G.R. No. L-29184 January 30, 1989 BENEDICTO LEVISTE, petitioner, vs. THE COURT OF APPEALS, HON.

JUDGE LUIS B. REYES, COURT OF FIRST INSTANCE OF MANILA, ROSA DEL ROSARIO, RITA BANU, CARMEN DE GUZMAN-MARQUEZ, JESUS R. DE GUZMAN, RAMON R. DE GUZMAN, JACINTO R. DE GUZMAN and ANTONIO R. DE GUZMAN, respondents.

Benedicto Leviste for and in his own behalf. Gatchalian, Ignacio & Associates for respondents de Guzman.

GRIO-AQUINO, J.: The issue in this case is whether or not an attorney who was engaged on a contingent fee basis may, in order to collect his fees, prosecute an appeal despite his client's refusal to appeal the decision of the trial court. On September 7, 1963, the petitioner, a practicing attorney, entered into a written agreement with the private respondent Rosa del Rosario to appear as her counsel in a petition for probate of the holographic will of the late Maxima C. Reselva. Under the will, a piece of real property at Sales Street, Quiapo, Manila, was bequeathed to Del Rosario. It was agreed that petitioner's contigent fee would be thirty-five per cent (35%) of the property that Rosa may receive upon the probate of the will (Annex "A", p. 59, Rollo). In accordance with their agreement, Leviste performed the following services as Del Rosario's counsel: (1) Thoroughly researched and studied the law on probate and succession; (2) Looked for and interviewed witnesses, and took their affidavits; (3) Filed the petition for. probate is Special Proceeding No. 58325; (4) Made the proper publications; (5) Presented at the trial the following witnesses: a) Eleuterio de Jesus b) Lucita de Jesus c) Purita L. Llanes d) Rita Banu e) Jesus Lulod. On August 20, 1965, Leviste received a letter from Ms. Del Rosario, informing him that she was terminating his services as her counsel due to "conflicting interest." This consisted, according to the letter, in petitioner's moral obligation to protect the interest of his brother-in-law, Gaudencio M. Llanes, whom Del Rosario and the other parties in the probate proceeding intended to eject as lessee of the property which was bequeathed to Del Rosario under the will (Annex "B", p. 60, Rollo). On September 20, 1965, petitioner filed a "Motion to Intervene to Protect His Rights to Fees for Professional Services." (Annex "B", p. 60, Rollo.) In an order dated November 12, 1965 the trial court denied his motion on the ground that he had "not filed a claim for attorney's fees nor recorded his attorney's lien." (p. 3, Rollo.) On November 23, 1965, petitioner filed a "Formal Statement of Claim for Attorney's Fees and Recording of Attorney's Lien,' which was noted in the court's order of December 20, 1965 (Annexes "D" and "E", pp. 63 & 64, Rollo). Although the order denying his motion to intervene had become final, petitioner continued to receive copies of the court's orders, as well the pleadings of the other parties in the case. He also continued to file pleadings. The case was submitted for decision without the respondents' evidence. On November 23, 1966, Del Rosario and Rita Banu, the special administratrix-legatee, filed a "Motion To Withdraw Petition for Probate" alleging that Del Rosario waived her rights to the devise in her favor and agreed that the De Guzman brothers and sisters who opposed her petition for probate, shall inherit all the properties left by the decedent. (Annex "F", p. 65, Rollo.) In an order of April 13, 1967 the trial court denied the motion to withdraw the petition for being contrary to public policy (Annex "G", pp. 66-67, Rollo). Nonetheless, on August 28, 1967, the court disallowed the will, holding that the legal requirements for its validity were not satisfied as only two witnesses testified that the will and the testatrix's signature were in the handwriting of Maxima Reselva. The petitioner filed an appeal bond, notice of appeal, and record on appeal. The private respondents filed a motion to dismiss the appeal on the ground that petitioner was not a party in interest. The petitioner opposed the motion to dismiss his appeal, claiming that he has a direct and material interest in the decision sought to be reviewed. He also asked that he be substituted as party-petitioner, in lieu of his former client, Ms. Del Rosario. On March 28, 1968, the trial judge dismissed the appeal and denied petitioner's motion for substitution. The petitioner filed in the Court of Appeals a petition for mandamus (CA-G.R. No. 41248) praying that the trial court be ordered to give due course to his appeal and to grant his motion for substitution. On May 22, 1968, the Court of Appeals dismissed the petition for being insufficient in form and substance as the petitioner did not appear to be the proper party to appeal the decision in Special Proceeding No. 58325 (Annex 1, p. 77, Rollo).

Upon the denial of his motion for reconsideration, petitioner appealed by certiorari to this Court, assigning the following errors against the Court of Appeals' resolution: 1. The Court of Appeals erred in finding that the petitioner appears not to be the proper party to appeal the decision in Sp. Proc. No. 58325 of the Court of First Instance of Manila. 2. Assuming the petitioner's right of appeal is doubtful, the Court of Appeals erred in dismissing his petition for mandamus; and 3. The Court of Appeals erred in not reversing the decision in Sp. Proc. No. 58325 denying the probate of the holographic will of the late Maxima C. Reselva, said decision being patently erroneous. Under his first assignment of error, petitioner argues that by virtue of his contract of services with Del Rosario, he is a creditor of the latter, and that under Article 1052 of the Civil Code which provides: ART. 1052. If the heir repudiates the inheritance to the prejudice of his own creditors, the latter may petition the court to authorize them to accept it in the name of the heir. The acceptance shall benefit the creditors only to an extent sufficient to cover the amount of their credits. The excess, should there be any, shall in no case pertain to the renouncer, but shall be adjudicated to the persons to whom, in accordance with the rules established in this Code, it may belong. he has a right to accept for his client Del Rosario to the extent of 35% thereof the devise in her favor (which she in effect repudiated) to protect his contigent attorney's fees. The argument is devoid of merit. Article 1052 of the Civil Code does not apply to this case. That legal provision protects the creditor of a repudiating heir. Petitioner is not a creditor of Rosa del Rosario. The payment of his fees is contingent and dependent upon the successful probate of the holographic will. Since the petition for probate was dismissed by the lower court, the contingency did not occur. Attorney Leviste is not entitled to his fee. Furthermore, Article 1052 presupposes that the obligor is an heir. Rosa del Rosario is not a legal heir of the late Maxima C. Reselva. Upon the dismissal of her petition for probate of the decedent's will, she lost her right to inherit any part of the latter's estate. There is nothing for the petitioner to accept in her name. This Court had ruled in the case of Recto vs. Harden, 100 Phil. 1427, that "the contract (for contingent attorney's fees) neither gives, nor purports to give, to the appellee (lawyer) any right whatsoever, personal or real, in and to her (Mrs. Harden's) aforesaid share in the conjugal partnership. The amount thereof is simply a basis for thecomputation of said fees." The Court of Appeals did not err in dismissing the petition for mandamus, for while it is true that, as contended by the petitioner, public policy favors the probate of a will, it does not necessarily follow that every will that is presented for probate, should be allowed. The law lays down procedures which should be observed and requisites that should be satisfied before a will may be probated. Those procedures and requirements were not followed in this case resulting in the disallowance of the will. There being no valid will, the motion to withdraw the probate petition was inconsequential. Petitioner was not a party to the probate proceeding in the lower court. He had no direct interest in the probate of the will. His only interest in the estate is an indirect interest as former counsel for a prospective heir. In Paras vs. Narciso, 35 Phil. 244, We had occassion to rule that one who is only indirectly interested in a will may not interfere in its probate. Thus: ... the reason for the rule excluding strangers from contesting the will, is not that thereby the court maybe prevented from learning facts which would justify or necessitate a denial of probate, but rather that the courts and the litigants should not be molested by the intervention in the proceedings of persons with no interest in the estate which would entitle them to be heard with relation thereto. (Paras vs. Narciso, 35 Phil. 244, 246.) Similary, in Morente vs. Firmalino, 40 O.G. 21st Supp. 1, We held: We are of the opinion that the lower court did not err in holding that notice of an attorney's lien did not entitle the attorney-appellant to subrogate himself in lieu of his client. It only gives him the right to collect a certain amount for his services in case his client is awarded a certain sum by the WHEREFORE, the petition for certiorari is denied for lack of merit. Costs against the petitioner. SO ORDERED.

court.

