Pre-Bar Quizzer in Political Law – PART 2: Constitution of Liberty 1 – 10

1. Define Police Power.

It is the power vested in the legislature by the Constitution to make, ordain, establish all manner of wholesome and reasonable laws for the good and welfare of the State and its people. (ERMITA MALATE HOTEL VS. CITY MAYOR, July 31, 1967)

2. What are the basic purposes/aspects of police power?

a.  to promote the general welfare, comfort and convenience of the people; (ASSOCIATION OF SMALL LANDOWNERS VS. SECRETARY, 175 SCRA 343; US VS. TORIBIO, 15 Phil. 85

b.  to promote and preserve public health; (VILLANUEVA VS. CASTANEDA, September 21, 1987; DECS VS. SAN DIEGO, 180 SCRA 533 [NMAT]; LORENZO VS. DIRECTOR OF HEALTH, 50 Phil. 595—apprehend and confine lepers in a leprosarium)

c.  to promote and protect public safety; (AGUSTIN VS. EDU, 88 SCRA 195; TAXICAB OPERATORS VS. JUINIO, 119 SCRA 897 )

d.  to maintain and safeguard peace and order; (GUAZON VS. DE VILLA)

e.  to protect public morals; (DE LA CRUZ VS. PARAS, 123 SCRA 569; ERMITA MALATE HOTEL VS. CITY MAYOR, July 31, 1967; JMM PROMOTIONS VS. CA, 260 SCRA 319; VELASCO VS. VILLEGAS, February 13, 1983)

f.  to promote the economic security of the people. (ichong vs. hernandez, 101 Phil. 11155)

3. Distinguish Police Power with Power of Eminent Domain.

The distinctions are:

  1. The power of eminent domain is the inherent right of the State to condemn or to take private property for public use upon payment of just compensation while police power is the power of the state to promote public welfare by restraining and regulating the use of liberty and property without compensation;
  2. In the exercise of police power, enjoyment of a property is restricted because the continued use thereof would be injurious to public welfare. In such case, there is no compensable taking provided none of the property interests is appropriated for the use or for the benefit of the public. Otherwise, there should be compensable taking if it would result to public use.
  3. Properties condemned under police power are usually noxious or intended for noxious purpose; hence , no compensation shall be paid. Likewise, in the exercise of police power, property rights of private individuals are subjected to restraints and burdens in order to secure the general comfort, health and prosperity of the state.(Didipio earth savers multi purpose association vs. denr sec. Elisea gozu, et al., 485 scra 586)

4. What are the tests for a valid exercise of police power?

  1. the interests of the public, not mere particular class, require the exercise of police power; (LAWFUL SUBJECT)
  2. the means employed is reasonably necessary for the accomplishment of the purpose and not unduly oppressive to individuals. (LAWFUL MEANS). In short, the end does not justify the means.

5. Define Due Process.

Due process is a law which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial (Per Daniel Webster in the DARTMOUTH COLLEGE CASE)

6. What are the Kinds of Due Process?

  1. Substantive due process  -  requires the intrinsic validity of the law in interfering with the rights of the person to life, liberty or property. In short, it is to determine whether it has a valid governmental objective like for the interest of the public as against mere particular class.
  2. Procedural due process  -  one which hears before it condemns, or the procedure as pointed out by Daniel Webster.

7. What are the requisites of “Judicial Due Process”?

As held in BANCO ESPANOL VS. PALANCA, 37 Phil. 921. The requisites are:

  1. There must be an impartial court or tribunal clothed with judicial power to hear and decide the matter before it;
  2. Jurisdiction must be lawfully acquired over the person of the defendant or over the property subject of the proceedings;
  3. The defendant must be given the opportunity to be heard;
  4. Judgment must be rendered only after lawful hearing.

8. What are the requisites of Due Process before administrative bodies?

As held in TIBAY VS. CIR, 69 Phil. 635, the requisites are:

  1. the right to a hearing which includes the right to present evidence;
  2. the tribunal must consider the evidence presented;
  3. the decision must have something to support itself;
  4. the evidence must be substantial;
  5. the decision must be based on the evidence presented during the hearing;
  6. the tribunal or body must act on its own independent consideration of the law or facts;
  7. the board or body shall in all controversial questions, render its decision in such a manner that the parties to the proceedings can know the various issues involved.

9. If an accused was represented by a non-lawyer during the trial of his criminal case, what right of the said accused was violated? Is he entitled to a new trial?

If an accused was represented by a non-lawyer during the trial (though he thought that he was a lawyer), his right to due process was violated and therefore entitled to a new trial. (DELGADO VS. CA, November 10, 1986)

10. What are the requisites of Procedural Due Process in disciplinary actions against students?

As held in GUZMAN VS. NU, 142 SCRA 706, the requisites are:

1.   the students must be informed in writing of the nature and cause of any accusation against them;

2.   they shall have the right to answer the charges against them, with the assistance of counsel;

3.   they shall be informed of the evidence against them;

4.   they shall have the right to adduce evidence in their own behalf;

5.   the evidence must be duly considered by the investigating committee or official designated by the school authorities to hear and decide the case.

 

Source:

Pre-Bar Quizzer in Political Law (Doctrinal Rulings, Requisites and Definitions)

July, 2008 by Atty. Larry D. Gacayan

College of Law, University of the Cordilleras

Baguio City

Commercial Law – Negotiable Instruments Law

1.       Negotiable Instruments – written contracts for the payment of money; by its form, intended as a substitute for money and intended to pass from hand to hand, to give the holder in due course the right to hold the same and collect the sum due.

2.       Characteristics of Negotiable Instruments:

a.       negotiability – right of transferee to hold the instrument and collect the sum due

b.       accumulation of secondary contracts – instrument is negotiated from person to person

3.       Difference between Negotiable Instruments from Non-Negotiable Instruments:

Negotiable Instruments Non-negotiable Instruments 
Contains all the requisites of Sec. 1 of the NIL does not contain all the requisites of Sec. 1 of the NIL
Transferred by negotiation transferred by assignment
Holder in due course may have better rights than transferor transferee acquires rights only of his transferor 
Prior parties warrant payment prior parties merely warrant legality of title
Transferee has right of recourse against intermediate parties transferee has no right of recourse 

4.       Difference between Negotiable Instruments and Negotiable Documents of Title

Negotiable Instruments Negotiable Documents of Title 
Have requisites of Sec. 1 of the NIL does not contain requisites of Sec. 1 of NIL
Have right of recourse against intermediate parties who are secondarily liable no secondary liability of intermediate parties
Holder in due course may have rights better than transferor transferee merely steps into the shoes of the transferor
Subject is money subject is goods
Instrument itself is property of value instrument is merely evidence of title; thing of value are the goods mentioned in the document

5.       Promissory Note – unconditional promise to pay in writing made by one person to anther, signed by the maker, engaging to pay on demand or a fixed determinable future time a sum certain in money to order or bearer. When the note is drawn to maker’s own order, it is not complete until indorse by him. (Sec. 184 NIL)

Parties:

  1. maker
  2. payee

6.       Bill of Exchange – unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer. (Sec. 126 NIL)

Parties:

  1. drawer
  2. payee
  3. drawee/ acceptor

7.       Check – bill of exchange drawn on a bank and payable on demand. (Sec. 185 NIL)

8.       Difference between Promissory Note and Bill of Exchange

Promissory Note Bill of Exchange 
Unconditional promise unconditional order
Involves 2 parties involves 3 parties
Maker primarily liable drawer only secondarily liable
only 1 presentment – for payment generally 2 presentments – for acceptance and for payment

9.       Distinctions between a Check and Bill of Exchange

CHECK BOE
- always drawn upon a bank or banker - may or may not be drawn against a bank
- always payable on demand - may be payable on demand or at a fixed or determinable future time
- not necessary that it be presented for acceptance - necessary that it be presented for acceptance
- drawn on a deposit - not drawn on a deposit
- the death of a drawer of a check, with knowledge by the banks, revokes the authority of the banker pay - the death of the drawer of the ordinary bill of exchange does not
- must be presented for payment within a reasonable time after its issue   (6 months) - may be presented for payment within a reasonable time after its last negotiation.

10.   Distinctions between a Promissory Note and Check

PN CHECK
- there are two (2) parties, the maker and the payee - there are three (3) parties, the drawer, the drawee bank and the payee
- may be drawn against any person, not necessarily a bank - always drawn against a bank
- may be payable on demand or at a fixed or determinable future time -always payable on demand
- a promise to pay - an order to pay

11.   Other Forms of Negotiable Instruments:

a.       certificates of deposits

b.       trade acceptances

c.       bonds in the nature of promissory notes

d.       drafts which are bills of exchange drawn by 1 bank to another

e.       letters of credit

12.   Trust Receipt – a security transaction intended to aid in the financing of importers and retailers who do not have sufficient funds to finance their transaction and acquire credit except to use as collateral the merchandise imported

13.   Requisites of a Negotiable Note (PN): (SUDO)

It must:

a.       be in writing signed by the drawer

b.       contains an unconditional promise or order to pay a sum certain in money

c.       be payable on demand or at a fixed determinable future time

d.       be payable to order or to bearer (Sec. 1 NIL)

14.   Requisites of a Negotiable Bill (BOE): (SUDOC)

It must:

  1. be in writing signed by the drawer
  2. contains an unconditional promise or order to pay a sum certain in money
  3. be payable on demand or at a fixed determinable future time
  4. be payable to order or to bearer
  5. the drawee must be named or otherwise indicated with reasonable certainty (Sec. 1 NIL)

Notes on Section 1:

-          In order to be negotiable, there must be a writing of some kind, else there would be nothing to be negotiated or passed from hand to hand. The writing may be in ink, print or pencil. It may be upon parchment, cloth, leather or any other substitute of paper.

-          It must be signed by the maker or drawer. It may consist of mere initials or even numbers, but the holder must prove that what is written is intended as a signature of the person sought to be charged.

-          The Bill must contain an order, something more than the mere asking of a favor.

-          Sum payable must be in money only. It cannot be made payable in goods, wares, or merchandise or in property.

-          A drawee’s name may be filled in under Section 14 of the NIL

15.   Determination of negotiability

  1. by the provisions of the Negotiable Instrument Law, particularly Section 1 thereof
  2. by considering the whole instrument
  3. by what appears on the face of the instrument and not elsewhere

*In determining is the instrument is negotiable, only the instrument itself and no other, must be examined and compared with the requirements stated in Sec. 1. If it appears on the instrument that it lacks one of the requirements, it is not negotiable and the provisions of the NIL do not govern the instrument. The requirement lacking cannot be supplied by using a separate instrument in which that requirement which is lacking appears.

16.   Sum is certain even if it is to be paid with:

a.       interest

b.       in installments

c.       in installments with acceleration clause

d.       with exchange

e.       costs of collection or attorney’s fees (Sec. 2 NIL)

17.   General Rule: The promise or order should not depend on a contingent event. If it is conditional, it is non-negotiable.

Exceptions:

a.       indication of particular fund from which the acceptor disburses himself after payment

b.       statement of the transaction which gives rise to the instrument. (Sec. 3 NIL)

But an order or promise to pay out of a particular fund is not unconditional

Notes on Section 3

-          The particular fund indicated should not be the direct source of payment, else it becomes unconditional and therefore non-negotiable. The fund should only be the source of reimbursement.

-          A statement of the transaction does not destroy the negotiability of the instrument. Exception: Where the promise to pay or order is made subject to the terms and conditions of the transaction stated.

18.   Instrument is payable upon a determinable future time if:

a.       there is a fixed period after sight/date

b.       on or before a specified date/fixed determinable future time

c.       on or at a fixed date after the occurrence of an event certain to happen though the exact date is not certain (Sec. 4 NIL)

Notes on Section 4

-          If the instrument is payable upon a contingency, the happening of the event does not cure the defect (still non-negotiable)

19.   General Rule: If some other act is required other than the payment of money, it is non-negotiable.

Exceptions:

a.       sale of collateral securities

b.       confession of judgment

c.       waives benefit of law

d.       gives option to the holder to require something to be done in lieu of money (Sec. 5 NIL)

Notes of Section 5

-          Limitation on the provision, it cannot require something illegal.

-          There are two kinds of judgements by confession: a) cognovit actionem b) relicta verificatione

-          Confessions of judgement in the Philippines are void as against public policy.

-          If the choice lies with the debtor, the instrument is rendered non-negotiable.

20.   The validity and negotiability of an instrument is not affected by the fact that:

  1. it is not dated
  2. does not specify the value given or that any had been given
  3. does not specify the place where it is drawn or payable
  4. bears a seal
  5. designates the kind of current money in which payment is to be made (Sec. 6 NIL)

21.   Instrument is payable upon demand if:

a.       it is expressed to be so payable on sight or upon presentation

b.       no period of payment is stipulated

c.       issued, accepted, or endorsed after maturity (Sec. 7 NIL)

Where an instrument is issued, accepted or indorsed when overdue, it is, as regards to the person so issuing, accepting, or indorsing it, payable on demand.

Notes on Section 7

- if the time for payment is left blank (as opposed to being omitted), it may properly be considered as an incomplete instrument and fall under the provisions of Sec. 14, 15, or 16 depending on how the instrument is delivered.

22.   Instrument is payable to order:

-          where it is drawn payable to the order of a specified person or

-          to a specified person or his order

It may be drawn payable to the order of:

  1. a payee who is not a maker, drawer, or drawee
  2. the drawer or maker
  3. the drawee
  4. two or more payees jointly
  5. one or some of several payees
  6. the holder of an office for the time being       (Sec. 8 NIL)

Notes on Section 8

-          The payee must be named or otherwise indicated therein with reasonable certainty.

-          If there is no payee, there would be no one to indorse the instrument payable to order. Therefore useless to be considered negotiable.

-          Joint payees in indicated by the conjunction “and”. To negotiate, all must indorse.

-          Being several payees is indicated by the conjunction “or”.

23.   Instrument is payable to bearer :

a.       when it is expressed to be so payable

b.       when payable to the person named or bearer

c.       payable to order of fictitious or non-existent person and this fact was known to drawer

d.       name of payee not name of any person

e.       only and last indorsement is an indorsement in blank (Sec. 9 NIL)

Notes on Section 9

-          “fictitious person” is not limited to persons having no legal existence. An existing person may be considered fictitious depending on the intention of the maker or the drawer.

-          “fictitious person” means a person who has no right to the instrument because the maker or drawer of it so intended. He was not intended to be the payee.

-          where the instrument is drawn, made or prepared by an agent, the knowledge or intent of the signer of the instrument is controlling.

-          Where the agent has no authority to execute the instrument, the intent of the principal is controlling

24.   The date may be inserted in an instrument when:

  1. an instrument expressed to be payable at a fixed period after date is issued undated
  2. where acceptance of an instrument payable at a fixed period after sight is undated (Sec. 13 NIL)

Effects:

-          any holder may insert the true date of issuance or acceptance

-          the insertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due course

-          as to the holder in due course, the date inserted (even if it be the wrong date) is regarded as the true date.

25.   Subsequent Holder in Due Course not affected by the following deficiencies:

a.       incomplete but delivered instrument (Sec. 14 NIL)

b.       complete but undelivered (Sec. 16 NIL)

c.       complete and delivered issued without consideration or a consideration consisting of a promise which was not fulfilled (Sec 28 NIL)

26.   Holder in Due Course Affected by Abnormality/Deficiency:

a.       incomplete and undelivered instrument (Sec. 15 NIL)

b.       maker/drawer’s signature forged (Sec. 23 NIL)

27.   Incomplete but Delivered Instrument:

1. Where an instrument is wanting in any material particular:

a.       Holder has prima facie authority to fill up the blanks therein.

b.       It must be filled up strictly in accordance with the authority given and within a reasonable time.

c.       If negotiated to a holder in due course, it is valid and effectual for all purpose as though it was filled up strictly in accordance with the authority given and within reasonable time. (Sec. 14 NIL)

2. Where only a signature on a blank paper was delivered:

  1. It was delivered by the person making it in order that it may be converted into a negotiable instrument
  2. The holder has prima facie authority to fill it up as such for any amount. (Sec. 14 NIL)

Notes on Section 14

-          if the instrument is wanting in material particular, mere possession of the instrument is enough to presume prima facie authority to fill it up.

