Adm. Case No. 632 - IN RE: Ruste

An administrative complaint was originally filed by Mateo San Juan against attorney Melchor E. Ruste on February 27, 1934.
Melchor E. Ruste answered the complaint on March 15, 1934.
The case was referred to the Solicitor-General by a resolution dated December 1, 1934 for a formal evaluation and report.

On March 26, 1935, the Solicitor-General filed a formal complaint against Ruste citing several counts of misconduct.
The charges included:

Ruste’s representation of Severa Ventura and her husband, Mateo San Juan, in cadastral case No. 6 (G. L. R. O. Record No. 483) for lot No. 3765, resulting in an adjudication of an undivided eleven-twentieth (11/20) share of the lot to the complainants.
The absence of a clear agreement regarding the attorney’s fees, with payments of P30 and P25 made on demand.
A subsequent demand for an additional fee of P25, whereupon the complainants, lacking sufficient funds, were induced to execute a contract of lease and a contract of sale affecting their share in lot No. 3764.

Execution of a contract of lease on September 22, 1930, for P100, leasing a coconut and banana plantation for five years.
Execution of a deed of sale on the same day for P1,000, transferring the complainants’ undivided eleven-twentieth share in lot No. 3764—though the consideration was never received by the complainants.
Two subsequent deeds of sale on March 21 and March 28, 1931, transferring the same share in lot No. 3764 to Ong Chua for P370 under varying conditions regarding the inclusion of a house.

Ruste authorizing Ong Chua to allow the complainants to retain possession of the house for two years without rent.
A notification on October 10, 1933, requiring the complainants to pay P40.50 for arrears and a monthly rental of P1.50.

It was also alleged that Ruste failed to turn over the amount of P370 received from Ong Chua or any part thereof to the complainants.

On April 23, 1935, Ruste filed an answer, denying the allegations and raising counterclaims, including allegations of perjury against the complainants and involving other parties such as Prosecutor Jose Evangelista and Fiscal Enrique Braganza.
The formal complaint and the answer were referred on April 24, 1935, to the judge of First Instance of Zamboanga for investigation, report, and recommendation.
From August 3, 1935 to October 18, 1939, various hearings and postponements took place, leading to Judge Catalino Buenaventura’s elevation of the case record to the Supreme Court.
The case was calendared for January 1940 and was heard on February 1, 1940, where Ruste submitted the case without oral argument, and the Solicitor-General’s memorandum recommending dismissal of the complaint was attached to the record.

Engineering the execution of a contract of lease and a deed of sale (Exhibits A and B) in his favor from his clients.
Failing to deliver the funds received from the transactions to the complainants.
Transferring the property to Ong Chua while still acting as counsel for the clients, thereby engaging in a conflict of interest.
Imposing additional rental demands on the complainants for the house they occupied, despite prior arrangements.

Engineering the contracts (lease and deed of sale) in his favor while representing clients in a cadastral case.
Failing to deposit or turn over the amounts received from these transactions to the complainants.
Transferring the property to a third party (Ong Chua) for monetary consideration without reimbursing his clients.

Whether the additional imposition of rental charges on the complainants constituted an abuse of his position, given his fiduciary duty as their legal counsel.

Considering the imbalance of power and the vulnerability of the clients, was the attorney’s conduct exploitative?
Whether the execution of the deeds and the lack of a clear fee agreement further complicated the attorney-client relationship.

The effect of conflicting evidence regarding the exact amounts due and whether such discrepancies should be resolved in a separate action initiated by the complainants.