Pesto vs. Millo

A lawyer who neglects a legal matter entrusted to him by giving false information and concealing his inefficiency, and who subsequently ignores the disciplinary proceedings against him, violates the duty of competence and diligence under Canon 18, Rule 18.03 of the Code of Professional Responsibility and the Lawyer’s Oath, warranting a substantial suspension from practice. The withdrawal of a disciplinary complaint by the client neither terminates the proceeding nor extinguishes the lawyer’s administrative liability.

In May 1990, Abella Pesto, wife of Johnny Pesto (a Canadian national), engaged the services of Atty. Marcelito M. Millo to handle two legal matters: (1) transfer of title over a parcel of land to her name, and (2) the adoption of her niece, Arvi Jane Dizon. The Pestos paid Atty. Millo P14,000.00 for the transfer and P10,000.00 for the adoption. Over the next five years, Atty. Millo repeatedly gave false information and excuses, including a false claim that the capital gains tax had already been paid in 1991. The Pestos later discovered that no tax had been paid and that the adoption case had been closed by the Department of Social Welfare and Development due to two years of inaction.

• Engagement: In May 1990, Abella Pesto retained Atty. Marcelito M. Millo to transfer a land title to her name and to handle the adoption of her niece. The Pestos paid P14,000.00 for the transfer and P10,000.00 for the adoption.
• False Representations and Neglect: Atty. Millo repeatedly gave false information to delay the transfer. He specifically claimed the capital gains tax had been paid in 1991, but when the Pestos returned to the Philippines in February 1995, they discovered it had not been paid. Atty. Millo failed to produce a receipt and only returned the P14,000.00 when the Pestos confronted him; he also promised in writing to assume liability for accrued penalties.
• Adoption Case: The Tarlac DSWD closed the adoption case due to Atty. Millo’s two-year inaction. He misled the Pestos about scheduled interviews: on February 14, 1995, no interview had been scheduled, and on February 23, 1995, he was absent, having rescheduled the hearing to the afternoon without informing them.
• Administrative Complaint: Johnny Pesto filed the administrative complaint on March 14, 1995. Atty. Millo did not file an answer despite extensions granted. He consistently failed to appear at IBP hearings. In a belated manifestation/motion filed through a representative in 2001, he claimed Johnny had died and Abella would withdraw the complaint.
• Post-Complaint Developments: Atty. Millo alleged that Abella intended to withdraw the complaint before her death, that the adoption was eventually granted, and that Juan Daquis (Abella’s brother) could attest to a simple misunderstanding, but Daquis died in November 2011.

• Negligence and Misrepresentation: Johnny Pesto maintained that Atty. Millo was grossly negligent and incompetent in handling the transfer of title and adoption, giving false assurances about the capital gains tax payment and causing the adoption case to be closed.
• Refund of Monies: Pesto sought disciplinary action and the refund of P15,643.75 in accrued tax penalties and the P10,000.00 paid for the adoption.
• Breach of Fiduciary Duty: Pesto asserted that Atty. Millo violated his Lawyer’s Oath and the Code of Professional Responsibility by failing to serve the clients with competence and fidelity.

• Withdrawal of Complaint: Atty. Millo claimed that Abella Pesto had assured him she would withdraw the complaint, and that he honestly believed the withdrawal had been effected prior to her death.
• Substantial Compliance: He argued that he had prepared the necessary transfer documents and had already returned the P14,000.00. He further stated that the adoption case was eventually granted by the trial court.
• Misunderstanding: Atty. Millo characterized the charge as arising from a simple misunderstanding, which Juan Daquis could have clarified had he not passed away in 2011.

• Violation of Canon 18, Rule 18.03: Whether Atty. Millo violated the duty of competence and diligence by neglecting the transfer of title and adoption proceedings and by misleading his clients about the status of the capital gains tax payment.
• Proper Penalty: Whether the IBP Board of Governors’ recommended suspension of two months was appropriate, or whether a longer suspension was warranted given Atty. Millo’s conduct during the disciplinary proceedings.
• Monetary Award: Whether Atty. Millo should be ordered to refund the P10,000.00 adoption fee and the P15,643.75 tax penalties.

• Violation of Canon 18, Rule 18.03: Atty. Millo was guilty of violating Canon 18, Rule 18.03 of the Code of Professional Responsibility and the Lawyer’s Oath. The lawyer-client relationship commenced upon his acceptance of the sums of money, obliging him to render competent and efficient service. He was inefficient and negligent; he concealed his neglect by giving false information about the capital gains tax payment. His failure to refute the charges by not filing an answer and disregarding the proceedings indicated that the complaint had substance. The subsequent return of P14,000.00 and the eventual granting of the adoption did not erase his neglect.
• Proper Penalty: The penalty was increased to six months’ suspension from the practice of law. Atty. Millo’s lack of remorse, his failure to answer the complaint, and his consistent absence from IBP hearings demonstrated utter disrespect for the Judiciary and his fellow lawyers, and suggested a deliberate strategy to delay until the complainants were no longer able to prosecute the complaint. The withdrawal of a disciplinary complaint does not warrant dismissal of the charge; such proceedings are undertaken for the public welfare, not private redress.
• Monetary Award: Atty. Millo was ordered to return the P10,000.00 adoption fee plus 6% interest per annum from the finality of the decision until full payment. The Court declined to order refund of the P15,643.75 tax penalties, stating that it is not a collection agency and may only direct repayment of attorneys’ fees for service not efficiently rendered.