Narvasa, Cruz, Gancayco and Medialdea, JJ, concur.

G.R. No. 117438 June 8, 1995 RAUL SESBREO, petitioner, vs. HON, COURT OF APPEALS, and PATRICIA GIAN, SOTERO BRANZUELA, ANDRES C. YPIL, SANTIAGO BACAYO, BRIGIDO COHITMINGAO, VICTORINO DINOY, GUILLERMO MONTEJO and EMILIO RETUBADO,respondents.

ROMERO, J.: Of interest to all law practitioners is the issue at bench, namely, whether the Court of Appeals had the authority to reduce the amount of attorney's fees awarded to petitioner Atty. Raul H. Sesbreo, notwithstanding the contract for professional services signed by private respondents. The antecedent facts of the case follow. Fifty-two employees sued the Province of Cebu and then Governor Rene Espina for reinstatement and backwages. 1 Herein petitioner, Raul H. Sesbreo, replaced the employees' former counsel Atty. Catalino Pacquiao. Thirty-two of the fifty-two employees signed two documents whereby the former agreed to pay petitioner 30% as attorney's fees and 20% as expenses to be taken from their back salaries. On September 12, 1974, the trial court rendered a decision ordering the Province of Cebu to reinstate the petitioning employees and pay them back salaries. Said decision became final and executory after it was affirmed in toto by the Court of Appeals and the petition to review the appellate decision, denied by this Court in 1978. 2 A compromise agreement was entered into by the parties below in April 1979 whereby the former employees waived their right to reinstatement among others. Likewise, pursuant to said compromise agreement, the Province of Cebu released P2,300,000.00 to the petitioning employees through petitioner as "Partial Satisfaction of Judgment." The amount represented back salaries, terminal leave pay and gratuity pay due to the employees. Sometime November and December 1979, ten employees, herein private respondents, 3 filed manifestations before the trial court asserting that they agreed to pay petitioner 40% to be taken only from their back salaries. The lower court issued two orders, with which petitioner complied, requiring him to release P10,000.00 to each of the ten private respondents and to retain 40% of the back salaries pertaining to the latter out of the P2,300,000.00 released to him. On March 28, 1980, the trial court fixed petitioner's attorney's fees at 40% of back salaries, terminal leave, gratuity pay and retirement benefits and 20% as expenses, or a total of 60% of all monies paid to the employees. Private respondents' motion for reconsideration was granted and on June 10, 1980, the trial court modified the award after noting that petitioner's attorney's lien was inadvertently placed as 60% when it should have been only 50%. The dispositive portion of the order reads: WHEREFORE, in view of all the foregoing the order of this Court fixing 60% as attorney's fee[s] of Atty. Sesbreo should be 50% of all monies which the petitioners (Suico, et al.) may receive from the Provincial Government. Obviously not satisfied with the attorney's fees fixed by the trial court, petitioner appealed to the Court of Appeals claiming additional fees for legal services before the Supreme Court, reimbursement for expenses and a clear statement that the fee be likewise taken from retirement pay awarded to his clients. Unfortunately, the respondent appellate court did not agree with him as the generous award was further reduced. 4 The appellate court noted that in this jurisdiction, attorney 's fees are always subject to judicial control and deemed the award of 20% of the back salaries awarded to private respondents as a fair, equitable and reasonable amount of attorney's fee. The decretal portion of the decision reads: WHEREFORE, the questioned order is MODIFIED. The attorney's fees due Atty. Raul Sesbreo is fixed at an amount equivalent to 20% of all back salaries which the Province of Cebu has awarded to herein 10 petitioners. 5 Hence this petition for review where he claims that attorney's fees amounting to 50% of all monies awarded to his clients as contingent fees should be upheld for being consistent with prevailing case law and the contract of professional services between the parties. He adds that since private respondents did not appeal, they are not entitled to affirmative relief other than that granted in the regional trial court. We find no reversible error in the decision of the Court of Appeals and vote to deny the petition. Respondent court found that the contract of professional services entered into by the parties 6 authorized petitioner to take a total of 50% from the employees' back salaries only. The trial court, however, fixed the lawyer's fee on the basis of all monies to be awarded to private respondents. Fifty per cent of all monies which private respondents may receive from the provincial government, according to the Court of Appeals, is excessive and unconscionable, not to say, contrary to the contract of professional services. 7 After considering the facts and the nature of the case, as well as the length of time and effort exerted by petitioner, respondent court reduced the amount of attorney's fees due him. It is a settled rule that what a lawyer may charge and receive as attorney's fees is always subject to judicial control.8 A lawyer is primarily an officer of the court charged with the duty of assisting the court in administering impartial justice between the parties. When he takes his oath, he submits himself to the authority of the court and subjects his professional fees to judicial control. 9 As stated by the Court in the case of Sumaong v. Judge: 10 A lawyer is not merely the defender of his client's cause and a trustee of his client in respect of the 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. 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 professional fees. 11 In the case at bench, the parties entered into a contingent fee contract. The Agreement provides: WE, the undersigned petitioners in the case of POLICRONIO BELACHO, ET AL., VS. RENE ESPINA ET AL., hereby agree to pay Atty. Sesbreo, our lawyer, the following to be taken from our back salaries: 30% as attorney's fees 20% as expenses That we enter into agreement in order to be paid our back salaries as early as possible and so that we may be reinstated as early as possible. A stipulation on a lawyer's compensation in a written contract for professional services ordinarily controls the amount of fees that the contracting lawyer may be allowed, unless the court finds such stipulated amount unreasonable unconscionable. 12 A contingent fee arrangement is valid in this jurisdiction 13 and is generally recognized as valid and binding but must be laid down in an express contract. 14 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 in consideration of the risk that the lawyer may get nothing if the suit fails. Contingent fee contracts are under the supervision and close scrutiny of the court in order that clients may be protected from unjust charges. 15 Its validity depends in large measure on the reasonableness of the stipulated fees under the circumstances of each case. 16 When the courts find that the stipulated amount is excessive or the contract is unreasonable or unconscionable, or found to have been marred by fraud, mistake, undue influence or suppression of facts on the part of the attorney, public policy demands that said contract be disregarded to protect the client from unreasonable exaction. 17 Stipulated attorney's fees are unconscionable whenever the amount is by far so disproportionate compared to the value of the services rendered as to amount to fraud perpetrated upon the client. This means to say that the amount of the fee contracted for, standing alone and unexplained would be sufficient to show that an unfair advantage had been taken of the client, or that a legal fraud had been perpetrated on him. 18 The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract, will not however, preclude recovery. It merely justifies the court's fixing a reasonable amount for the lawyer's services. Courts may always ascertain, if the attorney's fees are found to be excessive, what is reasonable under the circumstances. Quantum meruit, meaning "as much as he deserves," is used as the basis for determining the lawyer's professional fees in the absence of a contract. Factors such as the time spent and extent of services rendered; novelty and difficulty of the questions involved; importance of the subject matter; skill demanded; probability of losing other employment as a result of acceptance of the proffered case; customary charges for similar services; amount involved in the controversy and the benefits resulting to the client; certainty of compensation; character of employment; and professional standing of the lawyer, are considered in determining his fees. 19 There is nothing irregular about the respondent court's finding that the 50% fee of petitioner is unconscionable As aptly put by the court: It effectively deprives the appellees of a meaningful victory of the suit they have passionately pursued. Balancing the allocation of the monetary award, 50% of all monies to the lawyer and the other 50% to be allocated among all his 52 clients, is too lop-sided in favor of the lawyer. The ratio makes the practice of law a commercial venture, rather than a noble profession. . . . Also, the 52 employees who are the plaintiffs in the aforementioned civil case were dismissed from employment, their means of livelihood. All 52 hired claimant-appellant as counsel so that they could be reinstated and their source of income restored. It would, verily be ironic if the counsel whom they had hired to help would appropriate for himself 50% or even 60% of the total amount collectible by these employees. Here is an instance where the courts should intervene. 20 Considering the nature of the case, which is a labor case, the amount recovered and petitioner's participation in the case, an award of 50% of back salaries of his 52 clients indeed strikes us as excessive. Under the circumstances, a fee of 20% of back salaries would be a fair settlement in this case. In any event, this award pertains only to the ten private respondents herein. Petitioner has already been compensated in the amount of 50% of all monies received, by the rest of his clients in the case below. WHEREFORE, in view of the foregoing, the petition is DENIED and the appealed decision AFFIRMED. SO ORDERED.

