A.C. No.

4103 September 7, 1995

VERONICA S. SANTIAGO, BENJAMIN Q. HONTIVEROS, MR. SOCORRO F. MANAS, and TRINIDAD

NORDISTA, complainants,
vs.
ATTY. AMADO R. FOJAS, respondent.

DAVIDE JR., J.:

In their letter of 8 September 1993, the complainants, former clients of the respondent, pray that the latter
be disbarred for "malpractice, neglect and other offenses which may be discovered during the actual
investigation of this complaint." They attached thereto an Affidavit of Merit wherein they specifically allege:

1. That we are Defendants-Appellates [sic] in the Court of Appeals Case No. CA-G.N. CV
No. 38153 of which to our surprise lost unnecessarily the aforesaid Petition [sic]. A close
perusal of the case reveals the serious misconduct of our attorney on record, Atty. Amado
Fojas tantamount to malpractice and negligence in the performance of his duty obligation
to us, to defend us in the aforesaid case. That the said attorney without informing us the
reason why and riding high on the trust and confidence we repose on him either
abandoned, failed to act accordingly, or seriously neglected to answer the civil complaint
against us in the sala of Judge Teresita Capulong Case No. 3526-V-91 Val. Metro Manila
so that we were deduced [sic] in default.

2. That under false pretenses Atty. Fojas assured us that everything was in order. That he
had already answered the complaint so that in spite of the incessant demand for him to
give us a copy he continued to deny same to us. Only to disclose later that he never
answered it after all because according to him he was a very busy man. Please refer to
Court of Appeals decision dated August 17, 1993.

3. That because of Atty. Amado Foja's neglect and malpractice of law we lost the Judge
Capulong case and our appeal to the Court of Appeals. So that it is only proper that Atty.
Fojas be disciplined and disbarred in the practice of his profession.

In his Comment, the respondent admits his "mistake" in failing to file the complainants' answer in Civil
Case No. 3526-V-91, but he alleges that it was cured by his filing of a motion for reconsideration, which
was unfortunately denied by the court. He asserts that Civil Case No. 3526-V-91 was a "losing cause" for
the complainants because it was based on the expulsion of the plaintiff therein from the Far Eastern
University Faculty Association (FEUFA) which was declared unlawful in the final decision in NCR-OD-M-
90-10-050. Thus, "[t]he unfavorable judgment in the Regional Trial Court is not imputable to [his] mistake
but rather imputable to the merits of the case, i.e., the decision in the Expulsion case wherein defendants
(complainants herein) illegally removed from the union (FEUFA) membership Mr. Paulino Salvador. . . ."
He further claims that the complainants filed this case to harass him because he refused to share his
attorney's fees in the main labor case he had handled for them. The respondent then prays for the
dismissal of this complaint for utter lack of merit, since his failure to file the answer was cured and, even
granting for the sake of argument that such failure amounted to negligence, it cannot warrant his
disbarment or suspension from the practice of the law profession.

The complainants filed a Reply to the respondent's Comment.

Issues having been joined, we required the parties to inform us whether they were willing to submit this
case for decision on the basis of the pleadings they have filed. In their separate compliance, both
manifested in the affirmative.

The facts in this case are not disputed.

Complainants Veronica Santiago, Benjamin Hontiveros, Ma. Socorro Manas, and Trinidad Nordista were
the President, Vice-President, Treasurer, and Auditor, respectively, of the FEUFA. They allegedly expelled
from the union Paulino Salvador. The latter then commenced with the Department of Labor and
Employment (DOLE) a complaint (NCR-OD-M-90-10-050) to declare illegal his expulsion from the union.

In his resolution of 22 November 1990, Med-Arbiter Tomas Falconitin declared illegal Salvador's expulsion
and directed the union and all its officers to reinstate Salvador's name in the roll of union members with all
the rights and privileges appurtenant thereto. This resolution was affirmed in toto by the Secretary of
Labor and Employment.

Subsequently, Paulino Salvador filed with the Regional Trial Court (RTC) of Valenzuela, Metro Manila,
Branch 172, a complaint against the complainants herein for actual, moral, and exemplary damages and
attorney's fees, under Articles 19, 20, and 21 of the Civil Code. The case was docketed as Civil Case No.
3526-V-91.

As the complainants' counsel, the respondent filed a motion to dismiss the said case on grounds of
(1) res judicata by virtue of the final decision of the Med-Arbiter in NCR-OD-M-90-10-050 and (2) lack of
jurisdiction, since what was involved was an intra-union issue cognizable by the DOLE. Later, he filed a
supplemental motion to dismiss.

The trial court, per Judge Teresita Dizon-Capulong, granted the motion and ordered the dismissal of the
case. Upon Salvador's motion for reconsideration, however, it reconsidered the order of dismissal,
reinstated the case, and required the complainants herein to file their answer within a nonextendible
period of fifteen days from notice.

Instead of filing an answer, the respondent filed a motion for reconsideration and dismissal of the case.
This motion having been denied, the respondent filed with this Court a petition for certiorari, which was
later referred to the Court of Appeals and docketed therein as CA-G.R. SP No. 25834.

Although that petition and his subsequent motion for reconsideration were both denied, the respondent
still did not file the complainants' answer in Civil Case No. 3526-V-91. Hence, upon plaintiff Salvador's
motion, the complainants were declared in default, and Salvador was authorized to present his
evidence ex-parte.

The respondent then filed a motion to set aside the order of default and to stop the ex-parte reception of
evidence before the Clerk of Court, but to no avail.

Thereafter, the trial court rendered a decision ordering the complainants herein to pay, jointly and
severally, plaintiff Salvador the amounts of P200,000.00 as moral damages; P50,000.00 as exemplary
damages or corrective damages; and P65,000.00 as attorney's fees; plus cost of suit.
The complainants, still assisted by the respondent, elevated the case to the Court of Appeals, which,
however, affirmed in toto the decision of the trial court.

