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  • Legal Ethics Digest - Reyes Vs Gubatan

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    Peter Frogoso
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    This case involves attorney Gerald Gubatan borrowing money from his client Rommel Reyes and Reyes' company on multiple occasions, as evidenced by promissory notes. However, Atty. Gubatan failed to pay back the loans. The Supreme Court ruled that Atty. Gubatan violated legal ethics rules by borrowing from his client without protecting the client's interests, and abused the trust of his clients by refusing to repay the loans. The relationship between lawyers and clients requires trust, and borrowing from clients can allow lawyers to take advantage of their influence. Atty. Gubatan was employed by the company and retained as their legal consultant, so a lawyer-client relationship existed when he took the loans

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    Legal Ethics Digest - Reyes vs Gubatan

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    This case involves attorney Gerald Gubatan borrowing money from his client Rommel Reyes and Reyes' company on multiple occasions, as evidenced by promissory notes. However, Atty. Gubatan failed to pay back the loans. The Supreme Court ruled that Atty. Gubatan violated legal ethics rules by borrowing from his client without protecting the client's interests, and abused the trust of his clients by refusing to repay the loans. The relationship between lawyers and clients requires trust, and borrowing from clients can allow lawyers to take advantage of their influence. Atty. Gubatan was employed by the company and retained as their legal consultant, so a lawyer-client relationship existed when he took the loans

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    99 views1 page

    Legal Ethics Digest - Reyes Vs Gubatan

    Uploaded by

    Peter Frogoso
    This case involves attorney Gerald Gubatan borrowing money from his client Rommel Reyes and Reyes' company on multiple occasions, as evidenced by promissory notes. However, Atty. Gubatan failed to pay back the loans. The Supreme Court ruled that Atty. Gubatan violated legal ethics rules by borrowing from his client without protecting the client's interests, and abused the trust of his clients by refusing to repay the loans. The relationship between lawyers and clients requires trust, and borrowing from clients can allow lawyers to take advantage of their influence. Atty. Gubatan was employed by the company and retained as their legal consultant, so a lawyer-client relationship existed when he took the loans

    Copyright:

    © All Rights Reserved
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    of 1

    LEGAL ETHICS > The Code of Professional Responsibility > To the Legal Profession

    LEGAL ETHICS > The Code of Professional Responsibility > To the Clients

    Rommel Reyes vs. Atty. Gerald Gubatan


    A.C. No. 12839, November 03, 2020
    (First Division)

    FACTS: Atty. Gerald Z. Gubatan (Atty. Gubatan) borrowed money from Rommel N. Reyes (Reyes) and
    his company multiple times, as evidenced by a promissory note and an Acknowledgement/Agreement.
    The former was employed in the company of the latter as Legal Counsel and Special Assistant, handling
    corporate and personal matters. However, Atty. Gubatan failed and refused to pay the said obligations
    even after receiving a demand letter. Thereafter, Reyes filed complaints against Atty. Gubatan for
    collection of sum of money with damages before the MTC. The latter claimed that there was an
    agreement that the loans will be set off against his compensation and professional fees for services
    rendered to the company and to Reyes personally, and that he was not compensated for much of said
    rendered services. The Integrated Bar of the Philippines board reprimanded Atty. Gubatan for violating
    the rule which prohibits lawyers from borrowing money from their clients unless the latter's interests
    are fully protected by the nature of the case or by independent advice and found that there was no
    sufficient evidence of any subsequent agreement to set-off the loans.

    ISSUE: Whether Atty. Gubatan is justified in not paying his obligations on the ground of
    non-payment of professional fees.

    HELD: No. Atty. Gubatan is not justified in not paying his obligations on the ground of non-payment
    of professional fees.

    The relationship between lawyers and their clients is inherently imbued with trust and confidence —
    and as true as any natural tendency goes, this trust and confidence is susceptible to abuse. The rule
    prohibiting lawyers from borrowing from their clients is intended to prevent the lawyer from taking
    advantage of his influence over the client as the rule presumes that the client is disadvantaged by the
    lawyer's ability to use all legal maneuverings to renege on his obligation.

    In this case, Atty. Gubatan obtained several loans from Reyes and the Corporation, which are evidenced
    by promissory notes and an acknowledgment/agreement. These loans appear to have been contracted
    during the existence of a lawyer-client relationship among the parties, when Atty. Gubatan was
    employed by the Corporation and retained as legal consultant and special assistant to the president.
    Consequently, Atty. Gubatan clearly violated the following provisions of the CPR:

    CANON 16 — A lawyer shall hold in trust all moneys and properties of his client that may come into his
    possession.

    xxxx

    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 a legal matter
    he is handling for the client. (Emphasis supplied)

    Further, in unduly borrowing money from Reyes and the Corporation and refusing to pay the same,
    Atty. Gubatan abused the trust and confidence reposed in him by his clients. In doing so, he failed to
    uphold the integrity and dignity of the legal profession, in contravention of Canon 7 of the CPR, which
    provides:

    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.

    95

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