canon 17

A.C. No. 2736 May 27, 1991

LORENZANA FOOD CORPORATION represented by Mr. SOLOMON U. LORENZANA, JR., as its

President and General Manager, and/or Mrs. ELIZABETH L. DIAZ, as its Vice-President,
petitioners,
vs.
ATTY. FRANCISCO L. DARIA, respondent.

Jose Feliciano Loy, Jr. for petitioners.

RESOLUTION

PER CURIAM:

The respondent lawyer, Atty. Francisco L. Daria, is administratively charged 1 on two counts,
to wit:

1. Negligence and

2. Betrayal of his former client's confidences.

A verified complaint dated February 22, 1985 was filed by Lorenzana Food Corporation LFC,
hereinafter), and received by the Court on February 25, 1985. 2

The Court, on June 10, 1985, resolved to refer this case to the Office of the Solicitor General
for investigation, report, and recommendation.

After proper proceedings, the Office of the Solicitor General submitted its "Report and
Recommendation," dated February 21, 1990 and received by the Court on February 26, 1990.

From the findings made by the Solicitor General, the pertinent facts may be summarized as
follows:

Respondent Francisco L. Daria is charged with negligence and betrayal of his former client's
confidences. The following facts are in connection with the charge of negligence:

Respondent was hired by complainant Lorenzana Food Corporation (LFC) on January 8, 1981
as its legal counsel and was designated as its personnel manager six months later (tsn. pp. 6-
7, Dec. 9, 1985). On May 23, 1983, LFC employee, Violeta Hanopol, filed a complaint for illegal
dismissal and other monetary claims against complainant before the Ministry (now
Department) of Labor and Employment (MOLE). On May 30, 1983, summons was served on
the parties with the requirement that position papers be submitted (Exh. G).

During the initial hearing on June 13, 1973 * (sic) Hanopol and respondent tried to explore the
possibility of an amicable settlement. Since no agreement was reached the hearing was reset
to June 17, 1983. On the pretext that Hanopol was supposed to go to his office on that date
respondent failed to appear for the second setting (tsn. pp. 14-15, Dec. 9, 1985). So, the
Labor Arbiter was constrained to further reset the hearing to June 28, 1983. Respondent
received on June 23, 1983 the Order for the resetting to June 1983 (Exh. J).
In the meantime, on June 20, 1983, respondent received an Order in another labor case,
setting the hearing therein also on June 28, 1983 (Exh. H-6). Faced with a conflicting schedule,
respondent decided to move to postpone the hearing in the Hanopol case. However, instead
of filing a written motion for postponement, he opted to call, through his secretary, the Office
of the Labor Arbiter to move for postponement (Exh. H-5; tsn. p. 16, Dec. 9, 1985).
Respondent's telephone message apparently failed to reach the Labor Arbiter, because at the
hearing on June 28, 1983, he considered the case submitted for decision on the basis of
Hanopol's complaint and affidavit (Exh. G-1). Respondent had not submitted a position paper.

After a month, on July 29, 1983, the Labor Arbiter issued a Decision directing LFC to pay
Hanopol the total sum of P6,469.60 in labor benefits, on the basis of Hanopol's evidence
alone.

Respondent Daria appealed the Decision to the National Labor Relations Commission (NLRC)
on August 23, 1983 (Exh. 4). The case was remanded to the Labor Arbiter for further
proceedings. The case was set for hearing on June 25, 1984 and July 12, 1984 wherein
attempts for an amicable settlement still proved futile. The Labor Arbiter set two more dates
for hearing: July 27, 1984 and August 8, 1984 (tsn. pp. 21-22, Dec. 9, 1985).

In the meantime, the middle of June 1984, respondent signified to management his intention
to resign. In the light of this development, management hired Atty. Rogelio Udarbe to take his
place on July 16, 1984, the effective date of his resignation (Exh. 2). Respondent endorsed the
cases of complainant to Atty. Udarbe (tsn. pp. 23-25, Dec. 9, 1985).

During the hearings in the Hanopol case on July 27, 1984 and August 8, 1984, no one
appeared for complainant.1avvphi1 So, on August 15, 1984, Hanopol filed a "Manifestation
and Motion" praying that the earlier Decision of the Labor Arbiter dated July 29, 1983 be
revived. (Exh. 5).

On September 1, 1984, Atty. Jose Loy, Jr. was hired by complainant LFC vice Atty. Udarbe and
he immediately came across the abovementioned "Manifestation and Motion". On September
5, 1984, he filed an Opposition (Exh. 6) thereto, and on September 19, 1984, he followed this
up with a position paper for LFC (Exh. 7). However, the Labor Arbiter had already revived his
earlier Decision dated July 29, 1983 in another Decision dated September 4, 1984, thereby
prompting Atty. Loy to appeal the latter Decision (Exh. 3). In a resolution dated May 9, 1985,
the NLRC ordered anew the remand of the case for further proceedings (Exh. 8).

In connection with the other charge of betrayal by respondent of his former client's
confidences, the following facts appear on record:

While respondent was still connected with complainant, its general manager, Sebastian
Cortes, issued a memorandum dated February 28, 1984 (Exh. C) to its employee, Roberto San
Juan, requiring him to submit a written explanation for his alleged double liquidation and
unliquidated cash advances. Another memorandum dated March 15, 1984 (Exh. D) was issued
this time by complainant's internal auditor, Rosario L. Bernardo, addressed to complainant's
president, summing up San Juan's unliquidated advances amounting to P9,351.15.
Respondent was furnished a copy of this memorandum (Exh. D-3). The executive committee,
to which respondent belongs, investigated San Juan on his unliquidated advances. On account
of the gravity of the charge, respondent placed San Juan under preventive suspension, per his
letter to him dated April 25, 1984 (Exh. E).
On September 20, 1984, when respondent had already resigned, complainant sent a demand
letter to San Juan requiring him to restitute the amount of P9,351.15 (Exh. N-2). Since he
failed to pay the amount demanded, a complaint for estafa was lodged against him before the
Office of the Provincial Fiscal. San Juan thereafter resigned and sought the assistance of
respondent in the preparation of his counteraffidavit in January 1985 (tsn. p. 35, Nov. 5,
1985). Respondent prepared San Juan's counteraffidavit and signed it (Exh. F). San Juan then
submitted his counteraffidavit to the Office of the Provincial Fiscal (tsn. p. 42, Nov. 5, 1985). 3

xxx xxx xxx

For failure to appear in two consecutive hearings and to submit a position paper in the
Hanopol case which resulted in complainant LFC's default and judgment against it by the
Labor Arbiter, the respondent is faulted for negligence. The respondent avers that Hanopol
should have seen him in his office to work out a compromise agreement, on the scheduled
day of the second hearing, June 17, 1983, but did not. 4

It is the finding of the Solicitor General that this excuse by the respondent is not borne by the
Constancia 5 setting the case for hearing. The Constancia clearly states: "By agreement of the
parties, case reset to June 17, 1983 at 2:00 p.m. as previously scheduled." 6 Since it was
signed by both Hanopol and the respondent, the Solicitor General argues that the
respondent's explanation is manifestly unsatisfactory.

With regard to his second non-appearance for the hearing on June 2, 1983, the respondent
justified his absence by claiming that he had another hearing on the same date and that he
told his secretary to call up the Office of the Labor Arbiter to have the hearing of the Hanopol
case postponed. 7 The Solicitor General avers:

. . . It is submitted that respondent's actuation was not warranted by the circumstances. As it

turned out, the telephone request apparently did not reach the Labor Arbiter, thereby
constraining him to declare complainant in default and render judgment against it. 8

In an effort to extricate himself from this charge, the respondent submits that since he was
able to persuade the National Labor Relations Commission (NLRC) on appeal to set aside the
Decision of the Labor Arbiter and to remand the case for further proceedings, then the charge
of negligence should be considered moot and academic already. 9 We find this submission not
meritorious. Instead, we agree ,with the position of the Solicitor General:

Respondent's plea is untenable. The setting aside of the adverse Decision of the Labor Arbiter
cannot obliterate the effects of respondent's negligence. Indeed, had respondent attended the
two scheduled hearings and filed the required position paper, then at least, there would have
been no delay in the resolution of the case, which, perhaps, would have been in favor of
complainant. The delay, by itself, was prejudicial to complainant because it deprived
successor-counsel Atty. Loy of time which he should be devoting to other cases of
complainant. In fact he had to prepare complainant's position paper which respondent should
have done earlier (Exh. 7). 10

From the foregoing, it is manifest that the respondent is indeed guilty of negligence, a clear
violation of the Code of Professional Responsibility: 11

CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE
Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him and his negligence in
connection therewith shall render him liable.

The other accusation against the respondent by the Solicitor General was that he had
betrayed complainant LFC's confidences in violation of the then Canon 37 of the old Canons of
Professional Ethics, to wit:

It is the duty of a lawyer to preserve his client's confidences. This duty outlasts the lawyer's
employment, and extends as well to his employee's and neither of them should accept
employment which involves or may involve the disclosure or use of these confidences, either
for the private advantages of the client, without his knowledge and consent, and even though
there are other available sources of such information. A lawyer should not continue
employment when he discovers that this obligation prevents the performance of his full duty
to his former or to his new client.

xxx xxx xxx

Superseded by the Code of Professional Responsibility, the appropriate Canon now is:

CANON 17 A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE
MINDFUL OF THE TRUST AND CONFIDENCE REPOSED IN HIM.

The Solicitor General further found that the respondent assisted Roberto San Juan in the
preparation of the counter-affidavit, 12 submitted in defense of the latter in the accusation of
estafa filed against San Juan by LFC As a matter of fact, the respondent signed the jurat of the
San Juan counter-affidavit he (respondent) helped prepare. It is also a fact that the respondent
investigated this same charge of estafa while he was still the lawyer of the complainant and
San Juan still likewise an employee of LFC

Again, we concur with the findings and evaluation of the Office of the Solicitor General:

. . . Respondent, however, tried to extricate himself from his predicament by testifying that
the counteraffidavit was prepared by a lawyer-friend, Atty. Joselito R. Enriquez, who had his
(respondent's) name typed on it; that after reading it, he called up Atty. Enriquez so that he
will delete his name and signature thereon; that he instructed San Juan to bring the
counteraffidavit to Atty. Enriquez so that he will delete his name and signature, but San Juan
did not obey him; and that San Juan filed the counteraffidavit with the office of the Provincial
Fiscal with his name and signature still on it (tsn. pp. 47-51, Dec. 9, 1985).

It is submitted that, apart from being a mere afterthought, respondent's explanation is

incredible.1wphi1 His foregoing testimony is not reflected in his comment on the
complaint . . . 13

We are convinced that the respondent had betrayed the confidences of the complainant, his
former client.

. . . An attorney owes loyalty to his client not only in the case in which he has represented him
but also after the relation of attorney and client has terminated, and it is not a good practice
to permit him afterwards to defend in another case other persons against his former client
under the pretext that the case is distinct from and independent of the former case. 14
WHEREFORE, premises considered, the respondent is found guilty of both the charge of
negligence, a transgression of Rule 18.03, Canon 18, and the charge of betrayal of his former
client's confidences, in violation of Canon 17 of the Code of Professional Responsibility.

The respondent is hereby SUSPENDED from the practice of law for a period of six (6) months.

Let this Decision be entered in the personal records of the respondent and copies thereof
furnished to all courts and IBP chapters.

SO ORDERED.

A.M. No. 801 June 27, 1978

CESARIO ADARNE, complainant,

vs.
ATTY. DAMIAN V. ALDABA, respondent.

CONCEPCION JR., J.:

Administrative action against the respondent attorney for gross negligence and misconduct,
for failure to give his entire devotion to the interest of his client, warm zeal in the .
maintenance and defense of his rights, and exertion of his utmost learning and ability in the
prosecution and defense of his client, and for not taking steps to protect the interests of his
client in the face of an adverse decision.

The record shows that sometime in 1958, Raymunda Cumpio and her husband, Rufo Cumpio,
filed an action for forcible entry against herein complaint Cesario Adarne, Aning Arante, and
Miguel Inokando with the Justice of the Peace of Alang-alang Leyte. The case was docketed in
the said court as Civil Case No. 96. Atty. Isauro Marmita represented the defendants who
raised the issue of ownership of the land in question. After hearing the parties, the Justice of
the Peace dismissed the complaint for lack of jurisdiction. Consequently, the plaintiffs therein
appealed to the Court of First Instance of Leyte and the case was assigned to Branch VI of
Carigara, where it was docketed as Civil Case No. 556. Resolving the issue interposed by the
appellants, the Judge of the Court of First Instance found that the Justice of the Peace Court
has jurisdiction over the case and returned the same to the lower court for trial on the merits.
After trial on the merits, the Justice of the Peace again dismissed the case and the plaintiffs
again appealed to the Court of First Instance of Leyte where the case was docketed anew as
Civil Case No, 632. Attys. Arturo Mirales and Generoso Casimpan filed the answer for the
defendants. 1

At the hearing of the case on August 7, 1961, the herein complainant Cesario Adarne, one of
the defendants in the aforementioned Civil Case No. 632, noting that his attorneys had not
yet arrived, prevailed upon the respondent Atty. Damian Aldaba, who was then present in
court to attend the trial of an electoral case, to appear as counsel for them and ask for the
Postponement of the trial. The respondent, who is a third degree cousin of the complainant,
agreed, and entered a special appearance. Upon noticing that the plaintiffs and their counsel
were not also present in court, the respondent, instead of asking for a postponement, moved
for the dismissal of the case. "is motion was granted and the case was again dismissed.
Thereafter, the plaintiff filed a motion for the reconsideration of the order, 2 to which the
respondent filed an opposition in behalf of the defendants, 3 and the motion was denied. 4
Whereupon, the plaintiffs appealed to the Court of Appeals. After appropriate. proceedings,
the appellee court set aside the order of dismissal and remanded the case to the lower court
for further proceedings.

At the hearing of the case on October 23, 1964 before the Court of First Instance of Leyte, the
respondent was again prevailed upon by the complainant to appear in his behalf. The
respondent entered a "special appearance" for the complainant and thereafter argued that
the interest of justice would best be served of the defendants were allowed to file an action
for quieting of title and the case heard jointly with the pending action for forcible entry.
Finding merit in the argument, the court ordered the defendant Cesario Adarne to file an
action for quieting of title within one (1) week and the plaintiffs to answer the same within the
reglementary period, after which both cases would be tried jointly. The hearing was deferred
until after the filing of the action for quieting of title. 5

On June 17, 1965, the court declared the defendants in default for their failure to appeal at
the hearing set for that day and directed the plaintiffs to present evidence to support their
claim. 6 On September 17, 1965, the court rendered a decision and a writ of execution was
issued thereafter. 7

Because of this, Cesario Adarne filed the present complaint against the respondent Atty.
Damian V. Aldaba on August 3, 1967, praying:

Dahil dito, isinusumbong ko po ang aking Abogado ng "Mal practice" pabaya at pahamak sa
kliente at sinisingil ko po siya ng pinsala katumbas sa sinisingil sa kin ng akin kalaban. O kaya
lakarin niya na mapigil and decision ng Hukom sa C.F.I. at ulitin and hearing sa Forcible Entry.
Kung hindi niya magagawa ito, ipinauubaya ko na po sa kataas taasan Hukoman and paglapat
ng parusa. Sapagkat kung hindi p susugpo-in and masamang gawa naito ng mga ibang
abogado na nabibili, lalala and sakit naito sa profession ng mga abogado, at lilikha ng
maraming api, at habang naghahari and pang-aapi, lalaganap and kriminalidad ng walang
tigil, at walang katahimikan ang ating Demukrasya, at kung magkakagayon ang mga
mamamayan at sapilitan sa kumunista sasamba.

The respondent denied that he ever had any agreement with the complainant with respect to
the handling of the latter's case in the Court of First Instance of Leyte, Carigara Branch,
except for the "special appearance" that he entered for the complainant on August 7, 1961
and October 23, 1964, in view of the non-availability of the complainant's lawyers on said
dates.

The case referred to the Solicitor General for investigation, report and recommendation, 8
after which a complaint for the disbarment of the respondent attorney was filed. 9

The judgment by default rendered against the complainant cannot be attributed to the
respondent attorney. The blame lies with the complainant for having engaged the services of
several lawyers to handle his case without formally withdrawing the authority he had given to
them to appear in his behalf as to place the responsibility upon the respondent. To add to the
confusion, the complainant had also requested the clerk of court of the Court of First Instance
of Leyte that he (complainant) be furnished with summons and subpoena accorded to him. 10
He also filed a motion by himself, 11 thus implying that he was handling his case personally.

