Case Summary (A.C. No. 10261)
Petitioner’s Allegations
Rufina Luy Lim asserted that during Pastor Lim’s lifetime, conjugal funds were used to create multiple dummy corporations (e.g., Skyline International, Inc., Nell Mart, Inc.) with mistresses and employees as nominal incorporators and stockholders to deprive her of estate assets. She filed a petition for settlement of the estate before the RTC of Quezon City on March 17, 1995. Miguel Lim, on behalf of their mother, intervened on August 17, 1995, under oath declaring these corporations to be Pastor’s dummies and their assets conjugal property. Atty. Mendoza notarized the intervention petition and supporting affidavits confirming the dummy status and lack of capital contributions by incorporators. Subsequently, as counsel for Skyline and vice-president of Nell Mart, he maintained the corporations’ independent ownership of various properties and demanded tenants’ eviction, despite knowing their dummy character. He also used intemperate language in pleadings, accusing Rufina of dissipating “billions of pesos” on gambling.
Respondent’s Defenses
Atty. Mendoza contended that Rufina and Pastor had been separated for over 26 years and had executed a 1972 property partition agreement. He noted that the RTC in Special Proceeding Case No. Q-95-23334 excluded certain corporate assets from Pastor’s estate. He claimed the intervention petition was pre-arranged with Miguel, whose death prevented his testimony, rendering the petition hearsay. He viewed Rufina’s complaint as retaliatory, given prior IBP disciplinary proceedings on the same property issues.
IBP Investigation and Recommendation
The IBP Commission on Bar Discipline (CBD), through Commissioner Ruiz, found that Mendoza’s insistence on the partition agreement’s validity showed ignorance of law, breaching Canons 1 and 5 of the CPR. The CBD concluded that by signing and later repudiating the intervention petition, Mendoza misled courts, violating Canon 10, Rule 10.01 (no falsehood in pleadings). He also notarized affidavits attesting to corporate illegality without cautioning clients, failed to use respectful language, and omitted required professional identification details, breaching CPR and Bar Matter Nos. 1132 and 1922. The CBD recommended a two-year suspension. The IBP Board of Governors unanimously adopted this recommendation on April 16, 2013.
Supreme Court’s Analysis
Applying the 1987 Constitution and the Code of Professional Responsibility, the Court emphasized that law practice is a privilege requiring continual honesty, integrity, and respect for legal processes. It highlighted Canon 10’s mandate against falsehood and misleading the court. Atty. Mendoza’s flip-flopping positions—first affirming the dummy status under oath, then claiming hearsay and good-faith acquisition of shares—demonstrated a blatant lack of candor. His signature on pleadings constituted a solemn declaration of their truth, which he later contradicted.
The Court also addressed his erroneous assertion that the 1972 partition agreement, improper as a notarial act, nevertheless bound third parties, revealing legal ignorance or willful disregard for the law. His use of offensive language in court papers violated the requirement for temperat
Case Syllabus (A.C. No. 10261)
Facts of the Case
- Complainant Rufina Luy Lim is the surviving spouse of the late Pastor Y. Lim, who died on June 11, 1994.
- Pastor Lim allegedly used conjugal funds to create numerous dummy corporations (e.g., Skyline International, Inc.; Nell Mart, Inc.; Skunac Corporation) with mistresses and employees as nominal incorporators or stockholders.
- On March 17, 1995, Rufina filed a Joint Petition for the settlement of Pastor Lim’s estate in the Regional Trial Court (RTC) of Quezon City.
- Miguel Lim, Pastor’s brother, filed a Petition for Intervention on August 17, 1995, under oath asserting that the corporations were mere dummies and that their assets were really conjugal properties of the spouses Lim.
- Atty. Manuel V. Mendoza notarized the Petition for Intervention and related affidavits of witnesses admitting corporate irregularities and the dummy nature of the entities.
- Later, Atty. Mendoza represented one of the corporations (Skyline) in asserting ownership of real properties, despite his earlier notarization of affidavits declaring those corporations as dummies.
- As Vice-President of Nell Mart, Atty. Mendoza demanded tenants vacate lots covered by TCT Nos. 236236 and 236237, claiming corporate ownership while knowing the entity was a dummy.
- In his pleadings, he described Rufina’s rental collections as “BILLIONS OF PESOS” “DISSIPATED ON HER GAMBLING VICES,” using intemperate language.
Procedural History
- Rufina filed a Complaint for Disbarment against Atty. Mendoza for alleged violations of multiple Canons and Rules of the Code of Professional Responsibility (CPR) and Section 20, Rule 138 of the Rules of Court.
- Atty. Mendoza answered, asserting (a) a 1972 property partition agreement between Rufina and Pastor Lim; (b) a favorable RTC ruling excluding corporate deposits from Pastor’s estate; (c) that the Petition for Intervention was pre-arranged; and (d) retaliatory motives behind the complaint.
- The Integrated Bar of the Philippines Commission on Bar D