A.C. No. 3951 - United Coconut Planters Bank vs. Noel

Case Summary (A.C. No. 3951)

Factual Background: Respondent’s Handling of the LMWD Case

On November 22, 1990, complainant retained respondent to represent it in the LMWD case. On November 23, 1990, respondent attended a hearing and promised to file a comment on the application for preliminary injunction within ten (10) days. Respondent did not file the promised comment. He likewise failed to file an answer to the complaint.

Consequently, on December 7, 1991, LMWD’s counsel, Atty. Francisco P. Martinez, moved to declare complainant in default. On February 15, 1991, the RTC granted the motion to declare complainant in default and allowed LMWD to present evidence ex parte. On November 15, 1991, the decision was served on complainant. Respondent was informed of the decision and assured complainant’s Branch Manager in Tacloban, Mr. Francisco Cupin, Jr., that he need not worry because respondent would take care of everything.

On January 1, 1992, a writ of execution was served on complainant’s Tacloban Branch. Again, the Branch Manager referred the writ to respondent, who allegedly reassured him that everything was alright and that he would handle it. On February 5, 1992, the sheriff enforced the writ of execution. To satisfy the judgment, complainant was forced to open Savings Account No. 11724 in the name of the sheriff.

Initiation of the Administrative Case and Early Orders

In response to these events, complainant filed the disbarment complaint on November 17, 1992. On January 25, 1993, the Court issued a Resolution requiring respondent to file a comment within ten (10) days from notice. Respondent did not comply.

On July 31, 1995, the Court issued another Resolution directing respondent to show cause why he should not be disciplinarily dealt with or held in contempt of court for failing to file his comment. Respondent again failed to comply.

Contempt Sanctions and Respondent’s Noncompliance

On August 5, 1996, the Court imposed a fine of Five Hundred Pesos (P500.00) payable within ten (10) days or face imprisonment of five (5) days if the fine was not paid. Respondent received the Resolution on August 29, 1996, yet he remained noncompliant.

On February 23, 1998, the Court increased the fine to One Thousand Pesos (P1,000.00), reiterated the obligation to comply with prior Resolutions, and warned that failure to pay and to comply would lead to an order for respondent’s immediate arrest and detention until he satisfactorily complied.

Respondent still did not comply. On September 5, 2001, the Court declared respondent guilty of contempt of court and ordered his detention until he complied with the January 25, 1993 Resolution by filing the required comment and paying the fine of P1,000.00. That same date, the Court issued an Order of Arrest and Commitment, directing the Director of the NBI to detain respondent until compliance. The NBI was ordered to make immediate return of compliance.

On October 29, 2001, the NBI served the order of arrest and commitment. Respondent was detained at the NBI Eastern Visayas Regional Office in Tacloban. At about midnight on the same day, respondent was released after submission of the required comment and payment of the fine via postal money order.

Respondent’s Comment, Subsequent Orders, and Further Delay

In his Comment dated October 29, 2001, respondent claimed he had not been furnished a copy of the administrative complaint, and therefore he had not filed his comment. He also alleged he was not furnished a copy of the Resolution declaring him in contempt and adjudging him liable for a fine. In compliance with the contempt order, he attached a money order of P1,000.00 but reserved the right to file an extended comment upon receipt of a copy of the administrative complaint.

On January 28, 2002, the Court noted the NBI endorsement, respondent’s comment, and Official Receipt No. 15925598 issued on November 29, 2001 evidencing payment of the fine. The Court required complainant to furnish respondent a copy of the administrative complaint and its annexes and required respondent to file his comment within ten (10) days from receipt.

On March 21, 2002, complainant manifested compliance, stating that it served respondent a copy of the disbarment complaint on March 20, 2002. The Court acknowledged this in a May 22, 2002 Resolution. However, on December 7, 2005, the Court noted respondent’s persistent failure to comply with the January 28, 2002 directive requiring him to submit his comment, despite proof of service of the complaint. The Court required respondent to show cause and to comply within ten (10) days from notice.

On December 15, 2010, the Court again noted noncompliance and reiterated the same directive. In a Report dated February 17, 2012, the Office of the Bar Confidant informed the Court that respondent still failed to comply with the December 7, 2005 and December 15, 2010 Resolutions.

