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EN BANC

A.C. No. 927 September 28, 1970

IN THE MATTER OF THE COMPLAINT FOR DISBARMENT OF ATTORNEY POTENCIANO A. PALANCA. WILLIAM C. PFLEIDER, Complainant, vs. POTENCIANO A. PALANCA, Respondent.

R E S O L U T I O N

CASTRO, J.:

The respondent Atty. Potenciano A. Palanca was for sometime the legal counsel of the complainant William C. Pfleider. According to the complainant, he retained the legal services of Palanca from January 1966, whereas the latter insists that the attorney-client relationship between them began as early as in 1960.chanroblesvirtualawlibrarychanrobles virtual law library

At all events, the relations between the two must have attained such a high level of mutual trust that on October 10, 1969, Pfleider and his wife leased to Palanca a 1,328 hectare agricultural land in Hinobaan, Negros Occidental, known as the Hacienda Asia, for a period of ten years. In their contract, the parties agreed, among others, that a specified portion of the lease rentals would be paid to Pfleider, and the remainder would be delivered by Palanca to Pfleider's listed creditors.chanroblesvirtualawlibrarychanrobles virtual law library

The arrangement worked smoothly until October 14, 1969 when the rupture came with the filing by Pfleider of a civil suit (civil case 9187 of the CFI of Negros Occidental) against Palanca for rescission of the contract of lease on the ground of alleged default in the payment of rentals. In his answer to the complaint, Palanca averred full satisfaction of his rental liabilities, and therefore contended that the lease should continue. He also charged that he had already been dispossessed of the hacienda by Pfleider and the latter's goons at gunpoint and consequently had suffered tremendous financial losses.chanroblesvirtualawlibrarychanrobles virtual law library

With this history in, perspective, we shall now consider the administrative charges of gross misconduct in office brought by Pfleider against Palanca. The indictment consists of four counts.

First count. In regard to a criminal case for estafa filed in December 1965 by one Gregorio Uy Matiao against Pfleider, the latter instructed Palanca to offer in settlement the sum of P10,000, payable in installments, to Uy Matiao for the dismissal of the case. After sometime, Palanca reported to Pfleider that the offer has been rejected. Finally in October 1969, Palanca supposedly informed Pfleider that he had succeeded in negotiating the dismissal of the estafa case by leaving the sum of P5,000 with the Dumaguete City Court where the action was then pending. Sometime in December 1969, however, Pfleider was the object of a warrant of arrest in connection with the same estafa case. It turned out, charged the complainant Pfleider, that Palanca had not deposited the sum of P5,000 with the Dumaguete City Court, let alone communicated to Uy Matiao his earlier offer of settlement.chanroblesvirtualawlibrarychanrobles virtual law library

We have closely examined all the pleadings filed by the parties in this case and the annexes thereto, and it is our view that the first charge is devoid of merit. In support of his claim of alleged assurance made by Palanca that the estafa case had already been terminated, Pfleinder relies on certain letters written to him by Palanca. Our own reading of these letters, however, belies his claim. They contain nothing which might reasonably induce the complainant to believe that the criminal action against him had been finally settled by his attorney. On the contrary, the letters merely report a continuing attempt on the part of Palanca to secure a fair bargain for Pfleider. The letter-report of October 10, 1969, invoke by the complainant, states in no uncertain terms that "I am bargaining this (referring to the estafa case) even for P8,000.00 and I think they will agree. I'll finalize this and pay Tingyan on Tuesday. I have already left in Dumaguete P5,000.00 to show them the color of our money and I will bring the balance when I go there Tuesday."chanrobles virtual law library

Nothing in the above letter indicates that Palanca had deposited the sum of P5,000 with the Dumaguete City Court. What he did state is that he had left that sum in that City to enable their adversaries to see "the color of our money." In this connection, the veracity of the certification by Felicisimo T. Hilay, Dumaguete branch manager of RCPI, that he (Hilay) had been holding the sum of P5,000 during the early part of October in trust for Pfleider and his lawyer, has not been assailed by Pfleider.chanroblesvirtualawlibrarychanrobles virtual law library

If Pfleider was the object of a warrant of arrest in December 1969, no substantial blame can be laid at the door of the respondent Palanca inasmuch as the latter's services were implicitly terminated by Pfleider when the latter sued his lawyer in October of the same year. While the object of the suit is the rescission of the contract of lease between the parties, the conflict of interest which pits one against the other became incompatible with that mutual confidence and trust essential to every lawyer-client relation. Moreover, Pfleider fails to dispute Palanca's claim that on October 26, 1968, Pfleider refused to acknowledge receipt of a certain letter and several motions for withdrawal, including Palanca's withdrawal as counsel in the estafa case.

Second count. Palanca had fraudulently charged the sum of P5,000 (which he supposedly had left with the City Court in Dumaguete) to his rental account with Pfleider as part payment of the lease rentals of the Hacienda Asia. Third count. In the same statement of account, Palanca falsely represented having paid, for the account of Pfleider, one Samuel Guintos the sum of P866.50 when the latter would swear that he had received only the sum of P86.50.chanroblesvirtualawlibrarychanrobles virtual law library

These two charges are anchored upon the same "Statement of Disbursements" submitted by Palanca to Pfleider. It is our view that this statement is but a memorandum or report of the expenses which Palanca considered as chargeable to the account of Pfleider. By its very tentative nature, it is subject to the examination and subsequent approval or disapproval of Pfleider, and any and every error which it contains may be brought to the attention of Palanca for rectification or adjustment. Viewed in relation to the contract of lease between Pfleinder and Palanca, this "statement" is but one aspect of the prestation required of Palanca by the contract. Whatever breach he might have committed in regard to this prestation would be but a civil or contractual wrong which does not affect his office as a member of the Bar.

Final count. It is charged that the list of creditors which Pfleider had "confidentially" supplied Palanca for the purpose of carrying out the terms of payment contained in the lease contract was disclosed by Palanca, in violation of their lawyer-client relation, to parties whose interests are adverse to those of Pfleider.chanroblesvirtualawlibrarychanrobles virtual law library

As Pfleider himself, however, in the execution of the terms of the aforesaid lease contract between the parties, complainant furnished respondent with a confidential list of his creditors." This should indicate that Pfleider delivered the list of his creditors to Palanca not because of the professional relation then existing between them, but on account of the lease agreement. A violation therefore of the confidence that accompanied the delivery of that list would partake more of a private and civil wrong than of a breach of the fidelity owing from a lawyer to his client. Moreover, Pfleider fails to controvert Palanca's claim that there is no such thing as a "confidential" list of creditors and that the list of creditors referred to by Pfleider is the same list which forms part of the pleadings in civil case 9187 (the action for rescission of the lease contract) now, pending between the complainant and the respondent lawyer, and therefore is embraced within the category of public records open to the perusal of persons properly interested therein.chanroblesvirtualawlibrarychanrobles virtual law library

In sum, we are satisfied, and we so hold, that nothing in written complaint for disbarment against Palanca and in his reply to Palanca's answer supports a prima facie finding of such misconduct in office by Palanca as would warrant further proceedings in this case.chanroblesvirtualawlibrarychanrobles virtual law library

ACCORDINGLY, the complaint is hereby dismissed.