In 1970, Atty.

David and Tan Tek Beng, a non-lawyer, entered into an agreement whereby Tan Tek Beng
will supply clients to Atty. David and in exchange thereof, Atty. David shall give Tan Tek Beng 50% of the
attorney’s fees collected as the latter’s commission. Atty. David also agreed not to deal with clients
supplied by Tan Tek Beng directly without the latter’s consent. The agreement went sour due to
allegations of double-cross from both sides. Tan Tek Beng denounced Atty. David before the Supreme
Court but did not seek the enforcement of their agreement.

ISSUE: Whether or not Atty. David is guilty of Malpractice.

HELD: Yes. The agreement between Atty. David and Tan Tek Beng is void because it was tantamount to
malpractice which is “the practice of soliciting cases at law for the purpose of gain, either personally or
through paid agents or brokers” Sec. 27, Rule 138, Rules of Court). Malpractice ordinarily refers to any
malfeasance or dereliction of duty committed by a lawyer. Section 27 gives a special and technical
meaning to the term “malpractice”.

That meaning is in consonance with the elementary notion that the practice of law is a profession, not a
business. “The lawyer may not seek or obtain employment by himself or through others for to do so
would be unprofessional”.

On the agreement to divide the attorney’s fees, the Supreme Court noted: No division of fees for legal
services is proper, except with another lawyer, based upon a division of service or responsibility.

On the agreement that Atty. David shall not deal with clients supplied by Beng directly: The professional
services of a lawyer should not be controlled or exploited by any law agency, personal or corporate,
which intervenes between client and lawyer. A lawyer’s responsibilities and qualifications are individual.
He should avoid all relations which direct the performance of his duties by or in the interest of such
intermediary. A lawyer’s relation to his client should be personal, and the responsibility should be direct
to the client. . . .”

HALILI VS CIR
Facts: The cases involve disputes regarding claims for overtime of more than five hundred bus drivers
and conductors of Halili Transit. The disputes were eventually settled when the contending parties
reached an Agreement where the Administratrix would transfer to the employees the title to a tract of
land in Caloocan, Rizal. The parcel of land was eventually registered in the name of the Union. The
Union, through Atty. Pineda, filed an urgent motion with the Ministry of Labor and Employment (MOLE)
requesting for authority to sell and dispose of the property. Atty. Espinas, (the original counsel)
established the award of 897 workers' claim. When Atty. Pineda appeared for the Union in these cases,
still an associate of the law firm, his appearance carried the firm name
“
B.C. Pineda and Associates," giving the impression that he was the principal lawyer in these cases. Atty.
Pineda, without authority from the Supreme Court but relying on the earlier authority given him by the
Ministry of Labor, filed another urgent motion, praying that the Union be authorized to sell the lot. The
sale was finally consummated, resulting in the execution of an escrow agreement. Issue: Whether or not
Atty. Pineda and Arbiter Valenzuela should be held in contempt. Held:
YES.
Contempt of court is a defiance of the authority, justice or dignity of the court; such conduct as tends to
bring the authority and
administration of the law into disrespect or to interfere with or prejudice parties’ litigant
or their witnesses during litigation. The power to punish for contempt is inherent in all courts and is
essential to the preservation of order in judicial proceedings and to the enforcement of judgments,
orders, and mandates of the court, and consequently, to the due administration of justice. The Court
may suspend or disbar a lawyer for any conduct on his part showing his unfitness for the confidence and
trust which characterize the attorney and client relations, and the practice of law before the courts, or
showing such a lack of personal honesty or of good moral character as to render him unworthy of public
confidence. In the case, the expeditious manner by which Arbiter Valenzuela granted Atty. Pineda's
motion for such authority to sell the property makes the entire transaction dubious and irregular.
Significantly Atty. Pineda's act of filing a motion praying for authority to sell was by itself an admission on
his part that he did not possess the authority to sell the property. He could not and did not even wait for
valid authority but instead previously obtained the same from the labor arbiter whom he knew was not
empowered to so authorize.
Atty. Pineda is found guilty of indirect contempt of court for which he is sentenced to imprisonment and
directed to show cause why he should not be disbarred.

