Republic of the Philippines disposed of at public auction, and in which L & R Corporation

SUPREME COURT was itself the highest bidder.

Manila
Pending redemption, the private respondent filed a complaint
SECOND DIVISION for injunction against L & R Corporation, to enjoin consolidation
of title in its name, in which he succeeded in obtaining
G.R. No. L-77691 August 8,1988 preliminary injunctive relief. He was represented by the
petitioner. Two years later, and with no imminent end to the
PATERNO R. CANLAS, petitioner,  litigation in sight, the parties entered into a compromise
vs. agreement whereby L & R Corporation accorded the private
HON. COURT OF APPEALS, and FRANCISCO respondent another year to redeem the foreclosed properties
HERRERA, respondents. subject to payment of P600,000.00, with interest thereon at
one per cent per month. They likewise stipulated that the
petitioner shall be entitled to attorney's fees of P100,000.00.
Paterno R. Canlas Law Offices for petitioner.
On November 19, 1982, the court   approved the compromise.
3

Abalos, Gatdula & Bermejo for private respondent.

The private respondent, however, remained in dire financial
straits — a fact the petitioner himself concede   — for which
4

SARMIENTO, J.: The case dramatizes the unpleasant spectacle of a lawyer

reason he failed to acquire the finding to repay the loans in
tangling with his own client, more often than not, in the matter of fees. The lawyer, the
petitioner himself, would have his petition decided on pure questions of procedure, yet, question, let alone the sum of P100,000.00 in attorney's fees
the Court cannot let pass unnoticed the murkier face of the controversy, wherein the law demanded by the petitioner. That notwithstanding, the
is corrupted to promote a lawyer's selfseeking ends, and the law profession, debased
into a simple business dealing. Accordingly, we resolve it on the basis not only of the petitioner moved for execution insofar as his fees were
questions raised by the petitioner pertaining to procedure, but considering its serious concemed. The court granted execution, although it does not
ethical implications, on its merits as well.
appear that the sum was actually collected.  5

We turn to the facts. Sometime thereafter, the petitioner and the private respondent
met to discuss relief for the latter with respect to his liability to
The private respondent was the registered owner of eight (six, L & R Corporation on the one hand, and his obligation to the
according to the petitioner) parcels of land located in Quezon petitioner on the other. The petitioner contends that the private
City.   Between 1977 and 1978,   he obtained various loans
1 2
respondent "earnestly implored"   him to redeem the said
6

from the L & R Corporation, a financing institution, in various properties; the private respondent maintains that it was the
sums totalling P420,000.00 As security therefor, he executed petitioner himself who 'offered to advance the
deeds of mortgage in favor of the corporation over the parcels money,"   provided that he, the private respondent, executed a
7

aforesaid. On August 28,1979, and upon the maturing of said "transfer of mortgage"   over the properties in his favor. Who
8

loans, the firm caused an extrajudicial foreclosure of mortgage implored whom is a bone of contention, but as we shall see
following his failure to pay, as a consequence of which, the shortly, we are inclined to agree with the private respondent's
said eight (six, according to the petitioner) parcels of land were version, considering primarily the petitioner's moral
ascendancy over his client and the private respondent's and all my rights of equity of redemption and/or
increasing desperation. to redeem from the Mortgagee, L & R
Corporation my mortgaged properties
The records further show that the parties, pursuant to their foreclosed and sold at public auction by the
agreement, executed a "Deed of Sale and Transfer of Rights Sheriff of Quezon City and subject matter of the
of Redemption and/or to Redeem," a document that enabled above Compromise Agreement in Civil Case
the petitioner, first, to redeem the parcels in question, and No. Q30679. . . 10