Melo, Vitug and Francisco, JJ., concur. Feliciano, J., is on leave.

G.R. No. L-67970 January 15, 1988JOSE ABROGAR and JUANA DESEAR, petitioners, vs. INTERMEDIATE APPELLATE COURT, SOCORRO DESEAR and BRIGIDA DESEAR, respondents.

SARMIENTO, J.: This is a Petition for Review on certiorari of the Decision of the then Intermediate Appellate Court, 1 now Court of Appeals, affirming in toto the decision of the trial court which annulled a sheriff sale. The petitioners and private respondents were judgment plaintiffs and defendants, respectively, in a civil case 2decided by the trial court and affirmed by the appellate court. For failure of the private respondents to satisfy a final and executory judgment in the said civil case amounting to P2,553.00 only, their two parcels of land with a combined market value of P75,000.00, were levied on execution and advertised for public sale by the Provincial Sheriff. 3 The auction sale was scheduled for March 27, 1971 but the same did not push through because the trial court, upon motion of private respondent Socorro Desear, issued an order on March 26, 1971, or one day before the date fixed, postponing the auction sale on condition that the publication fees would be paid by the movant. The movant did not pay as ordered. Instead of proceeding with the auction sale on March 27, 1971, considering that there was no valid postponement, the condition thereof not having been complied with, the Provincial Sheriff of Pangasinan nevertheless held the auction almost four months later, on July 16, 1971, when the two parcels of land were sold, for, as earlier stated, P2,553.00 only. Subsequently, a Sheriffs Certificate of Sale was issued. There was no showing that private respondent Socorro Desear agreed to the July 16, 1971 auction sale. However, it is indisputable that there was neither new notice nor new publication of the said auction sale. 4 The trial court ruled that the Sheriffs Final Sale was null and void for lack of notice and publication and awarded attorney's fees in the amount of P2,000.00 in favor of the private respondents. 5 Now before us, the petitioners assigned several errors of the respondent appellate court. We summarize these assigned errors into two, to wit: (1) in ruling that there was no valid postponement of the date of the auction sale originally set for March 27, 1971; and (2) in awarding attorney's fees of P2,000.00 in the absence of any prayer and legal bases therefor. 6 As correctly pointed out by the respondent court (and the trial court), the proper notice and publication in a newspaper was made for the sale at public auction scheduled for March 27, 1971. On motion, however, of private respondents, the trial court in an Order dated March 26, 1971, directed the sale set for March 27, 1971 postponed provided the movant would pay the publication fees, otherwise the public auction would continue at a date to be designated by the Sheriff. The movant did not pay the publication fees hence there was no postponement of the public auction sale since the condition precedent or suspensive condition (that of paying the publication fees) was not complied with. 7 There was therefore no valid postponement of the public auction sale. And there was no written consent of debtor and creditor and neither was there any agreement in writing by the parties authorizing the sheriff or the officer making the sale to adjourn the same "to any date agreed upon in writing by the parties." 8 The public auction sale set for March 27, 1971, should have been held considering that the said schedule complied with all the requirements of law regarding a public sale, including notice and publication. The officer may adjourn the sale from day to day if it is necessary to do so for lack of time to complete the sale on the date fixed in the notice. 9 But he may not adjourn to another date unless with the written consent of the parties. 10 This was precisely the point of the appellate court when it stressed the fact that there was no written agreement between the debtor and the creditor to postpone the sale, and in fact there was no sale held on the scheduled date 11 to warrant the application of Section 24, Rule 39 of the Revised Rules of Court. Considering, therefore, that there was no valid postponement of the original date of the auction sale on March 27, 1971, "then the alleged public auction sale on July 16, 1971 or close to four months after the original date of sale on March 27, 1971 without the proper notice and publication is null and void" as correctly pointed out by the respondent court. 12 The second issue raised by the petitioners is meritorious. There is neither an allegation nor evidence to support the award of P2,000.00 by way of attorney's fees in favor of private respondents. The complaint does not pray for attorney's fees. 13 Even the transcript of stenographic notes in the trial does not contain any testimony to support an award of attorney's fees. 14 As succinctly put, the claim for attorney's fees was neither pleaded nor proved ! The exercise of judicial discretion in the award of attorney's fees under Article 2208 (ii) of the New Civil Code demands a factual, legal, and equitable justification. Without such justification, the award is a conclusion without a premise, its basis being improperly left to speculation and conjecture. 15 Attorney's fees are recoverable not as a matter of right. 16 It is the import of Article 2208 that the award of attorney's fees is an exception and that the decision must contain an express finding of fact to bring the case within the exception and justify the grant of attorney's fees. "Just and equitable" under paragraph 11, Article 2208, New Civil Code is not a matter of feelings, but demonstration. 17 The reason for the award of attorney's fees must be stated in the text of the court's decision, otherwise, if it is stated only in the dispositive portion of the decision, the same must be disallowed on appeal. 18 In the light of all the foregoing, the award of attorney's fees in favor of the private respondents in the case before us has no basis. Hence, attorney's fees must be disallowed. WHEREFORE, the Decision of the respondent court declaring null and void the public auction sale on July 16, 1971 for lack of notice and publication, is hereby AFFIRMED. However, the award of attorney's fees is REVERSED. Costs against petitioners.

This Decision is IMMEDIATELY EXECUTORY.

Yap, Melencio-Herrera, Paras and Padilla, JJ., concur.

G.R. No. 97255 August 12, 1994 SOLID HOMES, INC., petitioner, vs. HON. COURT OF APPEALS, INVESTCO, INC., ANGELA PEREZ STALEY, and ANTONIO PEREZ, respondents.

Rene A. Diokno for petitioner.

