Attorney’s fees/ Attorney-client Relationship
to say, the houses and lot pertained to your paraphernal
1.) G.R. No. L-961 September 21, 1949
BLANDINA GAMBOA HILADO, petitioner,
vs.
JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO,
JACOB ASSAD and SELIM JACOB ASSAD, respondents.
Delgado, Dizon and Flores for petitioner.
Vicente J. Francisco for respondents.
TUASON, J.:
It appears that on April 23, 1945, Blandina Gamboa Hilado brought
an action against Selim Jacob Assad to annul the sale of several
houses and lot executed during the Japanese occupation by Mrs.
Hilado's now deceased husband.
On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer
on behalf of the defendant; and on June 15, Attorneys Delgado,
Dizon, Flores and Rodrigo registered their appearance as counsel for
the plaintiff. On October 5, these attorneys filed an amended
complaint by including Jacob Assad as party defendant.
On January 28, 1946, Attorney Francisco entered his appearance as
attorney of record for the defendant in substitution for Attorney
Ohnick, Velilla and Balonkita who had withdrawn from the case.
On May 29, Attorney Dizon, in the name of his firm, wrote Attorney
Francisco urging him to discontinue representing the defendants on
the ground that their client had consulted with him about her case, on
which occasion, it was alleged, "she turned over the papers" to
Attorney Francisco, and the latter sent her a written opinion. Not
receiving any answer to this suggestion, Attorney Delgado, Dizon,
Flores and Rodrigo on June 3, 1946, filed a formal motion with the
court, wherein the case was and is pending, to disqualify Attorney
Francisco.
Attorney Francisco's letter to plaintiff, mentioned above and
identified as Exhibit A, is in full as follows:
VICENTE J. FRANCISCO
Attorney-at-Law
1462 Estrada, Manila
July 13, 1945.
Mrs. Blandina Gamboa Hilado
Manila, Philippines
My dear Mrs. Hilado:
From the papers you submitted to me in connection with
civil case No. 70075 of the Court of First Instance of
Manila, entitled "Blandina Gamboa Hilado vs. S. J. Assad,"
I find that the basic facts which brought about the
controversy between you and the defendant therein are as
follows:
(a) That you were the equitable owner of the property
described in the complaint, as the same was purchased
and/or built with funds exclusively belonging to you, that is
estate;
(b) That on May 3, 1943, the legal title to the property was
with your husband, Mr. Serafin P. Hilado; and
(c) That the property was sold by Mr. Hilado without your
knowledge on the aforesaid date of May 3, 1943.
Upon the foregoing facts, I am of the opinion that your
action against Mr. Assad will not ordinarily prosper. Mr.
Assad had the right to presume that your husband had the
legal right to dispose of the property as the transfer
certificate of title was in his name. Moreover, the price of
P110,000 in Japanese military notes, as of May 3, 1943,
does not quite strike me as so grossly inadequate as to
warrant the annulment of the sale. I believe, lastly, that the
transaction cannot be avoided merely because it was made
during the Japanese occupation, nor on the simple
allegation that the real purchaser was not a citizen of the
Philippines. On his last point, furthermore, I expect that
you will have great difficulty in proving that the real
purchaser was other than Mr. Assad, considering that death
has already sealed your husband's lips and he cannot now
testify as to the circumstances of the sale.
For the foregoing reasons, I regret to advise you that I
cannot appear in the proceedings in your behalf. The
records of the case you loaned to me are herewith returned.
Yours very truly,
(Sgd.) VICENTE J. FRANCISCO
VJF/Rag.
In his answer to plaintiff's attorneys' complaint, Attorney Francisco
alleged that about May, 1945, a real estate broker came to his office
in connection with the legal separation of a woman who had been
deserted by her husband, and also told him (Francisco) that there was
a pending suit brought by Mrs. Hilado against a certain Syrian to
annul the sale of a real estate which the deceased Serafin Hilado had
made to the Syrian during the Japanese occupation; that this woman
asked him if he was willing to accept the case if the Syrian should
give it to him; that he told the woman that the sales of real property
during the Japanese regime were valid even though it was paid for in
Japanese military notes; that this being his opinion, he told his visitor
he would have no objection to defending the Syrian;
That one month afterwards, Mrs. Hilado came to see him about a suit
she had instituted against a certain Syrian to annul the conveyance of
a real estate which her husband had made; that according to her the
case was in the hands of Attorneys Delgado and Dizon, but she
wanted to take it away from them; that as he had known the plaintiff's
deceased husband he did not hesitate to tell her frankly that hers was
a lost case for the same reason he had told the broker; that Mrs.
Hilado retorted that the basis of her action was not that the money
paid her husband was Japanese military notes, but that the premises
were her private and exclusive property; that she requested him to
read the complaint to be convinced that this was the theory of her
suit; that he then asked Mrs. Hilado if there was a Torrens title to the
property and she answered yes, in the name of her husband; that he
told Mrs. Hilado that if the property was registered in her husband's
favor, her case would not prosper either;
That some days afterward, upon arrival at his law office on Estrada
street, he was informed by Attorney Federico Agrava, his assistant,
that Mrs. Hilado had dropped in looking for him and that when he,
Agrava, learned that Mrs. Hilado's visit concerned legal matters he
attended to her and requested her to leave the "expediente" which she
was carrying, and she did; that he told Attorney Agrava that the firm
should not handle Mrs. Hilado's case and he should return the papers,
calling Agrava's attention to what he (Francisco) already had said to
Mrs. Hilado;
That several days later, the stenographer in his law office, Teofilo
Ragodon, showed him a letter which had been dictated in English by
Mr. Agrava, returning the "expedients" to Mrs. Hilado; that Ragodon
told him (Attorney Francisco) upon Attorney Agrava's request that
Agrava thought it more proper to explain to Mrs. Hilado the reasons
why her case was rejected; that he forthwith signed the letter without
reading it and without keeping it for a minute in his possession; that
he never saw Mrs. Hilado since their last meeting until she talked to
him at the Manila Hotel about a proposed extrajudicial settlement of
the case;
That in January, 1946, Assad was in his office to request him to
handle his case stating that his American lawyer had gone to the
States and left the case in the hands of other attorneys; that he
accepted the retainer and on January 28, 1946, entered his
appearance.
Attorney Francisco filed an affidavit of stenographer Ragodon in
corroboration of his answer.
The judge trying the case, Honorable Jose Gutierrez David, later
promoted to the Court of Appeals, dismissed the complaint. His
Honor believed that no information other than that already alleged in
plaintiff's complaint in the main cause was conveyed to Attorney
Francisco, and concluded that the intercourse between the plaintiff
and the respondent did not attain the point of creating the relation of
attorney and client.
Stripped of disputed details and collateral matters, this much is
undoubted: That Attorney Francisco's law firm mailed to the plaintiff
a written opinion over his signature on the merits of her case; that this
opinion was reached on the basis of papers she had submitted at his
office; that Mrs. Hilado's purpose in submitting those papers was to
secure Attorney Francisco's professional services. Granting the facts
to be no more than these, we agree with petitioner's counsel that the
relation of attorney and client between Attorney Francisco and Mrs.
Hilado ensued. The following rules accord with the ethics of the legal
profession and meet with our approval:
In order to constitute the relation (of attorney and client) a
professional one and not merely one of principal and agent,
the attorneys must be employed either to give advice upon
a legal point, to prosecute or defend an action in court of
justice, or to prepare and draft, in legal form such papers as
deeds, bills, contracts and the like. (Atkinson vs. Howlett,
11 Ky. Law Rep. (abstract), 364; cited in Vol. 88, A. L. R.,
p. 6.)
To constitute professional employment it is not essential
that the client should have employed the attorney
professionally on any previous occasion. . . . It is not
necessary that any retainer should have been paid,
promised, or charged for; neither is it material that the
attorney consulted did not afterward undertake the case
about which the consultation was had. If a person, in
respect to his business affairs or troubles of any kind,
consults with his attorney in his professional capacity with
the view to obtaining professional advice or assistance, and
the attorney voluntarily permits or acquiesces in such
consultation, then the professional employment must be
regarded as established. . . . (5 Jones Commentaries on
Evidence, pp. 4118-4119.)
An attorney is employed-that is, he is engaged in his
professional capacity as a lawyer or counselor-when he is
listening to his client's preliminary statement of his case, or
when he is giving advice thereon, just as truly as when he is
drawing his client's pleadings, or advocating his client's
cause in open court. (Denver Tramway Co. vs. Owens, 20
Colo., 107; 36 P., 848.)
Formality is not an essential element of the employment of
an attorney. The contract may be express or implied and it
is sufficient that the advice and assistance of the attorney is
sought and received, in matters pertinent to his profession.
An acceptance of the relation is implied on the part of the
attorney from his acting in behalf of his client in pursuance
of a request by the latter. (7 C. J. S., 848-849; see Hirach
Bros. and Co. vs. R. E. Kennington Co., 88 A. L. R., 1.)
Section 26 (e), Rule 123 of the Rules of Court provides that "an
attorney cannot, without the consent of his client, be examined as to
any communication made by the client to him, or his advice given
thereon in the course of professional employment;" and section 19 (e)
of Rule 127 imposes upon an attorney the duty "to maintain inviolate
the confidence, and at every peril to himself, to preserve the secrets
of his client." There is no law or provision in the Rules of Court
prohibiting attorneys in express terms from acting on behalf of both
parties to a controversy whose interests are opposed to each other, but
such prohibition is necessarily implied in the injunctions above
quoted. (In re De la Rosa, 27 Phil., 258.) In fact the prohibition
derives validity from sources higher than written laws and rules. As
has been aptly said in In re Merron, 22 N. M., 252, L.R.A., 1917B,
378, "information so received is sacred to the employment to which it
pertains," and "to permit it to be used in the interest of another, or,
worse still, in the interest of the adverse party, is to strike at the
element of confidence which lies at the basis of, and affords the
essential security in, the relation of attorney and client."
That only copies of pleadings already filed in court were furnished to
Attorney Agrava and that, this being so, no secret communication
was transmitted to him by the plaintiff, would not vary the situation
even if we should discard Mrs. Hilado's statement that other papers,
personal and private in character, were turned in by her. Precedents
are at hand to support the doctrine that the mere relation of attorney
and client ought to preclude the attorney from accepting the opposite
party's retainer in the same litigation regardless of what information
was received by him from his first client.
The principle which forbids an attorney who has been
engaged to represent a client from thereafter appearing on
behalf of the client's opponent applies equally even though
during the continuance of the employment nothing of a
confidential nature was revealed to the attorney by the
client. (Christian vs. Waialua Agricultural Co., 30 Hawaii,
553, Footnote 7, C. J. S., 828.)
Where it appeared that an attorney, representing one party
in litigation, had formerly represented the adverse party
with respect to the same matter involved in the litigation,
the court need not inquire as to how much knowledge the
attorney acquired from his former during that relationship,
before refusing to permit the attorney to represent the
 adverse party. (Brown vs. Miller, 52 App. D. C. 330; 286,
F. 994.)
In order that a court may prevent an attorney from
appearing against a former client, it is unnecessary that the
ascertain in detail the extent to which the former client's
affairs might have a bearing on the matters involved in the
subsequent litigation on the attorney's knowledge thereof.
(Boyd vs. Second Judicial Dist. Court, 274 P., 7; 51 Nev.,
264.)
This rule has been so strictly that it has been held an
attorney, on terminating his employment, cannot thereafter
act as counsel against his client in the same general matter,
even though, while acting for his former client, he acquired
no knowledge which could operate to his client's
disadvantage in the subsequent adverse employment.
(Pierce vs. Palmer [1910], 31 R. I., 432; 77 Atl., 201, Ann.
Cas., 1912S, 181.)
Communications between attorney and client are, in a great number
of litigations, a complicated affair, consisting of entangled relevant
and irrelevant, secret and well known facts. In the complexity of what
is said in the course of the dealings between an attorney and a client,
inquiry of the nature suggested would lead to the revelation, in
advance of the trial, of other matters that might only further prejudice
the complainant's cause. And the theory would be productive of other
un salutary results. To make the passing of confidential
communication a condition precedent; i.e., to make the employment
conditioned on the scope and character of the knowledge acquired by
an attorney in determining his right to change sides, would not
enhance the freedom of litigants, which is to be sedulously fostered,
to consult with lawyers upon what they believe are their rights in
litigation. The condition would of necessity call for an investigation
of what information the attorney has received and in what way it is or
it is not in conflict with his new position. Litigants would in
consequence be wary in going to an attorney, lest by an unfortunate
turn of the proceedings, if an investigation be held, the court should
accept the attorney's inaccurate version of the facts that came to him.
"Now the abstinence from seeking legal advice in a good cause is by
hypothesis an evil which is fatal to the administration of justice."
(John H. Wigmore's Evidence, 1923, Section 2285, 2290, 2291.)
Hence the necessity of setting down the existence of the bare
relationship of attorney and client as the yardstick for testing
incompatibility of interests. This stern rule is designed not alone to
prevent the dishonest practitioner from fraudulent conduct, but as
well to protect the honest lawyer from unfounded suspicion of
unprofessional practice. (Strong vs. Int. Bldg., etc.; Ass'n, 183 Ill.,
97; 47 L.R.A., 792.) It is founded on principles of public policy, on
good taste. As has been said in another case, the question is not
necessarily one of the rights of the parties, but as to whether the
attorney has adhered to proper professional standard. With these
thoughts in mind, it behooves attorneys, like Caesar's wife, not only
to keep inviolate the client's confidence, but also to avoid the
appearance of treachery and double-dealing. Only thus can litigants
be encouraged to entrust their secrets to their attorneys which is of
paramount importance in the administration of justice.
So without impugning respondent's good faith, we nevertheless can
not sanction his taking up the cause of the adversary of the party who
had sought and obtained legal advice from his firm; this, not
necessarily to prevent any injustice to the plaintiff but to keep above
reproach the honor and integrity of the courts and of the bar. Without
condemning the respondents conduct as dishonest, corrupt, or
fraudulent, we do believe that upon the admitted facts it is highly in
expedient. It had the tendency to bring the profession, of which he is
a distinguished member, "into public disrepute and suspicion and
undermine the integrity of justice."
There is in legal practice what called "retaining fee," the purpose of
which stems from the realization that the attorney is disabled from
acting as counsel for the other side after he has given professional
advice to the opposite party, even if he should decline to perform the
contemplated services on behalf of the latter. It is to prevent undue
hardship on the attorney resulting from the rigid observance of the
rule that a separate and independent fee for consultation and advice
was conceived and authorized. "A retaining fee is a preliminary fee
given to an attorney or counsel to insure and secure his future
services, and induce him to act for the client. It is intended to
remunerate counsel for being deprived, by being retained by one
party, of the opportunity of rendering services to the other and of
receiving pay from him, and the payment of such fee, in the absence
of an express understanding to the contrary, is neither made nor
received in payment of the services contemplated; its payment has no
relation to the obligation of the client to pay his attorney for the
services which he has retained him to perform." (7 C.J.S., 1019.)
The defense that Attorney Agrava wrote the letter Exhibit A and that
Attorney Francisco did not take the trouble of reading it, would not
take the case out of the interdiction. If this letter was written under
the circumstances explained by Attorney Francisco and he was
unaware of its contents, the fact remains that his firm did give Mrs.
Hilado a formal professional advice from which, as heretofore
demonstrated, emerged the relation of attorney and client. This letter
binds and estop him in the same manner and to the same degree as if
he personally had written it. An information obtained from a client by
a member or assistant of a law firm is information imparted to the
firm. (6 C. J., 628; 7 C. J. S., 986.) This is not a mere fiction or an
arbitrary rule; for such member or assistant, as in our case, not only
acts in the name and interest of the firm, but his information, by the
nature of his connection with the firm is available to his associates or
employers. The rule is all the more to be adhered to where, as in the
present instance, the opinion was actually signed by the head of the
firm and carries his initials intended to convey the impression that it
was dictated by him personally. No progress could be hoped for in
"the public policy that the client in consulting his legal adviser ought
to be free from apprehension of disclosure of his confidence," if the
prohibition were not extended to the attorney's partners, employers or
assistants.
The fact that petitioner did not object until after four months had
passed from the date Attorney Francisco first appeared for the
defendants does not operate as a waiver of her right to ask for his
disqualification. In one case, objection to the appearance of an
attorney was allowed even on appeal as a ground for reversal of the
judgment. In that case, in which throughout the conduct of the cause
in the court below the attorney had been suffered so to act without
objection, the court said: "We are all of the one mind, that the right of
the appellee to make his objection has not lapsed by reason of failure
to make it sooner; that professional confidence once reposed can
never be divested by expiration of professional employment."
(Nickels vs. Griffin, 1 Wash. Terr., 374, 321 A. L. R. 1316.)
The complaint that petitioner's remedy is by appeal and not by
certiorari deserves scant attention. The courts have summary
jurisdiction to protect the rights of the parties and the public from any
conduct of attorneys prejudicial to the administration of the justice.
The summary jurisdiction of the courts over attorneys is not confined
to requiring them to pay over money collected by them but embraces
authority to compel them to do whatever specific acts may be
incumbent upon them in their capacity of attorneys to perform. The
courts from the general principles of equity and policy, will always
look into the dealings between attorneys and clients and guard the
latter from any undue consequences resulting from a situation in
which they may stand unequal. The courts acts on the same principles
whether the undertaking is to appear, or, for that matter, not to
appear, to answer declaration, etc. (6 C.J., 718 C.J.S., 1005.) This
summary remedy against attorneys flows from the facts that they are
officers of the court where they practice, forming a part of the
machinery of the law for the administration of justice and as such
subject to the disciplinary authority of the courts and to its orders and
directions with respect to their relations to the court as well as to their
clients. (Charest vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note
26, 7 C. J. S., 1007.) Attorney stand on the same footing as sheriffs
and other court officers in respect of matters just mentioned.
We conclude therefore that the motion for disqualification should be
allowed. It is so ordered, without costs.
2.) A.C. No. 5108 May 26, 2005
ROSA F. MERCADO, complainant,
vs.
ATTY. JULITO D. VITRIOLO, respondent.
DECISION
PUNO, J.:
Rosa F. Mercado filed the instant administrative complaint against
Atty. Julito D. Vitriolo, seeking his disbarment from the practice of
law. The complainant alleged that respondent maliciously instituted a
criminal case for falsification of public document against her, a
former client, based on confidential information gained from their
attorney-client relationship.
Let us first hearken to the facts.
Complainant is a Senior Education Program Specialist of the
Standards Development Division, Office of Programs and Standards
while respondent is a Deputy Executive Director IV of the
Commission on Higher Education (CHED).1
Complainant's husband filed Civil Case No. 40537 entitled "Ruben
G. Mercado v. Rosa C. Francisco," for annulment of their marriage
with the Regional Trial Court (RTC) of Pasig City. This annulment
case had been dismissed by the trial court, and the dismissal became
final and executory on July 15, 1992.2
In August 1992, Atty. Anastacio P. de Leon, counsel of complainant,
died. On February 7, 1994, respondent entered his appearance before
the trial court as collaborating counsel for complainant.3
On March 16, 1994, respondent filed his Notice of Substitution of
Counsel,4 informing the RTC of Pasig City that he has been
appointed as counsel for the complainant, in substitution of Atty. de
Leon.
It also appears that on April 13, 1999, respondent filed a criminal
action against complainant before the Office of the City Prosecutor,
Pasig City, entitled "Atty. Julito Vitriolo, et al. v. Rose Dela Cruz F.
Mercado," and docketed as I.S. No. PSG 99-9823, for violation of
Articles 171 and 172 (falsification of public document) of the
Revised Penal Code.5 Respondent alleged that complainant made
false entries in the Certificates of Live Birth of her children, Angelica
and Katelyn Anne. More specifically, complainant allegedly
indicated in said Certificates of Live Birth that she is married to a
certain Ferdinand Fernandez, and that their marriage was solemnized
on April 11, 1979, when in truth, she is legally married to Ruben G.
Mercado and their marriage took place on April 11, 1978.
Complainant denied the accusations of respondent against her. She
denied using any other name than "Rosa F. Mercado." She also
insisted that she has gotten married only once, on April 11, 1978, to
Ruben G. Mercado.
In addition, complainant Mercado cited other charges against
respondent that are pending before or decided upon by other tribunals
– (1) libel suit before the Office of the City Prosecutor, Pasig City;6
(2) administrative case for dishonesty, grave misconduct, conduct
prejudicial to the best interest of the service, pursuit of private
business, vocation or profession without the permission required by
Civil Service rules and regulations, and violations of the "Anti-Graft
and Corrupt Practices Act," before the then Presidential Commission
Against Graft and Corruption;7 (3) complaint for dishonesty, grave
misconduct, and conduct prejudicial to the best interest of the service
before the Office of the Ombudsman, where he was found guilty of
misconduct and meted out the penalty of one month suspension
without pay;8 and, (4) the Information for violation of Section 7(b)(2)
of Republic Act No. 6713, as amended, otherwise known as the Code
of Conduct and Ethical Standards for Public Officials and Employees
before the Sandiganbayan.9
Complainant Mercado alleged that said criminal complaint for
falsification of public document (I.S. No. PSG 99-9823) disclosed
confidential facts and information relating to the civil case for
annulment, then handled by respondent Vitriolo as her counsel. This
prompted complainant Mercado to bring this action against
respondent. She claims that, in filing the criminal case for
falsification, respondent is guilty of breaching their privileged and
confidential lawyer-client relationship, and should be disbarred.
Respondent filed his Comment/Motion to Dismiss on November 3,
1999 where he alleged that the complaint for disbarment was all
hearsay, misleading and irrelevant because all the allegations leveled
against him are subject of separate fact-finding bodies. Respondent
claimed that the pending cases against him are not grounds for
disbarment, and that he is presumed to be innocent until proven
otherwise.10 He also states that the decision of the Ombudsman
finding him guilty of misconduct and imposing upon him the penalty
of suspension for one month without pay is on appeal with the Court
of Appeals. He adds that he was found guilty, only of simple
misconduct, which he committed in good faith.11
In addition, respondent maintains that his filing of the criminal
complaint for falsification of public documents against complainant
does not violate the rule on privileged communication between
attorney and client because the bases of the falsification case are two
certificates of live birth which are public documents and in no way
connected with the confidence taken during the engagement of
respondent as counsel. According to respondent, the complainant
confided to him as then counsel only matters of facts relating to the
annulment case. Nothing was said about the alleged falsification of
the entries in the birth certificates of her two daughters. The birth
certificates are filed in the Records Division of CHED and are
accessible to anyone.12
In a Resolution dated February 9, 2000, this Court referred the
administrative case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.13
The IBP Commission on Bar Discipline set two dates for hearing but
complainant failed to appear in both. Investigating Commissioner
Rosalina R. Datiles thus granted respondent's motion to file his
memorandum, and the case was submitted for resolution based on the
pleadings submitted by the parties.14
On June 21, 2003, the IBP Board of Governors approved the report of
investigating commissioner Datiles, finding the respondent guilty of
violating the rule on privileged communication between attorney and
client, and recommending his suspension from the practice of law for
one (1) year.
On August 6, 2003, complainant, upon receiving a copy of the IBP
report and recommendation, wrote Chief Justice Hilario Davide, Jr., a
letter of desistance. She stated that after the passage of so many
years, she has now found forgiveness for those who have wronged
her.
At the outset, we stress that we shall not inquire into the merits of the
various criminal and administrative cases filed against respondent. It
is the duty of the tribunals where these cases are pending to
determine the guilt or innocence of the respondent.
We also emphasize that the Court is not bound by any withdrawal of
the complaint or desistance by the complainant. The letter of
complainant to the Chief Justice imparting forgiveness upon
respondent is inconsequential in disbarment proceedings.
We now resolve whether respondent violated the rule on privileged
communication between attorney and client when he filed a criminal
case for falsification of public document against his former client.
A brief discussion of the nature of the relationship between attorney
and client and the rule on attorney-client privilege that is designed to
protect such relation is in order.
In engaging the services of an attorney, the client reposes on him
special powers of trust and confidence. Their relationship is strictly
personal and highly confidential and fiduciary. The relation is of such
delicate, exacting and confidential nature that is required by necessity
and public interest.15 Only by such confidentiality and protection will
a person be encouraged to repose his confidence in an attorney. The
hypothesis is that abstinence from seeking legal advice in a good
cause is an evil which is fatal to the administration of justice.16 Thus,
the preservation and protection of that relation will encourage a client
to entrust his legal problems to an attorney, which is of paramount
importance to the administration of justice.17 One rule adopted to
serve this purpose is the attorney-client privilege: an attorney is to
keep inviolate his client's secrets or confidence and not to abuse
them.18 Thus, the duty of a lawyer to preserve his client's secrets and
confidence outlasts the termination of the attorney-client
relationship,19 and continues even after the client's death.20 It is the
glory of the legal profession that its fidelity to its client can be
depended on, and that a man may safely go to a lawyer and converse
with him upon his rights or supposed rights in any litigation with
absolute assurance that the lawyer's tongue is tied from ever
disclosing it.21 With full disclosure of the facts of the case by the
client to his attorney, adequate legal representation will result in the
ascertainment and enforcement of rights or the prosecution or defense
of the client's cause.
Now, we go to the rule on attorney-client privilege. Dean Wigmore
cites the factors essential to establish the existence of the privilege,
viz:
(1) Where legal advice of any kind is sought (2) from a
professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or by
the legal advisor, (8) except the protection be waived.22
In fine, the factors are as follows:
(1) There exists an attorney-client relationship, or a prospective
attorney-client relationship, and it is by reason of this relationship
that the client made the communication.
Matters disclosed by a prospective client to a lawyer are protected by
the rule on privileged communication even if the prospective client
does not thereafter retain the lawyer or the latter declines the
employment.23 The reason for this is to make the prospective client
free to discuss whatever he wishes with the lawyer without fear that
what he tells the lawyer will be divulged or used against him, and for
the lawyer to be equally free to obtain information from the
prospective client.24
On the other hand, a communication from a (prospective) client to a
lawyer for some purpose other than on account of the (prospective)
attorney-client relation is not privileged. Instructive is the case of
Pfleider v. Palanca,25 where the client and his wife leased to their
attorney a 1,328-hectare agricultural land for a period of ten years. In
their contract, the parties agreed, among others, that a specified
portion of the lease rentals would be paid to the client-lessors, and the
remainder would be delivered by counsel-lessee to client's listed
creditors. The client alleged that the list of creditors which he had
"confidentially" supplied counsel for the purpose of carrying out the
terms of payment contained in the lease contract was disclosed by
counsel, in violation of their lawyer-client relation, to parties whose
interests are adverse to those of the client. As the client himself,
however, states, in the execution of the terms of the aforesaid lease
contract between the parties, he furnished counsel with the
"confidential" list of his creditors. We ruled that this indicates that
client delivered the list of his creditors to counsel not because of the
professional relation then existing between them, but on account of
the lease agreement. We then held that a violation of the confidence
that accompanied the delivery of that list would partake more of a
private and civil wrong than of a breach of the fidelity owing from a
lawyer to his client.
(2) The client made the communication in confidence.
The mere relation of attorney and client does not raise a presumption
of confidentiality.26 The client must intend the communication to be
confidential.27
A confidential communication refers to information transmitted by
voluntary act of disclosure between attorney and client in confidence
and by means which, so far as the client is aware, discloses the
information to no third person other than one reasonably necessary
for the transmission of the information or the accomplishment of the
purpose for which it was given.28
Our jurisprudence on the matter rests on quiescent ground. Thus, a
compromise agreement prepared by a lawyer pursuant to the
instruction of his client and delivered to the opposing party,29 an offer
and counter-offer for settlement,30 or a document given by a client to
his counsel not in his professional capacity,31 are not privileged
communications, the element of confidentiality not being present.32
(3) The legal advice must be sought from the attorney in his
professional capacity.33
The communication made by a client to his attorney must not be
intended for mere information, but for the purpose of seeking legal
advice from his attorney as to his rights or obligations. The
communication must have been transmitted by a client to his attorney
for the purpose of seeking legal advice.34
If the client seeks an accounting service,35 or business or personal
assistance,36 and not legal advice, the privilege does not attach to a
communication disclosed for such purpose.
Applying all these rules to the case at bar, we hold that the evidence
on record fails to substantiate complainant's allegations. We note that
complainant did not even specify the alleged communication in
confidence disclosed by respondent. All her claims were couched in
general terms and lacked specificity. She contends that respondent
violated the rule on privileged communication when he instituted a
criminal action against her for falsification of public documents
because the criminal complaint disclosed facts relating to the civil
case for annulment then handled by respondent. She did not,
however, spell out these facts which will determine the merit of her
complaint. The Court cannot be involved in a guessing game as to the
existence of facts which the complainant must prove.
Indeed, complainant failed to attend the hearings at the IBP. Without
any testimony from the complainant as to the specific confidential
information allegedly divulged by respondent without her consent, it
is difficult, if not impossible to determine if there was any violation
of the rule on privileged communication. Such confidential
information is a crucial link in establishing a breach of the rule on
privileged communication between attorney and client. It is not
enough to merely assert the attorney-client privilege.37 The burden of
proving that the privilege applies is placed upon the party asserting
the privilege.38
IN VIEW WHEREOF, the complaint against respondent Atty.
Julito D. Vitriolo is hereby DISMISSED for lack of merit.
SO ORDERED.
3.) A.C. No. 6711 July 3, 2007
MA. LUISA HADJULA, complainant,
vs.
ATTY. ROCELES F. MADIANDA, respondent.
DECISION
GARCIA, J.:
Under consideration is Resolution No. XVI-2004-472 of the Board of
Governors, Integrated Bar of the Philippines (IBP), relative to the
complaint for disbarment filed by herein complainant Ma. Luisa
Hadjula against respondent Atty. Roceles F. Madianda.
The case started when, in an AFFIDAVIT-COMPLAINT1 bearing date
September 7, 2002 and filed with the IBP Commission on Bar
Discipline, complainant charged Atty. Roceles F. Madianda with
violation of Article 2092 of the Revised Penal Code and Canon Nos.
15.02 and 21.02 of the Code of Professional Responsibility.
In said affidavit-complaint, complainant alleged that she and
respondent used to be friends as they both worked at the Bureau of
Fire Protection (BFP) whereat respondent was the Chief Legal
Officer while she was the Chief Nurse of the Medical, Dental and
Nursing Services. Complainant claimed that, sometime in 1998, she
approached respondent for some legal advice. Complainant further
alleged that, in the course of their conversation which was supposed
to be kept confidential, she disclosed personal secrets and produced
copies of a marriage contract, a birth certificate and a baptismal
certificate, only to be informed later by the respondent that she
(respondent) would refer the matter to a lawyer friend. It was
malicious, so complainant states, of respondent to have refused
handling her case only after she had already heard her secrets.
Continuing, complainant averred that her friendship with respondent
soured after her filing, in the later part of 2000, of criminal and
disciplinary actions against the latter. What, per complainant's
account, precipitated the filing was when respondent, then a member
of the BFP promotion board, demanded a cellular phone in exchange
for the complainant's promotion.
According to complainant, respondent, in retaliation to the filing of
the aforesaid actions, filed a COUNTER COMPLAINT3 with the
Ombudsman charging her (complainant) with violation of Section
3(a) of Republic Act No. 3019,4 falsification of public documents and
immorality, the last two charges being based on the disclosures
complainant earlier made to respondent. And also on the basis of the
same disclosures, complainant further stated, a disciplinary case was
also instituted against her before the Professional Regulation
Commission.
Complainant seeks the suspension and/or disbarment of respondent
for the latter's act of disclosing personal secrets and confidential
information she revealed in the course of seeking respondent's legal
advice.
In an order dated October 2, 2002, the IBP Commission on Bar
Discipline required respondent to file her answer to the complaint.
In her answer, styled as COUNTER-AFFIDAVIT,5 respondent
denied giving legal advice to the complainant and dismissed any
suggestion about the existence of a lawyer-client relationship
between them. Respondent also stated the observation that the
supposed confidential data and sensitive documents adverted to are in
fact matters of common knowledge in the BFP. The relevant portions
of the answer read:
5. I specifically deny the allegation of F/SUPT. MA.
LUISA C. HADJULA in paragraph 4 of her AFFIDAVIT-
COMPLAINT for reason that she never WAS MY
CLIENT nor we ever had any LAWYER-CLIENT
RELATIONSHIP that ever existed ever since and that
never obtained any legal advice from me regarding her
PERSONAL PROBLEMS or PERSONAL SECRETS. She
likewise never delivered to me legal documents much more
told me some confidential information or secrets. That is
because I never entertain LEGAL QUERIES or
CONSULTATION regarding PERSONAL MATTERS
since I know as a LAWYER of the Bureau of Fire
Protection that I am not allowed to privately practice law
and it might also result to CONFLICT OF INTEREST. As
a matter of fact, whenever there will be PERSONAL
MATTERS referred to me, I just referred them to private
law practitioners and never entertain the same, NOR listen
to their stories or examine or accept any document.
9. I specifically deny the allegation of F/SUPT. MA.
LUISA C. HADJULA in paragraph 8 of her AFFIDAVIT-
COMPLAINT, the truth of the matter is that her ILLICIT
RELATIONSHIP and her illegal and unlawful activities are
known in the Bureau of Fire Protection since she also filed
CHILD SUPPORT case against her lover … where she has
a child ….
 Moreover, the alleged DOCUMENTS she purportedly have
shown to me sometime in 1998, are all part of public
records ….
Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing
the instant case just to get even with me or to force me to
settle and withdraw the CASES I FILED AGAINST HER
since she knows that she will certainly be DISMISSED
FROM SERVICE, REMOVED FROM THE PRC ROLL
and CRIMINALLY CONVICTED of her ILLICIT,
IMMORAL, ILLEGAL and UNLAWFUL ACTS.
On October 7, 2004, the Investigating Commissioner of the IBP
Commission on Bar Discipline came out with a Report and
Recommendation, stating that the information related by complainant
to the respondent is "protected under the attorney-client privilege
communication." Prescinding from this postulate, the Investigating
Commissioner found the respondent to have violated legal ethics
when she "[revealed] information given to her during a legal
consultation," and accordingly recommended that respondent be
reprimanded therefor, thus:
WHEREFORE, premises considered, it is respectfully
recommended that respondent Atty. Roceles Madianda be
reprimanded for revealing the secrets of the complainant.
On November 4, 2004, the IBP Board of Governors issued
Resolution No. XVI-2004-472 reading as follows:
RESOLVED to ADOPT and APPROVE, as it is hereby
ADOPTED and APPROVED, the Report and
Recommendation of the Investigating Commissioner of the
above-entitled case, herein made part of this Resolution as
Annex "A"; and , finding the recommendation fully
supported by the evidence on record and the applicable
laws and rules, and considering the actuation of revealing
information given to respondent during a legal consultation,
Atty. Roceles Madianda is hereby REPRIMANDED.
We AGREE with the recommendation and the premises holding it
together.
As it were, complainant went to respondent, a lawyer who
incidentally was also then a friend, to bare what she considered
personal secrets and sensitive documents for the purpose of obtaining
legal advice and assistance. The moment complainant approached the
then receptive respondent to seek legal advice, a veritable lawyer-
client relationship evolved between the two. Such relationship
imposes upon the lawyer certain restrictions circumscribed by the
ethics of the profession. Among the burdens of the relationship is that
which enjoins the lawyer, respondent in this instance, to keep
inviolate confidential information acquired or revealed during legal
consultations. The fact that one is, at the end of the day, not inclined
to handle the client's case is hardly of consequence. Of little moment,
too, is the fact that no formal professional engagement follows the
consultation. Nor will it make any difference that no contract
whatsoever was executed by the parties to memorialize the
relationship. As we said in Burbe v. Magulta,6 -
A lawyer-client relationship was established from the very
first moment complainant asked respondent for legal advise
regarding the former's business. To constitute professional
employment, it is not essential that the client employed the
attorney professionally on any previous occasion.
It is not necessary that any retainer be paid, promised, or
charged; neither is it material that the attorney consulted
did not afterward handle the case for which his service had
been sought.
If a person, in respect to business affairs or troubles of any
kind, consults a lawyer with a view to obtaining
professional advice or assistance, and the attorney
voluntarily permits or acquiesces with the consultation,
then the professional employments is established.
Likewise, a lawyer-client relationship exists
notwithstanding the close personal relationship between the
lawyer and the complainant or the non-payment of the
former's fees.
Dean Wigmore lists the essential factors to establish the existence of
the attorney-client privilege communication, viz:
(1) Where legal advice of any kind is sought (2) from a
professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or by
the legal advisor, (8) except the protection be waived.7
With the view we take of this case, respondent indeed breached his
duty of preserving the confidence of a client. As found by the IBP
Investigating Commissioner, the documents shown and the
information revealed in confidence to the respondent in the course of
the legal consultation in question, were used as bases in the criminal
and administrative complaints lodged against the complainant.
The purpose of the rule of confidentiality is actually to protect the
client from possible breach of confidence as a result of a consultation
with a lawyer.
The seriousness of the respondent's offense notwithstanding, the
Court feels that there is room for compassion, absent compelling
evidence that the respondent acted with ill-will. Without meaning to
condone the error of respondent's ways, what at bottom is before the
Court is two former friends becoming bitter enemies and filing
charges and counter-charges against each other using whatever
convenient tools and data were readily available. Unfortunately, the
personal information respondent gathered from her conversation with
complainant became handy in her quest to even the score. At the end
of the day, it appears clear to us that respondent was actuated by the
urge to retaliate without perhaps realizing that, in the process of
giving vent to a negative sentiment, she was violating the rule on
confidentiality.
IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is
hereby REPRIMANDED and admonished to be circumspect in her
handling of information acquired as a result of a lawyer-client
relationship. She is also STERNLY WARNED against a repetition
of the same or similar act complained of.
SO ORDERED.
4.) A.M. No. RTJ-05-1900 January 28, 2005
SHIRLEY LORIA TOLEDO and ROSIE LORIA DAJAC,
complainants,
vs.
JUDGE ALFREDO E. KALLOS, respondent.
 RESOLUTION
DAVIDE, JR., C.J.:
For our resolution is the verified complaint, written in the vernacular
and dated 21 August 2002, of siblings Shirley Loria Toledo and
Rosie Loria Dajac against respondent Judge Alfredo E. Kallos,
Presiding Judge of the Regional Trial Court (RTC) of Legazpi City,
Branch 10, for violation of the Code of Judicial Conduct, the Code of
Professional Responsibility, and Article 1491 (5) of the Civil Code.
Prior to his appointment as a judge in March 1995,1 Judge Kallos was
complainants’ counsel of record in Civil Case No. 4879 filed with the
RTC of Legazpi City, Branch 4, involving the recovery of hereditary
shares with damages. On 25 March 1979, a judgment was rendered
ordering the defendants to, among other things, turn over to herein
complainants, the plaintiffs therein, the possession and ownership of
the total area of 4,514 square meters of "lot 2082 Albay Cadastre."
On appeal, the decision was affirmed by the Court of Appeals and
became final and executory on 16 December 1985.2
Several years thereafter, or in February 2002, the respondent filed in
the same action, Civil Case No. 4879, before the RTC of Legazpi,
Branch 4, an Omnibus Motion3 praying, inter alia, for the issuance an
order constituting in his favor an attorney’s lien to the extent of one-
third over the lot awarded in favor of the complainants representing
his attorney’s fee. He based his motion on a written contingency
agreement on attorney’s fees for professional services rendered
whereby he is entitled to one-third share of what would be awarded to
the complainants. He claimed that this agreement had already been
implemented when "one of the three (3) lots levied upon by the
sheriff to answer for the award of damages was given to (him) as his
one-third share while the other two lots went to the plaintiffs as their
two-third share … [as] evidenced by the Definite Deed of Sale and
Transfer Certificate of Titles Nos. T-77728, T-77458 and T-77459."
However, he misplaced a copy of said written agreement.
In the meantime, or on 5 September 2002, the complainants filed
before this Court, through the Office of the Court Administrator, the
subject verified complaint. Here, complainants pray for three things.
First, they pray for an order directing the respondent to stop
demanding his "1/3 share attorney’s fees." They assert that the
respondent has no basis for his claim because he failed to show in
court proof of the alleged written contingency fee agreement. They
also belie respondent’s insistence in his Omnibus Motion that the said
agreement had already been implemented when, on execution, one of
three lots levied upon by the sheriff was given to him as his 1/3 share.
They emphasize that all the lots levied by the sheriff were given to
them. However, the respondent "forced" them to sign a Deed of
Absolute Sale on 16 January 1990 involving a parcel of land valued
in the document at ₱10,000, but actually worth more than ₱500,000,
in payment of his attorney’s fees. While they did not want to sign the
document because respondent appeared in their case only during
execution, they were constrained to do so for fear that something
adverse might happen to their case, as the respondent so warned
them. The latter told them that they would not have won the case
were it not for his services.
The complainants thus seek, as their second prayer, the recovery of
the property involved in said Deed of Absolute Sale. They argue that
pursuant to Article 1491(5) of the Civil Code, lawyers are prohibited
from buying their client’s properties when the same are still the
object of litigation. To prove that the respondent was still their
counsel when the sale took place, the complainants attached to their
complaint the Motion to Terminate Services dated 23 June 1994,
which was based on respondent’s being remiss in his duties and
responsibilities as their lawyer, and the Order of the court dated 29
June 1994, approving the termination.
Third, the complainants pray for the removal of the respondent from
his position as RTC judge for his alleged abusive conduct
unbecoming a judge.
In his Comment dated 25 November 2002, the respondent denies the
allegations against him and asserts that he is only claiming what is
due him. He vehemently denies that he appeared in the case only
during the execution stage, pointing to the Minutes of Hearing and
the Order, both dated 05 October 1973, which show that he entered
his appearance as counsel for the complainants as early as 5 October
1973, or two months after the complaint was filed. He continuously
handled the case from then on, as shown by copies of the minutes of
the hearings and orders issued by the RTC, until a favorable
judgment was rendered on 25 March 1979 and the subject properties
were levied upon on execution to satisfy the judgment. He insists that
he was never remiss in the performance of his duties and
responsibilities as complainants’ counsel.
The respondent further alleges that the existence of the agreement on
attorney’s fees was admitted by complainant Shirley Loria Toledo as
evidenced by the order issued by the court on 01 March 2002, which
states that Ms. Toledo came to the court informally informing it that
she had a copy of the contract on attorney’s fees.4
As regards the Deed of Absolute Sale, respondent admits that he was
still complainants’ lawyer when the lot was transferred in his name.