It appears that there have been three changes made of the attorneys for the complainant in
the forcible entry case. The complainant was originally represented by Atty. Isauro Marmita
who, upon his appointment to the Department of Labor, engaged Atty. de Veyra to take his
place. 12 Then came Atty. Arturo Mirales and later, Atty. Generoso Casimpan. However, no
formalities whatever were observed in those changes such that the respondent entered a
"special appearance" for the complainant in order that he could ask for the dismissal of the
case for the failure of the adverse party to prosecute. The rule followed on matters of
substitution of attorneys as laid down by this Court is that no substitution of attorneys will be
allowed unless there be filed: (1) a written application for such substitution; (2) the written
consent of the client; (3) the written consent of the attorney substituted; and (4) in case such
written consent can not be secured, there must be filed with the application proof of service of
notice of such motion upon the attorney to be substituted, in the manner prescribed by the
rules. Unless the foregoing formalities are complied with, substitution will not be permitted,
and the attorney who properly appeared last in the cause, before such application for
substitution, will be regarded as the attorney of record and will be held responsible for the
proper conduct of the cause. 13

Besides, the respondent honestly believed that he had appeared for the complainant only for
a special purpose and that the complainant had agreed to contact his attorney of record to
handle his case after the hearing of October 23, 1964, so that he did nothing more about it.
14 It was neither gross negligence nor omission to have entertained such belief. An attorney is
not bound to exercise extraordinary diligence, but only a reasonable degree of care and skill,
having reference to the character of the business he undertakes to do. Prone to err like any
other human being, he is not answerable for every error or mistake, and will be protected as
long as he acts honestly and in good faith to the best of his skill and knowledge.

It is well settled that in disbarment proceedings, the burden of proof rests upon the
complainant and for the Court to exercise its disciplinary powers, the case against the
respondent attorney must be established by convincing proof. In the instant case, there is no
sufficient proof to warrant the disbarment of the respondent attorney. Neither is there
culpable malpractice to justify his suspension.

WHEREFORE, the present administrative complaint is hereby DISMISSED.

SO ORDERED.

[A.C. No. 5835. April 15, 2005]

CARLOS B. REYES, complainant, vs. ATTY. JEREMIAS R. VITAN, respondent.

DECISION
SANDOVAL-GUTIERREZ, J.:

A lawyer shall serve his client with competence and diligence[1] and never neglect a legal
matter entrusted to him and his negligence in connection therewith shall render him liable.
Indeed, it is his sworn duty not to delay no man for money or malice; and to conduct himself
in a proper manner not only to his client, but also to the court, the legal profession and
society at large.[2]

This is an administrative complaint for disbarment filed by Carlos Reyes against Atty. Jeremias
Vitan for gross negligence.

The complaint alleges that sometime in June 2001, complainant Carlos Reyes hired the
services of respondent Atty. Jeremias Vitan for the purpose of filing the appropriate complaint
or charge against his sister-in-law, Estelita Reyes, and the latters niece, Julieta P. Alegonza;
that both women refused to abide with the Decision of Judge Juan C. Nabong, Jr., of the
Regional Trial Court, Branch 32, Manila, in Civil Case No. 99-92657 ordering the partition of
the properties left by complainants brother Damaso B. Reyes; and that respondent, after
receiving the amount of P17,000.00, did not take any action on complainants case.

We referred the complaint to the Integrated Bar of the Philippines for investigation, report and
recommendation. IBP Commissioner Lydia A. Navarro issued several orders to respondent
directing him to file his answer to the complaint, but he failed to do so. He only sent his
secretary to represent him during the proceedings.

On April 18, 2001,[3] IBP Commissioner Navarro submitted to the IBP Board of Governors her
Report and Recommendation quoted as follows:

x x x. After going over the evidence on record, the undersigned noted that respondent ignored
all the Orders issued by this Commission and neither did he comply with any of those Orders.
Respondent even failed to submit the responsive pleadings he himself requested in his motion
and only sent his assistant secretary to represent him in the scheduled hearings of this case.
Up to and until the present, no pleadings was submitted despite respondents allegations that
he was collating evidence to prove his side of the case.

It was complainant who submitted the supposed letters of the respondent Estelita Reyes and
Juliet Alegonza but there were no proofs when they sent and when the same were received by
the addressee.

Likewise, the complaint submitted by the complainant was only a format in the sense that it
was not signed by the respondent; the RTC Branch No. was left blank; there was no Civil Case
No. and there was no proof that said pleading was filed which amounts only to a mere scrap of
paper and not a pleading or authenticated document in the legal parlance.

As it is, nothing had been done by the respondent for the complainant as his client for the
legal fees he collected which was paid by the complainant as reflected in the receipts issued
by the respondent in handwritten forms and signed by him.

Respondent not only violated Rule 18.03 and 18.04 of Cannon 18 of the Code of Professional
Responsibility for having neglected a legal matter entrusted to him and did not inform
complainant the status of his case but also disregarded the orders of the Commission without
reasons which amounted to utter disrespect of authority and unethical conduct in the practice
of his profession, thus, should be sanctioned.

Wherefore, in view of the foregoing, the undersigned respectfully recommends that the
respondent be suspended from the practice of his profession for a period of two (2) years from
receipt hereof; and refund to the complainant the amount of P17,000.00 paid to him for not
having extended his legal services to the complainant on a lawyer-client relationship within
six (6) months from receipt hereof.

On August 3, 2002, the IBP Board of Governors passed Resolution No. XV-2002-406 adopting
and approving the above Report and Recommendation of IBP Commissioner Navarro.

When respondent accepted the amount of P17,000.00 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 of him to serve his client, herein
complainant, with competence and attend to his cause with fidelity, care and devotion.

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. More specifically, Rule 18.03 states:

Rule 18.03. 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 his genuine interest, warm
zeal in the maintenance and defense of his rights.[4] An attorney is expected to exert his best
efforts and ability to preserve his clients 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.

In Santos vs. Lazaro,[5] we held that Rule 18.03 of the Code of Professional Responsibility,
above-quoted, is a basic postulate in legal ethics. Indeed, when a lawyer takes a clients
cause, he covenants that he will exercise due diligence in protecting his rights. The failure to
exercise that degree of vigilance and attention expected of a good father of a family makes
such lawyer unworthy of the trust reposed in him by his client and makes him answerable not
just to his client but also to the legal profession, the courts and society.[6]

Significantly, respondent also violated his oath as a lawyer, which declares in part, that he will
not delay any man for money or malice and will conduct himself as a lawyer according to the
best of his knowledge and discretion, with all good fidelity as well to the courts as to his client.

However, the recommended penalty by the IBP is too harsh. Jurisprudence shows that lighter
sanctions have been imposed for violations of this nature, taking into consideration the
gravity of the offense and the necessity of preserving the integrity of the legal profession.

The facts of Sencio vs. Calvadores[7] bear a striking similarity to the present case.
Respondent lawyer in Sencio did not return the money to complainant despite demand
following his failure to file the case. During the proceedings before the IBP, respondent did not
file his answer to the complaint nor appeared during the hearing notwithstanding his receipt
of notices. We found him guilty of violation of the lawyers oath, malpractice and gross
misconduct and suspended him for six (6) months, and ordered to return to his client the
amount of P12,000.00 with interest at 12% per annum from the date of the promulgation of
our Resolution until the return of the amount.
In Garcia vs. Manuel,[8] we suspended respondent lawyer from the practice of law for six (6)
months and ordered him to render an accounting of all monies he received from the
complainant. We found him guilty of gross misconduct.

WHEREFORE, respondent Atty. Jeremias R. Vitan is hereby declared guilty of violation of Canon
18 of the Code of Professional Responsibility and is SUSPENDED from the practice of law for a
period of six (6) months effective upon notice of this Decision. He is ordered to return to
complainant within five (5) days from notice the sum of P17,000.00 with interest of 12% per
annum from the date of the promulgation of this Decision until the full amount shall have
been returned.

Let a copy of this Decision be furnished the Court Administrator for distribution to all courts of
the land, the IBP, the Office of the Bar Confidant, and entered into respondents personal
records as an attorney and as a member of the Philippine Bar.

SO ORDERED.

A.C. No. 4380 October 13, 1995

NICANOR GONZALES and SALUD B. PANTANOSAS, complainants,

vs.
ATTY. MIGUEL SABACAJAN, respondent.

REGALADO, J.:

This resolves the administrative case filed by Nicanor Gonzales and Salud B. Pantanosas
against Atty. Miguel Sabacajan on February 14, 1995, 1 the verified complaint wherefor
alleges:

xxx xxx xxx

4. That sometime in October, 1994, complainants were informed by the Register of Deeds
of Cagayan de Oro City that the complainants' owner's duplicate of title covering their lands,
Transfer Certificate of Title Nos. T-91736 and T-91735 were entrusted to the office secretary of
the respondent who in torn entrusted the same to respondent;

5. That respondent admitted and confirmed to the complainants that their titles are in his
custody and has even shown the same (to) the complainant Salud B. Pantanosas but when
demanded (sic) to deliver the said titles to the complainant in a formal demand letter, marked
as ANNEX "A," respondent refused and continues to refuse without any justification to give
their titles (and) when confronted, respondent challenged the complainants to file any case in
any court even in the Honorable Supreme Court;

6. That respondent's dare or challeng(e) is a manifestation of his arrogance taking undue

advantage of his legal profession over the simplicity, innocence and ignorance of the
complainants, one of whom is his blood relative, his aunt, for which complainants shudder
with mental anguish;
7. That due to his challeng(e), the complainants sent a letter to the Honorable Supreme
Court for enlightenment, copy of which is attached as ANNEX "B", for which the Honorable
Supreme Court required 19 legible copies of a verified complaint;

8. That in spite of repeated demands, request(s) and pleas towards (sic) respondent,
respondent still fail(ed) and stubbornly refused without justification to surrender the said titles
to the rightful owners, the complainants here(in), which act is tantamount to willful and
malicious defiance of legal and moral obligations emanating from his professional capacity as
a lawyer who had sworn to uphold law and justice, to the prejudice and damage of the
complainants; 2

xxx xxx xxx

On March 22, 1995, the Court required respondent to comment on the foregoing complaint. In
his unverified "Answer" thereto, respondent admitted having met Salud Pantanosas but claims
that, to his recollection, "Nicanor Gonzales/Serdan" has never been to his office. Respondent
likewise denied that he challenged anyone to file a case in any court, much less the Supreme
Court. He also claims that he referred complainant Pantanosas to his client, Mr. Samto M. Uy
of Iponan, Cagayan de Oro City, for whom he worked out the segregation of the titles, two of
which are the subject of the instant case. 3

Respondent likewise denies complainants' allegation that he is arrogant, in contrast to the

innocence, simplicity and ignorance of said complainants. He contends that the truth of the
matter is that complainants have been charged with a number of criminal and civil complaints
before different courts. He also asserts that he was holding the certificates of title in behalf of
his client, Samto M. Uy. 4

Atty. Sabacajan stresses, by way of defense, that "the instant action was chosen precisely to
browbeat him into delivering the Certificates of Title to them without said certificates passing
the hands of Mr. Samto Uy with whom the complainants have some monetary obligations." 5

In its resolution dated June 26, 1995, 6 for internal administrative purposes the Court referred
this case to the Office of the Bar Confidant for the corresponding evaluation, report and
recommendation.

From the foregoing proceedings taken on this matter, the Court finds that respondent
admitted having taken possession of the certificates of title of complainants but refused to
surrender the same despite demands made by the latter. It follows, therefore, that it was
incumbent upon him to show that he was legally justified in doing so. Instead, all he did was
to inform this Court that "his obligation to deliver the certificates to Mr. Samto Uy excludes the
delivery of said certificates to anyone else." 7

Respondent attached some certifications to his "Answer" to support his contention that
complainants are notorious characters. However, the certifications indicate that most of the
cases stated therein, especially those involving fraud, have been dismissed. With respect to
those still pending, there is no indication as to the identity of the party who instituted the
same, aside from the consideration that the remedy thereon is judicial in nature. At any rate,
these aspersions on the character of complainants have no bearing on the misconduct of
respondent charged in the present case.

Respondent likewise submitted xerox copies of certain certificates of title in an effort to

explain why he kept the certificates of title of complainants, that is, supposedly for the
purpose of subdividing the property. However, an examination of the same does not show any
connection thereof to respondent's claim. In fact, the two sets of certificates of title appear to
be entirely different from each other.

As a lawyer, respondent should know that there are lawful remedies provided by law to
protect the interests of his client. The records do not show that he or his client have availed of
said remedies, instead of merely resorting to unexplained, if not curt, refusals to
accommodate the requests of complainants. Also, he cannot be unaware of the imposable
sanctions on a counsel who resorts to unlawful means that would cause injustice to the
adversaries of his client.

The Court accordingly finds that respondent has not exercised the good faith and diligence
required of lawyers in handling the legal affairs of their clients. If complainants did have the
alleged monetary obligations to his client, that does not warrant his summarily confiscating
their certificates of title since there is no showing in the records that the same were given as
collaterals to secure the payment of a debt. Neither is there any intimation that there is a
court order authorizing him to take and retain custody of said certificates of title.

Apparently, respondent has disregarded Canon 15, Rule 15.07 of the Code of Professional
Responsibility which provides that a lawyer shall impress upon his client the need for
compliance with the laws and principles of fairness. Instead, he unjustly refused to give to
complainants their certificates of titles supposedly to enforce payment of their alleged
financial obligations to his client and presumably to impress the latter of his power to do so.

Canon 19, Rule 19.01 ordains 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 charges to obtain an improper advantage in any case or proceeding.
Respondent has closely skirted this proscription, if he has not in fact transgressed the same.

On the foregoing considerations, the Court desires and directs that respondent should
forthwith return the certificates of title of complainants. To ensure the same, he should be
placed under suspension until he presents to the Court proof of receipt by complainants of
their respective copies of Certificates of Title Nos. T-91735 and T-91736 or a judicial order or
document authorizing or justifying the retention of possession thereof by respondent or his
aforenamed client.

WHEREFORE, Atty. Miguel Sabacajan is hereby SUSPENDED from the practice of law until he
can duly show to this Court that the disputed certificates of title have been returned to and
the receipt thereof duly acknowledged by complainants, or can present a judicial order or
appropriate legal authority justifying the possession by him or his client of said certificates. He
is further WARNED that a repetition of the same or similar or any other administrative
misconduct will be punished more severely.

Let a copy of this resolution be spread on the personal records of respondent and have copies
thereof furnished to the Integrated Bar of the Philippines and duly circularized to all courts in
the country.

SO ORDERED.

G.R. No. L-29184 January 30, 1989

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

Benedicto Leviste for and in his own behalf.

Gatchalian, Ignacio & Associates for respondents de Guzman.

GRIO-AQUINO, J.:

The issue in this case is whether or not an attorney who was engaged on a contingent fee
basis may, in order to collect his fees, prosecute an appeal despite his client's refusal to
appeal the decision of the trial court.

On September 7, 1963, the petitioner, a practicing attorney, entered into a written agreement
with the private respondent Rosa del Rosario to appear as her counsel in a petition for probate
of the holographic will of the late Maxima C. Reselva. Under the will, a piece of real property
at Sales Street, Quiapo, Manila, was bequeathed to Del Rosario. It was agreed that petitioner's
contigent fee would be thirty-five per cent (35%) of the property that Rosa may receive upon
the probate of the will (Annex "A", p. 59, Rollo).

In accordance with their agreement, Leviste performed the following services as Del Rosario's
counsel:

(1) Thoroughly researched and studied the law on probate and succession;

(2) Looked for and interviewed witnesses, and took their affidavits;

(3) Filed the petition for. probate is Special Proceeding No. 58325;

(4) Made the proper publications;

(5) Presented at the trial the following witnesses:

a) Eleuterio de Jesus

b) Lucita de Jesus

c) Purita L. Llanes

d) Rita Banu

e) Jesus Lulod.

On August 20, 1965, Leviste received a letter from Ms. Del Rosario, informing him that she
was terminating his services as her counsel due to "conflicting interest." This consisted,
according to the letter, in petitioner's moral obligation to protect the interest of his brother-in-
law, Gaudencio M. Llanes, whom Del Rosario and the other parties in the probate proceeding
intended to eject as lessee of the property which was bequeathed to Del Rosario under the
will (Annex "B", p. 60, Rollo).