secondly, to register the same in his name. The private

respondent alleges that he subsequently filed loan applications As a consequence, the private respondent caused the
with the Family Savings Bank to finance a wet market project annotation of an adverse claim upon the respective certificates
upon the subject premises to find, according to him, and to his of title embracing the properties. Upon learning of the same,
dismay, the properties already registered in the name of the the petitioner moved for the cancellation of the adverse claim
petitioner. He likewise contends that the "Deed of Sale and and for the issuance of a writ of possession. The court granted
Transfer of Rights of Redemption and/or to Redeem" on file both motions. The private respondent countered with a motion
with the Register of Deeds (for Quezon City) had been falsified for a temporary restraining order and later, a motion to recall
as follows: the writ of possession. He likewise alleges that he commenced
disbarment proceedings before this Court against the
WHEREFORE, for and in full settlement of the petitioner   as well as various criminal complaints for estafa,
11

attorney's fees of TRANSFEREE in the amount falsification, and "betrayal of trust"   with the Department of
12

of ONE HUNDRED THOUSAND PESOS Justice. On December 1, 1983, finally, he instituted an action
(Pl00,000.00) I, FRANCISCO HERRERA, for reconveyance and reformation of document,  praying that
13

hereby transfer, assign and convey unto the certificates of title issued in the name of the petitioner be
TRANSFEREE, Atty. Paterno R. Canlas, any cancelled and that "the Deed of Sale and Transfer of Rights of
and all my rights of the real properties and/or to Equity of Redemption and/or to Redeem dated May 3, 1983 ...
redeem from the Mortgagee, L & R Corporation be reformed to reflect the true agreement of Francisco Herrera
my mortgaged properties foreclosed and sold and Paterno R. Canlas, of a mortgage."   He vehemently
14

at public auction by the Sheriff of Quezon City maintains that the petitioner's "agreement with [him] was that
and subject matter of the above Compromise the latter would lend the money to the former for a year, so that
Agreement in Civil Case No. Q30679 ...  9 [petitioner] would have time to look for a loan for the wet
market which [the petitioner] intended to put up on said
whereas it originally reads: property."   Predictably, the petitioner moved for dismissal.
15

WHEREFORE, for and in full settlement of the The trial court, however, denied the private respondent's
attorney's fees of TRANSFEREE in the amount petition. It held that the alteration complained of did not change
of ONE HUNDRED THOUSAND PESOS the meaning of the contract since it was "well within [the
(P100,000.00), I, FRANCISCO HERRERA, petitioner's] rights"   "to protect and insure his interest of
16

hereby transfer, assign and convey unto P654,000.00 which is the redemption price he has
TRANSFEREE, Atty. Paterno R. Canlas, any paid;"   secondly, that the petitioner himself had acquired an
17
interest in the properties subject of reconveyance based on the THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS
compromise agreement approved by Judge Castro in the DISCRETION IN NOT DISMISSING AC G.R. NO. 07860 ON
injunction case, pursuant to Section 29(b), of Rule 39, of the THE GROUND THAT IT IS IN REALITY A PETITION FOR
Rules of Court, that had, consequently, made him a judgment CERTIORARI FILED OUT OF TIME AND SHOULD NOT BE
creditor in his own right; thirdly, that the private respondent had GIVEN DUE COURSE.
lost all rights over the same arising from his failure to redeem
them from L & R Corporation within the extended period; and II.
finally, that the petitioner cannot be said to have violated the
ban against sales of properties in custodia legis to lawyers by THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS
their clients pendente lite, since the sale in question took place DISCRETION IN NOT DISMISSING AC G.R. NO. 07860 ON
after judgment in the injunction case abovesaid had attained THE GROUND OF RES JUDICATA
finality. The complaint was consequently dismissed, a
dismissal that eventually attained a character of finality.
III.
Undaunted, the private respondent, on December 6, 1985,
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS
filed a suit for "Annulment Of Judgment   in the respondent
18