The lot was given to him by the complainants and their mother,
pursuant to their written contingency agreement, as his 1/3 share in
the three parcels of land levied upon by the sheriff to settle the
accrued rentals awarded in the second paragraph of the dispositive
portion of the decision. He did not pay for it. The figure appearing on
the document was written only to facilitate the transaction. He never
compelled the complainants and their mother to sell to him the parcel
of land. Neither did he tell them that nothing would happen to their
case without him.
Finally, the respondent asserts that his claim for attorney’s fees is still
being litigated in Civil Case No. 4879. Thus, the instant complaint is
premature.
In their Rejoinder dated 7 January 2003, the complainants insist that
there is no basis for respondent’s claim for attorney’s fees for the
following reasons: (1) the respondent failed to present the agreement
on attorney’s fees; (2) attorney’s fees were not awarded by the RTC
or the Court of Appeals; and (3) Civil Case No. 4879 is in its
execution stage.
After evaluating the pleadings submitted by the parties, the Court
Administrator found5 that respondent was, indeed, complainants’
counsel in Civil Case No. 4879, and he should therefore be
compensated for his services. The act of demanding payment for his
attorney’s fees is not a ground for administrative liability. However,
he can be allowed only fair and reasonable attorney’s fees under
Canon 20 of the Code of Professional Responsibility. As to this, the
Court Administrator stated:
On the question of whether respondent violated Article 1491(5) of the
Civil Code, the Court Administrator found that this may be fairly
resolved in an investigation, there being a factual dispute, and
recommended that the complaint be referred to an Associate Justice
of the Court of Appeals pursuant to Section 3, Rule 140 of the Rules
of Court. On the basis of this recommendation, we referred the matter
to Associate Justice Jose Mendoza of the Court of Appeals for
investigation, report, and recommendation.
In his Report,6 Justice Mendoza found that the respondent indeed
represented the complainants in Civil Case No. 4879. Like the Court
Administrator, he expresses the view that the act of demanding
attorney’s fees for services rendered is not a ground for
administrative sanction. He finds that when the respondent made the
demand, he did so as a lawyer who obtained a favorable judgment for
his client, and not as a judge. As a lawyer, it is but just that he be
fairly compensated for his services. And his filing of a claim for
attorney’s fees in Civil Case No. 4879 was an appropriate legal
remedy. Considering the pendency of such claim, Justice Mendoza
recommends the suspension of the determination of the instant
administrative complaint until the rendition of a final judicial ruling
on the matter of respondent’s attorney’s fees; thus:
As the said issue is still being litigated in the Regional Trial Court in
Civil Case No. 4879, it is the view of the undersigned that the
complaint is still premature ….
In other words, the complaint is not yet ripe for administrative
evaluation. The hearing on the matter being conducted by the court
below should be allowed to run its course as that court is the
appropriate forum for a ruling on the dispute….
…To make a determination at this time on whether the respondent
violated Article 1491 (A) would be to preempt the lower court in its
resolution of the issue. Any recommendation by the undersigned in
this administrative case and subsequent resolution by the Honorable
Supreme Court on the matter would certainly affect or influence the
thinking of the trial court before which the matter is pending. In such
a case, it will be unfair to either party. At any rate, the party who
would feel aggrieved might still elevate the decision to the higher
courts.
This recommendation is not without precedent. In the case of
Spouses De Leon v. Hon. Bonifacio, Adm. Case No. 4467, October
10, 1997, the then Deputy Court Administrator, Hon. Reynaldo
Suarez, recommended the dismissal of the case for being judicial in
nature or, at least, premature….
… v. Coloma,15 we stressed:
In this case, the respondent is not being charged for his acts or
decisions as a judge. Rather, he has been charged for dealing with the
property of his client which is prohibited by law. Nevertheless, the
principle is the same, in that, the matter is still judicial in nature.
We agree with Justice Mendoza.
It is fundamental that a claim for attorney’s fees may be asserted
either in the very action in which the services of a lawyer had been
rendered or in a separate action.7 The respondent chose to file his
claim for attorney’s fees in the same case in which he served as
counsel for the complainants. As mentioned, this is a proper remedy
under our jurisdiction and is preferred to an independent action as it
avoids multiplicity of suits. Besides, the right to recover attorney’s
fees is but an incident of the case in which the services of counsel
have been rendered. Moreover, the court trying the case is to a certain
degree already familiar with the nature and extent of the lawyer’s
services8 and is in a better position to decide the question of fees.
Undisputably, respondent’s claim for attorney’s fees is under
litigation. We find in the records an Order dated 7 January 2004
issued in Civil Case No. 4879 which granted respondent’s prayer for
"1/3 share of attorney’s fees in the proceeds of litigation" as claimed
in his Omnibus Motion dated 14 February 2002. This Order is the
subject of a motion for reconsideration by the complainants, as stated
in respondent’s Manifestation dated 24 January 20049 filed in the
investigation proceedings conducted by Justice Mendoza. Also part
of the records is respondent’s Affidavit dated 1 December 2003, filed
in the same investigation proceedings, alluding to the complainants’
filing of a Petition for Certiorari and Mandamus in the Court of
Appeals, docketed as CA-G.R. SP No. 80090, seeking to reverse the
Order of the trial court denying complainants’ Motion to Dismiss
respondent’s Omnibus Motion.
We, therefore, find no cogent reason for us to resolve complainants’
first two issues raised in the verified complaint, for they are
inextricably inherent in the claim of the respondent in his Omnibus
Motion, which is pending judicial determination. Since respondent’s
claim for attorney’s fees in the main case has not yet become final,
the objection of prematurity obtains, as a contrary holding may be
preemptive of a final judicial determination of factual and evidentiary
matters inherent in the claim.10 Clearly, the reliefs asked by the
complainants are judicial in nature.11 And, if only for an orderly
administration of justice, the proceedings in Civil Case No. 4879
should be allowed to continue and take its course, and the claim of
the respondent judicially settled first.
But while we give deference to the wisdom of the trial court to
initially decide respondent’s claim for attorney’s fees, we deem it
appropriate to reiterate certain principles governing the payment of
attorney’s fees and impart our observations on the instant claim.
Foremost of these principles is that the act of demanding attorney’s
fees for services rendered is not a ground for an administrative
sanction. On the contrary, Canon 20 of the Code of Professional
Responsibility allows lawyers to charge fair and reasonable fees. As
long as a lawyer honestly and in good faith serves and represents the
interest of the client, he should have a reasonable compensation for
his service.12
Lawyers are thus as much entitled to judicial protection against
injustice on the part of their clients as the clients are against abuses
on the part of counsel. The duty of the court is not only to see that
lawyers act in a proper and lawful manner, but also to see that
lawyers are paid their just and lawful fees.13 Thus, in J.K. Mercado
and Sons Agricultural Enterprises, Inc. v. De Vera ,14 citing Albano
While, indeed, the practice of law is not a business venture, a lawyer,
nevertheless, is entitled to be duly compensated for professional
services rendered. So, also, he must be protected against clients who
wrongly refuse to give him his just due. In Albano vs. Coloma, this
Court has said:
"Counsel, any counsel, who is worthy of his hire, is entitled to be
fully recompensed for his services. With his capital consisting solely
of his brains and with his skill, acquired at tremendous cost not only
in money but in the expenditure of time and energy, he is entitled to
the protection of any judicial tribunal against any attempt on the part
of a client to escape payment of his fees. It is indeed ironic if after
putting forth the best that is in him to secure justice for the party he
represents, he himself would not get his due. Such an eventuality this
Court is determined to avoid. It views with disapproval any and every
effort of those benefited by counsel’s services to deprive him of his
hard-earned honorarium. Such an attitude deserves condemnation."
It should be stressed in this connection that the absence of a written
contract will not preclude the finding that there was a professional
relationship that justifies the collection of attorney’s fees for
professional services rendered. Documentary formalism is not an
essential element in the employment of an attorney; the contract may
be express or implied. To establish the relation, it is sufficient that the
advice and assistance of an attorney is sought and received in any
matter pertinent to his profession.16 Hence, with or without a
contingency agreement between the complainants and the respondent,
the trial court must determine the propriety of respondent’s claim for
attorney’s fees and the reasonable amount thereof.
The third issue raised in the verified complaint deserves a short shrift.
No evidence was presented to prove respondent’s alleged abusive
conduct unbecoming a judge. The complainants do not dispute the
fact that the respondent was not yet a judge when the assailed action
or conduct was allegedly committed by him. As such, and to that
extent, there is no reason to bind him by the strict standards of the
Code of Judicial Conduct for acts committed as counsel to a case
prior to his appointment as a judge.
WHEREFORE, the instant administrative complaint is DISMISSED
for being premature and for lack of merit.
SO ORDERED.
5.) [G.R. No. 90983. September 27, 1991.]
LAW FIRM OF RAYMUNDO A. ARMOVIT, Petitioner, v.
COURT OF APPEALS, JUDGE GENARO C. GINES, Presiding
Judge of Branch XXVI, Regional Trial Court, First Judicial
Region, San Fernando, La Union, and BENGSON
COMMERCIAL BUILDING, INC., Respondents.
Raymundo A. Armovit and Rafael R. Armovit for Petitioner.
Pacifico C. Yadao for Private Respondent.
SYLLABUS
1. LEGAL ETHICS; ATTORNEY’S FEES; CONTINGENT FEES;
REASONABLE IN CASE AT BAR. — Contingent fees are valid in
this jurisdiction. It is true that attorney’s fees must at all times be
reasonable; however, we do not find Atty. Armovit’s claim for
"twenty percent of all recoveries" to be reasonable. In the case of Aro
v. Nañawa, (No. L-24163, April 28, 1969, 27 SCRA 1090), this
Court awarded the agreed fees amid the efforts of the client to deny
him fees by terminating his services. In parallel vein, we are
upholding Atty. Armovit’s claim for P252,000.00 more — pursuant
to the contingent fee agreement — amid the private respondent’s own
endeavors to evade its obligations.
DECISION
SARMIENTO, J.:
Before the Court is Atty. Raymundo Armovit’s claim for attorney’s
fees against the private Respondent.
It appears that Atty. Armovit was engaged as counsel for the private
respondent in a complaint to have an extrajudicial foreclosure of
certain properties by the Government Service Insurance System
declared null and void; that the parties allegedly agreed that the
private respondent shall pay P15,000.00 as initial compensation and
twenty percent in contingent fees; that after trial, the defunct Court of
First Instance rendered judgment annulling foreclosure and ordering
the Government Service Insurance System to restructure the private
respondent’s loan; that thereafter, the System appealed; that on
appeal, the Court of Appeals affirmed the decision of the lower court;
and that the Appellate Court’s judgment has since attained finality.
It also appears that when Atty. Armovit sought execution with the
court a quo, he was informed by Romualdo Bengzon, president of the
respondent corporation, that the firm had retained the services of
Atty. Pacifico Yadao. He was also informed that the company would
pay him the agreed compensation and that Atty. Yadao’s fees were
covered by a separate agreement. The private respondent, however,
later ignored his billings and over the phone, directed him allegedly
not to take part in the execution proceedings. Forthwith, he sought
the entry of an attorney’s lien in the records of the case. The lower
court allegedly refused to make the entry and on the contrary, issued
an order ordering the Philippine National Bank to "release to the
custody of Mr. Romualdo F. Bengzon and or Atty. Pacifico Yadao" 1
the sum of P2,760,000.00 (ordered by the Court of Appeals as rentals
payable by the Government Service Insurance System).
Atty. Armovit then moved, apparently for the hearing of his motion
to recognize attorney’s lien, and thereafter, the trial court issued an
order in the tenor as follows:
When this case was called for hearing on the petition to record
attorney’s charging lien, Attys. Armovit and Aglipay appeared for the
petitioners.
Atty. Armovit informed the Court that they are withdrawing the
petition considering that they are in the process of amicably settling
their differences with the plaintiff, which manifestation was
confirmed by Atty. Yadao as well as the plaintiffs, Romualdo
Bengson and Brenda Bengson, who are present today.
In view of this development, the petition to record attorneys charging
lien, the same being in order and not contrary to law, morals and
public policy, as prayed for by Attys. Armovit and Aglipay, it is
hereby withdrawn. The parties, therefore are hereby directed to
comply faithfully with their respective obligations.
SO ORDERED. 2
However, upon the turnover of the money to the private respondent,
Mrs. Brenda Bengson (wife of Romualdo Bengzon) delivered to
Atty. Armovit the sum of P300,000.00 only. Atty. Armovit protested
and demanded the amount of P552,000.00 (twenty percent of
P2,760,000.00), for which Mrs. Bengzon made assurances that he
will be paid the balance.
On November 4, 1988, however, Atty. Armovit received an order
emanating from the trial court in the tenor as follows:
During the hearing on the petition to record attorney s charging lien
on October 11, 1988, Attys. Armovit and Aglipay withdrew their
petition to record attorney’s charging lien, which was duly approved
by the Court, after which the Court directed the parties to comply
faithfully with their respective obligations.
In compliance with the Order of this Court, the plaintiff submitted a
pleading denominated as compliance alleging that petitioner (Atty.
Armovit) has already received from the plaintiff the sum of
P300,000.00, Philippine Currency, as and by way of attorneys fees.
With the receipt by the petitioner from the plaintiff of this amount,
the latter has faithfully complied with its obligation.
WHEREFORE, the Order of this Court dated October 11, 1988
approving the withdrawal of the petition to record attorney s charging
lien, on motion of the petitioner, is now final.
SO ORDERED. 3
Reconsideration having been denied, Atty. Armovit went to the Court
of Appeals on a petition for certiorari and prohibition.
On August 25, 1989, the Court of Appeals rendered judgment
dismissing the petition. Reconsideration having been likewise denied
by the Appellate Court, Atty. Armovit instituted the instant appeal.
Shortly thereafter, we required the private respondent to comment.
The private respondent did not materially traverse Atty. Armovit’s
chronicle of events but added: that the private respondent hired the
petitioner after the Government Service Insurance System had
answered and that it was Atty. Benjamin Bernardino who prepared
the complaint; that for his appearances, Atty. Armovit was paid a
total of P108,000.00, not to mention "beach resort accommodations" ;
that Atty. Armovit did not inform the private respondent that the
court had rendered judgment which they would have appealed; that
they lost an appeal on account of Atty. Armovit’s indiscretion; that
they forthwith engaged the services of another lawyer, Atty. Yadao;
and that it was the latter who prepared the brief in the Court of
Appeals (on GSIS’s appeal).
The private respondent also alleged that it opposed Atty. Armovit’s
effort to record his attorney’s lien on grounds of alleged nullity of the
retainer agreement, Atty. Armovit’s negligence, and because of
excessive fees demanded. The private respondent also insisted that
the retainer agreement was signed by only one of seven directors, and
it could not mind the corporation. Atty. Armovit, in any event, had
also been allegedly more than sufficiently compensated.
The private respondent alleged that Atty. Armovit had been paid
P300,000.00 — an amount approved by the court, and an amount he
accepted and for which he is allegedly estopped from claiming a
higher amount. The order of the court has the effect of res judicata,
the private respondent claimed, as well as a compromise agreement
which is immediately executory.
The disposition of the Court of Appeals was that since the receipt
evidencing payment to Atty. Armovit of the sum of P300,000.00
"was without any qualification as ‘advance’ or ‘partial’ or
‘incomplete’," the intention of the parties was that it was full
payment. The Appellate Court also noted Atty. Armovit’s withdrawal
of his motion to record attorney’s lien and figured that Atty. Armovit
was satisfied with the payment of P300,000.00.
The only issue is whether or not Atty. Armovit is entitled to the sum
of P252,000.00 more, in addition to the sum of P300,000.00 already
paid him by the private Respondent.
There is no question that the parties had agreed on a compensation as
follows:
a) P15,000.00 by way of acceptance and study fee, payable within
five (5) days from date;
b) 20% contingent fee computed on the value to be recovered by
favorable judgment in the cases; and
c.) the execution and signing of a final retainer agreement complete
with all necessary details.
(While the parties’ agreement speaks of "a final retainer agreement"
to be executed later, it does not appear that the parties did enter into a
"final" agreement thereafter.)
The private respondent’s version however is that while it may be true
that the agreed compensation was twenty percent of all recoveries,
the parties later agreed on a compromise sum approved allegedly by
the trial court, per its Order of October 11, 1988.
The Court is inclined to believe that Atty. Armovit never agreed on
the compromise sum of P300,000.00. It is true that he did agree to
withdraw his motion to annotate attorney’s lien, but because the
parties were "in the process of amicably settling their differences"
and not because Atty. Armovit had agreed to accept a lower amount
as full payment. There is nothing, on top of that, in Atty. Armovit’s
manifestation that would suggest that he was accepting the sum of
P300,000.00 as agreed final payment, other than the fact that an
agreement was supposedly certain.
ATTY. ARMOVIT:
Your Honor, we would like to manifest in Court that we served
notice to the counsel of the plaintiff, Bengson Commercial Building,
a copy of the petition to record attorney’s charging lien, and together
with the president of the corporation, Mr. Romualdo Bengson, and
his wife, Mrs. Brenda Bengson, we have discussed the problem and
we all agreed to settle the matter amicably and as proof, and there is a
certainty that this settlement we have in principle agreed upon is an
earnest one at this time, this representation is withdrawing his
petition to record charging lien.
ATTY. YADAO:
No objection, Your Honor, because we have to agree with Atty.
Armovit. I am in full accord with this.
There is nothing there that would indicate Atty. Armovit’s
willingness to accept, in fact, a lower figure in consideration of his
withdrawal of his request to enter attorney’s lien. What the Court
takes his statement to mean is that he was withdrawing his request on
the certainty that the private respondent would pay him the money,
presumably, under more becoming circumstances.
The Court does not therefore see how the private respondent can hold
Atty. Armovit to have been in estoppel.
The fact that Atty. Armovit did not, after all, accept the sum of
P300,000.00 as final compensation is indeed indicated by the
behavior of the private respondent, through Mrs. Romualdo Bengson,
when she assured Atty. Armovit that the balance was forthcoming.
According to Mrs. Bengson, she wished the rest of the Bengsons to
witness the final payment and when the occasion was present, wished
for a postponement on account of "All Saints Day."
The parties never therefore amended their original agreement, and
what appears to the Court is a clear effort on the part of a client, with
the apparent approval of the trial court, to renege on a valid
agreement with its lawyer.
The Court believes that the trial court, in accepting the private
respondent’s "compliance" as a final payment of Atty. Armovit’s
fees, was guilty of a grave abuse of discretion. The private
respondent had nothing with which to comply, and the parties, as
manifested by Atty. Armovit, were "in the process [merely] of
amicably settling their differences."
It is apparent furthermore that the trial judge himself was out to deny
Atty. Armovit the agreed compensation. In his order of October 4,
1988, he commanded:
The PNB is hereby ordered and directed to release to the custody of
Mr. Romualdo F. Bengson and/or Atty. Pacifico Yadao, counsel for
the plaintiff, the sum of Two Million Seven Hundred Sixty Thousand
Pesos (P2,760,000.00), Philippine Currency for the satisfaction of the
rentals of the Bengson Building against the GSIS.
in spite of the fact that Atty. Armovit had remained the private
respondent’s counsel of record. It is fundamental that unless a lawyer
has been validly discharged, his authority to act for his client
continues and should be recognized by the court.
The fact that the receipt evidencing payment by the private
respondent of the amount of P300,000.00 "was without any
qualification as ‘advance’ or ‘partial’ or ‘incomplete’," as the Court
of Appeals noted and the Court of Appeals took to mean "full
payment", will not weaken Atty. Armovit’s demand for the balance.
There is nothing in that receipt that will suggest that it was full
payment either, and the fact that Atty. Armovit accepted it does not
mean that he was satisfied that it was final payment. The fact of the
matter is that the private respondent had assured him that the balance
was forthcoming.
The private respondent can not justifiably downplay Atty. Armovit as
negligent (for failing to appeal) or his demand for fees excessive (that
he had been paid enough). Atty. Armovit, after all, succeeded in
obtaining a favorable decision for his client, and although his prayer
for various damages were denied, he succeeded in obtaining a
substantial award (P1,900,000.00 in unpaid rentals) for his client. On
appeal, the Court of Appeals sustained his theory. It should be noted
that the private respondent had in fact stood to lose substantial
properties on foreclosure — Atty. Armovit not only restored to the
private respondent its foreclosed properties, he succeeded in having
the private respondent’s loans restructured and the Government
Service Insurance System pay rentals. No client can ask a better
result from a lawyer.
Obviously, the private respondent’s effort to downgrade Atty.
Armovit’s performance is a wild, if not cheap, shot of a client out to
evade its obligations to its lawyer. The fact that Atty. Armovit may
have been paid substantially (in initial fees) while the case was
dragging is no justification for denying him the full amount under
their agreement. It has been held that initial fees and fees paid in the
progress of litigation are independent of the contingent fees.
That the retainer agreement was never approved by the board of the
corporation is also a poor excuse because the fact of the matter is that
the private respondent did deliver to Atty. Armovit the sum of
P300,000.00 in partial payment, and the private respondent can not
now deny him the balance by alleging lack of authority of the
Bengson spouses.
Contingent fees are valid in this jurisdiction. It is true that attorney’s
fees must at all times be reasonable; however, we do not find Atty.
Armovit’s claim for "twenty percent of all recoveries" to be
unreasonable. In the case of Aro v. Nañawa, decided in 1969, this
Court awarded the agreed fees amid the efforts of the client to deny
him fees by terminating his services. In parallel vein, we are
upholding Atty. Armovit’s claim for P252,000.00 more — pursuant
to the contingent fee agreement — amid the private respondent’s own
endeavours to evade its obligations.
Several times, we have come down hard on erring practitioners. We
will not however be slow either, in coming to the rescue of aggrieved
brother-lawyers in protecting the integrity of the bar from
unscrupulous litigants.
WHEREFORE, premises considered, the petition is GRANTED. The
private respondent is ORDERED to pay the petitioner the sum of
P252,000.00. Costs against the private Respondent.
IT IS SO ORDERED.
6.) G.R. No. 91958 January 24, 1991
WILFREDO D. LICUDAN and CRISTINA LICUDAN-
CAMPOS, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and ATTY.
TEODORO O. DOMALANTA, respondents.
Arnold V. Guerrero & Associates for petitioners.
Teodoro O. Domalanta for and on his behalf as private respondent.
GUTIERREZ, JR., J.:
The practice of law is a profession rather than trade. Courts must
guard against the charging of unconscionable and excessive fees by
lawyers for their services when engaged as counsel. Whether or not
the award of attorney's fees in this case is reasonable, being in the
nature of contingent fees, is the principal issue.
This petition for review on certiorari assails:
1) The Decision of the public respondent dated September 12, 1989
which dismissed the petitioners' appeal thereby upholding the
reasonableness of the respondent lawyer's lien as attorney's fees over
the properties of his clients; and
2) The Resolution of the public respondent dated January 30, 1990
which denied the petitioners' motion for reconsideration.
The grounds relied upon by the petitioners are as follows:
The respondent Court, in upholding the entitlement of
private respondent-attorney on the attorney's fees he
claimed, decided the question in a manner not in accord
with law or with the applicable decisions of this Honorable
Tribunal.
The respondent Court, in refusing to review and determine
the propriety, reasonableness and validity of the attorney's
fees claimed by the private respondent-attorney, departed
from the usual course of judicial proceedings.
The respondent Court, in failing to declare the attorney's
fees claimed by the private respondent-attorney as
unconscionable, excessive, unreasonable, immoral and
unethical, decided the question in a way not in accord with
law and with applicable decisions of this Honorable
Tribunal. (Petition, pp. 12-13; Rollo, pp. 16-17)
The following are the antecedent facts pertinent to the case at bar:
The respondent lawyer was retained as counsel by his brother-in-law
and sister, the now deceased petitioners' parents, spouses Aurelio and
Felicidad Licudan. His services as counsel pertained to two related
civil cases docketed as Civil Case No. Q-12254 for partition and
Civil Case No. Q-28655 for a sum of money in connection with the
redemption of the property subject matter of the two cases covered by
Transfer Certificate of Title No. 818 of the Register of Deeds of
Quezon City. In both cases, the respondent lawyer obtained a
judgment in favor of his clients.
On August 13,1979, the respondent lawyer filed a Petition for
Attorney's Lien with Notification to his Clients which substantially
alleged that his clients executed two written contracts for professional
services in his favor which provided that:
a) The undersigned counsel is entitled to own 97.5 square
meters of the plaintiff's share of the lot in question.
b) The undersigned counsel shall have a usufructuary right
for a period of ten (10) years of plaintiffs' share of the lot in
question.
c) And that all damages accruing to plaintiffs to be paid by
the defendant is for the undersigned counsel.(Annex "H" of
the Petition, Rollo, p. 54)
On September 19, 1979, the trial court handling Civil Case No. Q-
12254 ordered the annotation at the back of TCT No. 818 of the
Register of Deeds of Quezon City of the respondent lawyer's
Contract for Professional Services dated August 30, 1979 signed by
petitioner Wilfredo Licudan and Aurelio Licudan on his own behalf
and on behalf of his daughter, petitioner Cristina Licudan-Campos.
The said trial court's Order, being one of two Orders being essentially
challenged in this petition, is reproduced below:
Before the court for consideration is a Petition for
Attorney's Lien filed by Atty. Teodoro D. Domalanta,
counsel for the plaintiff, praying that his attorney's fees be
annotated as a lien at the back of Transfer Certificate of
Title No. 818 of the Register of Deeds of Quezon City,
subject matter of this case.
For the protection of the plaintiffs, the court required the
plaintiff Aurelio Licudan as well as his son to appear this
morning. Plaintiff Aurelio Licudan together with his son
Wilfredo Licudan, who appears to be intelligent and in fact
he speaks (the) English language well, appeared. Both
Aurelio and Wilfredo Licudan manifested that they have
freely and voluntarily signed the Contract for Professional
Services, dated August 30, 1979 and notarized before
Notary Public Amado Garrovillas as Doc. No. 32, Page 8,
Book No. XIX, Series of 1979.
Considering the manifestation of plaintiff, Aurelio Licudan
and Alfredo (sic) Licudan that they have entered freely and
voluntarily in the said contract of professional services, let
the same be annotated at the back of TCT 818 of the
Register of Deeds of Quezon City, upon payment of the
required legal fees. (CA Decision, pp. 7-8; Rollo, pp. 36-
37)
The Contract for Professional Services dated August 30, 1979 differs
from the earlier contractual provisions in that it entitled the
respondent lawyer to one-third (1/3) of the subject property or 90.5
square meters and provided for usufructuary rights over the entire lot
in question in favor of the respondent lawyer's son, Teodoro M.
Domalanta, Jr. for an agreed consideration. (Annex "J" of the
Petition; Rollo, p. 59)
On July 25, 1985, the respondent lawyer filed a motion ex parte to
amend the Order dated September 19, 1979 so as to conform with an
additional professional fee covering 31 square meters more of the lot
for services rendered in Civil Case No. Q-28655 as evidenced by a
Deed of Absolute Sale dated May 1, 1983 executed by Aurelio
Licudan in favor of the respondent lawyer.
On September 6, 1985, the trial court ordered the respondent lawyer
to submit a subdivision plan in conformity with his attorney's fees
contract under which one-third (1/3) of the property or 90.5 square
meters was alloted to him.
On September 23, 1985, the respondent lawyer filed a motion for
reconsideration praying for the amendment of the Order dated
September 19, 1979 to conform with the Deed of Absolute Sale dated
May 1, 1983 which was executed after the annotation of the original
attorney's lien of 90.5 square meters.
On September 30, 1985, the trial court denied the motion on the
ground that the respondent lawyer cannot collect attorney's fees for
other cases in the action for partition.
On October 4, 1985, the respondent lawyer filed a second motion for
reconsideration of the Order dated September 6, 1985 explaining that
what he sought to be included in the Order dated September 19, 1979
is the additional attorney's fees for handling the redemption case
which was but a mere offshoot of the partition case and further
manifesting that the additional 31 square meters as compensation for
the redemption case must be merged with the 90.5 square meters for
the partition case to enable the said respondent lawyer to comply with
the Order dated September 6,1985 which directed him to submit a
subdivision plan as required.
On October 21, 1985, the trial court issued the second Order being
assailed in this petition. The said Order reads:
Acting on the "Second Motion for Reconsideration" filed
by Atty. Teodoro Domalanta and finding the same to be
justified, let an attorney's lien be annotated in the title of
the property for 31 square meters as attorney's fees of said
Atty. Teodoro Domalanta in addition to the original 90.5
square meters. (CA Decision, p. 8; Rollo, p. 37)
On August 22, 1986, more than ten (10) months after the Orders of
September 6, 1985 and October 21, 1985 had become final and
executory, the petitioners as substituted heirs of the respondent
lawyers' deceased clients filed a motion to set aside orders on the
ground that the award of professional fees covering 121.5 square
meters of the 271.5 square meter lot is unconscionable and excessive.
After the respondent lawyer filed his Opposition to the above
petitioners' motion, the lower court, on August 29, 1986, finding that
the petitioners as substituted plaintiffs are not in full agreement with
the respondent lawyer's claim for attorney's fees, set aside its Orders
dated September 6, 1985 and October 21, 1985.
On September 16, 1986, the respondent lawyer filed a motion for
reconsideration stressing the fact that the payment of the professional
services was pursuant to a contract which could no longer be
disturbed or set aside because it has already been implemented and
had since then become final. This motion was denied on October 3,
1986.
On November 15, 1986, the respondent lawyer filed a motion to set
aside the orders dated August 29, 1986 and October 3, 1986
reiterating his position that the Orders of September 6, 1985 and
October 21, 1985 have become final and are already implemented.
The respondent lawyer further asked for the modification of the
October 21, 1985 Order to reflect 60.32 square meters instead of 31
square meters only since the stipulation in the Additional Contract for
Professional Services entitled him to 60.32 square meters.
After the petitioners' Opposition to the said motion was filed, the trial
court, on February 26, 1987, rendered an Order with the following
dispositive portion:
WHEREFORE, this Court has no alternative but to set
aside its orders of 29 August 1986 and 3 October 1986 and
declare its Orders of 19 September 1979 and 21 October
1985 irrevocably final and executory. (CA Decision, p. 5;
Rollo, p. 34)
On Appeal, the Court of Appeals ruled in favor of the respondent
lawyer by dismissing the appeal and the prayed for writ of
preliminary injunction. Their subsequent motion for reconsideration
having been denied', the petitioners filed the instant petition.
The petitioners fault the respondent Court for its failure to exercise its
inherent power to review and determine the propriety of the
stipulated attorney's fees in favor of the respondent lawyer and
accuse the respondent lawyer of having committed an unfair
advantage or legal fraud by virtue of the Contract for Professional
Services devised by him after the trial court awarded him attorney's
fees for P1,000.00 only instead of respecting the trust and confidence
of the highest level reposed on him considering the close blood and
affinal relationship between him and his clients.
The petitioners contend that under the award for professional
services, they may have won the case but would lose the entire
property won in litigation to their uncle-lawyer. They would be
totally deprived of their house and lot and the recovered damages
considering that of the 271.5 square meters of the subject lot, the
respondent lawyer is claiming 121.5 square meters and the remaining
portion of 150 square meters would also go to attorney's fees since
the said portion pertains to the lawyer's son by way of usufruct for ten
(10) years.
The aforesaid submissions by the petitioners merit our consideration.
It is a well-entrenched rule that attorney's fees may be claimed in the
very action in which the services in question have been rendered or as
an incident of the main action. The fees may be properly adjudged
after such litigation is terminated and the subject of recovery is at the
disposition of the court. (see Camacho v. Court of Appeals, 179
SCRA 604 [1989]; Quirante v. Intermediate Appellate Court, 169
SCRA 769 [1989]).
It is an equally deeply-rooted rule that contingent fees are not per se
prohibited by law. They are sanctioned by Canon 13 of the Canons of
Professional Ethics and Canon 20, Rule 20.01 of the recently
promulgated Code of Professional Responsibility. However, as we
have held in the case of Tanhueco v. De Dumo (172 SCRA 760
[1989]):
. . . When it is shown that a contract for a contingent fee
was obtained by undue influence exercised by the attorney
upon his client or by any fraud or imposition, or that the
compensation is clearly excessive, the Court must and will
protect the aggrieved party. (Ulanday v. Manila Railroad
Co., 45 Phil. 540 [1923]; Grey v. Insular Lumber Co., 97
Phil. 833 [1955]).
In the case at bar, the respondent lawyer caused the annotation of his
attorney's fees lien in the main action for partition docketed as Civil
Case No. Q-12254 on the basis of a Contract for Professional
Services dated August 30, 1979. We find reversible error in the Court
of Appeals' holding that:
When the reasonableness of the appellee's lien as attorney's
fees over the properties of his clients awarded to him by the
trial court had not been questioned by the client, and the
said orders had already become final and executory, the
same could no longer be disturbed, not even by the court
which rendered them (Tañada v. Court of Appeals, 139
SCRA 419). (CA Decision p. 7; Rollo, p. 36)
On the contrary, we rule that the questioned Orders dated September
19, 1979 and October 21, 1985 cannot become final as they pertain to
a contract for a contingent fee which is always subject to the
supervision of the Court with regard to its reasonableness as
unequivocally provided in Section 13 of the Canons of Professional
Ethics which reads:
13. Contingent Fees.—
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. (Emphasis
supplied).
There is no dispute in the instant case that the attorney's fees claimed
by the respondent lawyer are in the nature of a contingent fee. There
is nothing irregular about the execution of a written contract for
professional services even after the termination of a case as long as it
is based on a previous agreement on contingent fees by the parties
concerned and as long as the said contract does not contain
stipulations which are contrary to law, good morals, good customs,
public policy or public order.
Although the Contract for Professional Services dated August 30,
1979 was apparently voluntarily signed by the late Aurelio Licudan
for himself and on behalf of his daughter, petitioner Cristina Licudan-
Campos and by the petitioner Wilfredo Licudan who both manifested
in open court that they gave their free and willing consent to the said
contract we cannot allow the said contract to stand as the law
between the parties involved considering that the rule that in the
presence of a contract for professional services duly executed by the
parties thereto, the same becomes the law between the said parties is
not absolute but admits an exception—that the stipulations therein are
not contrary to law, good morals, good customs, public policy or
public order (see Philippine American Life Insurance Company v.
Pineda, 175 SCRA 416 [1989]; Syjuco v. Court of Appeals, 172
SCRA 111 [1989]).
Under Canon 20 of the Code of Professional Responsibility, a lawyer
shall charge only fair and reasonable fees.1âwphi1 In determining
whether or not the lawyer fees are fair and reasonable, Rule 20-01 of
the same Code enumerates the factors to be considered in resolving
the said issue. They are as follows:
a) The time spent and the extent of the services rendered or
required;
b) The novelty and difficulty of the questions involved;
c) The importance of the subject matter;
d) The skill demanded;
e) The probability of losing other employment as a result of
acceptance of the proferred case;
 f) The customary charges for similar services and the
schedule of fees of the IBP Chapter to which he belongs;
g) The amount involved in the controversy and the benefits
resulting to the client from the service;
h) The contingency or certainty of compensation;
i) The character of the employment, whether occasional or
established; and
j) The professional standing of the lawyer.
A similar provision is contained under Section 24, Rule 138 of the
Revised Rules of Court which partly states that:
Sec. 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. . . .
A written contract for services shall control the amount to
be paid therefor unless found by the court to be
unconscionable or unreasonable.
All that the respondent lawyer handled for his deceased sister and
brother-in-law was a simple case of partition which necessitated no
special skill nor any unusual effort in its preparation. The subsequent
case for redemption was admittedly but an offshot of the partition
case. Considering the close blood and affinal relationship between the
respondent lawyer and his clients, there is no doubt that Atty.
Domalanta took advantage of the situation to promote his own
personal interests instead of protecting the legal interests of his
clients. A careful perusal of the provisions of the contract for
professional services in question readily shows that what the
petitioners won was a pyrrhic victory on account of the fact that
despite the successful turnout of the partition case, they are now
practically left with nothing of the whole subject lot won in the
litigation. This is because aside from the 121.5 square meters
awarded to Atty. Domalanta as attorney's fees, the said contract for
professional services provides that the remaining portion shall pertain
to the respondent lawyer's son by way of usufruct for ten (10) years.
There should never be an instance where a lawyer gets as attorney's
fees the entire property involved in the litigation. It is unconscionable
for the victor in litigation to lose everything he won to the fees of his
own lawyer.
The respondent lawyer's argument that it is not he but his son
Teodoro M. Domalanta, Jr. who is claiming the usufructuary right
over the remaining portion of the subject lot is inaccurate. The
records show that the matter of usufruct is tied up with this case since
the basis for the said usufructuary right is the contract for
professional services the reasonableness of which is being questioned
in this petition. We find the ten-year usufruct over the subject lot part
and parcel of the attorney's fees being claimed by the respondent
lawyer.
In resolving the issue of reasonableness of the attorney's fees, we
uphold the time-honoured legal maxim that a lawyer shall at all times
uphold the integrity and dignity of the legal profession so that his
basic ideal becomes one of rendering service and securing justice, not
money-making. For the worst scenario that can ever happen to a
client is to lose the litigated property to his lawyer in whom an trust
and confidence were bestowed at the very inception of the legal
controversy. We find the Contract for Professional Services dated
August 30, 1979, unconscionable and unreasonable. The amount of
P20,000.00 as attorney's fees, in lieu of the 121.5 square meters
awarded to the respondent lawyer and the ten-year usufructuary right
over the remaining portion of 150 square meters by the respondent
lawyer's son, is, in the opinion of this Court, commensurate to the
services rendered by Atty. Domalanta.
WHEREFORE, IN VIEW OF THE FOREGOING, the instant
petition is GRANTED. The Court of Appeals' decision of September
12, 1989 is hereby REVERSED and SET ASIDE. Atty. Domalanta is
awarded reasonable attorney's fees in the amount of P20,000.00.
SO ORDERED.
7.) [G.R. No. 97006. February 9, 1993.]
ERNESTO F. ROLDAN and MARIETTA A. ROLDAN,
Petitioners, v. THE COURT OF APPEALS and COMMERCIAL
CREDIT CORPORATION OF DAVAO, Respondents.
Rodolfo B. Ta-asan, for Petitioners.
Honesto A. Cabarroguis for Private Respondent.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PETITION FOR
REVIEW ON CERTIORARI; LIMITED ONLY TO QUESTIONS
OF LAW. — Settled is the rule, that in petitions for review under
Rule 45 of the Rules of Court, only questions of law may be raised
since factual findings of the Court of Appeals are deemed conclusive
on the Supreme Court subject to certain exceptions.
2. LEGAL ETHICS; ATTORNEY’S FEES; REASONABLENESS
OR UNCONSCIONABLE CHARACTER THEREOF, MAY BE
REGULATED BY THE COURT. — In Radiowealth Finance Co.,
Inc. v. International Corporate Bank, petitioner Radiowealth
questioned the reasonableness of the amount of attorney’s fees
therein and asked whether this Court has the power to modify the
attorney’s fees previously agreed upon by the parties under a valid
contractual stipulation. The Court ruled there as follows: "As a basic
premise, the contention of petitioners that this Court may alter,
modify or change even an admittedly valid stipulation between the
parties regarding attorney’s fees is conceded. The high standards of
the legal profession as prescribed by law and the Canons of
Professional Ethics regulate if not limit the lawyer’s freedom in
fixing his professional fees. The moment he takes his oath, ready to
undertake his duties first, as a practitioner in the exercise of his
profession, and second, as an officer of the court in the administration
of justice, the lawyer submits himself to the authority of the court. It
becomes axiomatic therefore, that power to determine the
reasonableness or the unconscionable character of attorney’s fees
stipulated by the parties is a matter falling within the regulatory
prerogative of the courts (Panay Electric Co., Inc. v. Court of
Appeals, 119 SCRA 456 [1982]; De Santos v. City of Manila, 45
SCRA 409 [1972]; Rolando v. Luz, 34 SCRA 337 [1970]; Cruz v.
Court of Industrial Relations, 8 SCRA 826 [1963]). And this Court
has consistently ruled that even with the presence of an agreement
between the parties, the court may nevertheless reduce attorney’s fees
though fixed in the contract when the amount thereof appears to be
unconscionable or unreasonable (Borcena v. Intermediate Appellate
Court, 147 SCRA 111 [1987]; Mutual Paper Inc. v. Eastern Scott
Paper Co., 110 SCRA 481 [1981]; Gorospe v. Gochango, 106 Phil.
425 [1959]; Turner v. Casabar, 65 Phil. 490 [1938]; F.M. Yap Tico &
Co. v. Alejano, 53 Phil. 986 [1929]). For the law recognizes the
validity of stipulations included in documents such as negotiable
instruments and mortgages with respect to attorney’s fees in the form
of penalty provided that they are not unreasonable or unconscionable
(Philippine Engineering Co. v. Green, 48 Phil. 466)."cralaw
virtua1aw library
3. ID.; ID.; WHEN IN THE NATURE OF LIQUIDATED
DAMAGES; MUST BE AWARDED IN FAVOR OF THE
LITIGANT; CASE AT BAR. — It is worthwhile recalling what
Polytrade v. Blanco has to say on the matter of attorney’s fees, to wit:
"To be borne in mind is that the attorneys’ fees here provided is not,
strictly speaking, the attorneys’ fees recoverable as between attorney
and client spoken of and regulated by the Rules of Court. Rather, the
attorneys’ fees here are in the nature of liquidated damages and the
stipulation therefor is aptly called a penal clause. It has been said that
so long as such stipulation does not contravene law, morals, or public
order, it is strictly binding upon defendant. The attorney’s fees so
provided are awarded in favor of the litigant, not his counsel. It is the
litigant, not counsel, who is the judgment creditor entitled to enforce
the judgment by execution."
DECISION
NOCON, J.:
"While in bed the sick man’s lying,
While in Court your client’s cause you’re trying,
That’s the time to get your fee.
For, when the sick man has recovered,
And the lawsuit’s won or smothered
He will never think of thee." 1
Petitioners spouses Ernesto and Marietta Roldan claim that the
attorney’s fees claimed by the private respondent, Commercial Credit
Corporation of Davao City, being gargantuan, exhorbitant and
unconscionable, should be proportionately reduced on the basis of
quantum meruit. Private respondent Commercial Credit Corporation
of Davao demurs and states that the amount is reasonable or
conscionable considering the difficulty it has encountered in
collecting from the petitioners.
