Pesto vs. Millo

Factual Background

Johnny averred that Abella retained Atty. Millo in May 1990 for the transfer of title and the adoption case. Johnny and Abella paid Atty. Millo P14,000.00 for the transfer of title and P10,000.00 for the adoption matter. They later claimed that Atty. Millo repeatedly gave them false information and offered numerous excuses to justify his failure to complete the transfer of title.

Johnny further stated that Atty. Millo misled them into believing that the capital gains tax for the property had already been paid in 1991. When they returned to the Philippines in February 1995, they allegedly discovered that the tax remained unpaid and that they had become liable for penalties. When confronted, Atty. Millo allegedly insisted he had already paid, but he could not produce a receipt to substantiate payment. Johnny claimed that only after he confronted Atty. Millo and the latter “stormed out” of the office did Atty. Millo return the P14,000.00 received for the transfer of title, and he further promised in writing to assume liability for accrued penalties.

As to the adoption case, Johnny attributed further delay to Atty. Millo’s inaction. He stated that the Tarlac office of the Department of Social Welfare and Development (Tarlac DSWD) treated the adoption case as closed due to about two years of inactivity. He asserted that Atty. Millo had led them to believe an interview had been scheduled for February 14, 1995, but when they appeared at the Tarlac DSWD, they were informed no such interview was scheduled. Johnny alleged that Atty. Millo could not be reached at all, and that even when a hearing was later reportedly set for February 23, 1995 at 10:00 a.m., Atty. Millo could not be found and had requested a change of schedule to the afternoon without Johnny’s knowledge.

Commencement of the Administrative Complaint and Early IBP Proceedings

Because of what Johnny described as neglect and ineptitude, he filed an administrative complaint before the IBP on March 14, 1995, praying for disciplinary action and for a refund of P15,643.75 representing penalties from the non-payment of the capital gains tax, as well as the P10,000.00 paid for the adoption case. Johnny, being a resident of Canada, constituted Tita Lomotan as his attorney-in-fact to represent him during his and Abella’s absence.

The IBP required Atty. Millo to file an answer on July 10, 1995. Although Atty. Millo requested an extension, he ultimately filed no answer. He also did not appear at the hearings despite due notice. The IBP required Johnny, through Lomotan, to engage counsel and held the proceedings in abeyance while awaiting the appropriate motion from Johnny’s counsel. The matter then remained dormant for several years.

Johnny wrote to the President of the IBP on October 28, 1998 due to the long delay. The IBP Commission on Bar Discipline (IBP-CBD) scheduled another hearing only on June 29, 2001 on April 2, 2001. At that hearing, Atty. Millo appeared through a representative and submitted a manifestation or motion claiming that Johnny had meanwhile died and that Abella would withdraw the complaint. On October 11, 2001, the IBP-CBD, through Commissioner Victoria Gonzalez-De los Reyes, deemed the case submitted for resolution.

IBP Resolution and Modification of the Recommended Penalty

The case later came to Investigating Commissioner Victor C. Fernandez, who submitted a report and recommendation on October 4, 2010. The Investigating Commissioner found Atty. Millo liable for violating Canon 18 of the Code of Professional Responsibility and recommended suspension for six months.

On November 19, 2011, the IBP Board of Governors issued Resolution No. XX-2011-235, adopting the findings but lowering the suspension from six months to two months. The IBP Board also ordered Atty. Millo to return P16,000.00 to the complainant. Atty. Millo moved for reconsideration on March 27, 2012, asserting that he believed Abella had already withdrawn the complaint before her death, that the transfer documents had been prepared, that he had returned the P14,000.00, and that the adoption case had been granted by the trial court. He also claimed he had lost contact with Johnny and Abella in Canada and suggested that Abella’s brother, Juan Daquis, could have confirmed that the charge resulted from misunderstanding. He maintained that Daquis had died in November 2011, implying the communication difficulty.

On June 9, 2012, the IBP Board of Governors denied the motion for reconsideration.

