IN THE MATTER OF THE PETITION FOR DISBARMENT, EMILIO G. STA. MARIA, PETITIONER VS. EDUARDO M. TUAZON, RESPONDENT.

Sometime in June, 1955, respondent Atty. Eduardo M. Tuason
represented petitioner Emilio C. Sta. Maria and his two partners Andres
Guanzon and Fausto E. Chincuanco in prosecuting Civil Case No. 894, CFI
of Pampanga, entitled “Fausto E. Chincuanco, et al vs. Enriqueta M. de
Hidalgo, et al”, a collection case involving a promissory note of  P50,000.00. Defendant Enriqueta M. de Hidalgo was declared in default,
and the Court rendered judgment on October 8, 1955, ordering the
defendant de Hidalgo to pay:—

“(a) Plaintiffs the sum of P30,000.00 with interests
thereon at the rate of six percent (6%) per annum from June 18, 1955,
the date of the filing of the complaint, until the same shall have been
fully paid, plus the sum of f3,500.00 as plaintiffs’ attorney’s fees;

(b)
Plaintiff Andres A. Guanzon the other sum of P3.000.00 as compensation
for the injury caused to him in his credit standing; and—

(c)
Plaintiff Fausto E. Chincuanco another sum of P3.000.00 as compensation
for the injury caused to him in his credit standing.”

On December 9, 1955, a writ of execution was issued. Sufficient
amount of money to satisfy the judgment, came into the hands of the
Provincial Sheriff of Pampanga. Respondent Tuason, on September 10,
1958, obtained from the Sheriff, the amount of P22,930.64, which he
(Tuason) applied in the following manner: (1) P10,000.00 for his
alleged attorney’s fees; (2) P1,1618.00 to supposed expenses of
litigation, which he claimed to have advanced in the prosecution of the
case; and (3) the balance of P11,282.64, to plaintiff Fausto E.
Chincuanco, his. uncle. Petitioner claims that respondent Tuason
deprived him of his lawful share in the judgment which was P25,511.62;
that respondent was not entitled to P10.000.00 as attorney’s fees
because even the lower Court awarded him only P3,500.00; that the
foregoing acts were done, without the prior knowledge and consent of
petitioner.

Upon finding that the respondent withdrew the P22,930.64 from the
Office of the Provincial Sheriff, complainant Sta. Maria repaired to
the office of Atty. Tuason and demanded the amount to be turned over to
him, or to the Sheriff for proper disposition by the Court; that upon
failure of respondent to comply any of the two things, contempt
proceedings were instituted against respondent Tuason. In view,
however, of the claim of Tuason that he gave the money to Guanzon and
Chincuanco, petitioner filed with the CFI of Pampanga, Civil Case No.
1704, against said Tuason, Guanzon and Chincuanco, for collection of
his rightful share in the judgment in Civil Case No. 894.

Respondent, in his Answer, admitted having received the amounts in
question from the Sheriff of Pampanga, and disbursed the same in the
manner stated by petitioner, but he denied that he obtained and
disbursed the amounts, without the knowledge and consent of the
petitioner; the truth of the matter being that he was given full
authority by petitioner’s partners (Guanzon and Chincuanco) to receive
P10,000.00 for his services; that the two were the ones who engaged his
services in the prosecution of Civil Case No. 894, for their own behalf
and in behalf of petitioner himself; that he delivered the balance of
the amount, to Chincuanco, who was the one who had actually retained
his services and who took charge of liquidating the accounts with his
partners.

The matter was referred to the Office of the Solicitor General who made the following findings and recommendations :

“The foregoing evidence presented by the parties
involves two issues, namely: (1) Whether the respondent was in
connivance with Fausto Chincuanco and Andres Guanzon in delivering to
them the full amount of r22.930.64 and thereby deprived the petitioner
from getting his rightful share in the liquidation of the assets of the
partnership and (2) whether the respondent was guilty of malpractice
and gross misconduct in withholding the amount of P10,000 as his
attorney’s fees and also the amount of P1,648 as alleged expenses
incurred in the litigation.

The complainant in this case
contends that the respondent committed malpractice in delivering the
proceeds of the judgment money to Pausto Chincuanco, his uncle, and
Andres Guanzon, his close business associate (p. 17, tsn, July 10,
1961; p. 6, rec.)

As to the first issue, the petitioner
claims that he was unable to collect his rightful share in the
liquidation of the funds of the partnership as agreed upon by the
partners (Exh. E, pp. 3-4, tsn, June 15, 1900) for which reason, he had
to file a civil case against his partners. He attributes this failure
mainly to the respondent who delivered the judgment money to
Chincuanco, his partner, who disposed of the whole amount in the manner
already indicated earlier. While it is true that Fausto Chincuanco was
present in receiving the amount of P22,930.64 from the Sheriff (Exh. C,
p. 14, rec), there is no clear evidence presented to show that the
respondent connived with either Chincuanco or Guanzon in delivering the
judgment money to them for the purpose of depriving the complainant of
his rightful share in the partnership. What the respondent did in this
case was to deliver the judgment money to the partnership through
Chincuanco and Guanzon, the latter being the general manager. The
proper action for the complainant was to demand his share from Guanzon,
the managing partner, or from Chincuanco, the other partner. This he
did by filing a complaint in the Court of First Instance of Pampangn
(see Civ. Case No. 1704, Exh. 2). In this case Atty. Eduardo Tuason,
the herein respondent, was included as defendant. A contempt proceeding
was also filed by complainant, citing Atty. Tuason :uul the Sheriff of
Pampanga as respondents. It appears, however, that an amicable
settlement was finally agreed upon by the parties in this civil case
resulting in a compromise agreement, duly approved by the Court of
First Instance of Pampauga wherein the plaintiff waived all his claim
against his other partners. In said compromise agreement the plaintiff
also agreed not to proceed with the contempt case he filed against
Atty. Eduardo Tuason and the Sheriff of Pampanga (Exhs. 2, 3 and 5.
folder of exhibits).