-          material particular may be an omission which will render the instrument non-negotiable (e.g. name of payee), an omission which will not render the instrument non-negotiable (e.g. date)

-          in the case of the signature in blank, delivery with intent to convert it into a negotiable instrument is required. Mere possession is not enough.

28.   Incomplete and Undelivered Instrument:

General Rule: Where an incomplete instrument has not been delivered, it will not, if completed and negotiated without authority, be a valid contract in the hands of any holder against any person who signed before delivery. (Sec. 15 NIL)

Notes on Section 15

-          it is a real defense. It can be interposed against a holder in due course.

-          delivery is not conclusively presumed where the instrument is incomplete

-          defense of the maker is to prove non-delivery of the incomplete instrument.

29.   Complete but Undelivered:

General Rule: Every contract on a negotiable instrument is incomplete and revocable until delivery for the purpose of giving effect thereto.

a.       If between immediate parties and remote parties not holder in due course, to be effectual there must be authorized delivery by the party making, drawing, accepting or indorsing. Delivery may be shown to be conditional or for a special purpose only

b.       If the holder is a holder in due course, all prior deliveries conclusively presumed valid

c.       If instrument not in hands of drawer/maker, valid and intentional delivery is presumed until the contrary is proven (Sec. 16 NIL)

Rules on delivery of negotiable instruments:

1)    delivery is essential to the validity of any negotiable instrument

2)    as between immediate parties or those is like cases, delivery must be with intention of passing title

3)    an instrument signed but not completed by the drawer or maker and retained by him is invalid as to him for want of delivery even in the hands of a holder in due course

4)    but there is prima facie presumption of delivery of an instrument signed but not completed by the drawer or maker and retained by him if it is in the hands of a holder in due course. This may be rebutted by proof of non-delivery.

5)    an instrument entrusted to another who wrongfully completes it and negotiates it to a holder in due course, delivery to the agent or custodian is sufficient delivery to bind the maker or drawer.

6)    If an instrument is completed and is found in the possession of another, there is prima facie evidence of delivery and if it be a holder in due course, there is conclusive presumption of delivery.

7)    delivery may be conditional or for a special purpose but such do not affect the rights of a holder in due course.

30.   General rule: a person whose signature does not appear on the instrument in not liable.

Exception:

  1. one who signs in a trade or assumed name (Sec. 18)
  2. a duly authorized agent (Sec. 19)
  3. a forger (Sec. 23)

 

31.   General rule: an agent is not liable on the instrument if he were duly authorized to sign for or on behalf of a principal.

Requisites:

  1. he must be duly authorized
  2. he must add words to his signature indicating that he signs as an agent
  3. he must disclose his principal (Sec. 20 NIL)

Notes on Section 20

-          if an agent does not disclose his principal, the agent is personally liable on the instrument.

32.   Per Procuration – operates as notice that the agent has a limited authority to sign.

Effects:

-          the principal in only bound if the agent acted within the limits of the authority given

-          the person who takes the instrument is bound to inquire into the extent and nature of the authority given. (Sec. 21 NIL)

 

33.   General rule: Infants and corporations incur no liability by their indorsement or assignment of an instrument. (Sec. 22 NIL)

Effects:

-          no liability attached to the infant or the corporation

-          the instrument is still valid and the indorsee acquires title

 

34.   General rule: a signature which is forged or made without authority is wholly inoperative.

Effects:

  1. no right to retain
  2. no right to give a discharge
  3. no right to enforce payment can be acquired.       (Sec. 23 NIL)

Exception:

-          the party against whom it is sought to be enforced is precluded from setting up the forgery or want of authority.

Notes on Section 23

-          Section 23 applies only to forged signatures or signatures made without authority

-          Alterations such as to amounts or like fall under section 124

-          Forms of forgery are a) fraud in factum b) duress amounting to fraud c) fraudulent impersonation

-          Only the signature forged or made without authority is inoperative, the instrument or other signatures which are genuine are affected

-          The instrument can be enforced by holders to whose title the forged signature is not necessary

-          Persons who are precluded from setting up the forgery are a) those who warrant or admit the genuineness of the signature b) those who are estopped.

-          Persons who are precluded by warranting are a) indorsers b) persons negotiating by delivery c) acceptors.

-          drawee bank is conclusively presumed to know the signature of its drawer

-          if endorser’s signature is forged, loss will be borne by the forger and parties subsequent thereto

-          drawee bank is not conclusively presumed to know the signature of the indorser. The responsibility falls on the bank which last guaranteed the indorsement and not the drawee bank.

-          Where the payee’s signature is forged, payments made by the drawee bank to collecting bank is ineffective. No debtor/creditor relationship is created. An agency to collect is created between the person depositing and the collecting bank. Drawee bank may recover from collecting bank who may in turn recover from the person depositing.

Rules on liabilities of parties on a forged instrument

In a PN

-          a party whose indorsement is forged on a note payable to order and all parties prior to him including the maker cannot be held liable by any holder

-          a party whose indorsement is forged on a note originally payable to bearer and all parties prior to him including the maker may be held liable by a holder in due course provided that it was mechanically complete before the forgery

-          a maker whose signature was forged cannot be held liable by any holder

 

In a BOE

-          the drawer’s account cannot be charged by the drawee where the drawee paid

-          the drawer has no right to recover from the collecting bank

-          the drawee bank can recover from the collecting bank

-          the payee can recover from the drawer

-          the payee can recover from the recipient of the payment, such as the collecting bank

-          the payee cannot collect from the drawee bank

-          the collecting bank bears the loss but can recover from the person to whom it paid

-          if payable to bearer, the rules are the same as in PN.

-          if the drawee has accepted the bill, the drawee bears the loss and his remedy is to go after the forger

-          if the drawee has not accepted the bill but has paid it, the drawee cannot recover from the drawer or the recipient of the proceeds, absence any act of negligence on their part.

 

35.   Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration. (Sec. 24 NIL)

Effects:

-          every person whose signature appears thereon is a party for value

-          presumption is disputable

 

36.   Where value has at any time been given for the instrument, the holder is deemed a holder for value in respect to all parties who become such prior to that time. (Sec. 26 NIL)

 

37.   Effect of want of consideration:

  1. Absence or failure of consideration may be set up against a holder not a holder in due course (personal defense)
  2. Partial failure of consideration is a defense pro tanto (Sec 28 NIL)

 

Notes on Section 28

 

-          absence of consideration is where no consideration was intended to pass.

-          failure of consideration implies that consideration was intended by that it failed to pass

-          the defense of want of consideration is ineffective against a holder in due course

-          a drawee who accepts the bill cannot allege want of consideration against the drawer

 

38.   An accommodation party is one who signs the instrument as maker, drawer, acceptor, or indorser without receiving value therefor and for the purpose of lending his name to some other person.

Effects:

-          an accommodation party is liable to the holder for value notwithstanding that such holder knew that of the accommodation. (Sec. 28 NIL)

 

Notes on Section 28

-          the accommodated party cannot recover from the accommodation party

-          want of consideration cannot be interposed by the accommodation party

-          an accommodation maker may seek reimbursement from a co-maker even in the absence of any provision in the NIL; the deficiency is supplied by the New Civil Code.

-          he may do this even without first proceeding against the debtor provided:

a.       he paid by virtue of judicial demand

b.       principal debtor is insolvent

 

39.   An instrument is negotiated when:

  1. it is transferred from one person to another
  2. that the transfer must be in a manner as to constitute the transferee a holder

For a bearer instrument – by delivery

For payable to order – by indorsement and delivery (Sec. 30 NIL)

 

40.   Indorsement to be must be:

  1. written
  2. on the instrument itself or upon a piece of paper attached (Sec. 31 NIL)

Notes on Section 31

-          the paper attached with the indorsement is an allonge

-          an allonge must be attached so that it becomes a part of the instrument, it cannot be simply pinned or clipped to it.

41.   Kinds of Indorsements:

  1. Special (Sec. 34)
  2. Blank (Sec. 35)
  3. Restrictive (Sec. 36)
  4. Qualified (Sec. 38)
  5. Conditional (Sec. 39 NIL)

42.   Effects of indorsing an instrument originally payable to bearer:

-          it may further be negotiated by delivery

-          the person indorsing is liable as indorser to such persons as to make title through his indorsement (Sec. 40 NIL)

Notes on Section 40

-          Section 40 applies only to instruments originally payable to bearer

-          It cannot apply where the instrument is payable to bearer because the only or last indorsement is in blank.

43.   A holder may strike out any indorsement which is not necessary to his title.

Effects:

-          An indorser whose indorsement is struck out is discharged

-          All indorsers subsequent to such indorser who has been discharged are likewise relieved. (Sec. 48 NIL)

44.   Effects of a transfer without endorsement:

-          the transferee acquires such title as the transferor had

-          the transferee acquires the right to have the indorsement of the transferor

-          negotiation takes effect as of the time the indorsement is actually made (Sec. 49 NIL)

45.   Rights of a holder:

-          a holder may sue in his own name

-          a holder may receive payment.

Effects:

-          if in due course it discharges the instrument (Sec. 51 NIL)

46.   Requisites for a Holder in Due Course (HDC):

a.       receives the instrument complete and regular on its face

b.       became a holder before it was overdue and had no notice that it had been previously dishonored if such was the fact

c.       takes the instrument for value and in good faith

d.       at time he took the instrument, no notice of infirmity in instrument or defect in the title of the person negotiating it (Sec. 52 NIL)

Notes on Section 52

-          every holder is presumed to be a HDC (Sec. 59)

-          the person who questions such has the burden of proof to prove otherwise

-          if one of the requisites are lacking, the holder is not HDC

-          an instrument is considered complete and regular on its face if a) the omission is immaterial b) the alteration on the instrument was not apparent on its face

-          an instrument is overdue after the date of maturity.

-          on the date of maturity, the instrument is not overdue and the holder is a HDC

-          acquisition of the transferee or indorsee must be in good faith

-          good faith means lack of knowledge or notice of defect or infirmity

 

47.   A holder is not a HDC where an instrument payable on demand is negotiated at an unreasonable length of time after its issue (Sec. 53 NIL)

48.   Rights of a HDC:

-          holds the instrument free from any defect of title of prior parties

-          free from defenses available to prior parties among themselves (personal/ equitable defenses)

-          may enforce payment of the instrument for the full amount against all parties liable(Sec. 57 NIL)

Notes on Section 57

-          Personal or equitable defenses are those which grow out of the agreement or conduct of a particular person in regard to the instrument which renders it inequitable for him through legal title to enforce it. Can be set up against holders not HDC

-          Legal or real defenses are those which attach to the instrument itself and can be set up against the whole world, including a HDC.

Personal Defenses Real Defenses
1. absence or failure of consideration Alteration
2. want of delivery of complete instrument Want of delivery of incomplete instrument
3. insertion of wrong date where payable at a fixed period after date and issued undated; or at a fixed period after sight and acceptance is undated Duress amounting to forgery
4. filling up the blanks contrary to authority given or not within reasonable time Fraud in factum or in esse contractus
5. fraud in inducement Minority
6. acquisition of the instrument by force, duress or fear Marriage in case of a wife
7. acquisition of the instrument by unlawful means Insanity where the insane person has a guardian appointed by the court
8. acquisition of the instrument for an illegal consideration Ultra vires acts of a corporation where its charter or by statue, it is prohibited from issuing commercial paper
9. negotiation in breach of faith Want of authority of agent
10. negotiation under circumstances amounting to fraud Execution of instrument   between public enemies
  1. Mistake
Illegality of contract made by statue
12. intoxication Forgery
13. ultra vires acts of corporations
14. want of authority of the agent where he has apparent authority
15. illegality of contract where form or consideration is illegal
16. insanity where there is no notice of insanity

 

49.   A instrument not in the hands of a HDC is subject to the same defenses as if it were non-negotiable.

Exception:

-          a holder who derives his title through a HDC and is not a party to any fraud or illegality affecting the instrument, has all the rights of such HDC in respect to all parties prior. (Sec. 58 NIL)

 

Rights of a holder not a HDC

-          may sue in his own name

-          may receive payment and if it is in due course, the instrument is discharged

-          holds the instrument subject to the same defenses as if it were non-negotiable

-          if he derives his title through a HDC and is not a party to any fraud or illegality thereto, has all the rights of such HDC

 

50.   General rule: every holder is deemed prima facie to be a holder in due course.

Exception:

-          where it is shown that the title of any person who has negotiated the instrument is defective, the burden is on the holder to prove that he is a HDC or that a person under whom he claims is a HDC (Sec. 59 NIL)

 

51.   A maker is primarily liable:

Effects of making the instrument, the maker:

a.       engages to pay according to tenor of instrument

b.       admits existence of payee and his capacity to indorse (Sec. 60 NIL)

Notes on Section 60

-          a maker’s liability is primarily and unconditional

-          one who has signed as such is presumed to have acted with care and to have signed with full knowledge of its contents, unless fraud is proved

-          the payee’s interest is only to see to it that the note is paid according to its terms

-          when two or more makers sign jointly, each is individually liable for the full amount even if one did not receive the value given

-          the maker is precluded from setting up the defense of a) the payee is fictional, b) that the payee was insane, a minor or a corporation acting ultra vires

 

52.   A drawer is secondarily liable

Effects of drawing the instrument, the drawer:

  1. admits the existence of the payee,
  2. the capacity of such payee to indorse
  3. engages that on due presentment, the instrument will be accepted or paid or both according to its tenor.

If the instrument is dishonored, and the necessary proceedings on dishonor duly taken

  1. the drawer will pay the amount thereof to the holder
  2. will pay to any subsequent indorser who may be compelled to pay it. (Sec. 61 NIL)

Notes on Section 61

-          a drawer may insert an express stipulation to negative or limit his liability

53.   An acceptor is primarily liable

By accepting the instrument, an acceptor:

-          engages that he will pay according to the tenor of his acceptance

-          admits the existence of the drawer, the genuineness of his signature and his capacity and authority to draw the instrument

-          the existence of the payee and his then capacity indorse

54.   Irregular Indorser – a person not otherwise a party to an instrument places his signature in blank before delivery is liable as an indorser in the following manner:

  1. if payable to order of a third person – liable to the payee and to all subsequent parties
  2. if payable to order of the maker or drawer – liable to all parties subsequent to the maker or drawer
  3. if payable to bearer – liable to all parties subsequent to the maker or drawer
  4. if signs for an accommodation party – liable to all parties subsequent to the payee (Sec. 64 NIL)

55.   Warranties where negotiating by delivery or qualified endorsement:

  1. the instrument is genuine and in all respect what it purports to be
  2. the indorser has good title to it
  3. all prior parties had the capacity to contract
  4. indorser has no knowledge of any fact that would impair the validity or the value of the instrument.

Limitations of warranties:

-if by delivery – extends only to immediate transferee

-warranty of capacity to contract does not apply to persons negotiating public or corporate securities (Sec. 65 NIL)

Notes on Section 65

-          a qualified indorser is one who indorses without recourse or sans recourse

-          recourse – resort to a person secondarily liable after default of person primarily liable

-          a qualified indorser cannot raise the defense of a) forgery b) defect of his title or that it is void c) the incapacity of the maker, drawer or previous indorsers.

-          a qualified Indorsement makes the indorser mere assignor of title of instrument, relieves him of general obligation to pay if instrument is dishonored, but he is still liable for the warranties arising from instrument only up to warranties of general indorser

-          the warranty is to the capacity of prior parties at the time the instrument was negotiated. Subsequent incapacity does not breach the warranty.

-          lack of knowledge of the indorser as to any fact that would impair the validity or the value of the instrument must be subsisting all throughout.