DISCRETION IN NOT CONSIDERING AC G. R. 07860 AS

Court of Appeals,   praying that the orders of Judge Castro:
19

MOOT AND ACADEMIC SINCE PETITIONER HAD

(1). granting execution over the portion of the compromise
DISPOSED OF THE SUBJECT PROPERTIES LONG
agreement obliging the private respondent to pay the petitioner
BEFORE THE FILING OF THIS SUIT.
P100,000.00 as attorney's fees; (2) denying the private
respondent's prayer for a restraining order directed against the
execution: and (3) denying the motion to recall writ of IV
possession, all be set aside.
THE RESPONDENT COURT GRAVELY ABUSED ITS
The petitioner filed a comment on the petition, but followed it DISCRETION IN NOT DENYING PETITIONER'S MOTION TO
up with a motion to dismiss. On December 8, 1986, the DISMISS SOLELY ON THE GROUND THAT THE
respondent Court of Appeals promulgated the first of its ARGUMENT RAISED THEREIN ARE BUT REHASH OF THE
challenged resolutions, denying the motion to dismiss. On ARGUMENTS IN HIS COMMENT TO THE PETITION.  21

March 3, 1987, the Appellate Court denied reconsideration.  20

The petitioner argues that the petition pending with the

Hence the instant petition. respondent court "is actually a petition for
certiorari,"  disguised as a pleading for annulment of judgment
22

and that in such a case, it faces alleged legal impediments (1)

As we stated, the petitioner assails these twin resolutions on
It had been filed out of time, allegedly two years from the
grounds of improper procedure. Specifically, he assigns the
issuance of the assailed orders, and (2) It was not preceded by
following errors:
a motion for reconsideration. He adds that assuming
annulment of judgment were proper, no judgment allegedly
I.
exists for annulment, the aforesaid two orders being in the presided over by Judge Castro. On the contrary, Herrera's
nature of interlocutory issuances. petition in the respondent court will show that he was privy to
the incidents he complains of, and in fact, had entered timely
On purely technical grounds, the petitioner's arguments are oppositions and motions to defeat Atty. Canlas' claims under
impressive. Annulment of judgment, we have had occasion to the compromise agreement.
rule, rests on a single ground: extrinsic fraud. What "extrinsic
fraud" means is explained in Macabingkil v. People's Homesite What he objects to is his suspected collusion between Atty.
and Housing Corporation :  23
Canlas and His Honor to expedite the former's collection of his
fees. He alleges that his counsel had deliberately, and with
xxx xxx xxx malevolent designs, postponed execution to force him
(Herrera) to agree to sell the properties in controversy to him
It is only extrinsic or collateral fraud, as (Atty. Canlas) subject to redemption. ("...[I]t was
distinguished from intrinsic fraud, however, that understandable that respondent Atty. Paterno R. Canlas did
can serve as a basis for the annulment of not implement the writ of execution, instead he contacted
judgment. Fraud has been regarded as petitioner in order that petitioner would sign the questioned
extrinsic or collateral, within the meaning of the documents. This was the clincher of the plan of respondent
rule, "where it is one the effect of which Atty, Paterno R. Canlas to divest petitioner of his properties.
prevents a party from having a trial, or real For this purpose, it is obvious that respondent Atty. Paterno R.
contest, or from presenting all of his case to the Canlas had to conspire with the respondent court judge to
court, or where it operates upon matters achieve his plan."  ) Aside from being plain speculation, it is no
25

pertaining, not to the judgment itself, but of the argument to justify annulment. Clearly, it does not amount to
manner in which it was procured so that there extrinsic fraud as the term is defined in law.
is not a fair submission of the controversy." In
other words, extrinsic fraud refers to any Neither is it proper for the extraordinary remedy of
fraudulent act of the prevailing party in the certiorari. Certiorari presupposes the absence of an
litigation which is committed outside of the trial appeal   and while there is no appeal from execution of
26

of the case, whereby the defeated party has judgment, appeal lies in case of irregular implementation of the
been prevented from exhibiting fully his side of writ.   In the case at bar, there is no irregular execution to
27

the case, by fraud or deception practiced on speak of As a rule, "irregular execution" means the failure of
him by his opponent.  24 the writ to conform to the decree of the decision executed.   In
28

the instant case, respondent Herrera's charges, to wit, that

A perusal of the petition of therein private respondent Herrera Judge Castro had erred in denying his motions for temporary
pending before the respondent Court reveals no cause of restraining order and to recall writ of possession, or that His
action for annulment of judgment. In the first place, and as Honor had acted hastily (". . . that respondent court/judge took
herein petitioner Canlas correctly points out, the judgment itself only one [1) day to resolve petitioner's motion for issuance of
is not assailed, but rather, the orders merely implementing it. [a] [restraining] order. . ."  ) in denying his twofold motions, do
29