R E S O L U T I O N

VITUG, J.: An action for collection of sums of money, damages and attorney's fees was filed with the Regional Trial Court (Civil Case No. 40615) of Pasig by private respondents Investco, Angela Perez Staley and Antonio Perez Jr. against petitioner Solid Homes, Inc. Private respondents averred that, on 07 September 1976, they sold, under an agreement entitled "contract to sell and to buy," to Solid Homes six (6) parcels of land in Quezon City and Marikina, with an area of 704,443 sq.m., for a total selling price of P10,211,075.00 payable (in accordance with paragraph 1 thereof), as follows: a) P100,000.00, Philippine Currency, as part down payment upon signing and execution of this contract receipt of which in full is hereby acknowledged; b) P2,042,215.00, Philippine Currency, as down payment payable on the following dates: 1 July 22, 1977 P400,000.00 2 October 22, 1977 711,107.50 3 January 22, 1978 711,107.50 It is hereby agreed that the above down payment included the first down payment of P199,000.00. Should the FIRST PARTY obtain titles to the properties above-described after July 22, 1977, the due dates of the down payment and all subsequent payments on the balance shall be adjusted accordingly. c) The balance of P8,188,860.00 shall be payable in ten (10) semi-annual installments for a period of five (5) years and shall earn interest at the rate of twelve (12%) per annum, the first installment to be due on July 22, 1978. The installment due together with the Schedule of Payments attached hereto as Schedule "A" and made an integral part of this contract (Exh. A). 1 The second paragraph of Exhibit "A" stipulated that should Solid Homes fail to pay any of the installments on their respective due dates, an interest of one percent (1%) per month on the defaulted amount would be paid for up to two months or pro-rata thereof; thereafter, should the installment due, as well as the interest thereon, still remain unpaid, the entire balance of the purchase price would then become immediately due and demandable. Such due and demandable sum would be payable within thirty (30) days, counted from the expiration of the 2-month period, without further need for judicial action. Private respondents asserted that Solid Homes violated the terms of the agreement by refusing to pay the balance of P4,800,282.91 and by failing to negotiate a settlement with the tenants and squatters of the property despite its receipt from Investco of P350,000.00 for that specific purpose. The trial court rendered judgment on 14 February 1985; the dispositive portion read: WHEREFORE, judgment is hereby rendered ordering the defendant to pay the plaintiffs: 1) The amount of P4,800,282.91 with interest thereof at the rate of one percent per month from February 23, 1981, until fully paid; 2) The amount of P99,559.00 representing cost of science and transfer taxes which defendant credited to its account with interest at the legal rate from the filing of the complaint; 3) The amount of P250,000.00 to cover attorney's fees and litigation expenses. 2 On appeal, the Court of Appeals (CA-G.R. CV No. 13400), modified the trial court's judgment and rendered its own decision, dated 21 January 1991, resolving thusly: PREMISES CONSIDERED, the judgment of the trial court is hereby modified by ordering defendant-appellant to pay plaintiff the amount of P4,800,282.91 with interest thereon at the rate of one percent per month from March 22, 1982. The amount of attorney's fees is hereby reduced from P250,000.00 to P50,000.00. The decision is AFFIRMED in all other aspects. 3 In the instant petition for review, petitioner Solid Homes argues (a) that the Court of Appeals should not have awarded attorney's fees, there being an absence of any special finding of fact to justify such award, and (b) that it erred in declaring due and demandable the entire unpaid balance still owing to private respondents. The Second Division of this Court required respondents to comment on the petition in its Resolution of 22 April 1991. Meanwhile, Atty. Alejandro Barin withdrew as counsel for respondents Investco, Inc., Angela Perez Staley and Antonio Perez, Jr. 4 We required private respondents to submit the name and address of their new counsel; to this day, no compliance has yet been made. In our resolution, dated 01 December 1993, we required the parties to

move in the premises and to advise the Court whether "supervening events may have rendered this case moot and academic." 5 Petitioner submitted its compliance and manifested thusly: In the meantime, on April 15, 1985 before judgment was rendered by the RTC in Civil Case No. 40615 Investco, Inc. (respondent herein) sold the very same parcels of land involved in said case, in favor of Armed Forces of the Philippines Mutual Benefit Association, Inc. (AFPMBAI) Solid Homes, Inc. (herein petitioner) filed Civil Case No. Q-46570 RTC Quezon City entitled 'Solid Homes, Inc., plaintiff versus AFPMBAI, Investco, Inc. and the Register of Deeds of Quezon City covering titles registered in Quezon City and Civil Case No. 52999 Solid Homes, Inc., plaintiff versus AFPMBAI, Investco, Inc., and Register of Deeds for Pasig covering titles registered in Pasig, Metro Manila, both for nullification of the said second deed of sale over the same properties involved in the instant case. Quezon City RTC Civil Case No. 46570 was decided in favor of plaintiffs, Solid Homes, Inc.; on appeal, the Court of Appeals (CA G.R. No. 22365) reversed the decision; same was elevated to the Supreme Court where it is pending in SC G.R. No. 100437. Pasig RTC, Civil Case No. 52999 was decided in favor of plaintiff Solid Homes, Inc.; defendants appealed to the Court of Appeals (CA G.R. No. 27398), which affirmed the RTC Decision; on the main cause of action Petition for Review by this to this Honorable Court is pending under G.R. No. 104769. Under the circumstances, herein petitioner, in compliance with the Resolution dated December 1, 1993, hereby manifests that supervening events since the Petition herein was filed has not rendered this case as moot and academic, considering that the issue involved is the amount to be paid in SOLID HOMES, INC. as balance on the consideration of the original sale by Investco, Inc. to it and the concomitant transfer of titles to the latter upon payment thereof, whereas in G.R. No. 100437 and G.R. No. 104769, the issue is whether the second buyer AFPMBAI had actual or constructive notice of the prior sale by Investco, Inc. to herein Petitioner, Solid Homes, Inc. 6 As of this late date, the Court has yet to hear from private respondents. Given the premises, and in order to permit this case to be finally resolved and terminated, the required comment on the petition for review should now be, as it is hereby, dispensed with. Article 2208 of the Civil Code allows attorney's fees to be awarded by a court when its claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission of the party from whom it is sought. While judicial discretion is here extant, an award thereof demands, nevertheless, a factual, legal or equitable justification. The matter cannot and should not be left to speculation and conjecture (Mirasol vs. De la Cruz, 84 SCRA 337; Stronghold Insurance Company Inc. vs. Court of Appeals, 173 SCRA 619). In the case at bench, the records do not show enough basis for sustaining the award for attorney's fees and to adjudge its payment by petitioner. On the contrary, the appellate court itself has found that petitioner's act of withholding payment could not be said to be all that unjustified. The disagreement of the parties on the demandability of the amount still due and the accrual date of interest has persisted largely because of supervening circumstances and the perceived inexplicitness of the contract itself. The decision of the appellate court, has, in fact, reversed that of the trial court on the imposition of interest from 23 February 1981, thus upholding, which we similarly find to be in order, the position of petitioner that the accrual dated should instead start only on 28 March 1982. Relative to the demandability of the entire unpaid balance, we agree with, and so adopt as our own that of respondent court; viz: The amount actually paid on account of the contract to buy and sell (Exh. A or 1) is not an area of controversy in the first cause of action. The sum of P2,042,215.00 corresponding to the down payment, as well as P4,084,430.00 with respect to the first four semi-annual installments and a portion of the fifth installment, had been received making a total of P6,126,645.00. It is conceded that a balance of P4,800,282.91 is left unpaid. The dispute is with respect to the period when defendant had defaulted and, consequently, when payment of interest shall begin. The plaintiffs claim that said period should start on February 23, 1981; while the defendant contends that the period must be adjusted should the titles be obtained by the plaintiff corporation after July 22, 1977, as provided in Par. 1(b) of the contract to sell and to buy. Considering that titles were actually transferred to Investco, Inc. between March 21 to March 28, 1979, the defendant avers that the original schedule of payment must not be followed and the 5th installment shall only be due on March 22, 1982. xxx xxx xxx It is undisputed that appellant Solid Homes had made a total payment of P6,126,645.00 leaving a balance of P4,800,282.91, which refers to the 6th to the 10th installments. Of the 5th installment due on July 22, 1980, the following payments were made by appellant: Oct. 30, 1980 to Nov. 10, 1980 P150,000.00 Nov. 18, 1980 to Dec. 10, 1980 270,000.00

