4. Sotto vs. Samson, G.R. No. L-16917, July 31, 1962 PDF

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PLARIDEL SOTTO, Administrator of the Testate Estate of Vicente Sotto, petitioner-appellant, vs. QUINTILLANA SAMSON (SANSON), respondent-appellee. G. No. L-16917, July 31, 1962FACTS:A petition to review the Court of Appeals affirmation of the decision of the First Instance of Cebu in litigation which...

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LAWYER’S FIDUCIARY OBLIGATIONS PLARIDEL SOTTO, Administrator of the Testate Estate of Vicente Sotto, petitioner-appellant, vs. QUINTILLANA SAMSON (SANSON), respondent-appellee. G.R. No. L-16917, July 31, 1962

FACTS: A petition to review the Court of Appeals affirmation of the decision of the First Instance of Cebu in litigation which began a complaint of Quintillana Samson (Sanson) to annul the sale of a lot executed by her in favor of defendant Vicente Sotto alleging, as her attorney, Sotto had taken advantage of her financial difficulties and mental weakness and of the confidence she had reposed in him. Sotto avers that the action already prescribed; that judicial license had been granted her to dispose of said lot; that there was due consideration for the purchase — PHP 21,595.00; and that she was estopped from asserting this claim because she had ratified the sale on various occasions, once after the passage of the Paraphernal Property Act No. 3922 which authorizes a married woman to dispose of her paraphernal property without the consent of her husband. Vicente Sotto died while the case was pending decision; and upon orders of the lower court, he was substituted as a defendant by the administrator of his estate. On November 29, 1954, the Cebu court decided in favor of plaintiff Samson and upon appeal, the Court of Appeals affirmed the decision in all respects. The Court of Appeals found that since 1924 Atty. Sotto was appellee's counsel in several cases in which the adverse party was her husband, Manuel Carratala, from whom she was estranged. Sometime in March 1926, Atty. Sotto, acting as counsel for the appellee, filed a petition with the Court of First Instance of Cebu (Civil Case No. 6448) requesting judicial authority to sell her paraphernal property without the need for her husband's consent. Manuel Carratala filed on May 7, 1926, Civil Case No. 6528 asking the same court to annul or prevent any conveyance of said paraphernal property as well as obtained a writ of an injunction forbidding both appellee and Atty. Sotto from carrying out the sale and registering any conveyance of property with the register of deeds.

LAWYER’S FIDUCIARY OBLIGATIONS

Despite the appellee's pending petition for judicial authority and regardless of the writ of injunction, the respondent executed a deed of sale to her counsel, Atty. Sotto, her paraphernal property lot No. 872 of the Cadastral Survey of Cebu with Petitioner gave the appellee an option to repurchase the property within 2 years; which was extended for another 2 years, but the register of deeds of Cebu refused to register the same. On May 16, 1926, the respondent’s husband was declared in default and the case was decided in her favor by Judge Eulogio Revilla for failure to appear during the hearing in Manila despite being duly notified. On the day after she had obtained judicial authority to dispose of her property, she executed a confirmation deed of the original sale wherein the petitioner succeeded in having the Original Certificate of Title No. 681 in the appellee's name canceled and a new one issued in his name. The decision of the Manila Court was reversed by the Supreme Court, petitioner then filed another petition for judicial authority with the said Manila Court which was assigned to Judge Anacleto Diaz; that without notifying the respondent’s husband on the alleged ground that he was abroad as he was hunted as a leper, but the same was invalidated by the Supreme Court when it revoked the decision of Judge Diaz. On the other hand, the Cebu Court decided Civil Case No. 6528 in favor of the appellee's husband, thereby declaring null and void the sale of her paraphernal property in favor of her counsel; in which Atty. Sotto appealed to the Supreme Court but withdrew after Act No. 3922 was enacted which authorized a married woman to dispose of her paraphernal property without her husband's consent. 60 days after the passage of said law, Atty. Sotto had the third ratification deed executed by the appellee in his favor. ISSUE: Whether the new deed of sale was null and void and whether the action has been prescribed or not.

LAWYER’S FIDUCIARY OBLIGATIONS

RULING: The Court of Appeals agreed with Samson's contention that since Article 1459 of the Civil Code mentions property which is the object of any litigation in which the attorney may take part, it follows that Sotto fell within its inhibition. Petitioner maintains that Article 1459 the prohibition contained in No. 5 applies to lawyers and solicitors concerning property or rights that are the object of litigation in which they intervene by their profession or office thereby not banning him as he was not yet the attorney of record in said Case No. 6528 as he was not served with summons relative to the said complaint. In addition, the contract is merely voidable making it susceptible to ratification and its revalidation and confirmation have been accomplished by no less than 4 documents executed by the appellee, especially the ratification sale signed by her after the passage of the Paraphernal Act No. 3922. The court declared that on the day the sale was first agreed the petitioner was the respondent’s lawyer in litigation involving the subject of the contract thereby disqualifying him to buy under ART. 1459 par.5 of the Civil Code On said date, there was pending in the Court of First Instance of Cebu Civil Case No. 6448 which was litigation handled by the petitioner as the lawyer, concerning the same lot. Respondent’s husband objected to the wife's plan to sell by filing a petition to annul whatever conveyance his wife may have made or attempted to make (Civil Case No. 6528) on May 7, 1926. Because of their client-attorney relationship, Sotto may have unduly influenced the respondent, not only to sell the lot to him but also to accept terms less favorable to her. The petitioner claims that the action has been prescribed because it was filed 15 years after May 1926 but the complainant seeks the annulment of the document made by Samson in 1932. The argument has no merit since the litigation had not terminated on September 17, 1932, it appears that this Supreme Court granted the motion only on Sept. 26, 1932. Up to that time, at least, the appeal — in which Sotto represented Samson — was pending in court.

LAWYER’S FIDUCIARY OBLIGATIONS

The core of the matter is the conveyance of a litigant's property made during the existence of an attorney-and-client relationship; and the statute prohibiting such sales which are designed to curtail any undue influence of the lawyer upon his client on account of their confidential association. No pronouncement on this subject is needed, since this client's right may be sufficiently protected thru the line of approach we have already indicated but protection may not be extended to allow her to unjustly profit at the expense of her attorney by retaining the money or consideration given to her for the sale. Under Art. 1303 of the Civil Code when a sale is avoided, the seller shall return the purchase price, together with interest. The total consideration given by Sotto to Samson amounts to PHP 21,595.00 (Exh. 3). This requires one modification of the judgment of the Court of Appeals affirming the decision of the court of the first instance, which decision in its dispositive part. WHEREFORE, the decision of the Court of Appeals is hereby affirmed, with these additional directives: (a) In case Sotto cannot return the lot to Samson he shall pay for it (786 sq. m.) at the price of P70 pesos per square meter; (b) Sotto shall also pay rents at the rate of P100 pesos a month from Sept. 17, 1932; (c) Samson, in turn, Sotto the amount of PHP 21,595.00 plus legal interest from Sept. 17, 1932....