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Attorney’s fees/ Attorney-client Relationship and/or built with funds exclusively belonging to you, that is

to say, the houses and lot pertained to your paraphernal


1.) G.R. No. L-961 September 21, 1949 estate;

BLANDINA GAMBOA HILADO, petitioner, (b) That on May 3, 1943, the legal title to the property was
vs. with your husband, Mr. Serafin P. Hilado; and
JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO,
JACOB ASSAD and SELIM JACOB ASSAD, respondents. (c) That the property was sold by Mr. Hilado without your
knowledge on the aforesaid date of May 3, 1943.
Delgado, Dizon and Flores for petitioner.
Vicente J. Francisco for respondents. Upon the foregoing facts, I am of the opinion that your
action against Mr. Assad will not ordinarily prosper. Mr.
TUASON, J.: Assad had the right to presume that your husband had the
legal right to dispose of the property as the transfer
certificate of title was in his name. Moreover, the price of
It appears that on April 23, 1945, Blandina Gamboa Hilado brought P110,000 in Japanese military notes, as of May 3, 1943,
an action against Selim Jacob Assad to annul the sale of several does not quite strike me as so grossly inadequate as to
houses and lot executed during the Japanese occupation by Mrs. warrant the annulment of the sale. I believe, lastly, that the
Hilado's now deceased husband. transaction cannot be avoided merely because it was made
during the Japanese occupation, nor on the simple
On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer allegation that the real purchaser was not a citizen of the
on behalf of the defendant; and on June 15, Attorneys Delgado, Philippines. On his last point, furthermore, I expect that
Dizon, Flores and Rodrigo registered their appearance as counsel for you will have great difficulty in proving that the real
the plaintiff. On October 5, these attorneys filed an amended purchaser was other than Mr. Assad, considering that death
complaint by including Jacob Assad as party defendant. has already sealed your husband's lips and he cannot now
testify as to the circumstances of the sale.
On January 28, 1946, Attorney Francisco entered his appearance as
attorney of record for the defendant in substitution for Attorney For the foregoing reasons, I regret to advise you that I
Ohnick, Velilla and Balonkita who had withdrawn from the case. cannot appear in the proceedings in your behalf. The
records of the case you loaned to me are herewith returned.
On May 29, Attorney Dizon, in the name of his firm, wrote Attorney
Francisco urging him to discontinue representing the defendants on Yours very truly,
the ground that their client had consulted with him about her case, on
which occasion, it was alleged, "she turned over the papers" to
Attorney Francisco, and the latter sent her a written opinion. Not (Sgd.) VICENTE J. FRANCISCO
receiving any answer to this suggestion, Attorney Delgado, Dizon,
Flores and Rodrigo on June 3, 1946, filed a formal motion with the
court, wherein the case was and is pending, to disqualify Attorney VJF/Rag.
Francisco.
In his answer to plaintiff's attorneys' complaint, Attorney Francisco
Attorney Francisco's letter to plaintiff, mentioned above and alleged that about May, 1945, a real estate broker came to his office
identified as Exhibit A, is in full as follows: in connection with the legal separation of a woman who had been
deserted by her husband, and also told him (Francisco) that there was
a pending suit brought by Mrs. Hilado against a certain Syrian to
VICENTE J. FRANCISCO annul the sale of a real estate which the deceased Serafin Hilado had
Attorney-at-Law made to the Syrian during the Japanese occupation; that this woman
1462 Estrada, Manila asked him if he was willing to accept the case if the Syrian should
give it to him; that he told the woman that the sales of real property
during the Japanese regime were valid even though it was paid for in
July 13, 1945.
Japanese military notes; that this being his opinion, he told his visitor
he would have no objection to defending the Syrian;

