You are on page 1of 21

Camara vs. reyes Before us is a Letter-Complaint[1] filed by complainant Trinidad H. Camara against respondent Atty. Oscar Amandy Reyes.

Sometime in 2003, complainant hired the services of respondent to handle her case. As partial acceptance fee, respondent received from complainantP50,000.00 evidenced by a receipt[2] placed on his calling card. Respondent, however, took no steps to protect complainants interest. As no service was rendered by respondent, complainant asked that he return the amount given him so that she could use it in repairing her house. Respondent offered that he would take charge of repairing the house. Yet, he again failed to fulfill his promise, which prompted the complainant to reiterate her demand for the return of the money. [3] As respondent failed to give back the amount demanded, complainant initiated the instant case. In his Answer, respondent prayed that the case be closed and terminated, simply because the matter has already been resolved by all the parties concerned. He added that complainant went to his office and explained that she signed the letter-complaint not knowing that it was against respondent, as she was made to believe that it was a complaint against her neighbor.[4]

Complainant and respondent failed to attend the mandatory conference; and to submit their respective position papers.

On February 19, 2007, we referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.[5]

In his Report and Recommendation, IBP Commissioner Salvador B. Hababag made the following findings: There is proof that respondent receipted the amount of Php50,000.00 in his own handwriting. Even his calling card was given to the complainants. Canon 16, Rule 16.01 provides that a lawyer shall account for all money or property collected or received for or from the client. Canon 18, Rule 18.03 provides that a lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable. Canon 18, Rule 18.04 provides that a lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to clients request for information. Using the above yardsticks, clearly the respondent is liable and failed to live [up] to [the] above mentioned standards. While it is true that complainant Trinidad Camara allegedly executed an affidavit, the same will not save the respondent. As a general rule, disbarment proceeding shall not be interrupted or terminated by reason of the desistance, settlement, compromise, restitution, withdrawal of the charges or failure of the complainant to prosecute unless the Court motu proprio determines that there is no compelling reason to continue with the disbarment or suspension proceedings against the respondent. We reiterate that the respondent did not traverse the charges against him. He simply wanted this case to be closed and terminated allegedly because he and Mrs. Camara had already resolved their problem and the latters son, who also signed the letter-complaint as attorney-in-fact has no authority to do so. WHEREFORE, premises considered, it [is] most respectfully recommended that the respondent be suspended for six (6) months from the active practice of law.[6]

In its Resolution No. XVIII-2008-522, the IBP Board of Governors adopted and approved the report and recommendation of the investigating Commissioner, thus: 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 a[s] Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and for respondents violation of Canon 16, Rule 16.01, Canon 18, Rule 18.03 and 18.04 of the Code of Professional Responsibility, Atty. Oscar Amandy Reyes is hereby SUSPENDED from the practice of law for six (6) months.

We agree with the foregoing recommendation.

The Court notes that despite the opportunity accorded to respondent to refute the charges against him, he failed to do so or even offer a valid explanation.[7] It is incumbent upon respondent to meet the issue and overcome the evidence against him. He must show proof that he still maintains that degree of morality and integrity which at all times is expected of him. These, respondent miserably failed to do.[8]

The record is bereft of any evidence to show that respondent has presented any countervailing evidence to dispute the charges against him. In his answer, he did not even deny complainants allegations. He only prayed that the case be closed and terminated, simply because the problem with complainant had already been resolved.

The alleged compromise between complainant and respondent is not enough to exonerate the latter from the present disciplinary case. A case of suspension or disbarment may proceed regardless of the interest or lack of interest of the complainant. What matters is whether, on the basis of the facts borne out by the record, the charge of negligence has been duly proved. [9]

Disciplinary proceedings involve no private interest and afford no redress for private grievance. They are undertaken and prosecuted solely for the public welfare, and for the purpose of preserving courts of justice from the official ministration of persons unfit to practice in them. The attorney is called to answer to the court for his conduct as an officer of the court. The complainant is in no sense a party, and has generally no interest in the outcome of the case.[10] This is also the reason why this Court may investigate charges against lawyers regardless of complainants standing.[11]

When respondent accepted the amount of P50,000.00 from complainant, it was understood that he agreed to take up the latters case, and that an attorney-client relationship between them was established. From then on, it was expected that he would serve his client, herein complainant, with competence, and attend to her cause with fidelity, care and devotion. [12]

The act of receiving money as acceptance fee for legal services in handling complainants case and subsequently failing to render such services is a clear violation of Canon 18 of the Code of Professional Responsibility, which provides that a lawyer shall serve his client with competence and diligence.[13] Specifically, Rule 18.03 states: A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable.

A member of the legal profession owes his client entire devotion to the latters genuine interest, and warm zeal in the maint enance and defense of his rights. An attorney is expected to exert his best efforts and ability to preserve his client s cause, for the unwavering loyalty displayed to his client, likewise, serves the ends of justice. Verily, the entrusted privilege to practice law carries with it the corresponding duties, not only to the client, but also to the court, to the bar and to the public.[14]

The fiduciary duty of a lawyer and advocate is what places the law profession in a unique position of trust and confidence, and distinguishes it from any other calling. Once this trust and confidence is betrayed, the faith of the people, not only in the individual lawyer but also in the legal profession as a whole, is eroded. To this end, all members of the bar are strictly required at all times to maintain the highest degree of public confidence in the fidelity, honesty and integrity of their profession. [15]

The factual antecedents in Reyes v. Vitan[16] and Sencio v. Atty. Calvadores[17] bear a striking similarity to the present case. In Reyes, complainant engaged the services of respondent lawyer for the purpose of filing the appropriate complaint or charges against the formers sister-in-law and the latters niece. After receiving the amount of P17,000.00, respondent did not take any action on complainants case. In Sencio, complainant therein, likewise, engaged the services of Atty. Calvadores to prosecute the civil aspect of the case in relation to the death of her son in a vehicular accident. The total amount ofP12,000.00 was duly acknowledged and received by respondent as attorneys fees. Despite repeated assurances by respondent, complainant discovered that the former had not filed any case on her behalf.

In both cases, we suspended the respondent lawyers for a period of six (6) months. Thus, we impose the same penalty on respondent herein, as recommended by the IBP Board of Governors.

WHEREFORE, Resolution No. XVIII-2008-522 of the IBP Board of Governors is AFFIRMED. Accordingly, Atty. Oscar Amandy Reyes is herebySUSPENDED for a period of SIX (6) MONTHS from the practice of law.

Let copies of this Decision be furnished the Office of the Bar Confidant, to be appended to respondents personal record as a n attorney, the Integrated Bar of the Philippines, and all courts in the country for their information and guidance.

SO ORDERED.

DOLORES D. PARIAS, complainant, vs. ATTY. OSCAR P. PAGUINTO, respondent. DECISION CARPIO, J.:

The Case

A lawyer has the duty to give adequate attention and time to every case he accepts. A lawyer impliedly warrants that he possesses the necessary diligence, learning and skill to handle each case. He should exert his best judgment and exercise reasonable and ordinary care and diligence in the pursuit or defense of his clients cause.