On September 20, 1965, petitioner filed a "Motion to Intervene to Protect His Rights to Fees
for Professional Services." (Annex "B", p. 60, Rollo.)

In an order dated November 12, 1965 the trial court denied his motion on the ground that he
had "not filed a claim for attorney's fees nor recorded his attorney's lien." (p. 3, Rollo.)

On November 23, 1965, petitioner filed a "Formal Statement of Claim for Attorney's Fees and
Recording of Attorney's Lien,' which was noted in the court's order of December 20, 1965
(Annexes "D" and "E", pp. 63 & 64, Rollo).

Although the order denying his motion to intervene had become final, petitioner continued to
receive copies of the court's orders, as well the pleadings of the other parties in the case. He
also continued to file pleadings. The case was submitted for decision without the respondents'
evidence.

On November 23, 1966, Del Rosario and Rita Banu, the special administratrix-legatee, filed a
"Motion To Withdraw Petition for Probate" alleging that Del Rosario waived her rights to the
devise in her favor and agreed that the De Guzman brothers and sisters who opposed her
petition for probate, shall inherit all the properties left by the decedent. (Annex "F", p. 65,
Rollo.)

In an order of April 13, 1967 the trial court denied the motion to withdraw the petition for
being contrary to public policy (Annex "G", pp. 66-67, Rollo).

Nonetheless, on August 28, 1967, the court disallowed the will, holding that the legal
requirements for its validity were not satisfied as only two witnesses testified that the will and
the testatrix's signature were in the handwriting of Maxima Reselva.

The petitioner filed an appeal bond, notice of appeal, and record on appeal. The private
respondents filed a motion to dismiss the appeal on the ground that petitioner was not a party
in interest.

The petitioner opposed the motion to dismiss his appeal, claiming that he has a direct and
material interest in the decision sought to be reviewed. He also asked that he be substituted
as party-petitioner, in lieu of his former client, Ms. Del Rosario.

On March 28, 1968, the trial judge dismissed the appeal and denied petitioner's motion for
substitution.

The petitioner filed in the Court of Appeals a petition for mandamus (CA-G.R. No. 41248)
praying that the trial court be ordered to give due course to his appeal and to grant his
motion for substitution.

On May 22, 1968, the Court of Appeals dismissed the petition for being insufficient in form
and substance as the petitioner did not appear to be the proper party to appeal the decision
in Special Proceeding No. 58325 (Annex 1, p. 77, Rollo).
Upon the denial of his motion for reconsideration, petitioner appealed by certiorari to this
Court, assigning the following errors against the Court of Appeals' resolution:

1. The Court of Appeals erred in finding that the petitioner appears not to be the proper party
to appeal the decision in Sp. Proc. No. 58325 of the Court of First Instance of Manila.

2. Assuming the petitioner's right of appeal is doubtful, the Court of Appeals erred in
dismissing his petition for mandamus; and

3. The Court of Appeals erred in not reversing the decision in Sp. Proc. No. 58325 denying the
probate of the holographic will of the late Maxima C. Reselva, said decision being patently
erroneous.

Under his first assignment of error, petitioner argues that by virtue of his contract of services
with Del Rosario, he is a creditor of the latter, and that under Article 1052 of the Civil Code
which provides:

ART. 1052. If the heir repudiates the inheritance to the prejudice of his own creditors, the
latter may petition the court to authorize them to accept it in the name of the heir.

The acceptance shall benefit the creditors only to an extent sufficient to cover the amount of
their credits. The excess, should there be any, shall in no case pertain to the renouncer, but
shall be adjudicated to the persons to whom, in accordance with the rules established in this
Code, it may belong.

he has a right to accept for his client Del Rosario to the extent of 35% thereof the devise in
her favor (which she in effect repudiated) to protect his contigent attorney's fees.

The argument is devoid of merit. Article 1052 of the Civil Code does not apply to this case.
That legal provision protects the creditor of a repudiating heir. Petitioner is not a creditor of
Rosa del Rosario. The payment of his fees is contingent and dependent upon the successful
probate of the holographic will. Since the petition for probate was dismissed by the lower
court, the contingency did not occur. Attorney Leviste is not entitled to his fee.

Furthermore, Article 1052 presupposes that the obligor is an heir. Rosa del Rosario is not a
legal heir of the late Maxima C. Reselva. Upon the dismissal of her petition for probate of the
decedent's will, she lost her right to inherit any part of the latter's estate. There is nothing for
the petitioner to accept in her name.

This Court had ruled in the case of Recto vs. Harden, 100 Phil. 1427, that "the contract (for
contingent attorney's fees) neither gives, nor purports to give, to the appellee (lawyer) any
right whatsoever, personal or real, in and to her (Mrs. Harden's) aforesaid share in the
conjugal partnership. The amount thereof is simply a basis for the computation of said fees."

The Court of Appeals did not err in dismissing the petition for mandamus, for while it is true
that, as contended by the petitioner, public policy favors the probate of a will, it does not
necessarily follow that every will that is presented for probate, should be allowed. The law
lays down procedures which should be observed and requisites that should be satisfied before
a will may be probated. Those procedures and requirements were not followed in this case
resulting in the disallowance of the will. There being no valid will, the motion to withdraw the
probate petition was inconsequential.
Petitioner was not a party to the probate proceeding in the lower court. He had no direct
interest in the probate of the will. His only interest in the estate is an indirect interest as
former counsel for a prospective heir. In Paras vs. Narciso, 35 Phil. 244, We had occassion to
rule that one who is only indirectly interested in a will may not interfere in its probate. Thus:

... the reason for the rule excluding strangers from contesting the will, is not that thereby the
court maybe prevented from learning facts which would justify or necessitate a denial of
probate, but rather that the courts and the litigants should not be molested by the
intervention in the proceedings of persons with no interest in the estate which would entitle
them to be heard with relation thereto. (Paras vs. Narciso, 35 Phil. 244, 246.)

Similary, in Morente vs. Firmalino, 40 O.G. 21st Supp. 1, We held:

We are of the opinion that the lower court did not err in holding that notice of an attorney's
lien did not entitle the attorney-appellant to subrogate himself in lieu of his client. It only gives
him the right to collect a certain amount for his services in case his client is awarded a certain
sum by the court.

WHEREFORE, the petition for certiorari is denied for lack of merit. Costs against the petitioner.

SO ORDERED.

G.R. No. 91958 January 24, 1991

WILFREDO D. LICUDAN and CRISTINA LICUDAN-CAMPOS, petitioners,

vs.
THE HONORABLE COURT OF APPEALS and ATTY. TEODORO O. DOMALANTA,
respondents.

Arnold V. Guerrero & Associates for petitioners.

Teodoro O. Domalanta for and on his behalf as private respondent.

GUTIERREZ, JR., J.:

The practice of law is a profession rather than trade. Courts must guard against the charging
of unconscionable and excessive fees by lawyers for their services when engaged as counsel.
Whether or not the award of attorney's fees in this case is reasonable, being in the nature of
contingent fees, is the principal issue.

This petition for review on certiorari assails:

1) The Decision of the public respondent dated September 12, 1989 which dismissed the
petitioners' appeal thereby upholding the reasonableness of the respondent lawyer's lien as
attorney's fees over the properties of his clients; and

2) The Resolution of the public respondent dated January 30, 1990 which denied the
petitioners' motion for reconsideration.

The grounds relied upon by the petitioners are as follows:

The respondent Court, in upholding the entitlement of private respondent-attorney on the
attorney's fees he claimed, decided the question in a manner not in accord with law or with
the applicable decisions of this Honorable Tribunal.

The respondent Court, in refusing to review and determine the propriety, reasonableness and
validity of the attorney's fees claimed by the private respondent-attorney, departed from the
usual course of judicial proceedings.

The respondent Court, in failing to declare the attorney's fees claimed by the private
respondent-attorney as unconscionable, excessive, unreasonable, immoral and unethical,
decided the question in a way not in accord with law and with applicable decisions of this
Honorable Tribunal. (Petition, pp. 12-13; Rollo, pp. 16-17)

The following are the antecedent facts pertinent to the case at bar:

The respondent lawyer was retained as counsel by his brother-in-law and sister, the now
deceased petitioners' parents, spouses Aurelio and Felicidad Licudan. His services as counsel
pertained to two related civil cases docketed as Civil Case No. Q-12254 for partition and Civil
Case No. Q-28655 for a sum of money in connection with the redemption of the property
subject matter of the two cases covered by Transfer Certificate of Title No. 818 of the Register
of Deeds of Quezon City. In both cases, the respondent lawyer obtained a judgment in favor of
his clients.

On August 13,1979, the respondent lawyer filed a Petition for Attorney's Lien with Notification
to his Clients which substantially alleged that his clients executed two written contracts for
professional services in his favor which provided that:

a) The undersigned counsel is entitled to own 97.5 square meters of the plaintiff's share of
the lot in question.

b) The undersigned counsel shall have a usufructuary right for a period of ten (10) years
of plaintiffs' share of the lot in question.

c) And that all damages accruing to plaintiffs to be paid by the defendant is for the
undersigned counsel.(Annex "H" of the Petition, Rollo, p. 54)

On September 19, 1979, the trial court handling Civil Case No. Q-12254 ordered the
annotation at the back of TCT No. 818 of the Register of Deeds of Quezon City of the
respondent lawyer's Contract for Professional Services dated August 30, 1979 signed by
petitioner Wilfredo Licudan and Aurelio Licudan on his own behalf and on behalf of his
daughter, petitioner Cristina Licudan-Campos. The said trial court's Order, being one of two
Orders being essentially challenged in this petition, is reproduced below:

Before the court for consideration is a Petition for Attorney's Lien filed by Atty. Teodoro D.
Domalanta, counsel for the plaintiff, praying that his attorney's fees be annotated as a lien at
the back of Transfer Certificate of Title No. 818 of the Register of Deeds of Quezon City,
subject matter of this case.

For the protection of the plaintiffs, the court required the plaintiff Aurelio Licudan as well as
his son to appear this morning. Plaintiff Aurelio Licudan together with his son Wilfredo
Licudan, who appears to be intelligent and in fact he speaks (the) English language well,
appeared. Both Aurelio and Wilfredo Licudan manifested that they have freely and voluntarily
signed the Contract for Professional Services, dated August 30, 1979 and notarized before
Notary Public Amado Garrovillas as Doc. No. 32, Page 8, Book No. XIX, Series of 1979.

Considering the manifestation of plaintiff, Aurelio Licudan and Alfredo (sic) Licudan that they
have entered freely and voluntarily in the said contract of professional services, let the same
be annotated at the back of TCT 818 of the Register of Deeds of Quezon City, upon payment
of the required legal fees. (CA Decision, pp. 7-8; Rollo, pp. 36-37)

The Contract for Professional Services dated August 30, 1979 differs from the earlier
contractual provisions in that it entitled the respondent lawyer to one-third (1/3) of the subject
property or 90.5 square meters and provided for usufructuary rights over the entire lot in
question in favor of the respondent lawyer's son, Teodoro M. Domalanta, Jr. for an agreed
consideration. (Annex "J" of the Petition; Rollo, p. 59)

On July 25, 1985, the respondent lawyer filed a motion ex parte to amend the Order dated
September 19, 1979 so as to conform with an additional professional fee covering 31 square
meters more of the lot for services rendered in Civil Case No. Q-28655 as evidenced by a
Deed of Absolute Sale dated May 1, 1983 executed by Aurelio Licudan in favor of the
respondent lawyer.

On September 6, 1985, the trial court ordered the respondent lawyer to submit a subdivision
plan in conformity with his attorney's fees contract under which one-third (1/3) of the property
or 90.5 square meters was alloted to him.

On September 23, 1985, the respondent lawyer filed a motion for reconsideration praying for
the amendment of the Order dated September 19, 1979 to conform with the Deed of Absolute
Sale dated May 1, 1983 which was executed after the annotation of the original attorney's lien
of 90.5 square meters.

On September 30, 1985, the trial court denied the motion on the ground that the respondent
lawyer cannot collect attorney's fees for other cases in the action for partition.

On October 4, 1985, the respondent lawyer filed a second motion for reconsideration of the
Order dated September 6, 1985 explaining that what he sought to be included in the Order
dated September 19, 1979 is the additional attorney's fees for handling the redemption case
which was but a mere offshoot of the partition case and further manifesting that the
additional 31 square meters as compensation for the redemption case must be merged with
the 90.5 square meters for the partition case to enable the said respondent lawyer to comply
with the Order dated September 6,1985 which directed him to submit a subdivision plan as
required.

On October 21, 1985, the trial court issued the second Order being assailed in this petition.
The said Order reads:

Acting on the "Second Motion for Reconsideration" filed by Atty. Teodoro Domalanta and
finding the same to be justified, let an attorney's lien be annotated in the title of the property
for 31 square meters as attorney's fees of said Atty. Teodoro Domalanta in addition to the
original 90.5 square meters. (CA Decision, p. 8; Rollo, p. 37)

On August 22, 1986, more than ten (10) months after the Orders of September 6, 1985 and
October 21, 1985 had become final and executory, the petitioners as substituted heirs of the
respondent lawyers' deceased clients filed a motion to set aside orders on the ground that the
award of professional fees covering 121.5 square meters of the 271.5 square meter lot is
unconscionable and excessive.

After the respondent lawyer filed his Opposition to the above petitioners' motion, the lower
court, on August 29, 1986, finding that the petitioners as substituted plaintiffs are not in full
agreement with the respondent lawyer's claim for attorney's fees, set aside its Orders dated
September 6, 1985 and October 21, 1985.

On September 16, 1986, the respondent lawyer filed a motion for reconsideration stressing
the fact that the payment of the professional services was pursuant to a contract which could
no longer be disturbed or set aside because it has already been implemented and had since
then become final. This motion was denied on October 3, 1986.

On November 15, 1986, the respondent lawyer filed a motion to set aside the orders dated
August 29, 1986 and October 3, 1986 reiterating his position that the Orders of September 6,
1985 and October 21, 1985 have become final and are already implemented. The respondent
lawyer further asked for the modification of the October 21, 1985 Order to reflect 60.32
square meters instead of 31 square meters only since the stipulation in the Additional
Contract for Professional Services entitled him to 60.32 square meters.

After the petitioners' Opposition to the said motion was filed, the trial court, on February 26,
1987, rendered an Order with the following dispositive portion:

WHEREFORE, this Court has no alternative but to set aside its orders of 29 August 1986 and 3
October 1986 and declare its Orders of 19 September 1979 and 21 October 1985 irrevocably
final and executory. (CA Decision, p. 5; Rollo, p. 34)

On Appeal, the Court of Appeals ruled in favor of the respondent lawyer by dismissing the
appeal and the prayed for writ of preliminary injunction. Their subsequent motion for
reconsideration having been denied', the petitioners filed the instant petition.

The petitioners fault the respondent Court for its failure to exercise its inherent power to
review and determine the propriety of the stipulated attorney's fees in favor of the respondent
lawyer and accuse the respondent lawyer of having committed an unfair advantage or legal
fraud by virtue of the Contract for Professional Services devised by him after the trial court
awarded him attorney's fees for P1,000.00 only instead of respecting the trust and confidence
of the highest level reposed on him considering the close blood and affinal relationship
between him and his clients.

The petitioners contend that under the award for professional services, they may have won
the case but would lose the entire property won in litigation to their uncle-lawyer. They would
be totally deprived of their house and lot and the recovered damages considering that of the
271.5 square meters of the subject lot, the respondent lawyer is claiming 121.5 square
meters and the remaining portion of 150 square meters would also go to attorney's fees since
the said portion pertains to the lawyer's son by way of usufruct for ten (10) years.

The aforesaid submissions by the petitioners merit our consideration.

It is a well-entrenched rule that attorney's fees may be claimed in the very action in which the
services in question have been rendered or as an incident of the main action. The fees may be
properly adjudged after such litigation is terminated and the subject of recovery is at the
disposition of the court. (see Camacho v. Court of Appeals, 179 SCRA 604 [1989]; Quirante v.
Intermediate Appellate Court, 169 SCRA 769 [1989]).