Culled from private respondent’s statement of facts are the following
antecedents of this case. On June 7, 1971, petitioners purchased
fifteen (15) trucks on installment basis for P1,250,000.00 from
private Respondent. Since they could not fully pay their obligation,
private respondent sued them on November 21, 1981. On July 28,
1987, the trial court rendered its decision, which in its dispositive
portion reads as follows:jgc:chanrobles.com.ph
"IN VIEW WHEREOF, judgment is hereby rendered ordering the
defendants to pay in solidum the plaintiff the following
sums:chanrobles law library
1. Five Hundred Seventy Nine Thousand Five Hundred Sixty Seven
Pesos and Thirteen Centavos representing the principal balance with
interest at 12% to be computed from November 24, 1981 until fully
paid;
2. Twenty Thousand Two Hundred Eighty Five and Forty Three
Centavos representing the past due charges as of November 23, 1981
with interest of 12% per annum to be computed from November 24,
1981 until fully paid;
3. One Hundred Ninety Three Thousand One Hundred Sixty Nine
Pesos and Seventy Two Centavos representing liquidated damages as
of November 23, 1981 with interest of 12% per annum to be
computed from November 24, 1981 until fully paid;
4. Attorney’s fees equivalent to 25% of the total amount due in favor
of the plaintiff;
5. Two Hundred Fifty Pesos and Seventy Five Centavos representing
the value of the check which was drawn by the defendant, accepted
by the plaintiff and dishonored by the drawee bank.
6. Costs of suit.
SO ORDERED." 2
Seeking appellate review, the matter was elevated to the Court of
Appeals which dismissed petitioners’ appeal for lack of merit 3 and
so with their Motion for Reconsideration. 4
Hence, this petition.
Petitioners do not dispute the facts but only that portion of the
findings of fact of the trial court, as affirmed by the appellate court on
the alleged exhorbitant attorney’s fees, excessive liquidated damages
and usurious interest on the loan.
Settled is the rule, that in petitions for review under Rule 45 of the
Rules of Court, only questions of law may be raised since factual
findings of the Court of Appeals are deemed conclusive on the
Supreme Court subject to certain exceptions. 5
Thus, the issues raised by petitioners on (1) the alleged lack of basis
for liquidated damages imposed as a penalty for litigation as
determined by the trial court and (2) the alleged usurious interests
rate they were charged on the contract of loan as evidenced by the
promissory note has been disposed of by the trial court and the Court
of Appeals. Thus, the findings of fact are binding on
Us.chanrobles.com:cralaw:red
The matter, however, of the attorney’s fees — gargantuan,
exhorbitant and unconscionable as alleged by petitioners — is what
this Court will rule upon.
This is not the first time that the amount of attorney’s fees has been
questioned. In Radiowealth Finance Co., Inc. v. International
Corporate Bank, 6 petitioner Radiowealth questioned the
reasonableness of the amount of attorney’s fees therein and asked
whether this Court has the power to modify the attorney’s fees
previously agreed upon by the parties under a valid contractual
stipulation.
The Court ruled there as follows:jgc:chanrobles.com.ph
"As a basic premise, the contention of petitioners that this Court may
alter, modify or change even an admittedly valid stipulation between
the parties regarding attorney’s fees is conceded. The high standards
of the legal profession as prescribed by law and the Canons of
Professional Ethics regulate if not limit the lawyer’s freedom in
fixing his professional fees. The moment he takes his oath, ready to
undertake his duties first, as a practitioner in the exercise of his
profession, and second, as an officer of the court in the administration
of justice, the lawyer submits himself to the authority of the court. It
becomes axiomatic therefore, that power to determine the
reasonableness or the unconscionable character of attorney’s fees
stipulated by the parties is a matter falling within the regulatory x x x
prerogative of the courts (Panay Electric Co., Inc. v. Court of
Appeals, 119 SCRA 456 [1982]; De Santos v. City of Manila, 45
SCRA 409 [1972]; Rolando v. Luz, 34 SCRA 337 [1970]; Cruz v. It is my client’s fervent wish and desire that your client will favorably
Court of Industrial Relations, 8 SCRA 826 [1963]). And this Court consider our proposal to, satisfy their respective claims and interests.
has consistently ruled that even with the presence of an agreement
between the parties, the court may nevertheless reduce attorney’s fees x x x
though fixed in the contract when the amount thereof appears to be
unconscionable or unreasonable (Borcena v. Intermediate Appellate
Court, 147 SCRA 111 [1987]; Mutual Paper Inc. v. Eastern Scott 2. Reply of Atty. Cabarroguis of even date: 11
Paper Co., 110 SCRA 481 [1981]; Gorospe v. Gochango, 106 Phil.
425 [1959]; Turner v. Casabar, 65 Phil. 490 [1938]; F.M. Yap Tico & "Atty. R. Taa-san
Co. v. Alejano, 53 Phil. 986 [1929]). For the law recognizes the
validity of stipulations included in documents such as negotiable Brgly Bldg. Davao City
instruments and mortgages with respect to attorney’s fees in the form
of penalty provided that they are not unreasonable or unconscionable Re: Your letter (Roldan Case) can we meet over coffee tomorrow at
(Philippine Engineering Co. v. Green, 48 Phil. 466)." 7 (Emphasis JALTAN Coffee Shop along A. Pichon St? Please confirm.
supplied)
Regards.
Before We proceed any further, it is worthwhile recalling what
Polytrade v. Blanco 8 has to say on the matter of attorney’s fees, to H Cabarroguis
wit:jgc:chanrobles.com.ph
11-16-90"
"To be borne in mind is that the attorneys’ fees here provided is not,
strictly speaking, the attorneys’ fees recoverable as between attorney 3. Letter of Atty. Ta-asan to petitioner Marietta A. Roldan dated
and client spoken of and regulated by the Rules of Court. Rather, the November 17, 1990: 12
attorneys’ fees here are in the nature of liquidated damages and the
stipulation therefor is aptly called a penal clause. It has been said that "MRS. MARIETTA A. ROLDAN
so long as such stipulation does not contravene law, morals, or public
order, it is strictly binding upon defendant. The attorney’s fees so MacArthur Highway, Matina,
provided are awarded in favor of the litigant, not his counsel. It is the
litigant, not counsel, who is the judgment creditor entitled to enforce Davao City, Philippines
the judgment by execution." 9 (Emphasis supplied)chanrobles virtual
lawlibrary
Dear Mrs. Roldan,
Private respondent’s counsel must have forgotten this as evident from
I wish to inform you of the outcome of my conference with Atty.
the following exchange of letters between the parties, as
Honesto A. Cabarroguis, legal counsel of the Commercial Credit
follows:chanrob1es virtual 1aw library
Corporation (CCC), last Saturday November 17, 1990. During the
conference, we made known to Atty. Cabarroguis your previous
1. Letter of Atty. Ta-asan to Atty. Cabarroguis dated November 16,
proposal which I laid down in writing. However, Atty. Cabarroguis
1990: 10
suggested some modifications. He has made the following
proposal:chanroblesvirtualawlibrary
"ATTY. HONESTO A. CABARROGUIS

Hacalex Bldg., Brokenshire x x x

Complex, A. Pichon St.,

2. The attorney’s fees of Atty. Cabarroguis has not been altered. He is
Davao City, Philippines to be paid the full amount of P577,320.20 with P100,000.00 as initial
downpayment. The remaining balance can be paid in installments.
Dear Atty. Cabarroguis, You can make a proposal as to when you can fully satisfy his fees
provided that you put up either a surety bond or real property located
Greetings:chanrob1es virtual 1aw library in Davao City commensurate to the amount of your obligation;"

This is with reference to CA-G.R. CV No. 15939 entitled x x x

Commercial Credit Corporation of Davao v. Ernesto F. Roldan and
Marietta A. Roldan. My client, Mr. & Mrs. Roldan, have sought my
intercession instructing me to present to you a proposal to amicably 4. Letter of Atty. Cabarroguis to Atty. Ta-asan dated November 29,
settle the above entitled case. 1990: 13

My client wishes to make the following proposal:chanrob1es virtual "Atty. Rodolfo Ta-asan, Jr.
1aw library
Davao City
x x x
Re: CCC of Davao v. Ernesto

2. To pay P50,000.00 pesos cash downpayment and balance with real Roldan, et. als.
properties located in M’lang, Cotabato, Philippines, to be paid to the
plaintiff’s counsel for his attorney’s fees and other legal fees. Dear Atty. Ta-asan,

Further to our conference yesterday afternoon and previous ones in
connection with captioned case, I just came back from the office of
the Register of Deeds of Davao City where I checked the partial list
of 334-titles in the name of Marietta A. Roldan which was furnished
me by said office and which I showed you yesterday.
x x x
May I suggest that the amount of One Hundred Thousand
(P100,000.00) which is ready and available be paid to me
immediately by your clients, in partial payment of my fees from them
and from my client. In turn, I could do a lot to help them get the
waivers they are requesting from my clients through me. However,
with all of these lots available in Davao City to be levied upon on
execution or to be the subject-matter of your proposed settlement, we
shall in the meantime, disregard their offer of lots in M’lang to settle
an otherwise favorable judgment already by the Court of
Appeals."cralaw virtua1aw library
x x x The provision for payment of the legal services reads:
Private respondent’s counsel’s glaring cupidity is beyond Us. It could
be that private respondent might have contracted with its counsel that
the latter would get the 25% attorney’s fees stipulated in the
promissory note as his attorney’s fees. 14 The record however, does
not show such an agreement. But even if this were so, it is no excuse
for Atty. Cabarroguis, private respondent’s counsel, to act in such a
manner as to evoke disgust from non-members of the Bar.
A lawyer is to uphold the integrity and dignity of the legal profession
15 and one who acts like a middleman always out on grabs for what
he can get certainly lessens the dignity of the legal profession.
The trial court found:jgc:chanrobles.com.ph
"4. That one of the terms of Promissory Note is that in case of
litigation, ‘. . .the makers and indorsers shall in addition pay 25% of
the amount due as attorney’s fees and 33 1/3 more of the principal
due and unpaid as liquidated damages . . .’ (Exh. "F-2")"
Twenty-five (25%) percent of the balance of the Promissory Note due
which the trial court pegged at P579,576.13 is P579.576.13 x 0.25 =
P144,894.03, which amount would be due the private respondent —
NOT its counsel — as attorney’s fees. It is clear that the liquidated
damages and other charges are not to be included for computation of
the attorney’s fees. The reason why respondent’s counsel came up
with his attorney’s fees of P577,320.20 is that he erroneously added
the liquidated damages and other charges and interests due to the
balance of the promissory note to get the total due to which he
applied the 25% stipulated fee.
WHEREFORE, in view of the foregoing, this Petition is partially
granted. The private respondent is hereby AWARDED attorney’s
fees in the amount of ONE HUNDRED FORTY FOUR
THOUSAND, EIGHT HUNDRED NINETY FOUR PESOS AND
THREE CENTAVOS (P144,894.03). The other awards of the trial
court, as affirmed by the respondent Court of Appeals, are hereby
RETAINED.
SO ORDERED.
8.) G.R. No. 160334 September 11, 2006
GUENTER BACH, petitioner,
vs.
ONGKIKO KALAW MANHIT & ACORDA LAW OFFICES,
respondent.
DECISION
CHICO-NAZARIO, J.:
This Petition for Review on Certiorari seeks to reverse the Decision1
dated 8 October 2003 of the Court of Appeals in CA-G.R. CV No.
74445, entitled, "Ongkiko Kalaw Manhit & Accorda Law Offices v.
Guenter Bach."
The facts as culled from the records of the case are as follows:
On 7 November 1994, petitioner Guenter Bach engaged the services
of respondent law firm Ongkiko Kalaw Manhit & Accorda Law
Offices to represent him in a Petition for Declaration of Nullity of
Marriage filed before the Regional Trial Court (RTC) of Makati City,
Branch 143, docketed as Civil Case No. 95-224. The parties signed a
"Fee Agreement," for the legal services to be rendered by respondent.
(a) seven and one-half (7 ½ % ) of all cash recoveries,
including damages, interests, attorney's fees and costs; as
well as
(b) five percent (5 %) of the market value of all properties
awarded to [the petitioner] by the court or obtained through
the compromise agreement, valued at the time of recovery. 2
However, on 5 December 1995, respondent withdrew its appearance
as counsel of petitioner, due to policy differences. On 18 December
1995, respondent sent the termination billing3 for the services they
rendered and billed petitioner the total amount of P1,000,000.00 plus
2% interest for every month of delay in payment, based on the
provision for termination of services stated in their Fee Agreement,
thus:
(C) Interest for late payment
All fees mentioned herein are payable within seven (7)
days from receipt of our statement of account. It is
understood that all late payments shall be subject to interest
payment at the rate of 2 % per month of delay, a fraction of
a month being considered as one month, counted from the
date the fees shall fall due, without need of prior demand.
xxxx
(F) Termination Clause
It is understood that you may terminate our services at any
time. In such an event, we shall be entitled to collect fees
for legal services already performed and results obtained
based on quantum meruit."4
On 7 March 1996, respondent filed with the RTC a Notice5 of
Charging Lien over the properties of the spouses Bach.
On 5 February 1997, the RTC issued an Order6 directing the
annotation of the charging lien in the amount of P1,000,000.00 on all
the titles of the spouses Bach's personal and real properties
enumerated in the notice of charging lien.
On 11 February 1999, respondent received a copy of the Order 7 dated
8 June 1998, granting petitioner's Motion to Withdraw his petition in
Civil Case No. 95-224.
Despite respondent's demands for his legal fees, petitioner failed and
refused to pay. Thus, respondent filed a Complaint 8 for a sum of
money also before the RTC of Makati, Branch 148, docketed as Civil
Case No. 99-514. Respondent prayed for the payment of the
following: P1,000,000.00 as the latter's lawful fees for services
rendered in Civil Case No. 95-224, plus 2% interest from date of final
demand until paid; P250,000.00 as exemplary damages; P200,000.00
representing billable time spent in prosecuting the case, plus another
P150,000.00 for any appeal taken; and P50,000.00 as litigation
expenses and the cost of suit.
Within the period for filing an Answer, petitioner filed a Motion9 to
dismiss on the ground that respondent's claim had already been paid,
waived, abandoned or otherwise extinguished. Petitioner contended
that prior to respondent's withdrawal as counsel in Civil Case No. 95-
224, petitioner had already paid respondent's services in the total
amount of P200,000.00. On 9 August 1999, the Motion to Dismiss
was denied10 by the RTC for lack of merit. Petitioner failed to file his
Answer; thus, he was declared in default and respondent was allowed
to present its evidence ex parte.11
On 24 January 2002, the RTC rendered its judgment in favor of the
respondent, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the plaintiff and against the defendant
and the latter is hereby ordered to pay the following:
1. The amount of P750,000.00 as plaintiff's lawful fees for
services rendered under Civil Case No. 95-224, plus
interest at the rate of 2% per month from the date of
demand until paid;
2. P700,000.00 representing billable time which was spent
in prosecuting this case;
3. P50,000.00 as and litigation expenses, and
4. Costs of suit.12
Not satisfied, petitioner appealed to the Court of Appeals, which
modified the RTC Decision, thus:
WHEREFORE, Based on the foregoing premises, the
instant appeal is PARTLY GRANTED and the appealed
January 24, 2002 Decision of the Regional Trial Court of
Makati City-Branch 148 in Civil Case No. 99-514 is hereby
MODIFIED. Accordingly, the award of P700,000.00
representing billable time allegedly spent in the prosecution
of the case a quo is hereby DELETED. All other aspects of
the appealed DECISION are UPHELD.13
Hence, this Petition filed by petitioner Guenter Bach raising the
following issues to wit:
WHETHER OR NOT UNDER THE CONCEPT OF
QUANTUM MERUIT, THE AMOUNT OF P750,000.00
AS FEES FOR SERVICES RENDERED WITH
INTEREST PEGGED AT 2% A MONTH FROM DATE
OF DEMAND UNTIL FULLY PAID IS REASONABLE
WHETHER OR NOT THERE IS LEGAL BASIS TO
AWARD P50,000.00 AS AND FOR LITIGATION
EXPENSES AND COSTS OF SUIT.14
On the first issue, petitioner contends that the P750,000.00 awarded
to the respondent by way of quantum meruit, with interest of 2% a
month from date of demand until fully paid, is excessive,
unreasonable and confiscatory. Thus, petitioner prays for reduction of
the same.
Both the Court of Appeals and the trial court approved the attorney's
fees in the total amounts of P750,000.00 plus 2 % interest for the
services rendered by respondent in Civil Case No. 95-224. In this
regard, the rule is that the issue of the reasonableness of attorney's
fees based on quantum meruit is a question of fact, and well-settled is
the rule that conclusions and findings of fact by the lower courts are
entitled to great weight on appeal and will not be disturbed except for
strong and cogent reasons. The findings of the Court of Appeals by
itself, which are supported by substantial evidence, are almost
beyond the power of review by the Supreme Court. 15 Thus, in the
exercise of the Supreme Court's power of review the findings of facts
of the Court of Appeals are conclusive and binding on the Supreme
Court. There are, however, recognized exceptions to this rule,
namely: (1) when the findings are grounded entirely on speculation,
surmises or conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is grave abuse of
discretion; (4) when the judgment is based on misapprehension of
facts; (5) when the findings of facts are conflicting; (6) when in
making the findings the Court of Appeals went beyond the issues of
the case, or its findings are contrary to the admissions of both the
appellee and the appellant; (7) when the findings are contrary to the
trial court; (8) when the findings are conclusions without citation of
specific evidence on which they are based; (9) when the facts set
forth in the petition as well as in the petitioner's main and reply briefs
are not disputed by the respondent; (10) when the findings of facts
are premised on the supposed absence of evidence and contradicted
by the evidence on record; and (11) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the
parties, which if properly considered, would justify a different
conclusion.16 Exceptions (4) and (11) are present in the case at bar,
and so this Court shall make its own determination of the facts
relevant for the resolution of the case.
Ordinarily, therefore, we would have remanded this case for further
reception of evidence as to the extent and value of the services
rendered by respondent to petitioner. However, so as not to
needlessly prolong the resolution of a comparatively simple
controversy, we deem it just and equitable to fix in the present
recourse a reasonable amount of attorney's fees in favor of
respondent.
There are two concepts of attorney's fees. In the ordinary sense,
attorney's fees represent the reasonable compensation paid to a
lawyer by his client for the legal services rendered to the latter. On
the other hand, in its extraordinary concept, attorney's fees may be
awarded by the court as indemnity for damages to be paid by the
losing party to the prevailing party.17
The issue in this case concerns attorney's fees in the ordinary
concept. Generally, the amount of attorney's fees due is that
stipulated in the retainer agreement which is conclusive as to the
amount of the lawyer's compensation. In the absence thereof, the
amount of attorney's fees is fixed on the basis of quantum meruit, i.e.,
the reasonable worth of the attorney's services. Courts may ascertain
also if the attorney's fees are found to be excessive, what is
reasonable under the circumstances.18 In no case, however, must a
lawyer be allowed to recover more than what is reasonable, pursuant
to Section 24, Rule 138 of the Rules of Court, which provides:
SEC. 24. Compensation of attorney's fees; 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. (Underscoring supplied.)
We have identified the circumstances to be considered in determining
the reasonableness of a claim for attorney's fees as follows: (1) the
amount and character of the service rendered; (2) labor, time, and
trouble involved; (3) the nature and importance of the litigation or
business in which the services were rendered; (4) the responsibility
imposed; (5) the amount of money or the value of the property
affected by the controversy or involved in the employment; (6) the
skill and experience called for in the performance of the services; (7)
the professional character and social standing of the attorney; (8) the
results secured; and (9) whether the fee is absolute or contingent, it
being recognized that an attorney may properly charge a much larger
fee when it is contingent than when it is not.19
Rule 20.1, Canon 20 of the Code of Professional Responsibility
enumerates the following factors which should guide a lawyer in
determining his fees:
(a) the time spent and extent of services rendered or
required;
(b) the novelty and difficulty of the questions involved;
(c) the importance of the subject matter;
(d) the skill demanded;
(e) the probability of losing other employment as a result of
the acceptance of the proffered case;
(f) the customary charges for similar services and the
schedule of fees of the IBP Chapter to which he belongs;
(g) the amount involved in the controversy and the benefits
resulting to the client from the service;
(h) the contingency or certainty of compensation;
(i) the character of the employment, whether occasional or
established; and
(j) the professional standing of the lawyer.
In determining a reasonable fee to be paid to respondent as
compensation for their services on quantum meruit, based
on the factors abovequoted, it is proper to consider all the
facts and circumstances obtaining in this case.
It is undisputed that respondent firm had rendered services as counsel
for the petitioners in Civil Case No. 95-244. The services rendered
consist of the following:
1. Respondent was able to annotate a notice20 of lis pendens
on the property of Spouses Bach in Caloocan City covered
by TCT No. C-12112, thereby preventing easy disposition
of the property by Luzviminda Bach;
2. Respondent was likewise able to annotate a notice21 of
lis pendens on the property of Spouses Bach in Pasig City
covered by TCT No. 48223, thereby preventing disposition
of the property by Luzviminda Bach;
3. Further, respondent annotated a notice22 of lis pendens
on the property of Spouses Bach in Dasmarinas, Cavite
covered by TCT No. T-339282, thereby preventing
disposition of the property by Luzviminda Bach;
4. Additionally, respondent annotated a notice23 of lis
pendens on the property of Spouses Bach in Tanza, Cavite,
covered by TCT No. T-255263, thereby preventing
disposition of the property by Luzviminda Bach;
5. Respondent also worked on the annotation of the notice24
of lis pendens on the property of Spouses Bach in Makati,
covered by TCT No. S-62541, thereby preventing
disposition of the property by Luzviminda Bach;
6. Respondent worked on the annotation of a notice of lis
pendens on the property of Spouses Bach in Dasmariñas,
Cavite, covered by TCT No. T-380848, thereby preventing
disposition of the property by Luzviminda Bach;
7. Respondent annotated a notice25 of lis pendens on the
property of Spouses Bach situated in Tagaytay City,
covered by TCT No. P-705, thereby preventing disposition
of the property by Luzviminda Bach;
8. Respondent filed the Petition26 for Declaration of Nullity
of Marriage and Dissolution of the Conjugal Partnership of
Gains of petitioner with his wife;
9. Respondent prepared an affidavit27 in favor of petitioner
attesting to the fact of petitioner's marriage and their
properties acquired during his marriage with Luzviminda
Bach:
10. Respondent prepared an ex parte motion28 to declare
petitioner's wife to have waived her right to file answer for
failure to file the same within the period granted by law and
to direct the public prosecutor to determine whether or not
a collusion exist;
11. Respondent prepared a Petition29 for appointment of a
receiver and to compel petitioner's wife to render an
accounting;
12. Other services included the filling of several
oppositions30 to certain motions filed by petitioner's wife;
13. Respondent filed a motion31 to set the case for
preliminary investigation;
 14. Respondent filed an ex parte motion32 to declare
petitioner's wife in default;
15. Respondent submitted a supplemental comment33 on
the motion for leave to withdraw funds from Certificate of
Participation filed by petitioner's wife;
16. Respondent filed a manifestation and motion34 praying
the court to direct petitioner's wife to designate her lead
counsel in the case;
17. Respondent prepared a Reply35 to comments on
opposition of petitioner;
18. Respondent was able to secure an Order36 from the said
court freezing the United Coconut Planters Bank (UCPB)
account in the name of petitioner's wife, Luzviminda Bach,
containing about P6,500,000.00, representing the balance
of the proceeds from the sale of their conjugal property in
Pasig City;
19. Respondent represented petitioner in numerous
hearings in Civil Case No. 95-224, evidenced by the
signatures of the lawyers of respondent Law Firm in the
minutes dated 25 April 1995, 27 April, 1995, 14 June 1995,
27 June 1995, 1 August 1995, 11 August 1995, 22
September 1995,10 October 1995, 17 October 1995, 1
December 1995, 7 December 1995, 29 March 1996 and 16
January 1997;37
20. Conducted several preliminary and post litigation
conferences in the proceedings for preliminary injunction
leading to the freezing of the bank account of the parties;
and
21. Prepared and sent out numerous letters to third parties
and entities to protect the interest of petitioner and notices
to petitioner updating him of the status of the case and the
courses of action taken by respondent Law Firm.38
In sum, the services rendered by the respondent as enumerated above
and as admitted39 by Atty. Mario Ongkiko during the ex parte
hearing, consist of annotating notice of lis pendens on the conjugal
properties of petitioner and his wife; filing the Petition for
Declaration of Nullity of Marriage; preparing and filing various
pleadings and documents relevant to the case; obtaining a freeze
order of petitioner's funds in the UCPB; attending hearings in Civil
Case No. 05-224, and sending notices to petitioner updating the latter
of the status of the case. Nothing in Civil Case No. 95-224 so far
appears complicated and no extra ordinary skill was needed for
lawyers of respondent Law Firm to accomplish what they had done in
the case before they withdrew their appearance. We do not find
herein a situation so intricate that demands more than a careful
scrutiny of the legal matters involved. These are simply the normal
duties of a lawyer that he is bound by law to render to his clients with
utmost fidelity for which his client must not be burdened to pay an
extra price. It bears stressing that at the time respondent firm
withdrew their appearance due to policy differences with petitioner,
the case was still in its initial stage.
Guided by the above yardstick and so much of the pertinent data as
are extant in the records of this case and in the exercise of our sound
discretion, we hold that the amount of P500,000.00 is a reasonable
and fair compensation for the legal services rendered by respondent
to the petitioner.
The imposition of legal interest on the amount payable to private
respondent as attorney's fees is unwarranted. Even as we agree that
parties can freely stipulate on the terms of payment, still the
imposition of interest in the payment of attorney's fees is not
justified. In the case of Cortes v. Court of Appeals,40 we ruled that
Article 220941 of the Civil Code does not even justify the imposition
of legal interest on the payment of attorney's fees as it is a provision
of law governing ordinary obligations and contracts. It deleted the
6% interest imposed by the appellate court on the payment of
attorney's fees. It ratiocinated by citing Mambulao Lumber Co. v.
Philippine National Bank,42 thus:
Contracts for attorney's services in this jurisdiction
stands upon an entirely different footing from contracts
for the payment of compensation for any other services.
x x x [A]n attorney is not entitled in the absence of express
contract to recover more than a reasonable compensation
for his services; and even when an express contract is
made, the court can ignore it and limit the recovery to
reasonable compensation if the amount of the stipulated fee
is found by the court to be unreasonable. This is a very
different rule from that announced in section 1091 of the
Civil Code with reference to the obligation of contracts in
general, where it is said that such obligation has the force
of law between the contracting parties. Had the plaintiff
herein made an express contract to pay his attorney an
uncontingent fee of P2,115.25 for the services to be
rendered in reducing the note here in suit to judgment, it
would not have been enforced against him had he seen fit
to oppose it, as such a fee is obviously far greater than is
necessary to remunerate the attorney for the work involved
and is therefore unreasonable. In order to enable the court
to ignore an express contract for attorney's fees, it is
necessary to show, as in other contracts, that it is
contrary to morality or public policy (Art.1255, Civil
Code). It is enough that it is unreasonable or
unconscionable. (Emphases supplied.)
We have held that lawyering is not a moneymaking venture and
lawyers are not merchants.43 Law advocacy, it has been stressed, is
not capital that yields profits. The returns it births are simple rewards
for a job done or service rendered. It is a calling that, unlike
mercantile pursuits which enjoy a greater deal of freedom from
governmental interference, is impressed with a public interest, for
which it is subject to State regulation.44
A lawyer is not merely the defender of his client's cause and a trustee
of his client's cause of action and assets; he is also, and first and
foremost, an officer of the court and participates in the fundamental
function of administering justice in society.45 It follows that a
lawyer's compensation for professional services rendered are subject
to the supervision of the court, not just to guarantee that the fees he
charges and receives remain reasonable and commensurate with the
services rendered, but also to maintain the dignity and integrity of the
legal profession to which he belongs. Upon taking his attorney's oath
as an officer of the court, a lawyer submits himself to the authority of
the courts to regulate his right to charge professional fees.46
Though we reduced the award of attorney's fees and disallowed the
imposition of interest thereon, the fact that an attorney plays a vital
role in the administration of justice underscores the need to secure to
him his honorarium lawfully earned as a means to preserve the
decorum and respectability of the legal profession. A lawyer is as
much entitled to judicial protection against injustice, imposition of
fraud on the part of his client as the client against abuse on the part of
his counsel. The duty of the court is not alone to see that a lawyer
acts in a proper and lawful manner; it is also its duty to see that a
lawyer is paid his just fees. With his capital consisting only of his
brains and with his skill acquired at tremendous cost not only in
money but in expenditure of time and energy, he is entitled to the
protection of any judicial tribunal against any attempt on the part of
his client to escape payment of his just compensation. It would be
ironic if after putting forth the best in him to secure justice for his
client, he himself would not get his due.47
Thus, the Court of Appeals did not err in awarding expenses of
litigation. Article 2208, paragraphs 2, 5 and 11, of the Civil Code,
authorize the recovery of such fees "(2) When the defendant's act or
omission has compelled the plaintiff to litigate x x x or to incur
expenses to protect his interest; x x x (5) Where the defendant acted
in gross and evident bad faith in refusing to satisfy the plaintiff's
plainly valid, just and demandable claim; x x x and (11) In any other
case where the court deems it just and equitable that attorney's fees
and expenses of litigation should be recovered." Considering the fact
that respondent was drawn into this litigation by petitioner to protect
and defend their interest and taking into account the services already
rendered by respondent to petitioner, the sum of P30,000.00 as
expenses of litigation and cost of suit would be reasonable under the
premises.
WHEREFORE, the Decision appealed from is AFFIRMED WITH
MODIFICATIONS to the effect that the attorney's fees awarded to
respondent is REDUCED to P500,000.00, the legal interest of 2% on
the amount due to respondent is DELETED, and the award of
litigation expenses is REDUCED to P30,000.00.
SO ORDERED.
9.) G.R. No. 183385 February 13, 2009
EVANGELINA MASMUD (as substitute complainant for
ALEXANDER J. MASMUD), Petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (First
Division) and ATTY. ROLANDO B. GO, JR., Respondents.
RESOLUTION
NACHURA, J.:
Before the Court is a petition for review on certiorari1 assailing the
Decision2 dated October 31, 2007 and the Resolution dated June 6,
2008 of the Court of Appeals (CA) in CA-G.R. SP No. 96279.
The facts of the case are as follows:
On July 9, 2003, Evangelina Masmud’s (Evangelina) husband, the
late Alexander J. Masmud (Alexander), filed a complaint 3 against
First Victory Shipping Services and Angelakos (Hellas) S.A. for non-
payment of permanent disability benefits, medical expenses, sickness
allowance, moral and exemplary damages, and attorney’s fees.
Alexander engaged the services of Atty. Rolando B. Go, Jr. (Atty.
Go) as his counsel.
In consideration of Atty. Go’s legal services, Alexander agreed to pay
attorney’s fees on a contingent basis, as follows: twenty percent
(20%) of total monetary claims as settled or paid and an additional
ten percent (10%) in case of appeal. It was likewise agreed that any
award of attorney’s fees shall pertain to respondent’s law firm as
compensation.
On November 21, 2003, the Labor Arbiter (LA) rendered a Decision
granting the monetary claims of Alexander. The dispositive portion
of the decision, as quoted in the CA Decision, reads:
WHEREFORE, foregoing considered, judgment is rendered finding
the [First Victory Shipping Services and Angelakos (Hellas) S.A.]
jointly and severally liable to pay [Alexander’s] total permanent
disability benefits in the amount of US$60,000.00 and his sickness
allowance of US$2,348.00, both in Philippine currency at the
prevailing rate of exchange at the time of payment; and to pay further
the amount of ₱200,000.00 as moral damages, ₱100,000.00 as
exemplary damages and attorney’s fees equivalent to ten percent
(10%) of the total monetary award.
[Alexander’s] claim for payment of medical expenses is dismissed
for lack of basis.
SO ORDERED.4
Alexander’s employer filed an appeal before the National Labor
Relations Commission (NLRC). During the pendency of the
proceedings before the NLRC, Alexander died. After explaining the
terms of the lawyer’s fees to Evangelina, Atty. Go caused her
substitution as complainant. On April 30, 2004, the NLRC rendered a
Decision dismissing the appeal of Alexander’s employer. The
employer subsequently filed a motion for reconsideration. The NLRC
denied the same in an Order dated October 26, 2004.
On appeal before the CA, the decision of the LA was affirmed with
modification. The award of moral and exemplary damages was
deleted.5 Alexander’s employers filed a petition for certiorari6 before
this Court. On February 6, 2006, the Court issued a Resolution
dismissing the case for lack of merit.
Eventually, the decision of the NLRC became final and executory.
Atty. Go moved for the execution of the NLRC decision, which was
later granted by the LA. The surety bond of the employer was
garnished. Upon motion of Atty. Go, the surety company delivered to
the NLRC Cashier, through the NLRC Sheriff, the check amounting
to ₱3,454,079.20. Thereafter, Atty. Go moved for the release of the
said amount to Evangelina.
On January 10, 2005, the LA directed the NLRC Cashier to release
the amount of ₱3,454,079.20 to Evangelina. Out of the said amount,
Evangelina paid Atty. Go the sum of ₱680,000.00.
Dissatisfied, Atty. Go filed a motion to record and enforce the
attorney’s lien alleging that Evangelina reneged on their contingent
fee agreement. Evangelina paid only the amount of ₱680,000.00,
equivalent to 20% of the award as attorney’s fees, thus, leaving a
balance of 10%, plus the award pertaining to the counsel as attorney’s
fees.
In response to the motion filed by Atty. Go, Evangelina filed a
comment with motion to release the amount deposited with the
NLRC Cashier. In her comment, Evangelina manifested that Atty.
Go’s claim for attorney’s fees of 40% of the total monetary award
was null and void based on Article 111 of the Labor Code.
On February 14, 2005, the LA issued an Order7 granting Atty. Go’s
motion, the fallo of which reads:
WHEREFORE, premises considered, and further considering the
substitute complainant’s initial payment of 20% to movant-counsel of
the monetary claims as paid, let the balance or unpaid twenty (20%)
per cent of attorney’s fees due movant-counsel (or the amount of
₱839,587.39) be recorded as lien upon all the monies that may still be
paid to substitute complainant Evangelina Masmud.
Accordingly, the NLRC Cashier is directed to pay movant-counsel
the amount of ₱677,589.96 which is currently deposited therein to
partially satisfy the lien.
SO ORDERED.8
Evangelina questioned the February 14, 2005 Order of the LA before
the NLRC. On January 31, 2006, the NLRC issued a Resolution 9
dismissing the appeal for lack of merit.
Evangelina then elevated the case to the CA via a petition for
certiorari.10 On October 31, 2007, the CA rendered a Decision11
partially granting the petition. The dispositive portion of the decision
reads:
WHEREFORE, the petition is PARTIALLY GRANTED. The
Resolutions dated January 31, 2006 and July 18, 2006 are hereby
AFFIRMED with MODIFICATION in that the Attorney’s fees of
respondent Atty. Rolando B. Go, Jr. is declared fully compensated by
the amount of ₱1,347,950.11 that he has already received.
SO ORDERED.12
Evangelina filed a motion for reconsideration. However, on June 6,
2008, the CA issued a Resolution13 denying the motion for
reconsideration for lack of merit.
Hence, the instant petition.
Evangelina presented this issue, viz.:
THE COURT OF APPEALS COMMITTED SERIOUS AND
REVERSIBLE ERROR OF LAW IN ITS DECISION DATED 31
OCTOBER 2007 AND RESOLUTION DATED 6 JUNE 2008
INSOFAR AS IT UPHOLDS RESPONDENT LAWYER’S CLAIM
OF FORTY PERCENT (40%) OF THE MONETARY AWARD IN
A LABOR CASE AS ATTORNEY’S FEES.14
In effect, petitioner seeks affirmance of her conviction that the legal
compensation of a lawyer in a labor proceeding should be based on
Article 111 of the Labor Code.
There are two concepts of attorney's fees. In the ordinary sense,
attorney's fees represent the reasonable compensation paid to a
lawyer by his client for the legal services rendered to the latter. On
the other hand, in its extraordinary concept, attorney's fees may be
awarded by the court as indemnity for damages to be paid by the
losing party to the prevailing party,15 such that, in any of the cases
provided by law where such award can be made, e.g., those
authorized in Article 2208 of the Civil Code, the amount is payable
not to the lawyer but to the client, unless they have agreed that the
award shall pertain to the lawyer as additional compensation or as
part thereof.16
Here, we apply the ordinary concept of attorney’s fees, or the
compensation that Atty. Go is entitled to receive for representing
Evangelina, in substitution of her husband, before the labor tribunals
and before the court.
Evangelina maintains that Article 111 of the Labor Code is the law
that should govern Atty. Go’s compensation as her counsel and
assiduously opposes their agreed retainer contract.
Article 111 of the said Code provides:
ART. 111. Attorney's fees. — (a) In cases of unlawful withholding of
wages the culpable party may be assessed attorney's fees equivalent
to ten percent of the amount of the wages recovered.1avvphi1.zw+
Contrary to Evangelina’s proposition, Article 111 of the Labor Code
deals with the extraordinary concept of attorney’s fees. It regulates
the amount recoverable as attorney's fees in the nature of damages
sustained by and awarded to the prevailing party. It may not be used
as the standard in fixing the amount payable to the lawyer by his
client for the legal services he rendered.17
In this regard, Section 24, Rule 138 of the Rules of Court should be
observed in determining Atty. Go’s compensation. The said Rule
provides:
SEC. 24. Compensation of attorney's; 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.18
The retainer contract between Atty. Go and Evangelina provides for a
contingent fee. The contract shall control in the determination of the
amount to be paid, unless found by the court to be unconscionable or
unreasonable.19 Attorney's fees are unconscionable if they affront
one's sense of justice, decency or reasonableness.20 The decree of
unconscionability or unreasonableness of a stipulated amount in a
contingent fee contract will not preclude recovery. It merely justifies
the fixing by the court of a reasonable compensation for the lawyer's
services.21
The criteria found in the Code of Professional Responsibility are also
to be considered in assessing the proper amount of compensation that
a lawyer should receive.1avvph¡1.zw+ Canon 20, Rule 20.01 of the
said Code provides:
CANON 20 — A LAWYER SHALL CHARGE ONLY FAIR AND
REASONABLE FEES.
Rule 20.01. — A lawyer shall be guided by the following factors in
determining his fees:
(a) The time spent and the extent of the services rendered
or required;
(b) The novelty and difficulty of the question involved;
(c) The importance of the subject matter;
(d) The skill demanded;
(e) The probability of losing other employment as a result
of acceptance of the proffered case;
 (f) The customary charges for similar services and the
schedule of fees of the IBP Chapter to which he belongs;
(g) The amount involved in the controversy and the
benefits resulting to the client from the service;
(h) The contingency or certainty of compensation;
(i) The character of the employment, whether occasional or
established; and
(j) The professional standing of the lawyer.
Contingent fee contracts are subject to the supervision and close
scrutiny of the court in order that clients may be protected from
unjust charges.22 The amount of contingent fees agreed upon by the
parties is subject to the stipulation that counsel will be paid for his
legal services only if the suit or litigation prospers. A much higher
compensation is allowed as contingent fees because of the risk that
the lawyer may get nothing if the suit fails.23 The Court finds nothing
illegal in the contingent fee contract between Atty. Go and
Evangelina’s husband. The CA committed no error of law when it
awarded the attorney’s fees of Atty. Go and allowed him to receive
an equivalent of 39% of the monetary award.
The issue of the reasonableness of attorney's fees is a question of fact.
Well-settled is the rule that conclusions and findings of fact of the
CA are entitled to great weight on appeal and will not be disturbed
except for strong and cogent reasons which are absent in the case at
bench. The findings of the CA, which are supported by substantial
evidence, are almost beyond the power of review by the Supreme
Court.24
Considering that Atty. Go successfully represented his client, it is
only proper that he should receive adequate compensation for his
efforts. Even as we agree with the reduction of the award of
attorney's fees by the CA, the fact that a lawyer plays a vital role in
the administration of justice emphasizes the need to secure to him his
honorarium lawfully earned as a means to preserve the decorum and
respectability of the legal profession. A lawyer is as much entitled to
judicial protection against injustice or imposition of fraud on the part
of his client as the client is against abuse on the part of his counsel.
The duty of the court is not alone to ensure that a lawyer acts in a
proper and lawful manner, but also to see that a lawyer is paid his just
fees. With his capital consisting of his brains and with his skill
acquired at tremendous cost not only in money but in expenditure of
time and energy, he is entitled to the protection of any judicial
tribunal against any attempt on the part of his client to escape
payment of his just compensation. It would be ironic if after putting
forth the best in him to secure justice for his client, he himself would
not get his due.25
WHEREFORE, in view of the foregoing, the Decision dated October
31, 2007 and the Resolution dated June 6, 2008 of the Court of
Appeals in CA-G.R. SP No. 96279 are hereby AFFIRMED.
SO ORDERED.
10.) [A.C. NO. 9259 - August 23, 2012]
JASPER JUNNO F. RODICA, Complainant, v. ATTY. MANUEL
"LOLONG" M. LAZARO, ATTY. EDWIN M. ESPEJO, ATTY.
ABEL M. ALMARIO, ATTY. MICHELLE B. LAZARO, ATTY.
JOSEPH C. TAN, and JOHN DOES, Respondents.
RESOLUTION
DEL CASTILLO, J.:
"The power to disbar or suspend ought always to be exercised on the
preservative and not on the vindictive principle, with great caution
and only for the most weighty reasons."1ςrνll
This is a Complaint2 for disbarment filed by Jasper Junno F. Rodica
(Rodica) against Atty. Manuel "Lolong" M. Lazaro (Atty. Manuel),
Atty. Edwin M. Espejo (Atty. Espejo), Atty. Abel M. Almario, (Atty.
Almario), Atty. Michelle B. Lazaro (Atty. Michelle), and Atty.
Joseph C. Tan (Atty. Tan) for gross and serious misconduct, deceit,
malpractice, grossly immoral conduct, and violation of the Code of
Professional Responsibility.
