G.R. No. 103877 - Arao vs. Commission on Elections

Case Summary (G.R. No. 103877)

Factual Background

Respondent secured a favorable judgment in an illegal dismissal action against Fortune amounting to P 3,241,181.00, a judgment subsequently reduced to execution when Labor Arbiter Fatima Franco computed the award. Writs of garnishment were issued against Fortune’s bank accounts. While a petition for extraordinary remedy before the National Labor Relations Commission remained pending, Fortune negotiated an amicable settlement with respondent whereby respondent allegedly agreed to accept P 2 Million and to obtain the withdrawal of cases filed against him, and the parties prepared a Compromise Agreement and an Omnibus Motion to Dismiss Cases and for Lifting of Notice of Garnishment.

Events at LA Franco’s Office on March 1, 2013

On March 1, 2013, Atty. Melan Espela and Fortune’s treasury officer met respondent in Labor Arbiter Franco’s office to sign the Compromise Agreement and effect payment. Respondent insisted on cash payment. Fortune’s representative handed respondent a bundle of currency totaling P 2 Million. Respondent declined to sign the Compromise Agreement and the Omnibus Motion to Dismiss. Respondent then signaled two companions who removed the money and left the premises. Atty. Espela attempted to prevent respondent’s departure but was physically blocked; an apparent motion by one companion as if to draw a firearm caused Atty. Espela to desist. Criminal and administrative charges followed.

Respondent’s Account

Respondent maintained that he had reason to doubt Fortune’s ability and willingness to satisfy his judgment because he received information, including a text from the NLRC sheriff, that Fortune lacked sufficient funds and had transferred assets. He asserted that he consented to receive P 2 Million as partial payment and that he executed and delivered Acknowledgment Receipts characterizing the sum as a partial payment, then departed. Respondent denied robbery and noted that a criminal case was dismissed. He alleged that Fortune later sought approval of the Compromise Agreement, which Labor Arbiter Franco granted, and contended that the present administrative and criminal actions were harassing reprisals.

IBP Investigation and Recommendation

The Supreme Court referred the complaint to the IBP for investigation. Commissioner Numeriano F. Rodriguez, Jr. issued a Report and Recommendation dated August 24, 2015 finding respondent guilty of violating Canon 7 and Rule 7.03 of the Code of Professional Responsibility and recommending suspension from the practice of law for three years. Commissioner Rodriguez considered disbarment too severe and deemed restitution untenable because Labor Arbiter Franco had approved the Compromise Agreement. The IBP-Board of Governors, in Resolution No. XXII-2015-99 dated November 28, 2015, affirmed the factual findings and recommended penalty. Respondent’s motion for reconsideration was denied by the IBP-Board of Governors on May 27, 2017.

Issues Presented

The central issues were whether respondent’s conduct in the negotiation and receipt of P 2 Million violated Rule 1.01, Rule 7.03, Canon 7, and Canon 8 of the Code of Professional Responsibility, and, if so, what discipline the respondent should receive in view of the facts, his prior admonition, and governing precedents.

The Court’s Legal Analysis

The Court reiterated that members of the Bar, as officers of the Court, must observe high standards of moral probity and integrity and must avoid conduct that is unlawful, dishonest, immoral, or deceitful. The Court explained that Rule 1.01 proscribes dishonest and deceitful conduct, and it defined dishonesty and deceitful conduct as involving lying, cheating, deceptive misrepresentation, artifice and devices used to the prejudice of another. The Court emphasized that Canon 7 with Rule 7.03 requires conduct that upholds the integrity of the profession and refrains from behavior that would adversely reflect on one’s fitness to practice law, and that Canon 8 requires courtesy, fairness and candor toward professional colleagues. The Court applied these principles to the record of communications and conversations between Atty. Espela and respondent. The Court found that the evidence showed the parties agreed that P 2 Million was intended as full settlement and that respondent knew or should have known that Fortune expected the payment to effect a compromise. The Court held that respondent misled Fortune and Atty. Espela by participating in the meeting and permitting the payment to proceed while intending not to sign the compromise and to treat the money as only a partial payment. The Court found that respondent could have pursued legal remedies but instead engaged in deceit and chicanery. The Court further observed that respondent had been previously admonished by the Court, a circumstance that weighed against leniency. The Court relied on controlling disciplinary standards and precedents emphasizing that serious dishonesty and professional misconduct warrant the gravest penalties, citing decisions such as Noble v. Atty. Ailes, Fabugais v.

Case Syllabus (G.R. No. 103877)

Parties and Posture

Fortune Medicare, Inc. and Atty. Melan Espela filed a complaint dated March 20, 2013 for disbarment against Atty. Richard C. Lee.
The complaint arose from events following respondent's favorable final judgment in an illegal dismissal case against Fortune.
The Integrated Bar of the Philippines Board of Governors acted on the matter and the case reached the Court on review after denial of reconsideration.

Key Facts

The labor judgment in favor of respondent amounted to P 3,241,181.00 as computed by Labor Arbiter Fatima Franco.
While petitions for extraordinary remedies were pending before the National Labor Relations Commission, writs of garnishment were issued against several Fortune bank accounts.
Fortune negotiated an amicable settlement with respondent for P 2,000,000.00 and the withdrawal of cases respondent filed with the Ombudsman.
The parties agreed to sign a Compromise Agreement and an Omnibus Motion to Dismiss and to meet in LA Franco's office on March 1, 2013 for signing and payment.
Respondent insisted on cash payment and, at the March 1 meeting, received a bundle of bills confirmed to be P 2,000,000.00.
Respondent refused to sign the compromise documents, declared the sum a partial payment, signaled two companions to take the money, and left the NLRC premises amid attempts by Atty. Melan Espela to prevent departure.
A companion allegedly blocked pursuit and gestured as if drawing a concealed firearm, which deterred Atty. Espela from further pursuit.
Criminal and administrative charges subsequently ensued, and respondent asserted that the robbery charge was dismissed.

Procedural History

The Court referred the complaint to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.
Commissioner Numeriano F. Rodriguez, Jr. submitted a Report and Recommendation dated August 24, 2015 finding respondent guilty of violating Canon 7 and Rule 7.03 of the Code of Professional Responsibility (CPR) and recommending three years suspension.
The IBP Board of Governors affirmed the factual findings and recommended penalty in Resolution No. XXII-2015-99 dated November 28, 2015.
The IBP-BOG denied respondent's motion for reconsideration in Resolution No. XXII-2017-1144 dated May 27, 2017.
The case was elevated to the Court for final determination and penalty imposition.

Parties' Contentions

Fortune Medicare, Inc. maintained that respondent expressly agreed to the P 2,000,000.00 as full settlement and then reneged by taking the money without signing the compromise doc