Philcomsat Holdings Corporation vs. Atty. Luis K. Lokin, Jr. and Atty. Sikini C. Labastilla

A lawyer who causes or participates in the creation of a checkbook entry imputing corrupt motives against a court violates Canons 7 and 11 of the Code of Professional Responsibility and is subject to suspension from the practice of law, as such conduct undermines the dignity and authority of the courts and erodes public confidence in the judicial institution.

Complainant PHILCOMSAT Holdings Corporation, represented by its director and treasurer Erlinda I. Bildner, filed an administrative complaint before the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) against respondents Atty. Luis K. Lokin, Jr. and Atty. Sikini C. Labastilla. Atty. Lokin, Jr. was a director of PHILCOMSAT who had control and management of the company's financial records, while Atty. Labastilla served as the company's external counsel in an injunction case against Philippine Overseas Telecommunications Corporation (POTC) before the Sandiganbayan. The complaint sought disbarment for insinuating that the Sandiganbayan received P2,000,000.00 in exchange for issuing a temporary restraining order (TRO).

PHILCOMSAT Holdings Corporation, through its director and treasurer Erlinda I. Bildner, filed an administrative complaint against Atty. Luis K. Lokin, Jr. and Atty. Sikini C. Labastilla before the Commission on Bar Discipline of the Integrated Bar of the Philippines, praying for their disbarment. The complaint arose from an entry in complainant's checkbook stub which read "Cash for Sandiganbayan, tro, potc-philcomsat case - P2,000,000." The entry was discovered during a Senate investigation conducted sometime in June 2007 by the Committee on Government Corporations and Public Enterprises concerning anomalies in the PHILCOMSAT group of companies, particularly its huge disbursements of monies and/or assets. At that time, the company's financial records and documents were under the control and management of Atty. Lokin, Jr. and his co-directors.

The check was issued in connection with complainant's injunction case against Philippine Overseas Telecommunications Corporation (POTC) before the Sandiganbayan, which was filed by Atty. Lokin, Jr.'s group as its representatives, with Atty. Labastilla as its external counsel. As the Senate investigation was publicized by the media, the Sandiganbayan learned about the subject checkbook entry and, motu proprio, initiated indirect contempt proceedings against respondents and several others, docketed as Case No. SB-07-SCA-005. After due proceedings, the Sandiganbayan promulgated a Resolution dated May 7, 2009, finding respondents guilty beyond reasonable doubt of indirect contempt and sentencing each to pay a fine of P30,000.00 and to suffer imprisonment for six months.

The Sandiganbayan reasoned that any person reading the subject checkbook entry would conclude that a check in the amount of P2,000,000.00 was issued to the Sandiganbayan in exchange for the latter's issuance of a TRO, thereby degrading its integrity and honor. It found that Atty. Lokin, Jr. caused the creation of the entry, as testified to by complainant's bookkeeper, Desideria D. Casas, and that circumstantial evidence showed Atty. Labastilla conspired with Atty. Lokin, Jr., considering that the former was the counsel who applied for the TRO and admitted receipt of the proceeds of the check, although allegedly for legal fees. Sheriffs Manuel Gregorio Mendoza Torio and Romulo C. Barrozo of the Sandiganbayan similarly testified that the TRO was only effected/served upon payment of the corresponding fees.

In his defense, Atty. Lokin, Jr. maintained that he did not perform acts violative of the Code of Professional Responsibility, insisting that the Sandiganbayan's findings in the indirect contempt case were erroneous and contrary to the pertinent evidence and records. He pointed out that the Sandiganbayan ruling was appealed — albeit not by him but by Atty. Labastilla — to the Court in G.R. No. 187699, which appeal remained unresolved, and therefore could not be the basis for his administrative liability. Atty. Labastilla, for his part, harped on the fact that an appeal questioning the Sandiganbayan ruling was still pending before the Court, making the administrative complaint premature. He further maintained that he had no participation in the creation of the subject checkbook entry and that, even if he had any such participation, there was nothing contemptuous about it.

