Philippine Supreme Court Jurisprudence

The Facts

On September 6, 2011, complainant Atty. Virgilio A. Sevandal (Atty. Sevandal) filed with the Integrated Bar of the Philippines Commission on Bar Discipline (IBP-CBD) a Complaint¹ dated September 5, 2011 for disbarment against respondent Atty. Melita B. Adame (Atty. Adame) in violation of Rules 8.02,² Canon 8 (encroaching upon the professional employment of another lawyer) and Rule 10.01,³ Canon 10 (doing any falsehood) of the Code of Professional Responsibility (CPR).

Atty. Sevandal claimed that through a verbal agreement on February 2, 2011, Merlina Borja-Sevandal (Merlina) engaged his professional services to provide legal advice and assistance, as well as file court cases when necessary, to Merlina's claims with Fuyoh Shipping Co. (Fuyoh Shipping), Bandila Maritime Services, Inc. (Bandila Maritime), Social Security System (SSS), and other offices for whatever benefits she was entitled to as the surviving spouse of Master Camilo Verano Sevandal (Camilo). Camilo died on January 27, 2011 and was employed as a Ship Master by Fuyoh Shipping/Bandila Maritime at the time of his death. The aforementioned verbal agreement was substantiated by an Affidavit⁴ dated December 7, 2011 executed by Josefina Verano Sevandal, Merlina's first cousin, attesting that she was in the meeting with Atty. Sevandal and Merlina on February 2, 2011 and witnessed the agreement of the parties on Atty. Sevandal's 10% contingent fee for handling Merlina's case.

On March 9, 2011, Atty. Sevandal and Merlina executed a Retainer Contract⁵ with respect to the recovery of Merlina's share on the (1) conjugal partnership property, which she acquired during her marriage, and (2) legitime as heir and surviving spouse of Camilo. As compensation, Merlina promised to pay: (1) acceptance and success fees amounting to 10% of the prevailing market value of all real and/or personal property restored/vested in the possession of the client; (2) appearance fees; (3) hotel, travel and food expenses; and (4) cash advances of (a) P100,000.00 upon receipt by the client of the insurance proceeds from the employer/office concerned, and (b) P150,000.00 upon the filing of the complaint in the proper court. Further, it was expressly stated in the Retainer Contract that the contract covers the litigation at the level of the Regional Trial Court (RTC) only and that if there would be any appeal or petition before the appellate courts, a new retainer contract would be executed by the parties.

On April 25, 2011, Atty. Sevandal alleged that he executed an Addendum to Retainer Contract with Merlina stating that the client agreed to contract his services as legal counsel with respect to her claims for death and other monetary benefits as the legal wife of Camilo from the following offices/agencies: (1) Bandila Maritime; (2) Del Rosario Pandiphil, Inc. (DRPI); (3) Associated Maritime Officers' and Seamen's Union of the Philippines; (4) Overseas Workers Welfare Administration; (5) Employees' Compensation Commission; (6) SSS; and (7) other offices and/or agencies. Also, the client promised to pay an acceptance and success fee amounting to 20% of the total death/monetary benefits that the client may receive. Atty. Sevandal submitted an Affidavit dated December 2, 2011 executed by Analyn B. Dingal, secretary of Atty. Cris Paculanang who notarized the Addendum, stating that she handed the Addendum to client Merlina, in the presence of Atty. Sevandal.⁶clubjuris

On April 26, 2011, Atty. Sevandal filed a claim for death and other benefits that Merlina may be lawfully entitled to with DRPI, the indemnity agent of Fuyoh Shipping and Bandila Maritime.⁷clubjuris

Meanwhile, on May 3, 2011, Atty. Adame, in behalf of Merlina, filed a Complaint with the National Labor Relations Commission (NLRC)⁸ against Fuyoh Shipping and Bandila Maritime for the payment of death benefits, sickness allowance, damages, and attorney's fees.⁹clubjuris

On May 4, 2011, DRPI informed Atty. Sevandal that Merlina's claim for death benefits was discontinued due to the filing of the complaint by Atty. Adame with the NLRC. However, it was intimated that if the NLRC complaint would he withdrawn, the settlement of Merlina's claim would be resumed by DRPI and that in less than two (2) months, Merlina would receive a check covering the death benefits. Atty. Sevandal alleged that Merlina was amenable to the withdrawal of the NLRC complaint.¹⁰clubjuris

