EN BANC

[A.C. No. 6656. December 13, 2005.]

(formerly CBD-98-591)

BOBIE ROSE V. FRIAS , complainant, vs . ATTY. CARMENCITA

BAUTISTA LOZADA , respondent.

RESOLUTION

CORONA , J : p

In this disbarment case, we are faced with con icting versions of the incidents
surrounding the ling of the veri ed complaint 1 for deception and malpractice allegedly
committed by Atty. Carmencita Bautista Lozada.
For her part, complainant Bobie Rose Frias alleged that respondent became her
retained counsel and legal adviser in the early part of 1990. She entrusted to respondent
documents and titles of properties in November of that year. Sometime in December
1990, respondent persuaded complainant to sell her house located at 589 Batangas East,
Ayala Alabang Village, Muntinlupa City. Respondent allegedly acted as broker as she was in
need of money.
On December 7, 1990 respondent hastily arranged a meeting with her and a
prospective buyer, Dra. Flora San Diego, in Valenzuela, Manila. She was allegedly made to
sign a Memorandum of Agreement (MOA) 2 without her having read it because "they had to
reach the bank before it closed at 3:00 p.m."
When they arrived at the Security Bank branch in Valenzuela, San Diego handed
respondent P2M in cash and P1M in check, instead of P3M in cash as the down payment 3
indicated in the MOA.
Out of the P2M in cash, respondent took P1M as her commission without
complainant's consent. When complainant protested, respondent promised to sign a
promissory note later. The P1M check was later on dishonored by the bank because it was
a stale check.
San Diego eventually backed out from the sale. However, she converted the aborted
sale into a mortgage loan at 36% p.a. interest, as provided for in the MOA.
Since the transaction between her and San Diego did not materialize, complainant
allegedly tried to recover from respondent the title 4 to the property and other documents.
5 Respondent, however, started avoiding her. Complainant recovered the documents
placed inside an envelope only on May 6, 1991. On the same day, however, the envelope
was allegedly stolen from her Pajero. She reported the incident to the police. 6 She also
informed respondent about the incident, and the latter prepared an a davit of loss. 7
Complainant later offered this a davit as evidence in a petition for issuance of a duplicate
copy of the title she filed in the RTC of Makati, Branch 142. 8
A perjury case 9 was then led by San Diego against complainant on the ground that
the title to the property was never really lost (as alleged by complainant in the a davit of
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 loss) but was with San Diego all along. San Diego maintained that complainant handed it to
her on the day they signed the MOA. Complainant denied these allegations. She instead
claimed that the perjury case was led by San Diego, with respondent as counsel, to
coerce her (complainant) to assign the property to San Diego and to abandon her claim of
P1M from respondent.
San Diego also filed a case 1 0 for the return of the P3M she paid complainant, at 36%
p.a. interest. Complainant claimed that her failure to return the money to San Diego was by
reason of respondent's refusal to give back the P1M she took as commission.
Complainant was thus constrained to le a civil case against respondent. Despite the
favorable decision 1 1 of the trial court, which was a rmed by the Court of Appeals 1 2 ,
respondent refused to return the money.
In her answer 1 3 to the disbarment complaint, respondent claimed that, although
complainant was engaged in the buy-build-and-sell of real property, she represented her
only in labor cases relative to the latter's overseas recruitment business. Respondent
denied that she persuaded complainant to sell the property in Ayala Alabang. Rather, it was
complainant who offered to sell or mortgage the property to respondent. Since
respondent did not have enough money, complainant requested her to sell or mortgage
the property and offered her a loan, commission and attorney's fees on the basis of the
selling price. AEcTCD

According to respondent, complainant con ded that on October 29, 1990 she
offered the Alabang property to a certain Nelia Sta. Cruz. Complainant received P400,000
as earnest money in this transaction on the condition that she would return the said
amount to Sta. Cruz in two weeks in case the latter decided not to proceed with the sale.
1 4 The said amount would in turn be used to buy another property.