Dec. 18, 1980 to Jan. 14, 1981 101,853.12 Jan. 20 to Feb. 12, 1981 95,000.00 Feb. 16 to Feb. 19, 1981 115,000.00 P731,853.12 Thereafter, no further payment was made by appellant contending that under the provisions of paragraph 1(b) of the contract, the payment schedule should be adjusted. The said provisions states as follows: Par. 1, sub-par. (b) Should the FIRST PARTY (plaintiff Investco) obtain titles to the properties abovedescribed after July 22, 1977, the due dates of the downpayment and the subsequent payments on the balance shall be adjusted accordingly.' Admittedly, the subject titles were obtained during the period of March 21, to March 28, 1979, or after July 22, 1977 (Exhs. D to 1 and Exhs. 2 to 10). Thus, implementing par. 1(b) of the Contract, the due dates of payments should have been adjusted as follows: Due Dates Per Contract Installment Adjusted Schedule A Number Due Dates Downpayment July 22, 1977 March 28, 1979 October 22, 1977 June 08, 1979 January 22, 1978 September 28, 1979 Balance July 22, 1978 No. 1 March 08, 1980 January 22, 1979 No. 2 September 28, 1980 July 22, 1979 No. 3 March 28, 1981 January 22, 1981 No. 4 September 28, 1981 July 22, 1980 No. 5 March 28, 1982 January 22, 1981 No. 6 September 28, 1982 July 22, 1981 No. 7 March 28, 1983 January 22, 1982 No. 8 September 28, 1983 July 22, 1982 No. 9 March 28, 1984 January 22, 1983 No. 10 September 28, 1984 In view of the adjustment of due dates in accordance with par. 1(b) of the Contract payments made should correspond to the adjusted dates. Thus, the payment on the 4th installment which is supposed to have been made on January 22, 1980, should be credited on September 28, 1981, and the next payment on the 5th installment which should have been made on July 22, 1981 under the contract would have to be credited on March 28, 1981, the adjusted due date. 7 It is but proper, therefore, to indeed declare 28 March 1982 to be the due date for the payment of the 5th installment. The total amount of P731,853.12, representing payments for the 5th installment made by petitioner, should rightly be credited on 28 March 1982, the adjusted due date. Since no payment appears to have been made after 1981, petitioner should thereby be likewise held in default in the payment of the 6th to the 10th installments. Under the terms of the contract, hereinbefore recited, petitioner's default has effectively activated the acceleration clause of the contract, and we see no error on the part of the appellate court in ordering petitioner to pay the entire unpaid balance of P4,800,282.91 with interest thereon at the rate of 1% per month to be computed from 22 March 1982. WHEREFORE, except on the award of attorney's fees which is hereby DELETED, the decision of the Court of Appeals is AFFIRMED. No costs. SO ORDERED.

Bidin, Romero and Melo, JJ., concur. Feliciano, J. concurs in the result.

G.R. No. L-41862 February 7, 1992 B. R. SEBASTIAN ENTERPRISES, INC., petitioner, vs. HON. COURT OF APPEALS, EULOGIO B. REYES, NICANOR G. SALAYSAY, in his capacity as Provincial Sheriff of Rizal, and ANTONIO MARINAS, in his capacity as Deputy Sheriff, respondents.

Benito P. Fabie for petitioner. Ildefonso de Guzman-Mendiola for private respondents.

DAVIDE, JR., J.:

This is a petition for prohibition and mandamus, with prayer for preliminary injunction, to review the Resolution dated 10 November 1975 of respondent Court of Appeals in C.A.-G.R. No. 53546-R denying petitioner's motion to reinstate its appeal, earlier dismissed for failure to file the Appellant's Brief. The material operative facts of this case, as gathered from the pleadings of the parties, are not disputed. Eulogio B. Reyes, now deceased, filed an action for damages with the then Court of First Instance (now Regional Trial Court) of Rizal, Pasay City Branch, against the Director of Public Works, the Republic of the Philippines and petitioner herein, B. R. Sebastian Enterprises, Inc. The case was docketed as Civil Case No. 757-R. 1 On 7 May 1973, the trial court rendered a decision finding petitioner liable for damages but absolving the other defendants. 2 Petitioner, thru its counsel, the law firm of Baizas, Alberto and Associates, timely appealed the adverse decision to the respondent Court of Appeals, which docketed the case as C.A.-G.R. No. 53546-R. 3 During the pendency of the appeal, the plaintiff-appellee therein, Eulogio B. Reyes, died. Upon prior leave of the respondent Court, he was substituted by his heirs Enrique N. Reyes, Felicisima R. Natividad, Donna Marie N. Reyes and Renne Marie N. Ryes who are now the private respondents in this present petition. On 19 February 1974, petitioner, thru its then counsel of record, received notice to file Appellant's Brief within 45 days from receipt thereof. It had, therefore, until 5 April 1974 within which to comply. Counsel for petitioner failed to file the Brief; thus, on 9 July 1974, respondent Court issued a Resolution requiring said counsel to show cause why the appeal should not be dismissed for failure to file the Appellant's Brief within the reglementary period. 4 A copy of this Resolution was received by counsel for petitioner on 17 July 1974. 5 As the latter failed to comply with the above Resolution, respondent Court, on 9 September 1974, issued another Resolution this time dismissing petitioner's appeal: It appearing that counsel for defendant-appellant failed to show cause why the appeal should not be dismissed (for failure to file the appellant's brief within the reglementary period which expired on April 5, 1974) within the period of 10 days fixed in the resolution of July 9, 1974, copy of which was received by said counsel on July 17, 1974; . . . 6 On 28 September 1974, petitioner, this time thru the BAIZAS LAW OFFICE, filed a motion for reconsideration 7 of the resolution dismissing its appeal alleging that as a result of the death of Atty. Crispin Baizas, senior partner in the law firm of BAIZAS, ALBERTO & ASSOCIATES, the affairs of the said firm are still being settled between Atty. Jose Baizas (son of Crispin Baizas) and Atty. Ruby Alberto, the latter having established her own law office; furthermore, Atty. Rodolfo Espiritu, the lawyer who handled this case in the trial court and who is believed to have also attended to the preparation of the Appellant's Brief but failed to submit it through oversight and inadvertence, had also left the firm. In its Resolution of 9 October 1974, respondent Court denied the motion for reconsideration, stating that: Upon consideration of the motion of counsel for defendant-appellant, praying, on the grounds therein stated, that the resolution of September 9, 1974, dismissing the appeal, be set aside, and that appellant be granted a reasonable period of time within which to file its brief: considering that six (6) months had elapsed since the expiration of the original period and more than two and onehalf (2-) months since counsel received copy of the resolution requiring him to show cause why the appeal should not be dismissed for failure to file brief; Motion Denied. 8 No action having been taken by petitioner from the above Resolution within the period to file a petition for review, the same became final and executory, and the records of the case were remanded to the court of origin for execution. The trial court issued a writ of execution on 21 October 1975. 9 Pursuant thereto, respondent Provincial Sheriff and Deputy Sheriff attached petitioner's Hough Pay Loader with Hercules Diesel Engine and issued on 5 November 1975 a Notice of Sheriff's Sale, scheduling for Friday, 14 November 1975 at 10:00 o'clock in the morning, the auction sale thereof. 10 On 6 November 1975, petitioner filed with respondent Court a Motion to Reinstate Appeal with Prayer for Issuance of a Writ of Preliminary Injunction 11 dated 5 November 1975, and containing the following allegations: 1. That late as it may be, this Honorable Court has the inherent power to modify and set aside its processes, in the interest of justice, especially so in this case when the case was dismissed on account of the untimely death of Atty. Crispin D. Baizas, counsel of BRSEI (B.R. Sebastian Enterprises, Inc.). 2. That to dismiss the case for failure to file the appellant's brief owing to the untimely death of the late Atty. Crispin D. Baizas would be tantamount to denying BRSEI its ( sic) day in court, and is, therefore, a clear and unmistakable denial of due process on the part of BRSEI. 3. That to reinstate BRSEI's appeal would not impair the rights of the parties, since all that BRSEI is asking for, is a day in court to be heard on appeal in order to have the unfair, unjust and unlawful decision, set aside and reversed. The respondent Court denied the said motion in its Resolution of 10 November 1975: 12 . . . it appearing that appellant was represented by the law firm of Baizas, Alberto & Associates, and while Atty. Baizas died on January 16, 1974, his law firm was not dissolved since it received the notice to file brief on February 19, 1974, and the copy of the Resolution of July 9, 1974, requiring