The Facts Sometime in October 2001, complainant Dolores Dryden Parias (Parias) engaged the services of respondent Atty. Oscar P. Paguinto (Paguinto) to annul her marriage to Danilo Soriano. Th ey agreed that for the legal services, Parias would pay Paguinto an acceptance fee of P25,000, the filing fee of P2,500 and other incidental expenses. On 2 December 2001, Parias paid Paguinto P10,000 in cash as partial payment of the acceptance fee. An acknowledgment [1] receipt evidenced this payment. Parias gave Paguinto a diskette containing a narration of what happened between her and her estranged husband Danilo Soriano. Parias also furnished Paguinto with a copy of her marriage contract with Soriano. Before the end of December 2001, Parias gave Paguinto P2,500 for the filing fee. Sometime between January and April 2002, Parias inquired from Paguinto on the progress of her annulment case. Paguinto informed her that the case was filed with the Regional Trial Court of Manila, Branch 64 (RTC -Manila, Branch 64), before Judge Ricaforte and that the hearing was scheduled on 25 April 2002. Before the hearing, Parias requested for a meeting with Paguinto but the secretary informed her that the hearing was cancelled. The secretary further informed Parias that the judge reset the succeeding hearings originally scheduled on 29 May 2002 and 26 June 2002 because the judge was sick or out of town. On the first week of July 2002, Parias went to the trial court to inquire about her case but the court personnel in RTC-Manila, Branch 64 informed her that there was no such case filed in their court. Parias asked Paguinto for the case number, date of filing, copy of the petition and the court where the annulment case was pending. Paguinto told Parias that the records were at his office and that he was in Malolos, Bulacan attending to a case. It turned out that there was no annulment case filed in RTC-Manila, Branch 64. Paguinto promised to return the money that Parias paid as down payment. However, Paguinto returned the P10,000 only after Parias filed with the Commission on Bar Discipline (CBD) of the Integrated Bar of the Philippines (IBP) the present complaint for disbarment. In the Order dated 14 February 2003, the CBD directed Paguinto to answer the complaint. Paguinto asked for an extension of [3] 15 days to file his Answer. The CBD granted the extension in the Order dated 19 March 2003. However, Paguinto failed to file his [4] Answer within the extended period and thus the CBD declared him in default in the Order dated 15 July 2003. After the hearing, Parias submitted her Position Paper praying that the CBD declare Paguinto guilty of violation of Rule 16.01 and Rule 18.03 of the Code of Professional Responsibility. On 10 September 2003, Parias filed an Affidavit of Withdrawal of the complaint. Parias stated that Paguinto personally explained exhaustively the reasons why he failed to comply with his obligations and she realized that the complaint arose du e to a misapprehension of facts, misunderstanding and miscommunication. Parias manifested that she was withdrawing the complaint, as she was no longer interested in pursuing the case. On the same date, Paguinto filed a Manifestation and Motion explaining that he failed to attend the hearing on 30 July 2003 because he was in Tabuk, Kalinga attending a hearing in a criminal case for frustrated homicide. He apologized to Parias for his actuations claiming himself solely to be blamed. He further declared that he failed to timely prepare and file the petition for annulment because he spends his time mostly in Gen. Mariano Alvarez, Cavite where he practices law catering to those clients who have less in life.
[6] [5] [2]

Commissioners Report & Recommendation The IBP designated Atty. Rebecca Villanueva-Maala (Commissioner) as Commissioner to conduct a formal investigation of the case. The Commissioner found Paguinto negligent in performing his duties as a lawyer and as an officer of the court. The Commissioner declared that a lawyer has the duty to give adequate attention, care and time to his cases, accepting only as many cases as he can handle. Paguinto failed to comply with this duty. The Commissioner recommended the suspension of Paguinto from the practice of law for six months.

The Courts Ruling

We agree with the Commissioner. Parias gave Paguinto P10,000 cash as partial payment of the acceptance fee. Parias also gave Paguinto P2,500 for the filing fee. Paguinto led Parias to believe that he had filed the annulment case. Paguinto informed Parias that the case was filed with the RTC-Manila, Branch 64, before Judge Ricaforte. However, Parias later found out that Paguinto never filed the annulment case in court.

Rule 16.01 of the Code of Professional Responsibility (the Code) provides that a lawyer shall account for all money or prop erty collected for or from the client. Acceptance of money from a client establishes an attorney-client relationship and gives rise to the duty [7] of fidelity to the clients cause. Money entrusted to a lawyer for a specific purpose, such as for filing fee, but not used for failure to file [8] the case must immediately be returned to the client on demand. Paguinto returned the money only after Parias filed this administrative case for disbarment. Paguinto should know that as a lawyer, he owes fidelity to the cause of his client. When a lawyer accepts a case, his acceptance is an implied representation that he possesses the requisite academic learning, skill and ability to handle the case. The lawyer has the duty to exert his best judgment in the prosecution or defense of the case entrusted to him and to exercise reasonable and ordinary care and diligence in the pursuit or defense of the case. A lawyer should give adequate attention, care and time to his case. Once he agrees to handle a case, he should undertake the task with dedication and care. If he fails in this duty, he is not true to his oath as a lawyer. Hence, a lawyer must accept only as much [9] cases as he can efficiently handle, otherwise his clients interests will suffer. It is not enough that a lawyer possesses the qualification to handle the legal matter. He must also give adequate attention to his legal work. The lawyer owes it to his client to exercise his utmost learning and ability in handling his cases. A license to practice law is a [10] guarantee by the courts to the public that the licensee possesses sufficient skill, knowledge and diligence to manage their cases. The legal profession demands from a lawyer the vigilance and attention expected of a good father of a family. In Gamalinda vs. Alcantara,
[11]

we ruled:

A lawyer owes fidelity to the cause of his client and must be mindful of the trust and confidence reposed in him. He shall serve his client with competence and diligence, and his duty of entire devotion to his clients cause not only requires, but entitles him to e mploy every honorable means to secure for the client what is justly due him or to present every d efense provided by law to enable the latters cause to succeed. An attorneys duty to safeguard the clients interests commences from his retainer until his effective release fr om the case or the final disposition of the whole subject matter of the litigation. During that period, he is expected to take such reasonable steps and such ordinary care as his clients interests may require. And failure to do so violates Canon 18 of the Code.
[12]

Rule 18.01 of the Code is clear. A lawyer shall not undertake a legal service that he is not qualified to render. Rule 18.02 of the Code provides that a lawyer shall not handle any legal matter without adequate preparation. He has the duty to prepare for trial with diligence and deliberate speed. Rule 18.03 of the Code also provides that a lawyer shall not neglect a legal matter entrusted to him and his negligence shall render him liable. One last point. Parias executed an Affidavit of Withdrawal of the complaint stating that she was withdrawing the administrative complaint against Paguinto after realizing that said complaint against the respondent arose due to misapprehension of facts, misunderstanding and miscommunication. Paguinto, on the other hand, submitted a Manifestation and Motion apologizing to Pari as for his actuations and admitting that he was solely to be blamed. A compromise or withdrawal of charges does not terminate an [14] administrative complaint against a lawyer, especially in this case where the lawyer admitted his misconduct. Pariass affidavit of withdrawal of the disbarment case does not exonerate Paguinto in any way. We reiterate our ruling in Rayos[15] Ombac v. Rayos that [A] proceeding for suspension or disbarment is not in any sense a civil action where the complainant is a plaintiff and the respondent lawyer is a defendant. Disciplinary proceedings involve no private interest and afford no redress for private grievance. They are undertaken solely for the public welfare. x x x The attorney is called upon to answer to the court for his conduct as an officer of the court. The complainant or the person who called the attention of the court to the attorneys alleged misconduct is in no sense a party, and has generally no interest in the outcome except as all good citizens may have in the proper administration of justice. WHEREFORE, we find respondent Atty. Oscar P. Paguinto GUILTY of violation of the Code of Professional Responsibility. Accordingly, we penalize Atty. Oscar P. Paguinto with SUSPENSION for SIX (6) MONTHS from the practice of law effective upon receipt of this Decision. Let copies of this Decision be furnished the Office of the Bar Confidant, to be appen ded to respondents personal record as an attorney; the Integrated Bar of the Philippines; and all courts in the country for their information and guidance. SO ORDERED.
[13]

Fernando martin pena vs. aparicio In this administrative complaint, a lawyer is charged with violation of Rule 19.01 of Canon 19 of the Code of Professional Responsibility for writing a demand letter the contents of which threatened complainant with the filing of criminal cases for tax evasion and falsification of documents. Atty. Lolito G. Aparicio (respondent) appeared as legal counsel for Grace C. Hufana in an illegal dismissal case before the National Labor Relations Commission (NLRC). Sometime in August 2005, complainant Fernando Martin O. Pena, as President of MOF Company, Inc. (Subic), received a notice from the Conciliation and Mediation Center of the NLRC for a mediation/conciliation conference. In the conference, respondent, in behalf of his client, submitted a claim for separation pay arising from her alleged illegal dismissal. Complainant rejected the claim as being baseless. Complainant thereafter sent notices to Hufana for the latter to explain her absences and to return to work. In reply to this return to work notice, respondent wrote a letter to complainant reiterating his clients claim for separation pay. The letter also contained the following threat to the company: BUT if these are not paid on August 10, 2005, we will be constrained to file and claim bigger amounts including moral damages to the tune of millions under established precedence of cases and laws. In addition to other multiple charges like: 1. 2. 3. 4. Tax evasion by the millions of pesos of income not reported to the government. Criminal Charges for Tax Evasion Criminal Charges for Falsification of Documents Cancellation of business license to operate due to violations of laws.