Secondly, there is no showing that extrinsic fraud, not make out a case for irregular execution. The orders
as Makabingkil defines it, indeed vitiated the proceedings
impugned are conformable to the letter of the judgment and becomes its great hindrance and chief enemy."   It was 32

approving the parties'compromise agreement. almost eight decades ago that the Court held:

The lengths the private respondent, Francisco Herrera, would ... A litigation is not a game of technicalities in
go to in a last-ditch bid to hold on to his lands and constraints which one, more deeply schooled and skilled in
of economic privation have not been lost on us. It is obvious the subtle art of movement and position,
that he is uneasy about the judgment on compromise itself, as entraps and destroys the other. It is, rather, a
well as the subsequent contract between him and his lawyer. contest in which each contending party fully
In such a case, Article 2038 of the Civil Code applies: and fairly lays before the court the facts in
issue and then, brushing aside as wholly trivial
Art. 2038. A compromise in which there is and indecisive all imperfections of form and
mistake, fraud, violence intimidation, undue technicalities of procedure, asks that justice be
influence, or falsity of documents, is subject to done upon the merits. Lawsuits, unlike duels,
the provisions of article 1330 of this Code ... are not to be won by the a rapier's thrust ...  33

in relation to Article 1330 thereof: It is a ruling that almost eight decades after it was rendered,
holds true as ever.
Art. 1330. A contract where consent is given
through mistake, violence, intimidation, undue By Atty. Canlas' own account, "due to lack of paying capacity
influence, or fraud is voidable. of respondent Herrera, no financing entity was willing to extend
him any loan with which to pay the redemption price of his
in relation to its provisions on avoidance of'contracts.   The30 mortgaged properties and petitioner's P100,000.00 attorney's
court notes that he had, for this purpose, gone to the Regional fees awarded in the Compromise Judgment,"   a development
34

Trial Court, a vain effort as we stated, and in which the that should have tempered his demand for his fees. For
decision had become final. obvious reasons, he placed his interests over and above those
of his client, in opposition to his oath to "conduct himself as a
lawyer ... with all good fidelity ... to [his] clients."   The Court
35

We, however, sustain Atty. Canlas' position-on matters of

finds the occasion fit to stress that lawyering is not a
procedure — for the enlightenment solely of the bench and the
moneymaking venture and lawyers are not merchants, a
bar. It does not mean that we find merit in his petition. As we
fundamental standard that has, as a matter of judicial notice,
have intimated, we cannot overlook the unseemlier side of the
eluded not a few law advocates. The petitioner's efforts
proceeding, in which a member of the bar would exploit his
partaking of a shakedown" of his own client are not becoming
mastery of procedural law to score a "technical knockout" over
of a lawyer and certainly, do not speak well of his fealty to his
his own client, of all people. Procedural rules, after all, have for
oath to "delay no man for money."  36

their object assistance unto parties "in obtaining just, speedy,

and inexpensive determination of every action and
proceeding."  If procedure were to be an impediment to such
31 It is true that lawyers are entitled to make a living, in spite of
an objective, "it deserts its proper office as an aid to justice the fact that the practice of law is not a commercial enterprise;
but that does not furnish an excuse for plain lust for material
wealth, more so at the expense of another. Law advocacy, we petitioner to warrant his demands. The fact that the properties
reiterate, is not capital that yields profits. The returns it births subject thereof commanded quite handsome prices in the
are simple rewards for a job done or service rendered. It is a market should not be a measure of the importance or non-
calling that, unlike mercantile pursuits which enjoy a greater importance of the case. We are not likewise persuaded that
deal of freedom from government interference, is impressed the petitioner's stature warrants the sum claimed.
with a public interest, for which it is subject to State
regulation.   Anent attomey's fees, section 24, of Rule 138, of
37
All things considered, we reduce the petitioner's fees, on
the Rules, provides in part as follows: a quantum meruit basis, to P20,000.00.