It is an equally deeply-rooted rule that contingent fees are not per se prohibited by law. They
are sanctioned by Canon 13 of the Canons of Professional Ethics and Canon 20, Rule 20.01 of
the recently promulgated Code of Professional Responsibility. However, as we have held in the
case of Tanhueco v. De Dumo (172 SCRA 760 [1989]):

. . . When it is shown that a contract for a contingent fee was obtained by undue influence
exercised by the attorney upon his client or by any fraud or imposition, or that the
compensation is clearly excessive, the Court must and will protect the aggrieved party.
(Ulanday v. Manila Railroad Co., 45 Phil. 540 [1923]; Grey v. Insular Lumber Co., 97 Phil. 833
[1955]).

In the case at bar, the respondent lawyer caused the annotation of his attorney's fees lien in
the main action for partition docketed as Civil Case No. Q-12254 on the basis of a Contract for
Professional Services dated August 30, 1979. We find reversible error in the Court of Appeals'
holding that:

When the reasonableness of the appellee's lien as attorney's fees over the properties of his
clients awarded to him by the trial court had not been questioned by the client, and the said
orders had already become final and executory, the same could no longer be disturbed, not
even by the court which rendered them (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
always be subject to the supervision of a court, as to its reasonableness. (Emphasis supplied).

There is no dispute in the instant case that the attorney's fees claimed by the respondent
lawyer are in the nature of a contingent fee. There is nothing irregular about the execution of
a written contract for professional services even after the termination of a case as long as it is
based on a previous agreement on contingent fees by the parties concerned and as long as
the said contract does not contain stipulations which are contrary to law, good morals, good
customs, public policy or public order.

Although the Contract for Professional Services dated August 30, 1979 was apparently
voluntarily signed by the late Aurelio Licudan for himself and on behalf of his daughter,
petitioner Cristina Licudan-Campos and by the petitioner Wilfredo Licudan who both
manifested in open court that they gave their free and willing consent to the said contract we
cannot allow the said contract to stand as the law between the parties involved considering
that the rule that in the presence of a contract for professional services duly executed by the
parties thereto, the same becomes the law between the said parties is not absolute but
admits an exceptionthat 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.1wphi1 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.

A.M. No. 1388 March 28, 1980

ANA F. RETUYA, complainant,

vs.
ATTY. IEGO A. GORDUIZ, respondent.

AQUINO, J:

This disbarment case is linked to Administrative Case No. 1431-MJ which was filed by Ana F.
Retuya against Municipal Judge Paulo A. Equipilag of Maasin, Leyte and which was decided on
July 16, 1979 (Retuya vs. Equipilag). The facts of that case, which also gave rise to this
disbarment case, are as follows:

Ana F. Retuya, a widow with four minor children, filed a claim for workmen's compensation
against Eastern Shipping Lines, Inc., the employer of her husband who died in 1968. In a
decision dated December 4, 1970 the Workmen's Compensation Unit at Tacloban City
awarded to Ana the sum of P8,792.10 consisting of (a) P6,000 as compensation benefits, (b)
P2,292.10 for medical and hospitalization expenses, (c) P200 as burial expenses and (d) P300
as attorney's fees of Atty. Iego Gorduiz (Case No. 9728).

The employer appealed. During the pendency of the appeal, the employer proposed to
compromise the claim by paying P4,396.05 or only one-half of the total award. Ana accepted
the proposal and directed that the amount be remitted to Fiscal Mamerto Daclan through the
Philippine National Bank's branch at Maasin, Southern Leyte.
The employer paid the reduced award on November 16, 1972. Ana sent to the employer the
receipt and release signed by her with a covering letter dated December 19, 1972 wherein
she explained that her lawyer, Gorduiz, did not sign the joint motion to dismiss the claim
because he wanted twenty percent of the award as his attorney's fees. She was willing to give
him ten percent.

After she had cashed the check for P4,396.05, she was not able to contact Gorduiz and pay
his fee. Then, unexpectedly, in February, 1973, she was served with a warrant of arrest issued
in Criminal Case No. R-2362 of the municipal court of Maasin. To avoid detention, she had to
post bail in the sum of one thousand pesos.

It turned out that on January 12, 1973 Atty. Gorduiz executed an affidavit stating that Ana had
misappropriated his attorney's fees amounting to three hundred pesos and that he had
demanded payment of the amount from her but, she refused to make payment and. instead,
she went to Cebu and starved there for a long time.

On the basis of that affidavit, the acting chief of police filed against Ana a complaint for estafa
in the municipal court of Maasin. After posting bail, she filed a motion to quash wherein she
explained that she did not pay the fees of Atty. Gorduiz because he was demanding one-third
of the award: that when she did not accede to his demand, he lowered his claim to eight
hundred pesos, and that she bargained for six hundred fifty pesos but he refused to accept
that amount. Ana averred that the estafa case was filed just to harass her.

Judge Paulo A. Equipilag denied the motion to quash. He granted the motion of Atty. Gorduiz
requiring Ana to produce a copy of the decision awarding her workmen's compensation for her
husband's death.

The estafa case was not tried. Atty. Erasmo M. Diola, as lawyer of Ana, offered to Atty. Gorduiz
the sum of five hundred pesos as settlement of the case. The offer was accepted.

On November 22, 1973, the acting child of police filed a motion to dismiss the case on the
basis of the affidavit of Atty. Gorduiz ex. executed on that date stating that the prosecution
witnesses had allegedly become hostile and that he was no longer interested in further
prosecuting the case. Also, on that day, Judge Equipilag dismissed the case.

In spite of the dismissal of the estafa case Ana F. Retuya felt aggrieved by the proceedings
therein. In a complaint dated July 24, 1974 but filed in this Court on October 30, 1974, she
asked for the disbarment or suspension of Atty. Gorduiz and Judge Equipilag. The disbarment
case against Gorduiz was referred to the Solicitor General.

The case against Judge Equipilag was investigated by the Judge of the Court of First Instance
of Southern Leyte.

This Court found that there was no justification for suspending respondent Judge. However, he
was admonished to be more prudent and circumspect in the discharge of his duties so as to
obviate the suspicion that, for an ulterior motive, he wall in cahoots with the offended party in
a criminal case for the purpose of using the strong arm of the law that the accused in an
oppressive and vindictive manner.

The Solicitor General asked the provincial fiscal of Southern Leyte to investigate the case
against Gorduiz. The fiscal in her report of July 8, 1975 recommended the of the case.
The Solicitor General disagreeing with that recommendation, filed in this Court against
Gorduiz a complaint wherein he prayed that Gorduiz be suspended for six months because the
latter, in filing the estafa case, had promoted a groundless suit against his client.

Ana F. Retuya testified before the investigation Fiscal that in December, 1972 she was willing
to pay Gorduiz six hundred fifty pesos as his attorney's few but he demanded a bigger
amount.He lodged a complaint for estafa against her and was arrests She had to post bail in
the sum of one thousand pesos. As already stated above, the estafa case was later dismissed
when Ana paid Gorduiz sum of five hundred pesos.

In his testimony before the investigating fiscal and this Court's legal officer, respondent
Gorduiz denied that he demanded as attorney's fees an amount higher than three hundred
pesos. He explained that he filed the estafa cam because after Ana had received payment of
the award, she did not turn over to him the attorney's fees of three hundred pesos in spite of
her promises to pay the same and his demands for payment (Exh. 7 and 8).

Gorduiz declared that Ana filed the disbarment case against him in order that she could evade
the payment of his attorney's fees in the other cases which he had handled for her. It was also
possible that someone who had a score to settle with Gorduiz had instigated the filing of this
case against him.

He further declared that he filed the estafa case because he thought that Ana had absconded
when she stayed in Cebu City for a long time (23-24 tsn, June 26, 1979). He claimed that he
spent one hundred pesos of his own money in gathering evidence which was presented in the
workmen's compensation case. He had also advanced around two hundred pesos to cover the
expenses in the other cases which he had handled for Ana.

After reflecting on the conflicting contentions of the parties, the Court finds that there is
justification for suspending the respondent.

Respondent acted precipitately in filing a criminal action against his client for the supposed
misappropriation of his attomey's fees. It is not altogether clear that his client had swindled
him and, therefore, there is some basis for concluding that, contrary to his lawyer's oath, he
had filed a suit against her and had harassed and embarrassed her.

Paragraph 14 of the Canons of Legal Ethics prescribes that "controversies with clients
concerning compensation are to be avoided by the lawyer so far as shall be compatible with
his self- respect and with his right to receive reasonable recompense for his services; and
lawsuits with clients should be resorted to only to prevent injustice, imposition or fraud."

WHEREFORE, the respondent is from the practice of law for a period of six months counted
from notice of this decision. A copy of this decision should be attached to his record in the Bar
Confidant's office.

SO ORDERED.

[A.C. No. 6210. December 9, 2004]

FEDERICO N. RAMOS, complainant, vs. ATTY. PATRICIO A. NGASEO, respondent.
DECISION
YNARES-SANTIAGO, J.:

This is a complaint for suspension of respondent Atty. Patricio A. Ngaseo for violation of the
Code of Professional Responsibility and Article 1491 of the Civil Code by demanding from his
client, complainant Federico N. Ramos, the delivery of 1,000 square meters of land, a litigated
property, as payment for his appearance fees.

The facts as narrated by the complainant are as follows:

Sometime in 1998, complainant Federico Ramos went to respondent Atty. Patricio Ngaseos
Makati office to engage his services as counsel in a case[1] involving a piece of land in San
Carlos, Pangasinan. Respondent agreed to handle the case for an acceptance fee of
P20,000.00, appearance fee of P1,000.00 per hearing and the cost of meals, transportation
and other incidental expenses. Complainant alleges that he did not promise to pay the
respondent 1,000 sq. m. of land as appearance fees.[2]

On September 16, 1999, complainant went to the respondents office to inquire about the
status of the case. Respondent informed him that the decision was adverse to them because a
congressman exerted pressure upon the trial judge. Respondent however assured him that
they could still appeal the adverse judgment and asked for the additional amount of
P3,850.00 and another P2,000.00 on September 26, 2000 as allowance for research made.[3]

Although an appeal was filed, complainant however charges the respondent of purposely
failing to submit a copy of the summons and copy of the assailed decision. Subsequently,
complainant learned that the respondent filed the notice of appeal 3 days after the lapse of
the reglementary period.

On January 29, 2003, complainant received a demand-letter from the respondent asking for
the delivery of the 1,000 sq. m. piece of land which he allegedly promised as payment for
respondents appearance fee. In the same letter, respondent also threatened to file a case in
court if the complainant would not confer with him and settle the matter within 30 days.

Respondent alleged that sometime in the late 1997, a former client, Federico Ramos and his
brother, Dionisio, went to his Makati office to engage his professional services in connection
with a 2-hectare parcel of land situated in San Carlos, Pangasinan which the complainants
family lost 7 years earlier through an execution sale in favor of one Alfredo T. Castro.
Complainant, who was deaf and could only speak conversational Tagalog haltingly, was
assisted by his brother Dionisio. They came all the way from Pangasinan because no lawyer in
San Carlos City was willing to handle the case. Complainant, through Dionisio, avers that he
has consulted 2 local lawyers but did not engage their services because they were demanding
exorbitant fees. One local lawyer was willing to handle the case for at least one-half of the
land involved as his attorneys fee, plus cash expenses, while the other asked for of the land in
addition to a large sum of money. Respondent agreed to handle the case for an acceptance
fee of P60,000.00 plus an appearance fee of P3,000.00 per hearing. Complainant told him that
he would consult his siblings on the matter.

Six months later, i.e., in April 1998, complainant, assisted by one Jose Castillo, went to
respondents office to discuss the legal fees. Complainant, through Castillo, told respondent
that he was willing to pay an acceptance fee of P40,000.00, P20,000.00 of which shall be paid
upon engagement and the remaining P20,000.00 to be paid after their treasure hunt
operations in Nueva Viscaya were terminated. Further, complainant offered, in lieu of
P3,000.00 per appearance, 1,000 sq. m. of land from the land subject matter of the case, if
they win, or from another piece of property, if they lose. In addition, complainant also offered
to defray the expenses for transportation, meals and other incidental expenses. Respondent
accepted the complainants offer.

Respondent claims that after the trial court dismissed Civil Case No. SCC 2128, he filed a
timely notice of appeal and thereafter moved to be discharged as counsel because he had
colon cancer. Complainant, now assisted by one Johnny Ramos, implored respondent to
continue handling the case, with an offer to double the 1,000 sq. m. piece of land earlier
promised and the remaining balance of P20,000.00 acceptance fee. Johnny Ramos made a
written commitment and gave respondents secretary P2,000.00 of the P3,850.00 expenses for
the preparation of the appellants brief.

On July 18, 2001, the Court of Appeals rendered a favorable decision ordering the return of
the disputed 2-hectare land to the complainant and his siblings. The said decision became
final and executory on January 18, 2002. Since then complainant allegedly failed to contact
respondent, which compelled him to send a demand letter on January 29, 2003.

On February 14, 2003, complainant filed a complaint before the IBP charging his former
counsel, respondent Atty. Ngaseo, of violation of the Code of Professional Responsibility for
demanding the delivery of 1,000 sq. m. parcel of land which was the subject of litigation.

In a report dated July 18, 2003, IBP Commissioner Rebecca Villanueva-Maala found the
respondent guilty of grave misconduct and conduct unbecoming of a lawyer in violation of the
Code of Professional Responsibility and recommended that he be suspended from the practice
of law for 1 year.[4]

On August 30, 2003, the IBP Board of Governors passed Resolution No. XVI-2003-47 the full
text of which reads:[5]

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/Decision as Annex A; and, finding the recommendation fully supported
by the evidence on record and the applicable laws and rules, with modification, and
considering that respondent have violated the Code of Professional Responsibility for grave
misconduct and conduct unbecoming of a lawyer Atty. Patricio A. Ngaseo is hereby
SUSPENDED from the practice of law for six (6) months.

On December 11, 2003, respondent filed a petition for review assailing IBP Resolution No. XVI-
2003-47 for having been issued without or in excess of jurisdiction.[6]

Respondent argues that he did not violate Article 1491 of the Civil Code because when he
demanded the delivery of the 1,000 sq. m. of land which was offered and promised to him in
lieu of the appearance fees, the case has been terminated, when the appellate court ordered
the return of the 2-hectare parcel of land to the family of the complainant.

Respondent further contends that he can collect the unpaid appearance fee even without a
written contract on the basis of the principle of quantum meruit. He claims that his
acceptance and appearance fees are reasonable because a Makati based legal practitioner,
would not handle a case for an acceptance fee of only P20,000.00 and P1,000.00 per court
appearance.
Under Article 1491(5) of the Civil Code, lawyers are prohibited from acquiring either by
purchase or assignment the property or rights involved which are the object of the litigation in
which they intervene by virtue of their profession.[7] The prohibition on purchase is all
embracing to include not only sales to private individuals but also public or judicial sales. The
rationale advanced for the prohibition is that public policy disallows the transactions in view of
the fiduciary relationship involved, i.e., the relation of trust and confidence and the peculiar
control exercised by these persons.[8] It is founded on public policy because, by virtue of his
office, an attorney may easily take advantage of the credulity and ignorance of his client and
unduly enrich himself at the expense of his client.[9] However, the said prohibition applies
only if the sale or assignment of the property takes place during the pendency of the litigation
involving the clients property. Consequently, where the property is acquired after the
termination of the case, no violation of paragraph 5, Article 1491 of the Civil Code attaches.

Invariably, in all cases where Article 1491 was violated, the illegal transaction was
consummated with the actual transfer of the litigated property either by purchase or
assignment in favor of the prohibited individual. In Biascan v. Lopez, respondent was found
guilty of serious misconduct and suspended for 6 months from the practice of law when he
registered a deed of assignment in his favor and caused the transfer of title over the part of
the estate despite pendency of Special Proceedings No. 98037 involving the subject property.
[10] In the consolidated administrative cases of Valencia v. Cabanting,[11] the Court
suspended respondent Atty. Arsenio Fer Cabanting for six (6) months from the practice of law
when he purchased his client's property which was still the subject of a pending certiorari
proceeding.

In the instant case, there was no actual acquisition of the property in litigation since the
respondent only made a written demand for its delivery which the complainant refused to
comply. Mere demand for delivery of the litigated property does not cause the transfer of
ownership, hence, not a prohibited transaction within the contemplation of Article 1491. Even
assuming arguendo that such demand for delivery is unethical, respondents act does not fall
within the purview of Article 1491. The letter of demand dated January 29, 2003 was made
long after the judgment in Civil Case No. SCC-2128 became final and executory on January 18,
2002.

