Genato vs. Silapan

A lawyer owes fidelity to the cause of his client and must preserve confidences and secrets; however, the attorney-client privilege does not attach to communications made in contemplation of a crime or fraud. Nevertheless, even if a communication falls under the crime-fraud exception, a lawyer may not disclose irrelevant and immaterial information in pleadings when such disclosures are not indispensable to the protection of the lawyer's rights in the specific case, as this constitutes a breach of the duty of fidelity under Canon 17 of the Code of Professional Responsibility.

The complainant and respondent entered into a lawyer-client relationship when the respondent rented office space in the complainant's building and was retained to handle the complainant's legal cases. The relationship soured due to financial disputes involving a loan, a postdated check, and a mortgaged property, leading to the filing of civil and criminal cases between them.

• In July 1992, respondent Atty. Essex L. Silapan rented office space in complainant William Ong Genato's building in Quezon City for his law practice.
• Complainant introduced respondent to Atty. Benjamin Dacanay, complainant's retained lawyer, who accommodated respondent in the building and assigned him to handle some of complainant's cases.
• Respondent borrowed P200,000.00 from complainant as downpayment for a new car, issuing a postdated check for P176,528.00 to cover six months' interest and mortgaging his house and lot in Quezon City without surrendering the title, claiming it was subject to reconstitution proceedings.
• The car's document of sale was issued in complainant's name and financed through City Trust Company.
• In January 1993, respondent introduced Emmanuel Romero to complainant; Romero borrowed money from complainant, and respondent earned a commission of P52,289.90, which complainant used to pay respondent's car financing arrears.
• Respondent failed to pay the car amortization, and the financing firm sent demand letters to complainant.
• Complainant attempted to encash respondent's postdated check, but it was dishonored because respondent's account had been closed.
• Complainant filed a criminal case for violation of Batas Pambansa Blg. 22 and a civil case for judicial foreclosure of real estate mortgage against respondent.
• In his Answer in the foreclosure case, respondent alleged that complainant was engaged in "shark loans and other shady deals" and had many pending court cases.
• Respondent further alleged that complainant wanted him to offer bribe money to members of the Department of Justice review committee, the prosecutor, and the presiding judge in complainant's pending criminal case, which respondent refused to do because such acts were immoral and illegal.
• Complainant claimed these allegations were false, immaterial, malicious, and constituted a breach of the confidential lawyer-client relationship.

• The allegations in the Answer were libelous and not privileged because they were irrelevant to the foreclosure case.
• The respondent violated the confidential lawyer-client relationship by disclosing communications regarding the alleged intention to bribe government officials.
• The respondent should be administratively sanctioned for issuing a bouncing check in violation of Batas Pambansa Blg. 22.

• The imputations of dishonest business practices and the revelation of complainant's desire to bribe officials were made in the course of judicial proceedings to defend his case and discredit complainant's credibility by establishing his criminal propensity, and thus were not libelous.
• There was no breach of the confidential relationship because the disclosure was made in defense of his honor and reputation.
• The real estate mortgage was executed without consideration and only as a "formal requirement" to obtain the loan.
• The postdated check was issued not for value but as an acknowledgment of advance attorney's fees and as assurance that he would not abandon complainant's cases.
• The P52,289.90 received from Romero was attorney's fees, not commission, as Romero was his client.

• Procedural Issues:
  • N/A
• Substantive Issues:
  • Whether respondent violated Canon 17 of the Code of Professional Responsibility by disclosing complainant's alleged intention to bribe government officials and imputing illegal practices to him in the foreclosure case.
  • Whether the attorney-client privilege applies to communications made in contemplation of a crime.
  • Whether respondent should be sanctioned for issuing a bouncing check.

• Procedural:
  • N/A
• Substantive:
  • The attorney-client privilege does not extend to communications made in contemplation of a crime or perpetration of a fraud; if the unlawful purpose is avowed, as in this case where the complainant allegedly intended to bribe officials, the communication is not privileged because the client does not consult the lawyer professionally, and a lawyer is not a "gun for hire."
  • However, the respondent's disclosures were not indispensable to protect his rights in the foreclosure case because they were not pertinent to the subject matter of the litigation; it was improper to use these allegations against the complainant when the respondent's professional competence and legal advice were not being attacked.
  • The Court will not delve into the merits of the bouncing check allegation as the criminal case therefor is pending in the trial court.
  • Respondent committed a breach of fidelity to his client warranting disciplinary sanction, but the penalty is reduced from one year to six months suspension considering this is his first administrative offense.

• Attorney-Client Privilege — Communications between a lawyer and client made in the course of professional employment are confidential and privileged against disclosure unless the client consents; this protection is perpetual, survives the termination of litigation, and even survives the death of the client. In this case, the Court acknowledged the general rule but held that the privilege does not attach to the specific communication about bribery because it fell under the crime-fraud exception.
• Crime-Fraud Exception — The attorney-client privilege does not attach to communications made in contemplation of a crime or perpetration of a fraud because it is not within the profession of a lawyer to advise a client as to how he may commit a crime. The Court applied this exception to the complainant's alleged request to bribe government officials, holding that such communication was not privileged.
• Canon 17, Code of Professional Responsibility — A lawyer owes fidelity to the cause of his client and shall be mindful of the trust and confidence reposed in him; the relationship must be characterized by the highest degree of good faith, fairness, and integrity beyond reproach. The Court found that even if the bribery communication was not privileged, the respondent's disclosure of irrelevant and immaterial allegations in the foreclosure case constituted a breach of this duty.

• "Canon 17 of the Code of Professional Responsibility provides that a lawyer owes fidelity to the cause of his client and shall be mindful of the trust and confidence reposed on him."
• "The long-established rule is that an attorney is not permitted to disclose communications made to him in his professional character by a client, unless the latter consents."
• "The protection given to the client is perpetual and does not cease with the termination of the litigation, nor is it affected by the party's ceasing to employ the attorney and retaining another, or by any other change of relation between them. It even survives the death of the client."
• "It must be stressed, however, that the privilege against disclosure of confidential communications or information is limited only to communications which are legitimately and properly within the scope of a lawful employment of a lawyer. It does not extend to those made in contemplation of a crime or perpetration of a fraud."
• "A lawyer must conduct himself, especially in his dealings with his clients, with integrity in a manner that is beyond reproach. His relationship with his clients should be characterized by the highest degree of good faith and fairness."

• Hoyas v. State, (Fla App D3) 456 So 2d 1225, 9 FLW 1993 — Cited for the principle that the obligation to preserve client confidences arises at the inception of the attorney-client relationship.
• Schwimmer v. United States, (CA8 Mo) 232 F2d 855, 353 US 833, 1 L Ed 2d 52, 77 S Ct 48 — Cited for the principle that the protection given to the client is perpetual and survives the death of the client.
• People v. Van Alshine, 23 NW 594 (1885) — Cited for the crime-fraud exception to the attorney-client privilege.
• Regala v. Sandiganbayan, 262 SCRA 122 (1996) — Cited for the crime-fraud exception to the attorney-client privilege.

• Canon 17, Code of Professional Responsibility — Mandates that a lawyer owe fidelity to the cause of his client and be mindful of the trust and confidence reposed in him; serves as the basis for finding the respondent administratively liable.
• Batas Pambansa Blg. 22 — Mentioned as the basis for the criminal case filed by complainant against respondent for the dishonored check; the Court declined to rule on this issue as it was pending in another court.