Chu vs. Guico

A lawyer who demands and receives money from a client under the false pretense of bribing a public official to secure a favorable ruling, while actually appropriating the funds for personal use, commits gross misconduct warranting disbarment for violation of the Lawyer's Oath and Rules 1.01 and 1.02, Canon I of the Code of Professional Responsibility.

Fernando W. Chu is the owner of CVC San Lorenzo Ruiz Corporation (CVC), a company that faced labor disputes including a complaint for illegal dismissal filed by its employees. Atty. Jose C. Guico, Jr. was retained as counsel to handle these labor disputes, including an appeal before the NLRC of an adverse Labor Arbiter decision. The administrative complaint arose from Atty. Guico's alleged solicitation of money from Chu purportedly to influence the NLRC Commissioner handling CVC's appeal.

Fernando W. Chu retained Atty. Jose C. Guico, Jr. as counsel to handle labor disputes involving his company, CVC San Lorenzo Ruiz Corporation (CVC), including a complaint for illegal dismissal filed against CVC by its employees. On September 7, 2006, Labor Arbiter Herminio V. Suelo rendered a decision adverse to CVC, prompting Atty. Guico to file a timely appeal on behalf of the company before the NLRC.

According to Chu, during a Christmas party at Atty. Guico's residence on December 5, 2006, Atty. Guico asked him to prepare a substantial amount of money to be given to the NLRC Commissioner handling the appeal to ensure a favorable decision. On June 10, 2007, Chu informed Atty. Guico that he had raised ₱300,000.00 for the purpose. Atty. Guico directed him to deliver the money to his assistant, Reynaldo (Nardo) Manahan, at his office on Times Street, Quezon City. Chu complied and later confirmed with Atty. Guico that the money had been delivered to Nardo. Subsequently, Atty. Guico instructed Chu to meet him on July 5, 2007 at the UCC Coffee Shop on T. Morato Street, Quezon City, where Atty. Guico handed Chu a copy of an alleged draft NLRC decision favorable to CVC. The draft was printed on the dorsal portion of used paper apparently emanating from Atty. Guico's office. On that occasion, Atty. Guico told Chu to raise another ₱300,000.00 to encourage the NLRC Commissioner to issue the decision. Chu could only produce ₱280,000.00, which he brought to Atty. Guico's office on July 10, 2007 accompanied by his son, Christopher Chu, and one Bonifacio Elipane. Nardo received the amount without issuing any receipt.

Chu followed up on the status of the CVC case with Atty. Guico in December 2007, but was referred to Nardo, who said he would only know the status after Christmas. On January 11, 2008, Chu called Nardo, who invited him to lunch at the Ihaw Balot Plaza in Quezon City. When Chu asked if the NLRC Commissioner had accepted the money, Nardo replied in the negative and told Chu to wait, assuring him that the money was still with Atty. Guico, who would return it should the Commissioner decline to accept it. On January 19, 2009, the NLRC promulgated a decision adverse to CVC. Chu confronted Atty. Guico, who referred him to Nardo for the filing of a motion for reconsideration. After the motion was denied, Atty. Guico filed an appeal with the Court of Appeals. Chu terminated Atty. Guico's services on May 25, 2009.

In his position paper, Atty. Guico denied demanding or receiving any money from Chu, a denial corroborated by Nardo's affidavit. He described the complaint as replete with lies and inconsistencies and intended only for harassment. He further denied handing Chu a draft decision printed on used paper from his office, surmising that the used paper must have been among those freely lying around his office and pilfered by Chu's witnesses in a criminal case he had handled for Chu.

• Demand for Bribery Money: Complainant Chu alleged that Atty. Guico demanded and received a total of ₱580,000.00 from him, purportedly to be given to the NLRC Commissioner handling CVC's appeal to ensure a favorable decision.
• Fabrication of Draft Decision: Chu contended that Atty. Guico presented him with a supposed draft NLRC decision favorable to CVC, printed on used paper emanating from Atty. Guico's own office, to induce him to raise additional money.
• Misappropriation: Chu asserted that despite the NLRC ruling adversely to CVC, Atty. Guico never returned the money, which Nardo claimed was still with Atty. Guico.