-          a person Negotiating by Delivery warrants same as those of qualified indorser and extends to immediate transferees only

56.   Warranties of a general indorser:

  1. the instrument is genuine and in all respect what it purports to be
  2. the he has good title to it
  3. all prior parties had the capacity to contract
  4. that the instrument at the time of his indorsement was valid and subsisting (Sec. 66 NIL)

In addition:

-          engages that the instrument will be accepted or paid or both according to its tenor on due presentment

-          engages to pay the amount thereof if it be dishonored and the necessary proceedings on dishonor are taken

Notes on Section 66

-          the indorser under Section 66 warrants the solvency of a prior party

-          the indorser warrants that the instrument is valid and subsisting regardless of whether he is ignorant of that fact or not.

-          warranties extend in favor of a) a HDC b) persons who derive their title from HDC c) immediate transferees even if not HDC

-          the indorser does not warrant the genuineness of the drawer’s signature

-          general indorser is only secondarily liable

57.   General rule: Presentment for payment is not necessary to charge persons primarily liable on the instrument. Presentment for payment is necessary to charge the drawer and indorsers. (Sec 70 NIL)

Notes on Section 70

-          presentation for payment – production of a BOE to the drawee for his acceptance, or to a drawee or acceptor for payment. Also presentment of a PN to the party liable for payment of the same.

-          consists of a) a personal demand for payment at a proper place b) the bill or note must be ready to be exhibited if required and surrendered upon payment.

-          parties primarily liable – persons by the terms of the instrument are absolutely required to pay the same. E.g maker and acceptors. They can be sued directly.

-          if payable at the special place, and the person liable is willing to pay there at maturity, such willingness and ability is equivalent to tender of payment.

-          presentment is necessary to charge persons secondarily liable otherwise they are discharged

-          Acts needed to charge persons secondarily liable: a) presentment for payment/acceptance b) dishonor by non-payment/non-acceptance c) notice of dishonor to secondary parties

-          Acts needed to charge persons secondarily liable in other cases: a) Protest for non-payment by the drawee b) protest for non-payment by the acceptor for honor

58.   Proper presentment:

  1. by the holder or an authorized person
  2. at a reasonable hour on a business day
  3. at a proper place
  4. to the person primarily liable or if absent to any person found at the place where presentment is made (sec. 72 NIL)

Notes on Section 72

-          only the holder or one authorized by him has the right to make presentment for payment

-          presentment cannot be made on a Sunday or holiday

-          presentment for payment is made to the maker, or acceptor. Not to the person secondarily liable.

-          if the instrument is payable on demand – a) if it is a note – presentment must be made within reasonable time after issue b) if it is a bill – presentment must be made within reasonable time after last negotiation.

59.   Presentment not required to charge the drawer:

  1. he has no right to expect
  2. he has no right to require

that the drawee or acceptor will pay (Sec 79 NIL)

60.   Presentment not required to charge the indorser where:

  1. the instrument was made or accepted for his accommodation
  2. he has no reason to expect that the instrument will be paid if presented (Sec. 80 NIL)

 

61.   General rule: Presentment for payment necessary to charge persons secondarily liable otherwise they are discharged:

Exception:

-          Section 79 and 80

Notes on Section 79 and 80

-          only the drawer or indorser are not discharged. All other parties secondarily liable are discharged.

62.   Presentment for payment excused if:

a.       after due diligence, presentment cannot be made

b.       presentment is waived

c.       the drawee is a fictitious person (Sec 82 NIL)

Notes on Section 82

-          what is excused is the failure to make presentment. There is no need to make any presentment versus under section 81 (delay in presentment) presentment for payment is still required after the cause of delay has ceased.

 

63.   Summary of rules as to presentment for payment:

  1. presentment not necessary to charge persons primarily liable
  2. necessary to charge persons secondarily liable except:

-          the drawer under Sec. 79

-          the indorser under Sec. 80

-          when excused under Sec. 82

-          when the instrument has been dishonored by non-acceptance under Sec. 83

 

64.   How dishonored by non-acceptance:

-          the instrument was duly presented but payment is refused or cannot be obtained

-          presentment is excused and the instrument is overdue and unpaid (Sec. 83 NIL)

 

65.   Effects of dishonor by non-payment:

-          an immediate right of recourse to all parties secondarily liable accrues to the holder. (Sec. 84 NIL)

Notes on Section 84

-          parties cease to be secondarily liable and become principal debtors.

-          Liability becomes the same as that of the original obligors.

66.   Requisites for payment in due course:

  1. made at or after the maturity of the instrument
  2. to the holder
  3. in good faith
  4. without notice of any defect in the holder’s title (sec. 88 NIL)

Notes on Section 88

-          payment must be made to the possessor of the instrument

-          possession of the note by the maker is presumptive evidence that it has been paid

67.   Notice of Dishonor may be given:

  1. by or on behalf or the holder
  2. by or on behalf of any party who:

-          is a party to the instrument and might be compelled to pay the instrument

-          to a holder who having taken it up would have a right of reimbursement from the party to whom notice is given. (Sec. 90 NIL)

68.   Notice:

  1. may be written or oral (Sec. 96)
  2. written notice need not be signed or may be supplemented by verbal communication (Sec. 95)
  3. may be by personal delivery or by mail (Sec. 96)

69.   Notice may be waived either expressly or implied:

  1. before the time of giving notice has arrived
  2. after the omission to give due notice (Sec. 109 NIL)

70.   Protest may be waived:

Effects:

-          deemed a waiver of presentment and notice of dishonor as well (Sec. 111 NIL)

Notes on Section 111

-          Where notice is waived, presentment is not waived

-          Where presentment is waived, notice is also waived

-          Where protest is waived, notice and presentment is waived

71.   Notice of Dishonor – given by the holder to the parties secondarily liable, drawer and each indorser, that the instrument was dishonored by non-acceptance or non-payment by the drawee/maker

General rule: Any drawer or indorser to whom such notice is not given is discharged.

Exceptions:

  1. Waiver (Sec. 109)
  2. Notice is dispensed (Sec. 112)
  3. Not necessary to Drawer (Sec. 114)
  4. Not necessary to Indorser (Sec. 115)

- if notice is delayed, delay may be excused (Sec. 113)

72.   Instances when Notice of Dishonor Not Necessary to Drawer

a.       drawer and drawee same person

b.       drawee is a fictitious/incapacitated person

c.       drawer is the person to whom presentment for payment is made

d.       drawer has no right to expect that the drawee will accept/pay the instrument (Sec. 114 NIL)

73.   Instances when Notice Not Required to Indorser

a.       drawee was a fictitious/incapacitated person and the indorser was aware of such at the time of indorsement

b.       indorser is the person to whom instrument was presented for payment

c.       instrument made/accepted for his accommodation (Sec. 115 NIL)

74.   Omission to give notice of dishonor by non-acceptance doe not prejudice a HDC (Sec. 117 NIL)

75.   Protest only necessary for a foreign bill of exchange. Protest for other negotiable instruments is optional. (Sec. 118 NIL)

76.   Causes of Discharge of the Instrument

a.       payment by the debtor

b.       payment by accommodated party

c.       intentional cancellation by holder of instrument

d.       any other act discharging a simple monetary obligation

e.       debtor becomes holder of the instrument at/after maturity in his own right ( Sec 119 NIL)

Notes on Section 119

-          discharge of the instrument discharges all the parties thereto

-          payment must be in due course, and by the principal debtor or on his behalf

-          if payment is not made by the principal debtor, payment only cancels the liability of the payor and those obligated after him but does not discharge the instrument.

-          payment by an accommodation party does not discharge the instrument.

77.   Discharge of Secondary Parties:

a.       any act discharging the instrument

b.       cancellation of indorser’s signature by indorsers

c.       discharge of prior party

d.       tender of payment by prior party

e.       release of principal debtor

f.         extension of payment by the holder/postponement of right to enforce without assent of secondary parties and without reservation of right of recourse against secondary parties (Sec 120 NIL)

78.   Rights of a party secondarily liable who pays:

-          the instrument is not discharge

-          the party is remitted to his former rights as to all prior parties

-          the party may strike out his own and all subsequent indorsements

-          the party may negotiate the instrument again

Exception:

-          an instrument cannot be renegotiated where it is payable to order of a 3rd person and has been paid by the drawer

-          and instrument cannot be renegotiated where is was made or accepted for accommodation and it has been paid by the party accommodated.

78. Renunciation by a holder discharges an instrument when:

  1. it is absolute and unconditional
  2. made in favor of a person primarily liable
  3. made at or after maturity of the instrument
  4. in writing or the instrument is delivered up to the person primarily liable (Sec. 122 NIL)

Notes on Section 122

-          if renounced in favor of a party secondarily liable, only he is exonerated from liability and all parties subsequent to him

-          discharge by novation is allowed

79.   General rule: When materially altered, without the consent of all parties liable, the instrument is avoided except as against:

  1. the party who has made the alteration
  2. the party who authorized or assented to the alteration.
  3. subsequent indorsers

Exception:

-          if in the hands of a HDC, may be enforced according to its original tenor

Notes on Section 124

-          there is no distinction between fraudulent and innocent alteration

80.   Material Alteration – an alternation is said to be material if it alters the effect of the instrument.

Under Section 125 the following changes are considered material alterations:

  1. dates
  2. the sum payable
  3. time and place of payment
  4. number or relations of the parties
  5. medium or currency for payment
  6. adding a place of payment where no place is specified
  7. any other which alters the affect of the instrument

81.   Instances where a BOE may be treated as a PN:

  1. where the drawer and the drawee are one and the same
  2. where the drawee is a fictitious person
  3. where the drawee has no capacity to contract (Sec. 130 NIL)

The holder has the option to treat it as a BOE or a PN

 

82.   Acceptance is the signification by the drawee of his assent to the order of the drawer. It is an act by which a person on whom the BOE is drawn assents to the request of the drawer to pay it. (Sec. 132 NIL)

Acceptance may be:

  1. actual
  2. constructive
  3. general (Sec. 140)
  4. qualified (Sec. 141)

Requisites of actual acceptance:

-          in writing

-          signed by the drawee

-          must not express the drawee will perform his promise by any other means than payment of money

-          communicated or delivered to the holder

  1. A holder has the right:
  1. require that acceptance be written on the bill and if refused, treat it as if dishonored (Sec. 133)
  2. refuse to accept a qualified acceptance and may treat it as dishonored (Sec. 142)
  1. Constructive Acceptance:
  1. where the drawee to whom the bill has been delivered destroys it
  2. the drawee refuses within 24 hrs after such delivery or within such time as is given, to return the bill accepted or not.       (Sec. 137 NIL)

Notes on Section 137

-          drawee becomes primarily liable as an acceptor.

-          mere retention is equivalent to acceptance

  1. When presentment for acceptance is necessary:
  1. if necessary to fix the maturity of the bill
  2. if it is expressly stipulated that it shall be presented for acceptance
  3. if the bill is drawn payable elsewhere than the residence or place of business of the drawee (Sec. 143 NIL)

Notes on Section 143

-          Presentment is the production of a BOE to the drawee for his acceptance

-          in on order case is presentment necessary to make parties liable.

90. Summary on presentment for acceptance of Bills of Exchange:

a.       to make the drawee primarily liable and for the accrual of secondary liability (Sec. 144)

b.       necessary to fix maturity date, where bill expressly stipulates presentment, bill payable other than place of drawee (Sec. 143)

c.       when presentment is excused: drawee is dead, hides, is fictitious, incapacitated person, after due diligence presentment cannot be made, presentment is refused on another ground although presentment is irregular (Sec. 148)

  1. General rule: Protest is required only for foreign bills

Exception:

-          inland bills and notes may also be protested if desired

Protest is required:

  1. where the foreign bill is dishonored by non acceptance
  2. where the foreign bill is dishonored by non-payment
  3. where the bill has been accepted for honor, it must be protested for non-payment before it is presented for payment to the acceptor for honor
  4. where the bill contains a referee in case of need, it must be protested for non payment before presentment for payment to the referee in case of need (Sec. 152)

Notes on Section 152

-          Protest – formal statement in writing made by a notary under his seal of office at the request of the holder, in which it is declare that the some was presented for payment or acceptance (as the case may be) and such was refused.

-          it means all steps or acts accompanying the dishonor of a bill or note necessary to charge an indorser

-          required when the instrument is a foreign bill of exchange.

-          it must be made on the same date of dishonor, by a notary/respectable citizen of the place in the presence of 2 credible witnesses so recourse to secondary parties

  1. Acceptance for Honor   (Sec. 161 NIL)– an acceptance of a bill made by a stranger to it before maturirty, where the drawee of the bill has:
  1. refused to accept it
  2. and the bill has been protested for non-acceptance
  3. or where the bill has been protested for better security

Requisites for acceptance for honor:

-          the bill must have been previously protested a) for non-acceptance b) or for better security

-          the bill is not overdue at the time of the acceptance for honor

-          the acceptor for honor must be a stranger to the bill

-          the holder must give his consent

Notes on Acceptance for Honor

-          Purpose: to save the credit of the parties to the instrument or some party to it as the drawer, drawee, or indorser or somebody else.

-          Acceptor for honor is liable to the holder and to all the parties to the bill subsequent to the party for whose honor he has accepted (Sec. 164)

  1. How acceptance for honor is made:
  1. in writing and indicated that it is an acceptance for honor
  2. signed by the person making the acceptance (Sec. 162 NIL)

 

  1. Payment for Honor – payment made through a notarial act of honor of a party liable/stranger to the bill after bill has been dishonored by non-payment by the acceptor and protested for non-payment by the holder

Requisites:

a.       protest for non-payment

b.       any person may pay supra protest

Form for payment of honor:

  1. payment must be attested by notarial act appended to the protest, or form an extension to it.
  2. notarial act of honor must be based on a declaration by the payer for honor

 

  1. Bills in Set – bill of exchange drawn in several parts, each part of the set being numbered and containing a reference to the other parts, the whole of the parts just constituting one bill (Sec 178 NIL)

 

Source:

Commercial Law Memory Aid

Negotiable Instruments Law

Ateneo Central Bar Operations 2001

Legal Ethics – Code of Judicial Conduct

Code of Judicial Conduct

Preamble

An honorable, competent and independent judiciary exists to administer justice and thus promote the unity of the country, the stability of government, and the well being of the people.

CANON 1- A judge should uphold the integrity and independence of the judiciary 

Rule 1.01 – A judge should be the embodiment of competence, integrity, and independence.

Rule 1.02 – A judge should administer justice impartially and without delay.

Rule 1.03 – A judge should be vigilant against any attempt to subvert the independence of the judiciary and resist any pressure from whatever source.

  • Judges should avoid even the slightest infraction of the law.
  • Must be models of uprightness, fairness and honesty
  • Should not relax in his study of the law and court decisions.
  • Should not be swayed by public clamor or considerations of personal popularity
  • Must decide motions without delay.
  • Should also appear impartial.

CANON 2 – A judge should avoid impropriety and the appearance of impropriety in all activities. 

Rule 2.01 – A judge should so behave at all times as to promote public confidence in the integrity and impartiality of the judiciary.

Rule 2.02 – A judge should not seek publicity for personal vainglory.

Rule 2.03 – A judge shall not allow family, social, or other relationships to influence judicial conduct or judgment.  The prestige of judicial office shall not be used or lent to advance the private interests of others, nor convey or permit others to convey the impression that they are in a special position to influence the judge.

Rule 2.04 – A judge shall refrain from influencing in any manner the outcome of litigation or dispute pending before another court of administrative agency.

  • A judge must be beyond suspicion. He has the duty not only to render a just and impartial decision but also to render it in such a manner as to be free from any suspicion as to its fairness and impartiality, and also as to his integrity.
  • Every litigant is entitled to nothing short of the cold neutrality of an independent, wholly free, disinterested and impartial tribunal.
  • A judge must be temperate in his language and must not lose his cool.
  • A judge is prohibited from making public statements in the media regarding a pending case so as not to arouse public opinion for or against a party (violates the Principle of Subjudice)
  • Judges must not use or permit the use of any undignified/self-laudatory statement regarding their qualifications or legal services.
  • A judge must not allow anyone to ride on his prestige. He should not create the impression that someone or some people are so close to him to enjoy his favor.