The respondent asserts that he was about to appeal the said decision to this Court, but his services as
counsel for the complainants and for the union were illegally and unilaterally terminated by complainant
Veronica Santiago.

The core issue that presents itself is whether the respondent committed culpable negligence, as would
warrant disciplinary action, in failing to file for the complainants an answer in Civil Case No. 3526-V-91 for
which reason the latter were declared in default and judgment was rendered against them on the basis of
the plaintiff's evidence, which was received ex-parte.

It is axiomatic that no lawyer is obliged to act either as adviser or advocate for every person who may
wish to become his client. He has the right to decline employment, 1 subject, however, to Canon 14 of the
Code of Professional Responsibility. Once he agrees to take up the cause of a client, the lawyer owes
fidelity to such cause and must always be mindful of the trust and confidence reposed in him. 2 He must
serve the client with competence and diligence, 3 and champion the latter's cause with wholehearted
fidelity, care, and devotion. 4 Elsewise stated, he owes entire devotion to the interest of the client, warm
zeal in the maintenance and defense of his client's rights, and the exertion of his utmost learning and
ability to the end that nothing be taken or withheld from his client, save by the rules of law, legally
applied. 5 This simply means that his client is entitled to the benefit of any and every remedy and defense
that is authorized by the law of the land and he may expect his lawyer to assert every such remedy or
defense. 6 If much is demanded from an attorney, it is because the entrusted privilege to practice law
carries with it the correlative duties not only to the client but also to the court, to the bar, and to the public.
A lawyer who performs his duty with diligence and candor not only protects the interest of his client; he
also serves the ends of justice, does honor to the bar, and helps maintain the respect of the community to
the legal profession. 7

The respondent admits that it was his duty to file an answer in Civil Case No. 3526-V-91. He justifies his
failure to do so in this wise:

[I]n his overzealousness to question the Denial Order of the trial court, 8 [he] instead, thru
honest mistake and excusable neglect, filed a PETITION FOR CERTIORARI with the
Honorable Court, docketed as G.R. No. 100983. . . .

And, when the Court of Appeals, to which G.R. No. 100983 was referred, dismissed the petition,
he again "inadvertently" failed to file an answer "[d]ue to honest mistake and because of his
overzealousness as stated earlier. . . . "

In their Reply, the complainants allege that his failure to file an answer was not an honest mistake but was
"deliberate, malicious and calculated to place them on the legal disadvantage, to their damage and
prejudice" for, as admitted by him in his motion to set aside the order of default, his failure to do so was
"due to volume and pressure of legal work." 9 In short, the complainants want to impress upon this Court
that the respondent has given inconsistent reasons to justify his failure to file an answer.

We agree with the complainants. In his motion for reconsideration of the default order, the respondent
explained his non-filing of the required answer by impliedly invoking forgetfulness occasioned by a large
volume and pressure of legal work, while in his Comment in this case he attributes it to honest mistake
and excusable neglect due to his overzealousness to question the denial order of the trial court.

Certainly, "overzealousness" on the one hand and "volume and pressure of legal work" on the other are
two distinct and separate causes or grounds. The first presupposes the respondent's full and continuing
awareness of his duty to file an answer which, nevertheless, he subordinated to his conviction that the
trial court had committed a reversible error or grave abuse of discretion in issuing an order reconsidering
its previous order of dismissal of Salvador's complaint and in denying the motion to reconsider the said
order. The second ground is purely based on forgetfulness because of his other commitments.

Whether it be the first or the second ground, the fact remains that the respondent did not comply with his
duty to file an answer in Civil Case No. 3526-V-91. His lack of diligence was compounded by his
erroneous belief that the trial court committed such error or grave abuse of discretion and by his
continued refusal to file an answer even after he received the Court of Appeals' decision in
the certiorari case. There is no showing whatsoever that he further assailed the said decision before this
Court in a petition for review under Rule 45 of the Rules of Court to prove his claim of overzealousness to
challenge the trial court's order. Neither was it shown that he alleged in his motion to lift the order of
default that the complainants had a meritorious defense. 10 And, in his appeal from the judgment by
default, he did not even raise as one of the errors of the trial court either the impropriety of the order of
default or the court's grave abuse of discretion in denying his motion to lift that order.

Pressure and large volume of legal work provide no excuse for the respondent's inability to exercise due
diligence in the performance of his duty to file an answer. Every case a lawyer accepts deserves his full
attention, diligence, skill, and competence, regardless of its importance and whether he accepts it for a
fee or for free.

All told, the respondent committed a breach of Canon 18 of the Code of Professional Responsibility which
requires him to serve his clients, the complainants herein, with diligence and, more specifically, Rule
18.03 thereof which provides: "A lawyer shall not neglect a legal matter entrusted to him, and his
negligence in connection therewith shall render him liable."

The respondent's negligence is not excused by his claim that Civil Case No. 3526-V-91 was in fact a
"losing cause" for the complainants since the claims therein for damages were based on the final decision
of the Med-Arbiter declaring the complainants' act of expelling Salvador from the union to be illegal. This
claim is a mere afterthought which hardly persuades us. If indeed the respondent was so convinced of the
futility of any defense therein, he should have seasonably informed the complainants thereof. Rule 15.05,
Canon 15 of the Code of Professional Responsibility expressly provides:

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 understanding the
prospects of the case.

Then too, if he were unconvinced of any defense, we are unable to understand why he took all
the trouble of filing a motion to dismiss on the grounds of res judicata and lack of jurisdiction and
of questioning the adverse ruling thereon initially with this Court and then with the Court of
Appeals, unless, of course, he meant all of these to simply delay the disposition of the civil case.
Finally, the complainants were not entirely without any valid or justifiable defense. They could
 prove that the plaintiff was not entitled to all the damages sought by him or that if he were so,
they could ask for a reduction of the amounts thereof.

We do not therefore hesitate to rule that the respondent is not free from any blame for the sad fate of the
complainants. He is liable for inexcusable negligence.