We note that the report of the IBP Commissioner, as adopted by the IBP Board of Governors in
its Resolution No. XVI-2003-47, does not clearly specify which acts of the respondent
constitute gross misconduct or what provisions of the Code of Professional Responsibility have
been violated. We find the recommended penalty of suspension for 6 months too harsh and
not proportionate to the offense committed by the respondent. The power to disbar or
suspend must be exercised with great caution. Only in a clear case of misconduct that
seriously affects the standing and character of the lawyer as an officer of the Court and
member of the bar will disbarment or suspension be imposed as a penalty.[12] All considered,
a reprimand is deemed sufficient and reasonable.

WHEREFORE, in view of the foregoing, respondent Atty. Patricio A. Ngaseo is found guilty of
conduct unbecoming a member of the legal profession in violation of Rule 20.04 of Canon 20
of the Code of Professional Responsibility. He is REPRIMANDED with a warning that repetition
of the same act will be dealt with more severely.

SO ORDERED.

G.R. No. L-26096 February 27, 1979

THE DIRECTOR OF LANDS, petitioner,
vs.
SILVERETRA ABABA, ET AL., claimants, JUAN LARRAZABAL, MARTA C. DE
LARRAZABAL, MAXIMO ABAROQUEZ and ANASTACIA CABIGAS, petitioners-
appellants, ALBERTO FERNANDEZ, adverse claimant-appellee.

Juanito Ll. Abao for petitioners-appellants.

Alberto R Fernandez in his own behalf.

MAKASIAR, J.:

This is an appeal from the order of the Court of First Instance of Cebu dated March 19, 1966
denying the petition for the cancellation of an adverse claim registered by the adverse
claimant on the transfer certificate of title of the petitioners.

The adverse claimant, Atty. Alberto B. Fernandez was retained as counsel by petitioner,
Maximo Abarquez, in Civil Case No. R-6573 of the Court of First Instance of Cebu, entitled
"Maximo Abarquez vs. Agripina Abarquez", for the annulment of a contract of sale with right
of repurchase and for the recovery of the land which was the subject matter thereof. The
Court of First Instance of Cebu rendered a decision on May 29, 1961 adverse to the petitioner
and so he appealed to the Court of Appeals.

Litigating as a pauper in the lower court and engaging the services of his lawyer on a
contingent basis, petitioner, liable to compensate his lawyer whom he also retained for his
appeal executed a document on June 10, 1961 in the Cebuano-Visayan dialect whereby he
obliged himself to give to his lawyer one-half (1/2) of whatever he might recover from Lots
5600 and 5602 should the appeal prosper. The contents of the document as translated are as
follows:

AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

That I, MAXIMO ABARQUEZ, Plaintiff in Case No. R-6573 of the Court of First Instance of Cebu,
make known through this agreement that for the services rendered by Atty. Alberto B.
Fernandez who is my lawyer in this case, if the appeal is won up to the Supreme Court, I
Promise and will guarantee that I win give to said lawyer one-half (1/2) of what I may recover
from the estate of my father in Lots No. 5600 and 5602 which are located at Bulacao Pardo,
City of Cebu. That with respect to any money which may be adjudged to me from Agripina
Abarquez, except 'Attorney's Fees', the same shall pertain to me and not to said lawyer.

IN WITNESS WHEREOF, I have caused my right thumb. mark to be affixed hereto this 10th of
June, 1961, at the City of Cebu.

THUMBMARK
MAXIMO ABARQUEZ

(p. 5, Petitioner-Appellant's Brief, p. 26, rec.)

The real Property sought to be recovered in Civil Case No. R6573 was actually the share of the
petitioner in Lots 5600 and 5602, which were part of the estate of his deceased parents and
which were partitioned the heirs which included petitioner Maximo Abarquez and his elder
sister Agripina Abarquez, the defendant in said civil case.

This partition was made pursuant to a project of partition approved by the Court which
provided am other that Lots Nos. 5600 and 5602 were to be divided into three equal Parts,
one third of which shall be given to Maximo Abarquez. However, Agripina Abarquez the share
of her brother stating that the latter executed an instrument of pacto de retro prior to the
partition conveying to her any or all rights in the estate of their parents. Petitioner discovered
later that the claim of his sister over his share was based on an instrument he was believe all
along to be a mere acknowledgment of the receipt of P700.00 which his sister gave to him as
a consideration for g care of their father during the latter's illness and never an instrument of
pacto de retro. Hence, he instituted an action to annul the alleged instrument of pacto de
retro.

The Court of Appeals in a decision promulgated on August 27, 1963 reversed the decision of
the lower court and annulled the dead of pacto de retro. Appellee Agripina Abarquez filed a
motion for reconsideration but the same was denied in a resolution dated January 7, 1964 (p.
66, Record on Appeal; p. 13, Rec.) and the judgment became final and executory on January
22,1964.

Subsequently, Transfer Certificate of Title No. 31841 was issued on May 19,1965 in the name
of Maximo Abarquez, married to Anastacia Cabigas, over his adjudged share in Lots Nos. 5600
and 5602 containing an area of 4,085 square meters (p. 110, ROA; p. 13, rec.). These parcels
of land later by the subject matter of the adverse claim filed by the claimant.

The case having been resolved and title having been issued to petitioner, adverse claimant
waited for petitioner to comply with ha obligation under the document executed by him on
June 10, 1961 by delivering the one-half () portion of the said parcels of land.

Petitioner refused to comply with his obligation and instead offered to sell the whole parcels of
land covered by TCT No. 31841 to petitioner-spouses Juan Larrazabal and Marta C. de
Larrazabal. Upon being informed of the intention of the petitioner, adverse t claimant
immediately took stops to protect his interest by filing with the trial court a motion to
annotate Ins attorney's lien on TCT No. 31841 on June 10, 1965 and by notifying the
prospective buyers of his claim over the one-half portion of the parcels of land.

Realizing later that the motion to annotate attorney's lien was a wrong remedy, as it was not
within the purview of Section 37, rule 138 of the Revised Rule of Court, but before the same
was by the trial court, adverse t by an affidavit of adverse claim on July 19, 1965 with the
Register of Deeds of Cebu (p. 14, ROA; p. 13, rec.). By virtue of the petition of mid affidavit
the adverse claim for one-half () of the lots covered by the June 10, 1961 document was
annotated on TCT No. 31841.

Notwithstanding the annotation of the adverse claim, petitioner-spouse Maximo Abarquez and
Anastacia Cabigas conveyed by deed of absolute sale on July 29, 1965 two-thirds (2/3) of the
lands covered by TCT No. 31841 to petitioner-spouses Juan Larrazabal and Marta C. de
Larrazabal. When the new transfer certificate of title No. 32996 was issued, the annotation of
adverse claim on TCT No. 31841 necessarily had to appear on the new transfer certificate of
title. This adverse claim on TCT No. 32996 became the subject of cancellation proceedings
filed by herein petitioner-spouses on March 7, 1966 with the Court of First Instance of Cebu (p.
2 ROA; p. 13, rec.). The adverse claimant, Atty. Alberto B. Fernandez, filed his opposition to
the petition for cancellation on March 18, 1966 (p. 20, ROA; p. 13 rec.). The trial court
resolved the issue on March 19, 1966, when it declared that:

...the petition to cancel the adverse claim should be denied. The admission by the petitioners
that the lawyers (Attys. Fernandez and Batiguin) are entitled to only one-third of the lot
described in Transfer Certificate of Title No. 32966 is the best proof of the authority to
maintain said adverse claim (p. 57, ROA; p. 13, rec.).

Petitioner-spouses decided to appeal the order of dismissal to this Court and correspondingly
filed the notice of appeal on April 1, 1966 with the trial court. On April 2, 1966, petitioner-
spouses filed the appeal bond and subsequently filed the record on appeal on April 6, 1966.
The records of the case were forwarded to this Court through the Land Registration
Commission of Manila and were received by this Court on May 5, 1966.

Counsel for the petitioner-spouses filed the printed record on appeal on July 12, 1966.
Required to file the appellants' brief, counsel filed one on August 29, 1966 while that of the
appellee was filed on October 1, 1966 after having been granted an extension to file his brief.

The case was submitted for decision on December 1, 1966. Counsel for the petitioners filed a
motion to expunge appellees' brief on December 8, 1966 for having been filed beyond the
reglementary period, but the same was denied by this Court in a resolution dated February
13, 1967.

The pivotal issue to be resolved in the instant case is the validity or nullity of the registration
of the adverse claim of Atty. Fernandez, resolution of which in turn hinges on the question of
whether or not the contract for a contingent fee, basis of the interest of Atty. Fernandez, is
prohibited by the Article 1491 of the New Civil Code and Canon 13 of the Canons of
Professional Ethics.

Petitioners contend that a contract for a contingent fee violates Article 1491 because it
involves an assignment of a property subject of litigation. That article provides:

Article 1491. The following persons cannot acquire by purchase even at a public or judicial
auction, either in person or through the petition of another.

xxx xxx xxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior and other o and
employees connected with the administration of justice, the property and rights in litigation or
levied upon an execution before the court within whose jurisdiction or territory they exercise
their respective functions; this prohibition includes the act of acquiring by assignment and
shall apply to lawyers, with respect to the property and rights which may be the object of any
litigation in which they may take part by virtue of their profession (Emphasis supplied).

This contention is without merit. Article 1491 prohibits only the sale or assignment between
the lawyer and his client, of property which is the subject of litigation. As WE have already
stated. "The prohibition in said article a only to applies stated: " The prohibition in said article
applies only to a sale or assignment to the lawyer by his client of the property which is the
subject of litigation. In other words, for the prohibition to operate, the sale or t of the property
must take place during the pendency of the litigation involving the property" (Rosario Vda. de
Laig vs. Court of Appeals, et al., L-26882, November 21, 1978).

Likewise, under American Law, the prohibition does not apply to "cases where after
completion of litigation the lawyer accepts on account of his fee, an interest the assets
realized by the litigation" (Drinker, Henry S., Legal Ethics, p. 100 [1953], citing App. A, 280;
N.Y. Ciu 714). "There is a clear distraction between such cases and one in which the lawyer
speculates on the outcome of the matter in which he is employed" (Drinker, supra, p. 100
citing A.B.A. Op. 279).

A contract for a contingent fee is not covered by Article 1491 because the tranfer or
assignment of the property in litigation takes effect only after the finality of a favorable
judgment. In the instant case, the attorney's fees of Atty. Fernandez, consisting of one-half
(1/2) of whatever Maximo Abarquez might recover from his share in the lots in question, is
contingent upon the success of the appeal. Hence, the payment of the attorney's fees, that is,
the transfer or assignment of one-half (1/2) of the property in litigation will take place only if
the appeal prospers. Therefore, the tranfer actually takes effect after the finality of a
favorable judgment rendered on appeal and not during the pendency of the litigation
involving the property in question. Consequently, the contract for a contingent fee is not
covered by Article 1491.

While Spanish civilists differ in their views on the above issue whether or not a contingent
fee contract (quota litis agreement) is covered by Article 1491 with Manresa advancing that
it is covered, thus:

Se ha discutido si en la incapacidad de Ion Procumdam y Abogados asta o el pecto de quota

litis. Consiste este, como es sabido, en la estipulacion de que el Abogado o el Procurador ban
de hacer suyos una parte alicuota de In cona que se li m la son es favorable. Con es te
concepto a la vista, es para nosortros que el articulo que comentamos no menciona ese
pacto; pero como la incapacidad de los Abogados y Procuradores se extinede al acto de
adquirir por cesion; y la efectividad del pacto de quota litis implica necesariamente una
cesion, estimamos que con solo el num. 5 del articulo 1459 podria con exito la nulidad de ese
pacto tradicionalmente considerado como ilicito.

xxx xxx xxx

Debe tenerse tambien en cuenta, respecto del ultimo parrafo del articulo 1459, la sentencia
del Tribunal Supreme de 25 Enero de 1902, que delcara que si bien el procurador no puede
adquirir para si los bienes, en cuanto a los cuales tiene incapacidad, puede adquirirlos para
otra persona en quien no concurra incapacidad alguna (Manresa, Comentarios al Codigo Civil
Espaol, Tomo X, p. 110 [4a ed., 1931] emphasis supplied).

Castan, maintaining that it is not covered, opines thus;

C. Prohibiciones impuestas a las personas encargadas, mas o menos directamente, de la

administracion de justicia.El mismo art. 1,459 del Codigo civil prohibe a los Magistrados,
Jueces, individuos del Minesterio fiscal, Secretarios de Tribunales y Juzgados y Oficiales de
Justicia adquirir por compra (aunque sea en subasta publica o judicial, por si ni por persona
alguna intermedia). 'Los bienes y derechos que estuviesen en litigio ante el Tribunal en cuya
jurisdicion on teritorio ejercieran sus respectivas funciones, extendiendo se esta prohibicion al
acto de adquirir por cesion', y siendo tambien extensiva ' Alos Abogados y Procuradores
respecto a los bienes y derecho que fueran objeto del un litigio en que intervengan pos su
profession y oficio.'

El fundamento de esta prohibicion es clarismo. No solo se tratadice Manresade quitar la

ocasion al fraude; persiguese, ademas, el proposito de rodear a las personas que intervienen
en la administracion de justicia de todos los prestigios que necesitan para ejercer su
ministerio, librando los de toda sospecha, que, aunque fuere infundada, redundaria en
descredito de la institucion.

Por no dor lugar a recelos de ninguna clase, admite el Codigo (en el apartado penutimo del
art. 1.459) algunos casos en que, por excepcion, no se aplica el pricipio prohibitivo de que
venimos hablando. Tales son los de que se trate de acciones hereditarias entre coheredero, de
cesion en pago de creditos, o de garantia de los bienes que posean los funcionarios de
justicia.

Algunos autores (Goyena, Manresa, Valverde) creen que en la prohibicion del art. 1.459 esta
comprendido el pacto de quota litis (o sea el convenio por el cual se concede al Abogado o
Procurador, para el caso de obtener sentencia favorable una parte alicuota de la cosa o
cantidad que se litiga), porque dicho pacto supone la venta o cesion de una parte de la cosa o
drecho que es objecto del litigio. Pero Mucius Scaevola oberva, conrazon, que en el repetido
pacto no hay propiamente caso de compraventa ni de cesion de derechos, y bastan para
estimario nulo otros preceptos del Codigo como los relativos a la ilicitud de la causa (Castan,
Derecho Civil Espol, Tomo 4, pp. 68-69, [9a ed., 1956], emphasis supplied).

The Supreme Court of Spain, in its sentencia of 12 November 1917, has ruled that Article
1459 of the Spanish Civil Code (Article 1491 of our Civil Code) does not apply to a contract for
a contingent fee because it is not contrary to morals or to law, holding that:

... que no es susceptible de aplicarse el precepto contenido en el num. 5 del art. 1.459 a un
contrato en el que se restrigen los honorarios de un Abogado a un tanto por ciento de lo que
se obtuviera en el litigio, cosa no repudiada por la moral ni por la ley (Tolentino, Civil Code of
the Philippines, p. 35, Vol. V [1959]; Castan, supra; Manresa, supra).

In the Philippines, among the Filipino commentators, only Justice Capistrano ventured to state
his view on the said issue, thus:

The incapacity to purchase or acquire by assignment, which the law also extends to lawyers
with t to the property and rights which may be the object of any litigation in which they may
take part by virtue of their profession, also covers contracts for professional services quota
litis. Such contracts, however, have been declared valid by the Supreme Court" (Capistrano,
Civil Code of the Philippines, p. 44, Vol. IV [1951]).

Dr. Tolentino merely restated the views of Castan and Manresa as well as the state of
jurisprudence in Spain, as follows:

Attorneys-at-lawSome writers, like Goyena, Manresa and Valverde believe that this article
covers quota litis agreements, under which a lawyer is to be given an aliquot part of the
property or amount in litigation if he should win the case for his client. Scaevola and Castan,
however, believe that such a contract does not involve a sale or assignment of right but it
may be void under other articles of the Code, such as those referring to illicit cause- On the
other hand the Spanish Supreme Court has held that this article is not applicable to a contract
which limits the fees of a lawyer to a certain percentage of what may be recovered in
litigation, as this is not contrary to moral or to law. (Tolentino, Civil Code of the Philippines, p.
35, Vol. V [1959]; Castan, supra, Emphasis supplied).