CANON 3 -  A judge should perform official duties honestly, and with impartiality and diligence.

 

ADJUDICATIVE RESPONSIBILITIES

Rule 3.01 – A judge shall be faithful to the law and maintain professional competence.

  • Judge should be conversant with the law and its amendments.

Rule 3.02 – In every case, a judge shall endeavor diligently to ascertain the facts and the applicable law unswayed by partisan interest, public opinion or fear of criticism.

  • Finding of facts must be based not on the personal knowledge of the judge but upon the evidence presented.
  • If the personal view of the judge contradicts the applicable doctrine promulgated by the Supreme Court, nonetheless, he should decide the case in accordance with that doctrine and not in accordance with his personal views.  He is however not prohibited from stating his own opinion on the matter if he wants to invite constructive attention thereto.

Rule 3.03 – A judge shall maintain order and proper decorum in the courts.

Rule 3.04 – A judge should be patient, attentive, and courteous to lawyers, especially the inexperienced, to litigants, witnesses, and others appearing before the court.  A judge should avoid unconsciously falling into the attitude of mind that the litigants are made for the courts, instead of the courts for the litigants.

  • Conduct of trial must not be attended with fanfare and publicity; not permit pictures or broadcasting.
  • Must use temperate language; should not make insulting remarks.

Rule 3.05 – A judge shall dispose of the court’s business promptly and decide cases within the required periods.

Rule 3.06 – While a judge may, to promote justice, prevent waste of time or clear up some obscurity, properly intervene in the presentation of evidence during the trial, it should always be borne in mind that undue interference may prevent the proper presentation of the cause of the ascertainment of the truth.

 Rule 3.07 – A judge should abstain from making public comments on any pending or impending case and should require similar restraint on the part of court personnel.

  • Judge should take notes and rely on transcripts.
  • Judge is not excused if stenographer is overloaded. He is excused for delay on grounds of multifarious motions; appellate court enjoins judge from further proceeding; heavy caseload.

 

ADMINISTRATIVE RESPONSIBILITIES

Rule 3.08 – A judge should diligently discharge administrative responsibilities, maintain professional competence in court managements, and facilitate the performance of the administrative functions of other judges and court personnel.

Rule 3.09 – A judge should organize and supervise the court personnel to ensure the prompt and efficient dispatch of business, and require at all times the observance of high standards of public service and fidelity.

Rule 3.10 – A judge should take or inititate appropriate disciplinary measures against lawyers or court personnel for unprofessional conduct of which the judge may have become aware.

Rule 3.11 – A judge should appoint commissioners, receivers, trustees, guardians, administrators and others strictly on the basis of merit and qualifications, avoiding nepotism, and favoritism. Unless otherwise allowed by law, the same criteria should be observed in recommending appointment of court personnel.  Where the payment of compensation is allowed, it should be reasonable and commensurate with the fair value of services rendered.

  • Ascertain that the records of all cases are properly kept and managed.
  • Maintain a checklist on the cases submitted for decision with a view to know exactly the specific deadlines for the resolution/decision of the said cases.
  • Loss of records: gross negligence
  • Should be a good manager.
  • May not summarily suspend a lawyer for indirect contempt.
  • Judge has the power to appoint, but the power to dismiss court employees is vested in the Supreme Court.
  • If knowingly nominate or appoint to any public office any person lacking the legal qualification therefor, shall be guilty of unlawful appointment punishable with imprisonment and fine (Art 244, RPC).

 

DISQUALIFICATIONS

Rule 3.12 – A judge should take no part in proceeding where the judge’s impartiality might reasonably be questioned.  These cases include, among others, proceedings where;

  1. a.      the judge has personal knowledge of disputed evidentiary facts concerning the proceeding;
  2. b.     the judge served as executor, administrator, guardian, trustee or lawyer in the case or matters in controversy, or a former associate of the judge served as counsel during their association, or the judge or lawyer was a material witness therein;
  3. c.      the judge’s ruling in a lower court is subject of review
  4. d.     the judge is related by consanguinity or affinity to a party litigant within the 6th degree or to counsel within the 4th degree;
  5. e.      the judge knows that the judge’s spouse  or child has a financial interest, as heir, legatee, creditor, fiduciary, or otherwise, in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding.

In every instance the judge shall indicate the legal reason for inhibition.

  • Petition to disqualify judge must be filed before rendition of judgment by the judge; can’t be raised first time on appeal.
  • If a judge denies petition for disqualification, the ultimate test: is whether or not the complaint was deprived of a fair and impartial trial. Remedy: seek new trial.

REMITTAL OF DISQUALIFICATION

Rule 3.13 – A judge disqualified by the terms of Rule 3.12 may, instead of withdrawing from the proceeding, disclose on the record the basis of disqualification.  If, based on such disclosure, the parties and lawyers independently of the judge’s participation, all agree in writing that the reason for the inhibition is immaterial or insubstantial, the judge may then participate in the proceeding.  The agreement, signed by all parties and lawyers, shall be incorporated in the record of the proceeding.

 

CANON 4 – A judge may, with due regard to official duties, engage in activities to improve the law, the legal system and the administration of justice.

Rule 4.01 – A judge may, to the extent that the following activities do not impair the performance of judicial duties or case doubt on the judge’s impartiality:

  1. a.      speak, write, lecture, teach or participate in activities concerning the law, the legal system and the administration of justice;
  2. b.     appear at a public hearing before a legislative or executive body on matters concerning the law, the legal system or the administration of justice and otherwise consult with them on matters concerning the administration of justice;
  3. c.      serve on any organization devoted to the improvement of the law, the legal system or the administration of justice.
  • Decision to engage in these activities depends upon the sound judgement of the judge.
  • If has not enough time to spare (such as when caseload is too heavy) prudence dictates, he must concentrate on his judicial duties.
  • If a judge has time to spare, the best attitude to take is to participate in activities which are closely related to the performance of his duties and which do not consume much of his time and energy.

CANON 5 – A judge should regulate extra-judicial activities to minimize the risk of conflict with judicial activities.

VOCATIONAL, CIVIC AND CHARITABLE ACTIVITIES

Rule 5.01 – A judge  may engage in the following activities provided that they do not interfere with the performance of judicial duties or detract from the dignity of the courts:

  1. a.      write, lecture, teach and speak on non-legal subjects;
  2. b.     engage in the arts, sports, and other special recreational activities;
  3. c.      participate in civic and charitable activities;
  4. d.     serve as an officer, director, trustee, or non-legal advisor of a non-profit or non-political, educational, religious, charitable, fraternal, or civic organization.
  • If they opt to engage in such activities, they must learn how to manage their time in such manner that their judicial responsibilities do not falter and suffer.

FINANCIAL ACTIVITIES

Rule 5.02 – A judge shall refrain from financial and business dealings that tends to reflect adversely on the court’s impartiality, interfere with the proper performance of judicial activities, or increase involvements with lawyers or persons likely to come before the court. A judge should so manage investments and other financial interests as to minimize the number of cases giving grounds for disqualification.

Rule 5.03 – Subject to the provisions of the proceeding rule, a judge may hold and manage investments but should not serve as an officer, director, manager, advisor, or employee of any business except as director of a family business of the judge.

Rule 5.04 – A judge or any, immediate member of the family, shall not accept a gift, bequest, favor or loan from anyone except as may be allowed by law.

Rule 5.05 – No information acquired in a judicial capacity shall be used or disclosed by a judge in any financial dealing or for any other purpose not related to judicial activities.

  • Prohibitions under the Revised Penal Code:

Art 215. Prohibited Transaction. The penalty of prision correccional in its minimum period or a fine ranging from P200 to P1000 or both, shall be imposed upon any appointive public officer who, during his incumbency, shall directly or indirectly become interested in any transaction of exchange or speculation within the territory subject to his jurisdiction.

Art 216. Possession of prohibited interest by a public officer. The penalty of arresto mayor in its medium period to prision correccional in its minimum period, or a fine ranging from P200 to P1000, or both, shall be imposed upon a public officer who directly and indirectly, shall become interested in any contract or business which it is his official duty to intervene.

  • Sec 3. Corrupt practices of public officers.  In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

XXX

(h) Directly or indirectly having financial or pecuniary interest in any business, or contract or transaction in connection with which here intervenes or takes part in his official capacity or in which he is prohibited by the Constitution or by any law from having any interest, (Sec. 3(h), RA 3019)

  • General Rule: Avoid taking or receiving loans from litigants.
  • Exception (AGCPA): Unsolicited gifts or presents of small value offered or given as a mere ordinary token of gratitude or friendship according to local custom or usage.

FIDUCIARY ACTIVITIES

Rule 5.06 – A judge should not serve as the execution administrator, trustee, guardian, or other fiduciary, except for the estate, trust, or person of a member of the immediate family and then only if such service will not interfere with the proper performance of judicial duties. “member of immediate family” shall be limited to the spouse  and relatives within the second degree of consanguinity.  As a family fiduciary, a judge shall not:

  1. a.      serve in proceedings that might come before the court of said judge; or
  2. b.     act as such contrary to Rule 5.02 to 5.05

PRACTICE OF LAW AND OTHER PROFESSION

Rule 5.07 – A judge shall not engage in the private practice of law.  Unless prohibited by the Constitution or law, a judge may engage in the practice of any other profession provided that such practice will not conflict or tend to conflict with judicial functions.

  • Includes preparation of pleadings or papers in anticipation of litigation, and giving of legal advice to clients or persons needing the same.
  • Not engage in notarial work. Exception: “Notaries public ex-oficio” – may engage only in notarization of documents connected with the exercise of their official functions. Provided, all notarial fees on account of the government and certification attesting to lack of any lawyer or Notary Public.
  • Sworn statement of assets and liabilities including statement of amounts and services of income, the amount of personal and family expenses and the amount of income tax is paid for the next preceding calendar year.

FINANCIAL DISCLOSURE

Rule 5.08 – A judge shall make full financial disclosure as required by law.

EXTRA-JUDICIAL APPOINTMENTS

Rule 5.09 – A judge shall not accept appointment or designation to any agency performing quasi-judicial or administrative functions.

POLITICAL ACTIVITIES

Rule 5.10 – A judge is entitled to entertain personal views on political questions.  But to avoid suspicion of political partisanship, a judge shall not make political speeches, contribute to party funds, publicly endorse candidates for political office or participate in other partisan political activities.

COMPLIANCE WITH THE CODE OF JUDICIAL CONDUCT

All judges shall strictly comply with this code

 

DATE OF EFFECTIVITY

This code, promulgated on 5 September 1989, shall take effect on 20 October 1989.

  • An administrative case against a judge is not necessarily dismissed by the withdrawal by or desistance of the complainant.
  • Retirement, resignation or promotion of a judge does not necessarily render moot and academic all the cases against him.
  • Civil Liabilities Re Official Functions:
  1. obstructs, defeats, violates or in any manner impedes or impairs the civil rights.
  2. Willful or negligent rendition of a decision which causes damages to another
  3. For damages: rendering/neglecting to decide a case causing loss to a party.
  • Civil Code Disabilities:

Rule:  Can’t purchase properties subject of litigation is his court.

Exception: Does not apply where the subject property was not acquired from any of the parties to the case, nor will it apply when the litigation is already finished.

But… while in a technical sense, the judge may not have acquired the property in litigation in a case before him, nevertheless, it is improper for him to have done so under the canons of judicial ethics.

  • Donations made to a judge by reason of his office are void.
  • Taking advantage of his position to boost his candidacy amounts to gross misconduct.
  • Cannot serve as officers or advisers of political groups.

Criminal Liabilities of Judges

  • Malfeasance under the RPC:
  1. Knowingly Rendering Unjust Judgment (Art. 204, RPC)

            The elements are:

  1. that the officer is a judge;
  2. that he renders judgment in a case submitted to him for decision;
  3. that the judgment is unjust;
  4. the judge knows that his judgment is unjust.
  1. Judgment Rendered Through Negligence (Art. 205, RPC)

            The elements are:

  1. that the offender is a judge;
  2. that he renders judgment in a case submitted to him for decision
  3. that the judgment is manifestly unjust;
  4. that is due to his inexcusable negligence or ignorance.

Notaries Public 

  • Powers and Duties of a Notary Public

Section 241 of the Revised Administrative Act enumerates the General Powers of a Notary Public:

  1. To administer all oaths and affirmations provided for by law:
    1. in all matters incident to his notarial office;
    2. in the execution of:
      1. affidavits
      2. depositions
      3. other documents requiring an oath
  1. To receive proof or acknowledgment of all writings relating to commerce, such as
    1. ships, vessels or boats:
      1. Bills of Exchange
      2. Bottomries
      3. Mortgages
      4. Hypothecations
      5. charter parties or affreightments
      6. letters of attorney
      7. land/buildings or interest therein:
        1. deeds
        2. mortgages
        3. transfers and assignments
        4. other writings as are commonly provided or acknowledged before notaries.

3. To act as magistrate in the writing of affidavits or depositions

4. To make declarations and certify the truth thereof under his seal of office,   concerning all matters done by him in virtue of his office.

  • The law imposes on the notary public two kinds of duties:
  1. execution of formalities required by law; and
  2. verification of the capacity and identity of the parties as well as the legality of the act executed.
  • Extent of Jurisdiction of a Notary Public:

Under the Notarial Law, the jurisdiction of a notary public in general, used to be CO-EXTENSIVE with the province for which he was commissioned; and for the notary public in the City of Manila, the jurisdiction is CO-EXTENSIVE with said city. Circular 8 of 1985 however, clarified further that the notary public may be commissioned for the same term only by one court within the Metro Manila region.

  • Q: Must a Notary Public always be a LAWYER?

A: General Rule: Only those admitted to the practice of law are qualified to be notaries public.

Exception: When there are no persons with the necessary qualifications OR where there are qualified persons but refuse appointment. In which case, the following persons may be appointed as notaries:

  1. those who have passed the studies of law in a reputable university
  2. a clerk or deputy clerk of court for a period of not less than two years
  • Effects of NOTARIZATION
  1. The notary, in effect, proclaims to the world:
    1. that all the parties therein personally appeared before him
    2. that they are personally known to him
    3. that they are the same persons who executed the instrument
    4. that he inquired into the voluntariness of the execution of the instrument; and
    5. that they acknowledged personally before him that they voluntarily and freely executed the same
    6. 2.      Converts a private document into a public one and renders it admissible in court without further proof of its authenticity. (Joson vs. Baltazar)
    7. 3.      Documents enjoy a presumption of regularity. It constitutes prima facie evidence of the facts which give rise to their execution and of the date of said execution, but not of the truthfulness of the statements. The reason for the former presumption is that the law assumes that the act which the officer witnesses and certified to or the date written by him are not shown to be false since notaries are public officers.

 

Source:

Legal Ethics Reviewer

Ateneo

Legal Ethics – Special Disabilities of Lawyers and Judicial Ethics

Special Disabilities of Lawyers

            The following persons are prohibited from acquiring property under litigation by reason of the relation of trust or their peculiar control either directly or indirectly and even at a public or judicial auction:

  1. 1.      guardians;
  2. 2.      agents
  3. 3.      administrators
  4. 4.      public officers and employees
  5. 5.      judicial officers and employees
  6. 6.      prosecuting attorneys and lawyers (Art 1491, NCC)
  7. 7.      those specially disqualified by law (Rubias vs. Batilles, 31 SCRA 120)
  • Elements of Article 1491 (Civil Code; Laig vs. CA, 82 SCRA 294)
  1. there must be an attorney-client relationship
  2. the property or interest of the client must be in litigation
  3. the attorney takes part as counsel in the case
  4. the attorney by himself or through another purchases such property or interest during the pendency of the litigation.
  • General Rule: A lawyer may not purchase, even at a public or judicial auction, in person or through the mediation of another, any property or interest involved in any litigation in which he may take part by virtue of his profession. This prohibition is entirely independent of fraud and such need not be alleged or proven.

