### Facts

The case involves two disbarment complaints: one filed by Vantage Lighting Philippines, Inc., along with its President John Paul Fairclough and Vice President for Finance and Administration Ma. Cecilia G. Roque (collectively referred to as complainants) against their former counsel, Atty. Jose A. Diao, Jr. (Atty. Diao), and the other filed by Atty. Diao against Vantage's current lawyers, Attys. Paris G. Real and Sherwin G. Real. The first complaint, docketed as A.C. No. 7389, was initiated on January 2, 2007, alleging that Atty. Diao engaged in misconduct during his representation of Vantage. The complainants claimed that on August 15, 2006, they entered into a Retainer's Agreement with Atty. Diao for legal services related to a complaint against PHPC Co. and Hitachi Plant Engineering Co. Ltd. The agreement stipulated various fees, including an acceptance fee of P150,000, payable in two installments, and additional fees for pleadings and appearances.

The situation escalated when Atty. Diao requested a payment of P150,000 to the judge for a temporary restraining order (TRO), which Vantage initially believed to be a standard legal expense. After a series of communications, including demands for additional payments, Atty. Diao withdrew as counsel on September 21, 2006, following a breakdown in communication and trust. Subsequently, he filed multiple legal actions against the complainants, including a criminal complaint for estafa and a collection suit for unpaid fees, which the complainants argued were groundless and constituted harassment.

In the second complaint, Atty. Diao accused the Reals of using a letter that he claimed was falsified, which he alleged contained damaging statements against him. The Reals denied the allegations, asserting that the complaint was retaliatory. The Integrated Bar of the Philippines (IBP) investigated both complaints, leading to findings against Atty. Diao for gross misconduct and violations of the Code of Professional Responsibility.

### Issue

1. Did Atty. Jose A. Diao, Jr. commit gross misconduct and violate the Lawyer's Oath and the Code of Professional Responsibility in his dealings with Vantage Lighting Philippines, Inc.?
2. Was Atty. Diao's complaint against Attys. Paris G. Real and Sherwin G. Real substantiated by sufficient evidence?

### Ruling

1. The Supreme Court found Atty. Jose A. Diao, Jr. guilty of gross misconduct and disbarred him from the practice of law.
2. The complaint filed by Atty. Diao against Attys. Paris G. Real and Sherwin G. Real was dismissed for lack of evidence.

### Ratio

The Supreme Court's ruling emphasized that Atty. Diao's actions constituted gross misconduct, which is defined as any inexcusable, shameful, or flagrant unlawful conduct that prejudices the rights of parties involved in the administration of justice. The Court found that Atty. Diao misrepresented the purpose of the P150,000 payment, claiming it was for securing a TRO, which undermined the integrity of the judicial system. His threats and retaliatory legal actions against his former clients were deemed unprofessional and indicative of a lack of respect for the legal profession.

The Court also noted that Atty. Diao's claims against the Reals were not substantiated by credible evidence, as he failed to prove that they had falsified any documents. The dismissal of his complaint against the Reals was based on the lack of motive and the implausibility of their involvement in the alleged misconduct. The decision served as a stern reminder of the ethical standards expected of lawyers and the serious consequences of failing to uphold these standards.

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