WHEREFORE, ATTY. AMADO R. FOJAS is hereby REPRIMANDED and ADMONISHED to be,

henceforth, more careful in the performance of his duty to his clients.

SO ORDERED.

Padilla, Bellosillo, Kapunan and Hermosisima Jr., JJ., concur.

[G.R. No. 118746. September 7, 1995.]

ATTY. WILFREDO TAGANAS, Petitioner, v. NATIONAL LABOR RELATIONS

COMMISSION, MELCHOR ESCULTURA, ET AL., Respondents.

Wilfredo Espiritu Taganas in his own behalf.

The Solicitor General for Respondents.

SYLLABUS

1. LEGAL AND JUDICIAL ETHICS; ATTORNEYS FEES; CONTINGENT FEE ARRANGEMENT;

SUBJECT TO THE SUPERVISION OF A COURT AS TO ITS REASONABLENESS. A contingent
fee arrangement is an agreement laid down in an express contract between a lawyer and a
client in which the lawyers professional fee, usually a fixed percentage of what may be
recovered in the action, is made to depend upon the success of the litigation. This
arrangement is valid in this jurisdiction. It is, however, under the supervision and scrutiny of
the court to protect clients from unjust charges. Section 13 of the Canons of Professional
Ethics states that" [a] contract for a contingent fee, where sanctioned by law, should be
reasonable under all the circumstances of the case including the risk and uncertainty of the
compensation, but should always be subject to the supervision of a court, as to its
reasonableness." When it comes, therefore, to the validity of contingent fees, in large
measure it depends on the reasonableness of the stipulated fees under the circumstances of
each case. The reduction of unreasonable attorneys fees is within the regulatory powers of
the courts.

2. ID.; ID.; ID.; ID.; APPLICATION IN CASE AT BAR. We agree with the NLRCs
assessment that fifty percent of the judgment award as attorneys fees is excessive and
unreasonable. The financial capacity and economic status of the client have to be taken into
account in fixing the reasonableness of the fee. Noting that petitioners clients were lowly
janitors who receive miniscule salaries and that they were precisely represented by
petitioner in the labor dispute for reinstatement and claim for backwages, wage differentials,
emergency cost of living allowance, thirteenth-month pay and attorneys fees to acquire
what they have not been receiving under the law and to alleviate their living condition, the
reduction of petitioners contingent fee is proper. Labor cases, it should be stressed, call for
compassionate justice. Furthermore, petitioners contingent fee falls within the purview of
Article 111 of the Labor Code. This article fixes the limit on the amount of attorneys fees
which a lawyer, like petitioner, may recover in any judicial or administrative proceedings
since the labor suit where he represented private respondents asked for the claim and
recovery of wages. In fact, We are not even precluded from fixing a lower amount than the
ten percent ceiling prescribed by the article when circumstances warrant it. Nonetheless,
considering the circumstances and the able handling of the case, petitioners fee need not
be further reduced. The manifestation of petitioners four clients indicating their conformity
with the contingent fee contract did not make the agreement valid. The contingent fee
contract being unreasonable and unconscionable the same was correctly disallowed by
public respondent NLRC even with respect to the four private respondents who agreed to
pay higher percentage. Petitioner is reminded that as a lawyer he is primarily an officer of
the court charged with the duty of assisting the court in administering impartial justice
between the parties. When he takes his oath, he submits himself to the authority of the
court and subjects his professional fees to judicial control.

RESOLUTION

FRANCISCO, J.:

Petitioner Atty. Wilfredo E. Taganas represented herein private respondents in a labor suit
for illegal dismissal, underpayment and non-payment of wages, thirteenth-month pay,
attorneys fees and damages conditioned upon a contingent fee arrangement granting the
equivalent of fifty percent of the judgment award plus three hundred pesos appearance fee
per hearing. 1 The Labor Arbiter ruled in favor of private respondents and ordered Ultra
Clean Services (Ultra) and the Philippine Tuberculosis Society, Inc., (PTSI) respondents
therein, jointly and severally to reinstate herein private respondents with full backwages, to
pay wage differential, emergency cost of living allowance, thirteenth-month pay and
attorneys fee, but disallowed the claim for damages for lack of basis. 2 This decision was
appealed by Ultra and PTSI to the National Labor Relations Commission (NLRC), and
subsequently by PTSI to the Court but to no avail. During the execution stage of the
decision, petitioner moved to enforce his attorneys charging lien. 3 Private respondents,
aggrieved for receiving a reduced award due to the attorneys charging lien, contested the
validity of the contingent fee arrangement they have with petitioner, albeit four of the
fourteen private respondents have expressed their conformity thereto. 4

Finding the arrangement excessive, the Labor Arbiter ordered the reduction of petitioners
contingent fee from ,fifty percent of the judgment award to ten percent, except for the four
private respondents who earlier expressed their conformity. 5 Petitioner appealed to NLRC
which affirmed with modification the Labor Arbiters order by ruling that the ten percent
contingent fee should apply also to the four respondents even if they earlier agreed to pay a
higher percentage. 6 Petitioners motion for reconsideration was denied, hence this petition
for certiorari.

The sole issue in this petition is whether or not the reduction of petitioners contingent fee is
warranted. Petitioner argues that respondent NLRC failed to apply the pertinent laws and
jurisprudence on the factors to be considered in determining whether or not the stipulated
amount of petitioners contingent fee is fair and reasonable. Moreover, he contends that the
invalidation of the contingent fee agreement between petitioner and his clients was without
any legal justification especially with respect to the four clients who manifested their
conformity thereto. We are not persuaded.