  Effects:

  1. malpractice on the part of the lawyer and may be disciplined for misconduct
  2. transaction is null and void
  • Exceptions:
  1. property is acquired by lawyer through a contingent fee arrangement
  2. any of the 4 elements of Art. 1491 is missing

 

Judicial Ethics

  • Sources of Judicial Ethics:
  1. Code of Judicial Conduct
  2. Constitution (Art VIII, Art IX and Art III)
  3. New Civil Code (Articles 9, 20, 27, 32, 35, 739, 1491, 2005, 2035, 2046)
  4. Revised Rules of Court (Rules 71, 135, 137, 139B, 140)
  5. Revised Penal Code (Articles 204, 205, 206, 207)
  6. Anti-Graft and Corrupt Practices Act (RA 3019)
  7. Canons of Judicial Ethics (Adm. Order No. 162)
  8. Code of Professional Responsibility
  9. Judiciary Act of 1948 (RA 296)

10. Judiciary Reorganization Act of 1930 (BP129)

11. Supreme Court Decisions

12. Foreign Decisions

13. Opinions of authorities

14. Other Statutes

15. SC Circulars

  • Court –a board or other tribunal which decides a litigation or contest (Hidalgo v. Manglapus, 64 OG 3189)
  • Judge –a public officer who, by virtue of his office, is clothed with judicial authority, a public officer lawfully appointed to decide litigated questions in accordance with law.
  • De Jure Judge –one who is exercising the office of judge as a matter of right; and officer of a court who has been duly and legally appointed, qualified and whose term has not expired.
  • De Facto Judge –an officer who is not fully vested with all the powers and duties conceded to judges, but is exercising the office of a judge under some color of right.
  • Qualification of Supreme Court Members:
  1. Natural born citizen of the Philippines;
  2. At least 40 years of age;
  3. Must have been at least for 15 years, a judge of a lower court or engaged in the practice of law (Sec 7(2), Art. VIII, 1987 Constitution).

 

Source:

Legal Ethics Reviewer

Ateneo

Legal Ethics – Liabilities of Lawyers & Administrative Liabilities of Lawyers

Liabilities of Lawyers

  • Civil Liability
  1. Client is prejudiced by lawyer’s negligence or misconduct
  2. Breach of fiduciary obligation
  3. Civil liability to third persons
  4. Libelous words in pleadings; violation of communication privilege
  5. Liability for costs of suit (treble costs) – when lawyer is made liable for insisting on client’s patently unmeritorious case or interposing appeal merely to delay litigation
  • Criminal Liability
  1. Prejudicing client through malicious breach of professional duty
  2. Revealing client’s secrets
  3. Representing adverse interests
  4. Introducing false evidence
  5. Misappropriating client’s funds (estafa)
  • Contempt of Court

a.  Kinds of Contempt:

  • Direct – consists of misbehavior in the presence of or so near a court or judge as to interrupt or obstruct the proceedings before the court or the administration of justice; punished summarily.
  • Indirect – one committed away from the court involving disobedience of or resistance to a lawful writ, process, order, judgment or command of the court, or tending to belittle, degrade, obstruct, interrupt or embarrass the court.
  • Civil- failure to do something ordered by the court which is for the benefit of a party.
  • Criminal – any conduct directed against the authority or dignity of the court.

 b. Acts Constituting Contempt:

  1. Misbehavior
  2. Disobedience
  3. Publication concerning pending litigation
  4. Publication tending to degrade the court; disrespectful language in pleadings
  5. Misleading the court or obstructing justice
  6. Unauthorized practice of law
  7. Belligerent attitude
  8. Unlawful retention of client’s funds

 

Administrative Liabilities of lawyers

  • Main Objectives of Disbarment and Suspension:
  1. to compel the attorney to deal fairly and honestly with his clients;
  2. to remove from the profession a person whose misconduct has proved him unfit to be entrusted with the duties and responsibilities belonging to the office of an attorney;
  3. to punish the lawyer;
  4. to set an example or a warning for the other members of the bar;
  5. to safeguard the administration of justice from incompetent and dishonest lawyers;
  6. to protect the public

 

  • Characteristics of Disbarment Proceedings:
  1. Neither a civil nor criminal proceedings;
  2. Double jeopardy cannot be availed of in a disbarment proceeding;
  3. It can be initiated motu propio by the SC or IBP. It can be initiated without a complaint;
  4. It is imprescriptible;
  5. Conducted confidentially;
  6. It can proceed regardless of the interest of the lack thereof on the part of the complainant;
  7. It constitutes due process.

 

  • Grounds for Disbarment or Suspension:
  1. deceit;
  2. malpractice or other gross misconduct in office;
  3. grossly immoral conduct;
  4. conviction of a crime involving moral turpitude;
  5. violation of oath of office;
  6. willful disobedience of any lawful order of a superior court;
  7. corrupt or willful appearance as attorney for a party to case without authority to do so (Sec. 27, Rule 138, RRC)

 

  • Procedure for Disbarment
  1. Institution either by:
  2. the Supreme Court, motu proprio, or
  3. the IBP, motu proprio, or
  4. upon verified complaint by any person
  5. Six copies of the verified complaint shall be filed with the Secretary of the IBP or Secretary of any of its chapter and shall be forwarded to the IBP Board of Governors.
  6. Investigation by the National Grievance Investigators.
  7. Submission of investigative report to the IBP Board of Governors.
  8. Board of Governors decides within 30 days.
  9. Investigation by the Solicitor-General
  10. SC renders final decision for disbarment/suspension/dismissal.

 

Quantum of Proof Required: CLEAR, CONVINCING & SATISFACTORY evidence.

Burden of Proof:Rests on the COMPLAINANT, the one who instituted the suit

 

  • Officers authorized to investigate Disbarment cases:
  1. Supreme Court
  2. IBP through its Commission on Bar Discipline or authorized investigator
  3. Office of the Solicitor General

 

  • Mitigating Circumstances in Disbarment:
  1. Good faith in the acquisition of a property of the client subject of litigation (In re: Ruste, 70 Phil. 243)
  2. Inexperience of the lawyer (Munoz v. People, 53 SCRA 190)
  3. Age (Lantos v. Gan, 196 SCRA 16)
  4. Apology (Munoz v. People, 53 SCRA 190)

Lack of Intention to slight or offend the Court (Rhum of the Philippines, Inc. v. Ferrer, 20 SCRA 441).

 

Source:

Legal Ethics Reviewer

Ateneo

 

Legal Ethics Chapter IV – The Lawyer and the Client

Chapter IV

The Lawyer and the Client

CANON 14 – A Lawyer shall not refuse his services to the needy.

Rule 14.01 – A lawyer shall not decline to represent a person solely on account of the latter’s race, sex, creed or status of life, or because of his own opinion regarding the guilt of said person.

Rule 14.02 – A lawyer shall not decline, except for serious and sufficient cause, an appointment as counsel de oficio or as amicus curae or a request from the Integrated Bar of the Philippines or any of its chapters for rendition of free legal aid.

Rule 14.03 – A lawyer may refuse to accept representation of a client if:

  1. a.      He is not in position to carry out the work effectively and competently.
  2. b.     He labors under conflict of interest between him and the prospective client or between a present client and the prospective client.

Rule 14.04 – A lawyer who accepts the cause of a person unable to pay his professional fees shall observe the same standard of conduct governing his relations with paying clients.

  • Duties to Client:
  1. owe utmost learning and ability
  2. maintain inviolate the confidence of the client
  3. disclose all circumstances/interest regarding the controversy
  4. undivided loyalty
  5. not reject cause of defenseless and oppressed
  6. candor, fairness and loyalty
  7. hold in trust money or property
  8. respond with zeal to the cause of the client
  • Appointment of Amicus Curae
  1. by application to the judge
  2. the judge on his own initiative may invite the lawyer
  3. no right to interfere with or control the condition of the record, no control over the suit
  • Cannot refuse on the ground of insufficient of compensation or lack of it

 

CANON 15 – A lawyer shall observe candor, fairness and loyalty in all his dealings and transactions with his client.

Rule 15.01 – A lawyer in conferring with a prospective client, shall ascertain as soon as practicable whether the matter would involve a conflict with another client or his own interest, and if so, shall forthwith inform the prospective client.

Rule 15.02 – A lawyer shall be bound by the rule on privilege communication in respect of matters disclosed to him by a prospective client.

 

Rule on Revealing Client’s Identity

  • General Rule:  A lawyer may not invoke privilege communication to refuse revealing a client’s identity. (Regala vs. Sandiganbayan, 262 SCRA 122, September 20, 1996)

Exceptions:

  1. When by divulging such identity, it would implicate the client to that same controversy for which the lawyer’s services were required.
  2. It would open client to civil liability
  3. The disclosure of such identity will provide for the only link in order to convict the accused, otherwise, the government has no case.
  • Requisites of Privileged Communication:
  1. Atty.-client relationship (or a kind of consultancy relationship with a prospective client
  2. Communication made by client to lawyer in the course of lawyer’s professional employment
  3. Communication is intended to be confidential (see Rule 130, Sec. 21(b), Rules of Court)
  • When communication is not privileged:
  1. after pleading has been filed
  2. communication intended by the client to be sent to a third person through his counsel (it loses its confidential character as soon as it reaches the hands of third person)
  • Even if the communication is unprivileged, the rule of ethics prohibits him from voluntarily revealing or using to his benefit or to that of a third person, to the disadvantage of the client, the said communication unless the client consents thereto.
  • This is applicable to students under the Student Practice Law Program

Rule 15.03 – A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.

 

Rule on Conflicting Interest

            It is generally the rule based on sound public policy that an attorney cannot represent adverse interest. It is highly improper to represent both sides of an issue. The proscription against representation of conflicting interest finds application where the conflicting interest arises with respect to the same general matter and is applicable however slight such adverse interest may be. It applies although the attorney’s intention and motives were honest and he acted in good faith. However, representation of conflicting interest may be allowed where the parties consent to the representation after full disclosure of facts. (Nakpil vs. Valdez, 286 SCRA 758).

  • General Rule:An attorney cannot represent adverse interest.
  • Exception:Where the parties consent to the representation after full disclosure of facts.
  • The TEST in determining Conflicting Interest: The test is whether or not the acceptance of a new relation will prevent an attorney from the full discharge of his duty of individual fidelity and loyalty to his client or invite suspicion of unfaithfulness in double-dealing in the performance thereof.(Tiana vs. Ocampo)

Rule 15.04 – A lawyer may, with the written consent of all concerned, act as mediator, conciliator or arbitrator in settling disputes.

Rule 15.05 – A lawyer, when advising his client, shall give a candid and honest opinion on the merits and probable results of the client’s case, neither overstating nor understating the prospects of the case.

Rule 15.06 – A lawyer shall not state nor imply that he is able to influence any public official, tribunal or legislative body.

Rule 15.07 – A lawyer shall impress upon his client compliance with the laws and the principles of fairness.

Rule 15.08 – A lawyer who is engaged in another profession or occupation concurrently with the practice of law shall make clear to his client whether he is acting as a lawyer or in another capacity.

  • Lawyers should refrain from giving any advice unless they have obtained sufficient understanding of their client’s cause.  A careful investigation and examination of the facts must  first be had before any legal opinion be given by the lawyer to the client.
  • To avoid breach of legal ethics, a lawyer should keep any business, in which is engaged in concurrently with the practice of law, entirely separate and apart from the latter.

 

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.

Rule 16.02 – A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.

Rule 16.03 – A lawyer shall deliver the funds and property of his client when due or upon demand.  However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client.  He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for the Rules of Court.

            Attorneys’ Liens – an attorney shall have a lien upon the funds, documents and papers of his client which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such finds to the satisfaction thereof.  He shall also have a lien to the same extent upon all judgements for the payment of money, and executions issued in pursuance of such judgements which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgement, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his fees and disbursements.  (Sec, 37, Rule 138, RRC)

Rule 16.04 – A lawyer shall not borrow money from his client unless the client’s interests are fully protected by the nature of the case or by independent advice.  Neither shall a lawyer lend money to a client except, when in the interest of justice, he has to advance necessary expenses in the legal matter he is handling for the client.

  • Attorney’s lien is not an excuse for non-rendition of accounting
  • Cannot disburse client’s money to client’s creditors without authority.
  • Failure to deliver upon demand gives rise to the presumption that he has misappropriated the funds for his own use to the prejudice of the client and in violation of the trust reposed in him.
  • Notify client if retaining lien shall be implemented
  • When a lawyer enforces a charging lien against his client, the client-lawyer relationship is terminated.
  • The principle behind Rule 16.04 is to prevent the lawyer from taking advantage of his influence over the client or to avoid acquiring a financial interest in the outcome of the case.

 

CANON 17 – A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him.

  • No fear of judicial disfavor or public popularity should restrain him from full discharge of his duty.
  • It is the duty of the lawyer at the time of retainer to disclose to the client all the circumstances of his relations to the parties and any interest in, or connection with, the controversy which might influence the client in the selection of counsel.
  • The lawyer owes loyalty to his client even after the relation of attorney and client has terminated.  It is not good practice to permit him afterwards to defend in another case other persons against his former client under the pretext that the case is distinct from and independent of the former case.

 

CANON 18 – A lawyer shall serve his client with competence and diligence.

Rule 18.01 – A lawyer shall not undertake a legal service which he knows or should know that he is not qualified to render.  However, he may render such service if, with the consent of his client, he can obtain as collaborating counsel a lawyer who is competent on the matter.

Rule 18.02 – A lawyer shall not handle any legal matter without adequate preparation.

Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable.

Rule 18.04 – A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the client’s request for information.

  • Competence: sufficiency of lawyer’s qualification to deal with the matter in question and includes knowledge and skill and the ability to use them effectively in the interest of the client.
  • A lawyer must keep himself constantly abreast with the trend of authoritative pronouncements and developments in all branches of law.
  • There must be extraordinary diligence in prosecution or defense of his client’s cause.
  • If a lawyer errs like any other human being, he is not answerable for every error or mistake, and will be protected as long as he acts honestly and in good faith to the best of his skill and knowledge.
  • Lawyer is not an insurer of the result in a case where he is engaged in the counsel.

 

CANON 19 – A lawyer shall represent his client with zeal within the bounds of the law.

Rule 19.01 – A lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not present, participate in presenting or threaten to present unfounded criminal charges to obtain an improper advantage in any case or proceeding.

Rule 19.02 – A lawyer who has received information that his client has, in the course of the representation, perpetuated a fraud upon a person or tribunal, shall promptly call upon the client to rectify the same, and failing which he ha to terminate the relationship with such client in accordance with the Rules of Court.

Rule 19.03 – A lawyer shall not allow his client to dictate the procedure in handling the case.

  • General Rule:  Negligence binds client

Exception:  Reckless imprudence (deprives client of due process)

Results in outright deprivation of one’s property through technicality

  • Must not present in evidence any document known to be false; nor present a false witness.
  • Negative pregnant is improper since it is an ambiguous pleading (improper if in bad faith and the purpose is to confuse the other party)

In defense: present every defense the law permits.   

  • Lawyer should do his best efforts to restrain and to prevent his clients from perpetrating acts which he himself ought not to do. Or else, withdraw.  But lawyer shall not volunteer the information about the client’s commission of fraud to anyone – counter to duty to maintain client’s confidence and secrets.

 

CANON 20 – A lawyer shall charge only fair and reasonable fees.