Factual Antecedents
On May 5, 2011, William Strong (Strong), an American, was arrested
and detained by the operatives of the Bureau of Immigration. Strong
sought the assistance of Philip3 G. Apostol (Apostol), a friend and
neighbor, to secure the services of a lawyer. Apostol referred him to
Atty. Manuel, who is a partner at the M.M. Lazaro and Associates
Law Office (Lazaro Law Office).
Atty. Manuel initially declined because his law office only handles
cases of its retained clients and those known to him or any of the
associate lawyers.4 However, he was eventually prevailed upon by
Apostol who would consider it as a special favor if Atty. Manuel
would handle Strong s case. Hence, Atty. Manuel, together with Atty.
Almario and Atty. Espejo, senior and junior associates, respectively,
at the Lazaro Law Office, agreed to meet Strong at the Taguig
Detention Center of the Bureau of Immigration.5ςrνll
During the meeting, Atty. Manuel explained to Strong the terms of
the Lazaro Law Office s engagement as well as the fees. Strong
assured him of his capacity to pay and offered to pay a success fee of
US$100,000.00 should the said law office be able to expedite his
release from detention as well as his departure from the Philippines.6
Finding Strong to be believable and trustworthy, Atty. Manuel agreed
to handle his case.7ςrνll
During the course of their meeting, Strong casually mentioned that he
has a property in Boracay and that he suspected his neighbors as the
persons who caused his arrest. According to Strong, his live-in
partner Rodica filed a Complaint before the Regional Trial Court
(RTC) of Kalibo, Aklan, for recovery of possession and damages8
(against Hillview Marketing Corporation9 (Hillview),
Stephanie Dornau (Dornau) as President of Hillview, the Alargo Park
Neighborhood Association, Inc. and spouses Robert and Judy
Gregoire) in connection with the 353-square meter property they
bought in Boracay. He disclosed that he and Rodica had been trying
to sell the Boracay property to rid themselves of the problems but
could not find buyers because of the said case. They even offered the
property to Apostol but the latter was hesitant because of the said
pending case. Atty. Manuel averred that towards the end of the
interview with Strong, Rodica arrived. Strong described Rodica as his
"handyman" who will act as his liaison in the case.
Upon inquiry with the Bureau of Immigration, it was discovered that
Strong s arrest was made pursuant to an Interpol Red Notice; and that
Strong is wanted in Brazil for Conspiracy to Commit Fraud, Setting
Up a Gang and Other Related Crimes. Specifically, Strong is being
indicted for his alleged involvement in "an international gang
involved in shares fraud which led to the creation of hundreds of
millions of dollars in illegal securities."10 Strong denied any
participation in the alleged crime. Strong then pleaded with Atty.
Manuel to expedite his deportation to any country except Brazil and
reiterated his willingness to pay the success fee of US$100,000.00.
In her Complaint, Rodica alleged that in one of her meetings with the
lawyers of the Lazaro Law Office, she hinted that Atty. Tan, a senior
partner at the Marcos Ochoa Serapio Tan and Associates (MOST
Law) and who is also the lawyer of Hillview and Dornau, was
instrumental in the immigration case of Strong. According to Rodica,
Atty. Manuel called up Atty. Tan. Thereafter, Atty. Manuel allegedly
informed Rodica that Atty. Tan admitted having initiated the
immigration case resulting in the detention of Strong; that Atty. Tan
threatened to do something bad against Rodica and her family; and
that Atty. Tan demanded for Rodica to withdraw the RTC case as
part of a settlement package.
On May 25, 2011, the Bureau of Immigration, rendered its
Judgment11 granting the motion of Strong to voluntarily leave the
country. On May 31, 2011, Strong left the Philippines. Subsequently,
or on June 6, 2011, Rodica filed with the RTC a motion effectively
withdrawing her complaint.
Rodica alleged that after the deportation of Strong and the withdrawal
of the RTC case, she heard nothing from the Lazaro Law Office. She
also claimed that contrary to her expectations, there was no
"simultaneous over-all settlement of her grievances x x x [with] the
defendants [in the RTC] case.12 Thinking that she was deceived,
Rodica filed the instant administrative case. In sum, she claimed
that:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
21. RESPONDENT ATTORNEYS (MANUEL, MICHELLE,
EDWIN and ABEL) of M.M. LAZARO & ASSOCIATES,
furthermore, committed GRAVE MISCONDUCT & DECEIT to
complainant and the courts when (among other
things):ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
(a.) they mis-represented to complainant that the withdrawal of her
case at the Regional Trial Court at Kalibo (Branch VI-Civil Case No.
8987) was only the first step in an over-all settlement package of all
her differences with her legal adversaries (i.e. Hillview Marketing
Corporation and the latter s officials / Stephanie Dornau / Atty.
Joseph Tan etc.), which respondent Manuel M. Lazaro had allegedly
already taken care of;
(b.) they extorted from her more than P7 MILLION for alleged
professional / legal fees and PENALTIES involved in William Strong
s immigration case, when what actually happened was -
(c.) as complainant came to know later, almost all of said amount was
allegedly used as "pay-off" to immigration, police and
Malaca[ñ]ang officials as well as Atty. Joseph Tan, and as graft
money / kotong / lagay / "tong-pats", for the expeditious approval of
Mr. William Strong s voluntary deportation plea with the Bureau of
Immigration;
(d.) they even shamelessly denied the status of the complainant as
their client, just so that they can evade their responsibility to her;
(e.) they even submitted concocted stories (re Mr. Apostol s purchase
bid for the Boracay villa of complainant; Atty. Espejo s attempt to
cover-up for Lolong Lazaro and accept sole responsibility for signing
the questioned manifestation and withdrawal documents last May 24,
2011, and many others) with the Regional Trial Court of Kalibo
(Branch VI) just so that they can hide the truth, hide their crimes and
go scot free;
chanrobles virtual law library
22. RESPONDENT Atty. JOSEPH C. TAN on the other hand
performed as a willing partner of ATTY. MANUEL M. LAZARO by
acting as conduit to his Malacañang patron ("JOHN DOE") in
causing the arrest of William Strong last May 5, 2011, and in
packaging with Lolong Lazaro of the magic formula regarding
William Strong s voluntary deportation bid and the conditions
attached thereto as sufficiently explained;
xxx
23. RESPONDENTS also violated THEIR OATH AS x x x
ATTORNEYS, especially with the phrases ". . . I will obey the laws .
. . I will do no falsehood, nor consent to the doing of any in court; . . .
I will delay no man for money or malice . . . with all good fidelity as
well to the courts as to my clients . . . ";13ςrνll
chanrobles virtual law library
Otherwise stated, Rodica claimed that she is a client of the Lazaro
Law Office and that she was deceived into causing the withdrawal of
the RTC case. Further, she claimed that the Lazaro Law Office
collected exorbitant fees from her.
In their Comment, Atty. Almario and Atty. Espejo admitted being
present in the May 13, 2011 meeting with Rodica. They denied,
however, that Atty. Manuel talked with Atty. Tan during the said
meeting, or conveyed the information that Atty. Tan and the group of
Dornau were the ones behind Strong s arrest and detention.
Atty. Almario and Atty. Espejo disputed Rodica s assertion that the
withdrawal of the RTC case was a condition sine qua non to Strong s
departure from the country. They pointed out that the Manifestation
with Motion to Withdraw Motion for Reconsideration 14 was filed
only on June 3, 2011,15 or nine days after the May 25, 2011 Judgment
of the Bureau of Immigration was issued, and three days after Strong
left the country on May 31, 2011. They insisted that Rodica withdrew
the RTC case because it was one of the conditions set by Apostol
before buying the Boracay property.
As to the preparation of Rodica s Motion to Withdraw Motion for
Reconsideration relative to the RTC case, Atty. Espejo claimed that
the former begged him to prepare the said motion. Since the two
already became close friends, Atty. Espejo accommodated Rodica s
request. He admitted to acceding to Rodica s requests to put the name
of the Lazaro Law Office, the names of its partners, as well as his
name, in the motion and into signing the same, without the prior
knowledge and consent of the other senior lawyers of the firm. Atty.
Espejo claimed that he did all of these out of his good intention to
help and assist Rodica in making the Boracay property more saleable
by freeing it from any pending claims.
In his Comment,16 Atty. Manuel contended that none of the lawyers
of the Lazaro Law Office communicated with Atty. Tan relative to
the deportation proceedings or the RTC case. He claimed that it was
highly improbable for the Lazaro Law Office to impress upon Rodica
that it will coordinate with Atty. Tan for the withdrawal of the RTC
case to expedite the deportation proceedings as the RTC case was
already dismissed as early as March 29, 2011 for failure to state a
cause of action. Atty. Manuel averred that the two cases are
incongruous with each other and one cannot be used to compromise
the other.
Atty. Joseph Tan s Arguments
For his part, Atty. Tan asserted that the allegations against him are
"double hearsay" because the same were based on information
allegedly relayed to Rodica by Atty. Manuel, who, in turn, allegedly
heard it from Atty. Tan.17 He denied any participation in the
withdrawal of the RTC case and the arrest and deportation of Strong.
Atty. Tan stressed that Strong was deported on May 31, 2011. Three
days thereafter, or on June 3, 2011, Rodica, with the assistance of her
counsel of record, Atty. Joan I. Tabanar-Ibutnande (Atty. Ibutnande),
filed the Manifestation with Motion to Withdraw Motion for
Reconsideration. He averred that if it is indeed true, as Rodica
alleged, that the filing of the said motion was a pre-condition to
Strong s voluntary deportation, then the filing of the same should
have preceded Strong s deportation. However, it was the reverse in
this case.
Atty. Tan also pointed out that it would be inconceivable for him to
participate in Strong s arrest as he had already obtained a favorable
ruling "on the merits" for his clients in the RTC case even before
Strong was arrested and incarcerated. Besides, Strong is not a party
and had nothing to do with the RTC case. Atty. Tan likewise denied
having any dealings with the rest of the respondents insofar as the
arrest and voluntary deportation of Strong are concerned. Neither did
he receive any phone call or message from his co-respondents nor did
he communicate with them in any manner regarding Strong s case.
Issue
The sole issue to be resolved is whether the allegations in Rodica s
Complaint merit the disbarment or suspension of Respondents.
Our Ruling
In Siao v. Atty. De Guzman, Jr.,18 this Court reiterated its oft repeated
ruling that in suspension or disbarment proceedings, lawyers enjoy
the presumption of innocence, and the burden of proof rests upon the
complainant to clearly prove her allegations by preponderant
evidence. Elaborating on the required quantum of proof, this Court
declared thus:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Preponderance of evidence means that the evidence adduced by one
side is, as a whole, superior to or has greater weight than that of the
other. It means evidence which is more convincing to the court as
worthy of belief than that which is offered in opposition thereto.
Under Section 1 of Rule 133, in determining whether or not there is
preponderance of evidence, the court may consider the following: (a)
all the facts and circumstances of the case; (b) the witnesses manner
of testifying, their intelligence, their means and opportunity of
knowing the facts to which they are testifying, the nature of the facts
to which they testify, the probability or improbability of their
testimony; (c) the witnesses interest or want of interest, and also their
personal credibility so far as the same may ultimately appear in the
trial; and (d) the number of witnesses, although it does not mean that
preponderance is necessarily with the greater number. (Citations
omitted.)
chanrobles virtual law library
In the absence of preponderant evidence, the presumption of
innocence of the lawyer continues and the complaint against him
must be dismissed.19ςrνll
In the present case, the totality of evidence presented by Rodica
failed to overcome the said presumption of innocence.
Rodica s claim of "settlement package"
is devoid of merit.
Rodica s assertions that Atty. Tan orchestrated Strong s arrest and
that Atty. Manuel proposed the withdrawal of the RTC case to
facilitate the deportation of Strong, are mere allegations without
proof and belied by the records of the case. "The basic rule is that
mere allegation is not evidence, and is not equivalent to proof."20
Aside from her bare assertions, Rodica failed to present even an iota
of evidence to prove her allegations. In fact, the records belie her
claims. The documents issued by the Bureau of Immigration showed
that Strong was the subject of the Interpol Red Notice for being a
fugitive from justice wanted for crimes allegedly committed in
Brazil.21 His warrant of arrest was issued sometime in February 2008.
Significantly, even before Strong was arrested and eventually
deported, Atty. Tan had already obtained a favorable judgment for his
clients.
We also agree that it is highly inconceivable for Atty. Tan and the
Lazaro Law Office to concoct the scheme of "pressuring" Rodica to
withdraw the RTC case for the purpose of expediting the deportation
proceedings of Strong. The following facts are undisputed: (1)
Rodica s counsel of record in the RTC is Atty. Ibutnande; (2) the
RTC case was already dismissed in the Order22 of March 29, 2011 for
failure to state a cause of action; (3) on April 18, 2011, Rodica
through her counsel of record filed a Motion for Reconsideration; (4)
on May 5, 2011, Strong was arrested and detained pursuant to an
Interpol Red Notice; (5) Strong hired the Lazaro Law Office to
handle his deportation case; (6) on May 19, 2011 Strong filed a
Manifestation with Omnibus Motion to voluntarily leave the country;
(7) the Bureau of Immigration rendered a Judgment23 dated May 25,
2011 granting Strong s motion to voluntarily leave the country; (8)
Strong left the country on May 31, 2011; (9) Rodica s Manifestation
with Motion to Withdraw the Motion for Reconsideration was filed
on June 6, 2011; and, (8) acting on the said Manifestation with
Motion, the RTC on June 14, 2011 issued an Order24 granting the
same.
Given the chronology of events, there appears no relation between
the deportation case and the withdrawal of the RTC case. Thus, it
would be specious if not far-fetched to conclude that the withdrawal
of the RTC case was a pre-condition to Strong s deportation.
As regards the alleged participation of Atty. Manuel in the
"settlement package" theory of Rodica, suffice it to say that Atty.
Manuel has in his favor "the presumption that, as an officer of the
court, he regularly performs the duties imposed upon him by his oath
as a lawyer and by the Code of Professional Responsibility."25 Hence,
absent any competent evidence to the contrary, Atty. Manuel, as
Strong s counsel, is presumed to have worked out the release and
subsequent deportation of his client in accordance with the proper
procedures.
Preponderance of evidence shows that
Rodica caused the withdrawal of the
RTC case to facilitate the sale of the
Boracay property to Apostol.
We cannot lend credence to Rodica s allegation that she was deceived
by Atty. Manuel, Atty. Espejo, Atty. Almario and Atty. Michelle,
another senior associate at the Lazaro Law Office, into believing that
the withdrawal of the RTC case was part of a settlement package to
settle her differences with her legal adversaries. We accord more
credence to the explanation of the respondents, particularly Atty.
Espejo, that in the course of rendering legal services to Strong, he had
become close to Rodica so much so that he accommodated Rodica s
request to cause the withdrawal of the RTC case to facilitate the sale
of the Boracay property to Apostol.
In their Joint Comment,26 respondents Attys. Almario, Espejo and
Michelle debunked the opinion of Rodica s "well-meaning lawyer
friends" that the withdrawal of the RTC case "absolve[d] all
defendants from any wrong-doing" and made "the contents of her
original complaint practically meaningless." Atty. Almario and Atty.
Espejo opined that since the dismissal of Rodica s complaint was
based on her failure to state a cause of action and without prejudice,
the same may simply be re-filed by revising her complaint and
ensuring that it states a cause of action.
As argued by Atty. Manuel, he and his lawyers only acted in the best
interest of their client Strong and rendered services in accordance
with the latter s objective of leaving the country and not being
deported to Brazil. The Lazaro Law Office cannot be faulted for the
dismissal of the RTC case because it had already been dismissed
even before the Lazaro Law Office was engaged to handle Strong s
immigration case. Besides, Rodica admittedly agreed to withdraw her
RTC case to meet Apostol s condition and to make the property
marketable.
Apostol corroborated Atty. Manuel s statement in his Affidavit 27 of
July 21, 2011. He affirmed that he told Rodica that he would only
consider purchasing the Boracay property if it is cleared of any
pending case so that he can protect himself, as a buyer, from any
possible issues that may crop up involving the said property.
According to him, Rodica assured him that she would work for the
termination of the RTC case and consult her lawyers in Boracay on
the matter so she could already sell the property.
It is difficult to imagine that Rodica was deceived by some of the
respondent lawyers into believing that the withdrawal of the RTC
case was only the initial step in the settlement of her differences with
her adversaries.28 We went over the said Manifestation with Motion
to Withdraw the Motion for Reconsideration29 and we note that
paragraph 6 thereof specifically
states:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
6. However, the Plaintiff respectfully manifests that after much
serious thought and deliberation, and considering the anxieties caused
by the pendency of the instant case, Plaintiff is no longer interested in
pursuing the case. Accordingly, Plaintiff respectfully moves for the
withdrawal of the Motion for Reconsideration dated April 14, 2011
of the Order dated March 29, 2011 dismissing the instant Complaint
filed on April 18, 2011.30ςrνll
chanrobles virtual law library
As already noted by the RTC, Branch 6, Kalibo, Aklan in its Order 31
dated April 4, 2011, in the case for recovery of possession with
damages:32ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
This Manifestation was signed by plaintiff, her Manila lawyers and
Atty. Joan Ibutnande, plaintiff s counsel on record. From the
statements made by plaintiff in her Manifestation to Withdraw
Motion for Reconsideration that she had made serious thoughts and
deliberation she cannot now say that she was manipulated and forced
in signing the same. The Court perceives plaintiff to be an intelligent
woman not to be swayed of her principles and beliefs and
manipulated by others, she may have a fickle mind when it comes to
other things but definitely it can not be applied to the Court.
The Court does not see the connection between the instant case and
that of William Strong as alleged by the plaintiff. Mr. Strong is not a
party in this case, even plaintiff s counsel thought so too. From the
Motion for Reconsideration filed by Atty. Joan Ibutnande, it was
stated in paragraph 5: "That the undersigned counsel was baffled as
she did not see any connection [between] the incident surrounding the
arrest of Mr. William Strong and the above-entitled case filed [by]
the [plaintiff], and told the plaintiff about it x x x." As Mr. Strong is
not a party in the instance case, his affairs whatever they are can not
dictate the outcome of this case.33ςrνll
chanrobles virtual law library
Moreover, it would appear from her own narration that Rodica is not
someone who is naïve or ignorant. In her complaint, she claimed to
be an astute businesswoman who even has some business in
Barcelona, Spain.34 Thus, the more reason we cannot lend credence
to her claim that she was tricked into believing that the withdrawal of
the RTC case was only preliminary to the complete settlement of all
her differences with her perceived adversaries. If such had been the
agreement, then a Compromise Agreement enumerating all the terms
and conditions should have been filed instead of the Manifestation
with Motion to Withdraw the Motion for Reconsideration. In
addition, the withdrawal should not have been limited to the RTC
case as it appears that there are other cases pending with other
tribunals and agencies35 involving the same parties. If Rodica is to be
believed, then these cases should likewise have been dismissed in
order to achieve the full and complete settlement of her concerns with
her adversaries.
From the above and by preponderance of evidence, it is clear that
Rodica s purpose in withdrawing the RTC case is to pave the way for
Apostol to purchase the Boracay property. In fact, Rodica eventually
executed a Deed of Absolute Sale in favor of Apostol over the
Boracay property.36ςrνll
Rodica s claim of paying more than P7
million to the Lazaro Law Office is not
substantiated.
There is likewise no merit in Rodica s allegation that the Lazaro Law
Office extorted from her more than P7 million for alleged
professional and legal fees and penalties relative to Strong s
immigration case. To support her claim, Rodica attached four
statements of account issued by the Lazaro Law Office for
US$2,650.00 under Statement of Account No. 13837,37 US$2,400.00
under Statement of Account No. 13838,38 US$1,550.00 under
Statement of Account No. 1383939 and US$8,650.00 under Statement
of Account No. 13835,40 or for a total amount of US$15,250.00. She
likewise presented photocopies of portions of her dollar savings
account passbook to show where the aforesaid funds came from.
Considering the prevailing exchange rate at that time, the Court notes
that the sum total of the abovementioned figures in its peso
equivalent is far less than P7 million. In fact, the statements of
account even support the contention of Atty. Manuel that Strong
failed to fully pay the amount of US$100,000.00 as success fee.
Anent the alleged withdrawals from Rodica s dollar savings account,
the same merely established that she made those withdrawals. They
do not constitute as competent proof that the amounts so withdrawn
were indeed paid to Lazaro Law Office.
Rodica was not the client of the Lazaro
Law Office.
Rodica also faulted the Lazaro Law Office lawyers for disclaiming
that she is their client. However, Rodica admitted in paragraph 5 of
her unnotarized Sworn Affidavit41 that Atty. Manuel and his lawyer-
assistants were "engaged by William Strong to handle his case with
the Philippine immigration authorities." Thus, this Court is more
inclined to believe that the Lazaro Law Office agreed to handle only
the deportation case of Strong and such acceptance cannot be
construed as to include the RTC case. In fact, all the billings of
Lazaro Law Office pertained to the immigration case, and not to the
RTC case. To reiterate, the RTC case has nothing to do with Strong s
deportation case. Records also show that the RTC case was filed long
before Strong was arrested and detained. In fact, it had already been
dismissed by the trial court long before Strong engaged the legal
services of the Lazaro Law Office. More importantly, Strong is not a
party to the RTC case. Also, the counsel of record of Rodica in the
RTC case is Atty. Ibutnande, and not the Lazaro Law Office. There is
nothing on record that would show that respondent Attys. Manuel,
Michelle, and Almario had any participation therein.
Atty. Espejo s participation in the RTC
case.
However, we cannot say the same as regards Atty. Espejo. He
admitted drafting Rodica s Manifestation and Motion to Withdraw
Motion for Reconsideration indicating therein the firm name of the
Lazaro Law Office as well as his name and the names of Atty.
Manuel and Atty. Michelle without the knowledge and consent of his
superiors, and in likewise affixing his signature thereon.
Atty. Espejo acknowledged committing the abovementioned acts as a
way of assisting Rodica who had already become his close friend.
Atty. Espejo s admissions are as
follows:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
11. Atty. Espejo further recounts that after being advised to simply
withdraw her Motion for Reconsideration ("MR"), Rodica pleaded
with Atty. Espejo to prepare the documents required to be filed with
the RTC x x x to spare her Boracay lawyers from preparing the same.
Atty. Espejo accommodated Jasper and drafted the Manifestation
with Motion to Withdraw Motion for Reconsideration ("Motion to
Withdraw MR") to be given to Rodica s Boracay counsel, Atty. Joan
I. Tabanar-Ibutnande, who is in a better position to evaluate the merit
of the withdrawal of the MR.
11.1. Upon seeing Atty. Espejo s initial draft, Rodica requested Atty.
Espejo to include x x x the name of the Lazaro Law Office as
signatory allegedly to give more credence and weight to the pleading
and to show the defendants in the RTC case her sincere intention to
terminate the case.
Due to Rodica s pleas and insistence, Atty. Espejo, who among all
lawyers of the Lazaro Law Office, became the most familiar and
"chummy" with Rodica, agreed to include the Lazaro Law Office and
put his name as the signatory for the Office. Still not satisfied, Rodica
pleaded with Atty. Espejo to further revise the Motion to Withdraw
MR to include the names of Atty. Manuel and Atty. Michelle as
signatories and represented that she herself will cause them to sign it.
Relying on Rodica s representations that she would speak to Atty.
Manuel about the matter, Atty. Espejo obliged to include the name of
Atty. Michelle and Atty. Manuel. Rodica repeatedly reminded Atty.
Espejo not to bother Atty. Manuel on the matter and that she herself
will take it up with Atty. Manuel at the proper time.
11.2 Atty. Espejo has a soft heart. He signed the pleading only with
good intentions of helping and assisting Rodica, the common law
wife of a client, whom he had learned to fancy because of being
constantly together and attending to her. He never thought ill of
Rodica and believed her when she said she would speak to Atty.
Lazaro about the matter as represented. Atty. Espejo only agreed to
sign the pleading for purposes of withdrawing Rodica s MR to attain
Rodica s purpose or desired result and objective to convince or
facilitate the sale to Apostol and/or to make the property more
marketable to interested buyers and to attain peace with the
defendants in the RTC case. Evidently, Rodica took advantage of
Atty. Espejo s youth and naivete and manipulated him to do things on
her behalf, and deliberately excluded Atty. Almario the senior
lawyer. Rodica preferred to discuss matters with Atty. Espejo than
with Atty. Almario as the latter often contradicts her views. Atty.
Espejo apologized to Atty. Manuel for allowing himself to be
manipulated by Rodica.42ςrνll
chanrobles virtual law library
At the outset, Atty. Espejo was well aware that Rodica was
represented by another counsel in the RTC case. As a practicing
lawyer, he should know that it is the said counsel, Atty. Ibutnande,
who has the duty to prepare the said motion. In fact, he himself stated
that it is Atty. Ibutnande who is in a better position to evaluate the
merit of the withdrawal of the Motion for Reconsideration.
Atty. Espejo s claim that he drafted and signed the pleading just to
extend assistance to Rodica deserves scant consideration. It is true
that under Rules 2.01 and 2.02, Canon 2 of the Code of Professional
Responsibility, a lawyer shall not reject, except for valid reasons, the
cause of the defenseless or the oppressed, and in such cases, even if
he does not accept a case, shall not refuse to render legal advise to the
person concerned if only to the extent necessary to safeguard the
latter s right. However, in this case, Rodica cannot be considered as
defenseless or oppressed considering that she is properly represented
by counsel in the RTC case. Needless to state, her rights are amply
safeguarded. It would have been different had Rodica not been
represented by any lawyer, which, however, is not the case.
Moreover, the Court wonders why Atty. Espejo, knowing fully well
that Rodica is not their law firm s client and without the knowledge
and consent of his superiors, gave in to Rodica s request for him to
indicate in the said motion the names of his law firm, Atty. Manuel
and Atty. Michelle for the purpose of "giving more weight and credit
to the pleading." As a member of the bar, Atty. Espejo ought to know
that motions and pleadings filed in courts are acted upon in
accordance with their merit or lack of it, and not on the reputation of
the law firm or the lawyer filing the same. More importantly, he
should have thought that in so doing, he was actually assisting Rodica
in misrepresenting before the RTC that she was being represented by
the said law firm and lawyers, when in truth she was not.
It is well to remind Atty. Espejo that before being a friend to Rodica,
he is first and foremost an officer of the court.43 Hence, he is
expected to maintain a high standard of honesty and fair dealings and
must conduct himself beyond reproach at all times.44 He must
likewise ensure that he acts within the bounds of reason and common
sense, always aware that he is an instrument of truth and justice.45 As
shown by his actuations. Atty. Espejo fell short of what is expected of
him. Under the circumstances, Atty. Espejo should have exercised
prudence by first diligently studying the soundness of Rodica s pleas
and the repercussions of his acts.
We note that on August 5, 2011, or even before the filing of the
disbarment complaint, Atty. Espejo already caused the filing of his
Motion to Withdraw Appearance46 before the RTC. Therein, Atty.
Espejo already expressed remorse and sincere apologies to the RTC
for wrongly employing the name of the Lazaro Law Office.
Considering that Atty. Espejo is newly admitted to the Bar (2010),
we deem it proper to warm him to be more circumspect and prudent
in his actuations.
WHEREFORE, premises considered, the instant Complaint for
disbarment against respondents Atty. Manuel "Lolong" M. Lazaro,
Atty. Edwin M. Espejo, Atty. Abel M. Almario, Atty. Michelle B.
Lazaro and Atty. Joseph C. Tan is DISMISSED. Atty. Edwin M.
Espejo is WARNED to be more circumspect and prudent in his
actuations.
SO ORDERED.
11.) G.R. No. 191247, July 10, 2013
FRANCISCO L. ROSARIO, JR., Petitioner, v. LELLANI DE
GUZMAN, ARLEEN DE GUZMAN, PHILIP RYAN DE
GUZMAN, AND ROSELLA DE GUZMAN BAUTISTA,
Respondents.
DECISION
MENDOZA, J.:
This petition for review on certiorari under Rule 45 of the Rules of
Court seeks to set aside the November 23, 20091 and the February 11,
20102 Orders of the Regional Trial Court, Branch 7, Manila (RTC), in
Civil Case No. 89-50138, entitled "Loreta A. Chong v. Sps. Pedro
and Rosita de Guzman," denying the Motion to Determine Attorney's
Fees filed by the petitioner.
The Facts
Sometime in August 1990, Spouses Pedro and Rosita de Guzman
(Spouses de Guzman) engaged the legal services of Atty. Francisco L.
Rosario, Jr. (petitioner) as defense counsel in the complaint filed
against them by one Loreta A. Chong (Chong) for annulment of
contract and recovery of possession with damages involving a parcel
of land in Parañaque City, covered by Transfer Certificate of Title
(TCT) No. 1292, with an area of 266 square meters, more or less.
Petitioner’s legal services commenced from the RTC and ended up in
this Court.3 Spouses de Guzman, represented by petitioner, won their
case at all levels. While the case was pending before this Court,
Spouses de Guzman died in a vehicular accident. Thereafter, they
were substituted by their children, namely: Rosella de Guzman-
Bautista, Lellani de Guzman, Arleen de Guzman, and Philip Ryan de
Guzman (respondents).4
On September 8, 2009, petitioner filed the Motion to Determine
Attorney’s Fees5 before the RTC. He alleged, among others, that he
had a verbal agreement with the deceased Spouses de Guzman that he
would get 25% of the market value of the subject land if the
complaint filed against them by Chong would be dismissed. Despite
the fact that he had successfully represented them, respondents
refused his written demand for payment of the contracted attorney’s
fees. Petitioner insisted that he was entitled to an amount equivalent
to 25% percent of the value of the subject land on the basis of
quantum meruit.
On November 23, 2009, the RTC rendered the assailed order denying
petitioner’s motion on the ground that it was filed out of time. The
RTC stated that the said motion was filed after the judgment rendered
in the subject case, as affirmed by this Court, had long become final
and executory on October 31, 2007. The RTC wrote that considering
that the motion was filed too late, it had already lost jurisdiction over
the case because a final decision could not be amended or corrected
except for clerical errors or mistakes. There would be a variance of
the judgment rendered if his claim for attorney’s fees would still be
included.
Petitioner filed a motion for reconsideration, but it was denied by the
RTC for lack of merit. Hence, this petition.
The Issues
This petition is anchored on the following
grounds:cralavvonlinelawlibrary
I
THE TRIAL COURT COMMITTED A REVERSIBLE ERROR IN
DENYING THE MOTION TO DETERMINE ATTORNEY’S FEES
ON THE GROUND THAT IT LOST JURISDICTION OVER THE
CASE SINCE THE JUDGMENT IN THE CASE HAS BECOME
FINAL AND EXECUTORY;chanroblesvirtualawlibrary
II
THE TRIAL COURT SERIOUSLY ERRED IN DECLARING
THAT PETITIONER’S CLAIM FOR ATTORNEY’S FEES
WOULD RESULT IN A VARIANCE OF THE JUDGMENT THAT
HAS LONG BECOME FINAL AND
EXECUTORY;chanroblesvirtualawlibrary
III
THE TRIAL COURT ERRED IN NOT DECLARING THAT THE
FINALITY OF THE DECISION DID NOT BAR PETITIONER
FROM FILING THE MOTION TO RECOVER HIS ATTORNEY’S
FEES.6nadcralavvonlinelawlibrary
Petitioner claims that Spouses de Guzman engaged his legal services
and orally agreed to pay him 25% of the market value of the subject
land. He argues that a motion to recover attorney’s fees can be filed
and entertained by the court before and after the judgment becomes
final. Moreover, his oral contract with the deceased spouses can be
considered a quasi-contract upon which an action can be commenced
within six (6) years, pursuant to Article 1145 of the Civil Code.
Because his motion was filed on September 8, 2009, he insists that it
was not yet barred by prescription.7
For their part, respondents counter that the motion was belatedly filed
and, as such, it could no longer be granted. In addition, the RTC had
already resolved the issue when it awarded the amount of ?10,000.00
as attorney’s fees. Respondents further assert that the law,
specifically Article 2208 of the Civil Code, allows the recovery of
attorney’s fees under a written agreement. The alleged understanding
between their deceased parents and petitioner, however, was never
put in writing. They also aver that they did not have any knowledge
or information about the existence of an oral contract, contrary to
petitioner’s claims. At any rate, the respondents believe that the
amount of 25% of the market value of the lot is excessive and
unconscionable.8
The Court’s Ruling
Preliminarily, the Court notes that the petitioner filed this petition for
review on certiorari under Rule 45 of the Rules of Court because of
the denial of his motion to determine attorney’s fees by the RTC.
Apparently, the petitioner pursued the wrong remedy. Instead of a
petition for review under Rule 45, he should have filed a petition for
certiorari under Rule 65 because this case involves an error of
jurisdiction or grave abuse of discretion on the part of the trial court.
Moreover, petitioner violated the doctrine of hierarchy of courts
which prohibits direct resort to this Court unless the appropriate
remedy cannot be obtained in the lower tribunals.9 In this case,
petitioner should have first elevated the case to the Court of Appeals
(CA) which has concurrent jurisdiction, together with this Court, over
special civil actions for certiorari.10 Even so, this principle is not
absolute and admits of certain exceptions, such as in this case, when
it is demanded by the broader interest of justice.11
Indeed, on several occasions, this Court has allowed a petition to
prosper despite the utilization of an improper remedy with the
reasoning that the inflexibility or rigidity of the application of the
rules of procedure must give way to serve the higher ends of justice.
The strict application of procedural technicalities should not hinder
the speedy disposition of the case on the merits.12 Thus, this Court
deems it expedient to consider this petition as having been filed under
Rule 65.
With respect to the merits of the case, the Court finds in favor of
petitioner.
In order to resolve the issues in this case, it is necessary to discuss the
two concepts of attorney’s fees – ordinary and extraordinary. In its
ordinary sense, it is the reasonable compensation paid to a lawyer by
his client for legal services rendered. In its extraordinary concept, it is
awarded by the court to the successful litigant to be paid by the losing
party as indemnity for damages.13 Although both concepts are similar
in some respects, they differ from each other, as further explained
below:cralavvonlinelawlibrary
The attorney’s fee which a court may, in proper cases, award to a
winning litigant is, strictly speaking, an item of damages. It differs
from that which a client pays his counsel for the latter’s professional
services. However, the two concepts have many things in common
that a treatment of the subject is necessary. The award that the
court may grant to a successful party by way of attorney’s fee is
an indemnity for damages sustained by him in prosecuting or
defending, through counsel, his cause in court. It may be decreed
in favor of the party, not his lawyer, in any of the instances
authorized by law. On the other hand, the attorney’s fee which a
client pays his counsel refers to the compensation for the latter’s
services. The losing party against whom damages by way of
attorney’s fees may be assessed is not bound by, nor is his liability
dependent upon, the fee arrangement of the prevailing party with his
lawyer. The amount stipulated in such fee arrangement may,
however, be taken into account by the court in fixing the amount of
counsel fees as an element of damages.
The fee as an item of damages belongs to the party litigant and
not to his lawyer. It forms part of his judgment recoveries against
the losing party. The client and his lawyer may, however, agree that
whatever attorney’s fee as an element of damages the court may
award shall pertain to the lawyer as his compensation or as part
thereof. In such a case, the court upon proper motion may require the
losing party to pay such fee directly to the lawyer of the prevailing
party.
The two concepts of attorney’s fees are similar in other respects.
They both require, as a prerequisite to their grant, the intervention of
or the rendition of professional services by a lawyer. As a client may
not be held liable for counsel fees in favor of his lawyer who never
rendered services, so too may a party be not held liable for attorney’s
fees as damages in favor of the winning party who enforced his rights
without the assistance of counsel. Moreover, both fees are subject to
judicial control and modification. And the rules governing the
determination of their reasonable amount are applicable in one as in
the other.14 [Emphases and underscoring supplied]
In the case at bench, the attorney’s fees being claimed by the
petitioner refers to the compensation for professional services
rendered, and not as indemnity for damages. He is demanding
payment from respondents for having successfully handled the civil
case filed by Chong against Spouses de Guzman. The award of
attorney’s fees by the RTC in the amount of P10,000.00 in favor of
Spouses de Guzman, which was subsequently affirmed by the CA
and this Court, is of no moment. The said award, made in its
extraordinary concept as indemnity for damages, forms part of the
judgment recoverable against the losing party and is to be paid
directly to Spouses de Guzman (substituted by respondents) and not
to petitioner. Thus, to grant petitioner’s motion to determine
attorney’s fees would not result in a double award of attorney’s fees.
And, contrary to the RTC ruling, there would be no amendment of a
final and executory decision or variance in judgment.
The Court now addresses two (2) important questions: (1) How can
attorney’s fees for professional services be recovered? (2) When can
an action for attorney’s fees for professional services be filed? The
case of Traders Royal Bank Employees Union-Independent v.
NLRC15 is instructive:cralavvonlinelawlibrary
As an adjunctive episode of the action for the recovery of bonus
differentials in NLRC-NCR Certified Case No. 0466, private
respondent’s present claim for attorney’s fees may be filed before the
NLRC even though or, better stated, especially after its earlier
decision had been reviewed and partially affirmed. It is well settled
that a claim for attorney’s fees may be asserted either in the very
action in which the services of a lawyer had been rendered or in a
separate action.
With respect to the first situation, the remedy for recovering
attorney’s fees as an incident of the main action may be availed of
only when something is due to the client. Attorney’s fees cannot be
determined until after the main litigation has been decided and
the subject of the recovery is at the disposition of the court. The
issue over attorney’s fees only arises when something has been
recovered from which the fee is to be paid.
While a claim for attorney’s fees may be filed before the
judgment is rendered, the determination as to the propriety of
the fees or as to the amount thereof will have to be held in
abeyance until the main case from which the lawyer’s claim for
attorney’s fees may arise has become final. Otherwise, the
determination to be made by the courts will be premature. Of
course, a petition for attorney’s fees may be filed before the
judgment in favor of the client is satisfied or the proceeds thereof
delivered to the client.
It is apparent from the foregoing discussion that a lawyer has two
options as to when to file his claim for professional fees. Hence,
private respondent was well within his rights when he made his
claim and waited for the finality of the judgment for holiday pay
differential, instead of filing it ahead of the award’s complete
resolution. To declare that a lawyer may file a claim for fees in
the same action only before the judgment is reviewed by a higher
tribunal would deprive him of his aforestated options and render
ineffective the foregoing pronouncements of this Court.
[Emphases and underscoring supplied]
In this case, petitioner opted to file his claim as an incident in the
main action, which is permitted by the rules. As to the timeliness of
the filing, this Court holds that the questioned motion to determine
attorney’s fees was seasonably filed.
The records show that the August 8, 1994 RTC decision became final
and executory on October 31, 2007. There is no dispute that
petitioner filed his Motion to Determine Attorney’s Fees on
September 8, 2009, which was only about one (1) year and eleven
(11) months from the finality of the RTC decision. Because petitioner
claims to have had an oral contract of attorney’s fees with the
deceased spouses, Article 1145 of the Civil Code16 allows him a
period of six (6) years within which to file an action to recover
professional fees for services rendered. Respondents never asserted
or provided any evidence that Spouses de Guzman refused
petitioner’s legal representation. For this reason, petitioner’s cause of
action began to run only from the time the respondents refused to pay
him his attorney’s fees, as similarly held in the case of Anido v.
Negado:17
In the case at bar, private respondent’s allegation in the complaint
that petitioners refused to sign the contract for legal services in
October 1978, and his filing of the complaint only on November 23,
1987 or more than nine years after his cause of action arising from
the breach of the oral contract between him and petitioners point to
the conclusion that the six-year prescriptive period within which to
file an action based on such oral contract under Article 1145 of the
Civil Code had already lapsed.
As a lawyer, private respondent should have known that he only
had six years from the time petitioners refused to sign the
contract for legal services and to acknowledge that they had
engaged his services for the settlement of their parents’ estate
within which to file his complaint for collection of legal fees for
the services which he rendered in their favor. [Emphases supplied]
At this juncture, having established that petitioner is entitled to
attorney’s fees and that he filed his claim well within the prescribed
period, the proper remedy is to remand the case to the RTC for the
determination of the correct amount of attorney’s fees. Such a
procedural route, however, would only contribute to the delay of the
final disposition of the controversy as any ruling by the trial court on
the matter would still be open for questioning before the CA and this
Court. In the interest of justice, this Court deems it prudent to
suspend the rules and simply resolve the matter at this level. The
Court has previously exercised its discretion in the same way in
National Power Corporation v. Heirs of Macabangkit Sangkay:18
In the event of a dispute as to the amount of fees between the attorney
and his client, and the intervention of the courts is sought, the
determination requires that there be evidence to prove the amount of
fees and the extent and value of the services rendered, taking into
account the facts determinative thereof. Ordinarily, therefore, the
determination of the attorney’s fees on quantum meruit is remanded
to the lower court for the purpose. However, it will be just and
equitable to now assess and fix the attorney’s fees of both
attorneys in order that the resolution of “a comparatively simple
controversy,” as Justice Regalado put it in Traders Royal Bank
Employees Union-Independent v. NLRC, would not be needlessly
prolonged, by taking into due consideration the accepted guidelines
and so much of the pertinent data as are extant in the records. 19
[Emphasis supplied]
With respect to petitioner’s entitlement to the claimed attorney’s fees,
it is the Court’s considered view that he is deserving of it and that the
amount should be based on quantum meruit.
Quantum meruit – literally meaning as much as he deserves – is used
as basis for determining an attorney’s professional fees in the absence
of an express agreement. The recovery of attorney’s fees on the basis
of quantum meruit is a device that prevents an unscrupulous client
from running away with the fruits of the legal services of counsel
without paying for it and also avoids unjust enrichment on the part of
the attorney himself. An attorney must show that he is entitled to
reasonable compensation for the effort in pursuing the client’s cause,
taking into account certain factors in fixing the amount of legal
fees.20
Rule 20.01 of the Code of Professional Responsibility lists the
guidelines for determining the proper amount of attorney fees, to
wit:cralavvonlinelawlibrary
Rule 20.1 – A lawyer shall be guided by the following factors in
determining his fees:cralavvonlinelawlibrary
a) The time spent and the extent of the services rendered or
required;chanroblesvirtualawlibrary
b) The novelty and difficulty of the questions
involved;chanroblesvirtualawlibrary
c) The importance of the subject matter;chanroblesvirtualawlibrary
d) The skill demanded;chanroblesvirtualawlibrary
e) The probability of losing other employment as a result of
acceptance of the proffered case;chanroblesvirtualawlibrary
f) The customary charges for similar services and the schedule of fees
of the IBP chapter to which he belongs;chanroblesvirtualawlibrary
g) The amount involved in the controversy and the benefits resulting
to the client from the service;chanroblesvirtualawlibrary
h) The contingency or certainty of
compensation;chanroblesvirtualawlibrary
i) The character of the employment, whether occasional or
established; and
j) The professional standing of the lawyer.
