SECOND DIVISION

[A.C. No. 5018. January 26, 2007.]

ROGELIO H. VILLANUEVA, complainant,
vs. ATTY. AMADO B. DELORIA,
respondent.
RESOLUTION

TINGA, J :
p

This treats of the Complaint 1 for Disbarment dated

February 17, 1999 filed by Rogelio H. Villanueva
(Villanueva) against Atty. Amado B. Deloria in connection
with HLRB Case No. REM-080592-5166, entitled
"Spouses Conrado De Gracia v. Estate of Jaime
Gonzales, et al." Atty. Deloria, a former full-time
Commissioner of the Housing and Land Use Regulatory
Board (HLURB), appeared as counsel for the spouses
De Gracia.
Villanueva avers that a decision in that case was
rendered by Housing and Land Use Arbiter, 2 Atty.
Teresita R. Alferez, requiring the Estate of Jaime
Gonzales to, among other things, refund to the spouses
De Gracia the amount of P69,000.00 plus interest at the
prevailing commercial interest rates. The case was
eventually assigned to Villanueva upon the latter's
designation as Arbiter.
It appears that Atty. Deloria filed a Motion for Issuance of

Substitute Judgment and for Consignation 3 claiming that

the Estate of Jaime Gonzales does not want to pay
interest based on commercial interest rates. Villanueva
asserts, however, that Atty. Deloria's allegation is belied
by two motions filed by counsel for the Estate of Jaime
Gonzales which merely seek to clarify the precise
interest rate applicable to the case in order for it to fully
comply with the decision.
Atty. Deloria's misrepresentation is allegedly a violation
of the Code of Professional Responsibility (Code),
particularly Canons 1, 4 10, 5 12 6 and 19 7 thereof, the
Attorney's Oath of Office and Art. 19 of the Civil Code.
Atty. Deloria also allegedly violated Canon 11 8 of the
Code because he sought the substitution of a decision
which he knew had already become final and partially
executed.
Villanueva notes that Atty. Deloria enclosed with his
motion a check in the amount of P69,000.00 payable to
the order of the Estate of Jaime Gonzales and Corazon
Gonzales, representing the principal refunded to the
spouses De Gracia in compliance with the decision.
Villanueva states that the check was drawn against Atty.
Deloria's personal checking account in violation of Canon
16 9 of the Code.
Moreover, according to Villanueva, Atty. Deloria offered
him 50% of the recoverable amount in the case if he
resolves the latter's motion favorably. 10 Atty. Deloria's
conduct allegedly violates the previously cited canons of
the Code, Canon 13, 11 Rule 15.06, 12 Canon 15 of the
Code, Art. 212 of the Revised Penal Code, the Attorney's
Oath of Office and Art. 19 of the Civil Code.
AECcTS

Villanueva also alleges that Atty. Deloria used his

influence as former Commissioner of the HLURB to
persuade Atty. Alferez to impose interest based on
commercial rates instead of the interest rate fixed in
Resolution No. R-421 13 and Memorandum Circular No.
19, 14 both of which provide a uniform rate of interest in
decisions involving refunds. Atty. Deloria also allegedly
used his connections in the HLURB to prevent Villanueva
from releasing an Order denying the former's motion and
to prevail upon the agency's Legal Services Group to
interpret the term "commercial rate of interest" in a way
that is favorable to his client's case, again in violation of
the Code. 15
Further, Villanueva claims that Atty. Deloria assisted his
client in filing an unfounded criminal case against him
before the Office of the Ombudsman with the purpose of
getting even with Villanueva for denying their motion.
When his client pursued this course of action, Atty.
Deloria allegedly should have withdrawn his services in
accordance with Rule 22.01, 16 Canon 22 of the Code.
In his Comment 17 dated September 22, 2000, Atty.
Deloria denies any wrongdoing and sought the dismissal
of the Complaint for lack of merit. He avers that the
refusal of the Estate of Jaime Gonzales to pay the
interest stipulated in the decision is evident from the
various motions it has filed. On the alleged commingling
of his funds with those of his clients', Atty. Deloria claims
that the spouses De Gracia requested him to advance
the amount intended for consignation as they were then
on vacation in the United States. He also maintains that
he did not exert any influence on the HLURB to rule in