A contingent fee arrangement is an agreement laid down in an express contract between a

lawyer and a client in which the lawyers professional fee, usually a fixed percentage of what
may be recovered in the action, is made to depend upon the success of the litigation. 7 This
arrangement is valid in this jurisdiction. 8 It is, however, under the supervision and scrutiny
of the court to protect clients from unjust charges. 9 Section 13 of the Canons of
Professional Ethics states that" [a] contract for a contingent fee, where sanctioned by law,
should be reasonable under all the circumstances of the case including the risk and
uncertainty of the compensation, but should always be subject to the supervision of a court,
as to its reasonableness" Likewise, Rule 138, Section 24 of the Rules of Court
provides:chanrob1es virtual 1aw library

SECTION 24. Compensation of attorneys; agreement as to fees. An attorney shall be

entitled to have and recover from his client no more than a reasonable compensation for his
services, with a view to the importance of the subject-matter of the controversy, the extent
of the services rendered, and the professional standing of the attorney. No court shall be
bound by the opinion of attorneys as expert witnesses as to the proper compensation but
may disregard such testimony and base its conclusion on its own professional knowledge. A
written contract for services shall control the amount to be paid therefor unless found by the
court to be unconscionable or unreasonable.

When it comes, therefore, to the validity of contingent fees, in large measure it depends on
the reasonableness of the stipulated fees under the circumstances of each case. The
reduction of unreasonable attorneys fees is within the regulatory powers of the courts. 10

We agree with the NLRCs assessment that fifty percent of the judgment award as attorneys
fees is excessive and unreasonable. The financial capacity and economic status of the client
have to be taken into account in fixing the reasonableness of the fee. 11 Noting that
petitioners clients were lowly janitors who receive miniscule salaries and that they were
precisely represented by petitioner in the labor dispute for reinstatement and claim for
backwages, wage differentials, emergency cost of living allowance, thirteenth-month pay
and attorneys fees to acquire what they have not been receiving under the law and to
alleviate their living condition, the reduction of petitioners contingent fee is proper. Labor
cases, it should be stressed, call for compassionate justice.

Furthermore, petitioners contingent fee falls within the purview of Article 111 of the Labor
Code. This article fixes the limit on the amount of attorneys fees which a lawyer, like
petitioner, may recover in any judicial or administrative proceedings since the labor suit
where he represented private respondents asked for the claim and recovery of wages. In
fact, We are not even precluded from fixing a lower amount than the ten percent ceiling
prescribed by the article when circumstances warrant it. 12 Nonetheless, considering the
circumstances and the able handling of the case, petitioners fee need not be further
reduced.

The manifestation of petitioners four clients indicating their conformity with the contingent
fee contract did not make the agreement valid. The contingent fee contract being
unreasonable and unconscionable the same was correctly disallowed by public respondent
NLRC even with respect to the four private respondents who agreed to pay higher
percentage. Petitioner is reminded that as a lawyer he is primarily an officer of the court
charged with the duty of assisting the court in administering impartial justice between the
parties. When he takes his oath, he submits himself to the authority of the court and
subjects his professional fees to judicial control. 13
WHEREFORE, finding no grave abuse of discretion the assailed NLRC decision is hereby
affirmed in toto.

Narvasa, C.J., Regalado, Puno and Mendoza, JJ., concur.

A.M. No. 1625 February 12, 1990

ANGEL L. BAUTISTA, complainant,

vs.
ATTY. RAMON A. GONZALES, respondent.

RESOLUTION

PER CURIAM:

In a verified complaint filed by Angel L. Bautista on May 19, 1976, respondent Ramon A. Gonzales was
charged with malpractice, deceit, gross misconduct and violation of lawyer's oath. Required by this Court
to answer the charges against him, respondent filed on June 19, 1976 a motion for a bill of particulars
asking this Court to order complainant to amend his complaint by making his charges more definite. In a
resolution dated June 28, 1976, the Court granted respondent's motion and required complainant to file
an amended complaint. On July 15, 1976, complainant submitted an amended complaint for disbarment,
alleging that respondent committed the following acts:

1. Accepting a case wherein he agreed with his clients, namely, Alfaro Fortunado, Nestor Fortunado and
Editha Fortunado [hereinafter referred to as the Fortunados] to pay all expenses, including court fees, for
a contingent fee of fifty percent (50%) of the value of the property in litigation.

2. Acting as counsel for the Fortunados in Civil Case No. Q-15143, wherein Eusebio Lopez, Jr. is one of
the defendants and, without said case being terminated, acting as counsel for Eusebio Lopez, Jr. in Civil
Case No. Q-15490;

3. Transferring to himself one-half of the properties of the Fortunados, which properties are the subject of
the litigation in Civil Case No. Q-15143, while the case was still pending;

4. Inducing complainant, who was his former client, to enter into a contract with him on August 30, 1971
for the development into a residential subdivision of the land involved in Civil Case No. Q-15143, covered
by TCT No. T-1929, claiming that he acquired fifty percent (50%) interest thereof as attorney's fees from
the Fortunados, while knowing fully well that the said property was already sold at a public auction on
June 30, 1971, by the Provincial Sheriff of Lanao del Norte and registered with the Register of Deeds of
Iligan City;

5. Submitting to the Court of First Instance of Quezon City falsified documents purporting to be true
copies of "Addendum to the Land Development Agreement dated August 30, 1971" and submitting the
same document to the Fiscal's Office of Quezon City, in connection with the complaint for estafa filed by
respondent against complainant designated as I.S. No. 7512936;
6. Committing acts of treachery and disloyalty to complainant who was his client;

7. Harassing the complainant by filing several complaints without legal basis before the Court of First
Instance and the Fiscal's Office of Quezon City;

8. Deliberately misleading the Court of First Instance and the Fiscal's Office by making false assertion of
facts in his pleadings;

9. Filing petitions "cleverly prepared (so) that while he does not intentionally tell a he, he does not tell the
truth either."

Respondent filed an answer on September 29, 1976 and an amended answer on November 18, 1976,
denying the accusations against him. Complainant filed a reply to respondent's answer on December 29,
1976 and on March 24, 1977 respondent filed a rejoinder.

In a resolution dated March 16, 1983, the Court referred the case to the Office of the Solicitor General for
investigation, report and recommendation. In the investigation conducted by the Solicitor General,
complainant presented himself as a witness and submitted Exhibits "A" to "PP", while respondent
appeared both as witness and counsel and submitted Exhibits "1" to "11". The parties were required to
submit their respective memoranda.