Petitioner unquestionably rendered legal services for respondents’
deceased parents in the civil case for annulment of contract and
recovery of possession with damages. He successfully represented
Spouses de Guzman from the trial court level in 1990 up to this Court
in 2007, for a lengthy period of 17 years. After their tragic death in
2003, petitioner filed a notice of death and a motion for substitution
of parties with entry of appearance and motion to resolve the case
before this Court.21 As a consequence of his efforts, the respondents
were substituted in the place of their parents and were benefited by
the favorable outcome of the case.
As earlier mentioned, petitioner served as defense counsel for
deceased Spouses de Guzman and respondents for almost seventeen
(17) years. The Court is certain that it was not an easy task for
petitioner to defend his clients’ cause for such a long period of time,
considering the heavy and demanding legal workload of petitioner
which included the research and preparation of pleadings, the
gathering of documentary proof, the court appearances, and the
various legal work necessary to the defense of Spouses de Guzman. It
cannot be denied that petitioner devoted much time and energy in
handling the case for respondents. Given the considerable amount of
time spent, the diligent effort exerted by petitioner, and the quality of
work shown by him in ensuring the successful defense of his clients,
petitioner clearly deserves to be awarded reasonable attorney’s fees
for services rendered. Justice and equity dictate that petitioner be paid
his professional fee based on quantum meruit.
The fact that the practice of law is not a business and the attorney
plays a vital role in the administration of justice underscores the need
to secure him his honorarium lawfully earned as a means to preserve
the decorum and respectability of the legal profession. A layer is as
much entitled to judicial protection against injustice, imposition or
fraud on the part of his client as the client against abuse on the part of
his counsel. The duty of the court is not alone to see that a lawyer
acts in a proper and lawful manner; it is also its duty to see that a
lawyer is paid his just fees. With his capital consisting of his brains
and with his skill acquired at tremendous cost not only in money but
in expenditure of time and energy, he is entitled to the protection of
any judicial tribunal against any attempt on the part of his client to
escape payment of his just compensation. It would be ironic if after
putting forth the best in him to secure justice for his client he himself
would not get his due.22
The Court, however, is resistant in granting petitioner's prayer for an
award of 25% attorney's fees based on the value of the property
subject of litigation because petitioner failed to clearly substantiate
the details of his oral agreement with Spouses de Guzman. A fair and
reasonable amount of attorney's fees should be 15% of the market
value of the property.
WHEREFORE, the petition is GRANTED. Accordingly, the Court
grants the Motion to Determine Attorney's Fees filed by petitioner
Atty. Francisco L. Rosario, Jr. Based on quantum meruit, the amount
of attorney's fees is at the rate of 15% of the market value of the
parcel of land, covered by Transfer Certificate of Title No. 1292, at
the time of payment.
SO ORDERED.
12.) G.R. No. 124074 January 27, 1997
RESEARCH and SERVICES REALTY, INC., petitioner,
vs.
COURT OF APPEALS and MANUEL S. FONACIER, JR.,
respondents.
DAVIDE, JR., J.:
This petition for review on certiorari under Rule 45 of the Rules of
Court questions the propriety of the award for, and the
reasonableness of the amount of, attorney's fees granted in favor of
the private respondent by the Regional Trial Court (RTC) of Makati
City, Branch 64,1 in Civil Case No. 612,2 which the Court of
Appeals affirmed in its decision3 of 31 March 1995 in CA-G.R. CV
No. 44839.
The undisputed facts are as follows:
On 3 November 1969, the petitioner entered into a Joint Venture
Agreement with Jose, Fidel, and Antonia Carreon. Under the said
agreement, the petitioner undertook to develop, subdivide,
administer, and promote the sale of the parcels of land owned by the
Carreons. The proceeds of the sale of the lots were to be paid to the
Philippine National Bank (PNB) for the landowner's mortgage
obligation, and the net profits to be shared by the contracting parties
on a 50-50 basis.
On 4 April 1983, the Carreons and a certain Patricio C. Sarile
instituted before the RTC of Makati City an action against the
petitioner for rescission of the Joint Venture Agreement. They prayed
therein that pending the hearing of the case, a writ of preliminary
injunction be issued to enjoin the petitioner from selling the lots
subject of the agreement and that after hearing, the writ be made
permanent; the agreement be rescinded; and the petitioner be ordered
to pay the PNB the stipulated 15% per annum of the outstanding
obligation and to pay the plaintiffs attorney's fees, exemplary
damages, expenses of litigation, and costs of suit. This case was
docketed as Civil Case No. 612 at Branch 64 of the said court.
In its answer, which was prepared and signed by Atty. Apolonio G.
Reyes, the petitioner sought the denial of the writ of preliminary
injunction, the dismissal of the complaint, and payment in its favor of
(a) P10 million by way of actual damages; (b) P5 million by way of
return to the petitioner of the amount advanced to the Carreons,
payments to the PNB, and cost of the work on the subdivision; (c)
P100,000.00 by way of exemplary damages; (d) any and all damages
up to the amount of P4,638,420.00 which the petitioner may suffer
under the terms of its Performance Bond in favor of the National
Housing Authority; (e) P50,000.00 as attorney's fees; and (f) costs of
suit.
On 9 April 1985, the petitioner engaged the services of private
respondent Atty. Manuel S. Fonacier, Jr.,4 who then entered his
appearance in Civil Case No. 612.
While the said case was pending, or on 24 July 1992, the petitioner,
without the knowledge of the private respondent, entered into a
Memorandum of Agreement (MOA)5 with another land developer,
Filstream International, Inc. (hereinafter Filstream). Under this MOA,
the former assigned its rights and obligations under the Joint Venture
Agreement in favor of the latter for a consideration of P28 million,
payable within twenty-four months.
On 31 March 1993, the petitioner terminated the legal services of the
private respondent. At the time the petitioner had already received P7
million from Filstream.
Upon knowing the existence of the MOA, the private respondent
filed in Civil Case No. 612 an Urgent Motion to Direct Payment of
Attorney's Fees and/or Register Attorney's Charging Lien praying,
among other things, that the petitioner be ordered to pay him the sum
of P700,000.00 as his contingent fee in the case.6
After hearing the motion, the trial court issued an order dated 11
October 1993 directing the petitioner to pay the private respondent
the sum of P600,000.00 as attorney's fees on the basis of quantum
meruit.
The trial court justified the award in this manner:
Insofar as material to the resolution of this
Motion the records of this case show that movant
Atty. Fonacier became the counsel of defendant
Research in May 1985 while this case has been in
progress. (Records, p. 770). By this time also, the
defendant Research has been enjoined by the
Court from executing Contracts To Sell involving
Saranay Homes Subdivision. . . . (Order dated
December 3, 1984, Records pp. 625-626).
However, the said counsel for defendant
Research prepared for the latter various pleadings
and represented it in Court (See Records after
May 1985). Until his services were terminated
the lawyer client relationship between Atty.
Fonacier and Research was governed by a
"contract" embodied in a letter addressed to Atty.
Fonacier on April 19, 1985 [sic], the pertinent
portion of which is reproduced below, as follows.
...
xxx xxx xxx
Soon after said letter, cases were referred to him
including this case. In accordance with their
agreement, there were instances that Research
gave Atty. Fonacier ten (10%) percent of the
amount received as the latter's attorney's fees
pursuant to their agreement.
The instant case in which defendant is praying to
be awarded attorney's fees, is an action for
rescission of the Joint Venture Agreement
between plaintiffs, Patricio Sarile, et al., as
owners of a parcel of land and defendant
Research & Service Realty, Inc., as developer of
the land. At the time Atty. Fonacier entered his
appearance as counsel for defendant Research,
the Court has issued a preliminary injunction
against Research. Thus all developmental and
commercial activities of defendant had to stop. In
this regard, Atty. Fonacier did spade work
towards persuading the plaintiffs to agree to the
relaxation of the effects of the injunction to pave
the way to a negotiation with a third-party, the
Filstream. Atty. Fonacier's efforts were
complemented by the efforts of his counterpart in
the plaintiff's side. The third-party Filstream Inc.,
became the assignee of defendant Research. In
this connection, a memorandum of agreement
was entered into between them. By the terms of
agreement, defendant Research will be receiving
from the third-party Filstream International, Inc.
(Filstream) the following amount. . . .
xxx xxx xxx
The termination of the legal services of Atty.
Fonacier was made definite on March 31, 1993 at
which time the Memorandum of Agreement
which Research entered into with Filstream, Inc.,
has already been effective. By this time also,
defendant Research has already received the first
two stipulated consideration of the agreement in
the total sum of Six Million (P6,000,000.00). The
necessary and legal consequence of said
"Memorandum of Agreement" is the termination
of the case insofar as plaintiff Patricio Sarile, et
al. and defendant Research is concerned. The
conclusion of the Memorandum of Agreement
insofar as the cause of Research is concerned, is a
legal victory for defendant Research. What could
have been a loss in investment has been turned to
a legal victory. Atty. Fonacier's effort contributed
to defendant's victory, albeit outside the Court
which would not have been possible without the
legal maneuvering of a lawyer.
The dismissal of the case before this Court will
come in a matter of time considering that
plaintiffs, with the assumption by the third party,
Filstream Inc., of what were supposed to be the
obligations to them of defendant Research
pursuant to their Joint Venture Agreement, is no
longer interested in pursuing the rescission.
It is a matter of record that Atty. Fonacier is the
last of the three lawyers who handled this case.
Moreover it is Atty. Fonacier who contributed to
the forging of the memorandum of agreement as
testified to by Atty. Rogel Atienza one of the two
retained counsels of plaintiffs.
Considering the importance which is attached to
this case, certainly it would not be fair for Atty.
Fonacier if his attorney's fees in this case would
be equated only to the measly monthly allowance
of (P800.00) Pesos and office space and other
office facilities provided by defendant Research.
Ten (10%) per cent of the amount which
Research had received from Filstream at the time
of the termination of a lawyer-client relationship
between Atty. Fonacier and Research or
P600,000.00 will be a just and equitable
compensation for Atty. Fonacier's legal services,
by way of quantum meruit (See Cabildo v.
Provincial Treasurer, Ilocos Norte, et al., 54
SCRA 26).7
In its Order8 of 12 January 1994, the trial court denied the petitioner's
motion for reconsideration of the above order.
The petitioner appealed to the Court of Appeals. In its Appellant's
Brief, 9 the petitioner alleged that the private respondent was not
entitled to attorney's fees under the retainer contract. Moreover, the
private respondent did not exert any effort to amicably settle the case,
nor was he even present during the negotiations for the settlement of
the same. There was, therefore, no legal and factual justification for
the private respondent's "fantastic and unreasonable claim for
attorney's fees of P600,000.00.
On the other hand, the private respondent asserted that he was
assured by the petitioner that non-collection cases were included in
the contingent fee arrangement specified in the retainer contract
wherein there was to be contingent compensation for any award
arising from any lawsuit handled by him. According to him, Civil
Case No. 612 was not the only "non-collection" case he handled for
the petitioner. There was a "right of way" dispute where the petitioner
was awarded P50,000.00, and the latter paid him P5,000.00, or 10%
of the award as attorney's fees. He thus stressed that since under the
memorandum of agreement the petitioner was to receive P28 million,
he should be entitled to 10% thereof or P2.8 million as attorney's
fees.
In its decision 10 of 31 March 1995, the Court of Appeals affirmed
the challenged order of the trial court. It ratiocinated as follows:
Movant-appellee, on the other hand, correctly
argues that it was the clear intention of appellant
and counsel to compensate the latter for any legal
services rendered by him to the former. Stated
otherwise, it was never the intention of the parties
in the instant appeal that counsel's services shall
be free or to be rendered ex gratia.
xxx xxx xxx
It must in addition be underscored that the
retainer contract of April 9, 1985 is the law that
governs the relationship between appellant and
appellee. In fact, the following provisions
squarely and categorically supports the award of
P600,000.00 to counsel, to wit:
Minimal allowance of P800
per month plus contingent
fees and collection cases
(case to case basis) aside
from the attorney's fee
recovered from any law suit.
(Paragraph 3, Retainer Contract)
 In an American jurisprudence on this point cited
in local annotation on the Canon of Professional
Ethics, it was held that "if a lawyer renders
valuable services to one who receives the benefits
thereof, a promise to pay a reasonable value is
presumed, unless such services were intended to
be gratuitous" (Young vs. Buere, 78 Cal. Am.
127). In effect, to compensate a lawyer, we are
faced with the pivotal question: "was the legal
services intended to be free or not?" If it is not
free, then, appellant must simply pay. The 10%
contingent fee of the amount collected and/or to
be collected in Civil Case No. 612 of the lower
court, is, to Our mind fair and reasonable. As
ruled by the Supreme Court in the case of
Cosmopolitan Insurance Co. vs. Angel Reyes
(G.R. L-20199, Nov. 23, 1965) 15% was even
deemed reasonable. 11
The petitioner filed a motion for reconsideration 12 on the ground,
among other things, that the decision is contrary to the evidence, as
the trial court granted the claim for attorney's fees based on quantum
meruit, yet, the Court of Appeals granted the same on a contingent
basis which it based on an erroneous quotation and comprehension of
the following provision of the retainer contract:
Minimal allowance of P800.00 per month plus
contingent fees on collection cases (case to case
basis) aside from the attorney's fees recovered
from any law suit. (emphasis ours) 13
In its decision, the Court of Appeals substituted the word "on" after
"contingent fees" with the word "and". Under the aforequoted
paragraph, the private respondent was entitled to attorney's fees on
contingent basis in collection cases only. In non-collection cases, he
was entitled only to the attorney's fees that might be recovered in the
lawsuit. 14 Since Civil Case No. 612 is not a collection case but an
action for rescission of a contract, then the aforequoted paragraph is
not applicable as a basis for awarding attorney's fees to the private
respondent. 15
Finding nothing new in the motion for reconsideration, the Court of
Appeals denied it in the resolution 16 of 15 February 1996.
The petitioner then came to us via this petition for review wherein it
contends that
I thereof from 1985 to 1993," the P600,000.00 attorney's fees, whether
RESPONDENT COURT OF APPEALS HAD
DECIDED THE CASE NOT IN ACCORD
WITH LAW AND THE UNDISPUTED FACTS
OF THE CASE.
II
RESPONDENT COURT OF APPEALS
COMMITTED GRAVE ABUSE OF
DISCRETION IN AWARDING ON
CONTINGENT BASIS RESPONDENT-
APPELLEE'S ATTORNEY'S FEES ON THE
BASIS OF A MEMORANDUM OF
AGREEMENT IN WHICH HE HAD NO
PARTICIPATION IN THE NEGOTIATION
AND PREPARATION THEREOF.
III
RESPONDENT COURT OF APPEALS
GRAVELY ABUSED ITS DISCRETION IN
AWARDING EXCESSIVE AND
UNREASONABLE ATTORNEY'S FEES.
IV
THE TRIAL COURT AND THE
RESPONDENT COURT OF APPEALS HAVE
NO JURISDICTION TO SATISFY
ATTORNEY'S CHARGING LIEN ON A SUM
OF MONEY THAT THE COURT HAD NO
AUTHORITY TO DISPOSE OF AND OVER
WHICH THE TRIAL COURT HAD MADE NO
FINAL ADJUDICATION.
The petitioner's more important argument in support of the first error
is the Court of Appeals' misquotation of the provision in the retainer
contract regarding attorney's fees on contingent basis, which the
petitioner had stressed in its motion for reconsideration. The
petitioner maintains that under the contract, attorney's fees on
contingent basis could only be awarded in collection cases, and Civil
Case No. 612 is not a collection case. Hence, the Court of Appeals
erred in affirming the award on that basis, while the trial court was
correct in applying the principle of quantum meruit.
In its second assigned error, the petitioner asserts that the private
respondent admitted in his Urgent Motion to Direct Payment of
Attorney's Fees and/or Register Attorney's Charging Lien that he had
not participated in the negotiations and preparation of the
memorandum of agreement, thus:
Despite the dishonest concealment, by the light of
Providence coupled with a streak of good luck,
counsel discovered in the first week of March
1993 that the parties had respectively entered into
a meaningful agreement with a third-party as
early as July 27, 1992, which in the case of client,
case in the form of a "Memorandum of
Agreement" (MOA). . . . 17
The third assigned error is but a logical consequence of the second,
and the petitioner maintains that since the private respondent "did not
do anything spectacular or out of the ordinary" in Civil Case No. 612,
"except to ask for the suspension or postponement of the proceedings
on contingent basis or quantum meruit, is excessive and
unreasonable.
In the fourth imputed error, the petitioner argues that the
memorandum of agreement was never submitted to the trial court,
and the trial court never made any disposition or adjudication over
the proceeds of the said agreement. What would eventually happen
then is the dismissal of Civil Case No. 612, as the trial court itself had
intimated in its challenged order. Necessarily then, there would be no
money adjudication in favor of the petitioner as the defendant therein.
Since such lien is collectible only from an award of money that a
court would adjudicate in a judgment rendered in favor of the
attorney's client pursuant to Section 37, Rule 138 of the Rules of
Court, it would follow that no attorney's charging lien could be
validly entered.
We uphold the petitioner, but not necessarily on the strength of its
arguments.
The parties are in agreement that the lawyer-client relationship
between the petitioner and the private respondent, Atty. Manuel S.
Fonacier, Jr., was governed by a retainer contract dated 9 April 1985.
The petitioner's undertakings thereunder are outlined as follows:
I. CORPORAT[ION]:
I. Corporation will provide the following:
a. Office space — air
conditioned
b. Furnishings, tables,
executive chairs, visitor's
chair & steel filing cabinet
c. Telephone facilities and
partial secretarial services.
2. Legal service referrals by the corporation to its
clients for additional income of the lawyer.
3. Minimal allowance of P800 per month plus
contingent fees on contingent fees on collection
cases (case to case basis) aside from the
attorney's fees recovered from any lawsuit.
4. That in case of legal problems to be attended to
outside Metro Manila and Suburbs, the
corporation shall defray expenses for
transportation, lodging and other legal expenses
incidental in the case. 18
An analysis of the contract clearly shows that it was a general
retainer, since its primary purpose was to secure beforehand the
services of the private respondent for any legal problem which might
afterward arise. 19 The fixed retaining fee was P800.00 a month. A
retaining fee is a preliminary fee paid to ensure and secure a lawyer's
future services, to remunerate him for being deprived, by being
retained by one party, of the opportunity of rendering services to the
other party and of receiving pay from him. In the absence of an
agreement to the contrary, the retaining fee is neither made nor
received in consideration of the services contemplated; it is apart
from what the client has agreed to pay for the services which he has
retained him to perform. 20
In the retainer contract in question, there was no intention to make
the retaining fee as the attorney's fees for the services contemplated.
This is evident from the provision allowing additional attorney's fees
in collection cases consisting of (1) a "contingent fee" and (2)
whatever the petitioner might recover as attorney's fees in each case.
The latter could only refer to the attorney's fees which the court
might award to the petitioner in appropriate cases.
While the contract did not mention non-collection cases, it is,
nevertheless, clear therefrom that such cases were not excluded from
the retainership, as borne out by the provision requiring the private
respondent to "make appearances in court for cases involving the
corporation or any allied cases pertaining to the latter." As to such
cases, there was no specific stipulation of additional attorney's fees.
Nevertheless, nothing therein shows that the private respondent
agreed to render professional service in such cases gratuitously. The
absence then of the stipulation of additional attorney's fees cannot be
construed as a bar to the collection of additional attorney's fees in
non-collection cases.
Two basic principles come into play. The first is as stated earlier, viz.,
that the retaining fee is neither made nor received in consideration of
the services contemplated unless the contract itself so provides. The
second is that, unless expressly stipulated, rendition of professional
services by a lawyer is for a fee or compensation and is not
gratuitous. This is implicit from the opening clause of Section 24,
Rule 138 of the Rules of Court, which states that "[an] attorney shall
be entitled to have and recover from his client no more than a
reasonable compensation for his services. . . ," and by virtue of the
innominate contract of facio ut des (I do and you give), as enunciated
by this Court in Corpus v. Court of Appeals, 21 thus:
Moreover, the payment of attorney's fees . . . may
also be justified by virtue of the innominate
contract of facio ut des (I do and you give) which
is based on the principle that "no one shall
unjustly enrich himself at the expense of
another." Innominate contracts have been
elevated to a codal provision in the New Civil
Code by providing under Article 1307 that such
contracts shall be regulated by the stipulations of
the parties, by the general provisions or principles
of obligations and contracts, by the rules
governing the most analogous nominate
contracts, and by the customs of the people. The
rationale of this article was stated in the 1903
case of Perez vs. Pomar (2 Phil. 682).
In Perez v. Pomar, 22 this Court stated:
[B]ut whether the plaintiffs services were
solicited or whether they were offered to the
defendant for his assistance, inasmuch as these
services were accepted and made use of by the
latter, we must consider that there was a tacit and
mutual consent as to the rendition of the services.
This gives rise to the obligation upon the person
benefited by the services to make compensation
therefor, since the bilateral obligation to render
service as interpreter, on the one hand, and on the
other to pay for the services rendered, is thereby
incurred. (Arts. 1088, 1089, and 1262 of the Civil
Code).
Accordingly, as to non-collection cases where the petitioner was
either a plaintiff or a defendant, the private respondent could still
collect attorney's fees, apart from his regular retaining fee, on the
basis of any supplemental agreement or, in its absence, under the
principle of quantum meruit. There was no such supplemental
agreement in this case.
We cannot sustain the private respondent's theory that he could
collect attorney's fees on contingent basis because in the other "non-
collection" cases he handled for the petitioner, he was paid on
contingent basis at the rate of 10% of what was awarded to the
petitioner. In the first place, Civil Case No. 612 is still unresolved,
and no judgment has yet been rendered in favor of the petitioner. The
amount in the memorandum of agreement could not be made the
basis of a "contingent fee" in the said case for at least three reasons.
First, in his own Urgent Motion to Direct Payment of Attorney's Fees
and/or Register Attorney's Charging Lien, the private respondent
based the contingent fee not only in Civil Case No. 612 but in a
"multitude of peripheral cases," and the contingent fee would become
due and collectible only if and when the petitioner obtains a judgment
in his favor in Civil Case No. 612. The second paragraph of page 3 of
the said motion reads as follows:
 Hence, from May 1985 and continuously thru the
years without interruption and surviving a series
of no less than five (5) changes of Presiding
Judges, the undersigned counsel labored tirelessly
in handling the defense of client. In addition to
the instant lawsuit, a multitude of peripheral
cases, civil, criminal and administrative, arising
from the non-delivery of titles by client on fully
paid lots in the subdivision project were also filed
as a consequence, not only against defendant but
also against its President and Chief Executive
Officer (CEO). Needless to state, the undersigned
was designated to handle majority of these cases
for both, where he appeared and conducted trial
without any "appearance fees" for more than
eight (8) long years solely relying on the
contingent fee in case of recovery in the instant
main case. 23 (emphasis supplied)
Second, the amount of P28 million, which Filstream agreed to pay
the petitioner, was not a judgment or award in favor of the petitioner
in Civil Case No. 612. It was the consideration of the assignment,
transfer, and conveyance to Filstream of all the petitioner's "rights,
interest and participation embodied and specified in the Joint Venture
Agreement (Annex "A") and in all the eight hundred seventy-five
(875) parcels of land comprising the SARANAY HOMES
subdivision. . . ." The plaintiffs in Civil Case No. 612 were not
parties to the memorandum of agreement, and there is no showing
that they agreed to the assignment of the petitioner's rights, interest,
and participation in the Joint venture Agreement. While paragraph 10
of the memorandum of agreement provides that the petitioner
shall cause to sign a JOINT MOTION TO
DISMISS, together with the CARREONS
regarding Civil Case No. 612 of the Regional
Trial Court of Makati and to further DISMISS,
the case filed against PNB docketed as Civil Case
No. 6918 of the Regional Trial Court of Makati .
. . [and] shall obtain the dismissal of all cases
filed by lot buyers against it now pending with
the HLURB
the fact remains that no such motion to dismiss has been
filed yet in Civil Case No. 612, and there is no assurance
whatsoever that the plaintiffs therein will sign a joint
motion to dismiss. Third, as correctly posited by the
petitioner, the private respondent had no participation in the
negotiations leading to, and in the preparation of, the
memorandum of agreement.
Indisputably then, the private respondent's attorney's fee on
"contingent basis" in Civil Case No. 612 is unwarranted. If at all, he
could only be entitled to attorney's fees on quantum meruit basis as of
the expiration of his retainer contract on 31 March 1993.
Quantum meruit simply means "as much as he deserves." 24 In no
case, however, must a lawyer be allowed to recover more than what
is reasonable, pursuant to Section 24, Rule 138 of the Rules of Court,
which provides:
Sec. 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.
This Court had earlier declared the following as circumstances to be
considered in determining the reasonableness of a claim for attorney's
fees: (1) the amount and character of the service rendered; (2) labor,
time, and trouble involved; (3) the nature and importance of the
litigation or business in which the services were rendered; (4) the
responsibility imposed; (5) the amount of money or the value of the
property affected by the controversy or involved in the employment;
(6) the skill and experience called for in the performance of the
services; (7) the professional character and social standing of the
attorney; (8) the results secured; and (9) whether the fee is absolute or
contingent, it being recognized that an attorney may properly charge
a much larger fee when it is contingent than when it is not. 25
Rule 20.1, Canon 20 of the Code of Professional Responsibility
enumerates the following factors which should guide a lawyer in
determining his fees:
(a) The time spent and the extent of the services
rendered or required;
(b) The novelty and difficulty of the questions
involved;
(c) The importance of the subject matter;
(d) The skill demanded;
(e) The probability of losing other employment as
a result of acceptance of the proffered case;
(f) The customary charges for similar services
and the schedule of fees of the IBP Chapter to
which he belongs;
(g) The amount involved in the controversy and
the benefits resulting to the client from the
service;
(h) The contingency or certainty of
compensation;
(i) The character of the employment, whether
occasional or established; and
(j) The professional standing of the lawyer.
It was incumbent upon the private respondent to prove the reasonable
amount of attorney's fees, taking into account the foregoing factors or
circumstances. The records before us and the trial court's 11 October
1993 order do not confirm that the private respondent proved by
either testimonial or documentary evidence that the award of
P600,000.00 was reasonable. The private respondent's testimony
thereon was crucial. Yet, it does not appear from the 11 October 1993
order that he took the witness stand. From the Minutes of the trial
court attached to the Rollo of CA-G.R. CV No. 44839, 26 it appears
that only Atty. Atienza, and Mr. Suazo gave oral testimony on the
motion.
It necessarily follows then that the 11 October 1993 order has
insufficient factual basis, and the trial court committed grave abuse of
discretion in arbitrarily fixing the private respondent's attorney's fees
at P600,000.00. The affirmance of the said order by the Court of
Appeals premised on the provision in the retainer contract regarding
contingent fee is thus fatally flawed.
The interest for both the petitioner and the private respondent
demands that the trial court should conduct further proceedings in
Civil Case No. 612 relative to the private respondent's motion for the
payment of attorney's fees and, thereafter, fix it in light of Section 24,
Rule 138 of the Rules of Court; Rule 20.1, Canon 20 of the Code of
Professional Responsibility; and the jurisprudentially established
guiding principles in determining attorney's fees on quantum meruit
basis.
WHEREFORE, the instant petition is GRANTED. The challenged
Decision of 31 March 1995 of the Court of Appeals in CA-G.R. CV
No. 44839 and the Order of 11 October 1993 of the Regional Trial
Court of Makati, Branch 64, in Civil Case No. 612 are hereby SET
ASIDE. The trial court is further. DIRECTED to set for further
hearing the private respondent's Urgent Motion to Direct Payment of
Attorney's Fees and/or Register Attorney's Charging Lien and
thereafter to fix the private respondent's attorney's fees in Civil Case
No. 612 as of 31 March 1993 when his contract with the petitioner
was effectively terminated, taking into account Section 24, Rule 138
of the Rules of Court; Rule 20.1, Canon 20 of the Code of
Professional Responsibility; and the jurisprudentially established
guiding principles in determining attorney's fees on quantum meruit
basis.
No pronouncement as to costs.
SO ORDERED.
13.)
[G.R. No. 104600. July 2, 1999.]
RILLORAZA, AFRICA, DE OCAMPO and AFRICA,
Petitioners, v. EASTERN TELECOMMUNICATIONS PHILS.,
INC. and PHILIPPINE LONG DISTANCE COMPANY,
Respondents.
DECISION
PARDO, J.:
The Issue
The basic issue submitted for consideration of the Court is whether or
not petitioner is entitled to recover attorney’s fees amounting to
Twenty Six Million Three Hundred Fifty Thousand Seven Hundred
Seventy Nine Pesos and Ninety One Centavos (P26,350,779.91) for
handling the case for its client Eastern Telecommunications
Philippines, Inc. filed with the Regional Trial Court, Makati, though
its services were terminated in midstream and the client directly
compromised the case with the adverse
party.chanroblesvirtual|awlibrary
The Facts
In giving due course to the petition, we carefully considered the facts
attendant to the case. On August 28, 1987, Eastern
Telecommunications Philippines, Inc. (ETPI) represented by the law
firm San Juan, Africa, Gonzales and San Agustin (SAGA), filed with
the Regional Trial Court, Makati, a complaint for recovery of revenue
shares against Philippine Long Distance Telephone Company
(PLDT). Atty. Francisco D. Rilloraza, a partner of the firm appeared
for ETPI.
After ETPI rested its case, it paid SAGA the billed amount of One
Hundred Thousand Pesos (P100,000.00). On September 18, 1987, the
trial court issued a resolution granting ETPI’s application for
preliminary restrictive and mandatory injunctions. During this period,
SAGA was dissolved and four of the junior partners formed the law
firm Rilloraza, Africa, De Ocampo & Africa (RADA), which took
over as counsel in the case for ETPI. The latter signed a retainer
agreement with counsel dated October 1, 1987. 1
Petitioners presented the three aspects of the main case in the trial
court. First, the traffic revenue shares which ETPI sought to recover
from PLDT in accordance with the contract between them. Second,
ETPI sought preventive injunctive relief against the PLDT’s threats
to deny ETPI access to the Philippines international gateway switch.
Third, ETPI called this the "foreign correspondentships aspect"
where ETPI sought preventive injunctive relief against PLDT’s
incursions and inducements directed at ETPI’s foreign
correspondents in Hongkong, Taiwan and Singapore, to break their
correspondentship contracts with PLDT, using the threat of denying
them access to the international gateway as leverage.
In this connection, ETPI filed with the trial court two urgent motions
for restraining order, one on October 30, 1987 and another on
November 4, 1987. As the applications were not acted upon, ETPI
brought the case up to the Court of Appeals by petition for certiorari.
On June 28, 1988, petitioner received a letter from ETPI signed by E.
M. Villanueva, President and Chief Executive Officer. In substance,
the letter stated that ETPI was terminating the retainer contract dated
October 1, 1987, effective June 30, 1988.
On June 29, 1988, petitioner filed with the Regional Trial Court a
notice of attorney’s lien, furnishing copies to the plaintiff ETPI, to
the signatory of the termination letter and PLDT. On the same date,
petitioner additionally sent a letter to ETPI attaching its partial billing
statement. In its notice, RADA informed the court that there were
negotiations toward a compromise between ETPI and PLDT.
In April 1990, petitioner confirmed that indeed the parties arrived at
an amicable settlement and that the same was entered as a judgment.
On April 26, 1990, petitioner filed a motion for the enforcement of
attorney’s lien with the Regional Trial Court of Makati and then
appraised the Supreme Court thereof by manifestation. 2 We noted
the manifestation in a resolution dated July 23, 1990.
On May 24, 1990, PLDT filed with the trial court a manifestation that
it is not a party to nor in any manner involved in the attorney’s lien
being asserted by Atty. Rilloraza for and in behalf of the law firm, 3
while ETPI filed its opposition thereto on June 11, 1990.
The Lower Court’s Ruling
The trial court in its resolution dated September 14, 1990 denied the
motion for enforcement of attorney’s lien.
Thus:jgc:chanrobles.com.ph
"WHEREFORE, premises considered, the court finds that the Notice
of Attorney’s Lien filed by the law firm of Rilloraza, Africa, De
Ocampo and Africa has no basis in fact and in law, and therefore
denies the Motion for Enforcement of Attorney’s
Lien.chanroblesvirtual|awlibrary
"SO ORDERED.
"Makati, Metro Manila, September 4, 1990.
"(s/t) ZEUS C. ABROGAR
"Judge" 4
On October 10, 1990, petitioner filed with the trial court a notice of
appeal from the above-mentioned order to the Supreme Court. On
November 6, 1990, ETPI filed a Motion to Dismiss Appeal
contending that the case could be brought to the Supreme Court only
via a petition for review on certiorari, not by a mere notice of appeal.
In an order dated January 16, 1991, the trial court dismissed RADA’s
appeal.
The trial court said:jgc:chanrobles.com.ph
"There is no more regular appeal from the Regional Trial Court to the
Supreme Court. Under the amendment of Section 17 of the Judiciary
Act by R.A. 5440, orders and judgments of the Regional Trial Court
may be elevated to the Supreme Court only by petition for review on
certiorari.
x x x
"Wherefore, premises considered, the order dated September 14,
1990 is hereby reconsidered and set aside. The Notice of Appeal filed
by movant RADA is dismissed.
"SO ORDERED.
"Given this 16th day of January, 1991, at Makati, Metro Manila.
"(s/t) ZEUS C. ABROGAR
"Judge" 5
Hence, on February 9, 1991, petitioner filed a petition for certiorari
with the Supreme Court, which we remanded to the Court of
Appeals. The latter dismissed the petition in a decision promulgated
on November 14, 1991, 6 ruling that the judge committed no abuse of
discretion in denying petitioner’s motion for enforcement of
attorney’s lien. Thus:jgc:chanrobles.com.ph
"We therefore rule that respondent judge committed no abuse of
discretion, much less a grave one, in denying petitioner’s motion for
enforcement of attorney’s lien.
"Assuming that respondent judge committed an error in denying
petitioner’s motion for enforcement of attorney’s lien, it cannot be
corrected by certiorari.
"WHEREFORE, the writs prayed for are DENIED, and the petition is
hereby DISMISSED, with cost against petitioner.
"SO ORDERED.
"(s/t) REGINA G. ORDOÑEZ-BENITEZ
"Associate Justice"
"WE CONCUR:jgc:chanrobles.com.ph
"(s/t) JOSE A. R. MELO" (s/t) EMETERIO C. CUI
"Associate Justice "Associate Justice" 7
DISCUSSION
A. The Procedural Aspect
There is nothing sacrosanct about procedural rules, which are
liberally construed in order to promote their objectives and assist the
parties in obtaining just, speedy and inexpensive determination of
every action or proceeding. 8 In an analogous case, 9 we ruled that
where the rigid application of the rules would frustrate substantial
justice 10 , or bar the vindication of a legitimate grievance, the courts
are justified in exempting a particular case from the operation of the
rules.
In A-One Feeds, Inc. v. Court of Appeals, we said —
"Litigations should, as much as possible, be decided on the merits
and not on technicality. Dismissal of appeals purely on technical
grounds is frowned upon, and the rules of procedure ought not to be
applied in a very rigid, technical sense, for they are adopted to help
secure, not override, substantial justice and thereby defeat their very
claims. As has been the constant ruling of this Court, every party
litigant should be afforded the amplest opportunity for the proper and
just determination of his cause, free from the constraints of
technicalities." 11
A basic legal principle is that no one shall be unjustly enriched at the
expense of another. 12 This principle is one of the mainstays of every
legal system for centuries and which the Civil Code
echoes:jgc:chanrobles.com.ph
"ARTICLE 22. Every person who through an act of performance by
another, or any other means, acquires or comes into possession of
something at the expense of the latter without just or legal ground,
shall return the same to him." 13
The Code Commission, its report, emphasized
that:jgc:chanrobles.com.ph
"It is most needful that this ancient principle be clearly and
specifically consecrated in the proposed Civil Code to the end that in
cases not foreseen by the lawmaker, no one may unjustly benefit
himself to the prejudice of another. The German Civil Code has a
similar provision (Art. 812)." 14
With this in mind, one could easily understand why, despite technical
deficiencies, we resolved to give due course to this petition. More
importantly, the case on its face appears to be impressed with
merit.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
B. The Attorney’s Fees
We understand that Atty. Francisco Rilloraza handled the case from
its inception until ETPI terminated the law firm’s services in 1988.
Petitioner’s claim for attorney’s fees hinges on two grounds: first, the
fact that Atty. Rilloraza personally handled the case when he was
working for SAGA; and second, the retainer agreement dated
October 1, 1987.
We agree that petitioners are entitled to attorneys’ fees. We, however,
are not convinced with the petitioner’s arguments that the services
RADA rendered merit the amount they are claiming.
First, petitioner contends that Atty. Rilloraza initiated the filing of the
complaint. When a client employs the services of a law firm, he does
not employ the services of the lawyer who is assigned to personally
handle the case. Rather, he employs the entire law firm. In the event
that the counsel appearing for the client resigns, the firm is bound to
provide a replacement. Thus, RADA could not claim to have initiated
the filing of the complaint considering that ETPI hired SAGA. What
is more, on September 17, 1987, ETPI paid SAGA the amount of
One Hundred Thousand Pesos (P100,000.00) 15 representing
services performed prior to September 17, 1987. SAGA assigned one
of its associates, Atty. Francisco Rilloraza, to handle the case for the
firm. Although Atty. Rilloraza handled the case personally, he did so
for and in behalf of SAGA.
Second, petitioner claims that under the retainer agreement, which
provides:jgc:chanrobles.com.ph
"6.2 B. Court Cases:chanrob1es virtual 1aw library
Should recourse to judicial action be necessary to effect collection or
judicial action be taken by adverse party, our attorney’s fees shall be
fifteen percent (15%) of the amounts collected or the value of the
property acquired or liability saved." 16cralawnad
the firm is entitled to the fees agreed upon.
However, the retainer agreement has been terminated. True, Attorney
Rilloraza played a vital role during the inception of the case and in
the course of the trial. We cannot also ignore the fact that an attorney-
client relationship between petitioner and respondent no longer
existed during its culmination by amicable agreement. To award the
attorneys’ fees amounting to 15% of the sum of One Hundred
Twenty Five Million Six Hundred Seventy One Thousand Eight
Hundred Eighty Six Pesos and Four Centavos (P125,671,886.04) plus
Fifty Million Pesos (P50,000,000.00) paid by PLDT to ETPI would
be too unconscionable.
"In any case, whether there is an agreement or not, the courts shall fix
a reasonable compensation which lawyers may receive for their
professional services." 17 "A lawyer has the right to be paid for the
legal services he has extended to his client, which compensation must
be reasonable." 18 A lawyer would be entitled to receive what he
merits for his services. Otherwise stated, the amount must be
determined on a quantum meruit basis.
"Quantum meruit, meaning ‘as much as he deserved’ is used as a
basis for determining the lawyer’s professional fees in the absence of
a contract but recoverable by him from his client." 19 Recovery of
attorney’s fees on the basis of quantum meruit is authorized when (1)
there is no express contract for payment of attorney’s fees agreed
upon between the lawyer and the client; (2) when although there is a
formal contract for attorney’s fees, the fees stipulated are found
unconscionable or unreasonable by the court; and (3) when the
contract for attorney’s fees is void due to purely formal defects of
execution; (4) when the counsel, for justifiable cause, was not able to
finish the case to its conclusion; (5) when lawyer and client disregard
the contract for attorney’s fees. 20
In fixing a reasonable compensation for the services rendered by a
lawyer on the basis of quantum meruit, the elements to be considered
are generally (1) the importance of the subject matter in controversy,
(2) the extent of services rendered, and (3) the professional standing
of the lawyer. A determination of these factors would indispensably
require nothing less than a full-blown trial where private respondents
can adduce evidence to establish the right to lawful attorney’s fees
and for petitioner to oppose or refute the same. 21 The trial court has
the principal task of fixing the amount of attorney’s fees 22 . Hence,
the necessity of a hearing is beyond cavil.
C. Charging Lien
Petitioner contends that pursuant to Rule 138 of the Revised Rules of
Court, it is entitled to a charging lien. The rule
provides:jgc:chanrobles.com.ph
"SECTION 37. Attorney’s liens. — An attorney shall have a lien
upon the funds, documents and papers of his client, which have
lawfully come into his possession and may retain the same until his
lawful fees and disbursements have been paid, and may apply such
funds to the satisfaction thereof. He shall also have a lien to the same
extent upon all judgments for the payment of money, and executions
issued in pursuance of such judgments, which he has secured in a
litigation of his client, from and after the time when he shall have
caused a statement of his claim of such lien to be entered upon the
records of the court rendering such judgment, or issuing such
execution, and shall have caused written notice thereof to be
delivered to his client and to the adverse party; and he shall have the
same right and power over such judgments and executions as his
client would have to enforce his lien and secure the payment of his
just fees and disbursements." (Emphasis supplied)
We do not agree. A charging lien to be enforceable as security for the
payment of attorney’s fees requires as a condition sine qua non a
judgment for money and execution in pursuance of such judgment
secured in the main action by the attorney in favor of his client 23 . A
charging lien presupposes that the attorney has secured a favorable
money judgment for his client. 24 From the facts of the case it would
seem that petitioner had no hand in the settlement that occurred, nor
did it ever obtain a favorable judgment for ETPI.
ETPI entered into a compromise agreement when it ended the
services of petitioner and through the effort of ETPI’s new lawyers,
the law firm Romulo, Mabanta, Buenaventura, Sayoc and De los
Angeles. Whether there was bad faith in the substitution of the
lawyers to avoid compliance with the retainer agreement could only
be determined after a trial of the case on the merits.
This decision, however, should not be interpreted as to impose upon
petitioner any additional burden in collecting its attorney’s fees. The
petitioner must avail itself of the proper remedy in order to forestall
the possibility of any injustice on or unjust enrichment of any of the
parties.