These are reserved for future actions in case of failure to pay the above amounts as settlements in the National Labor [1] Relations Commission (NLRC). Believing that the contents of the letter deviated from accepted ethical standards, complainant filed an administrative complaint
[2]

with the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP). Respondent filed an Answer with
[3]

Impleader (Motion to Dismiss and Counterclaims) claiming that Atty. Emmanuel A. Jocson, complainants legal counsel, also played an important part in imputing the malicious, defamatory, and fabricated charges against him. Respondent also pointed out that the complaint had no certification against forum shopping and was motivated only to confuse the issues then pending before the Labor Arbiter. By way of counterclaim, respondent asked for damages and for the disbarment of Atty. Jocson. Respondent also asked the IBP to endorse the prosecution of Atty. Jocson for Usurpation of Public Functions
[4]

and for violation of the Notarial Law.


[6]

[5]

A mandatory conference was held on 6 December 2005 but respondent failed to appear. required to submit their position papers.The Report and Recommendation
[7]

Both parties were thereafter

of Investigating Commissioner Milagros V. San Juan found

that complainant, failed to file his position paper and to comply with Administrative Circular No. 04-94 requiring a certificate against forum shopping and, accordingly, recommended the dismissal of the complaint against respondent. On 26 May 2006, the IBP Board of Governors adopted and approved the Report and Recommendation of the Investigating Commissioner.
[8]

On 10 July 2006, the IBP


[9]

Commission on Bar Discipline transmitted to the Supreme Court the notice of said Resolution and the records of the case. on 18 August 2006, respondent filed with the IBP a Motion for Reconsideration (for Modification of Decision)
[10]

Thereafter,

reiterating his claim of

damages against complainant in the amount of four hundred million pesos (P400,000,000.00), or its equivalent in dollars, for filing the false, malicious, defamers [sic], fraudulent, illegal fabricators [sic], malevolent[,] oppressive, evasive filing [of] a gro undless and false suit.
[11]

Complainant thereafter filed this Petition for Review (of the Resolution of the IBP Commission on Bar Discipline)

[12]

alleging that

he personally submitted and filed with the IBP his position paper, after serving a copy thereof on respondent by registered mail. He further alleges that he was deprived of his right to due process when the IBP dismissed his complaint without considering his position paper and without ruling on the merits thereof.Complainant accordingly prays for the reversal and setting aside of the 26 May 2006 Resolution
[13]

of the IBP Board of Governors and the remand of the case to the IBP Commission on Bar Discipline for proper

adjudication and disposition on the merits.Based on the records, there is truth to complainants assertion that he filed his position paper on 21 December 2005, after serving a copy of the same to respondent. The IBP stamp on the front page of said document shows that it was received by the IBP on 21 December 2005. The registry receipt attached to the same document also shows that it was sent by registered mail to respondent on the same date.
[14]

Complainant, however, omitted to offer any explanation in his petition before this

Court for his failure to attach a certification against forum shopping in his complaint against respondent. The requirement of a certification against forum shopping was originally required by Circular No. 28-91, dated 8 February 1994, issued by this Court for every petition filed with the Court or the Court of Appeals. Administrative Circular No. 04-94, made effective on 1 April 1994, expanded the certification requirement to include cases filed in courts and quasi-judicial agencies below this Court and the Court of Appeals. Ultimately, the Court adopted paragraphs (1) and (2) of Administrative Circular No. 0494 to become Section 5, Rule 7 of the 1997 Rules of Civil Procedure.
[15]

Said rule states that a violation thereof would constitute

contempt of court and be cause for the summary dismissal of both petitions without prejudice to the taking of appropriate action against the counsel of the party concerned.
[16]

The Investigating Commissioner and the IBP Board of Governors took against complainant his

failure to attach the certification against forum shopping to his complaint and consequently dismissed his complaint. This Court, however, disagrees and, accordingly, grants the petition. However, a remand of the case to the IBP would unduly prolong its adjudication.The Courts determination is anchored on the sui generis nature of disbarment proceedings, the reasons for the certification against forum shopping requirement, complainants subsequent compliance with the requirement, and the merit of complainants complaint against respondent.The Court, in the case of In re Almacen, disciplinary proceedings against lawyers, thus: Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not involve a trial of an action or a suit, but is rather an investigation by the Court into the conduct of one of its officers. Not being intended to inflict punishment, it is in no sense a criminal prosecution. Accordingly, there is neither a plaintiff nor a prosecutor therein. It may be initiated by the Court motu proprio. Public interest is its primary objective, and the real question for determination is whether or not the attorney is still a fit person to be allowed the privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal profession and the proper and honest administration of justice by purging the profession of members who by their misconduct have proved themselves no longer worthy to be entrusted with the duties and responsibilities pertaining to the office of an attorney. In such posture, [18] there can thus be no occasion to speak of a complainant or a prosecutor . [Emphasis supplied]
[17]

dwelt on the sui generis character of

In view of the nature of disbarment proceedings, the certification against forum shopping to be attached to the complaint, if one is required at all in such proceedings, must refer to another administrative case for disciplinary proceedings against the same respondent, because such other proceedings or action is one that necessarily involves the same issues as the one posed in the disbarment complaint to which the certification is supposedly to be attached. Further, the rationale for the requirement of a certification against forum shopping is to apprise the Court of the pendency of another action or claim involving the same issues in another court, tribunal or quasi-judicial agency, and thereby precisely avoid the forum shopping situation. Filing multiple petitions or complaints constitutes abuse of court processes,
[19]

which tends to degrade the administration of justice, wreaks havoc upon orderly judicial
[20]

procedure, and adds to the congestion of the heavily burdened dockets of the courts.

Furthermore, the rule proscribing forum

shopping seeks to promote candor and transparency among lawyers and their clients in the pursuit of their cases before the courts to promote the orderly administration of justice, prevent undue inconvenience upon the other party, and save the precious time of the courts. It also aims to prevent the embarrassing situation of two or more courts or agencies rendering conflicting resolutions or decisions upon the same issue.
[21]

It is in this light that we take a further look at the necessity of attaching a certification against forum

shopping to a disbarment complaint. It would seem that the scenario sought to be avoided, i.e., the filing of multiple suits and the possibility of conflicting decisions, rarely happens in disbarment complaints c onsidering that said proceedings are either taken by the Supreme Court motu proprio, or by the Integrated Bar of the Philippines (IBP) upon the verified complaint of any person.
[22]

Thus, if the

complainant in a disbarment case fails to attach a certification against forum shopping, the pendency of another disciplinary action against the same respondent may still be ascertained with ease. We have previously held that the rule requiring a certification of forum shopping to accompany every initiatory pleading, should not be interpreted with such absolute literalness as to subvert its own

ultimate and legitimate objective or the goal of all rules of procedurewhich is to achieve substantial justice as expeditiously as possible.
[23]

At any rate, complainants subsequent compliance with the requirement cu red the supposed defect in the original

complaint. The records show that complainant submitted the required certification against forum shopping on 6 December 2006 when he filed his Comment/Opposition to respondents Motion to Dismiss the present petition. Finally, the intrinsic merit of complainants case against respondent justifies the grant of the present petition. Respondent does not deny authorship of the threatening letter to complainant, even spiritedly contesting the charge that the letter is unethical. Canon 19 of the Code of Professional Responsibility states that a lawyer shall represent his client with zeal within the bounds of the law, reminding legal practitioners that a lawyers duty is not to his client but to the administration of justice; to that end, his clients success is wholly subordinate; and his conduct ought to and must always be scrupulously observant of law and ethics.
[24]

In particular, Rule 19.01 commands that a lawyer shall employ only fair

and honest means to attain the lawful objectives of his client and shall not present, participate in presenting or threaten to present unfounded criminal charges to obtain an imprope r advantage in any case or proceeding. Under this Rule, a lawyer should not file or threaten to file any unfounded or baseless criminal case or cases against the adversaries of his client designed to secure a leverage to compel the adversaries to yield or withdraw their own cases against the lawyers client.
[25]