The issue, therefore, revolves more on
the division of the partnership assets rather than on the right of the
complainant to compel the respondent to turn over to him part of the
judgment money which respondent applied as his attorney’s fees and
reimbursement for his expenses in connection with the litigation he
handled for the partners. Under the foregoing circumstances, the
undersigned investigator is of the opinion that the respondent Tuason
has not committed any act that will constitute malpractice or gross
misconduct in office.

As to the second is3ue, there is no
dispute that the respondent collected the amount of P10,000 as
attorney’s fees for a collection suit in the amount of P50,000.00 based
on a promissory note. It appears that since the defendant was declared
in default, the case was terminated after one brief hearing. The
respondent also collected P1,648 as alleged expenses incurred in
connection with the litigation. No satisfactory evidence, however, was
presented to show that the respondent actually spent that amount. On
the other hand, there was the undisputed evidence which shows that the
case represented by the respondent was terminated with one brief
hearing after the defendant was declared in default. There is,
likewise, no dispute that said attorney’s fees and litigation expenses
were deducted from the judgment money collected by the respondent from
the Sheriff of Pampanga. This act of the respondent seems to be
irregular, if not suspicious, considering his close relationship with
Mr. Chincuanco. Notwithstanding the opinion of Mr. Guanzon, the amount
of P10,000 for attorney’s fees is, to our mind, also unreasonable under
the circumstances. It is to be noted in this connection that the
respondent himself alleged in the complaint he filed for the
partnership that ‘the plaintiffs will incur for attorney’s fees and
expenses of the litigation P6,000″ (p. 9, rec).

Moreover, the
circumstances of the case show that the respondent took advantage of
the fact that he was a nephew of Fausto Chincuanco and a close
associate of Andres Guanzon in collecting his lawyer’s fees. Even at
the time that the respondent was already representing the partnership,
the complainant inquired from Chincuanco about the respondent’s fees.
In reply Chincuanco said that he (Sta. Maria) should not worry about it
because the respondent is a nephew of his. On this assurance, the
complainant could be said to have assumed that the respondent would not
collect an excessive amount, much less take advantage of his
relationship with one of the partners by retaining the funds,
considering that the case was one of a simple collection based on a
promissory note. The act of the respondent in collecting P10,000 for
attorney’s fees and alleged expenses he incurred in the litigation,
aggravated the burden of the complainant who claims that he was not
given his due share in the distribution of the assets of the
partnership as his two partners were already in possession of the
money. While it is true that the partners of the complainant apparently
acceded to the respondent’s acts, it cannot be denied that the latter
acted with indiscretion, induced by his close relationship with
Ctiincuanco to the prejudice of the complainant. In effect,
respondent’s act constituted a retention of the funds of his client, an
act of professional indiscretion bordering on misbehaviour.

It
may be stated, however, that the respondent may have felt justified in
his acts, since they were done with apparent acquiescence of his
clients, Fausto Chincuanco and Andres Guanzon, Moreover, an amicable
settlement of all the suits filed by the herein complainant resulted in
a compromise agreement, whereby the complainant waived any and all
claims against his partners and the respondent arising from the
transactions which are the subject matter of the controversy, as well
as from the incidents thereof (Exh. 2, folder of the exhibits). While
it may be said that this compromise agreement may not affect the
misconduct of the herein respondent as a member of the bar, at least,
it cannot be denied that the complainant has, in effect, condoned
respondent’s acts.

RECOMMENDATION

IN VIEW OF FOREGOING, it is
respectfully recommended that instead of a more severe penalty which he
would have otherwise deserved, the respondent be reprimanded for
professional indiscretion, with the warning that a more severe penalty
lie imposed for a repetition of same or similar acts.”

The report of the Solicitor General was duly set for hearing, by
this Court. Respondent excepted from the recommendation which called
for the imposition of a reprimand. Respondent points out that the
findings of the Solicitor General did not warrant his recommendation,
since he found that respondent “has not committed any act that will
constitute malpractice or gross misconduct in office.” Respondent also
claims that the filing of different proceedings against him was simply
intended to harass and embarrass him, because of petitioner’s
dissatisfaction over the disposition by his partners, of the award in
Civil Case No. 894.

After an overall consideration of the facts and circumstances
surrounding the case, we find that the findings and conclusions of the
Solicitor General are supported by the evidence of record. The fact
that the respondent has placed his private and personal interest over
and above that of his clients constitutes a breach of a lawyer’s oath,
to say the least. Call it professional indiscretion or any other name,
but the cold fact remains that the acts, as found by the Solicitor
General, is not conducive to a healthy growth of the legal profession.
The respondent is hereby admonished that a repetition of similar acts
will merit more drastic action.

Bengzon, C. J., Bautista Angelo, Concepcion, Reyes, J. B. L., Regala and Makalintal, JJ., concur.