SEC. 24. Compensation of attorneys, It is futile to invoke the rule granting attorneys a lien upon the
agreement as to fees. — An attorney shall be things won in litigation similar to that vested upon
entitled to have and recover from his client no redemptioners.   To begin with, the rule refers to realty sold as
38

more than a reasonable compensation for his a result of execution in satisfaction of judgment. In this case,
services, with a view to the importance of the however, redemption was decreed by agreement (on
subject matter of the controversy, the extent of compromise) between the mortgagor and mortgagee. It did not
the services rendered, and the professional give the petitioner any right to the properties themselves, much
standing of the attorney... A written contract for less the right of redemption, although provisions for his
services shall control the amount to be paid compensation were purportedly provided. It did not make him a
therefor unless found by the court to be redemptioner for the plain reason that he was not named one
unconscionable or unreasonable. in the amicable settlement. To this extent, we reverse Judge
Pedro Santiago's ruling in Civil Case No. 40066, recognizing
So also it is decreed by Article 2208 of the Civil Code, Atty. Canlas' "legal right, independent of the questioned deed
reproduced in part, as follows: of sale and transfer which was executed subsequently on May
3, 1983, to redeem the subject realty from the L & R
Art. 2208 ... Corporation pursuant to Sec. 29 (b), Rule 39 of the Rules of
Court."   Whatever right he had, it was, arguably with respect
39

In all cases, the attorney's fees and expenses alone to his renumeration. It did not extend to the lands.
of litigation must be reasonable.
Secondly, and assuming that such a right exists, it must be in
We do not find the petitioner's claim of attorney's fees in the proportion to the "just fees and disbursements"   due him. It is
40

sum of P100,000.00 reasonable. We do not believe that it still subject to the tempering hand of this Court.
satisfies the standards set forth by the Rules. The extent of the
services he had rendered in Civil Case No. 30679, and as far The Court notes a hidden agenda in the petitioner's haste to
as the records will yield, is not impressive to justify payment of execute the compromise agreement and subsequently, to
such a gargantuan amount. The case itself moreover did not force the transfer of the properties to himself. As we have
involve complex questions of fact or law that would have observed, in spite of the issuance of the writ of execution, it
required substantial effort as to research or leg work for the does not appear that the petitioner took pains to implement it.
We find this perplexing given his passionate and persistent
pleas that he was entitled to the proceeds. There can indeed in the Compromise Agreement,"   and if his sole concern was
43

be no plausible explanation other than to enable him to keep his fees, there was no point in keeping the properties in their
an "ace" against the private respondent that led finally, to the entirety.
conveyance of the properties in his favor. To be sure, he would
have us beheve that by redeeming the same from the The Court simply cannot fag for the petitioner's pretensions
mortgagee and by in fact parting with his own money he had that he acquired the properties as a gesture of magnanimity
actually done the private respondent a favor, but this is to and altruism He denies, of course, having made money from it,
assume that he did not get anything out of the transaction. but what he cannot dispute is the fact that he did resell the
Indeed, he himself admits that "[t]itles to the properties have properties.  44

been issued to the new owners long before the filing of private
respondents [sic] petition for annulment."   To say that he did
41
But if he did not entertain intents of making any profit, why was
not profit therefrom is to take either this Court or the petitioner it necessary to reword the conveyance document executed by
for naive, a proposition this Court is not prepared to accept the private respondent? It shall be recalled that the deed, as
under the circumstances. originally drafted, provided for conveyance of the private
respondent's "rights of equity of redemption and/or
We are likewise convinced that it was the petitioner who redeem"   the properties in his favor, whereas the instrument
45