The Judgment (Fallo)
ACCORDINGLY, the Court GRANTS the petition, REVERSES the
decision of the Court of Appeals in CA-G.R. SP No. 24463 and
REMANDS the case to the court of origin for the determination of
the amount of attorney’s fees to which petitioner is
entitled.chanrobles virtual lawlibrary
No costs.
SO ORDERED.
14.) G.R. No. 137680 February 6, 2004
CONCEPT PLACEMENT RESOURCES, INC., petitioner,
vs.
RICHARD V. FUNK, respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
This is a petition for review on certiorari assailing the Decision1
dated February 18, 1999 of the Court of Appeals in CA-G.R. SP No.
46703, entitled "Richard V. Funk vs. Hon. Santiago Ranada, Jr.,
Presiding Judge of RTC, Makati, Branch 137 and Concept Placement
Resources, Inc."
The antecedent facts giving rise to the controversy at bar are as
follows:
On June 25, 1994, Concept Placement Resources, Inc., petitioner,
engaged the legal services of Atty. Richard V. Funk, respondent.
On July 1, 1994, the parties executed a retainer contract wherein they
agreed that respondent will be paid regular retainer fee for various
legal services, except litigation, quasi-judicial and administrative
proceedings and similar actions. In these services, there will be
separate billings.
Meanwhile, one Isidro A. Felosopo filed with the Philippine
Overseas Employment Administration (POEA) a complaint for
illegal dismissal against petitioner, docketed as POEA Case No. 94-
08-2370. Petitioner referred this labor case to respondent for legal
action.
Immediately, respondent, as counsel for petitioner, filed with the
POEA its answer with counterclaim for P30,000.00 as damages and
P60,000.00 as attorney’s fees.
On March 1, 1995, while the labor case was still pending, petitioner
terminated its retainer agreement with respondent. Nevertheless,
respondent continued handling the case.
On October 30, 1995, the POEA rendered a Decision dismissing
Felosopo’s complaint with prejudice. The POEA, however, failed to
rule on petitioner’s counterclaim for damages and attorney’s fees.
Thereafter, the Decision became final and executory.
On December 8, 1995, respondent advised petitioner of the POEA’s
favorable Decision and requested payment of his attorney’s fees.
In reply, petitioner rejected respondent’s request for the following
reasons: (1) the retainer agreement was terminated as early as March
1995; (2) there is no separate agreement for the handling of the labor
case; and (3) the POEA did not rule on petitioner’s counterclaim for
attorney’s fees. This prompted respondent to file with the
Metropolitan Trial Court (MTC), Branch 67, Makati City a complaint
for sum of money (attorney’s fees) and damages against petitioner,
docketed as Civil Case No. 51552.
During the pre-trial on September 3, 1996, the MTC, upon
respondent’s motion, declared petitioner as in default. Its motion for
reconsideration was denied in an Order dated September 13, 1996.
Forthwith, respondent was allowed to present his evidence ex-parte.
On October 27, 1996, the MTC rendered a Decision2 ordering
petitioner to pay respondent P50,000.00 as attorney’s fees.
On appeal, the Regional Trial Court (RTC), Branch 137, Makati City,
reversed the MTC Decision, holding inter alia that since the MTC, in
the same Decision, did not resolve petitioner’s counterclaim for
attorney’s fees, which constitutes res judicata, respondent is not
entitled thereto.
Respondent filed a motion for reconsideration but was denied by the
RTC in an Order3 dated December 29, 1997.
Thus, respondent filed with the Court of Appeals a petition for review
ascribing to the RTC the following errors: (1) in reversing the MTC
Decision on the ground of res judicata; and (2) in disregarding the
compulsory counterclaim as basis for respondent’s action for
attorney’s fees.
In due course, the Court of Appeals promulgated its Decision4 dated
February 18, 1999 reversing the assailed RTC Decision and affirming
the MTC Decision, thereby sustaining the award to respondent of his
attorney’s fees in the amount of P50,000.00.
Hence, this petition for review on certiorari wherein petitioner raises
the following assignments of error:
"I. A QUESTION OF LAW IS BEING RAISED ON
WHETHER AN ALLEGATION IN PLEADING
DRAFTED BY COUNSEL ON BEHALF OF HIS
CLIENT FILED IN A LABOR CASE CAN BE USED AS
THE SOLE BASIS OF A COLLECTION SUIT BY
COUNSEL IN THE ABSENCE OF ANY WRITTEN
CONTRACT; AND,
"II. ON A QUESTION OF LAW ON WHETHER THERE
IS A DISTINCTION BETWEEN THE PRINCIPLE OF
RES JUDICATA PER SE FROM THE PRINCIPLE THAT
THE DISMISSAL OF THE MAIN CASE CARRIES
WITH IT THE DISMISSAL OF THE COMPULSORY
COUNTERCLAIM AND SAID DISMISSAL
CONSTITUTES RES JUDICATA WITH RESPECT TO
THE COMPULSORY COUNTERCLAIM.5
The basic issue to be resolved is whether or not respondent is entitled
to attorney’s fees for assisting petitioner as counsel in the labor case.
While it is true that the retainer contract between the parties expired
during the pendency of the said labor case, it does not follow that
petitioner has no more obligation to pay respondent his attorney’s
fees. The Court of Appeals found that petitioner engaged the legal
services of respondent and agreed to pay him accordingly, thus:
"Anent the first issue, the Petitioner resolutely avers that he
and the Private Respondent had agreed on the latter paying
him the amount of P60,000.00 by way of attorney’s fees for
his professional services as its counsel in POEA Case No.
94-08-2370 the Petitioner relying on his ‘Retainer
Agreement’ in tandem with the ‘Compulsory Counterclaim’
of the Private Respondent to the complaint of Isidro
Felosopo.
"We agree with the Petitioner’s pose. It bears stressing that
the ‘Retainer Agreement’ of the Petitioner and the Private
Respondent (Exhibit ‘A’) envisaged two (2) species of
professional services of the Petitioner, namely, those
professional services covered by the regular retainer fee
and those covered by separate billings. Petitioner’s services
not covered by the regular retainer fee and, hence, subject
to separate billing include:
‘x x x
5. Services not covered by the regular retainer
fee and therefore, subject to separate billing:
 a) litigation, quasi-judicial proceedings,
administrative investigation, and similar
proceedings legal in nature;
x x x’
"x x x While admittedly, the Petitioner and the Private
Respondent did not execute a written agreement on
Petitioner’s fees in said case apart from the ‘Retainer
Agreement’, however, the Private Respondent did
categorically and unequivocally admit in its ‘Compulsory
Counterclaim’ embodied in its Answer to the Complaint, in
POEA Case No. 94-08-2370, that it engaged the services of
the Petitioner as its counsel ‘For a fee in the amount of
P60,000.00, Etc.’:
‘COMPULSORY COUNTERCLAIM
1. Respondent reproduces herein by reference all
the material allegations in the foregoing Answer.
2. As shown by the allegation in the Answer the
complaint is factually and legally unfounded. To
defend itself against this baseless suit, respondent
suffered and continues to suffer actual damage in
the amount of P30,000.00 and was compelled to
hire the services of counsel for a fee in the
amount of P60,000.00 plus P1,500.00
honorarium per appearance and litigation
expenses in the amount of not less than
P10,000.00 plus cost of
3. suit." (Exhibit ‘B-1’: underscoring supplied)
Petitioner, in order to evade its obligation, invoked the principle of
res judicata. Citing BA Finance Corporation vs. Co6 , petitioner
contends that since the complaint in the labor case was dismissed, the
counterclaim for attorney’s fees was likewise dismissed.
Consequently, the dismissal of the counterclaim has the effect of res
judicata on respondent’s complaint for attorney’s fees. Necessarily, it
must also be dismissed.
Petitioner’s invocation of res judicata7 is utterly misplaced. The
labor case and the instant complaint for collection of attorney’s fees
are entirely different. Obviously, in the two cases, there is no identity
of parties, identity of subject matter, and identity of causes of action.
Also, the Order in the labor case dismissing the complaint with
prejudice is not on the merits.
Significantly, in German Marine Agencies, Inc. vs. NLRC,8 we held
that there must always be a factual basis for the award of attorney’s
fees. Here, since petitioner agreed to be represented by respondent as
counsel in the labor case and to pay him his attorney’s fees, it must
abide with its agreement which has the force of law between them.9
We observe, however, that respondent did not encounter difficulty in
representing petitioner. The complaint against it was dismissed with
prejudice. All that respondent did was to prepare the answer with
counterclaim and possibly petitioner’s position paper. Considering
respondent’s limited legal services and the case involved is not
complicated, the award of P50,000.00 as attorney’s fees is a bit
excessive. In First Metro Investment Corporation vs. Este del Sol
Mountain Reserve, Inc.,10 we ruled that courts are empowered to
reduce the amount of attorney’s fees if the same is iniquitous or
unconscionable. Under the circumstances obtaining in this case, we
consider the amount of P20,000.00 reasonable.
WHEREFORE, the petition is GRANTED. The assailed Decision of
the Court of Appeals is AFFIRMED with MODIFICATION in the
sense that the award of P50,000.00 as attorney’s fees to herein
respondent is reduced to only P10,000.00. No costs.
SO ORDERED.
15.) A.C. No. 7337 September 29, 2014
ROLANDO VIRAY, Complainant,
vs.
ATTY. EUGENIO T. SANICAS, Respondent.
RESOLUTION
DEL CASTILLO, J.:
This is a verified Complaint for Disbarment/Gross Immoral Conduct1
filed with this Court on September 18, 2006 by complainant Rolando
Viray (complainant) against respondent Atty. Eugenio T. Sanicas
(respondent).
Factual Antecedents
Complainant alleges that he engaged the services of respondent
relative to a labor case2 he filed against Ester Lopez and Teodoro
Lopez III (spouses Lopez). On February 26, 2001, the Labor Arbiter
ruled in favor of complainant and disposed of the case as follows:
WHEREFORE, premises considered, judgment is hereby rendered
ordering respondents Ester Lopez and Teodoro Lopez III to pay
complainant Rolando Viray of the following, to wit:
1. Backwages ........................... ₱146,726.67
2. Separation Pay ......................... 24,000.00
3. Service Incentive Leave Pay ......... .1,538.46
4. Attorney's Fees ........................ .17,226.51
or a total amount of One Hundred Eighty Nine Thousand Fom
Hw1dred Ninety One Pesos & 64/100 (Pl89,491.60) [sic] to be
deposited with the Cashier of this Office, wjthin ten (10) days from
receipt hereof
All other claims are hereby denied for lack of merit.
SO ORDERED.3
Subsequently, an Alias Writ of Execution4 was issued relative to
aforesaid decision. During the implementation of said writ, however,
complainant discovered that respondent had already collected the
total amount of ₱95,000.00 from spouses Lopez. Respondent
received said amount in the following manner:
Voucher
Date
No.
Amount Purpose
0210512004 7802 ₱20,000.00 Attorney's fees
02/13/2004 7833 10,000.00 Partial payment for
 judgment In view of the foregoing, it is respectfully recommended that the
respondent be meted the penalty of two (2) years suspension.
0212612004 7848 10,000.00 Partial payment for Respondent is also ordered to return, in restitution all the amounts in
judgment his possession which are due to complainant, less his rightful
attorney's fees.10 On October 28, 2011, the IBP Board of Governors
03/12/2004 7894 20,000.00 Partial payment for adopted Resolution No. XX-2011-139,11 which approved the Report
judgment and Recommendation of the Investigating Commissioner suspending
respondent from the practice of law for two years, but with the
0410212004 7932 5,000.00 Partial payment for
modification that respondent should restitute the sum of
judgment
₱85,500.0012 to the complainant.
0410612004 7941 5,000.00 Partial payment for
judgment Issue
04/13/2004 7944 5,000.00 Partial payment for
judgment The essential issue in this case is whether the respondent is guilty of
gross misconduct for his failure to promptly account to his client the
04/16/2004 7954 10,000.00 Partial payment for funds received in the course of his professional engagement and
judgment return the same upon demand.

0413012004 7977 10,000.00 Partial payment for

judgment The Court's Ruling

Total Amount: ₱95,000.00
Complainant also discovered that respondent misrepresented to
spouses Lopez that he is authorized to receive payments on his
behalf, when in truth and in fact he is not. Consequently, complainant
made several verbal demands to the respondent to remit to him the
amount of ₱95,000.00, less his attorney's fees of ₱20,000.00. But
respondent did not budge. Thus, complainant lodged a complaint
before the Office of the Punong Barangay of Brgy. Felisa, Bacolod
City. Respondent, however, ignored the summons to attend a
conference before the barangay to resolve the issues.
In his Comment,5 respondent admits that he received ₱95,000.00
from spouses Lopez on installments, but denies that he was not
authorized to accept it. He explains that complainant agreed to pay
him additional attorney's fees equivalent to 25o/o of the total
monetary award, on top of the attorney's fees that may be awarded by
the labor tribunal, and to refund all expenses respondent incurred
relative to the case. Thus, from the total award of ₱189,491.60, the
sum of ₱17,226.57 representing respondent's professional fees has to
be deducted, leaving a balance of ₱172,275.13.6 Then from said
amount, complainant proposed that he will get ₱100,000.00 and the
balance of ₱72,275.13 shall belong to respondent as and for his
additional 25o/o attorney's fees and reimbursement for all expenses
he incurred while handling the case. However, after receiving the
amount of ₱95,000.00 and deducting therefrom the amounts of
₱20,000.007 attorney's fees, ₱17,000.00 earlier given to complainant,
and ₱2,000.00 paid to the sheriff, what was left to respondent was
only ₱56,000.00. Respondent whines that this amount is way below
the promised 25o/o attorney's fees and refund of expenses in the total
amount of ₱72,275.13.
Respondent asserts that, in any event, complainant will still be
receiving a sum greater than what he expects to receive. He avers that
complainant is still entitled to receive from spouses Lopez the sum of
₱93,491.60. Adding the Pl 7,000.00 respondent previously remitted
to complainant, the latter will get a total amount of ₱110,491.60. This
amount, according to respondent, exceeds the amount of ₱100,000.00
complainant agreed to and expected to receive.
IBP's Report and Recommendation
On February 26, 2007,8 we referred this case to the Integrated Bar of
the Philippines (IBP) for investigation, report and recommendation.
On January 31, 2011, the Investigating Commissioner issued his
Report and Recommendation9 with the following recommendation:
"The Code of Professional Responsibility demands the utmost degree
of fidelity and good faith in dealing with the moneys entrusted to
lawyers because of their fiduciary relationship."13 Specifically, Rule
16.01 of the Code imposes upon the lawyer the duty to "account for
all money or property collected or received for or from the client."
Rule 16.03 thereof, on the other hand, mandates that "[a] lawyer shall
deliver the funds xx x of his client when due or upon demand."
In this case, respondent on nine separate occasions from February 5,
2004 to April 30, 2004 received payments for attorney's fees and
partial payments for monetary awards on behalf of complainant from
spouses Lopez. But despite the number of times over close to three
months he had been receiving payment, respondent neither informed
the complainant of such fact nor rendered an accounting thereon. It
was only when an Alias Writ of Execution was issued and being
implemented when complainant discovered that spouses Lopez had
already given respondent the total amount of ₱95,000.00 as partial
payment for the monetary awards granted to him by the labor
tribunal.
To make matters worse, respondent withheld and refused to deliver to
the complainant said amount, which he merely received on behalf of
his client, even after demand. Complainant brought the matter before
the barangay, but respondent simply ignored the same. Such failure
and inordinate refusal on the part of the respondent to render an
accounting and return the money after demand raises the presumption
that he converted it to his own use.14 His unjustified withholding of
the funds also warrants the imposition of disciplinary action against
him.15
Respondent justifies his action by asserting that complainant
authorized him to receive payment. He implies that he is also
authorized to apply the sum of money he received from spouses
Lopez to his additional 25o/o attorney's fees and reimbursement for
all expenses he incurred for the case, in the total amount of
₱72,275.13. However, after deducting from the amount of
₱95,000.00 the amounts of ₱20,000.00, ₱17,000.00, and ₱2,000.00,
what was left to respondent, to his dismay was only ₱56,000.00.
The Court is not impressed. As aptly observed by the Investigating
Commissioner, other than his self-serving statements, there is nothing
in the records which would support respondent's claim that he was
authorized to receive the payments. Neither is there proof that
complainant agreed to pay him additional 25% attorney's fees and
reimburse him for all expenses he allegedly incurred in connection
with the case. Respondent did not present any document, retainer's
agreement, or itemized breakdown of the amount to be reimbursed to
support his claim.1âwphi1 In any event, even assuming that
respondent was authorized to receive payments, the same does not
exempt him from his duty of promptly informing his client of the
amounts he received in the course of his professional employment.
"The fiduciary nature of the relationship between counsel and client
imposes on a lawyer the duty to account for the money or property
collected or received for or from the client. He is obliged to render a
prompt accounting of all the property and money he has collected for
his client."16 "The fact that a lawyer has a lien for his attorney's fees
on the money in his hands collected for his client does not relieve
him from the obligation to make a prompt accounting."17 Moreover,
a lawyer has no right "to unilaterally appropriate his client's money
for himself by the mere fact alone that the client owes him attorney's
fees."18
In sum, "[r]espondent's failure to immediately account for and return
the money when due and upon demand violated the trust reposed in
him, demonstrated his lack of integrity and moral soundness, and
warrants the imposition of disciplinary action."19
The Penalty
"The penalty for gross misconduct consisting in the failure or refusal
despite demand of a lawyer to account for and to return money or
property belonging to a client has been suspension from the practice
of law for two years."20 Thus, the IBP Board of Governors did not
err in recommending the imposable penalty. Considering, however,
that this is respondent's first offense and he is already a
nonagenarian,21 the Court, in the exercise of its compassionate
judicial discretion, finds that a penalty of one year suspension is
sufficient. WHEREFORE, the Court finds respondent Atty. Eugenio
T. Sanicas GUILTY of gross misconduct and accordingly
SUSPENDS him from the practice of law for one (1) year upon the
finality of this Resolution, with a warning that a repetition of the
same or similar act or offense shall be dealt with more severly.
Atty. Sanicas is ordered to return to complainant, within 90 days
from finality of this Resolution, the net amount of ₱85,500.00 with
interest at the rate of 6% per annum from finality of this Resolution
until the full amount is returned. Failure to comply with the foregoing
directive will warrant the imposition of a more severe penalty.
Let copies of this Resolution be furnished the Office of the Bar
Confidant and noted in Atty. Sanicas' record as a member of the Bar.
SO ORDERED.
16.) A.C. No. 10868
[Formerly CBD Case No. 07-2041]
CHERYLE. VASCO-TAMARAY, Complainant,
vs.
ATTY. DEBORAH Z. DAQUIS, Respondent.
RESOLUTION
PERCURIAM:
Pretending to be counsel for a party in a case and using a forged
signature in a pleading merit the penalty of disbarment.
Cheryl E. Vasco-Tamaray (Vasco-Tamaray) filed a
ComplaintAffidavit before the Integrated Bar of the Philippines on
July 30, 2007, alleging that respondent Atty. Deborah Z. Daquis
(Atty. Daquis) filed, on her behalf, a Petition for Declaration of
Nullity of Marriage without her consent and forged her signature on
the Petition.1 She also alleged that Atty. Daquis signed the Petition
for Declaration of Nullity of Marriage as "counsel for petitioner,"
referring to Vasco-Tamaray.2
Vasco-Tamaray stated that Atty. Daquis was not her counsel but that
of her husband, Leomarte Regala Tamaray.3 To support her
allegation, she attached the Affidavit4 of Maritess Marquez-
Guerrero. The Affidavit states:
1. Sometime in October 2006, I accompanied Cheryl
Tamaray in going to East Cafe at Rustan's Makati to meet
with her husband Leomarte Tamaray;
2. We arrived at the said place at around 7:00 pm and
Leomarte introduced to us (Cheryl and I) Atty. Deborah Z.
Daquis as his lawyer. He further told us that Atty. Daquis'
husband also worked in Japan and that's how he got to
know the latter and got her services;
3. Among other things, Leomarte told Cheryl that the
reason for that meeting and the presence of Atty. Daquis
was because he had decided to file a case to annul his
marriage with Cheryl;
4. Cheryl was shocked and just cried. After awhile [sic],
Leomarte's brother arrived and shortly after, the group left;
5. The next instance that I saw Atty. Daquis was when we
(Cheryl and I) went to McDonald's-Greenbelt where Atty.
Daquis tried to convince her not to oppose Leomarte's
decision to have their marriage annulled[.]5 (Emphasis
supplied)
Vasco-Tamaray narrated that in December 2006, Atty. Daquis
informed her "that a Petition for Declaration of Nullity of Marriage
was filed before the Regional Trial Court of Muntinlupa City."6 In
February 2007, Atty. Daquis asked her to appear before the City
Prosecutor's Office of Muntinlupa City.7
On March 5, 2007, Vasco-Tamaray appeared before the City
Prosecutor's Office and met Atty. Daquis. She asked Atty. Daquis to
give her a copy of the Petition but Atty. Daquis refused.8
Vasco-Tamaray stated that she obtained a copy of the Petition for
Declaration of Nullity of Marriage from Branch 207 of the Regional
Trial Court of Muntinlupa City. She was surprised to see that the
Petition was allegedly signed and filed by her.9
Vasco-Tamaray alleged that she did not file the Petition, that her
signature was forged by Atty. Daquis, and that her purported
community tax certificate appearing on the jurat was not hers because
she never resided in Muntinlupa City.10 She attached a Certification
issued by the Sangguniang Barangay of Putatan, Muntinlupa City
stating that she was "never . . . a resident of #9 Daang Hari Street,
Umali Compound, Summitville Subdivision, Barangay Putatan."11
She also attached a Certification issued by Barangay Talipapa stating
that she has been a resident of "#484-J Saguittarius St., Solville
Subd., Barangay Talipapa, Novaliches, Quezon City... from 2000 till
present."12
Vasco-Tamaray also alleged that the Petition for Declaration of
Nullity of Marriage was Atty. Daquis' idea, consented to by Leomarte
Tamaray.13
She further alleged that she had never received any court process.
The Petition states that her postal address is "09 Daang Hari St.,
Umali Comp., Summitville Subd., Putatan, Muntinlupa City[,]"14
which is the address of her husband's family. The return slips of the
notices sent by the trial court were received by Encarnacion T.
Coletraba and Almencis Cumigad, relatives ofLeomarte Tamaray.15
Atty. Daquis filed an Answer countering that her client was Vasco-
Tamaray, complainant herself, and not complainant's husband. She
alleged that Vasco-Tamaray knew of the Petition as early as October
2006, not December 2006.16
With regard to the community tax certificate, Atty. Daquis explained
that when she notarized the Petition, the community tax certificate
number was supplied by Vasco-Tamaray.17 Atty. Daquis' allegation
was supported by the Joint Affidavit of her staff, Ma. Dolor E.
Purawan (Purawan) and Ludy Lorena (Lorena).18
Purawan and Lorena detailed in their Joint Affidavit that they knew
Vasco-Tamaray to be a client of Atty. Daquis and that they never saw
Atty. Daquis forge Vasco-Tamaray's signature. Purawan stated that
she typed the Petition for Declaration of Nullity of Marriage and that
the community tax certificate was provided by Vasco-Tamaray.19
Atty. Daquis alleged that Vasco-Tamaray wanted her to call and
demand money from Leomarte Tamaray but she refused to do so.20
Atty. Daquis argued that Vasco-Tamaray had a copy of the Petition.
When Vasco-Tamaray requested another copy on March 5, 2007,
Atty. Daquis was unable to grant her client's request because she did
not have a copy of the Petition with her at that time.21
Atty. Daquis further alleged that Vasco-Tamaray conceived an
illegitimate son with a certain Reuel Pablo Aranda. The illegitimate
son was named Charles Dino Vasco. Reuel Pablo Aranda signed the
Affidavit of Acknowledgment/ Admission of Paternity portion of the
birth certificate.22
The Commission on Bar Discipline required the parties to submit
their position papers,23 but based on the record, only Vasco-Tamaray
complied.24
The Commission on Bar Discipline recommended the dismissal of
the Complaint because Vasco-Tamaray failed to prove her
allegations. The Commission on Bar Discipline noted that Vasco-
Tamaray should have questioned the Petition or informed the
prosecutor that she never filed any petition, but she failed to do so.25
The Board of Governors of the Integrated Bar of the Philippines
adopted and approved the Report and Recommendation of the
Commission on Bar Discipline in the Resolution dated September 27,
2014.26
The issue for resolution is whether respondent Atty. Deborah Z.
Daquis should be held administratively liable for making it appear
that she is counsel for complainant Cheryl Vasco-Tamaray and for
the alleged use of a forged signature on the Petition for Declaration of
Nullity of Marriage.
This court finds that respondent violated Canons 1, 7, 10, and 17 of
the Code of Professional Responsibility. The charge against
respondent for violation of Canon 15 is dismissed.
I Prosecutor:
By pretending to be counsel for complainant, respondent violated
Canon 1, Rule 1.01 of the Code of Professional Responsibility and
failed to uphold her duty of doing no falsehood nor consent to the
doing of any falsehood in court as stated in the Lawyer's Oath.27
Canon 1, Rule 1.01 of the Code of Professional Responsibility
provides:
CANON 1 - A lawyer shall uphold the constitution, obey the laws of
the land and promote respect for law and for legal processes.
RULE 1.01 - A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
In this case, respondent merely denied complainant's allegation that
she was Leomarte Tamaray's counsel28 but was unable to rebut the
other allegations against her.
Respondent admitted that she met complainant in October 2006,29
but did not refute30 the statement in Maritess Marquez-Guerrero's
Affidavit that Leomarte Tamaray introduced her as his lawyer.31
Likewise, respondent admitted that she met with complainant
subsequently,32 but did not refute Maritess Marquez-Guerrero's
statement that in one of the meetings, she tried to convince
complainant not to oppose Leomarte Tamaray's decision to annul
their marriage.33
Respondent argued in her Answer that she was the counsel for
complainant.34 Yet, there is no explanation how she was referred to
complainant or how they were introduced. It appears, then, that
respondent was contacted by Leomarte Tamaray to file a Petition for
Declaration of Nullity of Marriage on the ground of bigamy. As
stated in Maritess Marquez-Guerrero's Affidavit, "Leomarte told
Cheryl that the reason for that meeting and the presence of Atty.
Daquis was because he had decided to file a case to annul his
marriage with Cheryl[. ]"35
Based on this, it seems Leomarte Tamaray intended to file the
petition for declaration of nullity of marriage. However, respondent
made it appear that complainant, not her client Leomarte Tamaray,
was the petitioner. There is a probability that respondent did not want
Leomarte Tamaray to be the petitioner because he would have to
admit that he entered into a bigamous marriage, the admission of
which may subject him to criminal liability.
In addition, if it is true that complainant was respondent's client, then
there appears to be no reason for respondent to advise her "not to
oppose Leomarte's decision to have their marriage annulled."36
The records of this case also support complainant's allegation that she
never received any court process because her purported address in the
Petition is the address of Leomarte Tamaray. The Petition states that
complainant is "of legal age, Filipino citizen, married with postal
address at 09 Daang Hari St., Umali Comp., Summitville Subd.,
Putatan, Muntinlupa City[.]"37
The Certificate of Marriage of complainant and Leomarte Tamaray
states that Leomarte's residence is at "Summitvil[l]e Subv [sic],
Muntinlupa," while complainant's residence is at "Hermosa St.
Gagalangin, Tondo, Manila."38 Assuming that complainant lived
with her husband after they were married, complainant most likely
did not receive court processes because she left their home before the
filing of the Petition for Declaration of Nullity of Marriage. As
written in the Minutes of the meeting before the Office of the City
P[etitioner] & R[espondent] met sometime in 1993 through his
secretary. They became sweethearts in 1993 and their relationship as
steadies lasted until 1996;
During the 3 years of their union, petitioner knew respondent's family
as she even sleeps in their house; Theirs was also a long distance
relationship as respondent worked in Japan;
Upon respondents [sic] return to the Philippines they got married in
Feb, 1996. They had no children, as respondent immediately left for
Japan on March 11, 1996;
Respondent returned to the Philippines but unfortunately he brought
another woman. As a result, petitioner left their house.39 (Emphasis
supplied)
Further, complainant cannot be faulted for her failure to inform the
prosecutor that she did not file any petition for declaration of nullity
of marriage because during the meeting on March 5, 2007,
complainant had no knowledge that the Petition was filed in her
name.40 She obtained a copy of the Petition after the March 5, 2007
meeting.41
In Yupangco-Nakpil v. Uy,42 this court discussed Canon 1, Rule
1.01, as follows:
Rule 1.01, Canon 1 of the Code, as it is applied to the members of the
legal professions, engraves an overriding prohibition against any
form of misconduct, viz:
CANON 1 - A LA WYER SHALL UPHOLD THE
CONSTITUTION, OBEY THE LAWS OF THE LAND AND
PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES
Rule 1.01 - A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
The gravity of the misconduct- determinative as it is of the errant
lawyer's penalty- depends on the factual circumstances of each case .
....
. . . Verily, members of the Bar are expected at all times to uphold the
integrity and dignity of the legal profession and refrain from any act
or omission which might lessen the trust and confidence reposed by
the public in the fidelity, honesty, and integrity of the legal
profession. By no insignificant measure, respondent blemished not
only his integrity as a member of the Bar, but also that of the legal
profession. In other words, his conduct fell short of the exacting
standards expected of him as a guardian of law and justice.43
When respondent filed the Petition as counsel for complainant when
the truth was otherwise, she committed a falsehood against the trial
court and complainant.
II
Respondent violated Canon 7, Rule 7.03 and Canon 10, Rule 10.01
when she allowed the use of a forged signature on a petition she
prepared and notarized.44
Complainant alleged that her signature on the Petition was forged.45
Respondent merely denied complainant's allegation.46
The Petition for Declaration of Nullity of Marriage was signed by a
certain "CVasco."47 The records of this case show that complainant
has used two signatures. In her identification cards issued by the
University of the East, she used a signature that spelled out
"CVasco."48 In her Complaint-Affidavit against respondent,
complainant used a signature that spelled out "CTamaray."49
A comparison of the signatures appearing on the Petition for
Declaration of Nullity of Marriage and on complainant's
identification cards show a difference in the stroke of the letters "c"
and "o." Further, complainant's signatures in the documents50
attached to the records consistently appear to be of the same height.
On the other hand, her alleged signature on the Petition for
Declaration of Nullity of Marriage has a big letter "c."51 Hence, it
seems that complainant's signature on the Petition for Declaration
ofNullity of Marriage was forged.
While there is no evidence to prove that respondent forged
complainant's signature, the fact remains that respondent allowed a
forged signature to be used on a petition she prepared and
notarized.52 In doing so, respondent violated Canon 7, Rule 7.03 and
Canon 10, Rule 10.01. These canons state:
CANON 7 - A lawyer shall at all times uphold the integrity and
dignity of the legal profession, and support the activities of the
integrated bar.
RULE 7.03 - A lawyer shall not engage in conduct that adversely
reflects on his fitness to practice law, nor shall he, whether in public
or private life, behave in a scandalous manner to the discredit of the
legal profession.
....
CANON 10 - A lawyer owes candor, fairness and good faith to the
court.
RULE 10.01 -A lawyer shall not do any falsehood, nor consent to the
doing of any in Court; nor shall he mislead or allow the Court to be
misled by any artifice.
In Embido v. Pe, Jr.,53 Assistant Provincial Prosecutor Salvador N.
Pe, Jr. was found guilty of violating Canon 7, Rule 7.03 and was
meted the penalty of disbarment for falsifying a court decision "in a
non-existent court proceeding."54 This court discussed that:
Gross immorality, conviction of a crime involving moral turpitude, or
fraudulent transactions can justify a lawyer's disbarment or
suspension from the practice of law. Specifically, the deliberate
falsification of the court decision by the respondent was an act that
reflected a high degree of moral turpitude on his part. Worse, the act
made a mockery of the administration of justice in this country, given
the purpose of the falsification, which was to mislead a foreign
tribunal on the personal status of a person. He thereby became
unworthy of continuing as a member of the Bar.55
In a similar manner, respondent's act of allowing the use of a forged
signature on a petition she prepared and notarized demonstrates a
lack of moral fiber on her part.
Other acts that this court has found violative of Canon 7, Rule 7.03
are: engaging in a scuffle inside court chambers;56 openly doubting
paternity of his own son;57 hurling invectives at a Clerk of Court;58
harassing occupants of a property;59 using intemperate language;60
and engaging in an extramarital affair.61
Furthermore, allowing the use of a forged signature on a petition filed
before a court is tantamount to consenting to the commission of a
falsehood before courts, in violation of Canon 10.
In Spouses Umaguing v. De Vera,62 this court discussed the
importance of Canon 10, Rule 10.01, as follows:
The Lawyer's Oath enjoins every lawyer not only to obey the laws of
the land but also to refrain from doing any falsehood in or out of
court or from consenting to the doing of any in court, and to conduct
himself according to the best of his knowledge and discretion with all
good fidelity to the courts as well as to his clients. Every lawyer is a
servant of the law, and has to observe and maintain the rule of law as
well as be an exemplar worthy of emulation by others. It is by no
means a coincidence, therefore, that the core values of honesty,
integrity, and trustworthiness are emphatically reiterated by the
Code of Professional Responsibility. In this light, Rule 10.01, Canon
10 of the Code of Professional Responsibility provides that "[a]
lawyer shall not do any falsehood, nor consent to the doing of any in
Court; nor shall he mislead, or allow the Court to be misled by any
artifice."63 (Emphasis supplied)
III
This court further finds that respondent violated Canon 17, which
states:
CANON 17 - A lawyer owes fidelity to the cause of his client and he
shall be mindful of the trust and confidence reposed in him.
Respondent failed to protect the interests of her client when she
represented complainant, who is the opposing party of her client
Leomarte Tamaray, in the same case.
The responsibilities of a lawyer under Canon 17 were discussed in
Penilla v. Alcid, Jr.:64
The legal profession dictates that it is not a mere duty, but an
obligation, of a lawyer to accord the highest degree of fidelity, zeal
and fervor in the protection of the client's interest. The most thorough
groundwork and study must be undertaken in order to safeguard the
interest of the client. The honor bestowed on his person to carry the
title of a lawyer does not end upon taking the Lawyer's Oath and
signing the Roll of Attorneys. Rather, such honor attaches to him for
the entire duration of his practice of law and carries with it the
consequent responsibility of not only satisfying the basic
requirements but also going the extra mile in the protection of the
interests of the client and the pursuit of justice[. ]65
Respondent is reminded of the duties and responsibilities of members
of the legal profession, as discussed in Tenoso v. Echanez:66
Time and again, this Court emphasizes that the practice of law is
imbued with public interest and that "a lawyer owes substantial duties
not only to his client, but also to his brethren in the profession, to the
courts, and to the nation, and takes part in one of the most important
functions of the State-the administration of justice-as an officer of the
court." Accordingly, "[l]awyers are bound to maintain not only a high
standard of legal proficiency, but also of morality, honesty, integrity
and fair dealing. "67 (Citations omitted)
IV
This court notes that respondent may have violated Canon 15, Rule
15.03 when she entered her appearance as counsel for complainant68
even though she was engaged as counsel by Leomarte Tamaray.69
Canon 15, Rule 15.03 of the Code of Professional Responsibility
provides:
CANON 15 - A lawyer shall observe candor, fairness and loyalty in
all his dealings and transactions with his client.
....
Rule 15.03 - A lawyer shall not represent conflicting interests except
by written consent of all concerned given after a full disclosure of the
facts.
The rationale for Canon 15 was discussed in Samson v. Era:70
The rule prohibiting conflict of interest was fashioned to prevent
situations wherein a lawyer would be representing a client whose
interest is directly adverse to any of his present or former clients. In
the same way, a lawyer may only be allowed to represent a client
involving the same or a substantially related matter that is materially
adverse to the former client only if the former client consents to it
after consultation. The rule is grounded in the fiduciary obligation of
loyalty. Throughout the course of a lawyer-client relationship, the
lawyer learns all the facts connected with the client's case, including
the weak and strong points of the case. Knowledge and information
gathered in the course of the relationship must be treated as sacred
and guarded with care. It behooves lawyers not only to keep inviolate
the client's confidence, but also to avoid the appearance of treachery
and double-dealing, for only then can litigants be encouraged to
entrust their secrets to their lawyers, which is paramount in the
administration of justice. The nature of that relationship is, therefore,
one of trust and confidence of the highest degree .
....
. . . The spirit behind this rule is that the client's confidence once
given should not be stripped by the mere expiration of the
professional employment.1âwphi1 Even after the severance of the
relation, a lawyer should not do anything that will injuriously affect
his former client in any matter in which the lawyer previously
represented the client. Nor should the lawyer disclose or use any of
the client's confidences acquired in the previous relation. In this
regard, Canon 17 of the Code of Professional Responsibility
expressly declares that: "A lawyer owes fidelity to the cause of his
client and he shall be mindful of the trust and confidence reposed in
him."
The lawyer's highest and most unquestioned duty is to protect the
client at all hazards and costs even to himself. The protection given to
the client is perpetual and does not cease with the termination of the
litigation, nor is it affected by the client's ceasing to employ the
attorney and retaining another, or by any other change of relation
between them. It even survives the death of the client.71
The test to determine whether conflict of interest exists was discussed
in Hornilla v. Salunat:72
There is conflict of interest when a lawyer represents inconsistent
interests of two or more opposing parties. The test is "whether or not
in behalf of one client, it is the lawyer's duty to fight for an issue or
claim, but it is his duty to oppose it for the other client. In brief, if he
argues for one client, this argument will be opposed by him when he
argues for the other client." This rule covers not only cases in which
confidential communications have been confided, but also those in
which no confidence has been bestowed or will be used. Also, there is
conflict of interests if the acceptance of the new retainer will require
the attorney to perform an act which will injuriously affect his first
client in any matter in which he represents him and also whether he
will be called upon in his new relation to use against his first client
any knowledge acquired through their connection. Another test of the
inconsistency of interests is whether the acceptance of a new relation
will prevent an attorney from the full discharge of his duty of
undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof.73
(Emphasis supplied, citations omitted)
Respondent was engaged by Leomarte Tamaray to be his counsel.74
When the Petition for Declaration of Nullity of Marriage was filed,
respondent signed the Petition as counsel for complainant.75 If
respondent was indeed engaged as counsel by complainant, then there
is conflict of interest, in violation of Canon 15, Rule 15.03.
However, there is nothing on record to show that respondent was
engaged as counsel by complainant. Hence, this court finds that
respondent did not commit conflict of interest.
V to the Integrated Bar of the Philippines, and to the Office of the Court
On a final note, Rule 139-B has been amended by Bar Matter No.
1645 dated October 13, 2015. Section 12 of Rule 139-B now
provides that:
Rule 139-B. Disbarment and Discipline of Attorneys
....
Section 12. Review and recommendation by the Board of Governors.
(a) Every case heard by an investigator shall be reviewed
by the IBP Board of Governors upon the record and
evidence transmitted to it by the Investigator with his
report.
(b) After its review, the Board, by the vote of a majority of
its total membership, shall recommend to the Supreme
Court the dismissal of the complaint or the imposition of
disciplinary action against the respondent. The Board shall
issue a resolution setting forth its findings and
recommendations, clearly and distinctly stating the facts
and the reasons on which it is based. The resolution shall be
issued within a period not exceeding thirty (30) days from
the next meeting of the Board following the submission of
the Investigator's report.
(c) The Board's resolution, together with the entire records
and all evidence presented and submitted, shall be
transmitted to the Supreme Court for final action within ten
(10) days from issuance of the resolution.
(d) Notice of the resolution shall be given to all parties
through their counsel, if any.76
Under the old rule, the Board of Governors of the Integrated Bar of
the Philippines was given the power to "issue a decision"77 if the
lawyer complained of was exonerated or meted a penalty of "less
than suspension or disbarment."78 In addition, the case would be
deemed terminated unless an interested party filed a petition before
this court.79
The amendments to Rule 139-B is a reiteration that only this court
has the power to impose disciplinary action on members of the bar.
The factual findings and recommendations of the Commission on Bar
Discipline and the Board of Governors of the Integrated Bar of the
Philippines are recommendatory, subject to review by this court.80
WHEREFORE, respondent Atty. Deborah Z. Daquis is found
GUILTY of violating Canon 1, Rule 1.01, Canon 7, Rule 7.03,
Canon 10, Rule 10.01, and Canon 17 of the Code of Professional
Responsibility.
The charge for violation of Canon 15, Rule 15.03 against respondent
Atty. Deborah Z. Daquis is DISMISSED.
The penalty of DISBARMENT is imposed upon respondent Atty.
Deborah Z. Daquis. The Office of the Bar Confidant is directed to
remove the name of Deborah Z. Daquis from the Roll of Attorneys.
Let a copy of this Resolution be furnished to the Office of the Bar
Confidant to be appended to respondent's personal record as attorney,
Administrator for dissemination to all courts throughout the country
for their information and guidance.
This Resolution takes effect immediately.
SO ORDERED.
17.) A.C. No. 5408
ANITA SANTOS MURRAY, Complainant
vs.
ATTY. FELICITO J. CERVANTES, Respondent
We sustain, with modification, the Integrated Bar of the Philippines
Board of Governors' Resolution No. XVI-2004-4811 and Resolution
No. XVIII-2008-711.2
Resolution No. XVI-2004-481 modified the Board of Governors'
Resolution No. XV-2002-599.3 The latter ruled that respondent Atty.
Felicito J. Cervantes must be reprimanded and ordered to return to
complainant Anita Santos Murray the sum of ₱80,000.00.4
Resolution No. XVI-2004-481 modified this with the penalty of one
(1)-year suspension from the practice of law, with an additional three
(3)-month suspension for every month (or fraction) that respondent is
unable to deliver to complainant the sum of ₱80,000.00.5 Resolution
No. XVIII-2008-711 denied respondent's Motion for
Reconsideration.6
On February 2, 2001, complainant filed before this Court a
Complaint7 charging respondent with violating Canon 188 of the
Code of Professional Responsibility.
Complainant alleged that sometime in June 2000, she sought the
services of a lawyer to assist in the naturalization (that is, acquisition
of Philippine citizenship) of her son, Peter Murray, a British national.