On May 9, 2011, Atty. Sevandal filed with the NLRC a Manifestation Re: Withdrawal of Complaint (filed by Atty. Adame), as well as a Formal Entry of Appearance as counsel for Merlina. Atty. Sevandal attached a photocopy of the Addendum to Retainer Contract.¹¹clubjuris

On May 10, 2011, Atty. Sevandal was informed by DRPI that the settlement claim for death benefits would not be resumed since DRPI decided to enter its appearance at the mandatory conference called by the NLRC.¹²clubjuris

On May 23, 2011, Atty. Sevandal entered his appearance as counsel for Merlina at the NLRC mandatory conference and a certain Atty. Ma. Bella Eviota (Atty. Eviota) entered her appearance, for and in the absence of Atty. Adame, as counsel for Merlina. Atty. Sevandal manifested his objection pursuant to Rule 8.02, Canon 8 of the CPR.¹³clubjuris

On May 30, 2011, at the next mandatory conference, Atty. Adame filed her entry of appearance as counsel for Merlina. Atty. Sevandal again reiterated his objection.¹⁴clubjuris

On June 17, 2011, Atty. Sevandal filed an Ex-Parte Motion for Attorney's Lien, equivalent to 20% of whatever amount would be awarded to Merlina, as agreed upon under the Addendum to Retainer Contract.¹⁵clubjuris

On July 7, 2011, Atty. Adame filed an Opposition/Manifestation¹⁶ (to the Ex-Parte Motion for Attorney's Lien) stating that she caused the filing of the NLRC complaint. Atty. Adame alleged that Atty. Sevandal has no basis for claiming attorney's fees since Merlina "vehemently denies having signed any addendum contract giving 20% fee to Atty. Sevandal."¹⁷ Atty. Adame added that the Retainer Contract dated March 9, 2011 was annulled/made void by Merlina through a Revocation of Retainer Contract dated May 24, 2011.

In an Order dated August 1, 2011, the Labor Arbiter approved the Compromise Agreement entered into by Merlina and Bandila Maritime and the amount of P300,000.00 attorney's fees was awarded to Atty. Sevandal. Atty. Sevandal was made to sign a general release and quitclaim, captioned as Sum of Money and Release of Attorney's Lien, to absolve and release Bandila Maritime from any and all claims.¹⁸clubjuris

On September 6, 2011, Atty. Sevandal filed the disbarment complaint against Atty. Adame with the IBP-CBD.

In her Answer¹⁹ dated October 4, 2011, Atty. Adame denied the allegations that she violated the CPR. Atty. Adame expressed that while she was not privy to the Retainer Contract executed by Atty. Sevandal and Merlina, the same had no relation to the case she filed with the NLRC since the Retainer Contract was made exclusively for the filing of civil cases at the RTC level only. Atty. Adame stated that Merlina executed a Revocation of Retainer Contract²⁰ dated May 24, 2011 revoking, annulling and voiding the Retainer Contract because of misrepresentations, threats, abuse of confidence and conflict of interests with Atty. Sevandal. Also, Atty. Adame posited that Merlina denied signing any Addendum to Retainer Contract and that Atty. Sevandal did not even submit an original copy of the alleged Addendum to the NLRC and the IBP, but only mere photocopies which were questionable in its content and accompanying signatures. Atty. Adame argued that since the Retainer Contract had been revoked by Merlina, then it should follow that the alleged Addendum had also been revoked.²¹clubjuris

Likewise, Atty. Adame declared that Atty. Sevandal's misleading assertions of alleged pending payment before DRPI in settlement of Merlina's claims was denied by DRPI's counsel during the NLRC mandatory conference on May 30, 2011 while in open session and in the presence of the Labor Arbiter and all parties, including Atty. Sevandal himself.²²clubjuris

Atty. Adame objected to Atty. Sevandal's allegation that Merlina agreed to the withdrawal of the NLRC complaint. Atty. Adame clarified that (1) Merlina filed a Manifestation on May 25, 2011 to the NLRC that she appointed Atty. Adame as her lawful attorney-in-fact on May 3, 2011 and Atty. Adame had the sole authority and discretion relevant to the case she filed before the NLRC, and (2) Merlina declared in the NLRC open session on May 30, 2011 that she chose Atty. Adame as her legal counsel.²³clubjuris