his clients' favor, adding that the draft order which he

filed in the case is required under the rules of the agency.
Atty. Deloria counters that it is Villanueva who has
exhibited partiality in favor of the Estate of Jaime
Gonzales by failing to rule on the motions for clarification
filed by the latter, thereby forcing the spouses De Gracia
to wait for an inordinately long time for the decision in
their favor to be fully implemented.
Villanueva, in his Reply 18 dated November 10,
contends that he would have been indicted by the
of the Ombudsman if it were true that his Order
case was motivated by bias and partiality in favor
Estate of Jaime Gonzales.

2000,
Office
in the
of the

In a Resolution 19 dated February 19, 2001, we referred

the case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.
Investigating Commissioner Renato G. Cunanan
submitted a Report 20 dated September 29, 2005, finding
merit in the Complaint and recommending that Atty.
Deloria be suspended from the practice of law for two (2)
years and/or be fined in the amount of P20,000.00. This
recommendation was annulled and set aside by the IBP
in its Resolution No. XVII-2006-279 dated May 26, 2006.
The case was instead dismissed for lack of merit.
The report and recommendation of the Investigating
Commissioner appears to be based solely on the Rollo of
the case which the Court sent to the IBP pursuant to the
Resolution dated February 19, 2001. The Investigating
Commissioner did not conduct any hearing to determine
the veracity of the allegations in Villanueva's Complaint

and the truthfulness of Atty. Deloria's answers thereto.

A formal investigation is a mandatory requirement which
may not be dispensed with except for valid and
compelling reasons. 21 In Baldomar v. Paras, 22 we held:
Complaints against lawyers for misconduct
are normally addressed to the Court. If, at the
outset, the Court finds a complaint to be
clearly wanting in merit, it outrightly dismisses
the case. If, however, the Court deems it
necessary that further inquiry should be
made, such as when the matter could not be
resolved by merely evaluating the pleadings
submitted, a referral is made to the IBP for a
formal investigation of the case during which
the parties are accorded an opportunity to be
heard. An ex-parte investigation may only be
conducted when respondent fails to appear
despite reasonable notice. . . .

Rule 139-B of the Rules of Court provides the procedure

for investigation in disbarment and disciplinary
proceedings against attorneys before the IBP, thus:
Sec. 8. Investigation. Upon joinder of
issues or upon failure of the respondent to
answer, the Investigator shall, with deliberate
speed, proceed with the investigation of the
case. He shall have the power to issue
subpoenas and administer oaths. The
respondent shall be given full opportunity to
defend himself, to present witnesses on his
behalf, and be heard by himself and counsel.
However, if upon reasonable notice, the
respondent fails to appear, the investigation

shall proceed ex-parte.

aCITEH

The Investigator shall terminate the

investigation within three (3) months from the
date of its commencement, unless extended
for good cause by the Board of Governors
upon prior application.
Willful failure or refusal to obey a subpoena
or any other lawful order issued by the
Investigator shall be dealt with as for indirect
contempt of court. The corresponding charge
shall be filed by the Investigator before the
IBP Board of Governors which shall require
the alleged contemnor to show cause within
ten (10) days from notice. The IBP Board of
Governors may thereafter conduct hearings,
if necessary, in accordance with the
procedure set forth in this Rule for hearings
before the Investigator. Such hearing shall as
far as practicable be terminated within fifteen
(15)
days
from
its
commencement.
Thereafter, the IBP Board of Governors shall
within a like period of fifteen (15) days issue a
resolution setting forth its findings and
recommendations, which shall forthwith be
transmitted to the Supreme Court for final
action and if warranted, the imposition of
penalty.

We find that due observance of the foregoing rules is

necessary for the proper resolution of this case.
WHEREFORE, the instant administrative case is
REMANDED to the Integrated Bar of the Philippines for
further proceedings. The IBP is also directed to act on

this referral with deliberate dispatch.