appellant to show cause why the appeal should not be dismissed was received by the law firm on July 17, 1974 and no cause was shown; . . . Hence, on 13 November 1975, petitioner filed the original petition 13 in this case against the Court of Appeals, Eulogio B. Reyes, Nicanor G. Salaysay, as Provincial Sheriff of Rizal, and Antonio Marinas, as Deputy Sheriff. The petition likewise prayed for the issuance of a Temporary Restraining Order. In the Resolution of 13 November 1975, this Court required respondents to comment on the petition within ten (10) days from receipt thereof, and issued a Temporary Restraining Order. 14 On 12 January 1976, respondents filed a Partial Comment on the Petition with a Motion to Suspend the Proceedings 15 on the ground that respondent Eulogio B. Reyes is already dead and his lawful heirs had already been ordered substituted for him during the pendency of the appeal before the respondent Court of Appeals. In the Resolution of 21 January 1976, this Court ordered petitioner to amend its petition within then (10) days from receipt of notice, and suspended the filing of respondents' Comment until after the amendment is presented and admitted. 16 In compliance therewith, petitioner filed on 9 February 1976 a Motion for Leave to Admit Amended Petition to which it attached the said Amended Petition. 17 The amendment consists in the substitution of Eulogio B. Reyes with his heirs. This Court admitted the Amended Petition 18 and required the respondents to file their Comment within ten (10) days from notice thereof, which they complied with on 5 April 1976. 19 Petitioner filed its Reply to the Comment on 29 April 1976.20 In the Resolution of 12 May 1976, this Court denied the petition for lack of merit: 21 L-41862 (B.R. Sebastian Enterprises, Inc. vs. Court of Appeals, et. al.). Considering the allegations, issues and arguments adduced in the amended petition for review on certiorari of the decision of the Court of Appeals, respondents' comment thereon, as well as petitioner's reply to said comment, the Court Resolved to DENY the petition for lack of merit. However, on 31 May 1976, petitioner filed a motion for its reconsideration 22 claiming that since it was deprived of the right to appeal without fault on its part, the petition should be given due course. Respondents submitted on 22 July 1976 their Comment 23 to said Motion for Reconsideration. On 10 September 1976, this Court resolved to reconsider 24 its Resolution of 12 May 1976 and required both parties to submit simultaneously their respective Memoranda within thirty (30) days from notice thereof. Petitioner submitted its Memorandum on 5 November 1976 25 while respondents submitted theirs on 22 November 1976. 26 On 29 November 1976, this Court deemed the present case submitted for decision. 27 The sole issue to be addressed is whether or not the respondent Court of Appeals gravely abused its discretion in denying petitioner's motion to reinstate its appeal, previously dismissed for failure to file the Appellant's Brief. Petitioner, in its Memorandum, extensively expounds on respondent Court's authority to reinstate dismissed appeals and cites as basis thereof the decision of this Court in Heirs of Clemente Celestino vs. Court of Appeals, et al., 28 Indeed, in said case, this Court affirmed the resolution of the Court of Appeals reinstating an appeal after being dismissed for failure by the appellants therein to file their brief, and after entry of judgment and remand of the records to the lower court and cancelled the entry of judgment, requiring the lower court to return the records to the Court of Appeals and admit appellant's brief. Said case, however, had a peculiar or singular factual situation" which prompted the Court of Appeals to grant the relief and which this Court found sufficient to justify such action. As this Court, through Associate Justice Ramon Aquino, said: We are of the opinion that under the peculiar or singular factual situation in this case and to forestall a miscarriage of justice the resolution of the Court of Appeals reinstating the appeal should be upheld. That Court dismissed the appeal of the Pagtakhans in the mistaken belief that they had abandoned it because they allegedly failed to give to their counsel the money needed for paying the cost of printing their brief. But presumably the Appellate Court realized later that fraud might have been practised on appellants Pagtakhans since their oppositions were not included in the record on appeal. In ( sic) sensed that there was some irregularity in the actuations of their lawyer and that Court ( sic) itself had been misled into dismissing the appeal. Counsel for the Pagtakhans could have furnished them with copies of his motions for extension of time to file brief so that they would have known that the Court of Appeals had been apprised of their alleged failure to defray the cost of printing their brief and they could have articulated their reaction directly to the Court. Counsel could have moved in the Appellate Court that he be allowed to withdraw from the case or that the Pagtakhans be required to manifest whether they were still desirous of prosecuting their appeal or wanted a mimeographed brief to be filed for them (See People vs. Cawili, L-30543, August 31, 1970, 34 SCRA 728). Since counsel did none of those things, his representation that the appellants had evinced lack of interest in pursuing their appeal is difficult to believe. If the appellate court has not yet lost its jurisdiction, it may exercise its discretion in reinstating an appeal, having in mind the circumstances obtaining in each case and the demands of substantial