Further, Atty. Adame asserted that Atty. Sevandal was the one vehemently against the filing of the case at the NLRC and his entry of appearances at the NLRC mandatory conferences as counsel for Merlina, as well as his objections to Atty. Adame's representation, was self-serving. Atty. Adame added that in all the pleadings from the parties in the NLRC case, Atty. Sevandal was not included as a counsel on record, but was merely allowed to be present in the proceedings as a mere bystander.²⁴clubjuris

Atty. Adame expressed that she did not object to Merlina's generous offer to give the amount of P300,000.00 to Atty. Sevandal, being the uncle of her deceased husband, in order to expedite the NLRC case. The said amount was given to Atty. Sevandal during the last hearing and where Atty. Sevandal was made to sign a document entitled "Sum of Money and Release of Attorney's Lien." However, despite receiving said amount and signing the quitclaim, Atty. Sevandal harbored ill feelings against her, when she only did her duty and successfully finished the case in a span of two months.²⁵clubjuris

Lastly, Atty. Adame stated that there was no encroachment of professional employment of another lawyer to speak of since the Retainer Contract refers to properties already acquired and which had to be recovered or restored to Merlina as the first wife of Camilo, but had nothing to do with the money claim for death benefits of her late husband's employment as a seafarer. Also, the scope of the Retainer Contract covered litigation of a case at the RTC level only.²⁶

The IBP's Report and Recommendation

On February 2, 2013, the Investigating Commissioner of the IBP-CBD issued a Report and Recommendation²⁷ finding that Atty. Adame did not encroach on the professional employment of Atty. Sevandal nor commit any falsehood. The dispositive portion of the Report and Recommendation states:clubjuris

In view of the foregoing premises, it is respectfully recommended that the instant complaint be dismissed for lack of merit.

MOREOVER, it is respectfully recommended that an order be made directing complainant to explain why he should not be held administratively liable for encroaching upon the professional services of respondent with client and for receiving Php300,000 as attorney's fees in the NLRC case considering that complainant has neither authority to appear nor has he rendered any service for the client on the said NLRC case.

RESPECTFULLY SUBMITTED.²⁸clubjuris

The Investigating Commissioner held that Atty. Adame did not violate Rule 8.02, Canon 8 of the CPR. The Investigating Commissioner stated that the Retainer Contract dated 9 March 2011 relied upon by Atty. Sevandal as his basis that Atty. Adame allegedly encroached on his professional services covered the litigation at the level of the RTC only. Thus, the NLRC case was not covered by Atty. Sevandal's engagement with his client, Merlina. Also, Merlina even declared in writing and in open court that Atty. Adame was her counsel of choice, which repudiated Atty. Sevandal's claim.²⁹clubjuris

Also, the Investigating Commissioner declared that on the contrary, it was Atty. Sevandal who encroached upon and meddled with the legal services and professional engagement provided by Atty. Adame to Merlina in the NLRC case by attending the NLRC hearings even without Merlina's authority. Further, Atty. Sevandal was awarded the amount of P300,000.00³⁰ as attorney's fees, without having done or filed anything to advance the interests of Merlina with the NLRC.³¹clubjuris

The Investigating Commissioner observed that Atty. Sevandal's own evidence, the Addendum to Retainer Contract, was doubtful for several reasons: (1) the Addendum did not amend or expand the scope of Atty. Sevandal's engagement as provided in the Retainer Contract, which was still limited to the RTC level only, and (2) there were two different versions of the Addendum � (a) Annex "B" of the Complaint, and (b) Annex "13" of Respondent's Position Paper and the last paragraph of the first version does not appear on the last paragraph of the second version.³²clubjuris

Lastly, the Investigating Commissioner held that Atty. Adame is not guilty of violating Rule 10.01, Canon 10 of the CPR. In the Complaint, Atty. Sevandal alleged that Atty. Adame falsely averred in her Opposition/Manifestation dated July 7, 2011 filed with the NLRC that (1) Merlina denied signing any Addendum giving 20% fee to Atty. Sevandal despite Atty. Sevandal's submission of a copy of the Addendum on May 9, 2011 to the NLRC, and (2) Merlina's statement in the Revocation to the Retainer Contract that she did not give any written authority to Atty. Sevandal to claim for death benefits and instead engaged the services of Atty. Adame and Atty. Eviota. The Investigating Commissioner stated that by Atty. Sevandal's own declaration, the alleged false statements were made by Merlina and not by Atty. Adame. Thus, Atty. Adame cannot be held liable for allegedly false statements merely relayed to her by Merlina.³³clubjuris

Thereafter, in the Notice of Resolution No. XX-2013-362³⁴ dated March 21, 2013, the IBP Board of Governors adopted and approved the Report and Recommendation of the Investigating Commissioner, finding the same to be fully supported by the evidence on record and the applicable laws and rules, and dismissed the case for lack of merit.