Rule 20.01 – A lawyer shall be guided by the following factors in determining his fees:

  1. a.      The time spent and the extent of the services rendered or required.
  2. b.     The novelty and difficulty of the questions involved;
  3. c.      The importance of the subject matter;
  4. d.     The skill demanded;
  5. e.      The probability of losing other employment as a result of acceptance of the proffered case;
  6. f.       The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs;
  7. g.     The amount involved in the controversy and the benefits resulting to the client from the services;
  8. h.     The contingency or certainty of compensation;
  9. i.        The character of the employment, whether occasional or established; and
  10. j.        The professional standing of the lawyer.
  • Kinds of Payment which may be stipulated upon:
  1. a  fixed or absolute fee which is payable regardless of the result of the case
  2. a contingent fee that is conditioned to the securing of a favorable judgment and recovery of money or property and the amount of which may be on a percentage basis
  3. a fixed fee payable per appearance
  4. a fixed fee computed by the number of hours spent
  5. a fixed fee based on a piece of work
  • Attorney’s Fees
  1. Ordinary attorney’s fee -the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis for this compensation is the fact of his employment by and his agreement with the client.
  2. Extraordinary attorney’s fee – an indemnity for damages ordered by the court to be paid by the losing party in litigation. The basis for this is any of the cases provided for by law where such award can be made, such as those authorized in Article 2208 of the Civil Code, and is payable NOT to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.
  • How attorney’s fees may be claimed by the lawyer:
  1. It may be asserted either in the very action in which the services of a lawyer had been rendered or in a separate action.
  2. A petition for attorney’s fees may be filed before the judgment in favor of the client is satisfied or the proceeds thereof delivered to the client.
  3. The determination as to the propriety of the fees or as to the amount thereof will have to be held in abeyance until the main case from which the lawyer’s claim for attorney’s fees may arise has become final. Otherwise, the determination of the courts will be premature.
  • Kinds of Retainer Agreements on Attorney’s fees:
  1. General Retainer or Retaining Fee – it is the fee paid to a lawyer to secure his future services as general counsel for any ordinary legal problem that may arise in the ordinary business of the client and referred to him for legal action;
  2. Special Retainer –  that is a fee for a specific case or service rendered by the lawyer for a client
  • Quantum Meruit -it means “as much as he deserves”, and is used as the basis for determining the lawyer’s professional fees in the absence of a contract, but recoverable by him from his client.
  • Quantum Meruit is resorted to  where:
  1. there is no express contract for payment of attorney’s fees agreed upon between the lawyer and the client;
  2. when although there is a formal contract for attorney’s fees, the stipulated fees are found unconscionable or unreasonable by the court.
  3. When the contract for attorney’s fees is void due to purely formal matters or defects of execution
  4. When the counsel, for justifiable cause, was not able to finish the case to its conclusion
  5. When lawyer and client disregard the contract for attorney’s fees.
  • Skill: length of practice is not a safe criterion of professional ability.

Rule 20.02 – A lawyer shall, in cases of referral, with the consent of the client, be entitled to a division of fees in proportion to the work performed and responsibility assumed.

Rule 20.03 – A lawyer shall not, without the full knowledge and consent of the client, accept any fee, reward, costs, commission, interest, rebate or forwarding allowance or other compensation whatsoever related to his professional employment from anyone other than the client.

Rule 20.04 – A lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud.

  • Unauthorized counsel: Not entitled to attorney’s fees.
  • Stipulation regarding payments of attorney’s fees is not illegal/immoral and is enforceable as the law between the parties provided such stipulation does not contravene law, good morals, etc.
  • When counsel cannot recover full amount despite written contract for attorneys’ fees:
  1. When he withdraws before the case is finished
  2. justified dismissal of attorney (payment: in quantum meruit only)
  • The reason for the award of attorney’s fees must be stated in the text of the decision; otherwise, if it is stated only in the dispositive portion of the decision, the same must be disallowed on appeal.
  • Even though the interest or property involved is of considerable value, if the legal services rendered do not call for much efforts there is no justification for the award of high fees.
  • Champertous Contracts (void) – Lawyer stipulates with his client that in the prosecution of the case, he will bear all the expenses for the recovery of things or property being claimed by the client and the latter agrees to pay the former a portion of the thing/property recovered as compensation.
  • Compensation to an attorney for merely recommending another lawyer is improper (agents)
  • Attorney’s fees for legal services shared or divided to non-lawyer is prohibited. Division of fees is only for division of service or responsibility.
  • A lawyer should try to settle amicably any differences on the subject. A lawyer has 2 options. Judicial action to recover attorney’s fees:
  1. In same case: Enforce attorney’s fees by filing an appropriate motion or petition as an incident to the main action where he rendered legal services.
  2. In a separate civil action.

 

CANON 21 – A lawyer shall preserve the confidences and secrets of his client even after the attorney-client relation is terminated.

  • Confidence – refers to information protected by the attorney-client privilege (RRC)
  • Secret – refers to other information gained in the professional relationship that the client has regulated to be held inviolate or the disclosure of which would be embarrassing or would likely be detrimental to the client.
  • An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment; nor can an attorney’s secretary, stenographer, or clerk be examined, without the consent of the client and his employees, concerning any fact the knowledge of which has been acquired in such capacity (Rule 130, Sec. 21 (b), RRC)
  • The mere establishment of a client-lawyer relationship does not raise a presumption of confidentiality.  There must be an intent or that the communication relayed by the client to the lawyer be treated as confidential.

Rule 21.01 – A lawyer shall not reveal the confidences or secrets of his client except:

  1. a.      When authorized by the client after acquainting him of the consequences of the disclosure:
  2. b.     When required by law;
  3. c.      When necessary to collect his fees or to defend himself, his employees or associates or by judicial action.
  • When properly authorized after having been fully informed of the consequences to reveal his confidences/secrets, then there is a valid waiver.
  • Art. 209. Betrayal of Trust by an Attorney or Solicitor. Revelation of secrets. In addition to the proper administrative action, the penalty of prision correccional in its minimum period, or a fine ranging from P200 to P1000, or both, shall be imposed upon any attorney at law or solicitor who, by any malicious break of professional duty as inexcusable negligence or ignorance, shall prejudice his client, or reveal any of the secrets of the latter learned by him in his professional capacity.

The same penalty shall be imposed upon an attorney at law or solicitor who, having undertaken the defense of a client, or having received confidential information from said client in a case, shall undertake the defense of the opposing party in the same case, without the consent of his first client (Rule 209, RPC)

  • General Rule: Obligation to keep secrets covers only lawful purposes
  • Exceptions:
  1. announcements of intention of  a client to commit a crime
  2. client jumped bail and lawyer knows his whereabouts; or client is living somewhere under an assumed name
  3. communication involves the commission of future fraud or crime but crimes/frauds “already committed” falls within the privilege.

Rule 21.02 – A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, nor shall he use the same to his own advantage or that of a third person, unless the client with full knowledge of the circumstances consents thereto.

Rule 21.03 – A lawyer shall not, without the written consent of his client, give information from his files to an outside agency seeking such information for auditing, statistical, bookkeeping, accounting, data processing, or any other similar purposes.

Rule 21.04 – A lawyer may disclose the affairs of a client of the firm to partners or associates thereof unless prohibited by the client.

Rule 21.05 – A lawyer shall adopt such measures as may be required to prevent those whose services are utilized by him, from disclosing or using confidences or secrets of the client.

Rule 21.06 – A lawyer shall avoid indiscreet conversation about a client’s affairs even with members of his family.

Rule 21.07 – A lawyer shall not reveal that he has been consulted about a particular case except to avoid possible conflict of interest.

  • Avoid committing calculated indiscretion – accidental revelation of secrets obtained in his professional employment.
  • Prohibition applies, even if the prospective client did not thereafter actually engage the lawyer.

 

CANON 22 – A lawyer shall withdraw his services only for good cause and upon notice appropriate in the circumstances.

Rule 22.01 – A lawyer may withdraw his services in any of the following cases:

  1. a.      When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling;
  2. b.     When the client insists that the lawyer pursue conduct violative of these canons and rules;
  3. c.      When his inability to work with co-counsel will not promote the best interest of the client;
  4. d.     When the mental or physical condition of the lawyer renders it difficult for him to carry out the employment effectively;
  5. e.      When the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement;
  6. f.       When the lawyer is elected or appointed to a public office, and
  7. g.     Other similar cases

Rule 22.02 – A lawyer who withdraws or is discharged shall subject to a retaining lien, immediately turn over all papers and property to which the client is entitled, and shall cooperate with his successor in the orderly transfer of the matter, including all information necessary for the proper handling of the matter.

 

Retaining Lien

Charging Lien

1. Nature Passive Lien: It cannot be actively enforced.  It is a general lien Active Lien: It can be enforced by execution.  It is a special lien.
2. Basis Lawful possession of papers, documents, property belonging to client. Securing of a favorable money judgment for the client.
3.  Coverage Covers only papers, documents and property in the lawful possession of the attorney by reason of his professional employment Covers all judgments for the payment of money and executions issued in pursuance of such judgments.
4. When Lien takes effect As soon as the attorney gets possession of the papers documents or property As soon as the claim for attorney’s fees had been entered into the records of the case
5.  Notice Client need not be notified to make it effective Client and adverse party must be notified to make it effective
6.  Applicability May be exercised before judgment or execution or regardless thereof. Generally, it is exercisable only when the attorney had already secured a favorable judgment for his client
  • In withdrawal as counsel for a client, an attorney may only retire from a case either by written consent of his client or by permission of the court after due notice and hearing, in which event the attorney should see to it that the name of the new attorney is recorded in the case.
  • An attorney who could not get the written consent of his client must make an application to the court, for the relation does not terminate formally until there is a withdrawal of record. Counsel has no right to presume that the court would grand his withdrawal and therefore must still appear on the date of hearing.
  • Requirements for the Substitution of Counsel in a Case:
  1. written application
  2. written consent of client
  3. written consent of attorney to be substituted
  4. if the consent of the attorney to be substituted cannot be obtained, there must be at least a proof of notice that the motion for substitution has been served upon him, in the manner prescribed by the rules.
  • A lawyer cannot recover compensation from one who did not employ or authorize his employment, however valuable the results of his services may have been to such person. In similar cases, no compensation when:
  1. client conducts himself in a manner which tends to degrade his attorney;
  2. client refuses to extend cooperation;
  3. client stops having contact with him.
  • The right of a client to terminate a lawyer is absolute.  Such termination may be with or without cause.

 

Source:

Legal Ethics Reviewer

Ateneo

 

Legal Ethics Chapter III – The Lawyer and the Courts

Chapter III

The Lawyer and the Courts

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 mislead by any artifice.

Rule 10.02 – A lawyer shall not knowingly misquote or misrepresent the contents of the paper, the language or the argument of opposing counsel, or the text of a decision of 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 approved.

Rule 10.03 – A lawyer shall observe the rules of procedure and shall not misuse them to defeat the ends of justice.

  • Judge-lawyer relationship:  based on independence and self-respect.
  • Lawyer’s duty to the court:
  1. respect and loyalty
  2. fairness, truth and candor
  3. no attempt to influence courts
  • Cases of falsehood:
  1. stating in the Deed of Sale that property is free from all liens and encumbrances when not so
  2. encashing check payable to a deceased cousin by signing the latter’s name on the check
  3. falsifying a power of attorney and using it in collecting the money due to the principal
  4. alleging in one pleading that the clients were mere lessees and in another pleading that the same clients were owners
  5. presenting falsified documents in court which he knows to be false
  6. filing false charges on groundless suits
  7. using in pleadings the IBP number of another lawyer
  8. unsolicited appearances
  9. use of fictitious residence certificate
  10. misquotation/misrepresentation
  11. citing a repealed or amended provision
  12. asserting a fact not proved
  13. verbatim reproductions down to the last word and punctuation mark
  14. slight typo mistake: not sufficient to place him in contempt

 

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.                                                          

Rule 11.01 – A lawyer shall appear in court properly attired.

  • A lawyer may NOT wear outlandish or colorful clothing to court.
  • As an officer of the court and in order to maintain the dignity and respectability of the legal profession, a lawyer who appears in court must be properly attired. Consequently, the court can hold a lawyer IN CONTEMPT of court if he does not appear in proper attire. Any deviation from the commonly accepted norm of dressing in court (barong or tie, not both) is enough to warrant a citing for contempt.

Rule 11.02 – A lawyer shall punctually appear at court hearings.

Rule 11.03 – A lawyer shall abstain from scandalous, offensive, or menacing language or behavior before the courts.

Rule 11.04 – A lawyer shall not attribute to a judge motives not supported by the record or having no materiality to the case.

Rule 11.05 – A lawyer shall submit grievances against a judge to the proper authorities already.

  • A lawyer is an officer of the court. He occupies a quasi-judicial office with a tripartite obligation to the courts, to the public and to his clients.
  • The public duties of the attorney take precedence over his private duties.  His first duty is to the courts. Where duties to the courts conflict with his duties to his clients, the latter must yield to the former.
  • Lawyers must be respectful not only in actions but also in the use of language whether in oral arguments or in pleadings.
  • Must exert efforts that others (including clients, witnesses) shall deal with the courts and judicial officers with respect.
  • Obedience to court orders and processes.
  • Criticisms of courts must not spill the walls of decency. There is a wide difference between fair criticism and abuse and slander of courts and judges.  Intemperate and unfair criticism is a gross violation of the duty to respect the courts.  It amounts to misconduct which subjects the lawyer to disciplinary action.
  • A mere disclaimer of any intentional disrespect by appellant is not a ground for exoneration.  His intent must be determined by a fair interpretation of the languages employed by him.  He cannot escape responsibility by claiming that his words did not mean what any reader must have understood them to mean.
  • Lawyer can demand that the misbehavior of a judge be put on record.
  • Lawyers must be courageous enough to expose arbitrariness and injustice of courts and judges.
  • A lawyer may submit grievances against judges in the Supreme Court, Ombudsman, or Congress (for impeachment of SC judges only).

 

CANON 12 – A lawyer shall exert every effort and consider it his duty to assist in the speedy and efficient administration of justice.

Rule 12.01 – A lawyer shall not appear for trial unless he has adequately prepared himself with the law and the facts of his case, the evidence he will adduce and the order of its preference.  He should also be ready with the original documents for comparison with the copies.

  • Newly hired counsel: must acquaint himself with all the antecedent proceedings and processes that have transpired in the record prior to his takeover.
  • If presenting documentary exhibits, he must be ready with the originals for the purpose of comparison with copies thereof.

Rule 12.02 – A lawyer shall not file multiple actions arising from the same cause.

  • Forum shopping omission to disclose pendency of appeal or prior dismissal of his case by a court of concurrent jurisdiction.
  • Forum shopping exists when as a result of an adverse opinion in one forum:
  1. a party seeks favorable opinion (other than by appeal or certiorari) in another; or
  2. when he institutes two or more actions or proceedings grounded on the same cause, on the gamble that one or the other would make a favorable disposition (Benguet Electric Corp. vs. Flores, 287 SCRA 449, March 12, 1998).
  • The most important factor in determining the existence of forum-shopping is the VEXATION caused the courts and party-litigants by a party who asks different courts to rule on the same related causes, asking the same relief.
  • Forum shopping constitutes DIRECT CONTEMPT of court and may subject the offending lawyer to disciplinary action.

Rule 12.03 – A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse without submitting the same or offering an explanation for his failure to do so.

  • Asking for extension of time must be in good faith.

Rule 12.04 – A lawyer shall not unduly delay a case, impede the execution of a judgment or misuse court processes.

Rule 12.05 – A lawyer shall refrain from talking to his witness during a break or recess in the trial, while the witness is still under examination.

Rule 12.06 – A lawyer shall not knowingly assist a witness to misrepresent himself or to impersonate another.

Rule 12.07 – A lawyer shall not abuse, browbeat or harass a witness nor needlessly inconvenience him.

Rights and obligations of a witness –  a witness must answer questions, although his answer may tend to establish a claim against him.  However, it is the right of a witness:

  1. to be protected from irrelevant, improper, or insulting questions and from harsh or insulting demeanor;
  2. not to be detained longer than the interest of justice requires;
  3. not to be examined except only as to matters pertinent to the issue;
  4. not to give any answer which will tend to subject him to a penalty for an offense unless otherwise provided by law, or
  5. nor to give answer which will tend to degrade his reputation, unless it be to the very fact at issue or to a fact from which the fact in issue would be presumed.  But a witness must answer to the fact of his previous final conviction for an offense. (Rule 132, Sec. 3, RRC)

Rule 12.08 – A lawyer shall avoid testifying in behalf of his client, except:

  1. a.      on formal matters, such as the mailing, authentication or custody of an instrument and the like:
  2. b.     on substantial matters, in cases where his testimony is essential to the ends of justice, in which event he must, during his testimony, entrust the trial of the case to another counsel.