In the case at bar, respondent did exactly

what Canon 19 and its Rule proscribe. Through his letter, he threatened complainant that should the latter fail to pay the amounts they propose as settlement, he would file and claim bigger amounts including moral damages, as well as multiple charges such as tax evasion, falsification of documents, and cancellation of business license to operate due to violations of laws. The threats are not only unethical for violating Canon 19, but they also amount to blackmail. Blackmail is the extortion of money from a person by threats of accusation or exposure or opposition in the public prints,obtaining of value from a person as a condition of refraining from making an accusation against him, or disclosing some secret calculated to operate to his prejudice. In common parlance and in general acceptation, it is equivalent to and synonymous with extortion, the exaction of money either for the performance of a duty, the prevention of an injury, or the exercise of an influence. Not infrequently, it is extorted by threats, or by operating on the fears or the credulity, or by promises to conceal or offers to expose the weaknesses, the follies, or the crime of the victim. In Sps. Boyboy v. Atty. Yabut, Jr.,
[27] [26]

we held that [a]n accusation for blackmail and extortion is a very serious one which, if

properly substantiated, would entail not only respondents disbarment from the pra ctice of law, but also a possible criminal prosecution.
[28]

While the respondent in Boyboy was exonerated for lack of evidence, the same may not be said of respondent in the

present case for he admits to writing the offensive letter. In fact, respondent does not find anything wrong with what he wrote, dismissing the same as merely an act of pointing out massive violations of the law by the other pa rty, and, with boldness, asserting that a lawyer is under obligation to tell the truth, to report to the government commission of offenses punishable by the State.
[29]

He further asserts that the writing of demand letters is a

standard practice and tradition and that our laws allow and encourage the settlement of disputes.

Respondents assertions, however, are misleading, for it is quite obvious that respondents threat to file the cases against complainant was designed to secure some leverage to compel the latter to give in to his clients demands. It was not respondents intention to point out complainants violations of the law as he so gallantly claims. Far from it, the letter even contains an implied promise to keep silent about the said violations if payment of the claim is made on the date indicated. Indeed, the writing of demand letters is a standard practice and tradition in this jurisdiction. It is usually done by a lawyer pursuant to the principal-agent relationship that he has with his client, the principal. Thus, in the performance of his role as agent, the lawyer may be tasked to enforce his clients claim and to take all the steps necessary to collect it, such as writing a letter of demand requiring payment within a specified period. However, the letter in this case contains more than just a simple demand to pay. It even contains a threat to file retaliatory charges against complainant which have nothing to do with his clients claim for separation pay. The letter was obviously designed to secure leverage to compel complainant to yield to their claims. Indeed, letters of this nature are definitely proscribed by the Code of Professional Responsibility. Respondent cannot claim the sanctuary provided by the privileged communication rule under which a private communication executed in the performance of a legal duty is not actionable. The privileged nature of the letter was removed when respondent used it to blackmail complainant and extort from the latter compliance with the demands of his client. However, while the writing of the letter went beyond ethical standards, we hold that disbarment is too severe a penalty to be imposed on respondent, considering that he wrote the same out of his overzealousness to protect his clients interests. Accordingly, the more appropriate penalty is reprimand. WHEREFORE, premises considered, the petition is granted. The 26 May 2006 Resolution of the IBP Board of Governors is hereby REVERSED and SET ASIDE. Respondent Atty. Lolito G. Aparicio is hereby found liable for violation of Rule 19.01 of Canon 19 of the Code of Professional Responsibility, and is accordingly meted out the penalty of REPRIMAND, with the STERN WARNING that a repetition of the same or similar act will be dealt with more severely.

SO ORDERED.

Briones vs. jimenez

The root of herein administrative complaint for Disbarment

[1]

dated August 12, 2004 filed by Atty. George S. Briones charging Atty.

Jacinto D. Jimenez with violation of Revised Circular No. 28-91 on forum-shopping and Rule 19.01 and Rule 12.08 of the Code of Professional Responsibility, is the April 3, 2002 Order of the Regional Trial Court (RTC) of Manila in SP Proc. No. 99-92870, entitled, In the Matter of the Petition for the Allowance of the Will of Luz J. Henson, to wi t: IN VIEW OF THE FOREGOING, the court hereby: 1. Reiterates its designation of the accounting firm of Messrs. Alba, Romeo & Co. to immediately conduct an audit of the administration by Atty. George S. Briones of the estate of the late Luz J. Henson, the expenses of which shall be charged against the estate. 2. Suspends the approval of the report of the special administrator except the payment of his commission which is hereby fixed at 1.8% of the value of the estate. 3. Directs the special administrator to deliver the residue to the heirs in proportion to their shares. From the share of Lilia J. Henson-Cruz, there shall be deducted the advances made to her. IT IS SO ORDERED.

Complainant Atty. Briones is the Special Administrator of the Estate of Luz J. Henson. Respondent Atty. Jacinto D. Jimenez is the counsel for the Heirs of the late Luz J. Henson (Heirs). On April 9, 2002, Atty. Jimenez filed with the RTC a notice of appeal from the Order dated April 3, 2002, questioning the payment of commission to Atty. Briones.
[2]

On April 29, 2002, Atty. Jimenez filed

with the Court of Appeals (CA) a Petition for Certiorari, Prohibition and Mandamus, docketed as CA-G.R. SP No. 70349 assailing the

Order dated March 12, 2002, appointing the firm of Alba, Romeo & Co. to conduct an audit at the expense of the late Luz J. Henson, as well as the Order dated April 3, 2002, insofar as it denied their motion for recommendation. with the CA a Petition for Mandamus, docketed as CA-G.R. No. 71844,
[4] [3]

On July 26, 2002, Atty. Jimenez filed

alleging that the respondent Judge therein unlawfully refused


[5]

to comply with his ministerial duty to approve their appeal which was perfected on time. Atty. Briones, in his Comment, contends that the heirs of the late Luz J. Henson, represented by Atty. Jimenez, are guilty of forum shopping for which reason, the petition should be dismissed.
[6]

On February 11, 2003, the CA without touching on the forum shopping issue, granted the petition and ordered the

respondent Judge to give due course to the appeal taken by Atty. Jimenez from the Order dated April 3, 2002, insofar as it di rected the payment of commission to Atty. Briones.
[7]

Atty. Briones then filed with this Court a Petition for Review on Certiorari under Rule 45

of the Rules of Court, docketed as G.R. No. 159130, praying for the dismissal of the appeal from the Order dated April 3, 2002, insofar as it ordered the payment of commission to him, as the Special Administrator of the estate of the deceased Luz J. Henson. Court gave due course to the petition and required the parties to file their respective memoranda.
[8]

The

Atty. Briones (hereinafter

referred to as complainant) filed his Memorandum with Administrative Complaint for Disbarment against Atty. Jacinto Jimenez, Counsel for Respondents,
[9]

for violation of Rule 19.01 and Rule 12.08 of the Code of Professional Responsibility and Revised Circular

No. 28-91 on forum shopping. Complainant claims that Atty. Jimenez (hereinafter referred to as respondent) and the Heirs engaged again in forum shopping when respondent, as counsel for the Heirs, filed a criminal complaint and executed an affidavit against complainant for resisting and seriously disobeying the RTC Order dated April 3, 2002 which directed complainant to deliver the residue of the estate to the Heirs in proportion to their shares, punishable under Article 151 of the Revised Penal Code. claims that respondent violated Rules 19.01 and 12.08 of the Code of Professional Responsibility, to wit: Rule 19.01 - A lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not present, participate in presenting or threaten to present unfounded criminal charges to obtain an improper advantage in any case of proceeding. Rule 12.08 A lawyer shall avoid testifying in behalf of his client, except: (a) on formal matters, such as the mailing, authentication or custody of an instrument, and the like; or b) on substantial matters, in cases where his testimony is essential to the ends of justice, in which event he must, during his testimony, entrust the trial of the case to another counsel. by filing the unfounded criminal complaint against him to obtain an improper advantage in Special Proceedings No. 99-92870 before the RTC, Branch 46, and coerce complainant to deliver to the Heirs the residue of the estate of the late Luz J. Henson without any writ of execution or any pronouncement from the RTC as to the finality of the Order dated April 3, 2002;
[10]

Complainant further

and in executing an affidavit in

support of the criminal complaint. The Court in its Resolution dated January 24, 2005, in G.R. No. 159130, resolved to docket the complaint against Atty. Jimenez as a regular administrative complaint; referred said Complaint to the Office of the Bar Confidant (OBC); and required Atty. Jimenez to comment.
[11]