On May 16, 1988 respondent filed a motion to dismiss the complaint against him, claiming that the long
delay in the resolution of the complaint against him constitutes a violation of his constitutional right to due
process and speedy disposition of cases. Upon order of the Court, the Solicitor General filed a comment
to the motion to dismiss on August 8, 1988, explaining that the delay in the investigation of the case was
due to the numerous requests for postponement of scheduled hearings filed by both parties and the
motions for extension of time to file their respective memoranda." [Comment of the Solicitor General, p. 2;
Record, p. 365]. Respondent filed a reply to the Solicitor General's comment on October 26, 1988. In a
resolution dated January 16, 1989 the Court required the Solicitor General to submit his report and
recommendation within thirty (30) days from notice.

On April 11, 1989, the Solicitor General submitted his report with the recommendation that Atty. Ramon A.
Gonzales be suspended for six (6) months. The Solicitor General found that respondent committed the
following acts of misconduct:

a. transferring to himself one-half of the properties of his clients during the pendency of the case where
the properties were involved;

b. concealing from complainant the fact that the property subject of their land development agreement
had already been sold at a public auction prior to the execution of said agreement; and

c. misleading the court by submitting alleged true copies of a document where two signatories who had
not signed the original (or even the xerox copy) were made to appear as having fixed their signatures
[Report and Recommendation of the Solicitor General, pp. 17-18; Rollo, pp. 403-404].

Respondent then filed on April 14, 1989 a motion to refer the case to the Integrated Bar of the Philippines
(IBP) for investigation and disposition pursuant to Rule 139-B of the Revised Rules of Court. Respondent
manifested that he intends to submit more evidence before the IBP. Finally, on November 27, 1989,
respondent filed a supplemental motion to refer this case to the IBP, containing additional arguments to
bolster his contentions in his previous pleadings.

I.

Preliminarily, the Court will dispose of the procedural issue raised by respondent. It is respondent's
contention that the preliminary investigation conducted by the Solicitor General was limited to the
determination of whether or not there is sufficient ground to proceed with the case and that under Rule
139 the Solicitor General still has to file an administrative complaint against him. Respondent claims that
the case should be referred to the IBP since Section 20 of Rule 139-B provides that:

This Rule shall take effect on June 1, 1988 and shall supersede the present Rule 139
entitled DISBARMENT OR SUSPENSION OF ATTORNEYS. All cases pending
investigation by the Office of the Solicitor General shall be transferred to the Integrated
Bar of the Philippines Board of Governors for investigation and disposition as provided in
this Rule except those cases where the investigation has been substantially completed.

The above contention of respondent is untenable. In the first place, contrary to respondent's claim,
reference to the IBP of complaints against lawyers is not mandatory upon the Court [Zaldivar v.
Sandiganbayan, G.R. Nos. 79690-707; Zaldivar v. Gonzales, G.R. No. 80578, October 7, 1988].
Reference of complaints to the IBP is not an exclusive procedure under the terms of Rule 139-B of the
Revised Rules of Court [Ibid]. Under Sections 13 and 14 of Rule 139-B, the Supreme Court may conduct
disciplinary proceedings without the intervention of the IBP by referring cases for investigation to the
Solicitor General or to any officer of the Supreme Court or judge of a lower court. In such a case, the
report and recommendation of the investigating official shall be reviewed directly by the Supreme Court.
The Court shall base its final action on the case on the report and recommendation submitted by the
investigating official and the evidence presented by the parties during the investigation.

Secondly, there is no need to refer the case to the IBP since at the time of the effectivity of Rule 139-B
[June 1, 1988] the investigation conducted by the Office of the Solicitor General had been substantially
completed. Section 20 of Rule 139-B provides that only pending cases, the investigation of which has not
been substantially completed by the Office of the Solicitor General, shall be transferred to the IBP. In this
case the investigation by the Solicitor General was terminated even before the effectivity of Rule 139-B.
Respondent himself admitted in his motion to dismiss that the Solicitor General terminated the
investigation on November 26, 1986, the date when respondent submitted his reply memorandum [Motion
to Dismiss, p. 1; Record, p. 353].

Thirdly, there is no need for further investigation since the Office of the Solicitor General already made a
thorough and comprehensive investigation of the case. To refer the case to the IBP, as prayed for by the
respondent, will result not only in duplication of the proceedings conducted by the Solicitor General but
also to further delay in the disposition of the present case which has lasted for more than thirteen (13)
years.

Respondent's assertion that he still has some evidence to present does not warrant the referral of the
case to the IBP. Considering that in the investigation conducted by the Solicitor General respondent was
given ample opportunity to present evidence, his failure to adduce additional evidence is entirely his own
fault. There was therefore no denial of procedural due process. The record shows that respondent
appeared as witness for himself and presented no less than eleven (11) documents to support his
contentions. He was also allowed to cross-examine the complainant who appeared as a witness against
him.

II.

The Court will now address the substantive issue of whether or not respondent committed the acts of
misconduct alleged by complainant Bautista.

After a careful review of the record of the case and the report and recommendation of the Solicitor
General, the Court finds that respondent committed acts of misconduct which warrant the exercise by this
Court of its disciplinary power.

The record shows that respondent prepared a document entitled "Transfer of Rights" which was signed by
the Fortunados on August 31, 1971. The document assigned to respondent one-half (1/2) of the
properties of the Fortunados covered by TCT No. T-1929, with an area of 239.650 sq. mm., and TCT No.
T-3041, with an area of 72.907 sq. m., for and in consideration of his legal services to the latter. At the
time the document was executed, respondent knew that the abovementioned properties were the subject
of a civil case [Civil Case No. Q-15143] pending before the Court of First Instance of Quezon City since
he was acting as counsel for the Fortunados in said case [See Annex "B" of Original Complaint, p. 12;
Rollo, p. 16]. In executing the document transferring one-half (1/2) of the subject properties to himself,
respondent violated the law expressly prohibiting a lawyer from acquiring his client's property or interest
involved in any litigation in which he may take part by virtue of his profession [Article 1491, New Civil
Code]. This Court has held that the purchase by a lawyer of his client's property or interest in litigation is a
breach of professional ethics and constitutes malpractice [Hernandez v. Villanueva, 40 Phil. 774 (1920);
Go Beltran v. Fernandez, 70 Phil. 248 (1940)].