Atty. Sevandal filed a Motion for Reconsideration which was denied in Notice of Resolution No. XXI-2014-128³⁵ dated March 22, 2014. In the same Resolution, the IBP directed Atty. Sevandal to show cause why he should not be held administratively liable for encroaching into the professional services of Atty. Adame and receiving P300,000.00 as attorney's fees having rendered no service and without any authority to appear in the NLRC case.

Atty. Sevandal filed a Compliance with Show Cause Resolution³⁶ dated December 14, 2015. Thereafter, the IBP-CBD issued a Report and Recommendation³⁷ finding Atty. Sevandal guilty of encroaching into the professional services of Atty. Adame and recommended that Atty. Sevandal be suspended from the practice of law for two (2) years and to return the amount of P300,000.00 to the client.

In a Resolution³⁸ dated November 28, 2017, the IBP Board of Governors adopted the findings of fact and recommendation of the IBP-CBD.

Pursuant to Rule 139-B of the Rules of Court, the IBP transmitted the documents of this case to the Court.

The issue is whether or not the IBP is correct in suspending Atty. Sevandal from the practice of law for two (2) years and in directing him to return the amount of P300,000.00 to the client.clubjuris

The Court's Ruling

We modify the recommendation of the IBP.

Atty. Sevandal's acts were in direct violation of Rule 8.02, Canon 8 of the CPR, which states:clubjuris

Rule 8.02 - A lawyer shall not, directly or indirectly, encroach upon the professional employment of another lawyer, however, it is the right of any lawyer, without fear or favor, to give proper advice and assistance to those seeking relief against unfaithful or neglectful counsel.

It is undisputed that Atty. Sevandal was not the counsel of record in NLRC Case No. NCR OFW (M) 05-06890-11. It was Atty. Adame who filed the complaint with the NLRC and the only counsel on record of Merlina.

Atty. Sevandal's insistence that he executed a Retainer Contract and an Addendum to Retainer Contract with Merlina as basis for appearing on her behalf before the NLRC is untenable. First, the Retainer Contract covered services for the recovery of the client's share in the conjugal partnership property acquired during the marriage, as well as her legitime as heir and surviving spouse of her deceased husband. The scope explicitly stated that the contract covers the litigation at the level of the RTC only. Next, the Addendum to Retainer Contract was dubious according to the findings of the IBP since (1) the said Addendum did not amend or expand the scope of Atty. Sevandal's engagement as provided in the Retainer Contract, i.e., still limited to the RTC level only, and (2) it appeared that there were two different versions as annexed in the Complaint and respondent's Position Paper.

Also, despite having no authority to represent Merlina in the proceedings before the NLRC, Atty. Sevandal did the following:clubjuris

1) Filed a formal entry of appearance as counsel on 9 May 2011 in the NLRC case filed by Atty. Adame despite his opposition to the said case since on the same date he filed a Manifestation Re: Withdrawal of Complaint;

2) At the succeeding NLRC mandatory conferences, he entered his appearances as counsel for Merlina and manifested his objections to the appearance of Atty. Adame; and

3) Filed an Ex Parte Motion for Attorney's Lien on 17 June 2011 asking for the payment of his attorney's fee equivalent to 20% of the amount that will be awarded to Merlina and later on received the amount of P300,000.00 as attorney's fees in order "to stop him from meddling in the ongoing settlement before the NLRC."

All of these occurred after Merlina hired the services of Atty. Adame as her lawful attorney-in-fact and caused the latter to file the NLRC Complaint on May 3, 2011 and the annulment of tbe Retainer Contract by Merlina through a Revocation of Retainer Contract dated May 24, 2011.

In Linsangan v. Atty. Tolentino,³⁹ Rule 8.02, Canon 8 of the CPR mandates that a lawyer "should not steal another lawyer's client nor induce the latter to retain him by a promise of better service, good result or reduced fees for his services."