The IBP Investigating Commissioner found Atty. Lokin, Jr. administratively liable and recommended suspension for one year, but absolved Atty. Labastilla. The IBP Board of Governors adopted and approved the report, later modifying the penalty on reconsideration to increase Atty. Lokin, Jr.'s suspension to three years. The Court noted that Atty. Labastilla's appeal in G.R. No. 187699 was already resolved through a Minute Resolution dated August 3, 2009 denying the same for failure to sufficiently show that the Sandiganbayan committed any reversible error, and his motions for reconsideration were denied with finality. The Sandiganbayan's ruling thus became final and executory as to both respondents.

• Prematurity of Administrative Case: Complainant argued that the administrative case was not premature despite the pendency of the appeal from the Sandiganbayan ruling, since disbarment proceedings are separate and distinct from criminal actions and may proceed independently.

• Atty. Labastilla's Complicity: Complainant pointed out that while Atty. Labastilla claimed he received the P2,000,000.00 as payment for legal fees, he failed to properly account for the amount, and the summary of legal fees paid to him did not reflect the P2,000,000.00 check he purportedly received as legal fees.

• Erroneous Sandiganbayan Findings (Atty. Lokin, Jr.): Atty. Lokin, Jr. maintained that he did not perform acts violative of the Code of Professional Responsibility, insisting that the Sandiganbayan's findings in the indirect contempt case were erroneous and contrary to the pertinent evidence and records.

• Pending Appeal as Bar to Administrative Liability (Atty. Lokin, Jr.): Atty. Lokin, Jr. pointed out that the Sandiganbayan ruling was appealed to the Court in G.R. No. 187699, which appeal remained unresolved, and therefore could not be the basis for his administrative liability.

• Prematurity (Atty. Labastilla): Atty. Labastilla argued that because an appeal questioning the Sandiganbayan ruling was still pending before the Court, it was premature to file an administrative complaint against him.

• No Participation (Atty. Labastilla): Atty. Labastilla maintained that he had no participation in the creation of the subject checkbook entry and, even if he had any such participation, there was nothing contemptuous about it.

• Administrative Liability of Atty. Lokin, Jr.: Whether Atty. Lokin, Jr. should be held administratively liable for causing the making of the subject checkbook entry.

• Administrative Liability of Atty. Labastilla: Whether Atty. Labastilla should be held administratively liable for complicity in the making of the subject checkbook entry.

• Prematurity of the Administrative Case: Whether the filing of the administrative case was premature on the ground that the Sandiganbayan's conviction had not attained finality.

• Administrative Liability of Atty. Lokin, Jr.: Yes. Atty. Lokin, Jr. was found guilty of violating Canons 7 and 11 of the Code of Professional Responsibility and suspended from the practice of law for three years, he being directly responsible for the making of the subject checkbook entry.

• Administrative Liability of Atty. Labastilla: Yes. Atty. Labastilla was found guilty of violating Canons 7 and 11 of the Code of Professional Responsibility and suspended from the practice of law for one year for his complicity in the making of the subject checkbook entry.

• Prematurity of the Administrative Case: No. A disbarment proceeding is separate and distinct from a criminal action filed against a lawyer despite being involved in the same set of facts; a finding of guilt in the criminal case will not necessarily result in a finding of liability in the administrative case, and conversely, acquittal does not necessarily exculpate a lawyer administratively.

• Administrative Liability of Atty. Lokin, Jr.: The Court agreed with the IBP's finding that the subject checkbook entry contained a contumacious imputation against the Sandiganbayan — that a check in the amount of P2,000,000.00 was issued and given to the Sandiganbayan to secure a favorable TRO in the POTC case. The records showed that Atty. Lokin, Jr. caused the making of the entry because: (a) during the time the entry was made, complainant's financial records and documents were under his and his co-directors' control and management; (b) the bookkeeper, Desideria D. Casas, categorically testified that Atty. Lokin, Jr. requested the issuance and disbursement of the P2,000,000.00 check and instructed her to write the subject checkbook entry; (c) Atty. Lokin, Jr. never denied participation and knowledge of the issuance of the check and the consequent creation of the entry; and (d) when asked to explain during the Senate investigation, he failed to give a credible justification and instead resorted to avoidance and confession posturing.