 

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.

Rule 13.01 – A lawyer shall not extend extraordinary attention or hospitality to, nor seek opportunity for, cultivating familiarity with judges.

Rule 13.02 – A lawyer shall not make public statements in the media regarding a pending case tending to arouse public opinion for or against a party.

Rule 13.03 – A lawyer shall not brook or invite interference by another branch or agency of the government in the normal course of judicial proceedings.

  • The judge has the corresponding duty not to convey or permit others to convey the impression that they are in a special position to influence the judge.
  • Discussing cases with the judge privately should be avoided.
  • Test when public statement is contemptuous: The character of the act done and its direct tendency to prevent and obstruct the discharge of official duty.
  • To warrant a finding of “prejudicial publicity”, there must be an allegation and proof that the judges have been unduly influenced, not simply that they might be, by the “barrage” of publicity.
  • Lawyer is equally guilty as the client if he induces the latter to cause the publicity.

 

Source:

Legal Ethics Reviewer

Ateneo

Legal Ethics Chapter II – Lawyer and Society

Chapter II

The Lawyer and the Legal Profession

CANON 7 – A lawyer shall at all times uphold the integrity and dignity of the legal profession, and support the activities of the integrated bar.

Rule 7.01 – A lawyer shall be answerable for knowingly making false statements or suppressing a material fact, in connection with his application for admission to the bar.

Rule 7.02 – A lawyer shall not support application for admission to the bar by any person known to him or be unqualified in respect to character, education, or other relevant attribute.

Rule 7.03 – A lawyer shall not engage in conduct that adversely reflects on his fitness to practice law, nor should he, whether in public or private life, behave in a scandalous manner to the discredit of the legal profession.

  • Upright character; not mere absence of bad character.
  • A lawyer must at all times conduct himself properly as not to put into question his fitness to practice law.
  • Avoid scandalous conduct; not only required to refrain from adulterous relationships or the keeping of mistress but must also behave himself as to avoid scandalizing the public by creating the belief that he is flouting those moral standards.

 

CANON 8 – A lawyer shall conduct himself with courtesy, fairness and candor towards his professional colleagues, and shall avoid harassing tactics against opposing counsel.

Rule 8.01 – A lawyer shall not, in his professional dealings, use language which is abusive, offensive or otherwise improper.

Rule 8.02 – A lawyer shall not, directly or indirectly, encroach upon the professional employment of another lawyer; however, it is the right of any lawyer without fear or favor, to give proper advice and assistance to those seeking relief against unfaithful or neglectful counsel.

  • It is the duty of a lawyer to inform the SC or the IBP of such malpractice to the end that the malpractitioner be properly disciplined.
  • Not to use in pleadings and in practice the following: disrespectful, abusive and abrasive language, offensive personalities, unfounded accusations or intemperate words tending to obstruct, embarrass or influence the court in administering justice.
  • Want of intention: not an excuse for the disrespectful language used. It merely extenuates liability.

 

CANON 9 – A lawyer shall not directly or indirectly assist in the unauthorized practice of law.

Rule 9.01 – A lawyer shall not delegate to any unqualified person the performance of any task which by law may only be performed by a member of the bar in good standing.

Rule 9.02 – A lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law, except:

  1. a.      Where there is a pre-existing agreement, with a partner or associate that , upon the latter’s death, money shall be paid over a reasonable period of time to his estate or to the persons specified in the agreement; or
  2. b.     Where a lawyer undertakes to complete unfinished legal business of a deceased lawyer; or
  3. c.      Where a lawyer or law firm includes non-lawyer employees in a retirement plan, even if the plan is based in whole or in part of a profit sharing arrangements.
  • Lawyer shall not negotiate with the opposite party who is represented by a counsel.  Neither should lawyer attempt to interview the opposite party and question him as to the facts of the case even if the adverse party is willing to do so.
  • Lawyer should deal only with counsel, even if there’s a fair agreement.
  • Lawyer may however interview any witness or prospective witness for the opposing side. Limitation: avoid influencing witness in recital and conduct.
  • A lawyer must not take as partner or associate one who:
  1. is not a lawyer
  2. is disbarred
  3. has been suspended from the practice of law
  4. foreign lawyer, unless licensed by the SC.
  • A lawyer cannot delegate his authority without client’s consent even to a qualified person.

 

Source:

Legal Ethics Reviewer

Ateneo

Legal Ethics Chapter I – Lawyer and Society

LEGAL ETHICS – is a branch of moral science, which treats of the duties which an attorney owes to the court, to the client, to his colleagues in the profession and to the public as embodied in the Constitution, Rules of Court, the Code of Professional Responsibility, Canons of Professional Ethics, jurisprudence, moral laws and special laws.

Original Bases of Legal Ethics:

  1. Canons of Professional Ethics
  2. Supreme court Decisions
  3. Statistics
  4. Constitution
  5. Treatises and publications

Present Basis of the Philippine Legal System: Code of Professional Responsibility.

BAR  V.  BENCH

BAR – Refers to the whole body of attorneys and body of judges.

BENCH – denotes the whole body of counselors, collectively the members of

the legal profession.

Practice of Law – any activity, in or out of court which requires the application of law, legal procedure, knowledge, training and experience. To engage in the practice of law is to give notice or render any kind of service, which or devise or service requires the use in any degree of legal knowledge or skill (Cayetano v. Monsod, 201 SCRA 210).

Attorney-at-law/Counsel-at-law/Attorney/Counsel/ Abogado/Boceros: that class of persons who are licensed officers of the courts, empowered to appear prosecute and defend and upon whom peculiar duties, responsibilities, and liabilities are developed by law as a consequence (Cui v. Cui, 120 Phil. 729).

Attorney in fact – an agent whose authority is strictly limited by the instrument appointing him, though he may do things not mentioned in his appointment necessary to the performance of the duties specifically required of him by the power of attorney appointing him, such authority being necessarily implied.  He is not necessarily a lawyer.

Counsel de Oficio – a counsel, appointed or assigned by the court, from among members of the Bar in good standing who, by reason of their experience and ability, may adequately defend the accused.

Note: In localities where members of the Bar are not available, the court may appoint any person, resident of the province and good repute for probity and ability, to defend the accused. Sec. 7, Rule 116, Rules of Court.

Attorney ad hoca person named and appointed by the court to defend an absentee defendant in the suit in which the appointment is made (Bienvenu v. Factor’s of Traders Insurance Cp., 33 La.Ann.209)

Attorney of Record – one who has filed a notice of appearance and who hence is formally mentioned in court records as the official attorney of the party. Person whom the client has named as his agent upon whom service of papers may be made.

(Reynolds v. Reynolds, Cal.2d580).

Of Counsel – to distinguish them from attorneys of record, associate attorneys are referred to as “of counsel” (5 Am. Jur. 261).

Lead Counsel – The counsel on their side of a litigated action who is charged with the principal management and direction of a party’s case.

House Counsel – Lawyer who acts as attorney for business though carried as an employee of that business and not as an independent lawyer.

Bar Association – an association of members of the legal profession.

Advocate – The general and popular name for a lawyer who pleads on behalf of someone else.

Barrister  (England) – a person entitled to practice law as an advocate or counsel in superior court.

Proctor (England) – Formerly, an attorney in the admiralty and ecclesiastical courts whose duties and business correspond to those of an attorney at law or solicitor in Chancery.

Titulo de Abogado –  it means not mere possession of the academic degree of Bachelor of Laws but membership in the Bar after due admission thereto, qualifying one for the practice of law.

Admission to the Practice of Law

The Supreme Court has the power to control and regulate the practice of law. Thus, the Constitution, under  Article  VIII, Sec. 5 (5) provides:

                        Sec. 5. The Supreme Court shall have the following powers:

(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the under privileged.

The Supreme Court acts through a Bar Examination Committee in the Exercise of his judicial function to admit candidates to the legal profession.

The Bar Examination Committee:

  • Composed of (1) member of the Supreme Court who acts as Chairman and eight (8) members of the bar.
  • The 8 members act as examiners for the 8 bar subjects with one subject assigned to each.
  • The Bar Confidant acts as a sort of liason officer between the court and the Bar Chairman on the other hand, and the individual members of the committee on the other.  He is at the same time a deputy clerk of court.
  • Admission of examinees is always subject to the final approval of the court.

Practice of Law

The practice of law is a privilege granted only to those who possess the STRICT INTELLECTUAL AND MORAL QUALIFICATIONS required of lawyers who are instruments in the effective and efficient administration of justice. (In Re: Argosino, 1997).

Requirements  for admission to the Bar:

  1. citizen of the Philippines
  2. at least 21 years old
  3. of good moral character
  4. Philippine resident
  5. Production before the supreme court satisfactory evidence of:
    1. good moral character
    2. no charges against him, involving moral turpitude, have been filed or are pending in any court in the Philippines.

Requirement of Good Moral Character: a continuing requirement; good moral character is not only a condition precedent for admission to the legal profession, but it must also remain intact in order to maintain one’s good standing in that exclusive and honored fraternity. (Tapucar vs. Tapucar, 1998)

Academic Requirements for Candidates:

  1. a bachelor’s degree in arts and sciences (pre-law course)
  2. a completed course in:
    1. civil law
    2. commercial law
    3. remedial law
    4. public international law
    5. private international law
    6. political law
    7. labor and social legislation
    8. medial jurisprudence
    9. taxation
    10. legal ethics

Non-lawyers who may be authorized to appear in court:

  1. Cases before the MTC:  Party to the litigation,  in person OR through an agent or friend or appointed by him for that purpose (Sec. 34, Rule 138, RRC)
  2. Before any other court: Party to the litigation, in person (Ibid.)
  3. Criminal case before the MTC in a locality where a duly licensed member of the Bar is not available: the judge may appoint a non-lawyer who is:
    1. resident of the province
    2. of good repute for probity and ability to aid the accused in his defense (Rule 116, Sec. 7, RRC).
  4. Legal Aid Program – A senior law student, who is enrolled in a recognized law school’s clinical education program approved by the supreme Court may appear before any court without compensation, to represent indigent clients, accepted by the Legal Clinic of the law school.  The student shall be under the direct supervision and control of an IBP member duly accredited by the law school.
  5. Under the Labor code, non-lawyers may appear before the NLRC or any Labor Arbiter, if
    1. they represent themselves, or if
    2. they  represent their organization or members thereof (Art 222, PO 442, as amended).
  6. Under the Cadastral Act, a non-lawyer can represent a claimant before the Cadastral Court (Act no. 2259, Sec. 9).

Public Officials who cannot engage in the private practice of Law in the Philippines:

  1. Judges and other officials as employees of the Supreme Court (Rule 148, Sec. 35, RRC).
  2. Officials and employees of the OSG (Ibid.)
  3. Government prosecutors (People v. Villanueva, 14 SCRA 109).
  4. President, Vice-President, members of the cabinet, their deputies and assistants (Art. VIII Sec. 15, 1987 Constitution).
  5. Members of the Constitutional Commission (Art IX-A, Sec. 2, 1987 Constitution)
  6. Ombudsman and his deputies (Art. IX, Sec. 8 (2nd par), 1987 Constitution)
  7. All governors, city and municipal mayors (R.A. No. 7160, Sec. 90).
  8. Those prohibited by special law

Public Officials with Restrictions in the Practice of Law:

  1. 1.      No Senator as member of the House of Representative may personally appear as counsel before any court of justice as before the Electoral Tribunals, as quasi-judicial and other administration bodies (Art. VI, Sec. 14, 1987 Constitution).
  2. Under the Local Government Code (RA 7160, Sec. 91)Sanggunian members may practice their professions provided that if they are members of the Bar, they shall not:
    1. appear as counsel before any court in any civil case wherein a local government unit or any office, agency, or instrumentality of the government is the adverse party;
    2. appear as counsel in any criminal case wherein an officer or employee of the national or local government is accused of an offense committed in relation to his office;
    3. collect any fee for their appearance in administrative proceedings involving the local government unit of which he is an official;
    4. use property and personnel of the government except when the Sanggunian member concerned is defending the interest of the government.
  3. Under RA 910, Sec. 1, as amended, a retired justice or judge receiving pension from the government, cannot act as counsel in any civil case in which the Government, or any of its subdivision or agencies is the adverse party or in a criminal case wherein an officer or employee of the Government is accused of an offense in relation to his office.

Attorney’s Oath:

            “I, __________________, do solemnly swear that I will maintain allegiance to the Republic of the Philippines; I will support its constitution and obey the laws as well as the legal orders of the duly constituted authorities therein; I will do no falsehood, nor consent to the doing of any in court; I will not willingly nor wittingly promote or sue any groundless, false or unlawful suit, or give aid nor consent to the same; I will delay no man for money or malice, and will conduct myself as a lawyer according to the best of my knowledge and discretion, with all good fidelity as well to the court as to my clients; and I impose upon myself this voluntary obligations without any mental reservation or purpose of evasion. So help me God.” (Form 28, RRC)

Nature of Lawyer’s Oath

  • The lawyer’s oath is not mere facile words, drift and hollow, but a sacred trust that must be upheld and kept inviolable. (Sebastian vs. Calis, 1999)
  • It is NOT a mere ceremony or formality for practicing law. Every lawyer should at all times weigh his actions according to the sworn promises he made when taking the lawyer’s oath. (In Re: Argosino, 1997, In Re: Arthur M. Cuevas, 1998).

Code of Professional Responsibility

Chapter 1:

Lawyer and Society

CANON 1 – A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and for legal processes

  • Duties of Attorneys:
  1. to maintain allegiance to the Republic of the Philippines and to support the Constitution and obey the laws of the Philippines;
  2. to observe and maintain the respect due to the courts of justice and judicial officers;
  3. to counsel or maintain such actions or proceedings only as appear to him as just, and such defenses only as he believes to be honestly debatable under the laws;
  4. to employ, for the purpose of maintaining the causes confided to him, such means only as are consistent with truth and honor, and never seek to mislead the judge or  any judicial officer by an artifice or false statement of fact or law;
  5. to maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client, and to accept no compensation in connection with his client’s business except from him or with his knowledge and approval;
  6. to abstain from all offensive personality and to advance no fact prejudicial to the honor or reputation of a party or witness, unless required by the justice of the cause with which he is charged;
  7. not to encourage either the commencement or the continuance of an action or proceeding, or delay any man’s cause for any corrupt motive or interest;
  8. never to reject, for any consideration personal to himself, the cause of the defenseless or oppressed;
  9. in the defense of a person accused of a crime, by all fair and honorable means, regardless of his personal opinion as to the guilt of the accused, to present every defense that the law permits, to the end that no person may be deprived of life or liberty, but by due process of law.

Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

  • Conviction for crimes involving moral turpitude – a number of lawyers have been suspended or disbarred for conviction of crimes involving moral turpitude such as:
  1. estafa
  2. bribery
  3. murder
  4. seduction
  5. abduction
  6. smuggling
  7. falsification of public documents
  • Morality as understood in law - This is a human standard based on natural moral law which is embodied in man’s conscience and which guides him to do good and avoid evil.
  • Moral Turpitude: any thing that  is done contrary to justice, honesty, modesty or good morals.
  • Immoral Conduct: that conduct which is willful, flagrant, or shameless and which shows a moral indifference to the opinion of the good and respectable members of the community (Arciga vs. Maniwag, 106 SCRA 591).
  • Grossly Immoral Conduct: One that is so corrupt and false as to constitute a criminal act or so unprincipled or disgraceful as to be reprehensible to a high degree; it is a WILLFUL, FLAGRANT or SHAMELESS ACT which shows a MORAL INDIFFERENCE to the opinion of respectable members of the community. (Narag vs. Narag, 1998)

Rule 1.02 – A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system.

Rule 1.03 – A lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or delay any man’s cause.

Rule 1.04 – A lawyer shall encourage his clients to avoid, end or settle the controversy if it will admit of a fair settlement.