justice (Alquiza vs. Alquiza, L-23342, February 10, 1968, 22 SCRA 494, 66 O.G. 276; C. Vda. de Ordoveza vs. Raymundo, 62 Phil. 275; Chavez vs. Ganzon, 108 Phil. 6). But even if it has already lost jurisdiction over the appeal by reason of the remand of the record to the lower court, it, nevertheless, has the inherent right to recall the remittitur or the remand of the record to the lower court if it had rendered a decision or issued a resolution which was induced by fraud practised upon it. Such a right is not affected by the statutory provision that after the record has been remanded, the appellate court has no further jurisdiction over the appeal (5 Am Jur. 2nd 433 citingLovett vs. State, 29 Fla. 384, 11 So. 176; 84 ALR 595; State vs. Ramirez, 34 Idaho 623, 203 Pac. 279). In the instant case, no fraud is involved; what obtain is simple negligence on the part of petitioner's counsel, which is neither excusable nor unavoidable. Petitioner thus failed to demonstrate sufficient cause to warrant a favorable action on its plea. As held in Chavez, et al. vs. Ganzon, et al., 29 and reiterated in Negros Stevedoring Co., Inc. vs. Court of Appeals, 30We said: Granting that the power or discretion to reinstate an appeal that had been dismissed is included in or implied from the power or discretion to dismiss an appeal, still such power or discretion must be exercised upon a showing of good and sufficient cause, in like manner as the power or discretion vested in the appellate court to allow extensions of time for the filing of briefs. There must be such a showing which would call for, prompt and justify its exercise ( sic). Otherwise, it cannot and must not be upheld. To justify its failure to file the Appellant's Brief, petitioner relies mainly on the death of Atty. Crispin Baizas and the supposed confusion it brought to the firm of BAIZAS, ALBERTO & ASSOCIATES. It says: 31 Petitioner, thru its president Bernardo R. Sebastian, engaged the services of Atty. Crispin D. Baizas to handle its defense in Civil Case No. 757-R; however, it appears that Atty. Baizas entered petitioner's case as a case to be handled by his law firm operating under the name and style "Crispin D. Baizas & Associates." Hence, the Answer to the complaint, Answer to Cross-Claim, and Answer to Fourth-party Complaint filed for petitioner in said case, evince that the law firm "Crispin D. Baizas & Associates" represents petitioner in the action. After rendition of the assailed Decision of the trial court, petitioner's counsel appears to have changed its firm name to "Baizas, Alberto & Associates." The appeal was thus pursued for petitioner by the law firm "Baizas, Alberto & Associates." On January 16, 1974, Atty. Crispin D. Baizas died as a result of a brief heart attack. In consequence (sic) of his death, the law firm "Baizas, Alberto & Associates" was in a terribly confused state of affairs. In effect, said law firm was dissolved. Atty. Ruby Alberto formed her own law office and other associates left the dissolved law firms ( sic) joining other offices or putting up their own. Atty. Jose Baizas, son of deceased Crispin D. Baizas, took over the management of why may have been left of his father's office, it appearing that some, if not many, cases of the defunct office were taken over by the associates who left the firm upon its dissolution. But, none of the former partners and associates/assistants of the dissolved law firm filed the required appellant's brief for herein petitioner in its appealed case before the respondent Court of Appeals. No notice was served upon petitioner by any of the surviving associates of the defunct law firm that its appellant's brief was due for filing or that the law office had been dissolved and that the law office had been dissolved and that none of the lawyers herein formerly connected desired to handle the appealed case of petitioner. . . . The circumstances that the law firm "Baizas, Alberto & Associates" was dissolved and that none of the associates took over petitioner's case, and no notice of such state of affairs was given to petitioner who could have engaged the services of another lawyer to prosecute its appeal before respondent Court, constitutes (sic) an UNAVOIDABLE CASUALTY that entitles petitioner to the relief prayed for. On the other hand, the non-dissolution of said law firm "Baizas, Alberto & Associates" will not defeat petitioner's claim for relief since, in such event, the said firm had ABANDONED petitioner's cause, which act constitutes fraud and/or reckless inattention the result of which is deprivation of petitioner's day in court. In the abovementioned Yuseco case, this Honorable Court had emphatically and forcefully declared that it will always be disposed to grant relief to parties aggrieved by perfidy, fraud, reckless inattention and downright incompetence of lawyers, which has the consequence of depriving their day (sic) in court. We find no merit in petitioner's contentions. Petitioner's counsel was the law firm of BAIZAS, ALBERTO & ASSOCIATES and not merely Atty. Crispin Baizas. Hence, the death of the latter did not extinguish the lawyerclient relationship between said firm and petitioner. In Gutierrez & Sons, Inc. vs. Court of Appeals, 32 the appeal filed by the law firm of BAIZAS, ALBERTO & ASSOCIATES on behalf of respondent therein was dismissed for failure to comply with the requisites enumerated in the Rules of Court; the excuse presented by said counsel was also the death of Atty. Crispin Baizas. This Court held therein that:

The death of Attorney Baizas was not a valid excuse on the part of his associates for not attending to Alvendia's appeal, supposing arguendo that his office was solely entrusted with the task of representing Alvendia in the Court of Appeals. Attorney Espiritu (not Attorney Baizas) was the one actually collaborating with Viola in handling Alvendia's case. He did not file a formal appearance in the Court of Appeals. Undoubtedly, there was inexcusable negligence on the part of petitioner's counsel in failing to file the Appellant's Brief. As revealed by the records, petitioner's counsel, the BAIZAS ALBERTO & ASSOCIATES law firm, received the notice to file Brief on 19 February 1974. It failed to do so within the 45 days granted to it. Said law firm also received a copy of the respondent Court's Resolution of 9 July 1974 requiring it to show cause why the appeal should not be dismissed for failure to file the Brief within the reglementary period. Petitioner chose not to comply with it, thus compelling the respondent Court to issue on 9 September 1974 a Resolution dismissing the appeal, a copy of which the former also received. Then, on 28 September 1974, the BAIZAS LAW OFFICE moved for reconsideration of the said Resolution which respondent Court denied in its Resolution of 9 October 1974. Nothing more was heard from petitioner until after a year when, on 6 November 1975, it filed the instant petition in reaction to the issuance of a writ of execution by the trial court following receipt of the records for the respondent Court. The "confusion" in the office of the law firm following the death of Atty. Crispin Baizas is not a valid justification for its failure to file the Brief. With Baizas' death, the responsibility of Atty. Alberto and his Associates to the petitioner as counsel remained until withdrawal by the former of their appearance in the manner provided by the Rules of Court. This is so because it was the law firm which handled the case for petitioner before both the trial and appellate courts. That Atty. Espiritu, an associate who was designated to handle the case, later left the office after the death of Atty. Baizas is of no moment since others in the firm could have replaced him.. Upon receipt of the notice to file Brief, the law firm should have re-assigned the case to another associate or, it could have withdrawn as counsel in the manner provided by the Rules of Court so that the petitioner could contract the services of a new lawyer. In the Negros Stevedoring case, supra., this Court held: The negligence committed in the case at bar cannot be considered excusable, nor ( sic) is it unavoidable. Time and again the Court has admonished law firms to adopt a system of distributing pleadings and notices, whereby lawyers working therein receive promptly notices and pleadings intended for them, so that they will always be informed of the status of their cases. Their Court has also often repeated that the negligence of clerks which adversely affect the cases handled by lawyers, is binding upon the latter. Compounding such negligence is the failure of the BAIZAS LAW OFFICE, which filed on 28 September 1974 the motion for reconsider the Resolution of 9 September 1974, to take any further appropriate action after the respondent Court denied said motion on 9 October 1974. The appearance of said counsel is presumed to be duly authorized by petitioner. The latter has neither assailed nor questioned such appearance. The rule is settled that negligence of counsel binds the client. 33 Moreover, petitioner itself was guilty of negligence when it failed to make inquiries from counsel regarding its case. As pointed out by respondents, the president of petitioner corporation claims to be the intimate friend of Atty. Crispin Baizas; hence, the death of the latter must have been known to the former. 34 This fact should have made petitioner more vigilant with respect to the case at bar. Petitioner failed to act with prudence and diligence, thus, its plea that they were not accorded the right to procedural due process cannot elicit either approval or sympathy. 35 Based on the foregoing, it is clear that there was failure to show a good and sufficient cause which would justify the reinstatement of petitioner's appeal. Respondent Court of Appeals did not them commit any grave abuse of discretion when it denied petitioner's motion to reinstate its appeal. WHEREFORE, the Petition is hereby DISMISSED and the temporary restraining order issued in this case is lifted. Costs against petitioner. IT SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin and Romero, JJ., concur.

