Santos vs. Arrojado

The prohibition in Article 1491(5) of the Civil Code against lawyers acquiring property or rights in litigation in which they participate by virtue of their profession is limited to the lawyers themselves and does not extend to their immediate family members or relatives. Absent proof that the relative acted as a conduit or mediator on behalf of the disqualified lawyer, no violation occurs.

Complainant Christopher R. Santos was the defendant in an unlawful detainer case filed by Lilia Rodriguez, in which respondent Atty. Joseph A. Arrojado served as counsel for Rodriguez. The ejectment case reached the Supreme Court, which resolved it in favor of Arrojado's client. The disbarment complaint arose from a sale of one of the properties subject of that litigation, executed while the case was still pending before the Supreme Court, from Rodriguez to Arrojado's son, Julius.

Christopher R. Santos was the defendant in an unlawful detainer case filed by Lilia Rodriguez, with Atty. Joseph A. Arrojado serving as counsel for Rodriguez. The case eventually reached the Supreme Court, which resolved it in favor of Arrojado's client.

While the case was still pending before the Supreme Court, on August 7, 2009, Lilia sold one of the properties subject of the ejectment suit to Julius P. Arrojado, the son of respondent lawyer. Atty. Arrojado signed as a witness to the deed of sale. Santos believed that Arrojado committed malpractice by acquiring, through his son, an interest in property subject of the unlawful detainer case, in violation of Article 1491 of the Civil Code.

In his verified comment, Arrojado admitted that Lilia was a client of the law firm where he was a senior partner, that Julius was his son, and that one of the subject properties in the ejectment suit was purchased by Julius from Lilia. He maintained that he had absolutely no interest in the property purchased by his son and that the proscription in Article 1491 did not extend to relatives of the judicial officers mentioned therein. He explained that Julius was already of legal age, a registered nurse, and an established businessman at the time of the sale, and that while it was through him that Lilia and Julius met, he did not facilitate the transaction.

The IBP Investigating Commissioner found no evidence that Arrojado used his son as a conduit to acquire the property, noting that Julius was a person separate and distinct from his father and capable of acquiring property on his own. The Commissioner also observed that in an unlawful detainer case the issue is possession, not ownership, and that Santos's lease was not affected by the sale — Julius was even considering allowing Santos to continue leasing the property, an offer Santos rejected. The IBP Board of Governors adopted the Commissioner's recommendation to dismiss, and denied Santos's motion for reconsideration.

• Violation of Article 1491: Complainant argued that respondent lawyer, as counsel of record in the ejectment case, could not acquire the property subject of litigation, either personally or through his son, without violating the Civil Code and his ethical duties.
• Use of Son as Conduit: Complainant contended that the sale to Julius was effectively an acquisition by respondent lawyer himself, circumventing the prohibition in Article 1491(5).

• No Personal Interest: Respondent maintained that he had absolutely no interest in the property purchased by his son and that the proscription in Article 1491 did not extend to relatives of the persons enumerated therein.
• Son's Independent Capacity: Respondent argued that Julius was already of legal age and discretion, a registered nurse, and an established businessman, and that while it was through him that Lilia and Julius met, he did not facilitate the transaction.
• No Specific Canon Violated: Respondent pointed out that complainant failed to cite a specific provision or canon in the Code of Professional Responsibility which he had allegedly transgressed.

• Scope of Article 1491(5): Whether the prohibition in Article 1491(5) of the Civil Code against lawyers from purchasing property and rights which may be the object of any litigation in which they may take part by virtue of their profession extends to their respective immediate families or relatives.

• Scope of Article 1491(5): No. The prohibition in Article 1491(5) applies only to the enumerated persons — including lawyers — and does not extend to their relatives. Absent evidence that the relative acted as a conduit or mediator on behalf of the disqualified lawyer, no violation is established.