• Administrative Liability of Atty. Labastilla: The Court disagreed with the IBP's finding that Atty. Labastilla could not reasonably be implicated in the making of the subject checkbook entry. The Court concurred with the Sandiganbayan's findings that Atty. Labastilla also had a hand, direct or indirect, in the creation of the entry in light of the following circumstances: (a) he was complainant's external counsel who applied for the TRO in the POTC case; (b) he admitted receipt of the proceeds of the check in the amount of P2,000,000.00, although allegedly for legal fees but with no supporting evidence therefor; (c) the TRO was only effected/served upon payment of the corresponding fees per the testimonies of the Sandiganbayan sheriffs; and (d) the TRO and the check were both dated September 23, 2005, establishing an unmistakable connection between them. Moreover, while Atty. Labastilla claimed he received the amount as payment for legal fees, he failed to properly account for the amount, and the summary of legal fees paid to him did not reflect the P2,000,000.00 check.

• Prematurity of the Administrative Case: The Court noted that the indirect contempt case before the Sandiganbayan was in the nature of criminal contempt, being conduct directed against the dignity and authority of the court. However, respondents could not insist that the filing of the administrative case was premature on the premise that their conviction had not attained finality. Citing Spouses Saunders vs. Pagano-Calde, the Court held that administrative cases against lawyers belong to a class of their own; they are distinct from and may proceed independently of criminal cases. A criminal prosecution will not constitute a prejudicial question even if the same facts and circumstances are attendant in the administrative proceedings. It is not sound judicial policy to await the final resolution of a criminal case before a complaint against a lawyer may be acted upon. The Court further noted that the Sandiganbayan ruling had become final and executory as to Atty. Lokin, Jr., who did not join Atty. Labastilla's appeal, and Atty. Labastilla's appeal was already denied with finality.

• Violation of Canons 7 and 11: As members of the Bar, respondents should not perform acts that would tend to undermine and/or denigrate the integrity of the courts. Canon 11 of the CPR provides that "[a] lawyer shall observe and maintain the respect due to the courts and to judicial officers and should insist on similar conduct by others." Canon 7 commands every lawyer to "at all times uphold the integrity and dignity of the legal profession." Respondents compromised the integrity of the judiciary by maliciously imputing corrupt motives against the Sandiganbayan through the subject checkbook entry, violating both Canons. Citing Baculi vs. Battung, the Court noted that in similar cases where lawyers perform acts which tend to erode public confidence in the courts, the penalty of suspension from the practice of law is imposed.

• Independence of Administrative Cases from Criminal Actions — Administrative cases against lawyers belong to a class of their own; they are distinct from and may proceed independently of criminal cases. A criminal prosecution will not constitute a prejudicial question even if the same facts and circumstances are attendant in the administrative proceedings. It is not sound judicial policy to await the final resolution of a criminal case before a complaint against a lawyer may be acted upon, as the objectives of the two proceedings are vastly disparate. Disciplinary proceedings involve no private interest and afford no redress for private grievance; they are undertaken and prosecuted solely for the public welfare and for preserving courts of justice from the official ministration of persons unfit to practice law.

• Criminal Contempt — Criminal contempt is conduct that is directed against the dignity and authority of the court or a judge acting judicially; it is an act obstructing the administration of justice which tends to bring the court into disrespect. Being directed against the dignity and authority of the court, it is an offense against organized society and against public justice which raises an issue between the public and the accused, and the proceedings to punish it are punitive.

• Finality of Conviction in Disbarment Cases — In disbarment cases, the Court is no longer called upon to review the judgment of conviction which has become final; the review of the conviction no longer rests upon the Court.

• Lawyer's Duty to Uphold the Dignity of Courts — As officers of the court, lawyers have a sworn and moral duty to help build and not destroy unnecessarily that high esteem and regard towards the courts so essential to the proper administration of justice. Acts and/or omissions emanating from lawyers which tend to undermine the judicial edifice are disastrous to the continuity of the government and to the attainment of the liberties of the people. All lawyers should be bound not only to safeguard the good name of the legal profession, but also to keep inviolable the honor, prestige, and reputation of the judiciary.