Petitioners her contend that a contract for a contingent fee violates the Canons of Professional
Ethics. this is likewise without merit This posture of petitioners overlooked Canon 13 of the
Canons which expressly contingent fees by way of exception to Canon 10 upon which
petitioners relied. For while Canon 10 prohibits a lawyer from purchasing ...any interest in the
subject matter of the litigation which he is conducting", Canon 13, on the other hand, allowed
a reasonable contingent fee contract, thus: "A contract for a con. tangent fee where
sanctioned by law, should be reasonable under all the circumstances of the ca including the
risk and uncertainty of the compensation, but should always be subject to the supervision of a
court, as to its reasonableness." As pointed out by an authority on Legal Ethics:

Every lawyer is intensely interested in the successful outcome of his case, not only as
affecting his reputation, but also his compensation. Canon 13 specifically permits the lawyer
to contract for a con tangent fee which of itself, negatives the thought that the Canons
preclude the lawyer's having a stake in his litigation. As pointed out by Professor Cheatham on
page 170 n. of his Case Book, there is an inescapable conflict of interest between lawyer and
client in the matter of fees. Nor despite some statements to the con in Committee opinions, is
it believed that, particularly in view of Canon 13, Canon 10 precludes in every case an
arrangement to make the lawyer's fee payable only out of the results of the litigation. The
distinction is between buying an interest in the litigation as a speculation which Canon 10
condemns and agreeing, in a case which the lawyer undertakes primarily in his professional
capacity, to accept his compensation contingent on the outcome (Drinker, Henry S Legal
Ethics, p. 99, [1953], Emphasis supplied).

These Canons of Professional Ethics have already received "judicial recognition by being cited
and applied by the Supreme Court of the Philippines in its opinion" Malcolm, Legal and Judicial
Ethics, p. 9 [1949]). And they have likewise been considered sources of Legal Ethics. More
importantly, the American Bar Association, through Chairman Howe of the Ethics Committee,
opined that "The Canons of Professional Ethics are legislative expressions of professional
opinion ABA Op. 37 [1912])" [See footnote 25, Drinker, Legal Ethics, p. 27]. Therefore, the
Canons have some binding effect

Likewise, it must be noted that this Court has already recognized this type of a contract as
early as the case of Ulanday vs. Manila Railroad Co. (45 PhiL 540 [1923]), where WE held that
"contingent fees are not prohibited in the Philippines, and since impliedly sanctioned by law
'Should be under the supervision of the court in order that clients may be protected from
unjust charges' (Canons of Profession 1 Ethics)". The same doctrine was subsequently
reiterated in Grey vs. Insular Lumber Co. (97 PhiL 833 [1955]) and Recto vs. Harden (100 PhiL
427 [1956]).

In the 1967 case of Albano vs. Ramos (20 SCRA 171 [19671), the attorney was allowed to
recover in a separate action her attomey's fee of one-third (1/3) of the lands and damages
recovered as stipulated in the contingent fee contract. And this Court in the recent case of
Rosario Vda de Laig vs. Court of Appeals, et al. (supra), which involved a contingent fee of
one-half () of the property in question, held than ,contingent fees are recognized in this i
jurisdiction (Canon 13 of the Canons of Professional Ethics adopted by the Philippine Bar
association in 1917 [Appendix B, Revised Rules of Court)), which contingent fees may be a
portion of the property in litigation."
Contracts of this nature are permitted because they redound to the benefit of the poor client
and the lawyer "especially in cases where the client has meritorious cause of action, but no
means with which to pay for legal services unless he can, with the sanction of law, make a
contract for a contingent fee to be paid out of the proceeds of the litigation" (Francisco, Legal
Ethics, p. 294 [1949], citing Lipscomb vs. Adams 91 S.W. 1046, 1048 [1949]). Oftentimes,
contingent fees are the only means by which the poor and helpless can redress for injuries
sustained and have their rights vindicated. Thus:

The reason for allowing compensation for professional services based on contingent fees is
that if a person could not secure counsel by a promise of large fees in case of success, to be
derived from the subject matter of the suit, it would often place the poor in such a condition
as to amount to a practical denial of justice. It not infrequently happens that person are
injured through the negligence or willful misconduct of others, but by reason of poverty are
unable to employ counsel to assert their rights. In such event their only means of redress lies
in gratuitous service, which is rarely given, or in their ability to find some one who will
conduct the case for a contingent fee. That relations of this king are often abused by
speculative attorneys or that suits of this character are turned into a sort of commercial traffic
by the lawyer, does not destroy the beneficial result to one who is so poor to employ counsel
(id, at p. 293, citing Warvelle, Legal Ethics, p. 92, Emphasis supplied).

Justice George Malcolm, writing on contingent fees, also stated that:

... the system of contingent compensation has the merit of affording to certain classes of
persons the opportunity to procure the prosecution of their claims which otherwise would be
beyond their means. In many cases in the United States and the Philippines, the contingent
fee is socially necessary (Malcolm, Legal and Judicial Ethics, p. 55 [1949], emphasis supplied).

Stressing further the importance of contingent fees, Professor Max Radin of the University of
California, said that:

The contingent fee certainly increases the possibility that vexatious and unfounded suits will
be brought. On the other hand, it makes possible the enforcement of legitimate claims which
otherwise would be abandoned because of the poverty of the claimants. Of these two
possibilities, the social advantage seems clearly on the side of the contingent fee. It may in
fact be added by way of reply to the first objection that vexations and unfounded suits have
been brought by men who could and did pay substantial attorney's fees for that purpose
(Radin, Contingent Fees in California, 28 Cal. L. Rev. 587, 589 [1940], emphasis supplied).

Finally, a contingent fee contract is always subject to the supervision of the courts with
respect to the stipulated amount and may be reduced or nullified. So that in the event that
there is any undue influence or fraud in the execution of the contract or that the fee is
excessive, the client is not without remedy because the court will amply protect him. As held
in the case of Grey vs. Insular Lumber Co., supra, citing the case of Ulanday vs. Manila
Railroad Co., supra:

Where it is shown that the contract for a contingent fee was obtained by any undue influence
of the attorney over the client, or by any fraud or imposition, or that the compensation is so
clearly excessive as to amount to extortion, the court win in a proper case protect the
aggrieved party.

In the present case, there is no iota of proof to show that Atty. Fernandez had exerted any
undue influence or had Perpetrated fraud on, or had in any manner taken advantage of his
client, Maximo Abarquez. And, the compensation of one-half of the lots in question is not
excessive nor unconscionable considering the contingent nature of the attorney's fees.

With these considerations, WE find that the contract for a contingent fee in question is not
violative of the Canons of Professional Ethics. Consequently, both under the provisions of
Article 1491 and Canons 10 and 13 of the Canons of Profession Ethics, a contract for a
contingent fee is valid

In resolving now the issue of the validity or nullity for the registration of the adverse claim,
Section 110 of the Land Registration Act (Act 496) should be considered. Under d section, an
adverse claim may be registered only by..

Whoever claims any part or interest in registered land adverse to the registered owner, arising
subsequent to the date of the o registration ... if no other provision is made in this Act for
registering the same ...

The contract for a contingent fee, being valid, vested in Atty Fernandez an interest or right
over the lots in question to the extent of one-half thereof. Said interest became vested in Atty.
Fernandez after the case was won on appeal because only then did the assignment of the
one-half () portion of the lots in question became effective and binding. So that when he
filed his affidavit of adverse claim his interest was already an existing one. There was
therefore a valid interest in the lots to be registered in favor of Atty. Fernandez adverse to Mo
Abarquez.

Moreover, the interest or claim of Atty. Fernandez in the lots in question arose long after the
original petition which took place many years ago. And, there is no other provision of the Land
Registration Act under which the interest or claim may be registered except as an adverse
claim under Section 110 thereof. The interest or claim cannot be registered as an attorney's
charging lien. The lower court was correct in denying the motion to annotate the attomey's
lien. A charging lien under Section 37, Rule 138 of the Revised Rules of Court is limited only to
money judgments and not to judgments for the annulment of a contract or for delivery of real
property as in the instant case. Said Section provides that:

Section 37. An attorney shall have a lien upon the funds, documents and papers of his client
which have lawfully come into his oppossession 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 ... (emphasis supplied).

Therefore, as an interest in registered land, the only adequate remedy open to Atty. Fernandez
is to register such interest as an adverse claim. Consequently, there being a substantial
compliance with Section 110 of Act 496, the registration of the adverse claim is held to be
valid. Being valid, its registration should not be cancelled because as WE have already stated,
"it is only when such claim is found unmeritorious that the registration thereof may be
cancelled" (Paz Ty Sin Tei vs. Jose Lee Dy Piao 103 Phil. 867 [1958]).

The one-half () interest of Atty. Fernandez in the lots in question should therefore be
respected. Indeed, he has a better right than petitioner-spouses, Juan Larrazabal and Marta C.
de Larrazabal. They purchased their two-thirds (2/3) interest in the lots in question with the
knowledge of the adverse claim of Atty. Fernandez. The adverse claim was annotated on the
old transfer certificate of title and was later annotated on the new transfer certificate of title
issued to them. As held by this Court:

The annotation of an adverse claim is a measure designed to protect the interest of a person
over a piece of real property where the registration of such interest or right is not otherwise
provided for by the Land Registration Act, and serves as a notice and warning to third parties
dealing with said property that someone is claiming an interest on the same or a better right
than the registered owner thereof (Sanchez, Jr. vs. Court of Appeals, 69 SCRA 332 [1976]; Paz
Ty Sin Tei vs. Jose Le Dy Piao supra).

Having purchased the property with the knowledge of the adverse claim, they are therefore in
bad faith. Consequently, they are estopped from questioning the validity of the adverse claim.

WHEREFORE, THE DECISION OF THE LOWER COURT DENYING THE PETITION FOR THE
CANCELLATION OF THE ADVERSE CLAIM SHOULD BE, AS IT IS HEREBY AFFIRMED, WITH COSTS
AGAINST PETITIONER-APPELLANTS JUAN LARRAZABAL AND MARTA C. DE LARRAZABAL.

SO ORDERED.

[A.C. No. 1890. August 7, 2002]

FEDERICO C. SUNTAY, complainant, vs. ATTY. RAFAEL G. SUNTAY, respondent.

DECISION
BELLOSILLO, J.:

This Complaint for disbarment was filed by Federico C. Suntay against his nephew, Atty. Rafael
G. Suntay, alleging that respondent was his legal counsel, adviser and confidant who was
privy to all his legal, financial and political affairs from 1956 to 1964. However, since they
parted ways because of politics and respondent's overweening political ambitions in 1964,
respondent had been filing complaints and cases against complainant, making use of
confidential information gained while their attorney-client relationship existed, and otherwise
harassing him at every turn.

Complainant enumerated the following cases filed by respondent to harass him: (a) Civil Case
No. 4306-M[1] for injunction and damages in 1975, "Carlos Panganiban v. Dr. Federico
Suntay," where respondent appeared as counsel for the plaintiff involving fishponds which
respondent had previously helped to administer; (b) Civil Case No. 4726-M,[2] "Narciso Lopez
v. Federico Suntay," in 1970 where respondent appeared as counsel for the plaintiff to
determine the real contract between the parties likewise involving the two (2) fishponds which
respondent had previously helped to administer; (c) Civil Case No. 112764,[3] "Magno
Dinglasan v. Federico Suntay," for damages where respondent appeared as counsel for the
plaintiff; and, (d) I.S. No. 77-1523, "Magno Dinglasan v. Federico Suntay," for false testimony
and grave oral defamation before the Office of the Provincial Fiscal of Bulacan involving
complainant's same testimony subject of the complaint for damages in Civil Case No. 112764.

In addition, complainant alleged that respondent relentlessly pursued a case against him for
violation of PD No. 296[4] for the alleged disappearance of two (2) creeks traversing
complainant's fishpond in Bulacan covered by TCT No. T-15674. Complainant alleged that
respondent's possession and examination of the TCT and the blueprint plan of the property
while he was still counsel for complainant provided him with the information that there used
to be two (2) creeks traversing the fishpond, and that since respondent helped in the
administration of the fishpond, he also came to know that the two (2) creeks had disappeared.

Required to answer the charges respondent filed a "Motion to Order Complainant to Specify
His Charges" alleging that complainant failed to specify the alleged "confidential information
or intelligence" gained by him while the attorney-client relationship existed but which he
allegedly used against complainant when the relationship terminated. Complainant filed his
Comments thereon as required in our Resolution of 26 July 1978. Thereafter this case was
referred to the Office of the Solicitor General (OSG) for investigation, report, and
recommendation in our Resolution dated 23 October 1978.

After almost four (4) years the OSG submitted its Report and Recommendation dated 14
October 1982 enumerating the following findings against respondent, to wit:

The evidence presented by complainant which was largely unrebutted by respondent

establish two counts of malpractice against respondent, one count of violating the
confidentiality of client-lawyer relationship and one count of engaging in unethical conduct.

1. Respondent committed malpractice when he represented Magno Dinglasan in the case for
false testimony and grave oral defamation filed by Magno Dinglasan against complainant
before the Office of the Provincial Fiscal of Bulacan (I.S. No. 77-1523).

The case stemmed from the testimony given by complainant on December 21, 1976, before
the Court of First Instance of Bulacan in Civil Case No. 3930-M. When asked why Magno
Dinglasan had testified against him in that case, complainant stated that he once declined the
demand of Magno Dinglasan, a former official of the Bureau of Internal Revenue, for
P150,000.00 as consideration for the destruction of complainants record in the Bureau.

On account of that testimony, Magno Dinglasan charged complainant on July 29, 1977 with
the crime of false testimony and grave oral defamation (Exhibits G and G-1). During the
preliminary investigation of the case by the Office of the Provincial Fiscal of Bulacan,
respondent acted as counsel for Magno Dinglasan. When the case was dismissed by the Office
of the Provincial Fiscal of Bulacan and it was elevated to the Ministry of Justice on appeal,
respondent continued to be the lawyer of Magno Dinglasan.

Complainant testified in this disbarment proceeding that he consulted respondent, who was
then his counsel, about the demand made in 1957 or 1958 by Magno Dinglasan for
P150,000.00 as consideration for the destruction of complainants record in the Bureau of
Internal Revenue. Respondents advice was for complainant to disregard the demand as it was
improper. Later, when Magno Dinglasan reduced the amount to P50,000.00, complainant
again consulted respondent. Respondent likewise advised complainant not to heed the
demand (pp. 61-62, tsn, May 21, 1981).

Respondents representation of Magno Dinglasan in I.S. No. 77-1523 constitutes malpractice

(Section 27, Rule 138, Rules of Court) for respondent was previously the lawyer of
complainant and respondent was consulted by complainant regarding the very matter which
was the subject of the case. By serving as the lawyer of Magno Dinglasan, in I.S. No. 77-1523,
respondent thus represented an interest which conflicted with the interest of his former client.

2. Respondent again committed malpractice when he served as lawyer of Magno Dinglasan in

Civil Case No. 112764 before the Court of First Instance of Manila.
Civil Case No. 112764 was an action for damages filed by Magno Dinglasan against
complainant based, among others, on the same testimony that complainant gave on
December 21, 1976 before the Court of First Instance of Bulacan in Civil Case No. 3930-M.

For the same reasons set forth above, respondents representation of Magno Dinglasan in Civil
Case No. 112764 constitutes malpractice as thereby he represented conflicting interests.

3. In filing a charge against complainant for alleged illegal destruction of dikes, respondent
violated the confidentiality of information obtained out of a client-lawyer relationship.

In his capacity as lawyer of complainant from 1956 to 1964, respondent had the following
functions:

Witness

A: He was my lawyer from 1956 from the time he passed the bar up to sometime in 1964 and
my legal adviser on political matters and legal matters.

ATTY. AQUINO:

Q: As your lawyer from 1956 to 1964, will you kindly inform the Honorable Hearing Officer
what was the nature of the work of Atty. Suntay?

A: He handled my cases on the titling of our properties. He served as my legal counsel in the
Hagonoy Rural Bank of which my family is the majority stockholders. He used to help me
manage my fishpond. He is our legal adviser on legal matters. He is our confidant. We have
no secrets between us. He has complete access in our papers (tsn, May 21, 1981)

Complainant owned several fishponds in Bulacan, among them, the fishpond covered by
Transfer Certificate of Title No. T-15674. This fishpond was previously traversed by two creeks,
Sapang Malalim and Sapang Caluang. The existence of the creeks is shown by the certificate
of title and the blue print plan of the fishpond. In the certificate of title, the fishpond is
bounded on the north and northeast by Sapang Caluang and on the west by Sapang Malalim
(please see Exhibit 6).

