A.C. No. 12072 - Quitazol vs. Capela

Case Summary (A.C. No. 12072)

Factual Background

Napoleon S. Quitazol engaged the services of Atty. Henry S. Capela to prosecute a civil action for breach of contract and damages before the Regional Trial Court of Alaminos City, Pangasinan. The retainer agreement recited an office address for Atty. Capela at Unit 1411, 14th Floor, Tower One & Exchange Plaza, Ayala Triangle, Makati City, and provided that the complainant would deliver possession of his Toyota Corolla GLI together with its official receipt and certificate of registration as acceptance. Atty. Capela entered his appearance, moved for extension of time, and filed an answer in the RTC action. He failed to appear at the preliminary conference on February 12, 2014 and at subsequent hearings set on March 26, May 7, and August 6, 2014. Left without counsel, Napoleon agreed to a Compromise Agreement which the RTC approved on August 19, 2014. After the compromise, Napoleon demanded return of the motor vehicle and P38,000.00, but Atty. Capela did not return them.

Complaint before the IBP Commission on Bar Discipline

Napoleon filed a complaint before the Integrated Bar of the Philippines, Commission on Bar Discipline, alleging that Atty. Capela neglected his duty by failing to appear at hearings and thereby forced the complainant into an unfavorable settlement. The IBP-CBD required Atty. Capela to file an answer and warned that failure to do so would render him in default and subject the case to ex parte hearing. Atty. Capela did not file an answer. The parties were later notified to appear for a mandatory conference on March 26, 2015, with notice that non-appearance would constitute waiver of the right to participate. Only Napoleon appeared at that conference. The IBP declared Atty. Capela in default and deemed him to have waived his right to further participation. Napoleon died on April 30, 2015, and his brother Frank S. Quitazol substituted as complainant.

Investigating Commissioner's Findings and Recommendation

Investigating Commissioner Honesto A. Villamor issued a Report and Recommendation dated May 29, 2015, finding Atty. Capela administratively liable for conduct unbecoming a lawyer. The Commissioner concluded that Atty. Capela failed to contradict the complaint, unjustifiably refused to heed IBP directives to file an answer, to appear at the mandatory conference, and to file a position paper. The Commissioner recommended a suspension of six months and an order to return the amount of Two Hundred Thousand Pesos (P200,000.00), the alleged value of the car, within thirty days, with a warning against repetition.

IBP Board of Governors' Disposition

The IBP Board of Governors adopted the Investigating Commissioner’s findings but modified the recommended penalty by resolving on June 20, 2015 to suspend Atty. Capela from the practice of law for three years. The Board expressly noted aggravation due to his failure to file an answer despite numerous notices and his unjustified refusal to appear at the scheduled mandatory conference. The Board's Resolution also stated that Atty. Capela could pursue a separate action for recovery of the value of the car in the proper court.

Respondent's Motion for Reconsideration and Defenses

Atty. Capela filed an omnibus motion for reconsideration denying that he served as counsel for Napoleon. He admitted that a retainer agreement was drafted but asserted that he did not receive a signed copy nor any motor vehicle as payment. He further contended that the administrative complaint had been withdrawn through an affidavit by the substitute complainant. Atty. Capela also explained that he was not properly notified because he no longer maintained the Makati City office address where notices were sent and that he first learned of the IBP Resolution only when informed by a third person. The IBP Board of Governors denied the motion for reconsideration on June 17, 2017.

Supreme Court's Ruling

The Court adopted the IBP’s factual findings that an attorney-client relationship existed and that Atty. Capela was negligent in his duties. The Court found Atty. Capela administratively liable for violating Rule 18.03, Canon 18 of the Code of Professional Responsibility. The Court modified the IBP’s imposed penalty. It suspended Atty. Capela from the practice of law for six months, effective immediately upon the respondent’s receipt of the resolution, and imposed a fine of P5,000.00 for his repeated refusal to obey IBP orders. The Court ordered payment of the fine within ten days from notice and directed that copies be furnished to the Office of the Bar Confidant, the Integrated Bar of the Philippines, and the Office of the Court Administrator.

