Wednesday, May 5, 2021

The award of attorney’s fees and litigation expenses is proper because of petitioners’ bad faith.

See -

G.R. No. 181359 August 5, 2013

SPOUSES CLEMENCIO C. SABITSANA, JR. and MA. ROSARIO M. SABITSANA, Petitioners, vs. JUANITO F. MUERTEGUI, represented by his Attorney-in-Fact DOMINGO A. MUERTEGUI, JR., Respondent.

"x x x.

The award of attorney’s fees and litigation expenses is proper because of petitioners’ bad faith.

Petitioners’ actual and prior knowledge of the first sale to Juanito makes them purchasers in bad faith. It also appears that petitioner Atty. Sabitsana was remiss in his duties as counsel to the Muertegui family. Instead of advising the Muerteguis to register their purchase as soon as possible to forestall any legal complications that accompany unregistered sales of real property, he did exactly the opposite: taking advantage of the situation and the information he gathered from his inquiries and investigation, he bought the very same lot and immediately caused the registration thereof ahead of his clients, thinking that his purchase and prior registration would prevail. The Court cannot tolerate this mercenary attitude. Instead of protecting his client’s interest, Atty. Sabitsana practically preyed on him.

Petitioner Atty. Sabitsana took advantage of confidential information disclosed to him by his client, using the same to defeat him and beat him to the draw, so to speak. He rushed the sale and registration thereof ahead of his client. He may not be afforded the excuse that he nonetheless proceeded to buy the lot because he believed or assumed that the Muerteguis were simply bluffing when Carmen told him that they had already bought the same; this is too convenient an excuse to be believed. As the Muertegui family lawyer, he had no right to take a position, using information disclosed to him in confidence by his client, that would place him in possible conflict with his duty. He may not, for his own personal interest and benefit, gamble on his client’s word, believing it at one time and disbelieving it the next. He owed the Muerteguis his undivided loyalty. He had the duty to protect the client, at all hazards and costs even to himself.38

Petitioner Atty. Sabitsana is enjoined to "look at any representation situation from the point of view that there are possible conflicts, and further to think in terms of impaired loyalty, that is, to evaluate if his representation in any way will impair his loyalty to a client."39

Moreover, as the Muertegui family’s lawyer, Atty. Sabitsana was under obligation to safeguard his client's property, and not jeopardize it. Such is his duty as an attorney, and pursuant to his general agency.40

Even granting that Atty. Sabitsana has ceased to act as the Muertegui family's lawyer, he still owed them his loyalty.1âwphi1 The termination of attorney-client relation provides no justification for a lawyer to represent an interest adverse to or in conflict with that of the former client on a matter involving confidential information which the lawyer acquired when he was counsel. The client's confidence once reposed should not be divested by mere expiration of professional employment.41 This is underscored by the fact that Atty. Sabitsana obtained information from Carmen which he used to his advantage and to the detriment of his client.

From the foregoing disquisition, it can be seen that petitioners are guilty of bad faith in pursuing the sale of the lot despite being apprised of the prior sale in respondent's favor. Moreover, petitioner Atty. Sabitsana has exhibited a lack of loyalty toward his clients, the Muerteguis, and by his acts, jeopardized their interests instead of protecting them. Over and above the trial court's and the CA's findings, this provides further justification for the award of attorney's fees, litigation expenses and costs in favor of the respondent.

Thus said, judgment must be rendered in favor of respondent to prevent the petitioners' void sale from casting a cloud upon his valid title.

x x x."