• Denial of Charges: Atty. Guico denied demanding or receiving any money from Chu, characterizing the complaint as replete with lies and inconsistencies and intended only for harassment. Nardo corroborated this denial with his own affidavit.
• Draft Decision Source: Atty. Guico denied handing Chu a draft decision printed on used paper from his office, surmising that the used paper could have been pilfered by Chu's witnesses from documents freely lying around in his office, which he claimed was open to the public.

• Gross Misconduct: Whether Atty. Guico violated the Lawyer's Oath and Rules 1.01 and 1.02, Canon I of the Code of Professional Responsibility for demanding and receiving ₱580,000.00 from Chu to guarantee a favorable decision from the NLRC.
• Proper Penalty: Whether the IBP Board of Governors' recommended penalty of three (3) years suspension was sufficient, or whether disbarment was the condign penalty for Atty. Guico's acts.
• Restitution: Whether Atty. Guico should be ordered to return the ₱580,000.00 to Chu.

• Gross Misconduct: Yes. Atty. Guico violated the Lawyer's Oath and Rules 1.01 and 1.02, Canon I of the Code of Professional Responsibility by demanding and receiving ₱580,000.00 from Chu under the pretense of bribing the NLRC Commissioner, while actually appropriating the money for himself.
• Proper Penalty: Disbarment was the condign penalty. The IBP's recommended three-year suspension was too soft given the gravity of the misconduct; Atty. Guico exhibited unworthiness to retain membership in the legal profession.
• Restitution: Yes. Atty. Guico was ordered to return ₱580,000.00 to Chu with legal interest, as the amount was exacted under the guise of serving the client's interest, and it would be unjust not to require full accounting and restitution.

• Gross Misconduct: In disbarment proceedings, the burden of proof rests on the complainant to establish the respondent attorney's liability by clear, convincing, and satisfactory evidence, specifically clearly preponderant evidence. Chu submitted the affidavits of his witnesses and presented the draft decision that Atty. Guico had represented as coming from the NLRC. The draft was printed on the dorsal portion of used paper emanating from Atty. Guico's office. Atty. Guico impliedly admitted that the used paper originated from his office by claiming only that it was "scattered around his office" and accessible to the public, rather than expressly denying Chu's forthright statement. This implied admission, combined with Chu's credible testimony and the surrounding circumstances, sufficed to confirm that Atty. Guico committed the imputed gross misconduct. Atty. Guico's general denial did not overcome the affirmative testimony of Chu. The production of the draft decision was intended to motivate Chu to raise money to ensure a favorable result, thereby discharging Chu's burden of proof under the substantial evidence standard of Section 5, Rule 133 of the Rules of Court. Atty. Guico violated the law against bribery and corruption by counseling Chu to raise large sums to obtain a favorable decision, and compounded this by appropriating the money for his own personal interest, constituting gross dishonesty and deceit and a flagrant breach of his ethical commitments.

• Proper Penalty: The sworn obligation to respect the law and legal processes under the Lawyer's Oath and the Code of Professional Responsibility is a continuing condition for every lawyer to retain membership in the legal profession. Atty. Guico willingly and wittingly violated the law, committed grave misconduct, and disgraced the legal profession. Grave misconduct is improper or wrong conduct, willful in character, implying wrongful intent and not mere error of judgment. Any gross misconduct by an attorney renders him unfit to manage the affairs of others and is a ground for suspension or disbarment, because good moral character is an essential qualification for admission to and continuance in the practice of law. The IBP's recommended three-year suspension was too soft; disbarment was warranted because Atty. Guico exhibited unworthiness to remain a member of the legal profession. Any resort to falsehood or deception, including adopting artifices to cover up misdeeds committed against clients, evinces unworthiness to continue enjoying the privilege to practice law.