• Duty of Competence and Diligence — Under Rule 18.03, Canon 18 of the Code of Professional Responsibility, a lawyer shall not neglect a legal matter entrusted to him, and his negligence renders him liable. An attorney owes fidelity to the client’s causes from engagement until effective release, and must exercise ordinary care as the client’s interests require.
• Disciplinary Proceedings Are Sui Generis — Disciplinary proceedings against lawyers are neither civil suits nor criminal actions. They are undertaken solely for the public welfare to preserve the courts from the ministration of unfit persons. The complainant is not a party in the traditional sense; withdrawal of the complaint or loss of interest does not terminate the proceeding or bar the Court from continuing the investigation.
• Default in Disciplinary Proceedings — A respondent attorney who fails to file an answer to an administrative complaint forfeits the right and chance to explain. A bare claim of “misunderstanding” is insufficient to refute charges. The failure to meet the issue and overcome the evidence against him indicates that the complaint has substance.
• Duty to Obey Court Orders — A lawyer’s repeated non-appearance at scheduled hearings and disregard of orders to attend constitutes utter disrespect for the Judiciary and conduct unbecoming an officer of the Court. The practice of deliberately not appearing is an odious means to evade explanation and warrants disciplinary sanction.

• “An attorney who conceals his inefficiency and lack of diligence by giving wrong information to his client regarding the matter subject of their professional relationship is guilty of conduct unbecoming an officer of the Court. He thereby violates his Lawyer’s Oath to conduct himself as a lawyer according to the best of his knowledge and discretion with all good fidelity as well to the courts as to his client.”
• “The withdrawal of an administrative charge for suspension or disbarment based on an attorney’s professional misconduct or negligence will not furnish a ground to dismiss the charge. Suspension or disbarment proceedings that are warranted will still proceed regardless of the lack or loss of interest on the part of the complainant. The Court may even entirely ignore the withdrawal of the complaint, and continue to investigate in order to finally determine whether the charge of professional negligence or misconduct was borne out by the record.”
• “Disciplinary proceedings against attorneys are unlike civil suits where the complainants are the plaintiffs and the respondent attorneys are the defendants. They neither involve private interests nor afford redress for private grievances. They are undertaken and prosecuted solely for the public welfare, for the purpose of preserving the courts of justice from the official ministration of persons unfit to practice law before them.”

• Dizon v. Laurente, A.C. No. 6597, September 23, 2005, 470 SCRA 595 — Cited to support the rule that an attorney’s duty to safeguard client interests commences upon engagement and lasts until effective release; the attorney must take every reasonable step and exercise ordinary care. (Followed)
• Camara v. Reyes, A.C. No. 6121, July 31, 2009, 594 SCRA 484 — Applied for the principle that a respondent attorney must submit an explanation and overcome the evidence, and that withdrawal of a complaint does not terminate disciplinary proceedings. (Followed)
• Gone v. Ga, A.C. No. 7771, April 6, 2011, 647 SCRA 243 — Cited for the rule that lawyers are particularly called upon to obey court orders and processes, and that disobedience constitutes utter disrespect for the Judiciary. (Followed)
• Espiritu v. Ulep, A.C. No. 5808, May 4, 2005, 458 SCRA 1 — Cited for the characterization of a respondent’s repeated non-appearances at hearings as an odious practice used to evade explanation. (Followed)
• Bautista v. Bernabe, A.C. No. 6963, February 9, 2006, 482 SCRA 1 — Relied upon for the doctrine that disciplinary proceedings are sui generis, undertaken solely for public welfare, and the complainant is not a party with a private interest in the outcome. (Followed)

• Canon 18, Rule 18.03, Code of Professional Responsibility — Provides that a lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable. Applied to hold Atty. Millo administratively liable for his neglect of the transfer of title and adoption case and for giving false information to clients.
• Lawyer’s Oath — The lawyer’s undertaking to conduct himself as a lawyer according to the best of his knowledge and discretion with all good fidelity to court and client. Held violated by Atty. Millo’s concealment of inefficiency, false representations, and disrespect for the disciplinary process.

Sereno, C.J., Leonardo-De Castro, Villarama, Jr., and Reyes, JJ., concurred.