The IBP Investigation and Respondent’s Failure to File an Answer

On July 11, 2012, the Court again imposed a P1,000.00 fine within ten (10) days or a five (5)-day imprisonment alternative, and required respondent to file his comment within ten (10) days from notice. Respondent then sought an extension on September 19, 2012, arguing that the files related to the administrative case had not yet been located in the RTC records. He later filed a compliance on September 27, 2012, attaching proof of payment of the fine. On November 19, 2012, the Court granted respondent an extension of twenty (20) days from September 20, 2012 to file his comment, while noting and accepting his payment.

In a Report for Agenda dated August 3, 2015, the Office of the Bar Confidant disclosed that the extended period expired on October 10, 2012 without respondent’s compliance. On August 19, 2015, the Court resolved to deem the right to file a comment waived and referred the complaint to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation.

Thereafter, the IBP Commission on Bar Discipline set a mandatory conference for December 8, 2015. Only respondent appeared. The Commission required him to file a verified answer within five (5) days or until December 14, 2015, and expressly stated that failure to file would be deemed a waiver. The record showed no proof that respondent filed an answer.

IBP Findings and Recommended Penalty

In its Report and Recommendation dated April 7, 2017, the IBP Commission recommended respondent’s disbarment. It ruled that respondent violated the Lawyer’s Oath and the Code of Professional Responsibility, specifically Canons 1 and 12, on account of his refusal to obey the Court’s and the Commission’s orders for nearly twenty-five (25) years. It likewise held that respondent violated Canons 17 and 18 by ignoring his responsibility to complainant. It stressed that his failure to file an answer in the LMWD case resulted in an adverse decision against complainant. The Commission also found no remorse or efforts to remedy the harm.

On May 27, 2017, the IBP Board of Governors adopted the Commission’s findings and recommendation through Resolution No. XXII-2017-1082.

Central Issues Before the Supreme Court

The Supreme Court agreed with the IBP’s finding that respondent violated the Lawyer’s Oath and the Code. It did not adopt the recommended penalty of disbarment. The Court focused on the “core issue” of whether respondent committed culpable negligence by failing to file an answer for complainant in the LMWD case, leading to default and judgment based on ex parte evidence.

Legal Basis: Duties to Client and Consequences of Neglect

The Court relied on Canon 17 of the Code of Professional Responsibility, which requires a lawyer to owe fidelity to the cause of the client and remain mindful of the trust and confidence reposed in the lawyer. It invoked Canon 18, which requires competence and diligence, and Rule 18.03, Canon 18, which expressly provides that a lawyer shall not neglect a legal matter entrusted to him and that negligence renders the lawyer liable.

The Court reiterated that while a lawyer is not obliged to act for every prospective client, once he accepts a client’s cause he must provide the client with wholehearted fidelity and assert every remedy or defense authorized by law. It emphasized that the privilege to practice law carries correlative duties to the client, the court, the bar, and the public.

The Court’s Findings: Inexcusable Negligence in the LMWD Case

The Court treated the failure to file an answer in the LMWD case as uncontested. It found that because respondent did not file an answer, complainant was declared in default. When the matter of default was referred to respondent, he assured complainant it would be taken care of. The Court held that respondent did not act thereafter, which allowed LMWD to present evidence ex parte and caused judgment to be rendered against complainant.

The Court further found that when the adverse judgment was referred again to respondent, he once more reassured complainant that he would handle the matter. The Court held that respondent nevertheless allowed the judgment based on ex parte evidence to become final and executory and permitted its enforcement through the writ of execution. It concluded that respondent’s conduct amounted to inexcusable negligence, constituting gross neglect of counsel to the extreme detriment of his client. The Court described respondent’s failure as willful and knowing in that he allowed default to attain finality, permitted ex parte judgment, and did not assert available defenses and remedies.

Respondent’s Willful Disobedience and Gross Misconduct in the Administrative Case

Apart from the client’s harm, the Court treated respondent’s disregard of court processes as an independent, additional ground for discipline. It noted respondent’s repeated failure to comply with the Court’s orders to file a comment on the administrative complaint. It recorded that he was found guilty of contempt of court and fined twice. It also recorded

Case Syllabus (A.C. No. 3951)

United Coconut Planters Bank (complainant) instituted a petition for the disbarment and/or suspension of Atty. Lauro G. Noel (respondent) for alleged violations of the Lawyer’s Oath.
The Court acted on an administrative complaint for lawyer’s discipline filed after respondent’s handling of a client’s case and after repeated noncompliance with the Court’s orders.