In a letter dated March 17, 1973, respondent reported the disappearance of the two creeks to
the authorities. The Chief State Prosecutor referred the letter to the Office of the Provincial
Fiscal of Bulacan. The Office of the Provincial Fiscal of Bulacan required the Public Works to
conduct a re-survey. (Exhibit 6).

In 1974, the Ministry of Public Works conducted a relocation survey of the fishpond. The
relocation survey disclosed that there were no more creeks traversing the fishpond. Sapang
Malalim and Sapang Caluang had disappeared.

Respondent was requested to file a formal complaint with supporting affidavits, for violation of
Presidential Decree No. 296. Respondent did so and the complaint was docketed as I.S. No.
74-193. (Exhibit 6)

From the foregoing facts, it is clear that respondent made use of the information he gained
while he was the lawyer of complainant as basis for his complaint for the building of illegal
dikes. His possession and examination of Transfer Certificate of Title No. T-15674 and the
blueprint plan provided him the information that there used to be two creeks traversing the
fishpond covered by the title. Since he helped in the administration of the fishpond, he also
came to know that the two creeks had disappeared. Thus, he gained the data which became
the basis of his complaint when he was a lawyer and part administrator of complainant. Under
the circumstances, there is a violation of professional confidence.

4. The evidence also establishes the commission of unethical conduct by respondent for
serving as lawyer of Panganiban and Lopez x x x and for himself filing criminal charges
against complainant which were later dismissed. The cases wherein respondent served as
lawyer for the adversary of complainant or filed by respondent himself against complainant
are the following:

1. Carlos Panganiban v. Federico Suntay, Civil Case No. 4306-M, CFI, Branch VII, Malolos,
Bulacan;

2. Narciso Lopez v. Federico Suntay, Civil Case No. 4726-M, CFI, Branch II, Malolos, Bulacan;

3. Magno Dinglasan v. Federico Suntay, I.S. No. 77-1523, Office of the Provincial Fiscal of
Bulacan;

4. Magno Dinglasan v. Federico Suntay, Civil Case No. 112764, CFI, Branch XX, Manila; and

5. Rafael G. Suntay and Magno Dinglasan v. Federico C. Suntay, I.S. No. 74-193, Office of the
Provincial Fiscal of Bulacan, for violation of P.D. 296.

While there may be validity to respondents contention that it is not improper for a lawyer to
file a case against a former client, especially when the professional relationship had ended
several years before, yet under the over-all circumstances of the case at bar it can not be said
that respondent acted ethically. Complainant was not a mere client of respondent. He is an
uncle and a political benefactor. The parties for whom respondent filed cases against
complainant were former friends or associates of complainant whom respondent met when he
was serving as the lawyer and general adviser of complainant. The cases filed by respondent
were about properties which respondent had something to do with as counsel and
administrator of complainant.

xxxx

IN VIEW OF THE FOREGOING, undersigned respectfully submit that the evidence establishes
commission by respondent of malpractice for violating the confidentiality of client-lawyer
relationship and engaging in unethical conduct x x x x[5]

Resolution of this case was delayed despite receipt of the foregoing Report and
Recommendation in view of the Omnibus Motion to Remand Case to the Office of the Solicitor
General; Motion to Disqualify Solicitor Rogelio Dancel to Act on this Case and Motion to
Suspend Period to File Answer dated 18 January 1983 filed by respondent principally accusing
handling Solicitor Dancel of having given unwarranted advantage and preference to the
complainant in the investigation of the case.

After several pleadings on the issue were filed by both respondent and Solicitor Rogelio
Dancel, the Court in its Resolution dated 22 August 1983 denied respondent's motion to
disqualify Solicitor Dancel and required the OSG to proceed with the investigation of this case.
However, no further proceedings were conducted by the OSG until the records of the case
together with other cases were turned over to the Integrated Bar of the Philippines (IBP) on 19
May 1988.

After almost three (3) years from the time the records of this case were turned over to it, the
IBP Commission on Bar Discipline submitted to this Court on 11 May 2001 Resolution No. XIV-
2001-169 adopting and approving the Report and Recommendation of the Investigating
Commissioner finding respondent guilty as charged. The IBP recommended that respondent
Atty. Suntay be suspended from the practice of law for two (2) years for immoral conduct. In
so recommending the Investigating Commissioner adopted in toto the findings of the OSG in
its Report and Recommendation dated 14 October 1982. In our Resolution of 5 September
2001 we noted the foregoing IBP Resolution. However, in view of the penalty involved, this
case was referred to the Court En Banc for final action pursuant to our Resolution dated 18
January 2000, Sec. 2, par. (b), in A.M. No. 99-12-08-SC.[6]

After a review of the records of this case, the Court finds the IBP Recommendation to be well
taken. As found by both the OSG and the IBP Investigating Commissioner, respondent Atty.
Rafael G. Suntay acted as counsel for clients in cases involving subject matters regarding
which he had either been previously consulted by complainant or which he had previously
helped complainant to administer as the latter's counsel and confidant from 1956 to 1964.
Thus in Civil Cases Nos. 4306-M and 4726-M respondent acted as counsel for estranged
business associates of complainant, namely, Carlos Panganiban and Narciso Lopez, the
subject matter of which were the two (2) fishponds which respondent had previously helped to
administer.

On the other hand, I.S. No. 77-1523 for false testimony and grave oral defamation before the
Office of the Provincial Fiscal of Bulacan, and Civil Case No. 112764 for damages before the
then Court of First Instance of Manila, were filed in behalf of Magno Dinglasan, a former
Bureau of Internal Revenue (BIR) official, regarding whose alleged demand for P150,000.00
from complainant in exchange for the destruction of the latter's record in the BIR, respondent
had previously advised complainant to disregard. Civil Case No. 117624 and I.S. No. 77-1523
were precisely filed against complainant because the latter had previously testified on the
alleged demand made by Dinglasan. Although respondent denied that there was ever such a
demand made by Dinglasan, the point is that his word on the matter, i.e., whether there was
in fact such a demand, would carry much weight against complainant considering that he was
the latter's counsel in 1957 or 1958 when the alleged demand was made. In addition,
respondent initiated the prosecution of complainant in I.S. No. 74-193 for violation of P.D. No.
296[7] for the disappearance of the two (2) creeks, namely, Sapang Malalim and Sapang
Caluang, previously traversing complainant's fishpond in Bulacan covered by TCT No. T-15674
by using information obtained while he was in possession of the certificate of title and the
blueprint plan of the property.

As the Code of Professional Responsibility provides:

Rule 21.01. - A lawyer shall not reveal the confidences or secrets of his client except:

a) When authorized by the client after acquainting him of the consequences of the disclosure;

b) When required by law;

c) When necessary to collect his fees or to defend himself, his employees or associates or by
judicial action.
Rule 21.01. - A lawyer shall not, to the disadvantage of his client, use information acquired in
the course of employment, nor shall he use the same to his own advantage or that of a third
person, unless the client with full knowledge of the circumstances consents thereto.

A lawyer shall preserve the confidences and secrets of his clients even after termination of the
attorney-client relation.[8] As his defense to the charges, respondent averred that
complainant failed to specify the alleged confidential information used against him. Such a
defense is unavailing to help respondent's cause for as succinctly explained in Hilado v. David
- [9]

Communications between attorney and client are, in a great number of litigations, a

complicated affair, consisting of entangled relevant and irrelevant, secret and well known
facts. In the complexity of what is said in the course of the dealings between an attorney and
a client, inquiry of the nature suggested would lead to the revelation, in advance of the trial,
of other matters that might only further prejudice the complainants cause. And the theory
would be productive of other unsalutary results. To make the passing of confidential
communication a condition precedent, i.e., to make the employment conditioned on the scope
and character of the knowledge acquired by an attorney in determining his right to change
sides, would not enhance the freedom of litigants, which is to be sedulously fostered, to
consult with lawyers upon what they believe are their rights in litigation. The condition would
of necessity call for an investigation of what information the attorney has received and in
what way it is or it is not in conflict with his new position. Litigants would in consequence be
wary in going to an attorney, lest by an unfortunate turn of the proceeding, if an investigation
be held, the court should accept the attorneys inaccurate version of the facts that came to
him x x x x

Hence, the necessity of setting down the existence of the bare relationship of attorney and
client as the yardstick for testing incompatibility of interests. This stern rule is designed not
alone to prevent the dishonest practitioner from fraudulent conduct, but as well to protect the
honest lawyer from unfounded suspicion of unprofessional practice x x x x It is founded on
principles of public policy, on good taste x x x x [T]he question is not necessarily one of the
rights of the parties, but as to whether the attorney has adhered to proper professional
standard. With these thoughts in mind, it behooves attorneys, like Caesars wife, not only to
keep inviolate the clients confidence, but also to avoid the appearance of treachery and
double-dealing. Only thus can litigants be encouraged to entrust their secrets to their
attorneys which is of paramount importance in the administration of justice.

WHEREFORE, in view of the foregoing, IBP Resolution No. XIV-2001-169 dated 29 April 2001 is
adopted and approved. For violating the confidentiality of lawyer-client relationship and for
unethical conduct, respondent Atty. Rafael G. Suntay is SUSPENDED from the practice of law
for two (2) years effective upon the finality hereof.

Let copies of this Decision be furnished the Office of the Bar Confidant, the Integrated Bar of
the Philippines and all courts throughout the country.

SO ORDERED.
[A.C. No. 4215. May 21, 2001]

FELICISIMO M. MONTANO, complainant, vs. INTEGRATED BAR of the PHILIPPINES

AND Atty. JUAN S. DEALCA, respondents.
RESOLUTION
KAPUNAN, J.:

In a verified complaint filed before this Court on March 9, 1994, complainant Felicisimo M.
Montano charged Atty. Juan Dealca with misconduct and prays that he be sternly dealt wit
administratively. The complaint[1] is summarized as follows:

1. On November 14, 1992, the complainant hired the services of Atty. Juan S. Dealca as his
counsel in collaboration with Atty. Ronando L. Gerona in a case pending before the Court of
Appeals docketed as CA-G.R. CV No. 37467 wherein the complainant was the plaintiff-
appellant.

2. The parties agreed upon attorneys fees in the amount of P15,000.00, fifty percent (50%) of
which was payable upon acceptance of the case and the remaining balance upon the
termination of the case. Accordingly, complainant paid respondent the amount of P7,500.00
representing 50% of the attorneys fee.

3. Thereafter, even before the respondent counsel had prepared the appellants brief and
contrary to their agreement that the remaining balance be payable after the termination of
the case, Atty. Dealca demanded an additional payment from complainant. Complainant
obliged by paying the amount of P4,000.00.

4. Prior to the filing of the appellants brief, respondent counsel again demand payment of the
remaining balance of 3,500.00. When complainant was unable to do so, respondent lawyer
withdrew his appearance as complainants counsel without his prior knowledge and/or
conformity. Returning the case folder to the complainant, respondent counsel attached a Note
dated February 28, 1993,[2] stating:

28 February 1994

Pepe and Del Montano,

For breaking your promise, since you do not want to fulfill your end of the bargain, heres your
reward:

Henceforth, you lawyer for yourselves. Here are your papers.

Johnny
Complainant claimed that such conduct by respondent counsel exceeded the ethical
standards of the law profession and prays that the latter be sternly dealt with administratively.
Complainant later on filed motions praying for the imposition of the maximum penalty of
disbarment.

After respondent counsel filed his comment on the complaint, the Court in the Resolution of
August 1, 1994, referred the case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.

The Investigating Commissioner found respondent counsel guilty of unprofessional conduct

and recommended that he be severely reprimanded. However, in a Resolution[3] by the IBP
Board of Governors on July 26, 1997, it was resolved that the penalty recommended by the
Investigating Commissioner meted to respondent by amended to three (3) months suspension
from the practice of law for having been found guilty of misconduct, which eroded the public
confidence regarding his duty as a lawyer.

Respondent counsel sought reconsideration of the aforementioned resolution of the IBP,

alleging that the latter misapprehended the facts and that, in any case, he did not deserve
the penalty imposed. The true facts, according to him, are the following:

1. Complainant is being represented by Atty. Ronando L. Gerona in his case on appeal;

2. Due to the ailment of Atty. Geronas daughter, he could not prepare and submit
complainants appellants brief on time;

3. Complainant went to the respondent to do just that, i.e., prepare and submit his appellants
brief on time at the agreed fee of P15,000.00, 50% down and 50% upon its completion;

4. Working overtime, respondent was able to finish the appellants brief ahead of its deadline,
so he advised the complainant about its completion with the request that the remaining
balance of P7,500.00 be paid. Complainant paid P4,000.00 only, promising to pay the
P3,500.00 tomorrow or on later particular date. Please take note that, at this juncture, there
was already a breach of the agreement on complainants part.

5. When that tomorrow or on a later particular date came, respondent, thru a messenger,
requested the complainant to pay the P3,500.00 as promised but word was sent that he will
again pay tomorrow or on later date. This promise-non-payment cycle went on repeatedly
until the last day of the filing of the brief. Please take note again that it was not the
respondent but the complainant who sets the date when he will pay, yet fails to pay as
promised;

6. Even without being paid completely, respondent, of his own free will and accord, filed
complainants brief on time;

7. After the brief was filed, respondent tried to collect from the complainant the remaining
balance of P3,500.00, but the latter made himself scarce. As the records would show, such
P3,500.00 remains unpaid until now;

8. Sensing that something was amiss, respondent sent the February 28, 1993 note and case
folder to the complainant, hoping that the latter would see personally the former about it to
settle the matter between them;
9. However, instead of seeing the respondent, complainant filed this case;

10. Respondent was constrained to file his withdrawal with the Court of Appeals because of
this case to avoid further misunderstanding since he was the one who signed the appellants
brief although Atty. Gerona was his counsel of record. Such withdrawal was accordingly
granted by the appellate court;

xxx xxx xxx.[4]

Respondent counsel further averred that complainants refusal to pay the agreed lawyers fees,
measly as it was, was deliberate and in bad faith; hence, his withdrawal as counsel was just,
ethical and proper. Respondent counsel concluded that not only was the penalty of suspension
harsh for his act of merely trying to collect payment for his services rendered, but it indirectly
would punish his family since he was the sole breadwinner with children in school and his wife
terminally ill with cancer.

In its Resolution No. XIII-97-129 dated October 25, 1997, the IBP denied Atty. Dealcas motion
for reconsideration, to wit:

xxx

RESOLVED TO DENY Atty. Dealcas Motion For Reconsideration of the Boards Decision in the
above-entitled case there being no substantive reason to reverse the finding therein.
Moreover, the motion is improperly laid the remedy of the respondent is to file the appropriate
pleading with the Supreme Court within fifteen (15) days from receipt of notice of said
Decision pursuant to Sec. 12 [c] of Rule 139-B.[5]

On December 10, 1997, this Court noted the following pleadings filed in the present
complaint,

(a) notice and a copy of Resolution No. XII-97-154 dated July 26, 1997 of the Integrated Bar of
the Philippines amending the recommendation of the Investigating Commissioner of
reprimand to three (3) months suspension of respondent from the practice of law for having
been found guilty of misconduct which eroded the public confidence regarding his duty as a
lawyer;

(b) complainants motion for praying for the imposition of the maximum penalty of
disbarment;

(c) motion dated September 15, 1997 of respondent for reconsideration of the aforesaid
resolution of July 26, 1997;

(d) comment/opposition of respondent praying that the motion for the imposition of the
maximum penalty be denied;

(e) comment of complainant praying that the penalty of three (3) months suspension for the
practice of law as recommended by the Integrated Bar of the Philippines pursuant to
Resolution No. XII-97-154 be raised to a heavier penalty;

(f) comment/manifestation/opposition of complainant praying that the respondent be

disbarred; and
(g) rejoinder of respondent praying that this case be dismissed for being baseless.[6]

and referred the same to the IBP for evaluation and report.

In compliance therewith, on March 28, 1998, the IBP issued Resolution No. XIII-98-42 referring
the above-entitled case to Commissioner Vibar for evaluation, report and recommendation in
view of the Motion for Reconsideration granted by the Supreme Court.

