a refund; respondent promised but failed to return the money; a demand letter was sent but ignored.

As Legal Officer III of NCMH, he had written authorization dated August 1, 2001 from NCMH Chief Bernardino A. Vicente allowing private practice “provided it will not run in conflict with the interest of the Center and the Philippine government as a whole.”
He and complainant had an arrangement: complainant would courier case papers; he would evaluate and discuss fees; a 50% downpayment would be deposited to his or his secretary’s account; balances to be paid in installments; success fee was voluntary.
On July 10, 2009, after complainant received the Ombudsman’s decision and resolution (dismissal for serious dishonesty and indictment under RA 3019, Sec. 3[e]), he accepted her case and charged P500,000.00 as acceptance fee, exclusive of filing, appearance, and miscellaneous costs.
He asserted he prepared: (a) motions for reconsideration (administrative and criminal), both dated July 23, 2009; (b) a petition for injunction filed October 15, 2009 with the RTC, Gapan City; (c) a petition for preliminary injunction with TRO before the Court of Appeals on November 18, 2009, amended November 26, 2009; and several letters to officials/agencies.
Complainant allegedly paid in tranches, completing P450,000.00 of the acceptance fee by February 11, 2010 and P60,000.00 for sundries; other expenses he advanced were unpaid. On the last day to file the Ombudsman petition for review, complainant terminated his services in favor of Atty. Tyrone Contado (his co-counsel).

Written Authority: Letter dated August 1, 2001 from NCMH Chief authorizing private practice subject to non-conflict with Center’s and government’s interests and revocable when public interest so requires.
Pleadings and signatures: Complainant asserted respondent did not sign or appear in any pleading before the Ombudsman; respondent claimed authorship/preparation of multiple pleadings and letters; the pleadings allegedly filed did not bear his name/signature.
Text messages: Numerous SMS attributed to respondent referencing “Dep. Omb.,” persons like “Orly,” “Gutierez,” “letter,” “allowance,” and specific amounts/dates suggestive of influence-peddling/follow-ups and money deliveries.
Payments and demands: Complainant paid substantial sums including the alleged P500,000.00 for respondent’s “contacts”; later demanded refund; respondent failed to return any amount.

On June 1, 2011, complainant filed a Verified Complaint for disbarment with the Office of the Bar Confidant; the Supreme Court required respondent to comment and referred the case to the IBP for investigation.
Investigating Commissioner Honesto A. Villamayor (Report, November 12, 2012) found respondent guilty of violating the Code of Professional Responsibility (CPR), recommended one-year suspension and ordered return of P700,000.00 with legal interest.
The IBP Board of Governors (Resolution No. XX-2013-778, June 21, 2013) adopted the recommendation; respondent’s motion for reconsideration was denied (Resolution No. XXI-2014-286, May 3, 2014).
Before the Supreme Court (Second Division), the case was resolved on April 20, 2016 (785 Phil. 303), penned by J. Leonen.

Whether a lawyer employed as Legal Officer III in the NCMH (a DOH agency) is authorized to engage in private practice of law, particularly representing a public officer in Ombudsman cases, given the written authority conditioned on non-conflict with the Center’s and government’s interests.

Related sub-issue: Whether respondent’s acts—preparing pleadings and advising the client without signing/appearing—constitute practice of law.

Whether the amounts charged by respondent as attorney’s fees are reasonable under the principle of quantum meruit, and whether restitution is proper.

Related sub-issue: Whether influence peddling occurred and its effect on fees and sanctions.