Respondent also claimed that on December 4, 1990, she introduced complainant to

another client, Dra. San Diego, as a prospective buyer. They visited the Alabang property to
check on the house. It was there that complainant offered the house to San Diego for
either sale or mortgage. They then discussed the terms and conditions to be contained in
the MOA. 1 5 The agreement was thereafter signed in respondent's o ce in Valenzuela,
Metro Manila on December 7, 1990, duly notarized by Atty. Manuel Aguinaldo. 1 6 They then
proceeded to Prudential Bank (not Security Bank as alleged in the complaint) to withdraw
P2M in cash. Upon receipt of P2M in cash and P1M check down payment, complainant
gave San Diego the TCT.
Complainant then handed to respondent P900,000 as commission and loan, duly
receipted in a promissory note. 1 7 Complainant further entrusted P100,000 to respondent
to be given to Nelia Sta. Cruz as partial reimbursement of the P400,000 earnest money. 1 8
Respondent maintained that when San Diego backed out from the transaction, the
latter demanded the return of only P2M, not P3M, as clearly stated in San Diego's letter 1 9
to the complainant dated March 20, 1991.
Respondent denied that complainant previously demanded the return of the P1M
until the civil case against her was instituted. She expressed her willingness to pay the
P900,000 plus the agreed interest, but not the P1M plus interest baselessly demanded
from her by complainant. In an attempt to settle the controversy, respondent offered to
pay the P900,000 to complainant in the presence of San Diego, so complainant could in
turn pay San Diego the P2M.

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 Respondent also denied that she prepared the a davit of loss which was offered as
evidence by complainant in the petition for issuance of lost title.
Respondent further denied that she represented San Diego in the criminal cases of
perjury and false testimony which the latter filed against complainant.
In a report and recommendation dated July 25, 2000, the IBP Investigating
Commissioner 2 0 found respondent guilty of dishonesty and malpractice for concealing
the identity of the person in actual possession of complainant's documents and for
preparing an a davit of loss even if she knew that the documents were in San Diego's
custody. A suspension for six months from the practice of law was accordingly
recommended.
A careful study of the records reveals that the IBP recommendation relied solely on
complainant's self-serving and unsupported claims. A re-examination of the differing
claims of the parties, however, discloses that, instead of the grounds relied on by the IBP,
respondent should be held accountable for certain serious violations of the Code of
Professional Responsibility.
Canon 15.03 of the Code of Professional Responsibility provides:
A lawyer shall not represent con icting interests except by written consent
of all concerned given after a full disclosure of the facts.

A lawyer may not, without being guilty of professional misconduct, act as counsel
for a person whose interest con icts with that of his present 2 1 or former client. 2 2 He may
not also undertake to discharge con icting duties any more than he may represent
antagonistic interests. This stern rule is founded on the principles of public policy and
good taste. 2 3 It springs from the relation of attorney and client which is one of trust and
confidence.
The test of con ict of interest is whether the acceptance of a new relation will
prevent an attorney from the full discharge of his duty of undivided delity and loyalty to
his client or invite suspicion of unfaithfulness or double-dealing in its performance. 2 4 The
con ict exists if the acceptance of the new retainer will require the attorney to perform an
act which will injuriously affect his rst client in any matter in which he represented him
and also whether he will be called upon in his new relation to use against the rst client any
knowledge acquired through their connection. 2 5
In this case, respondent not only admitted that she represented both complainant
and San Diego in unrelated actions but also counseled both of them in the sale of the
Alabang property.
As their lawyer, she was duty-bound to protect both of their interests. She should
have therefore refrained from jumbling their affairs. Yet she introduced complainant to
another client of hers as a buyer of the property. She even had the temerity to broker the
transaction. At that early stage, she should have realized that her role as their lawyer had
been seriously compromised. Since buyer and seller had evident antagonistic interests,
she could not give both of them sound legal advice. On top of this, respondent's obvious
tendency then was to help complainant get a high selling price since the amount of her
commission was dependent on it.
After several suits were led as an offshoot of the transaction between her two
clients, respondent found herself in a very tight situation. Although she denied that she
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 represented any of them, her active participation in the transaction was obvious and it
clearly displayed an utter disregard of the rule against discharging inconsistent duties to
her clients. The great likelihood was that she would be called upon to use against either
the complainant or San Diego information acquired through her professional connection
with them.