The Investigating Commissioner, after referring the case, recommended that his original
recommendation of the imposition of the penalty of reprimand be maintained, noting that
respondent counsel had served the IBP well as President of the Sorsogon Chapter.[7]
Accordingly, on February 23, 1999, the IBP Board of Governors, issued the following
resolution:

RESOLUTION NO. XIII-99-48

xxx

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and
Recommendation of the Investigating Commissioner in the above-entitled case, herein made
part of this Resolution/Decision as Annex A; and, finding the recommendation fully supported
by the evidence on record and the applicable laws and rules, the Motion for Reconsideration
be granted and that the penalty of REPRIMAND earlier recommended by the Investigating
Commissioner be imposed on Atty. Juan S. Dealca.[8]

Complainant asked the IBP to reconsider the foregoing resolution but the motion was denied.
[9]

On April 10, 2000, complainant filed with this Court a petition for review on certiorari in
connection with Administrative Case No. 4215 against the IBP and respondent counsel
averring that the IBP Board of Governors committed grave abuse of discretion when it
overturned its earlier resolution and granted respondent counsels motion for reconsideration
on February 23, 1999. He claimed that the earlier resolution denying the motion for
reconsideration issued on October 25, 1997 had already become final and executory; hence,
any further action or motion subsequent to such final and executory judgment shall be null
and void.

When the Court issued the resolution of December 10, 1997 treating the several pleadings
filed in the present complaint, it should be noted that the IBP resolution denying respondents
motion for reconsideration (Resolution No. XIII-97-129) dated October 25, 1997, for some
reason, had not yet reached this Court. As of that date, the only IBP resolution attached to the
records of the case was Resolution No. XII-97-54 amending the administrative sanction from
reprimand to three months suspension. Hence, at the time the pleadings were referred back
to the IBP in the same resolution, the Court was not aware that the IBP had already disposed
of the motion for reconsideration filed by respondent counsel.

Thus, when the IBP was informed of the said Court resolution, it construed the same as
granting Atty. Dealcas motion for reconsideration and as an order for IBP to conduct a re-
evaluation of the case. The IBP assumed that its resolution of October 25, 1997 was already
considered by this Court when it referred the case back to the IBP. It failed to notice that its
resolution denying the motion for reconsideration was not among those pleadings and
resolution referred back to it.
Hence, on the strength of this Courts resolution which it had inadvertently misconstrued, the
IBP conducted a re-evaluation of the case and came up with the assailed resolution now
sought to be reversed. The Court holds that the error is not attributable to the IBP. It is
regrettable that the procedural infirmity alleged by complainant actually arose from a mere
oversight which was attributable to neither party.

Going into the merits, we affirm the findings made by the IBP that complainant engaged the
services of respondent lawyer only for the preparation and submission of the appellants brief
and the attorneys fees was payable upon the completion and submission of the appellants
brief and not upon the termination of the case.

There is sufficient evidence which indicates complainants willingness to pay the attorneys
fees. As agreed upon, complainant paid half of the fees in the amount of P7,500.00 upon
acceptance of the case. And while the remaining balance was not yet due as it was agreed to
be paid only upon the completion and submission of the brief, complainant nonetheless
delivered to respondent lawyer P4,000.00 as the latter demanded. This, notwithstanding, Atty.
Dealca withdrew his appearance simply because of complainants failure to pay the remaining
balance of P3,500.00, which does not appear to be deliberate. The situation was aggravated
by respondent counsels note to complainant withdrawing as counsel which was couched in
impolite and insulting language.[10]

Given the above circumstances, was Atty. Dealcas conduct just and proper?

We find Atty. Dealcas conduct unbecoming of a member of the legal profession. Under Canon
22 of the Code of Professional Responsibility, lawyer shall withdraw his services only for good
cause and upon notice appropriate in the circumstances. Although he may withdraw his
services when the client deliberately fails to pay the fees for the services,[11] under the
circumstances of the present case, Atty. Dealcas withdrawal was unjustified as complainant
did not deliberately fail to pay him the attorneys fees. In fact, complainant exerted honest
efforts to fulfill his obligation. Respondents contemptuous conduct does not speak well of a
member of the bar considering that the amount owing to him was only P3,500.00. Rule 20.4
of Canon 20, mandates that a lawyer shall avoid controversies with clients concerning his
compensation and shall resort to judicial action only to prevent imposition, injustice or fraud.
Sadly, for not so large a sum owed to him by complainant, respondent lawyer failed to act in
accordance with the demands of the Code.

The Court, however, does not agree with complainants contention that the maximum penalty
of disbarment should be imposed on respondent lawyer. The power to disbar must be
exercised with great caution. Only in a clear case of misconduct that seriously affects the
standing and character of the lawyer as an officer of the Court and member of the bar will
disbarment be imposed as a penalty. It should never be decreed where a lesser penalty, such
as temporary suspension, would accomplish the end desired.[12] In the present case,
reprimand is deemed sufficient.

WHEREFORE, in view of the foregoing, respondent Atty. Juan S. Dealca is REPRIMANDED with a
warning that repetition of the same act will be dealt with more severely.

SO ORDERED.
[A. C. No. 5485. March 16, 2005]

ELMER CANOY, complainant, vs. ATTY. JOSE MAX ORTIZ, respondent.

DECISION
TINGA, J.:

There are no good reasons that would justify a lawyer virtually abandoning the cause of the
client in the midst of litigation without even informing the client of the fact or cause of
desertion. That the lawyer forsook his legal practice on account of what might be perceived as
a higher calling, election to public office, does not mitigate the dereliction of professional duty.
Suspension from the practice is the usual penalty, and there is no reason to deviate from the
norm in this case.

A Complaint[1] dated 10 April 2001 was filed with the Office of the Bar Confidant by Elmer
Canoy (Canoy) accusing Atty. Jose Max Ortiz (Atty. Ortiz) of misconduct and malpractice. It was
alleged that Canoy filed a complaint for illegal dismissal against his former employer, Coca
Cola Bottlers Philippines. The complaint was filed with the National Labor Relations
Commission (NLRC) Regional Arbitration Board VI in Bacolod City.[2] Atty. Ortiz appeared as
counsel for Canoy in this proceeding. In 1998, the labor arbiter hearing the complaint ordered
the parties to submit their respective position papers. Canoy submitted all the necessary
documents and records to Atty. Ortiz for the preparation of the position paper. Thereafter, he
made several unfruitful visits to the office of Atty. Ortiz to follow-up the progress of the case.
After a final visit at the office of Atty. Ortiz in April of 2000, during which Canoy was told to
come back as his lawyer was not present, Canoy decided to follow-up the case himself with
the NLRC. He was shocked to learn that his complaint was actually dismissed way back in
1998, for failure to prosecute, the parties not having submitted their position papers.[3] The
dismissal was without prejudice. Canoy alleged that Atty. Ortiz had never communicated to
him about the status of the case, much less the fact that he failed to submit the position
paper.

The Comment[4] filed by Atty. Ortiz is the epitome of self-hagiography. He informs the Court
that since commencing his law practice in 1987, he has mostly catered to indigent and low-
income clients, at considerable financial sacrifice to himself. Atty. Ortiz claims that for more
than ten years, his law office was a virtual adjunct of the Public Attorneys Office with its
steady stream of non-paying clients in the hundreds or thousands.[5] At the same time, he
hosted a legal assistance show on the radio, catering to far-flung municipalities and reaching
the people who need legal advice and assistance.[6] Atty. Ortiz pursued on with this lifestyle
until his election as Councilor of Bacolod City, a victory which he generously attributes to the
help of the same people whom he had helped by way of legal assistance before.[7]

Canoy was among those low-income clients whom Atty. Ortiz deigned to represent. The lawyer
was apparently confident that the illegal dismissal case would eventually be resolved by way
of compromise. He claims having prepared the position paper of Canoy, but before he could
submit the same, the Labor Arbiter had already issued the order dismissing the case.[8] Atty.
Ortiz admits though that the period within which to file the position paper had already lapsed.
He attributes this failure to timely file the position paper to the fact that after his election as
Councilor of Bacolod City, he was frankly preoccupied with both his functions as a local
government official and as a practicing lawyer. Eventually, his desire to help was beyond
physical limitations, and he withdrew from his other cases and his free legal services.[9]

According to Atty. Ortiz, Mr. Canoy should have at least understood that during all that time,
he was free to visit or call the office and be entertained by the secretary as [he] would
normally report to the office in the afternoon as he had to attend to court trials and report to
the Sanggunian office.[10] He states that it was his policy to inform clients that they should
be the ones to follow-up their cases with his office, as it would be too difficult and a financial
burden to attend making follow-ups with hundreds of clients, mostly indigents with only two
office personnel.[11]

Nonetheless, Atty. Ortiz notes that the dismissal of Canoys complaint was without prejudice,
thus the prescriptive period had been tolled. He claims not being able to remember whether
he immediately informed Canoy of the dismissal of the case, though as far as he could recall,
Canoy had conveyed a message to him that he had a lawyer to handle the case, thus his
office did not insist on refiling the same.[12]

The matter was referred to the Integrated Bar of the Philippines (IBP) for investigation, report
and recommendation.[13] Canoy eventually submitted a motion withdrawing the complaint,
but this was not favorably acted upon by the IBP in view of the rule that the investigation of a
case shall not be interrupted or terminated by reason of withdrawal of the charges.[14]
Eventually, the investigating commissioner concluded that clearly, the records show that
[Atty. Ortiz] failed to exercise that degree of competence and diligence required of him in
prosecuting his clients (sic) claim, and recommended that Atty. Ortiz be reprimanded.[15] The
IBP Commission on Discipline adopted the recommendation, with the slight modification that
Atty. Ortiz be likewise warned that a repetition of the same negligence shall be dealt with
more severely in the future.

The Court is sensitive to the difficulties in obtaining legal representation for indigent or low-
income litigants. Apart from the heroic efforts of government entities such as the Public
Attorneys Office, groups such as the IBP National Committee on Legal Aid and the Office of
Legal Aid of the UP College of Law have likewise been at the forefront in the quest to provide
legal representation for those who could not otherwise afford the services of lawyers. The
efforts of private practitioners who assist in this goal are especially commendable, owing to
their sacrifice in time and resources beyond the call of duty and without expectation of
pecuniary reward.

Yet, the problem of under-representation of indigent or low-income clients is just as grievous

as that of non-representation. Admirable as the apparent focus of Atty. Ortizs legal practice
may have been, his particular representation of Canoy in the latters illegal dismissal case
leaves much to be desired.

Several of the canons and rules in the Code of Professional Responsibility guard against the
sort of conduct displayed by Atty. Ortiz with respect to the handling of Canoys case.

CANON 17A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE
MINDFUL OF THE TRUST AND CONFIDENCE REPOSED IN HIM.

CANON 18A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.

...

Rule 18.03A lawyer shall not neglect a legal matter entrusted to him, and his negligence in
connection therewith shall render him liable.

Rule 18.04A lawyer shall keep the client informed of the status of his case and shall respond
within a reasonable time to the clients request for information.
...

CANON 22A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR GOOD CAUSE AND UPON
NOTICE APPROPRIATE IN THE CIRCUMSTANCES.

...

Rule 22.02 A lawyer who withdraws or is discharged shall, subject to a retainer lien,
immediately turn over all papers and property to which the client is entitled, and shall
cooperate with his successor in the orderly transfer of the matter, including all information
necessary for the proper handling of the matter.

Atty. Ortiz should have filed the position paper on time, owing to his duty as counsel of Canoy
to attend to this legal matter entrusted to him. His failure to do so constitutes a violation of
Rule 18.03 of the Code of Professional Responsibility.

Once he agrees to take up the cause of a client, a lawyer owes fidelity to such cause and must
always be mindful of the trust and confidence reposed in him. He must serve the client with
competence and diligence and champion the latter's cause with wholehearted fidelity, care
and devotion. Elsewise stated, he owes entire devotion to the interest of the client, warm zeal
in the maintenance and defense of his client's rights, and the exertion of his utmost learning
and ability to the end that nothing be taken or withheld from his client, save by the rules of
law, legally applied. This simply means that his client is entitled to the benefit of any and
every remedy and defense that is authorized by the law of the land and he may expect his
lawyer to assert every such remedy or defense. If much is demanded from an attorney, it is
because the entrusted privilege to practice law carries with it the correlative duties not only to
the client but also to the court, to the bar and to the public. A lawyer who performs his duty
with diligence and candor not only protects the interest of his client; he also serves the ends
of justice, does honor to the bar and helps maintain the respect of the community to the legal
profession.[16]

If indeed Atty. Ortizs schedule, workload, or physical condition was such that he would not be
able to make a timely filing, he should have informed Canoy of such fact. The relationship of
lawyer-client being one of confidence, there is ever present the need for the client to be
adequately and fully informed of the developments of the case and should not be left in the
dark as to the mode and manner in which his/her interests are being defended.[17]

There could have been remedies undertaken to this inability of Atty. Ortiz to file on time the
position paper had Canoy been told of such fact, such as a request for more time to file the
position paper, or maybe even the hiring of collaborating counsel or substitution of Atty. Ortiz
as counsel. Since Atty. Ortiz did not exercise the necessary degree of care by either filing the
position paper on time or informing Canoy that the paper could not be submitted seasonably,
the ignominy of having the complaint dismissed for failure to prosecute could not be avoided.

That the case was dismissed without prejudice, thus allowing Canoy to refile the case, hardly
serves to mitigate the liability of Atty. Ortiz, as the failure to file the position paper is per se a
violation of Rule 18.03.[18]

Neither is the Court mollified by the circumstance of Atty. Ortizs election as a City Councilor of
Bacolod City, as his adoption of these additional duties does not exonerate him of his
negligent behavior. The Code of Professional Responsibility does allow a lawyer to withdraw
his legal services if the lawyer is elected or appointed to a public office.[19] Statutes
expressly prohibit the occupant of particular public offices from engaging in the practice of
law, such as governors and mayors,[20] and in such instance, the attorney-client relationship
is terminated.[21] However, city councilors are allowed to practice their profession or engage
in any occupation except during session hours, and in the case of lawyers such as Atty. Ortiz,
subject to certain prohibitions which are not relevant to this case.[22] In such case, the lawyer
nevertheless has the choice to withdraw his/her services.[23] Still, the severance of the
relation of attorney-client is not effective until a notice of discharge by the client or a
manifestation clearly indicating that purpose is filed with the court or tribunal, and a copy
thereof served upon the adverse party, and until then, the lawyer continues to be counsel in
the case.[24]

Assuming that Atty. Ortiz was justified in terminating his services, he, however, cannot just do
so and leave complainant in the cold unprotected.[25] Indeed, Rule 22.02 requires that a
lawyer who withdraws or is discharged shall, subject to a lien, immediately turn over all
papers and property to which the client is entitled, and shall cooperate with his successor in
the orderly transfer of the matter. Atty. Ortiz claims that the reason why he took no further
action on the case was that he was informed that Canoy had acquired the services of another
counsel. Assuming that were true, there was no apparent coordination between Atty. Ortiz and
this new counsel.

In fact, it took nearly two years before Canoy had learned that the position paper had not
been filed and that the case had been dismissed. This was highly irresponsible of Atty. Ortiz,
much more so considering that Canoy was one of the indigent clients whom Atty. Ortiz proudly
claims as his favored clientele. It does not escape the Courts attention that Atty. Ortiz faults
Canoy for not adequately following up the case with his office.[26] He cannot now shift the
blame to complainant for failing to inquire about the status of the case, since, as stated
above, it was his duty as lawyer to inform his clients of the status of cases entrusted to him.
[27]

The appropriate sanction is within the sound discretion of this Court. In cases of similar
nature, the penalty imposed by the Court consisted of either a reprimand, a fine of five
hundred pesos with warning, suspension of three months, six months, and even disbarment in
aggravated cases.[28] Given the circumstances, the Court finds the penalty recommended by
the IBP too lenient and instead suspends Atty. Ortiz from the practice of law for one (1) month.
The graver penalty of suspension is warranted in lieu of an admonition or a reprimand
considering that Atty. Ortizs undisputed negligence in failing to timely file the position paper
was compounded by his failure to inform Canoy of such fact, and the successive dismissal of
the complaint.

Lawyers who devote their professional practice in representing litigants who could ill afford
legal services deserve commendation. However, this mantle of public service will not deliver
the lawyer, no matter how well-meaning, from the consequences of negligent acts. It is not
enough to say that all pauper litigants should be assured of legal representation. They
deserve quality representation as well.

WHEREFORE, respondent Atty. Jose Max S. Ortiz is ordered SUSPENDED from the practice of
law for one (1) month from notice, with the warning that a repetition of the same negligence
will be dealt with more severely. Let a copy of this decision be attached to respondent's
personal record in the Office of the Bar Confidant and copies be furnished to all chapters of
the Integrated Bar of the Philippines and to all the courts in the land. SO ORDERED.