FACTS:

Petitioner Victoria Legarda was the defendant in a complaint for specific performance with damages filed by private respondent New Cathay House, Inc. The complaint sought to compel Victoria Legarda to sign a lease contract for her house and lot in Quezon City, which New Cathay House intended to use as a restaurant. The lower court issued a temporary restraining order and a writ of preliminary injunction to prevent Victoria Legarda from interfering with the renovation of the property.

Victoria Legarda's counsel, Atty. Coronel, filed an urgent motion for an extension of time to file an answer, which was granted by the court. However, Victoria Legarda failed to file her answer within the extended period and was declared in default by the court. The court then rendered a decision by default, ordering Victoria Legarda to execute the lease contract and pay damages and attorney's fees. Atty. Coronel received a copy of the decision but did not appeal within the prescribed period. As a result, the decision became final and a writ of execution was issued. The property was eventually sold at public auction to New Cathay House.

Victoria Legarda, represented by her attorney-in-fact, filed a petition for annulment of the judgment in the Court of Appeals, alleging fraud and lack of evidence in the decision. The Court of Appeals issued a temporary restraining order and later dismissed the petition, finding no merit in the fraud allegations. Atty. Coronel did not file a motion for reconsideration or initiate an appeal. The decision of the Court of Appeals became final.

New Cathay House demanded Victoria Legarda to vacate the property, and she was forced to oblige. Victoria Legarda, now represented by new counsel, filed a petition for certiorari before the Supreme Court, arguing that the decisions of the lower courts were null and void due to the negligence of Atty. Coronel.

ISSUES:

1. Whether the decisions of the lower courts are null and void due to the alleged deprivation of petitioner's right to due process.

2. Whether Atty. Coronel should be held administratively liable for his acts and omissions.

RULING:

1. The Supreme Court declared the decisions of the lower courts null and void and ordered the reconveyance of the property to the petitioner. The Court found that petitioner was deprived of her day in court and divested of her property without due process of law due to the gross negligence of her previous counsel, Atty. Coronel.

2. The Court held that Atty. Coronel should be held administratively liable for his acts and omissions that resulted in grave injustice to the petitioner. The Court considered his failure to show cause as a waiver of his rights to be heard and to due process.

PRINCIPLES:

• Lawyers are expected to serve their clients with competence and diligence, and negligence in connection with a legal matter entrusted to them renders them liable.

• The granting or denial of motions for extension of time is addressed to the sound discretion of the court, with a view to attaining substantial justice.

• Lawyers are expected to recognize the authority of the court and obey its lawful processes and orders.

• A lawyer who fails to exercise due diligence or abandons his client's cause makes him unworthy of the trust reposed on him by the latter.

• A lawyer owes fealty, not only to his client, but also to the Court of which he is an officer.

• Lawyers should be fair, honest, respectable, above suspicion and beyond reproach in dealing with their clients. The legal profession is a matter of public interest.