Furthermore, her role as their counsel in the other unrelated cases was also
compromised. Both parties had, at this point, become wary of her since she had by then
taken — for her own convenience — San Diego's side by refusing to return the P900,000 to
complainant until San Diego was paid. It was not surprising therefore that complainant
led this administrative case because of the suspicion that respondent had double-
crossed her.
The records further establish that respondent collected her full commission even
before the transaction between complainant and San Diego was completed. This
unmasked respondent's greed which she now wants us so badly to ignore. Her integrity
was placed in serious doubt the moment her promised commission started motivating her
every move. Her behavior was, sad to say, simply distasteful.
Likewise, her act of borrowing money from a client was a violation of Canon 16.04
of the Code of Professional Responsibility:
A lawyer shall not borrow money from his client unless the client's interests
are fully protected by the nature of the case and by independent advice.

A lawyer's act of asking a client for a loan, as what respondent did, is very unethical.
It comes within those acts considered as abuse of client's con dence. The canon
presumes that the client is disadvantaged by the lawyer's ability to use all the legal
maneuverings to renege on her obligation.
Finally, respondent should be reminded that a lawyer should, at all times, comply
with what the court lawfully requires. 2 6 Here, respondent continues to disregard the nal
order of the Court of Appeals nding her liable for the P900,000 she received from
complainant. We see no justi cation for her continued delay in complying with an order
that has long become nal. Respondent adamantly insists that she and complainant
should simultaneously settle their obligations. As a lawyer, she should have known that her
obligation to complainant was independent of and separate from complainant's obligation
to the buyer. Her refusal to comply with the appellate court's order is, therefore, a willful
disobedience to its lawful orders and must not be left unpunished. aAHTDS

WHEREFORE, respondent Atty. Carmencita Bautista Lozada is hereby found guilty of

violating Rule 15.03 and 16.04 of the Code of Professional Responsibility and of willfully
disobeying a nal and executory decision of the Court of Appeals. She is hereby
SUSPENDED from the practice of law for a period of two (2) years from notice, with a
STERN WARNING that a repetition of the same or similar acts will be dealt with more
severely.
Let copies of this Resolution be furnished all courts of the land, the Integrated Bar of
the Philippines, as well as the O ce of the Bar Con dant for their information and
guidance, and let it be entered in respondent's personal records.
SO ORDERED.
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 Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Carpio, Austria-Martinez, Carpio Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario and
Garcia, JJ., concur.

Footnotes

1. Dated August 8, 1998; Rollo, pp. 1-7.

2. Id., pp. 8-10.
3. The selling price of the Alabang property was P6.4M.

4. TCT No. 168173; Id., pp. 101-102.

5. Deed of Sale executed by Island Masters Realty and Development Corporation in favor
of complainant covering the subject property.
6. Police Blotter; Id., p. 32.

7. Id., p. 116.
8. Order issued by RTC, Br. 142, Makati in Case No. M-2282, April 10, 1992; Id., pp. 117-119.
9. Id., pp. 33-37.
10. Decision of Civil Case No. 93-65367 rendered by RTC, Br. 30, Manila in favor of San
Diego; January 31, 1996; Penned by Judge Senecio O. Ortile; Id., pp. 120-126.

11. Decision of Civil Case No. 92-2988 rendered by RTC, Br. 63, Manila in favor of Bobie
Rose Frias; November 11, 1994; Penned by Judge Julio R. Logarta; Id., pp. 137-139.