Respondent was later introduced to her. On June 14, 2000, she and
respondent agreed on the latter's services, with complainant handing
respondent the sum of ₱80,000.00 as acceptance fee.9
About three (3) months passed without respondent doing "anything
substantial."10 Thus, on September 11, 2000, complainant wrote
respondent to inform him that she was terminating his services. She
explained:
I am not satisfied with the way things are going regarding my
petition. I am expecting that you keep me abreast of your activities
but I am left in the dark as to what have you done so far. You do not
show up on our scheduled appointments nor do you call me up to let
me know why you cannot come. You stood me up twice already
which shows that you are not even interested in my case.
....
Since I already paid the ₱80,000.00 acceptance fee in full, I expect to
get a refund of the same from you.11
As respondent failed to return the ₱80,000.00 acceptance fee,
complainant instituted the Complaint in this case. She also instituted
criminal proceedings against respondent for violation of Article
315(1)(b)12 of the Revised Penal Code.13
This case was subsequently referred to the Integrated Bar of the
Philippines for its investigation, report, and recommendation.14
After the proceedings before the Integrated Bar of the Philippines,
Investigating Commissioner Demaree J.B. Raval (Commissioner
Raval) furnished a Report15 dated September 9, 2002 recommending
that respondent be reprimanded and required to return the sum of
₱80,000.00 to complainant. In its Resolution No. XV-2002-599,16
the Integrated Bar of the Philippines Board of Governors adopted
Commissioner Raval's recommendations.
Respondent filed before this Court a Motion for Leave to Admit
Additional Evidence with Motion to Dismiss.17 He asserted that he
never required complainant to immediately pay him ₱80,000.00 as
acceptance fee.18 This Motion was forwarded to the Integrated Bar
of the Philippines19 and was treated as respondent's Motion for
Reconsideration20. For her part, complainant filed several
manifestations and motions asking that a heavier penalty be imposed
on respondent.21
Acting on the pending incidents of the case, Investigating
Commissioner Dennis A.B. Funa (Commissioner Funa) furnished a
Report22 recommending that respondent be suspended from the
practice of law for one (1) year, with an additional three (3)-month
suspension for every month (or fraction) that respondent fails to
deliver to complainant the sum of ₱80,000.00.
Commissioner Funa justified the penalty of suspension by
emphasizing that, in a hearing conducted by the Integrated Bar of the
Philippines on August 18, 2004, respondent was "orally directed" to
return the ₱80,000.00 not later than the end of August 2004.23
Respondent acceded to this; however, he failed to return the
₱80,000.00.24
In its Resolution No. XVI-2004-481,25 the Board of Governors
adopted Commissioner Funa' s recommendation.1âwphi1
The Board of Governors' Resolution No. XVIII-2008-711 later
denied respondent's Motion for Reconsideration.26
It is evident from the records that respondent failed to deliver on the
services that he committed to complainant despite receiving the
amount of ₱80,000.00 as acceptance fee. Although respondent
asserted that he did not actively solicit this amount from complainant,
it remains, as Commissioner Funa underscored, that respondent
accepted this amount as consideration for his services.27 Moreover,
following complainant's engagement of his services, respondent
failed to communicate with complainant or update her on the
progress of the services that he was supposed to render. Not only did
he fail in taking his own initiative to communicate; he also failed to
respond to complainant's queries and requests for updates.
Respondent's failure to timely and diligently deliver on his
professional undertaking justifies the Integrated Bar of the
Philippines' conclusion that he must restitute complainant the amount
of ₱80,000.00.
Luna v. Galarrita28 has explained the parameters for ordering
restitution in disciplinary proceedings:
In Ronquillo v. Atty. Cezar, the parties entered a Deed of Assignment
after which respondent received ₱937,500.00 from complainant as
partial payment for the townhouse and lot. However, respondent did
not turn over this amount to developer Crown Asia, and no copy of
the Contract to Sell was given to complainant. This court suspended
Atty. Cezar from the practice of law for three (3) years, but did not
grant complainant's prayer for the return of the ₱937,500.00.
Ronquillo held that "[d]isciplinary proceedings against lawyers do
not involve a trial of an action, but rather investigations by the court
into the conduct of one of its officers." Thus, disciplinary
proceedings are limited to a determination of "whether or not the
attorney is still fit to be allowed to continue as a member of the Bar."
Later jurisprudence clarified that this rule excluding civil liability
determination from disciplinary proceedings "remains applicable
only to claimed liabilities which are purely civil in nature - for
instance, when the claim involves moneys received by the lawyer
from his client in a transaction separate and distinct [from] and not
intrinsically linked to his professional engagement." This court has
thus ordered in administrative proceedings the return of amounts
representing legal fees.
This court has also ordered restitution as concomitant relief in
administrative proceedings when respondent's civil liability was
already established:
Although the Court renders this decision in an administrative
proceeding primarily to exact the ethical responsibility on a member
of the Philippine Bar, the Court's silence about the respondent
lawyer's legal obligation to restitute the complainant will be both
unfair and inequitable. No victim of gross ethical misconduct
concerning the client's funds or property should be required to still
litigate in another proceeding what the administrative proceeding has
already established as the respondent's liability. That has been the
reason why the Court has required restitution of the amount involved
as a concomitant relief in the cited cases of Mortera v. Pagatpatan,
Almendarez, Jr. v. Langit, Small v. Banares.29 (Citations and
emphases omitted)
It is proper, in the course of these disciplinary proceedings, that
respondent be required to return to complainant the amount of
₱80,000.00. This amount was delivered to respondent during
complainant's engagement of his professional services, or in the
context of an attorney-client relationship. This is neither an
extraneous nor purely civil matter.
By the same failure to timely and diligently deliver on his
professional undertaking (despite having received fees for his
services), as well as by his failure to keep complainant abreast of
relevant developments in the purposes for which his services were
engaged, respondent falls short of the standards imposed by Canon
18 of the Code of Professional Responsibility:
CANON 18 - A LA WYER SHALL SERVE HIS CLIENT WITH
COMPETENCE AND DILIGENCE.
Rule 18.01 - A lawyer shall not undertake a legal service which he
knows or should know that he is not qualified to render. However, he
may render such service if, with the consent of his client, he can
obtain as collaborating counsel a lawyer who is competent on the
matter.
Rule 18.02 - A lawyer shall not handle any legal matter without
adequate preparation.
Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to
him, and his negligence in connection therewith shall render him
liable.
Rule 18.04 - A lawyer shall keep the client informed of the status of
his case and shall respond within a reasonable time to the client's
request for information. (Emphasis supplied)
Disciplinary sanctions more severe than those considered proper by
the Integrated Bar of the Philippines are warranted.
We emphasize that, during the proceedings before the Integrated Bar
of the Philippines, respondent acknowledged his duty to compensate
complainant for the amount of ₱80,000.00. He then made a
commitment to return that sum to her. To date, however, he has failed
to deliver on the commitment made almost twelve and a half years
ago.
We clarify that the oral instruction given to respondent in the
Integrated Bar of the Philippines' August 18, 2004 hearing was not a
juridically binding order. Rule 139-B of the Rules of Court sanctions
and spells out the terms of the Integrated Bar of the Philippines'
involvement in cases involving the disbarment and/or discipline of
lawyers. The competence of the Integrated Bar of the Philippines is
only recommendatory. Under Article VIII, Section 5(5)30 of the
1987 Constitution, only this Court has the power to actually rule on
disciplinary cases of lawyers, and to impose appropriate penalties.
Rule 139-B merely delegates investigatory functions to the Integrated
Bar of the Philippines. With the exercise of its delegated
investigatory power, the Integrated Bar of the Philippines refers
proposed actions to this Court. Recognizing the Integrated Bar of the
Philippines' limited competence in disciplinary cases impels a
concomitant recognition that, pending favorable action by this Court
on its recommendations, its determinations and conclusions are only
provisional. Therefore, rulings on disciplinary cases attain finality
and are enforceable only upon this Court's own determination that
they must be imposed.
The oral instruction given to respondent in the August 18, 2004
hearing has, thus, not attained such a degree of finality as would
immutably require him to comply, such that failure to comply
justifies additional or increased penalties. Penalizing him for non-
compliance is premature.
Nevertheless, respondent acknowledged his duty to compensate
complainant for the amount of ₱80,000.00 and made his own
commitment to make this compensation.31 He may not have been
bound by a juridical instruction, but he was certainly bound by his
own honor. That he has failed to adhere to his own freely executed
commitment after more than a decade speaks volumes of how he has
miserably failed to live up to the "high standard of ... morality,
honesty, integrity and fair dealing"32 that is apropos to members of
the legal profession.
For this reason, we exact upon respondent a penalty more severe than
that initially contemplated by the Integrated Bar of the Philippines
Board of Governors. Moreover, to impress upon respondent the
urgency of finally returning to complainant the amount he received,
we impose on him an additional penalty corresponding to the
duration for which he fails to make restitution. We adopt the
Integrated Bar of the Philippines Board of Governors' position in
Resolution No. XVI-2004-481 that an additional period of suspension
must be imposed on respondent for every month (or fraction) that he
fails to pay in full the amount he owes complainant. However,
instead of a three (3)-month suspension for every month (or fraction)
of non-payment or incomplete payment, he is to be suspended for one
(1) month for every such period of failure to make full payment.
This approach hopefully underscores the burden that respondent must
justly carry. By automatically extending his suspension should he not
return the amount, we save complainant, the victim from the
additional costs of having to find and retain another counsel to
compel the return of what is due her. Counsels who have caused
harm on their clients must also suffer the costs of restitution.
WHEREFORE, respondent Atty. Felicito J.Cervantes is
SUSPENDED from the practice of law for one (1) year and six (6)
months. He is ORDERED to restitute complainant Anita Santos
Murray the sum of ₱80,000.00. For every month (or fraction) the he
fails to fully restitute complainant the sum of ₱80,000.00, respondent
shall suffer an additional suspension of one (1) month.
He is likewise WARNED that a repetition of similar acts shall be
dealt with more severely.
Let copies of this Resolution be served on the Office of the Bar
Confidant, the Integrated Bar of the Philippines, and all courts in the
country for their information and guidance. Let a copy of this
Resolution be attached to respondent's personal record as attorney.
SO ORDERED.
18.) A.C. No. 11668, July 17, 2017
JOY T. SAMONTE, Complainant, v. ATTY. VIVENCIO V.
JUMAMIL, Respondent.
RESOLUTION
PERLAS-BERNABE, J.:
For the Court's resolution is a Complaint1 dated March 15, 2013, filed
before the Integrated Bar of the Philippines (IBP), by complainant
Joy T. Samonte (complainant) against respondent Atty. Vivencio V.
Jumamil (respondent), praying that the latter be disbarred for acts
unbecoming of a lawyer and betrayal of trust.
The Facts
Complainant alleged that sometime in October 2012, she received
summons from the National Labor Relations Commission (NLRC),
Regional Arbitration Branch XI, Davao City, relative to an illegal
dismissal case, i.e., NLRC Case RAB-XI-10-00586-12, filed by four
(4) persons claiming to be workers in her small banana plantation.2
Consequently, complainant engaged the services of respondent to
prepare her position paper, and paid him the amount of P8,000.00 3 as
attorney's fees.4 Despite constantly reminding respondent of the
deadline for the submission of her position paper, complainant
discovered that he still failed to file the same.5 As such, on January
25, 2013, the Labor Arbiter rendered a Decision 6 based on the
evidence on record, whereby complainant was held liable to the
workers in the total amount of P633,143.68.7 When complainant
confronted respondent about the said ruling, the latter casually told
her to just sell her farm to pay the farm workers.8 Because of
respondent's neglect, complainant claimed that she was left
defenseless and without any remedy to protect her interests against
the execution of the foregoing judgment;9 hence, she filed the instant
complaint.
In an Order10 dated March 26, 2013, the IBP Commission on Bar
Discipline (IBP-CBD) directed respondent to submit his Answer to
the complaint.
In his Answer11 dated April 19, 2013, respondent admitted that he
indeed failed to file a position paper on behalf of complainant.
However, he maintained that said omission was due to complainant's
failure to adduce credible witnesses to testify in her favor. In this
relation, respondent averred that complainant instructed her to
prepare an Affidavit12 for one Romeo P. Baol (Romeo), who was
intended to be her witness; nevertheless, respondent was instructed
that the contents of Romeo's affidavit were not to be interpreted in
the Visayan dialect so that the latter would not know what he would
be testifying on. Respondent added that complainant's uncle, Nicasio
Ticong, who was also an intended witness, refused to execute an
affidavit and testify to her lies. Thus, it was complainant who was
deceitful in her conduct and that the complaint against him should be
dismissed for lack of merit.13
The IBP's Report and Recommendation
In its Report and Recommendation14 dated March 14, 2014, the IBP-
CBD found respondent administratively liable and, accordingly,
recommended that he be suspended from the practice of law for a
period of one (1) year. Essentially, the IBP-CBD found respondent
guilty of violating Rule 10.01, Canon 10, and Rule 18.03, Canon 18
of the Code of Professional Responsibility (CPR), as well as the 2004
Rules on Notarial Practice.15
In a Resolution16 dated December 13, 2014, the IBP Board of
Governors adopted and approved the aforesaid Report and
Recommendation, finding the same to be fully supported by the
evidence on record and the applicable laws and rules.
The Issue Before the Court
The sole issue in this case is whether or not respondent should be
held administratively liable.
The Court's Ruling
The Court concurs with and affirms the findings of the IBP, with
modification, however, as to the penalty in order to account for his
breach of the rules on notarial practice.
The relationship between a lawyer and his client is one imbued with
utmost trust and confidence. In this regard, clients are led to expect
that lawyers would be ever-mindful of their cause, and accordingly,
exercise the required degree of diligence in handling their affairs.
Accordingly, lawyers are required to maintain, at all times, a high
standard of legal proficiency, and to devote their full attention, skill,
and competence to their cases, regardless of their importance, and
whether they accept them for a fee or for free.17 To this end, lawyers
are enjoined to employ only fair and honest means to attain lawful
objectives.18 These principles are embodied in Rule 10.01 of Canon
10 and Rule 18.03 of Canon 18 of the CPR, which respectively read
as follows:
CANON 10 – A LAWYER OWES CANDOR, FAIRNESS AND
GOOD FAITH TO THE COURT.
Rule 10.01 – A lawyer shall not do any falsehood, nor consent to the
doing of any in court; nor shall he mislead, or allow the Court to be
misled by any artifice.
CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH
COMPETENCE AND DILIGENCE.
Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to
him, and his negligence in connection therewith shall render him
liable.
In this case, it is undisputed that a lawyer-client relationship was
forged between complainant and respondent when the latter agreed to
file a position paper on her behalf before the NLRC and, in
connection therewith, received the amount of P8,000.00 from
complainant as payment for his services. Case law instructs that a
lawyer-client relationship commences when a lawyer signifies his
agreement to handle a client's case and accepts money representing
legal fees from the latter,19 as in this case. From then on, as the CPR
provides, a lawyer is duty-bound to "serve his client with competence
and diligence," and in such regard, "not neglect a legal matter
entrusted to him."
However, it is fairly apparent that respondent breached this duty
when he admittedly failed to file the necessary position paper before
the NLRC, which had, in fact, resulted into an adverse ruling against
his client, i.e., herein complainant. To be sure, it is of no moment that
complainant purportedly failed to produce any credible witnesses in
support of her position paper; clearly, this is not a valid justification
for respondent to completely abandon his client's cause. By
voluntarily taking up complainant's case, respondent gave his
unqualified commitment to advance and defend the latter's interest
therein. Verily, he owes fidelity to such cause and must be mindful of
the trust and confidence reposed in him.20 In Abay v. Montesino,21 it
was explained that regardless of a lawyer's personal view, the latter
must still present every remedy or defense within the authority of the
law to support his client's cause:
Once a lawyer 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. He must serve the client with competence
and diligence, and champion the latter's cause with wholehearted
fidelity, care, and devotion. Otherwise 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. 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. 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.22 (Emphasis and underscoring supplied)
In light of the foregoing, the Court therefore agrees with the IBP that
respondent should be held administratively liable for violation of
Rule 18.03, Canon 18 of the CPR.
Likewise, the IBP correctly found that respondent violated Rule
10.01, Canon 10 of the CPR. Records show that he indeed indulged
in deliberate falsehood when he admittedly prepared23 and notarized24
the affidavit of complainant's intended witness, Romeo, despite his
belief that Romeo was a perjured witness. In Spouses Umaguing v.
De Vera,25 the Court highlighted the oath undertaken by every lawyer
to not only obey the laws of the land, but also to refrain from doing
any falsehood, viz.:
The Lawyer's Oath enjoins every lawyer not only to obey the laws of
the land but also to refrain from doing any falsehood in or out of
court or from consenting to the doing of any in court, and to
conduct himself according to the best of his knowledge and
discretion with all good fidelity to the courts as well as to his
clients. Every lawyer is a servant of the law, and has to observe and
maintain the rule of law as well as be an exemplar worthy of
emulation by others. It is by no means a coincidence, therefore, that
the core values of honesty, integrity, and trustworthiness are
emphatically reiterated by the Code of Professional Responsibility. In
this light, Rule 10.01, Canon 10 of the Code of Professional
Responsibility provides that "[a] lawyer shall not do any
falsehood, nor consent to the doing of any in Court; nor shall he
mislead, or allow the Court to be misled by any artifice."26
(Emphases supplied)
Notably, the notarization of a perjured affidavit also constituted a
violation of the 2004 Rules on Notarial Practice. Section 4 (a), Rule
IV thereof pertinently provides:
SEC. 4. Refusal to Notarize. – A notary public shall not perform any
notarial act described in these Rules for any person requesting such
an act even if he tenders the appropriate fee specified by these Rules
if:
(a) the notary knows or has good reason to believe that the
notarial act or transaction is unlawful or immoral[.]
(Emphasis supplied)
On this score, it is well to stress that "notarization is not an empty,
meaningless routinary act. It is invested with substantive public
interest. It must be underscored that the notarization by a notary
public converts a private document into a public document, making
that document admissible in evidence without further proof of
authenticity thereof. A notarial document is, by law, entitled to full
faith and credit upon its face. For this reason, a notary public must
observe with utmost care the basic requirements in the performance
of their duties; otherwise, the confidence of the public in the integrity
of this form of conveyance would be undermined."27
Having established respondent's administrative liability, the Court
now determines the proper penalty.
The appropriate penalty to be meted against an errant lawyer depends
on the exercise of sound judicial discretion based on the surrounding
facts. In Del Mundo v. Capistrano,28 the Court suspended the lawyer
for a period of one (1) year for his failure to perform his undertaking
under his retainership agreement with his client. Similarly, in Conlu
v. Aredonia, Jr.,29 the same penalty was imposed on a lawyer for his
inexcusable negligence in failing to file the required pleading to the
prejudice of his client. Hence, consistent with existing jurisprudence,
the Court adopts the penalty recommended by the IBP and
accordingly suspends respondent from the practice of law for a period
of one (1) year. Moreover, as in the case of Dela Cruz v. Zabala,30
where the notary public therein notarized an irregular document, the
Court hereby revokes respondent's notarial commission and further
disqualifies him from being commissioned as a notary public for a
period of two (2) years.
WHEREFORE, respondent Atty. Vivencio V. Jumamil is found
GUlLY of violating Rule 10.01, Canon 10 and Rule 18.03, Canon 18
of the Code of Professional Responsibility. Accordingly, he is hereby
SUSPENDED for a period of one (1) year, effective upon his receipt
of this Resolution. Moreover, in view of his violation of the 2004
Rules on Notarial Practice, his notarial commission, if still existing,
is hereby REVOKED, and he is DISQUALIFIED from being
commissioned as a notary public for a period of two (2) years.
Finally, he is STERNLY WARNED that a repetition of the same or
similar offense shall be dealt with more severely.
Let a copy of this Decision be furnished the Office of the Bar
Confidant to be appended to respondent's personal record as a
member of the Bar. Likewise, let copies of the same be served on the
Integrated Bar of the Philippines and the Office of the Court
Administrator, which is directed to circulate them to all courts in the
country for their information and guidance.
SO ORDERED.
19.) A.C. No. 10580
SPOUSES GERALDY AND LILIBETH VICTORY,
Complainants
vs.
ATTY. MARIAN JOS. MERCADO, Respondent
DECISION
TIJAM, J.:
This is a disbarment case against respondent Atty. Marian Jo S.
Mercado for violation of the Code of Professional Responsibility and
the Lawyer's Oath.
The Facts
Sometime in 2009, Spouses Geraldy and Lilibeth Victory (Spouses
Victory) were enticed by respondent to enter into a financial
transaction with her with a promise of good monetary returns. As
respondent is a lawyer and a person of reputation, Spouses Victory
entrusted their money to respondent to invest, manage, and
administer into some financial transactions that would earn good
profit for the parties.1
Respondent called and asked Geraldy Victory (Geraldy) whether he
wanted to invest his money. The respondent promised that for an
investment of PhP 400,000, she will give Geraldy PhP 600,000 in 30
days; and for PhP 500,000, she will give Geraldy PhP 625,000.2
The investment transactions went well for the first 10 months.
Spouses Victory received the agreed return of profit. Some of such
financial transactions were covered by Memoranda of Agreement.3
Later on, respondent became evasive in returning to Spouses Victory
the money that the latter were supposed to receive as part of the
agreement. Respondent failed to settle and account the money
entrusted to her by Spouses Victory.4
Spouses Victory alleged that the outstanding obligation of respondent
is PhP 5 Million plus interest or a total of PhP 8.3 Million.5
Spouses Victory filed a criminal complaint for estafa and violation of
Batas Pambansa Blg. 22 with the Office of the City Prosecutor of Sta.
Rosa, Laguna.6
After the filing of said criminal case, respondent met with Spouses
Victory. Respondent proposed to reduce her obligation from PhP 8.3
Million to PhP 7.5 Million in staggered payments, to which Spouses
Victory agreed. Respondent then issued three postdated checks in the
amount of PhP 300,000 each. However, said checks bounced.7
Report and Recommendation
of the Integrated Bar of the Philippines
Commission on Bar Discipline
The Integrated Bar of the Philippines (IBP)-Commission on Bar
Discipline (CBD) found that respondent indeed lured Spouses
Victory in entering into a series of financial transactions with a
promise of return of profit. Respondent, however, failed to deliver
such promise. On such premise, the IBP-CBD recommended
respondent's suspension, to wit:
On the basis of the foregoing, it is respectfully recommended that
respondent Atty. Marian Jo S. Mercado be SUSPENDED for SIX (6)
MONTHS from the practice of law.8
Resolutions of the IBP Board of Governors
On March 20, 2013, the IBP Board of Governors issued Resolution
No. XX-2013-199, which reads:
RESOLVED to ADOPT and APPROVE, as it is hereby unanimously
ADOPTED and APPROVED, with modification, the Report and
Recommendation of the Investigating Commissioner in the above-
entitled case, herein made part of this Resolution as Annex "A ", and
finding the recommendation fully supported by the evidence on
record and the applicable laws and rules and considering
Respondent's violation of Canon 7 of the Code of Professional
Responsibility for evading the settlement of her financial obligations
to the complainants and for not bothering to appear in the
investigation of this case, Atty. Marian Jo S. Mercado is hereby
DISBARRED.9 (Emphasis supplied)
Respondent filed a motion for reconsideration,10 which was denied
in Resolution No. XXI-2014-158, to wit:
RESOLVED to DENY Respondent's Motion for Reconsideration,
there being no cogent reason to reverse the findings of the
Commission and it being a mere reiteration of the matters which had
already been threshed out and taken into consideration. However,
considering that Respondent is currently settling her financial
obligations to Complainants and very apologetic and granting her
good faith in her investment transaction with Complainants,
Resolution No. XX-2013-199 dated March 20, 2013 is hereby
AFFIRMED, with modification, and accordingly the penalty earlier
imposed on Atty. Marian Jo S. Mercado is hereby reduced to
SUSPENSION from the practice of law for one (1) year. 11
(Emphasis supplied)
Issue
Should the respondent be held administratively liable based on the
allegations in the pleadings of all parties on record?
Our Ruling
Emphatically, a lawyer shall at all times uphold the integrity and
dignity of the legal profession. The bar should maintain a high
standard of legal proficiency as well as honesty and fair dealing. A
lawyer brings honor to the legal profession by faithfully performing
his duties to society, to the bar, to the courts and to his clients.12
Canon 1, Rule 1.01, and Canon 7 provides:
CANON 1 - A LA WYER SHALL UPHOLD THE
CONSTITUTION, OBEY THE LAWS OF THE LAND AND
PROMOTE RESPECT FOR LAW AND FOR LEGAL
PROCESSES.
Rule 1.01 - A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
CANON 7 - A LAWYER SHALL AT ALL TIMES UPHOLD THE
INTEGRITY AND DIGNITY OF THE LEGAL PROFESSION
AND SUPPORT THE ACTIVITIES OF THE INTEGRATED BAR.
Exercising its disciplinary authority over the members of the bar, this
Court has imposed the penalty of suspension or disbarment for any
gross misconduct that a lawyer committed, whether it is in his
professional or in his private capacity. Good character is an essential
qualification for the admission to and continued practice of law.
Thus, any wrongdoing, whether professional or non-professional,
indicating unfitness for the profession justifies disciplinary action.13
In this case, it is without dispute that respondent has an outstanding
obligation with Spouses Victory, as the latter's investments which
they coursed through the respondent fell through. To make matters
worse, respondent issued several checks to settle her obligation;
unfortunately, said checks bounced.
As a lawyer, respondent is expected to act with the highest degree of
integrity and fair dealing. She is expected to maintain not only legal
proficiency, but also a high standard of morality, honesty, integrity
and fair dealing so that the people's faith and confidence in the
judicial system is ensured. She must, at all times, faithfully perform
her duties to society, to the bar, to the courts and to her clients, which
include prompt payment of financial obligations.14
It must be considered that the deliberate failure to pay just debts and
the issuance of worthless checks constitute gross misconduct, for
which a lawyer may be sanctioned with suspension from the practice
of law. Lawyers are instruments for the administration of justice and
vanguards of our legal system.15
We cannot exempt respondent from liability just because she
encountered financial difficulties in the course of her investment
deals. Respondent even admitted that she continued to do business
despite such financial hardships; as such, her monetary obligations
with different investors accumulated at an alarming rate. In an
attempt to settle her obligations, respondent issued checks, which all
bounced.
To Our mind, the actuations of respondent fell short of the exacting
standards expected of every member of the bar.
In this case, while respondent admitted her responsibility and
signified her intention of complying with the same, We cannot close
our eyes to the fact that respondent committed infractions. To uphold
the integrity of the legal profession, We deem it proper to uphold the
findings as well as the sanction imposed by the IBP Board of
Governors.
WHEREFORE, premises considered, We resolve to SUSPEND
Atty. Marian Jo S. Mercado from the practice of law for one (1) year
to commence immediately from the receipt of this Decision, with a
WARNING that a repetition of the same or similar offense will
warrant a more severe penalty.
Let copies of this Decision be furnished all courts, the Office of the
Bar Confidant, and the Integrated Bar of the Philippines for their
information and guidance. The Office of the Bar Confidant is
directed to append a copy of this Decision to respondent's record as
member of the Bar.
SO ORDERED.
20.) G.R. No. 217004
RAMON R. VILLARAMA, Petitioner,
vs.
ATTY. CLODUALDO C. DE JESUS, Respondent
DECISION
PERALTA, J.:
Before this Court is the Petition for Review on Certiorari under Rule
45 of the Rules of Court dated, April 20, 2015, of petitioner Ramon
R. Villarama that seeks to reverse and set aside the Decision 1 dated
March 31, 2014 and the Resolution2 dated February 18, 2015 of the
Court of Appeals (CA) reversing the Decision3 dated May 25, 2011
of the Regional Trial Court (RTC), Branch 100, Quezon City in a
case for collection of sum of money with damages.
The facts follow.
Respondent Atty. Clodualdo De Jesus (Atty. De Jesus) and petitioner,
sometime in October 1996, entered into a contract denominated as
"Contract for Legal Services" and "Professional Fees" wherein it was
agreed upon that Atty. De Jesus shall render legal services for
petitioner in order for the latter to take full possession of a property
located at No. 19 Jose Escaler St., Loyola Heights, Quezon City and
the titling of the same property under petitioner's name; thus, under
the heading, "Scope of Legal Work," it reads:
1.1 The main objective in this case is to see to it that the property
involved in this case (a parcel ofland located at #19 Jose Escaler St.,
Loyola Heights, Quezon City, with an area of 1,754 square meters)
shall remain in the possession and be titled under the name of the
Client.4
The contract also provides for a provision on Success Fee which
reads as follows:
2.3 Success Fee:
In the event Client is successful in retaining possession and having
said property titled under the name of the Client, Counsel shall be
paid ONE MILLION (₱l,000,000.00) PESOS.5
Thereafter, in conformance to the contract, Atty. De Jesus handled
eight (8) cases that involved petitioner in relation to the property
mentioned in the contract.
To be clear, the subject property was formerly registered in the name
of petitioner's sister, Rita Reyes, and her husband Marcial Reyes. The
property was then sold to Crisantomas Guno. Prudential Bank lent
Guno some amount as partial payment for the purchase of the subject
property secured by a mortgage of the same property. After Guno
failed to pay the loan, the same property was foreclosed by Prudential
Bank; thus, the 8 cases handled by Atty. De Jesus stemmed from such
premise.
While acting as lawyer for petitioner, Atty. De Jesus was able to
obtain a favorable judgment by having the Decision of the
Metropolitan Trial Court (MeTC) of Quezon City in Civil Case No,
43-12872 reversed by the RTC of Quezon City, Branch 85 in Civil
Case No. 43-12872. Petitioner has also retained, and is still enjoying,
the possession of the said property. Atty. De Jesus was also able to
obtain favorable decision for petitioner when the RTC of Makati City
declared him to be the owner of the subject property to the extent of
70%, the remaining 30% of which was adjudged in favor of
Prudential Bank.
As such, Atty. De Jesus claims that the first condition for the
payment of the success fee, petitioner's retention of possession, had
been fulfilled. Thus, Atty. De Jesus was able to pave the way for the
partial fulfillment of the second condition to the extent of70% of the
property. According to Atty. De Jesus, what remains to be titled is
only the 30% portion of the property from Prudential Bank. Hence,
Atty. De Jesus feels that he is entitled to claim the success fee
provided under the contract for legal services.
Subsequently, Atty. De Jesus stopped rendering legal services to
petitioner after the former drafted the letter offer dated November 30,
2005 stating that petitioner is offering to buy Prudential Bank's
ownership of the 30% portion of the subject property. Atty. De Jesus
further made a formal demand for petitioner to settle at least 50% of
the ₱1,000,000.00 stipulated in the contract as success fee.
Petitioner, on the other hand, claims that he has not paid the success
fee because one condition for the payment thereof - the property
being titled to his name has not yet been fulfilled. According to
petitioner, he cannot yet transfer the title of the subject property to his
name because there are pending cases initiated by the Spouses Guno
that involves the same property. Petitioner also avers that there is a
Decision of the RTC of Quezon City, Branch 95, in Civil Case No.
Q-52422 annulling Prudential Bank's title over the property and
ordering the reinstatement thereof to the Spouses Guno. The said
decision has already been affirmed by this Court and attained its
finality. However, petitioner still paid Atty. De Jesus the amount of
₱100,000.00 after the latter made a demand.
Thus, Atty. De Jesus filed a complaint for the collection of sum of
money with damages with the RTC of Quezon City and, on May 25,
2011, the said court found in favor of petitioner. The dispositive
portion of the Decision reads:
WHEREFORE, premises considered, the complaint is hereby ordered
dismissed for lack of cause of action and prematurity. Likewise
dismissed is the defendant's claim for attorney's fees, moral damages
and exemplary damages.
SO ORDERED.6
Atty. De Jesus elevated the case to the CA and, on March 31, 2014,
the CA reversed and set aside the Decision of the RTC, thus:
WHEREFORE, in view of the foregoing premises, the Appeal is
PARTIALLY GRANTED. Accordingly, the Decision dated May 25,
2011 of the Regional Trial Court of Quezon City, Branch 100 in Civil
Case No. Q-06-57463 is hereby ANNULLED AND SET ASIDE and
a new one is entered declaring Atty. Clodualdo C. De Jesus entitled
to fifty percent (50%) of the success fee as stated in the Contract of
Legal Services or FIVE HUNDRED THOUSAND (PhpS00,000.00)
PESOS. The amount of ONE HUNDRED THOUSAND PESOS
(Phpl00,000.00) earlier paid to him by Ramon R. Villarama as
advanced payment is ordered deducted therefrom.
SO ORDERED.7
His motion for reconsideration having been denied by the CA,
petitioner thus filed the present petition with this Court raising the
following issues:
A. Whether the Court of Appeals is correct in holding that
the respondent is discharged from fulfilling the second
condition for the entitlement of the ₱1,000,000.00 success
fee because the same has been rendered legally impossible
due to the final decision annulling Prudential Bank's title to
the subject property.
B. Whether respondent is entitled to fifty percent (50%) of
the success fee less the ₱100,000.00 previously paid by the
petitioner to respondent. 8
Petitioner argues that the CA is not correct in discharging Atty. De
Jesus from fulfilling the second condition for the entitlement of the
₱1,000,000.00 success fee because there is no legal impossibility for
the transfer of title to the property to petitioner. The CA, in its
Decision, ruled that due to the facts of the case and the attendant
circumstances, the happening of the second condition was
jeopardized, placed beyond performance, became legally impossible
and manifestly difficult to perform. Petitioner, however, claims that
there were still several remedies that Atty. De Jesus could have
utilized in order to meet the second condition but the latter had given
up and abandoned such task. As such, according to petitioner, Atty.
De Jesus is not entitled to fifty (50%) of the success fee less the
₱100,000.00 previously paid by petitioner.
In his Comment9 dated September 11, 2015, Atty. De Jesus contends
that while it is true that there was no legal impossibility to have the
title of the property transferred to petitioner, it was petitioner upon
the advice of his counsel who refused to pay the value of the 30%
equity of the property in the amount of ₱1,325,000.00. Thus, the
second condition is deemed fulfilled because petitioner voluntarily
prevented its fulfillment. Atty. De Jesus further asserts that it was
only him who secured for petitioner permanent possession of the
property and paved the way for petitioner to get a complete title by
merely paying the 30% equity of the property.
The Rules of Court require that only questions of law should be
raised in petitions filed under Rule 45. 10 This Court is not a trier of
facts. It will not entertain questions of fact as the factual findings of
the appellate courts are "final, binding[,] or conclusive on the parties
and upon this [c]ourt" 11 when supported by substantial evidence. 12
Factual findings of the appellate courts will not be reviewed nor
disturbed on appeal to this Court. 13
In Cheesman v. Intermediate Appellate Court, 14 this Court
distinguished questions of law from questions of fact, thus:
As distinguished from a question of law - which exists "when the
doubt or difference arises as to what the law is on a certain state of
facts" - "there is a question of fact when the doubt or difference arises
as to the truth or the falsehood of alleged facts;" or when the "query
necessarily invites calibration of the whole evidence considering
mainly the credibility of witnesses, existence and relevancy of
specific surrounding circumstances, their relation to each other and to
the whole and the probabilities of the situation." 15
However, these rules do admit of exceptions.16 Over time, the
exceptions to these rules have expanded. At present, there are 10
recognized exceptions that were first listed in Medina v. Mayor
Asistio, Jr.: 17
(1) When the conclusion is a finding grounded entirely on
speculation, surmises or conjectures; (2) When the inference made is
manifestly mistaken, absurd or impossible; (3) Where there is a grave
abuse of discretion; (4) When the judgment is based on a
misapprehension of facts; (5) When the findings of fact are
conflicting; (6) When the Court of Appeals, in making its findings,
went beyond the issues of the case and the same is contrary to the
admissions of both appellant and appellee; (7) The findings of the
Court of Appeals are contrary to those of the trial court; (8) When the
findings of fact are conclusions without citation of specific evidence
on which they are based; (9) When the facts set forth in the petition
as well as in the petitioner's main and reply briefs are not disputed by
the respondents; and (10) The finding of fact of the Court of Appeals
is premised on the supposed absence of evidence and is contradicted
by the evidence on record. 18
In the present case, the findings of facts of the R TC and the CA are
apparently in contrast, hence, this Court deems it proper to rule on the
issues raised in the petition.
After careful consideration, this Court finds the petition
unmeritorious.
The payment of the success fee, as contained in the Contract for
Legal Services, is dependent on the fulfillment of two conditions,
namely: 1) petitioner retaining possession of the subject property, and
2) the property being titled under the name of petitioner. Clearly, this
falls under a contingent fee contract. In The Conjugal Partnership of
the Spouses Cadavedo v. Lacaya, 19 this Court defined a contingent
fee contract as "an agreement in writing where the fee, often a fixed
percentage of what may be recovered in the action, is made to depend
upon the success of the litigation. "Contingent fee contracts are
permitted in this jurisdiction because they redound to the benefit of
the poor client and the lawyer "especially in cases where the client
has meritorious cause of action, but no means with which to pay for
legal services unless he can, with the sanction of law, make a contract
for a contingent fee to be paid out of the proceeds of litigation.
Oftentimes, the contingent fee arrangement is the only means by
which the poor clients can have their rights vindicated and upheld."
Further, such contracts are sanctioned by Canon 13 of the Canons of
Professional Ethics.20
In this case, it is beyond dispute that the first condition stipulated in
the Contract for Legal Services, through the services of Atty. De
Jesus, petitioner was able to retain possession of the subject property.
The second condition, the transfer of title of the property under the
name of petitioner, however, is yet to be fulfilled. According to the
CA, the second condition has been rendered legally impossible to
fulfill or considered manifestly difficult to perform, thus:
With respect to the second condition, however, the trial court's
assessment is that the same is yet to be fulfilled and Atty. De Jesus'
claim is premature.1âwphi1 We disagree.
The facts of the case reveal that the second condition ·has been
rendered legally impossible to fulfill or considered manifestly
difficult to perform. The trial court failed to take into consideration
the manifestation in Villarama's evidence particularly Exhibit "4"
which states that:
On 1 December 1987, [Crisantomas Guno] and his wife filed the
complaint for nullification of defendant Bank's title due to defect in
foreclosure proceedings, entitled 'Spouses Crisantomas and Carmelita
Guno vs. Prudential Bank and Trust Company docketed as Civil Case
No. Q-52422 in the Regional Trial Court Branch 95 of Quezon City.
On 18 October 1991, the RTC rendered a Decision annulling
defendant Bank's Title and ordering the reinstatement of the spouses
Guno's title. The RTC Decision was affirmed on appeal by the
Supreme Court and became final and executory on 11 March 1997.
This the Decision which [Crisantomas Guno] seeks to enforce in this
action.
It must also be noted that when the terms of the agreement was
drafted in 1996, the prevailing circumstance then was that the 30%
portion of the property was titled in the name of Prudential Bank.
Later, however, spouses Guno was able to obtain a final and
favourable judgment in 1997 ordering the cancellation of Prudential
Bank's title. Spouses Guno has yet to implement said Decision. Thus,
the previous understanding that after Atty. De Jesus shall have
ensured the ownership of Villarama over the 70% portion of the
property and the latter shall buy the remaining 30% of said property
from the bank so that Atty. De Jesus can now have it fully titled to
Villarama' s name was also rendered legally impossible because of
the final Decision annulling Prudential Bank's title to the subject
property.
Accordingly, under the foregoing subsequent circumstances, the
happening of the second condition was jeopardized and placed
beyond performance because of these intervening legal
developments. Had the trial court been more circumspect and
receptive of the present factual circumstances it would have
considered that our laws on contract admit certain exceptions in order
to discharge the obligor from fulfilling the condition when said
condition is rendered beyond performance or it has become so
difficult to perform.
xxxx
Here, there is no dispute that the legal developments that transpired in
the string of cases of Villarama relative to the subject property has
rendered the second condition impossible to perform which factor
cannot be attributed to Atty. De Jesus. Thus, the condition should be
annulled excuse atty. De Jesus from the obligation of fulfilling the
same before he could obtain the success fee.21
Upon consideration of the arguments of both parties, this Court finds
that the above-reasoning of the CA is erroneous. There is no legal
impossibility in the fulfillment of the second condition. There is still
a remedy upon which petitioner may be able to transfer the title of the
subject property under his name. In fact, respondent admitted in his
Comment that there was no legal impossibility and that the only
hindrance was the refusal of petitioner to pay Prudential Bank the
value of the 30% equity of the property in the amount of
₱1,325,000.00. Although petitioner insists that it has already taken
steps in offering Prudential Bank an amount to settle the issue, this
still negates the finding of the CA that it is legally impossible for
petitioner to transfer the title of the property under his name.
Be that as it may, the fact still remains that petitioner was already
awarded 70% of the subject property by virtue of the RTC's decision
in Civil Case No. 95-973 through the services of Atty. De Jesus.
Thus, this Court finds that Atty. De Jesus, as well as every attorney,
is entitled to have and receive a just and reasonable compensation for
services performed at the special instance and request of his client.
Once the attorney has performed the task assigned to him in a valid
agreement, his compensation is determined on the basis of what he
and the client agreed.22 In the absence of the written agreement, the
lawyer's compensation shall be based on quantum meruit, which
means "as much as he deserved."23 The determination of attorney's
fees on the basis of quantum meruit is also authorized "when the
counsel, for justifiable cause, was not able to finish the case to its
conclusion."24 Moreoyer, quantum meruit becomes the basis of
recovery of compensation by the attorney where the circumstances of
the engagement indicate that it will be contrary to the parties'
expectation to deprive the attorney of all compensation. 25 In this
case, since respondent was not able to fulfill one of the conditions
provident in the Contract for Legal Services, his attorney's fees shall
be based on quantum meruit.
Quantum meruit- literally meaning as much as he deserves - is used
as basis for determining an attorney's professional fees in the absence
of an express agreement. The recovery of attorney's fees on the basis
of quantum meruit is a device that prevents an unscrupulous client
from running away with the fruits of the legal services of counsel
without paying for it and also avoids unjust enrichment on the part of
the attorney himself. An attorney must show that he is entitled to
reasonable compensation for the effort in pursuing the client's cause,
taking into account certain factors in fixing the amount of legal
fees.26
Rule 20.01 of the Code of Professional Responsibility lists the
guidelines for determining the proper amount of attorney's fees, to
wit:
Rule 20.1 - A lawyer shall be guided by the following factors in
determining his fees:
a) The time spent and the extent of the services rendered or
required;
b) The novelty and difficulty of the questions involved;
c) The importance of the subject matter;
d) The skill demanded;
e) The probability of losing other employment as a result of
acceptance of the proffered case;
f) The customary charges for similar services and the
schedule of fees of the IBP chapter to which he belongs;
g) The amount involved in the controversy and the benefits
resulting to the client from the service;
h) The contingency or certainty of compensation;
i) The character of the employment, whether occasional or
established; and
j) The professional standing of the lawyer.
