A.C. No. 4763 - Gamilla vs. Marino, Jr.

In 1986, respondent Atty. Eduardo J. MariAo Jr., as president of the UST Faculty Union, and other union officers entered into a collective bargaining agreement with the University of Santo Tomas (UST) for the provision of economic benefits amounting to P35 million.
The agreement generated disputes arising from its interpretation and implementation, ultimately souring the relationship between the contracting parties.
The 1986 agreement expired in 1988, and subsequent attempts to forge a new agreement were unsuccessful.

In 1989, following a strike by the faculty members, UST terminated the employment of 16 union officers and directors, including respondent Atty. MariAo Jr.
Legal battles ensued, with the Court eventually ordering the reinstatement of the dismissed union officers, along with back wages and other claims.

In 1990, Secretary of Labor Ruben D. Torres prescribed a new five-year collective bargaining agreement retroactive to 1988. Concurrently, UST and the UST Faculty Union entered into a compromise agreement for the payment of P7,000,000.

Of the P7,000,000, P5,000,000 was intended for the back wages and other claims of the dismissed officers (including respondent), while the remaining P2,000,000 was to satisfy UST’s obligations under the expired agreement.

In 1992, a memorandum of agreement was executed to settle salary increases and other benefits for the period from 1 June 1991 to 31 May 1993, for a total of P42,000,000.

The agreement detailed that benefits from 1 June 1991 to 31 October 1992 were released directly to faculty members, with the remainder ceded to the Union for subsequent disbursement.
Specific allocations from the P42,000,000 included payments for outstanding obligations, salary adjustments, ancillary expenses, and attorney’s fees amounting to P4,200,000.

After the deduction of these expenses, a balance remained, part of which was not fully released to the Union, and subsequent money market investments and adjustments increased the total funds ultimately distributed to faculty members in 1994.
Discrepancies in delivery and accounting of funds brought forth questions regarding transparency in the management and disbursement process.

Complainants, who were members of the UST Faculty Union, raised issues about the alleged lack of transparency among the union’s officers and directors regarding the management of the monetary benefits.
They initiated two complaints with the Office of the Regional Director, Department of Labor and Employment (DLE) in October 1995 and November 1996, alleging:

On 2 July 1997, a disbarment complaint was filed against respondent Atty. MariAo Jr. alleging:

On 18 March 1998, the case was referred to the Integrated Bar of the Philippines (IBP) for investigation, which resulted in a report and a resolution recommending the suspension of respondent pending a detailed accounting.
In 1999, further investigations and IBP resolutions ensued:

On 7 September 1999, respondent filed comments reiterating his defense, arguing forum-shopping and asserting his accounting was adequate.
On 27 October 1999, the case was sent back for a more detailed inquiry by the IBP.

Separately, on 27 May 1999, a Regional Director found merit in the earlier complaints and ordered the expulsion of respondent and other union officers.
However, on 9 March 2000, the Bureau of Labor Relations set aside the expulsion order, finding full and adequate accounting of the funds, while still requiring the distribution of the attorney’s fees among faculty members and calling for elections.
The Court of Appeals affirmed the Bureau’s decision on 16 March 2001, and the issue was later elevated to the Supreme Court (G.R. No. 149763).
Finally, on 25 September 2002, the IBP issued a detailed report and resolution recommending the lifting of the suspension, having found that respondent had sufficiently accounted for the questioned funds.

The facts reveal that Atty. MariAo, by assuming dual roles—as union president, legal counsel, and a dismissed employee seeking his own benefits—placed himself in a situation of conflict of interest.
His negotiation of the 1990 compromise agreement led to a lopsided settlement that favored the dismissed union officers by awarding them P5,000,000, while the faculty members received only P2,000,000, despite their claim being much higher.
Additionally, the manner in which he secured and later accounted for the P4,200,000 as attorney’s fees raised serious questions regarding transparency and proper disclosure to the union members.
The cumulative effect of these actions was deemed to have violated several provisions of the Code of Professional Responsibility requiring candor, fairness, and undivided loyalty to the client.

Whether respondent Atty. MariAo Jr. committed ethical lapses by failing to avoid a conflict of interest while simultaneously acting as union president, legal counsel, and an interested party in the compromise agreement.
Whether the negotiation and execution of the 1990 compromise agreement, which resulted in a disproportionate allocation of funds unfavorable to the faculty members, constituted a violation of his fiduciary obligations under the Code of Professional Responsibility.
Whether his lack of transparency and failure to disclose crucial information regarding the disbursement of the funds (including the P4,200,000 attorney’s fees) misled the union members and undermined their ability to make informed decisions concerning their interests.
Whether the disciplinary measures imposed (i.e., the reprimand with a warning) were appropriate in addressing the ethical lapses identified in his conduct.