However, respondent notes that Canon 10 of the old Canons of Professional Ethics, which states that
"[t]he lawyer should not purchase any interests in the subject matter of the litigation which he is
conducting," does not appear anymore in the new Code of Professional Responsibility. He therefore
concludes that while a purchase by a lawyer of property in litigation is void under Art. 1491 of the Civil
Code, such purchase is no longer a ground for disciplinary action under the new Code of Professional
Responsibility.

This contention is without merit. The very first Canon of the new Code states that "a lawyer shall uphold
the Constitution, obey the laws of the land and promote respect for law and legal process" (Emphasis
supplied), Moreover, Rule 138, Sec. 3 of the Revised Rules of Court requires every lawyer to take an oath
to 44 obey the laws [of the Republic of the Philippines] as well as the legal orders of the duly constituted
authorities therein." And for any violation of this oath, a lawyer may be suspended or disbarred by the
Supreme Court [Rule 138, Sec. 27, Revised Rules of Court]. All of these underscore the role of the lawyer
as the vanguard of our legal system. The transgression of any provision of law by a lawyer is a repulsive
and reprehensible act which the Court will not countenance. In the instant case, respondent, having
violated Art. 1491 of the Civil Code, must be held accountable both to his client and to society.

Parenthetically, it should be noted that the persons mentioned in Art. 1491 of the Civil Code are prohibited
from purchasing the property mentioned therein because of their existing trust relationship with the latter.
A lawyer is disqualified from acquiring by purchase the property and rights in litigation because of his
fiduciary relationship with such property and rights, as well as with the client. And it cannot be claimed
that the new Code of Professional Responsibility has failed to emphasize the nature and consequences of
such relationship. Canon 17 states that "a lawyer owes fidelity to the cause of his client and he shall be
mindful of the trust and confidence reposed in him." On the other hand, Canon 16 provides that "a lawyer
shall hold in trust all moneys and properties of his client that may come into his possession." Hence,
notwithstanding the absence of a specific provision on the matter in the new Code, the Court, considering
the abovequoted provisions of the new Code in relation to Art. 1491 of the Civil Code, as well as the
prevailing jurisprudence, holds that the purchase by a lawyer of his client's property in litigation
constitutes a breach of professional ethics for which a disciplinary action may be brought against him.

Respondent's next contention that the transfer of the properties was not really implemented, because the
land development agreement on which the transfer depended was later rescinded, is untenable. Nowhere
is it provided in the Transfer of Rights that the assignment of the properties of the Fortunados to
respondent was subject to the implementation of the land development agreement. The last paragraph of
the Transfer of Rights provides that:

... for and in consideration of the legal services of ATTY. RAMON A. GONZALES, Filipino, married to Lilia
Yusay, and a resident of 23 Sunrise Hill, New Manila, Quezon City, rendered to our entire satisfaction, we
hereby, by these presents, do transfer and convey to the said ATTY. RAMON A. GONZALES, his heirs,
successor, and assigns, one-half (1/2) of our rights and interests in the abovedescribed property, together
with all the improvements found therein [Annex D of the Complaint, Record, p. 28; Emphasis supplied].

It is clear from the foregoing that the parties intended the transfer of the properties to respondent to be
absolute and unconditional, and irrespective of whether or not the land development agreement was
implemented.

Another misconduct committed by respondent was his failure to disclose to complainant, at the time the
land development agreement was entered into, that the land covered by TCT No. T-1929 had already
been sold at a public auction. The land development agreement was executed on August 31, 1977 while
the public auction was held on June 30, 1971.

Respondent denies that complainant was his former client, claiming that his appearance for the
complainant in an anti-graft case filed by the latter against a certain Gilbert Teodoro was upon the request
of complainant and was understood to be only provisional. Respondent claims that since complainant was
not his client, he had no duty to warn complainant of the fact that the land involved in their land
development agreement had been sold at a public auction. Moreover, the sale was duly annotated at the
back of TCT No. T-1929 and this, respondent argues, serves as constructive notice to complainant so that
there was no concealment on his part.

The above contentions are unmeritorious. Even assuming that the certificate of sale was annotated at the
back of TCT No. T-1929, the fact remains that respondent failed to inform the complainant of the sale of
the land to Samauna during the negotiations for the land development agreement. In so doing,
respondent failed to live up to the rigorous standards of ethics of the law profession which place a
premium on honesty and condemn duplicitous conduct. The fact that complainant was not a former client
of respondent does not exempt respondent from his duty to inform complainant of an important fact
pertaining to the land which is subject of their negotiation. Since he was a party to the land development
agreement, respondent should have warned the complainant of the sale of the land at a public auction so
that the latter could make a proper assessment of the viability of the project they were jointly undertaking.
This Court has held that a lawyer should observe honesty and fairness even in his private dealings and
failure to do so is a ground for disciplinary action against him [Custodio v. Esto, Adm. Case No. 1113,
February 22, 1978, 81 SCRA 517].

Complainant also charges respondent with submitting to the court falsified documents purporting to be
true copies of an addendum to the land development agreement.