AMALGAMATED LABORERS’ ASSOCIATION and/or FELISBERTO M. JAVIER for himself and as General
President, ATTY. JOSE UR. CARBONELL, ET.AL.(petitioners) vs. CIR and ATTY. LEONARDO C. FERNANDEZ
(respondent)
GR No. L-23467 March 27, 1968

FACTS:

Amalgamated Laborers’ Association won a case of unfair labor practice against Binalbagan Sugar
Central Company, Inc. (Biscom). Upon motion of the complainants, CIR sent the Chief Examiner to go to
Biscom and compute the backwages. Total net backwages amounted to P79,755.22. Appeals were made
against this decision. In the interim, Atty. Leonardo C. Fernandez (herein respondent), in the same case,
filed a “Notice of Attorney’s Lien” over the amount to be awarded. He alleged therein that he had been
the attorney of record for the said case since the inception of the preliminary hearings of said case up to
the Supreme Court in Appeal, as chief counsel. He claimed that the labourers have voluntarily agreed to
give him as attorney’s fees on contingent basis 25% of the award. He further averred that this is already a
discounted fee out of the plea of the union’s president to reduce it from 30% for them to also satisfy
Atty. Jose Ur Carbonell. Meanwhile, CIR decided the appeals still in favour of the petitioners and ordered
Biscom to deposit the amount representing 25% of P79,755.22 with the cashier of the court to be
awarded and granted to Atty. Fernandez. Atty. Carbonell and ALA appealed from the decision
contending that 1) CIR is bereft of jurisdiction to adjudicate contractual disputes over attorney’s fees
averring that a dispute arising from contracts for attorney’s fees is not a labor dispute and is not one
among the cases ruled to be within CIR’s authority and to consider such a dispute to be a mere incident
to a case over which CIR may validly assume jurisdiction is to disregard the special and limited nature of
said court’s jurisdiction; 2) the award of 25% as attorney’s fees to Atty. Fernandez is excessive, unfair and
illegal. This and a subsequent motion for reconsideration was denied. Hence, this petition.

ISSUES:

1. Is CIR bereft of jurisdiction over the claim for attorney’s fees?

2. Is 25% of the award a reasonable attorney’s fee?

RULING:
 1. No. Court may be expressly granted the incidental powers necessary to effectuate its jurisdiction.
In the absence of such express grant, and in the absence of prohibitive legislation, it shall also be
impliedly granted. In the case at bench, to direct that the present dispute be lodged in another
court as petitioners advocate would only result in multiplicity of suits, a situation abhorred by
the rule. Since the court of Industrial Relations obviously had the jurisdiction over the main
cases, it likewise had jurisdiction to consider and decide all matters collateral thereto, such as
claims for attorney’s fees made by the members of the bar who appeared therein.
2. Yes. An examination of the record of the case will readily show that an award of 25% attorney’s
fees reasonably compensates the whole legal services rendered in the case. This must however
be shared by petitioner Atty. Carbonell and respondent Atty. Fernandez. Afterall, they are the
counsel of record of the complainants. Though common effort is presumed, the rightful shares of
both must be ascertained. As such, the case has been remanded to the CIR for the sole
determination of shares.

OTHER IMPORTANT POINTS:

 Canon 34 of Legal Ethics condemns the arrangement wherein union presidents should share in
the attorney’s fees. No division of fees for legal services is proper, except with another lawyer,
based upon a division of service and responsibility. The union president is not the attorney for
the labourers. He may seek compensation only as union president.
 A contingent fee contract specifying the percentage of recovery an attorney is to receive in a suit
should be reasonable under all circumstances of the case, but should always be subject to the
supervision of a court, as to its reasonableness.