succeeded in having the private respondent sign the "Deed of registered with the Register of Deeds purported to transfer
Sale and Transfer of Rights of Equity of Redemption and/or to "any and all my rights of the real properties and/or to
Redeem," a pre-prepared document apparently, that allowed redeem,"   in his favor. He admits having entered the
46

him (the petitioner) to exercise the right of redemption over the intercalations in question but argues that he did so "to facilitate
properties and to all intents and purposes, acquire ownership the registration of the questioned deed with the Register of
thereof. As we have earlier averred, the private respondent, by Deeds"   and that it did not change the meaning of the paper,
47

reason of bankruptcy, had become an easy quarry to his for which Judge Santiago acquitted him of any falsification
counsel's moral influence and ascendancy. We are hard put to charges.   To start with, the Court is at a loss how such an
48

believe that it was the private respondent who "earnestly alteration could "facilitate" registration. Moreover, if it did not
implored"   him to undertake the redemption amid the former's
42
change the tenor of the deed, why was it necessary then? And
obstinate attempts to keep his lands that have indeed led to why did he not inform his client? At any rate, the agreement is
the multiple suits the petitioner now complains of, apart from clearly a contract of adhesion. Its provisions should be read
the fact that the latter himself had something to gain from the against the party who prepared it.
transaction, as alluded to above. We are of the opinion that in
ceding his right of redemption, the private respondent had But while we cannot hold the petitioner liable for falsification —
intended merely to forestall the total loss of the parcels to the this is not the proper occasion for it — we condemn him
mortgagee upon the understanding that his counsel shall nonetheless for infidelity to his oath "to do no falsehood" 49

acquire the same and keep them therefore within reach,

subject to redemption by his client under easier terms and
This brings us to the final question: Whether or not the
conditions. Surely, the petitioner himself would maintain that
conveyance in favor of the petitioner is subject to the ban on
he agreed to make the redemption"in order that [he] may
acquisition by attorneys of things in litigation. The pertinent
already be paid the P100,000.00 attorney's fees awarded him
provisions of the Civil Code state as follows:
Art. 1491. The following persons cannot which they may take part by virtue of their
acquire by purchase, even at a public or profession.
judicial action, either in person or through the
mediation of another: (6) Any others specially disqualified by law.**

(1) The guardian, the property of the person or In Rubias v. Batiller,   we declared such contracts to be void
50

persons who may be under his guardianship; by force of Article 1409, paragraph (7), of the Civil Code,
defining inexistent contracts. In Director of Lands v.
(2) Agents, the property whose administration Ababa   however, we said that the prohibition does not apply
51

or sale may have been intrusted to them, to contingent contracts, in which the conveyance takes place
unless the consent of the principal have been after judgment, so that the property can no longer be said to be
given; "subject of litigation."

(3) Executors and administrators, the property In the instant case, the Court observes that the "Deed of Sale
of the estate under administration; and Transfer of Rights of Equity of Redemption and/or to
Redeem" was executed following the finality of the decision
(4) Public officers and employees, the property approving the compromise agreement. It is actually a new
of the State or of any subdivision thereof, or of contract — not one in pursuance of what had been agreed
any government owned or controlled upon on compromise — in which, as we said, the petitioner
corporation, or institution, the administration of purportedly assumed redemption rights over the disputed
which has been instrusted to them; this properties (but in reality, acquired absolute ownership thereof).
provision shall apply to judges and government By virtue of such a subsequent agreement, the lands had
experts who, in any manner whatsoever, take ceased to be properties which are "the object of any litigation."
part in the sale; Parenthetically, the Court states that a writ of possession is
improper to eject another from possession unless sought in
(5) Justice judges prosecuting attorneys clerks connection with: (1) a land registration proceeding; (2) an
of superior and inferior courts, and other extrajudicial foreclosure of mortgage of real property; (3) in a
officers and employees connected with the judicial foreclosure of property provided that the mortgagor has
administration of justice, the property and possession and no third party has intervened; and (4) in
rights in litigation or levied upon an execution execution sales.   It is noteworthy that in this case, the
52