12. Decision of CA-G.R. CV No. 50636 rendered by the Court of Appeals affirming RTC, Br.
63, Manila but reducing the award to P900,000; March 3, 1999; Penned by Justice
Ramon Mabutas, Jr. and concurred in by Justices Hilarion L. Aquino and Candido V.
Rivera of the Thirteenth Division; Id., pp. 140-149.
13. Id., pp. 15-27.
14. Id., p. 28.
15. In the MOA, the buyer Dra. San Diego-Sison agreed to pay P3M to complainant which
could either be considered as: (a) down payment to the P6.4M selling price of the
property, in case she decides to buy within the 6-month period agreed upon; and (b) loan
with 36% per annum interest, in case she decides not to proceed with the sale.
16. Id., p. 10.
17. AGREEMENT

FOR VALUE RECEIVED, I, CARMENCITA S. BAUTISTA-LOZADA, of legal age, Filipino,

married and presently residing at 154 Palasan, Valenzuela, Metro Manila do hereby
promise to pay BOBIE ROSE FRIAS the amount of NINE HUNDRED THOUSAND
(P900,000) within one year from this date with interest (bank rate).

Payment of the said amount shall be subject to the following conditions:

(1) If the sale of the house and lot at Ayala Alabang between Dra. Flora San
Diego-Sison would materialize and consummate within a period of one (1) year from
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 this date, I will not return the P600,000 and the same shall be considered as commission
and attorney's fees. However, the amount of P300,000 shall be returned to Bobie Rose
Frias.
(2) If the sale does not materialize, I will return the whole amount within one year
from this date with interest (bank rate).
(3) In case I will be able to sell the said property to other persons, the commission
and attorney's fees shall be as follows which amount Bobie Rose Frias agreed to pay to
me:

Selling Price Commission/Attorney's Fees

P6.4M P600,000.00
7.0M 1,000,000.00
7.5M 1,200,000.00

8.0M 1,400,000.00
Done this 7th day of December, 1990.
(signed) (signed)
BOBIE ROSE FRIAS ATTY. CARMENCITA S. BAUTISTA-LOZADA

(signed)
WITNESS
Id., p. 29.
18. December 7, 1990
This is to acknowledge receipt of the sum of ONE HUNDRED THOUSAND (P100,000)
from Bobie Rose Frias to be given to Nelia Sta. Cruz
Received by:

(signed)
Atty. Carmencita Bautista-Lozada
Id., p. 30.
19. March 20, 1991
Ms. Bobie Rose Frias

Marcelo Green Village

Parañaque, Metro Manila
Dear Ms. Bobie Rose Frias:
This is to formally inform you that I have finally decided not to proceed with the
purchase of your house and lot at Ayala Alabang due to the objection of my husband.
While you have given me a period of six months within which to decide whether or not
to purchase the said property, I am informing you of my decision this early so you could
offer the property to other interested buyers.
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 As per our agreement, the amount of P2,000,000.00 which you received from me will
be considered as loan in the event that I would decide not to purchase the property
within six months and the property will serve as security or collateral for the loan plus
the interest of 36% per annum (bank rate at the time the money was given).
Upon payment of the P2,000,000.00 plus interest, I shall be most willing to release the
encumbrance on your property and deliver the title to you.

Thank you.
Yours truly,
(signed)
DRA. FLORA SAN DIEGO-SISON

Id., p. 31.
20. Lydia Navarro.
21. Abaqueta v. Atty. Florido, 443 Phil. 688 (2003).
22. Cruz v. Jacinto, 385 Phil. 359 (2000).
23. Agpalo, Legal Ethics, 6th Edition, p. 219, 225; citing cases.

24. Gamilla v. Mariño, Jr., 447 Phil. 419 (2003).

25. Hornilla v. Salunat, A.C. No. 5804, 1 July 2003, 405 SCRA 220.
26. Agpalo, p. 389, citing cases.

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