Respondent filed his Comment on April 6, 2005. He contends that when he assisted

the Heirs in filing a criminal case against complainant, he was merely fulfilling his legal duty to take the necessary steps to protect the interests of his clients; that it cannot serve as basis for filing an administrative case against him. v. Rafanan
[13] [12]

Respondent further cites Santiago

where the Court absolved the respondent lawyer from administrative liability in submitting an affidavit in a preliminary

investigation in defense of his clients. On January 31, 2007, the OBC submitted its Report and Recommendation recommending that the administrative complaint against Atty. Jimenez be dismissed for lack of merit.
[14]

The Court agrees with the OBC that

respondent is not guilty of forum shopping. Records show that respondent, as counsel for the heirs of the late Luz J. Henson, filed a special civil action docketed as CA-G.R. SP No. 70349 assailing the Order of March 12, 2002 appointing the accounting firm of Alba, Romeo and Co. as auditor; and, a regular appeal docketed as CA-G.R. SP No. 71488 assailing the Order of April 3, 2002, insofar as it directed the payment of commission to complainant. It is evident that there is identity of parties but different causes of action and reliefs sought. Hence, respondent is not guilty of forum shopping.
[15]

The Court likewise finds no fault on the part of respondent However, there is sufficient ground in

in executing an affidavit in support of the criminal complaint as held in theSantiago case.

support of complainants claim that respondent violated Rule 19.01 of the Code of Professional Responsibility. Records reveal that

before respondent assisted the Heirs in filing the criminal complaint against herein complainant, he sent demand letters to the latter to comply with the Order of Judge Tipon to deliver the residue of the estate to the heirs of the late Luz J. Henson. Considering that complainant did not reply to the demand letters, respondent opted to file said criminal complaint in behalf of his clients for refusal to obey the lawful order of the court. The Order referred to is the third part of the assailed Order dated April 3, 2002 which directs

complainant to deliver the residue to the Heirs in proportion to their shares. As aptly pointed out by complainant, respondent should have first filed the proper motion with the RTC for execution of the third part of said Order instead of immediately resorting to the filing of criminal complaint against him. A mere perusal of the rest of the Order dated April 3, 2002readily discloses that the approval of the report of complainant as Special Administrator was suspended prior to the audit of the administration of complainant. Consequently, the RTC would still have to determine and define the residue referred to in the subject Order. The filing of the criminal complaint was evidently premature. Respondent claims that he acted in good faith and in fact, did not violate Rule 19.01 because he assisted the

Heirs in filing the criminal complaint against herein complainant after the latter ignored the demand letters sent to him; and that a lawyer owes his client the exercise of utmost prudence and capability. The Court is not convinced. Fair play demands that respondent should have filed the proper motion with the RTC to attain his goal of having the residue of the estate delivered to his clients and not subject complainant to a premature criminal prosecution. As held in Suzuki v. Tiamson:
[16]

Canon 19 of the Code of Professional Responsibility enjoins a lawyer to represent his client with zeal. However, the same Canon provides that a lawyers performance of his duties towards his client must be within the bounds of the law. Rule 19.01 of the same Canon requires, among others, that a lawyer shall employ only fair and honest means to attain the lawful objectives of his client. Canon 15, Rule 15.07 also obliges lawyers to impress upon their clients compliance with the laws and the principle of fairness. To permit lawyers to resort to unscrupulous practices for the protection of the supposed rights of their clients is to defeat one of the purposes of the state the administration of justice. While lawyers owe their entire devotion to the interest of their clients and zeal in the defense of their clients right, they should not forget that they are, first and foremost, officers of the court, bound to [17] exert every effort to assist in the speedy and efficient administration of justice. Although respondent failed to live up to this expectation, there is no evidence that he acted with malice or bad faith. Consequently, it is but fit to reprimand respondent for his act of unfair dealing with complainant. It must be stressed that disbarment is the most severe form of disciplinary sanction, and, as such, the power to disbar must always be exercised with great caution for only the most imperative reasons and in clear cases of misconduct affecting the standing and moral character of the lawyer as an officer of the court and a member of the bar. Accordingly, disbarment should not be decreed where any punishment less severe such as reprimand, suspension, or fine would accomplish the end desired.
[18]

WHEREFORE, Atty. Jacinto D. Jimenez is found GUILTY of and REPRIMANDED for violation of Rule 19.01 of the Code of Professional Responsibility. SO ORDERED.

Rayos vs. hernandez This is a Petition for Review[1] of the Resolution dated 12 March 2005 of the Integrated Bar of the Philippines (IBP), dismissing petitioner Francisco Rayoss complaint for disbarment against respondent Atty. Ponciano Hernandez.

Respondent was the counsel of petitioner in Civil Case No. SM-951 entitled, Francisco Rayos v. NAPOCOR, filed before the Regional Trial Court (RTC), Malolos, Bulacan. The complaint alleged, among other things, that the National Power Corporation (NAPOCOR) recklessly, imprudently and negligently opened the three floodgates of the spillway of Angat Dam at midnight of 26 October 1978 until the early morning hours of 27 October 1978, during the occurrence of typhoon Kading causing the release of a great volume of stored water, the resultant swelling and flooding of Angat River, and the consequent loss of lives of some of petitioners relatives and destruction of his familys properties, for which he sought damages. Of the 10 members of petitioners family who perished, only four bodies were recovered and only petitioner and one of his sons, German Rayos, survived.

On 21 December 1979, the complaint was dismissed[2] on the ground that the State cannot be sued without its consent as the operation and management of Angat Dam, Norzagaray, were governmental functions. Said dismissal was questioned directly to this Court which set aside the RTC decision and ordered the reinstatement of the complaint.[3]

On 30 April 1990, however, the complaint was dismissed again by the RTC for lack of sufficient and credible evidence. [4]

The case was subsequently appealed to the Court of Appeals, which reversed the RTC decision and awarded damages in favor of petitioner, the dispositive portion of which reads: CONFORMABLY TO THE FOREGOING, the joint decision appealed from is hereby REVERSED and SET ASIDE, and a new one is hereby rendered: xxxx 2. In Civil Case No. SM-951, ordering defendants-appellees to pay jointly and severally, plaintiff-appellant, with legal interest from the date when this decision shall have become final and executory, the following: A. Actual damages of Five Hundred Twenty Thousand Pesos (P520,000.00); B. Moral Damages of Five Hundred Thousand Pesos (P500,000.00); and C. Litigation Expenses of Ten Thousand Pesos (P10,000.00). xxxx In addition, in all the four (4) instant cases, ordering defendants-appellees to pay, jointly and severally, plaintiffs-appellants, attorneys fees in an amount equivalent to 15% of the total amount awarded. [5]

The case was appealed to this Court, which affirmed the Court of Appeals Decision.[6] The Decision of the Supreme Court became final and executory on 4 August 1993.

Thus, a Writ of Execution[7] was issued by the RTC on 10 December 1993, upon motion filed by respondent. As a consequence, NAPOCOR issued Check No. 014710 dated 5 January 1994, in the amount of P1,060,800.00 payable to petitioner. Thereafter, the check was turned over to respondent as counsel of petitioner. Petitioner demanded the turn over of the check from respondent, but the latter refused.

On 24 January 1994 , petitioner filed with the RTC a motion [8] to direct respondent to deliver to him the check issued by NAPOCOR, corresponding to the damages awarded by the Court of Appeals. Petitioner sought to recover the check in the amount of P1,060,800.00 from respondent, claiming that respondent had no authority to receive the same as he was already dismissed by petitioner as his counsel on 21 November 1993.[9] Respondent, on the other hand, justifies his retention as a means to ensure payment of his attorneys fees.

On 7 April 1994, the RTC issued an Order directing respondent to deliver the check to the Sheriff of the court who will subsequently deliver it to petitioner. A Writ of Execution was subsequently issued. Despite the Court Order, respondent refused to surrender the check.

However, on 4 July 1994, respondent deposited the amount of P502,838.79 with Farmers Savings and Loan Bank, Inc., Norzagaray, Bulacan, in the name of petitioner which was eventually received by the latter.

Thus, petitioner initiated this complaint for disbarment for the failure of respondent to return the rest of the award in the amount of P557,961.21.

In his comment,[10] respondent alleged that he handled petitioners case, in Civil Case No. SM -951, for 15 years, from the trial court up to the Supreme Court. On 21 November 1993, he received a letter from petitioner dismissing him as counsel. Simultaneous thereto, respondent received a letter dated 15 November 1993 from Atty. Jose G. Bruno asking him to comment on the therein attached letter dated 19 November 1993 of petitioner addressed to NAPOCOR, requesting that the award of damages granted by the Court of Appeals and affirmed by the Supreme Court be paid to him.