  • If a lawyer finds that his client’s cause is defenseless, it is his burden/duty to advise the latter to acquiesce and submit, rather than traverse the incontrovertible.
  • It is unprofessional for a lawyer to volunteer advice to bring a lawsuit, except in rare cases where the blood, relationship or trust makes it his duty to do so.
  • Temper client’s propensity to litigate.
  • Should not be an instigator of controversy but a mediator for concord and conciliator for compromise.
  • The law violated need not be a penal law. “Moral Turpitude” – everything which is done contrary to justice, honesty, modesty or good morals.
  • Give advice tending to impress upon the client and his undertaking exact compliance with the strictest principles of moral law.
  • Until a statute shall have been construed and interpreted by competent adjudication, he is free and is entitled to advise as to its validity and as to what he conscientiously believes to be its just meaning and extent.
  • A lawyer has the obligation not to encourage suits. This is so as to prevent barratry and ambulance chasing.
  • Barratry – offense of frequently exciting and stirring up quarrels and suits, either at law or otherwise; Lawyer’s act of fomenting suits among individuals and offering his legal services to one of them.
  • Ambulance Chasing – Act of chasing victims of accidents for the purpose of talking to the said victims (or relatives) and offering his legal services for the filing of a case against the person(s) who caused the accident(s).

CANON 2 – A lawyer shall make his legal services available in an efficient and convenient manner compatible with the independence, integrity and effectiveness of the profession.

Rule 2.01 – A lawyer shall not reject, except for valid reasons, the cause of the defenseless or oppressed.

Rule 2.02 – In such a case, even if a lawyer does not accept a case, he shall not refuse to render legal advise to the person concerned if only to the extent necessary to safeguard latter’s rights.

Rule 2.03 – a lawyer shall not do or permit to be done any act designed primarily to solicit legal business.

  • Primary  characteristics which distinguish the legal profession from business;
  1. duty of service, of which the emolument is a by product, and in which one may attain the highest eminence without making such money;
  2. a relation as an ‘officer of court’ to the administration of justice involving thorough sincerity, integrity and reliability;
  3. a relation to clients in the highest degree of fiduciary;
  4. a relation to colleagues at the bar characterized by candor, fairness and unwillingness to resort to current business methods of advertising and encroachment on their practice or dealing with their clients.
  • Defenseless – not in the position to defend themselves due to poverty, weakness, ignorance or other similar reasons.
  • Oppressed victims of acts of cruelty, unlawful exaction, domination or excessive use of authority.

Rule on Advertisements

  • General Rule: No advertisements allowed. The most worthy and effective advertisement possible is the establishment of a well-merited reputation for professional capacity and fidelity to trust.

Lawyers may not advertise their services or expertise nor should not resort to indirect advertisements for professional employment, such as furnishing or inspiring newspaper comments, or procuring his photograph to be published in connection with causes in which the lawyer has been engaged or concerning the manner of their conduct, the magnitude of the interest involved, the importance of the lawyer’s position, and all other self-laudation.

  • Exceptions/ Permissible advertisements: 
  1. Reputable law lists, in a manner consistent with the standards of conduct imposed by the canons, of brief biographical and informative data, are allowed.
  2. Ordinary simple professional Card. It may contain only a statement of his name, the name of the law firm which he is connected with, address, telephone number and the special branch of law practiced.
  3. A simple announcement of the opening of a law firm or of changes in the partnership, associates, firm name or office address, being for the convenience of the profession, is not objectionable.
  4. Advertisements or simple announcement of the existence of a lawyer or his law firm posted anywhere it is proper such as his place of business or residence except courtrooms and government buildings.
  5. Advertisements or announcement in any legal publication, including books, journals, and legal magazines.

Rule 2.04 – A lawyer shall not charge rates lower than those customarily or prescribed, unless circumstances so warrant.

  • A lawyer cannot delay the approval of a compromise agreement entered into between parties, just because his attorney’s fees were not provided for in the agreement.
  • Rule:  A lawyer cannot compromise the case without client’s consent (special authority). Exception:  Lawyer has exclusive management of the procedural aspect of the litigation (e.g. Submission for decision on the evidence so far presented. But in case where lawyer is confronted with an emergency and prompt/urgent action is necessary to protect clients interest and there’s no opportunity for consultation, the lawyer may compromise.
  • Rule:  Refrain from charging rates lower than the customary rates.

Valid Justification:  relatives, co-lawyers, too poor

CANON 3 – A lawyer in making known is legal services shall use only true, honest, fair dignified and objective information or statement of facts.

Rule 3.01 – A lawyer shall not use or permit the use of any false, fraudulent, misleading, deceptive, undignified, self-auditory or unfair statement or claim regarding his qualifications or legal services.

  • Violation of Rule 3.01 is unethical, whether done by him personally or through another with his permission.

Rule 3.02 – In the choice of a firm name, no false, misleading, or assumed name shall be used.  The continued use of the name of a deceased partner is permissible provided that the firm indicates in all its communication that said partner is deceased.

Rule 3.03 – Where a partner accepts public office, he shall withdraw from the firm and his name shall be dropped from the firm name unless the law allows him to practice law concurrently.

Rule 3.04 – A lawyer shall not pay or give anything of value to representatives of the mass media in anticipation of, or in return for, publicity to attract legal business.

  • It is unethical to use the name of a foreign firm.
  • Death of a partner does not extinguish attorney-client relationship with the law firm.
  • Negligence of a member in the law firm is negligence of the firm.

CANON 4 – A lawyer shall participate in the improvement of the legal system by initiating or supporting efforts in law reform and in the administration of justice.

  • Examples: Presenting position papers or resolutions for the introduction of pertinent bills in congress; Petitions with the Supreme Court for the amendment of the Rules of Court.

CANON 5 – A lawyer shall keep abreast of legal developments, participate in continuing legal education programs, support efforts to achieve high standards in law schools as well as in the practical training of students and assist in disseminating information regarding the law and jurisprudence.

 

Objectives of integration of  the Bar

  • To elevate the standards of the legal profession
  • To improve the administration of justice
  • To enable the Bar to discharge its responsibility more effectively.

The three-fold obligation of a lawyer

  • First, he owes it to himself to continue improving his knowledge of the laws;
  • Second, he owes it to his profession to take an active interest in the maintenance of high standards of legal education;
  • Third, he owes it to the lay public to make the law a part of their social consciousness.

CANON 6 – These canons shall apply to lawyers in government service in the discharge of their official tasks.

  • Public Officials – include elective and appointive officials and employees, permanent or temporary, whether in the career or non-career service, including military and police personnel, whether or not they receive compensation, regardless of amount. (Sec. 3 (b), RA 6713).
  • The law requires the observance of the following norms of conduct by every public official in the discharge and execution of their official duties:
  1. commitment to public interest
  2. professionalism
  3. justness and sincerity
  4. political neutrality
  5. responsiveness to the public
  6. nationalism and patriotism
  7. commitment to democracy
  8. simple living (Sec. 4, RA 6713)

Rule 6.01 – The primary duty of a lawyer engaged in public prosecution is not to convict but to see that justice is done. The suppression of facts or the concealment of witnesses capable of establishing the innocence of the accused is highly reprehensible and is cause of disciplinary action.

Rule 6.02 – A lawyer in the government service shall not use his public position to promote or advance his private interest, nor allow the latter to interfere with his public duties.

Rule 6.03 – A lawyer shall not, after leaving government service, accept engagements or employment in connection with any matter in which he had intervened while in said service.

  • Various ways a government lawyer leaves government service:
  1. retirement
  2. resignation
  3. expiration of the term of office
  4. dismissal
  5. abandonment
  • Q:  What are the pertinent statutory provisions regarding this Rule?

A:   Sec. 3 (d) RA 3019 as amended and Sec. 7 (b), RA 6713

Sec 3.  Corrupt practice of Public Officers.  In addition to acts or omission of public officers already penalized by existing law, the following shall constitute corrupt practice of any public officer and are hereby declared to be unlawful:

(d) accepting or having any member of his family accept employment in a private enterprise which has pending official business with him during the pendency thereof or within one year after termination.

Section 7 (b) of RA 6713 prohibits officials from doing any of the following acts:

  1. own, control, manage or accept employment as officer, employee, consultant, counsel, broker, agent, trustee or nominee in any private enterprise regulated, supervised or licensed by their office unless expressly allowed by law.

These prohibitions shall continue to apply for a period of one (1) year after resignation, retirement, or separation from public office, except in the case of subparagraph (b) (2) above, but the professional concerned cannot practice his profession in connection with any matter before the office he used to be with, in which case the one year prohibition shall likewise apply.

  • Lawyers in the government service are prohibited to engage in the private practice of their profession unless authorized by the constitution or law, provided that such practice will not conflict or tend to conflict with their official functions.
  • Misconduct in office as a public official may be a ground for disciplinary action (if of such character as to affect his qualification as lawyer or to show moral delinquency).
  • Should recommend the acquittal of the accused whose conviction is on appeal, IF he finds no legal basis to sustain the conviction.
  • Includes restriction is representing conflicting interest (e.g. Accepting engagements vs. former employer, PNB)
  • The OSG is not authorized to represent a public official at any state of a criminal case.

 

Reference: Legal Ethics Reviewer

Ateneo

Estoppel Memory Aid

Estoppel  (Article 1431)

  1. An admission;
  2. Is rendered conclusive
  3. Upon the person making it; and
  4. Cannot be denied or disproved against the person relying thereon

 

Concept of Estoppel

Estoppel is a bar which precludes a person from denying or asserting anything to the contrary of that which has, in contemplation of law, been established as the truth, either by the acts of judicial or legislative officers or by his own deed or representation, either expressed or implied.

It concludes the truth in order to prevent fraud and falsehood, and imposes silence on a party only when in conscience and honesty he should not be allowed to speak.

 

Distinguished from Waiver

A waiver is a voluntary and intentional abandonment or relinquishment of a known right. It carries no implication of fraud. It involves the act or conduct of only one of the parties.

An equitable estoppel may arise, however, even where there is no intention on the part of the person estopped to relinquish any existing right and frequently carries the implication of fraud. It involves the conduct of both parties.

In Lopez v. Ochoa (L- 7955, May 30, 1958), the Supreme Court held that waiver and estoppel are frequently used as convertible terms. The doctrine of waiver belongs to the family of, is of the nature of, is based on, estoppel. The essence of waiver is estoppel and where there is no estoppel, there is no waiver. This is especially true where the waiver relied upon is constructive or implied from the conduct of a party.

 

Distinguished from Ratification

In ratification, the party is bound because he intended to be bound; in estoppel, the party is bound notwithstanding the fact that there was no such intention because the other party will be prejudiced and defrauded by his conduct unless the law treats him as legally bound.

 

Distinguished from  Fraud

Estoppel exists with or without a contract; fraud presupposes an attempt to enter into a valid agreement or contract.

While estoppel may raised as a defense, fraud may properly be a cause of action on account of the vitiated consent that it produces.

 

Admissions

A party may be estopped to insist upon a claim, assert an objection, or take a position which is inconsistent with an admission which he had previously made and in reliance upon which the other party has changed his position.

 

Silence or Inaction

This is sometimes referred to as estoppel by “standing by” or “laches.” Mere innocent silence will not work an estoppel. There must also be some element of turpitude or negligence connected with the silence by which another is misled to his injury. But one who invokes this doctrine of estoppel must show not only unjustified inaction but also some unfair injury would result to him unless the action is held barred.

Estoppel by acquiescence is closely related to estoppel by silence. In the former, a person is prevented from maintaining a position inconsistent with one in which he has acquiesced.

 

Nature of Laches

Laches is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned or declined to assert it.

 

Elements of Laches

  1. Conduct on the part of the defendant or of one under whom he claims, giving rise to the situation complained of;
  2. Delay in asserting complainant’s rights after he had knowledge of the defendant’s conduct and after he has had an opportunity to sue;
  3. Lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit;
  4. Injury or prejudice to the defendant in the event relief is accorded to the complainant.

Laches and Prescription Distinguished

PRESCRIPTION

LACHES

Concerned with the fact of delay Concerned with the fact of delay
A matter of time  Principally a question of inequity founded on some change in the condition of the property or the relation of the parties
Statutory Not statutory
Applies to law Applies to equity
Based on a fixed time Not based on a fixed time

 

Kinds of Estoppel

1.    Technical Estoppels

  1. Estoppel by record – the preclusion to deny the truth of matters set forth in a record, whether judicial or legislative, and also to deny the facts adjudicated by a court of competent jurisdiction

Example:  the conclusiveness of a judgment on the parties to a case

  1. Estoppel by deed – a bar which precludes one party to a deed and his privies from asserting as against the other party and his privies any right or title in derogation of the deed, or from denying the truth of any material facts asserted in it; a written instrument is necessary for there to be estoppel by deed

Æ    Some doctrines:

  1. If the deed or instrument is null and void because of the contract, there is no estoppel
  2. Ordinarily, the person estopped must be capacitated; but a minor is clever enough to deceive others, estoppel may result
  3. If a person, who is not a party to the instrument, notarizes the same, he is not in estoppel

2.   Equitable Estoppel or Estoppel in Pais

It arises when one by his acts, representations or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist, and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts.  It takes place in a situation where because if a party’s action or omission, he is denied the right to plead or prove an otherwise important fact.

This may be estoppel:

  1. by conduct or by acceptance of benefits
  2. by representation or concealment
  3. by silence
  4. by omission
  5. by laches

Æ   Some doctrines:

  1. Conduct because of ignorance or mistake does not result in estoppel
  2. Estoppel by laches bars an action to create a vested right (executory interest) but does not bar an action to protect a vested right (executed interest)
  3. Just because a person is silent does not necessarily mean that he will be in estoppel; there should have been a duty or obligation to speak
  4. A mere promise to perform or to omit at some future time does not necessarily result in estoppel (promissory estoppel); for this to exist, the promise must have been relied upon and prejudice would result unless estoppel is applied

 

Elements of Estoppel in Pais

In relation to the party sought to be estopped:

  1. Conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than and consistent with those which the party subsequently attempts to assert;
  2. Intent or at least expectation that this conduct shall be acted upon by at least influence the other party;
  3. Knowledge, actual or constructive, of the real facts

In relation to the party claiming the estoppel:

  1. Lack of knowledge or of the means of knowing the truth as to the facts in question;
  2. Reliance, in good faith, upon the conduct or statement as to the facts in question;
  3. Action or inaction based thereon of such character as to change the position or status of the party claiming the estoppel to his injury, detriment, or prejudice

 

Estoppel against Owner

When in a contract between third persons concerning immovable property, one of them is misled by a person with respect to the ownership of real right over the real estate, the latter is precluded from asserting his legal title or interest therein, provided all these requisites are present:

  1. There must be fraudulent representation or wrongful concealment of facts known to the party estopped;
  2. The party precluded must intend that the other should act upon the facts as misrepresented;
  3. The party misled must have been unaware of the true facts; and
  4. The party defrauded must have acted in accordance with the misrepresentation.

Æ   An estoppel operates on the parties to the transaction out of which it arises and their privies.

Æ   The government is not estopped by mistake or error on the part of its officials or agents; the erroneous application and enforcement of the law by public officers does not prevent a subsequent correct application of the statute.

 

Natural Law

  1. Immutable and independent of all human regulations
  2. Includes those rules which are neither written nor promulgated, but are derived from reason and nature

 

Types of Obligations:

  1. Moral obligations – duties of conscience completely outside the field of law
  2. Natural obligations – not sanctioned by any action but have a relative juridical effect
  3. Civil obligations – juridical obligations which apparently are in conformity with positive law but are contrary to juridical principles and susceptible of being annulled
  4. Mixed obligations – have full juridical effect

 

Conditions Necessary for Natural Obligation to Arise:

  1. Juridical tie which is not prohibited by law
  2. This tie is not given effect by law

Æ   When a debtor offers a guarantor for his natural obligation, he impliedly accepts the coercive remedies to enforce the guaranty, and therefore, the transformation of the natural obligation into a civil obligation.

 

Source:

Civil Law (Estoppel)  Memory Aid

Ateneo Central Bar Operations 2001

Follow

Get every new post delivered to your Inbox.

Join 230 other followers