• Scope of Article 1491(5): The Court applied the maxim expressio unius est exclusio alterius — the express mention of one person, thing, act, or consequence excludes all others. Article 1491(5) enumerates six categories of persons: (1) justices; (2) judges; (3) prosecuting attorneys; (4) clerks of court; (5) other officers and employees connected with the administration of justice; and (6) lawyers. The enumeration cannot be stretched or extended to include relatives of the lawyer. To do so would amount to amending the law. The Court acknowledged that Article 1491 prohibits acquisition "either in person or through the mediation of another," but found that complainant failed to adduce any evidence that Julius acted or mediated on behalf of respondent, or that respondent was the ultimate beneficiary of the sale. The mere fact that Julius was respondent's son did not support a finding of violation. The Court adopted the Investigating Commissioner's findings that complainant himself was unsure whether respondent had taken advantage of his fiduciary relationship, using hedging language like "it looks like" or "we believe," and that affidavits from the property owners and Julius himself showed respondent did not actively participate in the negotiations. While respondent's role in the sale might "ruffle very sensitive scruples," it was not per se prohibited by Article 1491.

• Expressio unius est exclusio alterius — The express mention of one person, thing, act, or consequence excludes all others; where terms are expressly limited to certain matters, they may not, by interpretation or construction, be stretched or extended to other matters. The Court applied this maxim to hold that the enumeration in Article 1491(5) — justices, judges, prosecuting attorneys, clerks of court, other officers and employees connected with the administration of justice, and lawyers — cannot be extended to include relatives of the disqualified lawyer.

• Prohibition under Article 1491(5) of the Civil Code — The prohibition rests on public policy considerations arising from the fiduciary relationship between lawyer and client; it is intended to curtail any undue influence of the lawyer upon his client on account of his fiduciary and confidential relationship. The prohibition applies only to the enumerated persons and covers acquisition by purchase "either in person or through the mediation of another." Absent proof that a third party acted as a conduit or mediator on behalf of the disqualified lawyer, no violation is established.

• "Were we to include within the purview of the law the members of the immediate family or relatives of the lawyer laboring under disqualification, we would in effect be amending the law." — This passage articulates the ratio decidendi: extending the statutory prohibition to relatives would exceed the Court's interpretive authority and effectively amend the Civil Code.

• "The mere fact that it was Julius, son of respondent lawyer, who purchased the property, will not support the allegation that respondent lawyer violated Article 1491(5) of the Civil Code." — This statement clarifies that the familial relationship alone, without evidence of conduit or mediation, is insufficient to establish a violation of the prohibition.

• "At most, although respondent lawyer's role or participation in the sale in question, if any, might ruffle very sensitive scruples, it is not, however, per se prohibited or forbidden by said Article 1491." — The Court acknowledges the ethical sensitivity of the transaction while confining the legal analysis to the statutory text, distinguishing moral scruples from legal prohibition.

• Peña vs. Delos Santos, G.R. No. 202223, March 2, 2016, 785 SCRA 440 — Cited for the rationale underlying the prohibition in Article 1491(5): public policy disallows transactions involving the fiduciary relationship between attorney and client, as an attorney may easily take advantage of the credulity and ignorance of his client and unduly enrich himself at the client's expense.

• Zalamea vs. De Guzman, Jr., A.C. No. 7387, November 7, 2016, 807 SCRA 1 — Cited for the principle that the prohibition rests on considerations of public policy and is intended to curtail any undue influence of the lawyer upon his client on account of their fiduciary and confidential relationship.

• Zuellig Pharma Corporation vs. Sibal, 714 Phil. 33 (2013) — Cited for the definition and application of the maxim expressio unius est exclusio alterius.

• Article 1491(5), Civil Code — Prohibits justices, judges, prosecuting attorneys, clerks of superior and inferior courts, other officers and employees connected with the administration of justice, and lawyers from acquiring by purchase, even at public or judicial auction, either in person or through the mediation of another, the property and rights in litigation or levied upon execution before the court within whose jurisdiction they exercise their functions. The provision was applied to determine whether the prohibition extends to relatives of the enumerated persons; the Court held it does not.

• Section 12(c), Rule 139-B, Rules of Court — Governs the procedure for the Supreme Court's final action on IBP recommendations in disbarment proceedings; the case was elevated to the Court pursuant to this provision.

Justices Teresita J. Leonardo-De Castro, Francis H. Jardeleza, Noel Gimenez Tijam, and Alexander G. Gesmundo concurred in the decision.