Respondent also averred that petitioner had a verbal contract for attorneys fees on a contingent basis and that the said contract was only reduced in writing on 6 October 1991, duly signed by both of them. By virtue of the contract, petitioner and respondent supposedly agreed on a 40%60% sharing, respectively, of the court award. Respondent was entitled to receive 60% of the award because petitioner agreed to pay him 40% of the award as attorneys fees and 20% of the award as litigation expenses.

Respondent further asseverated that because petitioner dismissed the respondent and refused to settle his obligation, he deposited the amount ofP424,320.00 in a bank in petitioners name under Account No. 381 (representing petitioners share of 40% of the total award) o n 10 May 1994[11]; and the amount of P63,648.00 in petitioners name under Account No. 389 (representing petitioners share of 40% of the P159,120.00 awarded as attorneys fees by the Court of App eals) on 19 May 1994.[12] Petitioner already received the amount of P502,838.79 in accordance with the RTC Order dated 7 April 1994.

Respondent contended that the petitioners complaint was without basis and was meant only to harass and put him to shame before the residents of Norzagaray, Bulacan.

In a Resolution dated 9 August 1995,[13] the Court referred the case to the Commission on Bar Discipline of the IBP for investigation, report and recommendation.

A series of hearings were conducted by the Commission on Bar Discipline of the IBP at the IBP Building, Ortigas Center, Pasig City, from March to September 2001.

On 1 February 2005, Investigating Commissioner Lydia A. Navarro B. Funa submitted her Report and Recommendation, [14] recommending the dismissal of the case.

Thereafter, the IBP issued its Resolution dated 12 March 2005, approving and adopting the recommendation of the Investigating Commissioner, thus: RESOLVED to ADOPT and APPROVE, as it 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 that the case lacks merit, the same is hereby DISMISSED.[15]

We do not agree in the recommendation of the IBP.

The threshold issue in this petition is: whether respondent is justified in retaining the amount awarded to petitioner in Civil Case No. SM-951 to assure payment of his attorneys fees.

Moneys collected by an attorney on a judgment rendered in favor of his client constitute trust funds and must be immediately paid over to the client.
[16]

Canon 16 of the Code of Professional Responsibility provides as follows: CANON 16 - A lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Rule 16.01 A lawyer shall account for all money or property collected or received for or from the client.

In the case at bar, when respondent withheld and refused to deliver the NAPOCOR check representing the amount awarded by the court in Civil Case No. SM-951, which he received on behalf of his client (petitioner herein), he breached the trust reposed on him. It is only after an Order was issued by the RTC ordering the delivery of the check to petitioner that the respondent partially delivered the amount of P502,838.79 to the former, but still retaining for himself the amount of P557,961.21 as payment for his attorneys fees. The claim of the respondent that petitioner failed to pay his attorneys fees is not an excuse for respondents failure to deliver the amount to the petitioner. A lawyer is not entitled to unilaterally appropriate his clients money for himself by the mere fact alone that the client owes him attorneys fees.[17] The failure of an attorney to return the clients money upon demand gives rise to the presumption that he has misappropriated it for his own use to the prejudice and violation of the general morality, as well as of professional ethics; it also impairs public confidence in the legal profession and deserves punishmen t. In short, a lawyers unjustified withholding of money belonging to his client, as in this case, warrants the imposition of disciplinary action. [18]

It is true that under Canon 16.03 of the Code of Professional Responsibility, an attorney has the following rights; Rule 16.03- A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court. (Emphases supplied.)

But the fact alone that a lawyer has a lien for fees on moneys in his hands collected for his client, as above-stated, does not relieve him of his duty to promptly account for the moneys received; his failure to do so constitutes professional misconduct.[19] Thus, what respondent should have properly done in the case at bar was to provide the petitioner with an accounting before deducting his attorneys fees and then to turn over the remaining balance of the award collected to petitioner. The Court notes that respondent represented petitioner from the time of filing of the complaint in Civil Case No. SM-951 before what is now the RTC and of the appeal of the same case to the Court of Appeals and Supreme Court. But respondent was not justified to hold on the entire amount of award collected by him until his fees had been paid and received by him.

The relationship of attorney and client has always been rightly regarded as one of special trust and confidence. An attorney must exercise the utmost good faith and fairness in all his relationship vis--vis his client. Respondent fell far short of this standard when he failed to render an accounting for the amount actually received by him on behalf of his client and when he refused to turn over any portion of said amount to his client upon the pretext that his attorneys fees had not at all been paid. Respondent had, in fact, placed his private and personal interest above that of his client.

We have held that lawyering is not a moneymaking venture and lawyers are not merchants. [20] 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.[21]

A lawyer is not merely the defender of his clients cause and a trustee of his clients 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. [22] It follows that a lawyers compensation for professional services rendered is 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 attorneys oath as an officer of the court, a lawyer submits himself to the authority of the courts to regula te his right to charge professional fees.[23]

There is another aspect to this case which the Court cannot just gloss over. Respondent claimed that he charged petitioner, his client, a contingent fee comprising of forty percent (40%) as attorneys fees and twenty percent (20%) as litigation expenses. The agreement provides: UNAWAIN NG LAHAT SA PAMAMAGITAN NITO: Ako, si Francisco Rayos, Sr., Pilipino, may sapat na gulang at ngayon ay naninirahan sa Pinagbarilan, Baliwag, Bulacan, sa pamamagitan ng kasulatang ito, ay nagpapatunay sa mga sumusunod: Na, kaugnay sa aking usapin laban sa NPC at Benjamin Chavez (Rayos vs. NPC, et al.) na ngayon ay nakabinbin sa Court of Appeals, ako ay nakipagkasundo sa aking abogado, Atty. Ponciano G. Hernandez, gaya ng sumusunod: 1 Sakaling ipanalo ang aking usapin, ang ano mang aking makukuha ay hahatiin gaya ng sumusunod: 40% ang para sa akin; 40% ang para kay Atty. Ponciano G. Hernandez; 20% ay ilalabas bilang gastos sa kaso. 2. Kung matalo ako sa kaso ay wala akong sagutin sa aking abogado.

Sa katunayan ng lahat, ako ay lumagda sa kasunduang ito dito sa Norzagaray, Bulacan ngayong ika-6 ng Oktubre 1991. (SGD)PONCIANO G. HERNANDEZ Abogado (SGD)FRANCISCO RAYOS May Usapin[24]

A contingent fee arrangement is valid in this jurisdiction[25] and is generally recognized as valid and binding but must be laid down in an express contract.[26] 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.[27]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 unle ss 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 vind icated.[28]

Contingent fee contracts are subject to the supervision and close scrutiny of the court in order that clients may be protected from unjust charges.[29] Section 13 of the Canons of Professional Ethics states that a contract for a contingent fee, where sanctioned by law, should be reasonable under all the circumstances of the case including the risk and uncertainty of the compensation, but should always be subject to the supervision of a court, as to its reasonableness. Likewise, Rule 138, Section 24, of the Rules of Court provides: 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. (Underscoring supplied.)

The reduction of unreasonable attorneys fees is within the regulatory powers of the courts.[30] When the courts find that the stipulated amount is excessive or the contract is unreasonable, 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.[31]

There is, therefore, now a corollary issue of whether the stipulated attorneys fees are unreasonable and unconscionable unde r the circumstances of the case as to warrant a reduction thereof.

Stipulated attorneys 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.[32]

The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract, will not, however, preclude recovery. It merely justifies the fixing by the court of a reasonable compensation for the lawyers services.

Generally, the amount of attorneys fees due is that stipulated in the retainer agreement which is conclusive as to the amount of the lawyers compensation. A stipulation on a lawyers compensation in a written contract for professional services ordinarily co ntrols the amount of fees that the contracting lawyer may be allowed, unless the court finds such stipulated amount unreasonable or unconscionable.[33] In the absence thereof, the amount of attorneys fees is fixed on the basis of quantum meruit, i.e., the reasonable worth of the attorneys services. Courts may ascertain also if the attorneys fees are found to be excessive, what is reasonable under the circumstances. [34] 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.