Issues Framed by the Court

The Court addressed whether Atty. Millo’s acts and omissions—especially his failure to competently and diligently handle the entrusted matters, his alleged misrepresentations about payment of the capital gains tax, his failure to timely answer the complaint, and his disregard of hearing schedules—constituted violations of the Lawyers Oath and Rule 18.03, Canon 18 of the Code of Professional Responsibility. It also considered the appropriate sanction and the propriety of ordering refunds for the monetary amounts sought by the complainant.

The Parties’ Contentions

Johnny maintained that Atty. Millo accepted payments for legal services and then failed to accomplish the intended transfer of title, misled him into believing that the capital gains tax had been paid, and left him and Abella exposed to penalties. Johnny further insisted that the adoption case was likewise mishandled due to misrepresentations about scheduled interviews and hearings and delays attributable to Atty. Millo’s lack of diligence and availability.

Atty. Millo, in his efforts before the IBP, sought reconsideration by invoking alleged withdrawal assurances and by asserting that documents were already prepared, the P14,000.00 was returned, and the adoption case had eventually been granted by the trial court. However, the Court underscored that these claims were post facto and did not negate the alleged professional neglect and misrepresentations while the case was pending.

Legal Basis and Reasoning

The Court held that every attorney owes fidelity to clients’ concerns and that the attorney’s duty to safeguard the clients’ interests begins upon engagement and continues until the effective release of the attorney by the client. The Court emphasized that during that period, the lawyer must take every reasonable step and exercise ordinary care as clients’ interests require.

It ruled that Atty. Millo’s acceptance of P14,000.00 for the transfer of title and P10,000.00 for the adoption case established a lawyer-client relationship. From that moment, he was bound to render competent and efficient professional service. The Court found that he failed to discharge that duty. It concluded that he was inefficient and negligent in handling what the professional service required.

The Court particularly faulted Atty. Millo for concealing his inefficiency and neglect by giving false information to his clients about having already paid the capital gains tax. It found that, as a matter of reality, the capital gains tax had not been paid, thereby exposing the clients to substantial financial liability in the form of penalties.

Invoking Rule 18.03, Canon 18, the Court stressed the explicit command that a lawyer shall not neglect a legal matter entrusted to him and that negligence connected with such matter renders the lawyer liable. The Court characterized Johnny’s complaint as serious and not to be taken lightly. It held that Atty. Millo did not take it seriously enough and even ignored it for a long period. It noted that despite several opportunities, he filed no written answer, thereby forfeiting the chance to explain the circumstances. The Court reasoned that a worthy and blameless respondent would have refuted an unfair or baseless complaint promptly and seasonably. It therefore treated Atty. Millo’s belated response as inadequate.

The Court also considered but rejected the significance of later developments. It stated that the subsequent return of the P14,000.00 and the later granting of the adoption case by the trial court did not erase liability because those events were post facto and did not nullify the neglect inflicted on the clients. It further held that Atty. Millo could not ignore his obligations without consequences when the Court and the IBP had given him a liberal opportunity to justify his neglect and ineptitude.

The Court further addressed what it perceived as deliberate procedural evasion. It found likely that Atty. Millo purposely disregarded the opportunity to answer in a manner consistent with delaying investigation until the complainants, being abroad, would have lost interest, or until they would have died. It rejected any tolerance of such conduct. The Court reiterated that when an attorney is made a respondent in disciplinary proceedings, he must submit an explanation and meet the issues and overcome the evidence against him.

Additionally, the Court held that Atty. Millo compounded his position by consistently absenting himself from scheduled IBP hearings set for his benefit. It ruled that his disregard of IBP orders requiring attendance reflected utter disrespect for the Judiciary and fellow lawyers. The Court underscored that lawyers are expected to obey court processes and to comply foremost with orders from duly constituted authorities. It cited Espiritu v. Ulep to support the view that repeated, apparently deliberate non-appearance can function as an evasion from the duty to explain one’s side.

The Court also addressed the argument that Atty. Millo’s belated response resulted from assurances that Abella would withdraw the complaint. The Court disbelieved this explanation and treated it as a belated attempt to save the day. It emphasized that withdrawal of an administrative complaint based on professional misconduct or negligence does not warrant dismissal of the case. It explained that suspension or disbarment proceedings proceed regardless o