Based on evidence submitted by the parties, the Solicitor General found that in the document filed by
respondent with the Court of First Instance of Quezon City, the signatories to the addendum to the land
development agreement namely, Ramon A. Gonzales, Alfaro T. Fortunado, Editha T. Fortunado, Nestor T.
Fortunado, and Angel L. Bautistawere made to appear as having signed the original document on
December 9, 1972, as indicated by the letters (SGD.) before each of their names. However, it was only
respondent Alfaro Fortunado and complainant who signed the original and duplicate original (Exh. 2) and
the two other parties, Edith Fortunado and Nestor Fortunado, never did. Even respondent himself
admitted that Edith and Nestor Fortunado only signed the xerox copy (Exh. 2-A) after respondent wrote
them on May 24, 1973, asking them to sign the said xerox copy attached to the letter and to send it back
to him after signing [Rejoinder to Complainant's Reply, pp. 4-6; Rollo, pp. 327-329]. Moreover, respondent
acknowledged that Edith and Nestor Fortunado had merely agreed by phone to sign, but had not actually
signed, the alleged true copy of the addendum as of May 23, 1973 [Respondent's Supplemental Motion to
Refer this Case to the Integrated Bar of the Philippines, p. 16]. Thus, when respondent submitted the
alleged true copy of the addendum on May 23, 1973 as Annex "A" of his Manifestation filed with the Court
of First Instance of Quezon City, he knowingly misled the Court into believing that the original addendum
was signed by Edith Fortunado and Nestor Fortunado. Such conduct constitutes willful disregard of his
solemn duty as a lawyer to act at all times in a manner consistent with the truth. A lawyer should never
seek to mislead the court by an artifice or false statement of fact or law [Section 20 (d), Rule 138, Revised
Rules of Court; Canon 22, Canons of Professional Ethics; Canon 10, Rule 10.01, Code of Professional
Responsibility].

Anent the first charge of complainant, the Solicitor General found that no impropriety was committed by
respondent in entering into a contingent fee contract with the Fortunados [Report and Recommendation,
p. 8; Record, p. 394]. The Court, however, finds that the agreement between the respondent and the
Fortunados, which provides in part that:

We the [Fortunados] agree on the 50% contingent fee, provided, you [respondent Ramon Gonzales]
defray all expenses, for the suit, including court fees.Alfaro T. Fortunado [signed]
Editha T. Fortunado [signed]
Nestor T. Fortunado [signed]CONFORME

Ramon A. Gonzales [signed]

[Annex A to the Complaint, Record, p. 4].

is contrary to Canon 42 of the Canons of Professional Ethics which provides that a lawyer may not
properly agree with a client to pay or bear the expenses of litigation. [See also Rule 16.04, Code of
Professional Responsibility]. Although a lawyer may in good faith, advance the expenses of litigation, the
same should be subject to reimbursement. The agreement between respondent and the Fortunados,
however, does not provide for reimbursement to respondent of litigation expenses paid by him. An
agreement whereby an attorney agrees to pay expenses of proceedings to enforce the client's rights is
champertous [JBP Holding Corp. v. U.S. 166 F. Supp. 324 (1958)]. Such agreements are against public
policy especially where, as in this case, the attorney has agreed to carry on the action at his own expense
in consideration of some bargain to have part of the thing in dispute [See Sampliner v. Motion Pictures
Patents Co., et al., 255 F. 242 (1918)]. The execution of these contracts violates the fiduciary relationship
between the lawyer and his client, for which the former must incur administrative sanctions.

The Solicitor General next concludes that respondent cannot be held liable for acting as counsel for
Eusebio Lopez, Jr. in Civil Case No. Q-15490 while acting as counsel for the Fortunados against the
same Eusebio Lopez, Jr. in Civil Case No. Q-15143. The Court, after considering the record, agrees with
the Solicitor General's findings on the matter. The evidence presented by respondent shows that his
acceptance of Civil Case No. Q-15490 was with the knowledge and consent of the Fortunados. The
affidavit executed by the Fortunados on June 23, 1976 clearly states that they gave their consent when
respondent accepted the case of Eusebio Lopez, Jr. [Affidavit of Fortunados, dated June 23, 1976; Rollo,
p. 198]. One of the recognized exceptions to the rule against representation of conflicting interests is
where the clients knowingly consent to the dual representation after full disclosure of the facts by counsel
[Canon 6, Canons of Professional Ethics; Canon 15, Rule 15.03, Code of Professional Responsibility].

Complainant also claims that respondent filed several complaints against him before the Court of First
Instance and the Fiscal's Office of Quezon City for the sole purpose of harassing him.

The record shows that at the time of the Solicitor General's investigation of this case, Civil Case No. Q-
18060 was still pending before the Court of First Instance of Quezon City, while the complaints for libel
(I.S. No. 76-5912) and perjury (I.S. No. 5913) were already dismissed by the City Fiscal for insufficiency
of evidence and lack of interest, respectively [Report and Recommendation, pp. 16-17; Rollo, pp. 402-
403]. The Solicitor General found no basis for holding that the complaints for libel and perjury were used
by respondent to harass complainant. As to Civil Case No. Q-18060, considering that it was still pending
resolution, the Solicitor General made no finding on complainants claim that it was a mere ploy by
respondent to harass him. The determination of the validity of the complaint in Civil Case No. Q-18060
was left to the Court of First Instance of Quezon City where the case was pending resolution.

The Court agrees with the above findings of the Solicitor General, and accordingly holds that there is no
basis for holding that the respondent's sole purpose in filing the aforementioned cases was to harass
complainant.

Grounds 6, 8 and 9 alleged in the complaint need not be discussed separately since the above discussion
on the other grounds sufficiently cover these remaining grounds.

The Court finds clearly established in this case that on four counts the respondent violated the law and
the rules governing the conduct of a member of the legal profession. Sworn to assist in the administration
of justice and to uphold the rule of law, he has "miserably failed to live up to the standards expected of a
member of the Bar." [Artiaga v. Villanueva, Adm. Matter No. 1892, July 29, 1988, 163 SCRA 638, 647].
The Court agrees with the Solicitor General that, considering the nature of the offenses committed by
respondent and the facts and circumstances of the case, respondent lawyer should be suspended from
the practice of law for a period of six (6) months.