Not having been engaged by the client to appear before the NLRC, Atty. Sevandal had no authority to enter his appearance as counsel and encroach on the services of another lawyer. He also had no right to receive the amount of P300,000.00 as attorney's fees awarded by the NLRC.

In the cases of Likong v. Lim⁴⁰ and Cahanap v. Palangan,⁴¹ the Court disciplined and imposed a penalty of one (1)-year suspension from the practice of law on a lawyer for violating Rule 8.02, Canon 8 of the CPR.

Just like in these cases, We modify in this case the recommendation of penalty by the IBP from a suspension of two (2) years from the practice of law to one (1)-year suspension. Also, aside from violating Rule 8.02, Atty. Sevandal demanded and received a substantial amount of money not due to him. Thus, Atty. Sevandal should return the amount of P300,000.00 to Merlina.

WHEREFORE, the Court finds Atty. Virgilio A. Sevandal GUILTY of Encroaching the Professional Services of Atty. Melita B. Adame. He is hereby SUSPENDED from the practice of law for ONE (1) YEAR, effective upon receipt of this Decision and directed to RETURN the amount of P300,000.00 to Merlina B. Sevandal. He is likewise WARNED that a repetition of the same or similar acts shall be dealt with more severely.

Let a copy of this Decision be furnished to the Office of the Bar Confidant to be appended to complainant's personal record, the Integrated Bar of the Philippines, the Public Information Office and the Office of the Court Administrator for circulation to all courts for their information and guidance. Likewise, a Notice of Suspension shall be prominently posted in the Supreme Court website as a notice to the general public.

Atty. Virgilio A. Sevandal, upon receipt of this Decision, shall forthwith be suspended from the practice of law and shall formally manifest to this Court that his suspension has started. He shall furnish all courts and quasi-judicial bodies where he has entered his appearance a copy of this Decision.

SO ORDERED.

Leonen (Chairperson), Hernando, and Rosario, JJ., concur.
Inting, J., on official leave.

March 25, 2021

NOTICE OF JUDGMENT

Sirs / Mesdames:

Please take notice that on November 11, 2020 a Decision, copy attached hereto, was rendered by the Supreme Court in the above-entitled case, the original of which was received by this Office on March 25, 2021 at 8:20 a.m.

Endnotes:

¹ Docketed as CBD Case No. 11-3154; rollo, pp. 2-7.

² Rule 8.02 - A lawyer shall not, directly or indirectly, encroach upon the professional employment of another lawyer, however, it is the right of any lawyer, without fear or favor, to give proper advice and assistance to those seeking relief against unfaithful or neglectful counsel.

³ Rule 10.01 - A lawyer shall not do any falsehood, nor consent to the doing of any in Court; nor shall he mislead, or allow the Court to be misled by any artifice.

⁴Rollo, pp. 78-79.

⁵ Id. at 23-24.

⁶ Id. at 3, 45.

⁷ Id. at 3.

⁸ Docketed as NLRC Case No. NCR OFW (M) 05-06890-11.

⁹Rollo, pp. 3, 61-64.

¹⁰ Id. at 3-4.

¹¹ Id. at 4.

¹² Id.

¹³ Id.

¹⁴ Id. at 4-5.

¹⁵ Id. at 5.

¹⁶ Id. at 16-18.

¹⁷ Id. at 17.

¹⁸ Id. at 58-59.

¹⁹ Id. at 28-40.

²⁰ Id. at 25-26.

²¹ Id. at 28-31.

²² Id. at 32.

²³ Id. at 32-33.

²⁴ Id. at 33.

²⁵ Id. at 33-34.

²⁶ Id. at 36-37.

²⁷ Id. at 151-161.

²⁸ Id. at 161.

²⁹ Id. at 158-159.

³⁰ Also stated as "P30,000.00" in IBP Resolution No. XXI-2014-128; id. at 183.

³¹ Id. at 159.

³² Id. at 159-160.

³³ Id. at 160-161.

³⁴ Id. at 150.

³⁵ Id. at 25-26.

³⁶ Id. at 212-213.

³⁷ Id. at 225-228.

³⁸ Id. at 223

³⁹ 614 Phil. 327 (2009).

⁴⁰ 305 Phil. 448 (1994).

⁴¹ A.C. No. 11983, August 6, 2018