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

,
INC., Respondents.

SYLLABUS

1. CIVIL LAW; DAMAGES; ATTORNEY’S 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 ATTORNEY’S 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
petitioner’s 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
petitioner’s 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
petitioner’s counsel, the trial court’s award of attorney’s 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
door’s handle bar that caused the latter to lose his grip and balance. The refusal of private respondent to settle
petitioner’s 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 attorney’s 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 attorney’s fees from P33,641.50 to P5,000.00. Petitioner’s
motion for reconsideration questioning the reduction of attorney’s 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 attorney’s 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 petitioner’s 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 petitioner’s 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 petitioner’s counsel, the trial court’s award of attorney’s 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 court’s award of attorney’s fees.
SO ORDERED.

Feliciano, Romero and Melo, JJ., concur.

Bidin, J., is on leave.

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. Bautista—were 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.

[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.

Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin and Cortes, JJ., concur.

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; ATTORNEY’S 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 lawyer’s 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
attorney’s fees is within the regulatory powers of the courts.

2. ID.; ID.; ID.; ID.; APPLICATION IN CASE AT BAR. — We agree with the NLRC’s assessment that fifty percent of the
judgment award as attorney’s 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 petitioner’s 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 attorney’s fees to acquire what they have not been receiving under the law and to
alleviate their living condition, the reduction of petitioner’s contingent fee is proper. Labor cases, it should be
stressed, call for compassionate justice. Furthermore, petitioner’s contingent fee falls within the purview of Article
111 of the Labor Code. This article fixes the limit on the amount of attorney’s 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, petitioner’s fee need not be further reduced. The
manifestation of petitioner’s 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, attorney’s 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 attorney’s 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
attorney’s charging lien. 3 Private respondents, aggrieved for receiving a reduced award due to the attorney’s
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 petitioner’s 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 Arbiter’s 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 petitioner’s 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 petitioner’s 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 lawyer’s 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 attorney’s fees is within
the regulatory powers of the courts. 10

We agree with the NLRC’s assessment that fifty percent of the judgment award as attorney’s 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 petitioner’s 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 attorney’s fees to
acquire what they have not been receiving under the law and to alleviate their living condition, the reduction of
petitioner’s contingent fee is proper. Labor cases, it should be stressed, call for compassionate justice.

Furthermore, petitioner’s contingent fee falls within the purview of Article 111 of the Labor Code. This article fixes
the limit on the amount of attorney’s 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, petitioner’s fee need not be further reduced.

The manifestation of petitioner’s 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.

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.