Parties and Procedural Posture

Complainant retained respondent’s services in a case for injunction and damages with writ of preliminary injunction and prayer for temporary restraining order filed by Leyte Metro Water District before the Regional Trial Court of Palo, Leyte.
The administrative complaint for disbarment was filed by complainant against respondent.
The Court issued multiple resolutions requiring respondent to file a comment and, later, to explain noncompliance, treating respondent’s omissions as matters warranting contempt and disciplinary action.
The matter proceeded through the Integrated Bar of the Philippines (IBP), where the IBP Commission on Bar Discipline investigated and recommended a penalty.
The IBP Board of Governors adopted the Commission’s recommendation.
The Court ultimately reviewed the case and agreed with the violations found, but modified the recommended penalty.

Key Factual Allegations

On November 22, 1990, complainant retained respondent for the Leyte Metro Water District (LMWD) case.
On November 23, 1990, respondent attended a hearing and promised to file a comment on the application for preliminary injunction within ten (10) days.
Respondent failed to file the promised comment and also failed to file an answer to the complaint.
On December 7, 1991, LMWD’s counsel moved to declare complainant in default, and on February 15, 1991, the motion was granted.
After complainant’s default, LMWD was allowed to present evidence ex parte, and judgment was later rendered against complainant.
On November 15, 1991, the decision was served on complainant, and respondent assured complainant’s Branch Manager, Mr. Francisco Cupin, Jr., that respondent would “take care of everything.”
On January 1, 1992, a writ of execution was served on complainant’s Tacloban Branch manager, and respondent again assured that he would handle the matter.
On February 5, 1992, the sheriff enforced the writ of execution, and complainant was forced to open a Savings Account in the sheriff’s name to satisfy the judgment.
Complainant filed the present complaint for disbarment on November 17, 1992.

Noncompliance with Court Orders

On January 25, 1993, the Court required respondent to file a comment within ten (10) days, but respondent failed to comply.
On July 31, 1995, the Court ordered respondent to show cause for failing to file a comment and reiterated the ten (10) day deadline; respondent again failed to comply.
On August 5, 1996, the Court imposed a fine of Five Hundred Pesos (P500.00) or imprisonment of five (5) days if unpaid, and repeated the directive to explain and file a comment; respondent received the resolution on August 29, 1996 but still did not comply.
On February 23, 1998, the Court increased the fine to One Thousand Pesos (P1,000.00) and warned that failure to pay and to comply would lead to immediate arrest and detention until respondent complied.
On September 5, 2001, the Court declared respondent guilty of contempt of court and ordered detention until he filed the required comment and paid the fine.
On the same date, September 5, 2001, the Court issued an Order of Arrest and Commitment directing NBI to detain respondent until compliance.
On October 29, 2001, NBI served the arrest order, and respondent was detained; at about 12:00 a.m. he was released upon submitting the required comment and paying the fine.
Respondent’s Comment dated October 29, 2001 asserted that he was not furnished a copy of the administrative complaint and that he was not furnished a copy of the contempt resolution, attaching a money order for P1,000.00 while reserving the right to file an extended comment.
On January 28, 2002, the Court required complainant to furnish respondent the administrative complaint and annexes and required respondent to file his comment within ten (10) days from receipt.
On March 21, 2002, complainant manifested compliance by asserting service of the complaint via specified receipts, and the Court later noted such compliance.
Despite service and repeated directives, the Court found continued noncompliance and issued further show-cause resolutions on December 7, 2005 and December 15, 2010.
The Office of the Bar Confidant later reported respondent’s continued failure to comply, prompting another resolution on July 11, 2012 imposing a fine or imprisonment if not paid and requiring compliance by filing the comment.
Respondent sought an extension to file the comment, citing difficulty locating relevant files in the RTC records, and the Court granted an extension on November 19, 2012.
The record later showed the extended period expired without compliance, and the Court deemed respondent’s right to file the comment waived and referred the complaint to the IBP.
During the IBP mandatory conference, only respondent appeared, and the Commission required respondent to file a verified answer within a specified period; the record showed no proof that respondent filed an answer.

Ethical Rules Implicated

The Court found that respondent violated Canon 17 of the Code of Professional Responsibility, which requires fidelity to the client’s cause and mindful respect for the trust reposed.
The Court found that respondent violated Canon 18 of the Code of Professional