• Restitution: The recommendation that Atty. Guico return ₱580,000.00 to Chu was well-taken. Although the purpose for the amount was unlawful, it would be unjust not to require Atty. Guico to fully account for and return the money to Chu. As held in Bayonla vs. Reyes, no victim of gross ethical misconduct concerning the client's funds or property should be required to litigate in another proceeding what the administrative proceeding has already established as the respondent's liability.

• Burden of Proof in Disbarment Proceedings — The burden of proof rests on the complainant to establish the respondent attorney's liability by clear, convincing, and satisfactory evidence. The Court has consistently required clearly preponderant evidence to justify the imposition of either disbarment or suspension. In this case, Chu discharged his burden through his credible testimony, corroborating witness affidavits, and the draft decision printed on used paper from Atty. Guico's office, which constituted substantial evidence sufficient to justify a conclusion.

• Substantial Evidence Standard in Administrative Cases — A fact may be deemed established in an administrative case if it is supported by substantial evidence, defined as that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion, pursuant to Section 5, Rule 133 of the Rules of Court.

• Grave Misconduct — Grave misconduct is "improper or wrong conduct, the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies a wrongful intent and not mere error of judgment." Any gross misconduct by an attorney in his professional or private capacity renders him unfit to manage the affairs of others and is a ground for suspension or disbarment, because good moral character is an essential qualification for admission to and continuance in the practice of law.

• Continuing Obligation Under the Lawyer's Oath — The sworn obligation to respect the law and legal processes under the Lawyer's Oath and the Code of Professional Responsibility is a continuing condition for every lawyer to retain membership in the legal profession. A lawyer must not render any service or give advice that would involve defiance of the very laws he is bound to uphold, and must act in a manner that promotes public confidence in the integrity of the legal profession. Violation of this obligation forfeits the privilege to continue as a member of the legal profession.

• Restitution in Disbarment Proceedings — Although disbarment proceedings are primarily administrative in character, the Court may order the respondent lawyer to restitute funds or property wrongfully obtained from the complainant, as requiring the victim to litigate separately what the administrative proceeding has already established would be unfair and inequitable.

• "Atty. Guico willingly and wittingly violated the law in appearing to counsel Chu to raise the large sums of money in order to obtain a favorable decision in the labor case. He thus violated the law against bribery and corruption. He compounded his violation by actually using said illegality as his means of obtaining a huge sum from the client that he soon appropriated for his own personal interest." — This passage articulates the ratio decidendi identifying the specific acts constituting gross misconduct: counseling bribery, then exploiting that illegality to extract and misappropriate client funds.

• "Any resort to falsehood or deception, including adopting artifices to cover up one's misdeeds committed against clients and the rest of the trusting public, evinces an unworthiness to continue enjoying the privilege to practice law and highlights the unfitness to remain a member of the Law Profession. It deserves for the guilty lawyer stern disciplinary sanctions." — This passage, quoting Samonte vs. Abellana, states the canonical formulation of the principle that deceit and cover-up against clients warrant severe discipline, supporting the Court's imposition of disbarment.

• "Although the Court renders this decision in an administrative proceeding primarily to exact the ethical responsibility on a member of the Philippine Bar, the Court's silence about the respondent lawyer's legal obligation to restitute the complainant will be both unfair and inequitable. No victim of gross ethical misconduct concerning the client's funds or property should be required to still litigate in another proceeding what the administrative proceeding has already established as the respondent's liability." — This passage, quoting Bayonla vs. Reyes, establishes the doctrine permitting restitution orders within disbarment proceedings.