• "A criminal prosecution will not constitute a prejudicial question even if the same facts and circumstances are attendant in the administrative proceedings. Besides, it is not sound judicial policy to await the final resolution of a criminal case before a complaint against a lawyer may be acted upon; otherwise, this Court will be rendered helpless to apply the rules on admission to, and continuing membership in, the legal profession during the whole period that the criminal case is pending final disposition, when the objectives of the two proceedings are vastly disparate." — This passage from Spouses Saunders vs. Pagano-Calde, quoted by the Court, establishes the controlling doctrine that administrative cases against lawyers proceed independently of criminal cases and are not barred by the pendency of an appeal from a criminal conviction.

• "Disciplinary proceedings involve no private interest and afford no redress for private grievance. They are undertaken and prosecuted solely for the public welfare and for preserving courts of justice from the official ministration of persons unfit to practice law. The attorney is called to answer to the court for his conduct as an officer of the court." — This passage articulates the public character of disbarment proceedings, distinguishing them from criminal actions and explaining why the finality of a criminal conviction is not a precondition for administrative liability.

• "Respect for the courts guarantees the stability of the judicial institution; without this guarantee, the institution would be resting on very shaky foundations. This is the very thrust of Canon 11 of the CPR, which provides that '[a] lawyer shall observe and maintain the respect due to the courts and to judicial officers and should insist on similar conduct by others.'" — This passage states the ratio decidendi for finding the respondents liable under Canon 11, connecting the duty of respect for courts to the stability of the judicial institution.

• Spouses Saunders vs. Pagano-Calde, A.C. No. 8708, August 12, 2015 — Controlling precedent cited for the doctrine that administrative cases against lawyers are distinct from and may proceed independently of criminal cases, and that a criminal prosecution will not constitute a prejudicial question in administrative proceedings.

• Fortun vs. Quinsayas, G.R. No. 194578, February 13, 2013, 690 SCRA 623 — Cited for the definition of criminal contempt as conduct directed against the dignity and authority of the court or a judge acting judicially, obstructing the administration of justice and tending to bring the court into disrespect.

• Bengco vs. Bernardo, A.C. No. 6368, June 13, 2012, 672 SCRA 8 — Cited for the proposition that a finding of guilt in a criminal case will not necessarily result in a finding of liability in an administrative case, and conversely, acquittal does not necessarily exculpate a lawyer administratively.

• Baculi vs. Battung, 674 Phil. 1 (2011) — Cited as precedent for imposing the penalty of suspension from the practice of law in cases where lawyers perform acts which tend to erode public confidence in the courts, put the courts in a bad light, and bring the justice system into disrepute.

• In Re: Disbarment of Rodolfo Pajo, 203 Phil. 79 (1983) — Cited for the rule that in disbarment cases, the Court is no longer called upon to review a judgment of conviction which has become final.

• Francia vs. Abdon, A.C. No. 10031, July 23, 2014, 730 SCRA 341 — Cited for the proposition that it is every lawyer's duty to maintain the high regard for the profession by staying true to his oath and keeping his actions beyond reproach.

• Canon 7, Code of Professional Responsibility — Provides that a lawyer shall at all times uphold the integrity and dignity of the legal profession. The Court applied this provision in finding that respondents compromised the integrity of the judiciary by maliciously imputing corrupt motives against the Sandiganbayan through the subject checkbook entry.

• Canon 11, Code of Professional Responsibility — Provides that a lawyer shall observe and maintain the respect due to the courts and to judicial officers and should insist on similar conduct by others. The Court applied this provision in finding that respondents performed acts that tended to undermine and denigrate the integrity of the courts.

Sereno, C.J., Brion, Bersamin, Del Castillo, Perez, Mendoza, Reyes, Leonen, and Jardeleza, JJ., concurred. Carpio, J., took no part due to prior inhibition; Velasco, Jr., J., took no part due to relationship to a party; Leonardo-De Castro, J., took no part due to prior participation in a related case; Peralta, J., took no part due to prior participation in a related case in the Sandiganbayan; Caguioa, J., took no part due to relationship to a party.