Having established that petitioner is entitled to attorney's fees and
that he filed his claim well within the prescribed period, the proper
remedy is to remand the case to the R TC for the determination of the
correct amount of attorney's fees. Such a procedural route, however,
would only contribute to the delay of the final disposition of the
controversy as any ruling by the trial court on the matter would still
be open for questioning before the CA and this Court. In the interest
of justice, this Court deems it prudent to suspend the rules and simply
resolve the matter at this level.27
Based on the considerations set forth in Rule 20.01 of the Code of
Professional Responsibility, this Court rules that the CA was correct
in its determination that Atty. De Jesus is entitled to the extent of
50% of the Php1,000,000.00 success fee stipulated in the contract. As
ruled by the CA:
At any rate, Atty. De Jesus cannot claim the entire Phpl,000,000.00
success fee because the fact remains that Villarama has yet to place
the entire subject property to his name. Thus, applying the quantum
meruit principle in this case, Atty. De Jesus is deemed to be entitled
only to half of the success fee for the effort and legal services he had
provided to Villarama. xxx
In fine, Villarama, under the Contract of Legal Services, is obliged to
pay Atty. De Jesus his success fee to a fair and reasonable extent of
50% or Php500,000.00 considering the latter's substantial
performance of his part of the contract. The previous payment made
by Villarama in the amount of Php100,000.00 shall be considered as
an advanced payment deductible from the Php500,000.00 of which
Atty. De Jesus is entitled.28
It must always be remembered that the fact that the practice of law is
not a business and the attorney plays a vital role in the administration
of justice underscores the need to secure him his honorarium lawfully
earned as a means to preserve the decorum and respectability of the
legal profession. A lawyer is as much entitled to judicial protection
against injustice, imposition or fraud on the part of his client as the
client against abuse on the part of his counsel. The duty of the court
is not alone to see that a lawyer acts in a proper and lawful manner; it
is also its duty to see that a lawyer is paid his just fees. With his
capital consisting of his brains and with his skill acquired at
tremendous cost not only in money but in expenditure of time and
energy, he is entitled to the protection of any judicial tribunal against
any attempt on the part of his client to escape payment of his just
compensation. It would be ironic if after putting forth the best in him
to secure justice for his client he himself would not get his due.29
WHEREFORE:, the Petition for Review on Certiorari under Rule
45 of the Rules of Court, dated April 20, 2015, of petitioner Ramon
R. Villarama is DENIED for lack of merit. Consequently, the
Decision dated March 31, 2014 and the Resolution dated February
18, 2015 of the Court of Appeals are AFFIRMED.
SO ORDERED.
21.) A.C. No. 9119, March 12, 2018
EUGENIO E. CORTEZ, Complainant, v. ATTY. HERNANDO P.
CORTES, Respondent.
DECISION
TIJAM, J.:
The instant controversy arose from a Complaint-Affidavit1 filed by
complainant Eugenio E. Cortez2 against respondent Atty. Hernando
P. Cortes (Atty. Cortes) for grave misconduct, and violation of the
Lawyer's Oath and the Code for Professional Responsibility.
Complainant alleged that he engaged the services of Atty. Cortes as
his counsel in an illegal dismissal case against Philippine Explosives
Corporation (PEC). He further alleged that he and Atty. Cortes had a
handshake agreement on a 12% contingency fee as and by way of
attorney's fees.3
Atty. Cortes prosecuted his claims for illegal dismissal which was
decided in favor of complainant. The Court of Appeals affirmed the
decision of the National Labor Relations Commission ordering PEC
to pay complainant the total amount of One Million One Hundred
Thousand Pesos (P1,100,000) three staggered payments. PEC then
Issued City Bank Check No. 1000003986 dated March 31, 2005 in
the amount of Five Hundred Fifty Thousand Pesos (P550,000),
Check No. 1000003988 in the amount of Two Hundred Seventy-Five
Thousand Pesos (P275,000) dated April 15, 2005, and Check No.
1000003989 also in the amount of Two Hundred Seventy-Five
Thousand Pesos (P275,000) dated April 30, 2005, all payable in the
name of complainant.4
Complainant narrated that after the maturity of the first check, he
went to China Bank, Southmall Las Pinas with Atty. Cortes and his
wife to open an account to deposit the said check. Atty. Cortes asked
complainant to wait outside the bank while he personally, for and in
his behalf, facilitated the opening of the account. After thirty minutes,
he was asked to go inside and sign a joint savings account with Atty.
Cortes.5
On April 7, 2005, complainant alleged that when he was about to
withdraw the amount of the initial check deposited, Atty. Cortes
arrived with his wife and ordered the bank teller to hold off the
transaction. When complainant asked why he did that, Atty. Cortes
answered that 50% of the total awarded claims belongs to him as
attorney's fees. When complainant questioned him, Atty. Cortes
became hysterical and imposingly maintained that 50% of the total
awarded claims belongs to him.6
Complainant then tried to pacify Atty. Cortes and his wife and
offered to pay P200,000, and when Atty. Cortes rejected it, he offered
the third check amounting to P275,000, but Atty. Cortes still insisted
on the 50% of the total award. Complainant was then forced to
endorse the second and third checks to Atty. Cortes, after which he
was able to withdraw the proceeds of the first check. With the help of
the lawyers in the Integrated Bar of the Philippines (IBP),
complainant was able to have the drawer of the checks cancel one of
the checks endorsed to Atty. Cortes before he was able to encash the
same.
Atty. Cortes, in his Answer, admitted that his services were engaged
by complainant to pursue the labor claims. He, however, denied that
they agreed on a 12% contingency fee by way of attorney's fees. 7
Atty. Cortes claimed that complainant is a relative of his, but
considering that the case was to be filed in Pampanga and he resided
in Las Pinas, he would only accept the case on a fifty-fifty sharing
arrangement.8
Atty. Cortes alleged that the checks were issued pursuant to the pre-
execution agreement reached by the parties at the office of Labor
Arbiter Herminio V. Suelo. He and complainant agreed that the
amount of the first check be divided fifty-fifty, the whole of the
second check would be the complainant's, and the third check would
be his.9
Atty. Cortes further alleged that he had to assist complainant in the
opening of an account to deposit the checks. Atty. Cortes had to
convince the bank manager to accept the checks issued in the name of
Eugene E. Cortez despite the fact that complainant's ID's are all in the
name of Eugenio E. Cortez.10 He claimed that anyone in his place
would have demanded for the holding off of the transaction because
of the base ingratitude, patent deception and treachery of
complainant.11
Atty. Cortes posited that the check forms part and parcel of the
judgment award to which he had a lien corresponding to his
attorney's fees and complainant should have at least invited him to
witness the "harvest of the fruits."12
Atty. Cortes insisted that the alleged 12% agreement is false, being
merely a concoction of complainant's fertile and unstable mind. He
also pointed out that the fifty-fifty sharing arrangement is not
unconscionably high because the complainant was given the option to
hire other lawyers, but still he engaged his services.13
After hearing and submission of position papers, the IBP
Commission on Bar Discipline, in a Report and Recommendation
dated April 11, 2007, recommended the six-month suspension of
Atty. Cortes. It ruled that a contingent fee arrangement should
generally be in writing, and that contingent fees depend upon an
express contract without which the lawyer can only recover on the
basis of quantum meruit. It also pointed out that the Labor Code
establishes a limit as to the amount of attorney's fees that a lawyer
may collect or charge his client in labor cases.
The report and recommendation was adopted and approved by the
IBP Board of Governors in an August 17, 2007 Resolution:
RESOLUTION NO. XVIII-2007-74
CBD Case No. 05-1482
Eugenio E. Cortez vs.
Atty. Hernando P. Cortes
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED
and APPROVED the Report and Recommendation of the
Investigating Commissioner of the above-entitled case, herein made
part of this Resolution as Annex "A"; and, finding the
recommendation fully supported by the evidence on record and the
applicable laws and rules, and for violation of Article 11(b) of the
Labor Code, Atty. Hernando P. Cortes is hereby SUSPENDED from
the practice of law for six (6) months and Ordered to Return to
complainant whatever amount he received in excess of the 10%
allowable attorney's fees in labor case (sic).
TOMAS N. PRADO
National Secretary14
A motion for reconsideration15 was filed by Atty. Cortes, which was
denied by the IBP Board of Governors.16
The issue, plainly, is whether or not the acts complained of constitute
misconduct on the part of Atty. Cortes, which would subject him to
disciplinary action.
We rule in the affirmative.
We have held that a contingent fee arrangement is valid in this
jurisdiction. It is generally recognized as valid and binding, but must
be laid down in an express contract.17 The case of Rayos v. Atty.
Hernandez18 discussed the same succinctly, thus:
A contingent fee arrangement is valid in this jurisdiction and is
generally recognized as valid and binding but must be laid down
in an express contract. The amount of contingent fee agreed upon
by the parties is subject to the stipulation that counsel will be paid for
his legal services only if the suit or litigation prospers. A much
higher compensation is allowed as contingent fee in consideration of
the risk that the lawyer may get nothing if the suit fails. Contracts of
this nature are permitted because they redound to the benefit of the
poor client and the lawyer especially in cases where the client has
meritorious cause of action, but no means with which to pay for legal
services unless he can, with the sanction of law, make a contract for a
contingent fee to be paid out of the proceeds of the litigation.
Oftentimes, the contingent fee arrangement is the only means by
which the poor and helpless can seek redress for injuries sustained
and have their rights vindicated.19 (Emphasis Ours)
In this case, We note that the parties did not have an express contract
as regards the payment of fees. Complainant alleges that the
contingency fee was fixed at 12% via a handshake agreement, while
Atty. Cortes counters that the agreement was 50%.
The IBP Commission on Discipline pointed out that since what
respondent handled was merely a labor case, his attorney's fees
should not exceed 10%, the rate allowed under Article 11120 of the
Labor Code.
Although we agree that the 50% contingency fee was excessive, We
do not agree that the 10% limitation as provided in Article 111 is
automatically applicable.
The case of Masmud v. NLRC (First Division), et al.,21 discussed the
matter of application of Article 111 of the Labor Code on attorney's
fees:
There are two concepts of attorney's fees. In the ordinary sense,
attorney's fees represent the reasonable compensation paid to a
lawyer by his client for the legal services rendered to the latter.
On the other hand, in its extraordinary concept, attorney's fees
may be awarded by the court as indemnity for damages to be
paid by the losing party to the prevailing party, such that, in any
of the cases provided by law where such award can be made, e.g.,
those authorized in Article 2208 of the Civil Code, the amount is
payable not to the lawyer but to the client, unless they have agreed
that the award shall pertain to the lawyer as additional compensation
or as part thereof.
xxxx
Contrary to Evangelina's proposition, Article 111 of the Labor Code
deals with the extraordinary concept of attorneys fees. It
regulates the amount recoverable as attorney's fees in the nature
of damages sustained by and awarded to the prevailing party. It
may not be used as the standard in fixing the amount payable to
the lawyer by his client for the legal services he rendered.22
(Emphasis Ours)
It would then appear that the contingency fees that Atty. Cortes
required is in the ordinary sense as it represents reasonable
compensation for legal services he rendered for complainant.
Necessarily, the 10% limitation of the Labor Code would not be
applicable. Beyond the limit fixed by Article 111, such as between
the lawyer and the client, the attorney's fees may exceed 10% on the
basis of quantum meriut.23 We, however, are hard-pressed to accept
the justification of the 50% contingency fee that Atty. Cortes is
insisting on for being exorbitant.
Generally, the amount of attorney's fees due is that stipulated in the
retainer agreement which is conclusive as to the amount of the
lawyers compensation. In the absence thereof, the amount of
attorney's fees is fixed on the basis of quantum meruit, i.e., the
reasonable worth of the attorneys services.24 Courts may ascertain
also if the attorney's fees are found to be excessive, what is
reasonable under the circumstances. In no case, however, must a
lawyer be allowed to recover more than what is reasonable, pursuant
to Section 24, Rule 13825 of the Rules of Court.26
Canon 20 of the Code of Professional Responsibility states that "A
lawyer shall charge only fair and reasonable fees." Rule 20.01 of the
same canon enumerates the following factors which should guide a
lawyer in determining his fees:
(a) The time spent and the extent of the services rendered or required;
(b) The novelty and difficulty of the questions involved;
(c) The importance of the subject matter;
(d) The skill demanded;
(e) The probability of losing other employment as a result of
acceptance of the proffered case;
(f) The customary charges for similar services and the schedule of
fees of the IBP Chapter to which he belongs;
(g) The amount involved in the controversy and the benefits resulting
to the client from the service;
(h) The contingency or certainty of compensation;
(i) The character of the employment, whether occasional or
established; and
(j) The professional standing of the lawyer.
Here, as set out by Atty. Cortes himself, the complainant's case was
merely grounded on complainant's alleged absence without leave for
the second time and challenging the plant manager, the complainant's
immediate superior, to a fist fight. He also claimed that the travel
from his home in Las Pinas City to San Fernando, Pampanga was
costly and was an ordeal. We likewise note that Atty. Cortes admitted
that complainant was a close kin of his, and that complainant
appealed to his services because, since his separation from work, he
had no visible means of income and had so many mouths to feed.
These circumstances cited by Atty. Cortes to justify the fees; to Our
mind, does not exculpate Atty. Cortes, but in fact, makes Us question
all the more, the reasonableness of it.
We believe and so hold that the contingent fee here claimed by Atty.
Cortes was, under the facts obtaining in this case, grossly excessive
and unconscionable. The issues involved could hardly be said to be
novel and Atty. Cortes in fact already knew that complainant was
already hard up. We have held that lawyering is not a moneymaking
venture and lawyers are not merchants.27 Law advocacy, it has been
stressed, is not capital that yields profits.28 The returns it births are
simple rewards for a job done or service rendered. It is a calling that,
unlike mercantile pursuits which enjoy a greater deal of freedom
from governmental interference, is impressed with a public interest,
for which it is subject to State regulation.29
Here, considering that complainant was amenable to a 12%
contingency fee, and which we likewise deem to be the reasonable
worth of the attorney's services rendered by Atty. Cortes under the
circumstances, Atty. Cortes is hereby adjudged to return to
complainant the amount he received in excess of 12% of the total
award. If the Law has to remain an honorable profession and has to
attain its basic ideal, those enrolled in its ranks should not only
master its tenets and principles but should also, by their lives, accord
continuing fidelity to such tenets and principles.30
We, however, find that the recommended suspension of six months is
too harsh and considering that Atty. Cortes is nearing ninety years old
and that there was no question that Atty. Cortes was able to get a
favorable outcome, a reduction of the suspension is proper. We then
reduce and sanction Atty. Cortes to a three-month suspension from
the practice of law.
WHEREFORE, premises considered, respondent Atty. Hernando P.
Cortes is found GUILTY of violation of Canon 20 of the Code of
Professional Responsibility and is hereby SUSPENDED from the
practice of law for three (3) months, and is ordered to return to
complainant Eugenio E. Cortez the amount he received in excess of
the 12% allowable attorney's fees.
SO ORDERED.
22.) .C. No. 9186, April 11, 2018
ATTY. JUAN PAULO VILLONCO, Complainant, v. ATTY.
ROMEO G. ROXAS, Respondent.
DECISION
PERALTA, J.:
The present case stemmed from the complaint of Atty. Juan Paolo T.
Villonco against respondent Atty. Romeo G. Roxas for gross
misconduct and for violating the Code of Professional Responsibility
(CPR).
The factual and procedural antecedents of the case are as follows:
Republic Real Estate Corporation (RREC), with complainant Atty.
Juan Paolo T. Villonco as its president, hired respondent Atty.
Romeo G. Roxas as its counsel on a contingent basis in its case
against the Republic of the Philippines with respect to a reclaimed
land which is now the Cultural Center of the Philippines (CCP)
complex. Subsequently, RREC was awarded around P10,926,071.29
representing the sum spent in the reclamation of the CCP complex.
The case was later remanded to the Regional Trial Court (RTC) of
Pasay City for the execution of the decision. RREC's Board of
Directors enjoined Atty. Roxas to defer the filing of the motion for
the issuance of a Writ of Execution until further instruction, but he
still filed the same. Thereafter, the Republic filed a Petition for
Certiorari against the Writ of Execution eventually issued by the trial
court. On February 27, 2009, the Court of Appeals (CA) issued an
Order granting said petition and declared the Writ of Execution null
and void. Aggrieved, Atty. Roxas, without first securing RREC 's
consent and authority, filed a Motion for Reconsideration and a
Motion for Inhibition with the CA.
Without being approved or authorized by the RREC's Board of
Directors, he likewise filed a complaint for serious misconduct
against CA Justices Sesinando E. Villon, Andres B. Reyes, Jr. and
Jose Catral Mendoza, and a petition assailing the constitutionality of
Presidential Decree No. 774, both on RREC's behalf. For his
foregoing unauthorized acts, RREC's Board requested Atty. Roxas to
voluntarily withdraw as counsel for the corporation. When Atty.
Roxas refused, RREC terminated its retainer agreement with Atty.
Roxas and engaged the services of another lawyer to replace him in
the representation of the company.
However, despite his termination, Atty. Roxas still appeared for
RREC and continued to argue for the corporation in the case. He also
threatened to sue the members of the RREC Board unless they
reinstated him as counsel. Thus, Atty. Villonco was compelled to file
the instant administrative complaint against Atty. Roxas.
For his part, Atty. Roxas denied the accusations and claimed that
from August 1992 up to the time of the filing of the complaint, or a
period of twenty-one (21) years, his law firm had been competently
rendering legal services for RREC. Through those years, he
singlehandedly advanced the necessary expenses to sustain and
pursue the case. He claimed that he could not be removed as counsel
for RREC since they had a contract for a contingency fee coupled
with interest. He argued that his appearance before the CA was
proper since his removal by the RREC Board was illegal and unfair.
Securing the Board's approval before he could file pleadings on
RREC's behalf was unnecessary since he had been explicitly given
the blanket authority to exercise his sound discretion in the pursuit of
the case. He pointed out that he filed the administrative complaint
against the CA Justices only to further RREC's case.
On May 17, 2013, the Commission on Bar Discipline of the
Integrated Bar of the Philippines (IBP) recommended the penalty of
censure: 1
Foregoing premises considered, the undersigned believes and so
holds that the Respondent had violated Sec. 27 of Rule 138 of the
Rules of Court and Canon 15 of the CPR. Accordingly, he
recommends that he be meted with the penalty of CENSURE with a
warning that a repetition of the same would invite a stiffer penalty.
On September 27, 2014, the IBP Board of Governors issued
Resolution No. XXI-2014-660,2 adopting the foregoing
recommendation but with modification, thus:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED
and APPROVED, with modification, the Report and
Recommendation of the Investigating Commissioner in the above-
entitled case, herein made part of this Resolution as Annex "A ", and
for Respondent's blatant violation of Section 27 of Rule 138 of the
Rules of Court and Canon 15 of the Code of Professional
Responsibility, instead of Censure Atty. Romeo G. Roxas is hereby
SUSPENDED from the practice of law for six (6) months.
The Court's Ruling
The Court finds no cogent reason to depart from the findings and
recommendation of the IBP that Atty. Roxas must be held
administratively liable.
It is settled that the relationship between a lawyer and his client is
one imbued with utmost trust and confidence. In this regard, clients
are led to expect that lawyers would be ever-mindful of their cause,
and accordingly, exercise the required degree of diligence in handling
their affairs.3
Here, RREC's Board of Directors specifically instructed Atty. Roxas
to postpone the filing of the motion for the issuance of a Writ of
Execution until further notice, but he defied the same and still filed
the motion. He then filed a Motion for Reconsideration and a Motion
for Inhibition with the CA without first securing RREC's consent and
authority. Again, without being authorized, he likewise filed an
administrative complaint against several CA Justices and a petition
assailing the constitutionality of Presidential Decree No. 774, both on
RREC's behalf. Said unauthorized acts caused RREC's Board to
request Atty. Roxas to voluntarily withdraw as counsel for the
corporation and to finally terminate its retainer agreement with him
when he refused. Even after he was terminated, Atty. Roxas still
continued to appear and argue for RREC. Worse, he also threatened
to sue the members of the RREC Board unless they reinstated him as
the company's counsel.
In engaging the services of an attorney, the client reposes on him
special powers of trust and confidence. Their relationship is strictly
personal and highly confidential and fiduciary. The relation is of such
delicate, exacting, and confidential nature that is required by
necessity and public interest. Only by such confidentiality and
protection will a person be encouraged to repose his confidence in an
attorney. Thus, the preservation and protection of that relation will
encourage a client to entrust his legal problems to an attorney, which
is of paramount importance to the administration of justice.4
In the instant case, Atty. Roxas's defiant attitude ultimately caused
his client to lose its trust in him. He intentionally denied his client's
requests on how to proceed with the case and insisted on doing it his
own way. He could not possibly use the supposed blanket authority
given to him as a valid justification, especially on non-procedural
matters, as in the case at bar, if he would be contradicting his client's
trust and confidence in the process. Atty. Roxas clearly disregarded
the express commands of the Code of Professional Responsibility
(CPR), specifically Canon 17.
Canon 17 of the CPR states:
CANON 17 - A lawyer owes fidelity to the cause of his client and
he shall be mindful of the trust and confidence reposed in him.
The Court upholds the IBP's finding that Atty. Roxas was so
principally moved by his desire to be compensated for the advanced
expenses of litigation and his professional fees that he proceeded with
the filing of the motion for the issuance of a Writ of Execution
against the express advice of his client. Then he later filed the motion
for inhibition and administrative complaints against the CA Justices
out of extreme exasperation and disappointment.
The Court has repeatedly emphasized that the practice of law is
imbued with public interest and that a lawyer owes substantial duties,
not only to his client, but also to his brethren in the profession, to the
courts, and to the public, and takes part in the administration of
justice, one of the most important functions of the State, as an officer
of the court. Accordingly, lawyers are bound to maintain, not only a
high standard of legal proficiency, but also of morality, honesty,
integrity, and fair dealing.5
Atty. Roxas has fallen short of the high standard of morality, honesty,
integrity, and fair dealing expected of him. Thus, RREC's termination
of his retainer is proper and justified. A client may absolutely
discharge his lawyer at any time, with or without cause, and without
need of the lawyer's consent or the court's approval. He may, at any
time, dismiss his attorney or substitute another in his stead. Such
right, however, is subject to the lawyer's right to be compensated. In
the discretion of the court, the attorney may intervene in the case to
protect his rights and he shall have a lien upon all judgments for the
payment of money and executions issued in pursuance of such
judgment, rendered in the case where his services had been retained
by the client, for the payment of his compensation.6
There can be no question that a lawyer is guilty of misconduct
sufficient to justify his suspension or disbarment if he so acts as to be
unworthy of the trust and confidence involved in his official oath and
is found to be wanting in that honesty and integrity that must
characterize the members of the Bar in the performance of their
professional duties. Although a six (6)-month suspension from the
practice of law would suffice for violating Canon 17 of the CPR, the
Court deems it proper to increase the penalty of suspension in this
case to one (1) year, as that would be more proportionate to the
offense charged and established.7 The Court notes that in 2007, Atty.
Roxas was also found guilty of indirect contempt and was fined the
amount of P30,000.00 for insinuating that then Associate Justice
Minita V. Chico-Nazario had decided his cases on considerations
other than the pure merits of the case, and called the Supreme Court a
"dispenser of injustice." The Court warned him that a repetition of a
similar act will warrant a more severe penalty.8 Verily, for the
constant display of contumacious attitude on the part of Atty. Roxas,
not only against his very own client, but likewise against the courts, a
more serious penalty is warranted.
WHEREFORE, IN VIEW OF THE FOREGOING, the Court
SUSPENDS Atty. Romeo G. Roxas from the practice of law for a
period of one (1) year and WARNS him that a repetition of the same
or similar offense shall be dealt with more severely.
Let copies of this Decision be included in the personal records of
Atty. Romeo G. Roxas and entered in his file in the Office of the Bar
Confidant.
Let copies of this Decision be disseminated to all lower courts by the
Office of the Court Administrator, as well as to the Integrated Bar of
the Philippines, for their information and guidance.
SO ORDERED.
23.) Sorongon Jr. v. Gargantos, Sr. AC No. 11326 June 27, 2018
(cannot be found)
24.) A.C. No. 10557 (Formerly CBD Case No. 07-1962), July
10, 2018
JERRY M. PALENCIA, Complainant, v. ATTY. PEDRO L.
LINSANGAN, ATTY. GERARD M. LINSANGAN, AND ATTY.
GLENDA M. LINSANGAN-BINOYA, Respondents.
DECISION
PER CURIAM:
Before us is a complaint1 filed by Jerry M. Palencia (complainant)
against Attorneys (Attys.) Pedro L. Linsangan, Gerard M. Linsangan 2
and Glenda Linsangan-Binoya (respondents) for disciplinary action.
Complainant was an overseas Filipino worker seafarer who was
seriously injured during work when he tell into the elevator shaft of
the vessel M/T "Panos G" flying a Cyprus flag.3 After initial
treatment in Singapore, complainant was discharged and flown to the
Philippines to continue his medical treatment and rehabilitation.
While confined at the Manila Doctors Hospital, one "Moises," and
later Jesherel L. Millena (Jesherel), paralegals in respondents' law
office, approached complainant. They convinced him to engage the
services of respondents' law office in order to file a suit against his
employers for indemnity.4 After several visits from the paralegals and
respondent Atty. Pedro Linsangan, complainant executed (1) an
Attorney-Client Contract,5 and (2) a Special Power of Attorney,6
where he engaged the legal services of respondents and Gurbani &
Co., a law firm based in Singapore, and agreed to pay attorney's fees
of 35% of any recovery or settlement obtained for both.
After execution of the contract, complainant, through the efforts of
respondents, was paid by his employer the following amounts:
US$60,000.00 as indemnity and US$20,000.00 under their collective
bargaining agreement. From these amounts, respondents charged
complainant attorney's fees of 35%.7
Respondents and Gurbani & Co. also filed a tort case against the
owners of "Panos G" before the High Court of Singapore (Singapore
case). For this case, respondents engaged the services of
Papadopoulos, Lycourgos & Co., a law firm based in Cyprus, to draft
a written opinion on the issues involving Cyprus law, among others. 8
They also engaged the services of retired Justice Emilio Gancayco
(Justice Gancayco) for his expert opinion regarding various issues
raised by defendant's lawyer and representatives.9
Thereafter, negotiations led to a settlement award in favor of
complainant in the amount of US$95,000.00. Gurbani & Co. remitted
to respondents the amount of US$59,608.40.10 From this amount,
respondents deducted: (l) US$5,000.00 as payment to Justice
Gancayco; (2) their attorney's fees equivalent to 35%; and (3) other
expenses, leaving the net amount of US$18,132.43 for complainant. 11
Respondents tendered the amount of US$20,756.05 (representing the
US$18,132.43) to complainant, which the latter refused.12 As
complainant contested the amount comprised of the expenses and
attorney's fees deducted, the following civil actions ensued between
complainant and respondents:
(1) On September 12, 2005, respondents filed an action for
preliminary mandatory injunction (Civil Case No. 05113475)
before the Regional Trial Court (RTC) of Manila to compel
complainant to receive the amount tendered.13 This case was
dismissed by the RTC, and the dismissal was eventually upheld
by this Court on July 7, 2008.14
(2) On September 22, 2005, complainant filed with the RTC of
Ligao City an action for accounting, remittance of settlement
amounts and damages (Civil Case No. 2401 or accounting
case).15 On June 16, 2011, the RTC ruled in favor of
complainant and ordered respondents to make proper
accounting, among others.16 Although the RTC upheld the
stipulated attorney's fees as binding between the parties, it
determined that the fees are lumped for both respondents and
Gurbani & Co.17 On appeal, the CA affirmed the RTC's
Decision but reduced the rate of attorney's fees to 10%.18 This
Court affirmed the CA Decision in our Resolution dated
February 20, 2013 in G.R. No. 205088. An Entry of Judgment
was issued on August 8, 2013.
On March 28, 2007, complainant also filed the subject letter--
Complaint19 with the Integrated Bar of the Philippines (IBP)
Commission on Bar Discipline (CBD). He requested that an
investigation be conducted and the corresponding disciplinary action
be imposed upon respondents for committing the following unethical
acts: (1) refusing to remit the amount collected in the Singapore case
worth US$95,000.00, and in offering only US$20,756.05; (2)
depositing complainant's money into their own account; and (3)
engaging in "ambulance chasing" by deploying their agents to
convince complainant to hire respondents' services while the former
was still bedridden in the hospital.
In their answer,20 respondents explained that complainant retained
respondents and Gurbani & Co.'s services in 2004 for purposes of
filing a claim against the ship owner, its agents and principals. This
led to the filing of a claim before the Singapore High Court. They
averred that on April 29, 2005, Gurbani & Co. advised respondents of
the settlement of the claim in Singapore for US$95,000.00. 21 On June
20, 2005, respondents sent a letter to complainant informing him that
they already received the settlement amount and requested him to
come to the former's office to get his net share.22 Complainant went
to respondents' law office on June 28, 2005 where respondents
tendered to the former his net share of US$20,756.05.23 However,
complainant unjustly refused to accept the amount. Complainant also
refused their tender of payment in their letter dated August 3, 2005.24
On September 12, 2005, respondents even filed a "consignation case"
(Civil Case No. 05113475) before the RTC of Manila.25
Respondents denied that they deposited the amount to their own
account. They claimed that the amount of US$20,756.05 has been
placed for safekeeping in a vault located inside their office ever
since.26 On May 3, 2007, after their receipt of the complaint and the
IBP-CBD's Order dated April 3, 2007, they decided to deposit the
money with Bank of the Philippine Islands in an interest savings
account, in trust for complainant.27
As to the allegations of ambulance chasing, respondents averred that
they provide free legal advice to the public. It was in the course of
this public service when they met complainant.28
After proceedings, the IBP-CBD in its Report and Recommendation29
ruled that respondents violated the canons of the Code of Professional
Responsibility (CPR): ( l) in soliciting legal business through their
agents while complainant was in the hospital; (2) in failing to account
for, and deliver the funds and property of his client when due or upon
demand; and (3) in hiring the services of a foreign law firm and
another lawyer without prior knowledge and consent of complainant
of the fees and expenses to be incurred.30 The IBP-CBD found that
all three respondents connived and thus recommended that all
respondents be suspended from the practice of law for a period of one
year. It also directed respondents to comply with the Decision in the
accounting case (Civil Case No. 2401) in favor of complainant.31
The IBP Board of Governors adopted the Report and
Recommendation.32 After respondents' motion for reconsideration33
and complainant's opposition34 thereto, the IBP Board of Governors
modified the penalty and increased respondents' suspension from the
practice of law to two years with warning, and ordered respondents to
return the 5% of the amount assessed to complainant as attorney's
fees.35
We adopt the findings of the IBP on the unethical conduct of
respondents Attys. Pedro L. Linsangan and, Gerard M. Linsangan.
We, however, absolve respondent Atty. Glenda M. Linsangan-Binoya
for lack of any evidence as to her participation in the acts complained
of.
I award of US$95,000.00, and after deducting their fees, tendered the
The practice of law is a profession and not a business. 36 Lawyers are
reminded to avoid at all times any act that would tend to lessen the
confidence of the public in the legal profession as a noble calling,
including, among others, the manner by which he makes known his
legal services.
A lawyer in making known his legal services must do so in a
dignified manner.37 They are prohibited from soliciting cases for the
purpose of gain, either personally or through paid agents or brokers. 38
The CPR explicitly states that "[a] lawyer shall not do or permit to be
done any act designed primarily to solicit legal business."39 Corollary
to this duty is for lawyers not to encourage any suit or proceeding for
any corrupt motive or interest.40 Thus, "ambulance chasing," or the
solicitation of almost any kind of business by an attorney, personally
or through an agent, in order to gain employment, is proscribed. 41
Here, there is sufficient evidence to show that respondents violated
these rules. No less than their former paralegal Jesherel admitted that
respondent Atty. Pedro Linsangan came with her and another
paralegal named Moises, to Manila Doctors Hospital several times to
convince complainant to hire their services.42 This is a far cry from
respondents' claim that they were merely providing free legal advice
to the public. Moreover, while respondents deny Jesherel 's
connection with their law firm, this was sufficiently rebutted by
complainant when he presented Jesherel's resignation letter as
received by respondents' firm.43 In employing paralegals to
encourage complainant to file a lawsuit against his employers,
respondents indirectly solicited legal business and encouraged the
filing of suit. These constitute malpractice44 which calls for the
exercise of the court's disciplinary powers and warrants serious
sanctions.45
II
The relationship between a lawyer and his client is highly fiduciary.46
This relationship holds a lawyer to a great degree of fidelity and good
faith especially in handling money or property of his clients.47 Thus,
Canon 16 and its rules remind a lawyer to: (1) hold in trust all
moneys and properties of his client that may come into his
possession;48 (2) deliver the funds and property of his client when
due or upon demand subject to his retaining lien;49 and (3) account
for all money or property collected or received for or from his
client.50
Money collected by a lawyer on a judgment rendered in favor of his
client constitutes trust funds and must be immediately paid over to
the client.51 As he holds such funds as agent or trustee, his failure to
pay or deliver the same to the client after demand constitutes
conversion.52 Thus, whenever a lawyer collects money as a result of a
favorable judgment, he must promptly report and account the money
collected to his client.53
It is the lawyer's duty to give a prompt and accurate account to his
client. Upon the collection or receipt of property or funds for the
benefit of the client, his duty is to notify the client promptly and,
absent a contrary understanding, pay or remit the same to the client,
less only proper fees and disbursements, as soon as reasonably
possible.54 He is under absolute duty to give his client a full, detailed,
and accurate account of all money and property which has been
received and handled by him, and must justify all transactions and
dealings concerning them.55 And while he is in possession of the
client's funds, he should not commingle it with his private property or
use it for his personal purposes without his client's consent.56
Here, respondents claim that they promptly accounted for the total
amount of US$20,756.05. Complainant, however, refused to accept
the amount because he contested both the expenses and the separate
deduction of attorney's fees by respondents and Gurbani & Co.
We find that while respondents gave prompt notice to complainant of
their receipt of money collected in the latter's favor, they were amiss
in their duties to give accurate accounting of the amounts due to
complainant, and to return the money due to client upon demand.
The Attorney-Client Contract between the parties states: "We/I
hereby voluntarily agree and bind ourselves, our heirs and assigns to
pay Atty. Pedro L. Linsangan and his collaborating Singapore
counsels, the sum equivalent to thirty-five [35%] percent of any
recovery or settlement obtained."57 Clearly, the stipulated rate
referred to the combined professional fees of both respondents and
their collaborating Singapore counsel, Gurbani & Co.58 Nevertheless,
respondents proceeded to deduct separate fees on top of the amount
already deducted by Gurbani & Co. Complainant contested this
deduction and refused to accept the amount being tendered by
respondents. Since a claim for attorney's fees may be asserted either
in the very action in which the services of a lawyer had been
rendered, or in a separate action,59 respondents, instead of forcibly
deducting their share, should have moved for the judicial
determination and collection of their attorney's fees. The fact alone
that a lawyer has a lien for his attorney's fees on money in his hands
collected for his client does not entitle him to unilaterally appropriate
his client's money for himself.60
Worse, respondents allegedly kept the money inside the firm's vault
for two years until they were made aware of the disciplinary
complaint against them before the IBP-CBD. However, as noted by
the IBP-CBD in its Report and Recommendation:
[T]he defense of respondents that they kept in their office vault the
share of complainant as computed by them in the amount of
US$18,132.43, hence, they forgot the same and remembered it only
when they received the Order of this Commission for them to file an
Answer to complainant's Complaint [which is more than 2 years] is
rather highly incredible considering that it involves a substantial
amount, the series of communications between the parties, and the
Civil cases subsequently filed.61 (Italics in the original.)
Even if we give credence to this explanation, it is improper for the
lawyer to put his client's funds in his personal safe deposit vault.62
Funds belonging to the client should be deposited in a separate trust
account in a bank or trust company of good repute for safekeeping. 63
It is apparent from the foregoing that respondents failed to handle
their client's money with great degree of fidelity. Respondents also
showed their lack of good faith when they appropriated for
themselves more than what is allowed under their contract. They
have demonstrated that the payment of their attorney's fees is more
important than their fiduciary and faithful duty of accounting and
returning what is rightfully due to their client. More, they also failed
to observe proper safekeeping of their client's money. Respondents
violated the trust reposed in them, and demonstrated their lack of
integrity and moral soundness.64 Respondents' flagrant and malicious
refusal to comply with the CPR amounts to gross misconduct. 65 This
warrants the imposition of disciplinary sanctions.66
III
The practice of law is a profession, a form of public trust, the
performance of which is entrusted to those who are qualified and who
possess good moral character.67 Thus, the violation of the lawyer's
oath and/or breach of the ethics of the legal profession embodied in
the CPR may, depending on the exercise of sound judicial discretion
based on the surrounding facts, result in the suspension or disbarment
of a member of the Bar.68
While we find respondents Attys. Pedro Linsangan and Gerard
Linsangan to have violated Rule 1.03, Rule 2.03, Canon 3, Canon 16,
Rule 16.01, and Rule 16.03 of the CPR, the records do not support
respondent Atty. Glenda Linsangan-Binoya's participation in their
unethical activities. Complainant himself admits that he only dealt
with respondents Attys. Pedro and Gerard Linsangan.69 Thus, we
hold that the case against Atty. Glenda Linsangan-Binoya be
dismissed.
For his violation of the proscription on ambulance chasing, we have
previously imposed the penalty of suspension of one year.70 We find
no reason not to impose the same penalty here.
On the other hand, the penalty for violation of Canon 16 of the CPR
usually ranges from suspension for six months, to suspension for one
year, or two years, and even disbarment depending on the amount
involved and the severity of the lawyer's misconduct. 71 In addition,
the penalty for gross misconduct consisting in the failure or refusal,
despite demand, of a lawyer to account for and to return money or
property belonging to a client has been suspension from the practice
of law for two years.72 Complainant, who was impaired for life, was
constrained to file this complaint and the action for accounting
because of his lawyers' lack of fidelity and good faith in handling the
award he received. We recognize, however, respondents' efforts in
tendering payment, albeit of an improper amount, to complainant, as
well as the fact that this is their first offense. The imposition of a one
year suspension is sufficient under the circumstances.73
This penalty of one year suspension for the second infraction is
justified, and does not deserve a further reduction. The fact that it is
respondents' first administrative case cannot serve to mitigate the
penalty. In Cerdan v. Gomez,74 respondent there was still suspended
for a period of one year, after already taking into account that it was
his first offense. More, there are several decisions which support the
imposition of the one year suspension for similar violations.75 In
Viray v. Sanicas,76 the court imposed a one year penalty for the same
infraction even after exercising its "compassionate judicial
discretion."77
More importantly, respondents' acts do not merely constitute a
violation of Canon 16 and its rules, but already amounts to gross
misconduct.78First, respondents breached the trust reposed in them
when they betrayed the express language of their Attorney-Client
Contract that they are only entitled to a single 35% attorney's fees
together with the Singapore counsels. In the process, respondents
have also unjustly retained for themselves the 35% of the settlement
award amounting to US$95,000.00—which is more or less
US$33,250.00 or roughly around P1.5 million pocketed, and also
immensely disparaging to the US$20,756.05 they tendered to
complainant. Second, their actions following complainant's objection
manifests their disregard of their fiduciary duties. For two years,
respondents insisted on, and forcibly deducted the amount when there
are alternative avenues to determine the correct amount of attorney's
fees. They instead treaded to a path where they advanced their own
interests ahead of their client's. Third, respondents also mishandled
their client's money when they did not exercise proper safekeeping
over it; they failed to deposit it in a separate trust account in a bank or
trust company of good repute for safekeeping but co-mingled it with
their own funds. Undoubtedly, the gravity of these acts amounts to
gross misconduct that warrants, at the very least, a suspension. 79
For both violations, we adopt the recommendation of the IBP Board
of Governors of the imposition of two-year suspension for
respondents Attys. Pedro L. Linsangan and Gerard M. Linsangan. We
emphasize that this penalty of two years of suspension corresponds to
the compounded infractions of the violations of Rule 1.03, Rule 2.03,
Canon 3, Canon 16, Rule 16.01, and Rule 16.03 of the CPR: (1) the
penalty of suspension of one year is imposed for the violation of the
proscription on ambulance chasing; and (2) the penalty of one year
suspension for gross misconduct consisting in the failure or refusal,
despite demand, of a lawyer to account for and return money or
property belonging to a client.
To reiterate, there is no basis, and would even be unjust under the
circumstances, to reduce the penalty imposed on respondents. Quite
the contrary, respondents should find themselves so fortunate that for
all their exploits, including their ambulance chasing, this Court would
only impose a two-year suspension.
Finally, we note that this Court, in G.R. No. 205088, has already
affirmed the CA's ruling as to the issue of how much respondents can
collect from complainant as attorney's fees. This judgment has long
attained finality and, in fact, appears to be set for execution. For this
reason, we do not adopt the IBP Board of Governors'
recommendation for respondents to return to complainant 5% of the
amount assessed. The principle of immutability of judgments
behooves us from making any further statements on this particular
issue
WHEREFORE, we find respondents Attys. Pedro L. Linsangan and
Gerard M. Linsangan GUILTY. Accordingly, we SUSPEND
respondents Attys. Pedro Linsangan and Gerard Linsangan from the
practice of law for TWO YEARS effective upon finality of this
Decision, with a WARNING that a repetition of the same or similar
act in the future will be dealt with more severely. The complaint
against Atty. Glenda M. Linsangan-Binoya is DISMISSED.
SO ORDERED.
25.) Goopio v. Maglalang AC No. 10S55 July 31, 2018 En Banc
(cannot be found)

26.) Yumang v. Alaestonte AC No. 10992 June 19, 2018 En Banc

(cannot be found)