• Aba vs. De Guzman, A.C. No. 7649, December 14, 2011, 662 SCRA 361; Ceniza vs. Rubia, A.C. No. 6166, October 2, 2009, 602 SCRA 1 — Cited for the proposition that the burden of proof in disbarment proceedings rests on the complainant, who must establish liability by clear, convincing, and satisfactory evidence, and that clearly preponderant evidence is required to justify suspension or disbarment.

• Whitson vs. Atienza, A.C. No. 5535, August 28, 2003, 410 SCRA 10 — Cited for the definition of grave misconduct and the principle that gross misconduct by an attorney renders him unfit to manage the affairs of others and is a ground for suspension or disbarment.

• Ong vs. Grijaldo, A.C. No. 4724, April 30, 2003, 402 SCRA 1 — Cited in support of the imposition of disbarment as the appropriate penalty.

• Samonte vs. Abellana, A.C. No. 3452, June 23, 2014 — Cited for the principle that resort to falsehood or deception against clients evinces unworthiness to practice law and warrants stern disciplinary sanctions.

• Bayonla vs. Reyes, A.C. No. 4808, November 22, 2011, 660 SCRA 490 — Cited for the doctrine that the Court may order restitution in administrative proceedings, as requiring the complainant to litigate separately what has already been established would be unfair and inequitable.

• Donton vs. Tansingco, A.C. No. 6057, June 27, 2006, 493 SCRA 1 — Cited for the principle that a lawyer should not render any service or give advice that would involve defiance of the laws he is bound to uphold.

• Rangwani vs. Diño, A.C. No. 5454, November 23, 2004, 443 SCRA 408; Ducat, Jr. vs. Atty. Villalon, A.C. No. 3910, August 14, 2000, 337 SCRA 622 — Cited for the principle that a lawyer must act and comport himself in a manner that promotes public confidence in the integrity of the legal profession.

• Lawyer's Oath — The oath requires a lawyer to maintain allegiance to the Republic, support the Constitution and obey the laws, do no falsehood nor consent to the doing of any in court, and delay no man for money or malice. Atty. Guico violated these obligations by counseling Chu to raise money for bribery and by appropriating the funds for personal use.

• Canon 1, Code of Professional Responsibility — A lawyer shall uphold the constitution, obey the laws of the land, and promote respect for law and legal processes. Atty. Guico violated this canon by engaging in activities aimed at defiance of the law against bribery and corruption.

• Rule 1.01, Code of Professional Responsibility — A lawyer shall not engage in unlawful, dishonest, immoral, or deceitful conduct. Atty. Guico's demand for money under false pretenses and fabrication of a draft decision constituted unlawful, dishonest, and deceitful conduct.

• Rule 1.02, Code of Professional Responsibility — A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system. Atty. Guico counseled Chu to raise money to bribe an NLRC Commissioner, an activity aimed at defiance of the law.

• Canon 7, Code of Professional Responsibility — Cited for the principle that a lawyer is bound to be law-abiding and to uphold the integrity and dignity of the legal profession.

• Section 5, Rule 133, Rules of Court — Provides that a fact may be deemed established in an administrative case if supported by substantial evidence, that is, relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Applied to uphold the finding that Chu's evidence sufficed to establish Atty. Guico's liability.

Chief Justice Maria Lourdes P.A. Sereno, Associate Justice Antonio T. Carpio, Associate Justice Presbitero J. Velasco, Jr. (on leave), Associate Justice Teresita J. Leonardo-De Castro, Associate Justice Arturo D. Brion (on leave), Associate Justice Diosdado M. Peralta, Associate Justice Lucas P. Bersamin, Associate Justice Mariano C. Del Castillo, Associate Justice Martin S. Villarama, Jr., Associate Justice Jose Portugal Perez, Associate Justice Jose Catral Mendoza, Associate Justice Bienvenido L. Reyes, Associate Justice Estela M. Perlas-Bernabe, Associate Justice Marvic M.V.F. Leonen, and Associate Justice Francis H. Jardeleza. The decision was rendered Per Curiam.