before the court within whose jurisdiction or petitioner moved for the issuance of the writ pursuant to the
territory they exercise their respective deed of sale between him and the private respondent and not
functions; this prohibition includes the act of the judgment on compromise. (He was, as we said, issued a
acquiring by assignment and shall apply to writ of execution on the compromise agreement but as we
lawyers, with respect to the property and rights likewise observed, he did not have the same enforced. The
which may be the object of any litigation in sale agreement between the parties, it should be noted,
superseded the compromise.) The writ does not lie in such a
case. His remedy is specific performance.
At any rate, the transfer, so we hold, is not subject to the write finis to the controversy that has taxed considerably the
injunction of Article 1491 of the Civil Code. But like all voidable dockets of the inferior courts.
contracts, it is open to annulment on the ground of mistake,
fraud, or undue influence,   which is in turn subject to the right
53
Let the Court further say that while its business is to settle
of innocent purchasers for value.  54
actual controversies and as a matter of general policy, to leave
alone moot ones, its mission is, first and foremost, to dispense
For this reason, we invalidate the transfer in question justice. At the outset, we have made clear that from a technical
specifically for undue influence as earlier detailed. While the vantage point, certiorari, arguably lies, but as we have likewise
respondent Herrera has not specifically prayed for invalidation, stated, the resolution of the case rests not only on the mandate
this is the clear tenor of his petition for annulment in the of technical rules, but if the decision is to have any real
Appellate Court. It appearing, however, that the properties meaning, on the merits too. This is not the first time we would
have been conveyed to third persons whom we presume to be have done so; in many cases we have eschewed the rigidity of
innocent purchasers for value, the petitioner, Atty. Paterno the Rules of Court if it would establish a barrier upon the
Canlas, must be held liable, by way of actual damages, for administration ofjustice. It is especially so in the case at bar, in
such a loss of properties. which no end to suit and counter-suit appears imminent and for
which it is high time that we have the final say. We likewise
We are not, however, condoning the private respondent's own cannot, as the overseer of good conduct in both the bench and
shortcomings. In condemning Atty. Canlas monetarily, we the bar, let go unpunished what convinces us as serious
cannot overlook the fact that the private respondent has not indiscretions on the part of a lawyer.
settled his hability for payment of the properties. To hold Atty.
Canlas alone liable for damages is to enrich said respondent at WHEREFORE, judgment is hereby rendered.
the expense of his lawyer. The parties must then set off their
obligations against the other. To obviate debate as the actual 1. ORDERING the petitioner, Atty. Patemo Canlas, to pay to
amounts owing by one to the other, we hold Francisco Herrera, the private respondent, Francisco Herrera, the sum of
the private respondent, liable to Atty. Paterno Canlas, the P326,000.00, as and for damages;
petitioner, in the sum of P654,000.00 representing the
redemption price of the properties,   in addition to the sum of
55
2. ORDERING the petitioner to SHOW CAUSE why no
P20,000. 00 as and for attomey's fees. We order Atty. Canlas, disciplinary action may be imposed on him for violation of his
in turn, to pay the respondent Herrera the amount of oath, as a lawyer, within ten (10) days from notice, after which
P1,000,000.00, the sum he earned from the resale the same will be consolidated with AC No. 2625;
thereof,   such that he shall, after proper adjustments, be
56

indebted to his client in the sum of P326,000.00 as and for

3. DISMISSING this petition and REMANDING the case to the
damages.
respondent Court of Appeals for execution; and
Needless to say, we sustain the action of the respondent Court
4. ORDERING the petitioner to pay costs.
of Appeals in taking cognizance of the petition below. But as
we have stated, we are compelled, as the final arbiter of
justiciable cases and in the highest interests ofjustice, to SO ORDERED.