We have identified the circumstances to be considered in determining the reasonableness of a claim for attorneys 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; (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;[35] and (10) the financial capacity and economic status of the client have to be taken into account in fixing the reasonableness of the fee. [36]

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) (b) (c) (d) (e) (f) (g) (h) (i) (j) The time spent and the extent of the services rendered or required; The novelty and difficulty of the questions involved; The importance of the subject matter; The skill demanded; The probability of losing other employment as a result of acceptance of the proffered case; The customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs; The amount involved in the controversy and the benefits resulting to the client from the service; The contingency or certainty of compensation; The character of the employment, whether occasional or established; and The professional standing of the lawyer.

In the case at bar, respondent retained the amount of P557,961.21 out of the P1,060,800.00 award for damages paid by NAPOCOR to petitioner. Under the said scheme, respondent actually collected fifty-three percent (53%) or more than half of the total amount due the petitioner; indeed, he appropriated for himself more than the amount which he had already turned over to and actually received by his client.

As adverted to above, we note that petitioner was unschooled and frustrated and hopeless with the tragic loss of his loved ones caused by the inundation of the town of Norzagaray, Bulacan, on 26-27 October 1978 because of the negligent release by NAPOCOR of the water through the spillways of the Angat Dam. Petitioner also had to face the loss and destruction of his familys properties. Under such circumstances and given his understandable desire to recover the damages for the loss of his loved ones and properties, petitioner would easily succumb and readily agree to the demands of respondent lawyer regarding his attorneys fees.

We believe and so hold that the contingent fee here claimed was, under the facts obtaining in this case, grossly excessive and unconscionable. Such a fee structure, when considered in conjunction with the circumstances of this case, also shows that an unfair advantage was taken of the client and legal fraud and imposition perpetrated upon him. Lawyers should not be permitted to get a lions share of the benefits due the poor and the helpless. Contracts for legal services between the helpless and attorney should be zealously scrutinized to the end that a fair share of the benefits be not denied to the former. This Court has the power to guard a client,[37] especially an aged and necessitous client,[38] against such a contract.

A survey of existing jurisprudence regarding attorneys fees would reveal the following: in the case of Amalgamated Laborers Association v. Court of Industrial Relations,[39] the rate of attorneys fees allowed was 25%; in Law Firm of Raymundo A. Armovit v. Court of Appeals,[40] the rate allowed was 20%; in Polytrade Corporation v. Blanco,[41] 25%; in Santiago v. Dimayuga,[42] 20%; in Cosmopolitan Insurance Co., Inc. v. Reyes,[43] 15%; in Reyes v. Court of Appeals,[44] 15%; and in Social Security Commission v. Almeda,[45] 15%.

In the present case, respondent Atty. Hernandez, after all, succeeded in obtaining a favorable decision for his client, the petitioner. At first, respondent failed to obtain a favorable judgment in the RTC as the case was dismissed. But on appeal to the Court of Appeals, the RTC Decision was reversed and petitioner was awarded the amount of P1,060,800.00 as damages and P159,120.00 as attorneys fees. Said award was sustained by the Supreme Court. We also take note respondents efforts in litigating petitioners case for a long period of 15 years. Lastly, the respondent took risk in representing petitioner on a contingent fee basis.

In consideration of the foregoing, a fee of 35% of the amount awarded to petitioner would be a fair compensation for responde nts legal services.

The misconduct of a lawyer, whether in his professional or private capacity, which shows him to be wanting in moral character, honesty, probity and good demeanor, renders him unworthy to the privileges which his license and the law confer upon him, may be sanctioned with disbarment or suspension.[46]

The court should also exercise a sound discretion in determining whether a lawyer should be disbarred or merely suspended. It should bear in mind that admission to the Bar is obtained only after years of labor and study and the office acquired often becomes the source of great honor and emolument to its possessor. To most members of the legal profession, it is a means of support for themselves and their families. To deprive one of such an office is often to decree poverty to the lawyer and destitution to his family. [47] Disbarment, therefore, should never be decreed where any lesser penalty, such as temporary suspension, would accomplish the end desired. [48]

In the case of Schulz v. Atty. Flores,[49] a lawyer was suspended for six months for not returning his clients money despite demands, for unjustifiably refusing to return his clients papers, and for collecting excessive and unreasonable fees. Also in the case of Tanhueco v. Atty. De Dumo,[50] a lawyer was suspended for a period of six months for failure to return the money received by him on behalf of his client and for collecting excessive and unconscionable fees.

Guided by our rulings in the abovestated cases, suspension of respondent for six months is justified in the case at bar.

WHEREFORE the Court Resolves that:

1.

Respondent is guilty of violation of the attorneys oath and of serious professional misconduct and shall be SUSPENDED from the practice of law for six (6) months and WARNED that repetition of the same or similar offense will be dealt with more severely;

2.

Respondent is entitled to attorneys fees in the amount equivalent to THIRTY-FIVE PERCENT (35%) of the total amount awarded[51] to petitioner in Civil Case No. SM-951; and

3.

Respondent is to return the amount of Two Hundred Ninety Thousand One Hundred Nine Pesos and Twenty-One Centavos (P290,109.21),[52] which he retained in excess of what we herein declared as fair and reasonable attorneys fees, plus legal interest from date of finality of this judgment until full payment thereof.

Tanhueco vs. dumo On 24 February 1975, complainant Hilaria Tanhueco filed before the Court a Petition for Disbarment (docketed as Administrative Case No. 1437) against respondent Justiniano G. de Dumo for having violated the Canons of Professional Ethics by his (a) refusal to remit to her money collected by him from debtors of the complainant; and (b) refusal to return documents entrusted to him as counsel of complainant in certain collection cases. In his Answer and Counter-Petition 1 filed on 3 April 1975, respondent denied the charges. Complainant filed a Rejoinder [should be Reply] to Answer with Counter-Petition, on 18 April 1975. By a Resolution 2 dated 16 June 1975, the Court referred this case to the Solicitor General for investigation, report and recommendation. A year later, on 25 June 1976, one Jose Florencio N. Tanhueco claiming to be the nephew and representative of the complainant, addressed a sworn letter complaint to Mrs. Imelda R. Marcos against the respondent for (a) refusal to remit the money collected by respondent from debtors of complainant's aunt, Mrs. Hilaria Tanhueco Vda. de David; (b) refusal to return documents entrusted to him in his capacity as counsel in certain cases; and (c) abandonment of cases in respect of which his professional services had been engaged. On 24 August 1976, the letter complaint was forwarded by the then Public Information Assistance Staff, Department of Public Information, to this Court for appropriate action (and docketed as Administrative Case No. 1683). After respondent had filed his Answer, the Court, by a Resolution 3 dated 9 December 1976, referred this case to then Acting Judicial Consultant Ricardo C. Puno for study, report and recommendation. Since Administrative Case No. 1683 and Administrative Case No. 1437 involved the same parties and the same subject matter, Hon. Ricardo C. Puno referred the former case to the Office of the Solicitor General for consolidation with the latter one. The Office of the Solicitor General held two (2) hearings, one on 3 December 1975 and another on 18 April 1988. In the first hearing, respondent de Dumo was absent although he had been notified thereof. At the end of the first hearing, continuation of the hearing of the case was set for 14 January 1976. The records show that the second hearing took place on 18 April 1988 but do not indicate the reason for the 12-year interregnum. By then, complainant Tanhueco had died. There was no appearance at the second hearing by complainant Jose Florencio Tanhueco but respondent de Dumo was then present. The report of the Solicitor General, dated June 15, 1988 in Administrative Case No. 1437 summarized the evidence for the complainant in the following manner: EVIDENCE FOR COMPLAINANT Complainant Hilaria Tanhueco testified that she secured the legal services of respondent to collect indebtedness from her different debtors. Although she offered to execute a document evidencing their lawyer-client relationship, respondent told her that it was not necessary. She nonetheless offered to give him 15% of what he may be able to collect from the debtors (pp. 4-7. tsn, Dec. 3, 1975).

