RULE 9.

02 NOT TO DIVIDE LEGAL FEES

No. L-24864
Halili v. Court of Industrial Relations
Makasiar, J.
Summarized by Cristelle Collera
[Digesters Note: I only included the parts related to the lesson.]
IMPORTANT PEOPLE
Halili Bus Drivers and Conductors Union (PTGWO) union who filed suit against
its employer
Halili Transit employer of PTGWO
Atty. Benjamin Pineda one of the lawyers for PTGWO; herein asshole
Arbiter Valenzuela NLRC; also in motion for contempt
FACTS
1. PTGWO filed claims for overtime against Halili Transit, eventually settled by
an agreement wherein the administrator of Fortunato Halilis estate would
transfer a tract of land in Caloocan, Rizal to the union. This award was
established by their original counsel, Atty. Espinas, for Espinas & Associates.
2. Atty. Pineda, while working for the same law firm, later appeared in court for
PTGWO. However, he represented himself with the firm B.C. Pineda and
Associates (with the same address as Espinas & Associates sketchy)
giving the impression that he was now the principal lawyer in the cases (and
would be entitled to a bigger share of fees).
3. Meanwhile, Atty. Pineda also entered into an anomalous retainers contract
with PTGWO, which was later found to be illegal and unethical.
It was executed only between Atty. Pineda and PTGWOs officers (only
14% of its members). The Labor Code requires all members to vote on
any question of major policy.
Atty. Pineda required a contingent fee of 30% for those still working at
Halili Transit, and 45% for those already separated. However, when the
contract was executed, Halili had already stopped operations, meaning
the 45% fee now applied to all the members of PTGWO.
The contract was executed while Atty. Espinas was still representing
PTGWO in Halilis SC appeal. Atty. Pineda didnt tell his firm about the
contract, nor did he try to substitute as counsel, now that he was
retained by the union.
The contract wasnt even notarized.

4. Manila Memorial Park, which was supposed to buy the land in the award to
PTGWO, expressed misgivings over the authority of PTGWO bec. of PD
1529, which says that a court of competent jurisdiction must authorize the
sale of a property in trust.
5. Atty. Pineda approached the NLRC, asking for authority to sell the property,
which was granted by Arbiter Valenzuela. He later filed a second motion to
distribute the proceeds of the sale, also granted by Valenzuela. The
distribution was to include the attorneys fees for him stipulated in his
retainers contract with PTGWO.
In both motions, neither the two other counsels (Atty. Espinas and Atty.
Lopez) nor the other parties were informed.
ISSUE with HOLDING
1. W/N Atty. Pineda is guilty of misconduct Yes.
The 45% attorneys lien on the award of the employees was exorbitant
and unconscionable. He must now return the excessive amount of fees
he received.
He acted in a fraudulent manner, representing himself as principal
lawyer in the case and from another law firm, albeit at the same
address as Espina & Associates.
It was also found that Atty. Pineda intended to share his
attorneys fees with union leaders, which may be why the general
membership wasnt informed of the retainers contract with
Pineda. This goes against Canon 9.02, which prohibits sharing of
attorneys fees with non-lawyers.
2. W/N Atty. Pineda is guilty of indirect contempt of court Yes.
He knowingly approached the NLRC for authority to sell and dispose of
the proceeds of the awarded property, knowing full well that the NLRC
had no jurisdiction to give such authority.
He also did this without the knowledge of his co-counsels and the other
parties in the case.
DISPOSITIVE PORTION
Atty. Pineda is found guilty of indirect contempt, sentenced to imprisonment, and
directed to show cause why he should not be disbarred.
DOCTRINE
Canon 9.02. A lawyer shall not divide or stipulate to divide a fee for legal
services with persons not licensed to practice law, except:
2

(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 persons specified in the agreement; or
(b) Where a lawyer undertakes to complete unfinished legal business of a
deceased lawyer; or
(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, on a profit
sharing agreement.
RELEVANCE TO THE LESSON
Sharing of attorneys fees with non-lawyers (in this case, union heads) is
prohibited. Also, dont be an asshole.