WHEREFORE, finding that respondent Attorney Ramon A. Gonzales committed serious misconduct, the
Court Resolved to SUSPEND respondent from the practice of law for SIX (6) months effective from the
date of his receipt of this Resolution. Let copies of this Resolution be circulated to all courts of the country
for their information and guidance, and spread in the personal record of Atty. Gonzales.
SO ORDERED.

[G.R. No. 98149. September 26, 1994.]

JOSE V. DEL ROSARIO, Petitioner, v. HON. COURT OF APPEALS and DE DIOS

MARIKINA TRANSPORTATION CO., INC., Respondents.

SYLLABUS

1. CIVIL LAW; DAMAGES; ATTORNEYS FEES; GRANT AND AMOUNT THEREOF, SUBJECT TO
THE SOUND DISCRETION OF THE COURT. There is no question that a court may,
whenever it deems it just and equitable, allow the recovery by the prevailing party of
attorneys fees.

2. ID.; ID.; ID.; ID.; CRITERIA. In determining the reasonableness of such fees, this
Court in a number of cases has provided various criteria which, for convenient guidance, we
might collate thusly: a) the quantity and character of the services rendered; b) the labor,
time and trouble involved; c) the nature and importance of the litigation; d) the amount of
money or the value of the property affected by the controversy; e) the novelty and difficulty
of questions involved; f) the responsibility imposed on counsel; g) the skill and experience
called for in the performance of the service; h) the professional character and social
standing of the lawyer; i) the customary charges of the bar for similar services; j) the
character of employment, whether casual or for established client; (k) whether the fee is
absolute or contingent (it being the rule that an attorney may properly charge a higher fee
when it is contingent than when it is absolute); and (1) the results secured.

3. ID.; ID.; ID.; ID.; AWARD OF ATTORNEYS FEES IN THE AMOUNT OF P33,641.50 IN A
COMPLAINT FOR DAMAGES PENDING FOR MORE THAN FOUR (4) YEARS, JUST AND
REASONABLE. In this instance, the complaint for damages was instituted by petitioner in
June 1985, following the refusal of private respondent to settle petitioners claim, and the
decision thereon was promulgated by the court a quo only in December 1989 or about four
years and six months later. Several pleadings were filed and no less than twenty
appearances were made by petitioners counsel, not counting the various other pleadings
ultimately filed with the Court of Appeals and now before this Court. Given the nature of the
case, the amount of damages involved, and the evident effort exerted by petitioners
counsel, the trial courts award of attorneys fees for P33,641.50 would appear to us to be
just and reasonable.

RESOLUTION

VITUG, J.:

Petitioner suffered physical injuries, requiring two (2) major operations, when he fell from,
and then was dragged along the asphalted road by, a passenger bus operated by private
respondent transportation company. The incident occurred when the bus driver bolted
forward at high speed while petitioner was still clinging on the bus doors handle bar that
caused the latter to lose his grip and balance. The refusal of private respondent to settle
petitioners claim for damages constrained petitioner to file, on 26 June 1985, a complaint
for damages against private Respondent.chanroblesvirtualawlibrary

After the reception of evidence, the trial court, on 11 December 1989, rendered its decision,
the dispositive portion reading thusly:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered dismissing defendant De Dios Marikina

Transportation Co., Inc.s counterclaim for lack of merit and ordering said defendant to pay
plaintiff Jose V. Del Rosario: (a) the sum of P76,944.41, as actual and compensatory
damages; (b) the sum of P15,000.00, as moral and exemplary damages; and (c) the sum of
P33,641.50, as attorneys fees, as well as to pay the costs of suit; and, as regards the third-
party complaint herein, ordering third-party defendant First Quezon City Insurance Co., Inc.
to indemnify third-party plaintiff De Dios Marikina Transportation Co., Inc. in the sum of
P12,000.00, with interest thereon at the legal rate from date of filing of the third-party
complaint on August 20, 1985, being no satisfactory warrant, therefor, the Court hereby
dismisses the rest of the claims in the complaint and third-party complaint herein.

"IT IS SO ORDERED."cralaw virtua1aw library

On appeal to it, the Court of Appeals affirmed in toto the findings of fact of the trial court, as
well as the grant to petitioner of damages, but it reduced the award for attorneys fees from
P33,641.50 to P5,000.00. Petitioners motion for reconsideration questioning the reduction
of attorneys fees was denied by the appellate court. Hence, this petition raising this sole
issue.

We see merit in the petition.

There is no question that a court may, whenever it deems it just and equitable, allow the
recovery by the prevailing party of attorneys fees. 1 In determining the reasonableness of
such fees, this Court in a number of cases 2 has provided various criteria which, for
convenient guidance, we might collate thusly:chanrobles.com:cralaw:red

a) the quantity and character of the services rendered:chanrob1es virtual 1aw library

b) the labor, time and trouble involved;

c) the nature and importance of the litigation;

d) the amount of money or the value of the property affected by the controversy;

e) the novelty and difficulty of questions involved;

f) the responsibility imposed on counsel;

g) the skill and experience called for in the performance of the service;

h) the professional character and social standing of the lawyer;

i) the customary charges of the bar for similar services;

j) the character of employment, whether casual or for established client;

k) whether the fee is absolute or contingent (it being the rule that an attorney may properly
charge a higher fee when it is contingent than when it is absolute); and

l) the results secured.

In this instance, the complaint for damages was instituted by petitioner in June 1985,
following the refusal of private respondent to settle petitioners claim, and the decision
thereon was promulgated by the court a quo only in December 1989 or about four years
and six months later. Several pleadings were filed and no less than twenty appearances
were made by petitioners counsel, not counting the various other pleadings ultimately filed
with the Court of appeals and now before this Court. Given the nature of the case, the
amount of damages involved, and the evident effort exerted by petitioners counsel, the trial
courts award of attorneys fees for P33,641.50 would appear to us to be just and
reasonable.chanrobles law library : red

WHEREFORE, the instant petition is hereby GRANTED, and the decision of the Court of
Appeals is MODIFIED by REINSTATING the trial courts award of attorneys fees.

SO ORDERED.