Complainant also declared that respondent borrowed from her P2,000.00, Pl,300.00, and P3,000.00 on three separate occasions, but she could not remember when she gave those amounts. Respondent did not pay those loans (pp. 8-9, tsn, Id.). She confirmed that respondent filed cases against her debtors and that one of them, Constancia Maosca paid P12,500.00 to respondent. Informed of such payment by Maosca herself, complainant confronted respondent but the latter denied having received payment from any of her debtors. Complainant then brought the matter to the attention of Malacaang which referred her to Camp Crame. Notwithstanding subsequent demands of complainant for the money, respondent had refused to give her the amount (pp. 11 -15, tsn, Id.). The Solicitor General then summed up the evidence for the respondent in the following terms: EVIDENCE FOR RESPONDENT Respondent Atty. Justiniano G. de Dumo testified that complainant indeed secured his legal services to collect from her debtors, with the agreement that he gets 50% of what he may be able to collect. He thus filed collection cases against Tipace Maosca Morena, Jr., and others, and was able to obtain favorable judgment in the cases against Maosca, Tipace, and Leonila Mendoza. The initial payments made by these judgment-debtors were all given to complainant. With respect to Maosca respondent obtained a judgment for P19,000.00 although the debt was only P12,000.00 (pp. 3-9, tsn, April 18, 1988). Respondent also declared that complainant, who was then already old and sickly, was influenced by her debtors, who were also her friends into distrusting him. Ultimately, because complainant filed a complaint against him with Malacaang which referred the matter to Camp Crame, he terminated his relationship with complainant and demanded his attorney's fees equivalent to 50% of what he had collected. Complainant refused to pay him, hence, he did not also turn over to her the P12,000.00 initial payment of Maosca which he considered, or applied, as part payment of his attorney's fee (pp. 9-19, tsn., Id.). Respondent estimated his attorney's fee due from complainant in the amount of P17,000.00 (p. 20, tsn, Id.) Respondent denied having borrowed the amounts of P2,000.00, P1,300.00, P3,000.00 and P1,000.00, pointing out that complainant did not even have money to pay him so that he handled the cases for her on contingent basis (p. 17, tsn, Id.) He also denied having received documentary evidence from complainant. What evidence he had were all gathered by him on his initiative (pp. 4-7, tsn, Id.). The Solicitor General then set out the following: FINDINGS There is in the case at bar clear admissions by both complainant and respondent of an attorney-client relationship between them, specifically in the collection of debts owing complainant. Respondent also admitted, in his answer to the complaint and in his testimony, having received P12,000.00 from indebtor Constancia Manosca without turning over the amount to his client, complainant herein, and applying it instead as part of his attorney's fees . It has been held that the money collected by a lawyer in pursuance of a judgement in favor of his client held in trust (Aya v. Bigonia,57 Phil.8;Daroy v..Legaspi 65 SCRA 304), and that the attorney should promptly account for all funds and property received or held by him for the client's benefit (Daroy v. Legaspi, supra; In re Bamberger, 49 Phil. 962). The circumstance that an attorney 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 (Domingo l v. Doming[o] G.R. No. 30573, Oct. 29, 1971; Daroy v. Legaspi, supra). Undoubtedly, respondent's failure to account for the P12,000.00, representing payment of the judgement debt of Maosca constitutes unprofessional conduct and subjects him to disciplinary action. Nonetheless, it has likewise been recognized that a lawyer is as much entitled to judicial protection against injustice, imposition or fraud on the part of his client; and that the attorney is entitled to be paid his just fees. The attorney should be protected against any attempt on the part of his client to escape payment of his just compensation (Fernandez v. Bello, 107 Phil. 1140; Albano v. Coloma, G.R. Adm. Case No. 528, Oct. 11, 1967). This countervailing rule mitigates the actions of respondent. As regards the charges that respondent received documents evidencing the debts to complainant and had refused to return them to the latter, and that respondent also borrowed some amounts from her, there [is] no competent, conclusive evidence to support them. Perforce, such allegations have no factual basis. (Emphasis supplied) The Solicitor General then recommended that: For failure to turn over the amount of P12,000.00 to the complainant, and applying it as his attorney's fees, respondent Atty. Justiniano G. de Dumo be severely reprimanded and admonished that repetition of the same or similar offense will be dealt with more severely. We find the findings of fact of the Solicitor General supported by the evidence of record. We are, however, unable to accept his recommendation. Moneys collected by an attorney on a judgment rendered in favor of his client, constitute trust funds and must, be immediately paid over to the client. 4 Canon 11 of the Canons of Professional Ethics 5 then in force, provides as follows: 11. Dealing with trust property. The lawyer should refrain from any action whereby for his personal benefit or gain he abuses or takes advantage of the confidence reposed in him by his client. Money of the client or collected for the client or other trust property coming into the possession of the lawyer should be reported and accounted for promptly and should not under any circumstance be comingled with his own or be used by him. (Emphasis supplied)

When respondent withheld and refused to deliver the money received by him for his client, the deceased complainant Hilaria Tanhueco, he breached the trust reposed upon him.The claim of the respondent that complainant had failed to pay his attorney's fees, is not an excuse for respondent's failure to deliver any amount to the complainants. 6 It is of course true that under Section 37 of Rule 138 of the Revised Rules of Court, an attorney hasa 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. The fact that a lawyer has a lien for fees on moneys in his hands collected for his client, does not relieve him from his duty promptly to account for the moneys received; his failure to do so constitutes professional misconduct. 7 In the present case, what respondent could have properly done was to make an account with his client, the complainant, deduct his attorney's fees due in respect of the amount actually collected by him , and turn over the remaining balance to the complainant. The Court notes that the services of respondent de Dumo were engaged by the complainant on a number of cases and that these were on differing stages of completion. Respondent was not entitled to hold on to the entire amount of P12,000.00 collected by him until all his fees for the other cases had also been paid and received by him. There was not enough evidence in the record to show how much money, if any, respondent had in fact previously (i.e., other than the P12,000.00 from Maosca) collected for and turned over to complainant (thereby waiving his lien thereon) without deducting therefrom his claimed contingent fees in respect of such collections. The relationship of attorney and client has always been rightly regarded as one of special trust and confidence. An attorney must exercise the utmost good faith and fairness in all his relationships vis-a-vis his client. Respondent fell far short of this standard when he failed to render an accounting for the amount actually received by him and when he refused to turn over any portion of such amount received by him on behalf of his client upon the pretext that his attorney's fees had not all been paid. Respondent had in fact placed his private and personal interest above that of his client. Respondent's act constitutes a breach of his lawyer's oath and a mere reprimand is not an adequate sanction. There is another aspect to this case which the Court cannot gloss over. Respondent claimed that he charged complainant, his client, a contingent fee of fifty percent (50%) of the amount collected by him, plus interest and whatever attorney's fees may be awarded by the trial court chargeable to the other party. In this jurisdiction, contingent fees are not per se prohibited by law. 8 But when it is shown that a contract for a contingent fee are 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. 9 From the Answer of respondent de Dumo it appears that in three (3) collection cases filed by him for the complainant and which were decided in favor of the complainant, the awards totalled P31,390.00. Respondent asserted that he was entitled to attorney's fees amounting to Pl8,840. 00 out of the aggregate total of P31,390.00: 7. That the understanding between Hilaria Tanhueco and me was a fifty- fifty on collected principal and interests. The lawyer has the right to charge attorney's fees to the other party-defendant and that Hilaria Tanhueco shall not interfere nor be included in the computation. Cueto vs. jimenez Legal Ethics Canon 20 Duty to Avoid Controversies Involving Lawyers Fees Engineer Alex Cueto, for P5,000,000.00, was contracted to build a building for Jose Jimenez III. Cueto decided to have the contract be notarized and he chose Atty. Jose Jimenez, Jr., father of Jimenez III, to notarize said contract. Before the notarization, Cueto did not ask how much will Atty. Jimenez be charging. So he was surprise when after the notarization, he was being asked to pay P50,000.00. He paid the P30,000.00 and he issued a check worth P20,000.00 to Atty. Jimenez. Later, Cueto advised Atty. Jimenez not to encash the check yet because he has insufficient funds. Notwithstanding, Atty. Jimenez still tried to encash the check hence it was dishonored. Atty. Jimenez then filed a criminal suit against Cueto. ISSUE: Whether or not what Atty. Jimenez, Jr. did is proper. HELD: No. He violated Canon 20 of the Code of Professional Responsibility which states: [a] lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud. There was no intention on the part of Cueto to commit fraud against Jimenez as he paid the P30k downpayment. Its just that, ironically, t he reason why Cueto does not have sufficient fund in his account was that Jimenez III has failed to pay Cuetos professional services in the building project.

Licudan vs. domalanta 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 (Taada 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 alwaysbe 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. 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.