[A.C. No. 3773. September 24, 1997] ANGELITA C. ORCINO, complainant, vs. ATTY. JOSUE GASPAR, respondent. R E S O L U T I O N PUNO, J.: On June 14, 1992, complainant Angelita C. Orcino filed with this Court a letter-complaint dated December 10, 1991 against respondent Atty. Josue Gaspar, her former counsel. Complainant prayed that this Court impose disciplinary sanctions on respondent for abandoning his duties and for failing to return the legal fees she fully paid for his services. The complaint arose from the following facts: Complainant engaged the services of respondent to prosecute a criminal case she intended to file against several suspects in the slaying of her husband. In consideration thereof, complainant bound herself to pay respondent legal fees of P20,000.00 -- P10,000.00 to be paid upon signing of the

contract and the balance to be paid on or before the conclusion of the case. Complainant was also to pay P500.00 per appearance of respondent before the court and fiscal. This agreement was embodied in a contract executed on February 22, 1991.[1] In accordance with the contract, complainant paid respondent the sum of P5,000.00 on February 25, 1991,[2] another P5,000.00 on March 31, 1991,[3] and P10,000.00 on May 21, 1991,[4] for a total of P20,000.00. Forthwith, respondent entered into his duties. He interviewed witnesses and gathered evidence to build a case against the suspects. He drew up the necessary sworn statements and dutifully attended the preliminary investigation. The case was thereafter filed with the Regional Trial Court, Branch 37, Baloc, Sto. Domingo, Nueva Ecija.[5] As private prosecutor, respondent religiously attended the bail hearings for the accused although these hearings were postponed on motion of the accused's counsel. Respondent however failed to attend the hearing scheduled in August 1991. It was at this hearing that the court, over complainant's objections, granted bail to all the accused. After the hearing, complainant immediately went to respondent's residence and confronted him with his absence.[6] Respondent explained that he did not receive formal notice of the hearing. [7] Complainant became belligerent and started accusing him of jeopardizing the case by his absence. Respondent said that her suspicions were based on rumors and intrigues fed to her by her relatives. [8] Complainant, however, continued accusing him belligerently. She asked for the records of the case saying that she could refer them to another lawyer. Stung by her words, respondent gave her the records.[9] Complainant never returned the records nor did she see respondent. On September 18, 1991, respondent filed before the trial court a "Motion to Withdraw as Counsel."[10] The motion did not bear the consent of complainant. On October 23, 1991, the court issued an order directing respondent to secure complainant's consent to the motion "and his appearance as private prosecutor shall continue until he has secured this consent." [11] Complainant refused to sign her conformity to respondent's withdrawal.[12] Meanwhile, the hearings in the criminal case continued. Respondent did not appear at the hearings nor did he contact complainant. Complainant was thus compelled to engage the services of another lawyer. Hence, the letter-complaint. We referred the letter-complaint to the Integrated Bar of the Philippines, Commission on Bar Discipline, for investigation, report and recommendation. The rule in this jurisdiction is that a client has the absolute right to terminate the attorney-client relation at any time with or without cause.[13] The right of an attorney to withdraw or terminate the relation other than for sufficient cause is, however, considerably restricted. [14] Among the fundamental rules of ethics is the principle that an attorney who undertakes to conduct an action impliedly stipulates to carry it to its conclusion. [15] He is not at liberty to abandon it without reasonable cause. [16] A lawyer's right to withdraw from a case before its final adjudication arises only from the client's written consent or from a good cause. [17] Section 26 of Rule 138 of the Revised Rules of Court provides: "Sec. 26. Change of attorneys -- An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party. x x x." A lawyer may retire at any time from any action or special proceeding with the written consent of his client filed in court and copy thereof served upon the adverse party. Should the client refuse to give his consent, the lawyer must file an application with the court. The court, on notice to the client and adverse party, shall determine whether he ought to be allowed to retire. The application for withdrawal must be based on a good cause. [18] In the instant case, complainant did not give her written consent to respondent's withdrawal. The court thus ordered respondent to secure this consent. Respondent allegedly informed the court that complainant had become hostile and refused to sign his motion. [19] He, however, did not file an application with the court for it to determine whether he should be allowed to withdraw. Granting that respondent's motion without complainant's consent was an application for withdrawal with the court, we find that this reason is insufficient to justify his withdrawal from the case. Respondent's withdrawal was made on the ground that "there no longer exist[ed] the xxx confidence" between them and that there had been "serious diffferences between them relating to the manner of private prosecution." [20] Rule 22.01 of Canon 22 of the Code of Professional Responsibility provides: "CANON 22 -- A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE CIRCUMSTANCES. Rule 22.01-- A lawyer may withdraw his services in any of the following cases: a) When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling; b) When the client insists that the lawyer pursue conduct violative of these canons and rules; c) When his inability to work with co-counsel will not promote the best interest of the client; d) When the mental or physical condition of the lawyer renders it difficult for him to carry out the employment effectively;

e) When the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement; f) When the lawyer is elected or appointed to public office; and g) Other similar cases." A lawyer may withdraw his services from his client only in the following instances: (a) when a client insists upon an unjust or immoral conduct of his case; (b) when the client insists that the lawyer pursue conduct violative of the Code of Professional Responsibility; (c) when the client has two or more retained lawyers and the lawyers could not get along to the detriment of the case; (d) when the mental or physical condition of the lawyer makes him incapable of handling the case effectively; (e) when the client deliberately fails to pay the attorney's fees agreed upon; (f) when the lawyer is elected or appointed to public office; (g) other similar cases. The instant case does not fall under any of the grounds mentioned. Neither can this be considered analogous to the grounds enumerated. As found by the Commission on Bar Discipline, this case arose from a simple misunderstanding between complainant and respondent. Complainant was upset by respondent's absence at the hearing where bail was granted to the suspected killers of her husband. She vehemently opposed the grant of bail. It was thus a spontaneous and natural reaction for her to confront respondent with his absence. Her belligerence arose from her overzealousness, nothing more. Complainant's words and actions may have hurt respondent's feelings considering the work he had put into the case. But her words were uttered in a burst of passion. And even at that moment, complainant did not expressly terminate respondent's services. She made this clear when she refused to sign his "Motion to Withdraw as Counsel." Assuming, nevertheless, that respondent was justified in terminating his services, he, however, cannot just do so and leave complainant in the cold unprotected. The lawyer has no right to presume that his petition for withdrawal will be granted by the court.[21] Until his withdrawal shall have been approved, the lawyer remains counsel of record who is expected by his client as well as by the court to do what the interests of his client require.[22] He must still appear on the date of hearing [23] for the attorney-client relation does not terminate formally until there is a withdrawal of record. [24] Respondent expressly bound himself under the contract to bring the criminal case to its termination. He was in fact paid in full for his services. Respondent failed to comply with his undertaking, hence, it is but fair that he return to complainant half of the amount paid him. The peculiar circumstances of the case have rendered it impossible for respondent and complainant to continue their relation under the contract. IN VIEW WHEREOF, respondent is admonished to exercise more prudence and judiciousness in dealing with his clients. He is also ordered to return to complainant within fifteen (15) days from notice the amount of ten thousand pesos (P10,000.00) representing a portion of his legal fees received from the latter with a warning that failure on his part to do so will result in the imposition of stiffer disciplinary action. SO ORDERED. Regalado, (Chairman) and Torres, Jr., JJ., concur. Mendoza, J., on official leave.