Legal Reasoning on Attorney-Client Relationship and Negligence

The Court reasoned that a written, signed retainer was not essential to establish professional employment. It found the contention that Atty. Capela did not represent Napoleon incredible in light of his entry of appearance, motion for extension, and filing of an answer. The Court reiterated that a contract to employ counsel may be express or implied and that payment is not necessary to create an attorney-client relation. The Court held that Atty. Capela’s failure to attend four scheduled hearings constituted inexcusable negligence. The Court applied Rule 18.03, Canon 18 of the Code of Professional Responsibility which requires competence and diligence and provides that neglect of a legal matter renders a lawyer liable. The Court emphasized that a lawyer’s duty includes attending scheduled hearings, preparing pleadings, and prosecuting cases with reasonable dispatch.

Treatment of Affidavit of Withdrawal and Disciplinary Character

The Court explained that an affidavit of withdrawal, desistance, or compromise by the complainant did not terminate disciplinary proceedings against a lawyer. It invoked Section 5, Rule 139-B of the Rules of Court and reiterated settled jurisprudence that disciplinary proceedings are sui generis, may proceed motu proprio, and serve the public interest in preserving the integrity of the profession. The Court relied on precedents, including Spouses Soriano v. Atty. Reyes, Angalan v. Atty. Delante, and Ylaya v. Atty. Gacott, to hold that desistance does not preclude disciplinary action where the record sustains the charge.

Aggravation, Address Obligation, and Comparable Sanctions

Case Syllabus (A.C. No. 12072)

Parties and Procedural Posture

Napoleon S. Quitazol was the complainant who engaged legal services for a civil action before the Regional Trial Court of Alaminos City, Pangasinan.
Atty. Henry S. Capela was the respondent who entered his appearance as counsel of record and filed pleadings in the RTC case.
The complaint for professional misconduct was lodged with the Integrated Bar of the Philippines Commission on Bar Discipline following respondent's repeated non-appearance at scheduled proceedings.
The Investigating Commissioner issued a Report and Recommendation finding respondent administratively liable and recommending suspension and restitution.
The IBP Board of Governors adopted the findings but modified the recommended penalty to suspension for three years.
The respondent filed a motion for reconsideration denying the attorney-client relationship and claiming lack of notice, which the IBP Board of Governors denied.
The Supreme Court adopted the IBP’s findings of liability but modified the penalty and imposed a fine and suspension.

Key Facts

The retainer identified respondent’s office at Unit 1411, 14th Floor, Tower One & Exchange Plaza, Ayala Triangle, Makati City, and provided that the complainant would deliver possession of a Toyota Corolla GLI and its official receipt and certificate of registration as acceptance fee.
Atty. Capela entered his appearance, moved for extension of time, and filed an answer before the RTC.
Four scheduled proceedings on February 12, March 26, May 7, and August 6, 2014 were set and respondent failed to appear at the latter three hearings.
Left without counsel, Napoleon agreed to a compromise which the RTC approved on August 19, 2014.
Napoleon demanded return of the motor vehicle and P38,000.00, which respondent did not yield, prompting the disciplinary complaint.
The IBP required respondent to file an answer and warned that failure would render him in default, but respondent did not file an answer.
At the mandatory conference on March 26, 2015 only the complainant appeared and respondent was declared in default and deemed to have waived his right to participate.
Napoleon died on April 30, 2015 and was substituted by his brother Frank S. Quitazol, and an affidavit of withdrawal was later filed by the substitute.
The Investigating Commissioner recommended suspension for six months and restitution of P200,000.00 as value of the car, and the IBP Board modified the suspension to three years.

Issues Presented

Whether an attorney-client relationship existed between Napoleon and Atty. Capela.
Whether respondent’s failure to appear and to comply with IBP directives constituted neglect, conduct unbecoming a lawyer, and disobedience to IBP orders.
Whether an affidavit of withdrawal by the complainant terminated the disciplinary proceedings.
What penalty, if any, was appropriate for respondent’s misconduct.

Parties' Contentions

Napoleon alleged that respondent’s continued absence constituted neglect and compelled a prejudicial compromise.
Atty. Capela contended that no signed retainer nor motor vehicle was received and denied that he served as counsel to Napoleon.
Atty. Capela further contended that he was not properly notified because notices were sent to his former Makati office and that the affidavit of withdrawal by the substitute should end the administrative case.

Investigating Findings

The Investigating Commissioner found respondent guilty of violat