SO ORDERED.
Quisumbing, Carpio, Carpio-Morales and Velasco, Jr.,
JJ., concur.
Footnotes

1. Rollo, Vol. 1, pp. 1-38.

2. Now HLURB Commissioner.
3. Rollo, Vol. 1, pp. 47-49.
4. CANON 1 A LAWYER SHALL UPHOLD THE
CONSTITUTION, OBEY THE LAWS OF THE LAND
AND PROMOTE RESPECT FOR LAW AND LEGAL
PROCESSES.
Rule 1.01 A lawyer shall not engage in unlawful,
dishonest, immoral or deceitful conduct.
5.

CANON 10 A LAWYER OWES CANDOR,

FAIRNESS AND GOOD FAITH TO THE COURT.

Rule 10.01 A lawyer shall not do any falsehood, nor

consent to the doing of any in Court; nor shall he
mislead, or allow the Court to be misled by any
artifice.
Rule 10.02 A lawyer shall not knowingly misquote or
misrepresent the contents of a paper, the language
or the argument of opposing counsel, or the text of a
decision or authority, or knowingly cite as law a
provision already rendered inoperative by repeal or

amendment, or assert as a fact that which has not

been proved.
6. CANON 12 A LAWYER SHALL EXERT EVERY
EFFORT AND CONSIDER IT HIS DUTY TO
ASSIST IN THE SPEEDY AND EFFICIENT
ADMINISTRATION OF JUSTICE.
7. CANON 19 A LAWYER SHALL REPRESENT HIS
CLIENT WITH ZEAL WITHIN THE BOUNDS OF
THE LAW.
8. CANON 11 A LAWYER SHALL OBSERVE AND
MAINTAIN THE RESPECT DUE TO THE COURTS
AND TO JUDICIAL OFFICERS AND SHOULD
INSIST ON SIMILAR CONDUCT BY OTHERS.

9. CANON 16 A LAWYER SHALL HOLD IN TRUST

ALL MONEYS AND PROPERTIES OF HIS CLIENT
THAT MAY COME INTO HIS POSSESSION.
Rule 16.01 A lawyer shall account for all money or
property collected or received for or from the client.
10. Rollo, Vol. 1, p. 13.
11. CANON 13 A LAWYER SHALL RELY UPON THE
MERITS OF HIS CAUSE AND REFRAIN FROM
ANY
IMPROPRIETY
WHICH
TENDS
TO
INFLUENCE OR GIVES THE APPEARANCE OF
INFLUENCING THE COURT.
12. Rule 15.06 A lawyer shall not state or imply that he
is able to influence any public official, tribunal or
legislative body.

13. Rollo, p. 71.

14. Id. at 60.
15. Id. at 17-21.
16. Rule 22.01 A lawyer may withdraw his services in
any of the following cases:
a) When the client pursues an illegal or immoral course of
conduct in connection with the matter he is handling;
b) When the client insists that the lawyer pursue conduct
violative of these canons and rules;
c) When his inability to work with co-counsel will not
promote the best interest of the client;
d) When the mental or physical condition of the lawyer
renders it difficult for him to carry out the
employment effectively;
e) When the client deliberately fails to pay the fees for the
services or fails to comply with the retainer
agreement;
f) When the lawyer is elected or appointed to public office;
and
g) Other similar cases.
17. Rollo, Vol. 1, pp. 177-190.
18. Id. at 195-203.
19. Id. at 233.
20. Rollo, Vol. 2, pp. 245-255.
21. Tabang v. Gacott, A.C. No. 6490, September 29, 2004,

439 SCRA 307; Fajardo v. Dela Torre, A.C. No.

6295, April 14, 2004, 427 SCRA 125; and Arandia v.
Magalong, 435 Phil. 199 (2002).
ADCIca

22. 401 Phil. 370, 373 (2000), citing Cottam v. Atty. Laysa,
383 Phil. 510, 514-516 (2000).

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