Mrs. Blandina Gamboa Hilado That one month afterwards, Mrs. Hilado came to see him about a suit
Manila, Philippines
she had instituted against a certain Syrian to annul the conveyance of
a real estate which her husband had made; that according to her the
My dear Mrs. Hilado: case was in the hands of Attorneys Delgado and Dizon, but she
wanted to take it away from them; that as he had known the plaintiff's
From the papers you submitted to me in connection with deceased husband he did not hesitate to tell her frankly that hers was
civil case No. 70075 of the Court of First Instance of a lost case for the same reason he had told the broker; that Mrs.
Manila, entitled "Blandina Gamboa Hilado vs. S. J. Assad," Hilado retorted that the basis of her action was not that the money
I find that the basic facts which brought about the paid her husband was Japanese military notes, but that the premises
controversy between you and the defendant therein are as were her private and exclusive property; that she requested him to
follows: read the complaint to be convinced that this was the theory of her
suit; that he then asked Mrs. Hilado if there was a Torrens title to the
property and she answered yes, in the name of her husband; that he
(a) That you were the equitable owner of the property told Mrs. Hilado that if the property was registered in her husband's
described in the complaint, as the same was purchased favor, her case would not prosper either;
That some days afterward, upon arrival at his law office on Estrada the view to obtaining professional advice or assistance, and
street, he was informed by Attorney Federico Agrava, his assistant, the attorney voluntarily permits or acquiesces in such
that Mrs. Hilado had dropped in looking for him and that when he, consultation, then the professional employment must be
Agrava, learned that Mrs. Hilado's visit concerned legal matters he regarded as established. . . . (5 Jones Commentaries on
attended to her and requested her to leave the "expediente" which she Evidence, pp. 4118-4119.)
was carrying, and she did; that he told Attorney Agrava that the firm
should not handle Mrs. Hilado's case and he should return the papers, An attorney is employed-that is, he is engaged in his
calling Agrava's attention to what he (Francisco) already had said to professional capacity as a lawyer or counselor-when he is
Mrs. Hilado; listening to his client's preliminary statement of his case, or
when he is giving advice thereon, just as truly as when he is
That several days later, the stenographer in his law office, Teofilo drawing his client's pleadings, or advocating his client's
Ragodon, showed him a letter which had been dictated in English by cause in open court. (Denver Tramway Co. vs. Owens, 20
Mr. Agrava, returning the "expedients" to Mrs. Hilado; that Ragodon Colo., 107; 36 P., 848.)
told him (Attorney Francisco) upon Attorney Agrava's request that
Agrava thought it more proper to explain to Mrs. Hilado the reasons Formality is not an essential element of the employment of
why her case was rejected; that he forthwith signed the letter without an attorney. The contract may be express or implied and it
reading it and without keeping it for a minute in his possession; that is sufficient that the advice and assistance of the attorney is
he never saw Mrs. Hilado since their last meeting until she talked to sought and received, in matters pertinent to his profession.
him at the Manila Hotel about a proposed extrajudicial settlement of An acceptance of the relation is implied on the part of the
the case; attorney from his acting in behalf of his client in pursuance
of a request by the latter. (7 C. J. S., 848-849; see Hirach
That in January, 1946, Assad was in his office to request him to Bros. and Co. vs. R. E. Kennington Co., 88 A. L. R., 1.)
handle his case stating that his American lawyer had gone to the
States and left the case in the hands of other attorneys; that he Section 26 (e), Rule 123 of the Rules of Court provides that "an
accepted the retainer and on January 28, 1946, entered his attorney cannot, without the consent of his client, be examined as to
appearance. any communication made by the client to him, or his advice given
thereon in the course of professional employment;" and section 19 (e)
Attorney Francisco filed an affidavit of stenographer Ragodon in of Rule 127 imposes upon an attorney the duty "to maintain inviolate
corroboration of his answer. the confidence, and at every peril to himself, to preserve the secrets
of his client." There is no law or provision in the Rules of Court
The judge trying the case, Honorable Jose Gutierrez David, later prohibiting attorneys in express terms from acting on behalf of both
promoted to the Court of Appeals, dismissed the complaint. His parties to a controversy whose interests are opposed to each other, but
Honor believed that no information other than that already alleged in such prohibition is necessarily implied in the injunctions above
plaintiff's complaint in the main cause was conveyed to Attorney quoted. (In re De la Rosa, 27 Phil., 258.) In fact the prohibition
Francisco, and concluded that the intercourse between the plaintiff derives validity from sources higher than written laws and rules. As
and the respondent did not attain the point of creating the relation of has been aptly said in In re Merron, 22 N. M., 252, L.R.A., 1917B,
attorney and client. 378, "information so received is sacred to the employment to which it
pertains," and "to permit it to be used in the interest of another, or,
worse still, in the interest of the adverse party, is to strike at the
Stripped of disputed details and collateral matters, this much is element of confidence which lies at the basis of, and affords the
undoubted: That Attorney Francisco's law firm mailed to the plaintiff essential security in, the relation of attorney and client."
a written opinion over his signature on the merits of her case; that this
opinion was reached on the basis of papers she had submitted at his
office; that Mrs. Hilado's purpose in submitting those papers was to That only copies of pleadings already filed in court were furnished to
secure Attorney Francisco's professional services. Granting the facts Attorney Agrava and that, this being so, no secret communication
to be no more than these, we agree with petitioner's counsel that the was transmitted to him by the plaintiff, would not vary the situation
relation of attorney and client between Attorney Francisco and Mrs. even if we should discard Mrs. Hilado's statement that other papers,
Hilado ensued. The following rules accord with the ethics of the legal personal and private in character, were turned in by her. Precedents
profession and meet with our approval: are at hand to support the doctrine that the mere relation of attorney
and client ought to preclude the attorney from accepting the opposite
party's retainer in the same litigation regardless of what information
In order to constitute the relation (of attorney and client) a was received by him from his first client.
professional one and not merely one of principal and agent,
the attorneys must be employed either to give advice upon
a legal point, to prosecute or defend an action in court of The principle which forbids an attorney who has been
justice, or to prepare and draft, in legal form such papers as engaged to represent a client from thereafter appearing on
deeds, bills, contracts and the like. (Atkinson vs. Howlett, behalf of the client's opponent applies equally even though
11 Ky. Law Rep. (abstract), 364; cited in Vol. 88, A. L. R., during the continuance of the employment nothing of a
p. 6.) confidential nature was revealed to the attorney by the
client. (Christian vs. Waialua Agricultural Co., 30 Hawaii,
553, Footnote 7, C. J. S., 828.)
To constitute professional employment it is not essential
that the client should have employed the attorney
professionally on any previous occasion. . . . It is not Where it appeared that an attorney, representing one party
necessary that any retainer should have been paid, in litigation, had formerly represented the adverse party
promised, or charged for; neither is it material that the with respect to the same matter involved in the litigation,
attorney consulted did not afterward undertake the case the court need not inquire as to how much knowledge the
about which the consultation was had. If a person, in attorney acquired from his former during that relationship,
respect to his business affairs or troubles of any kind, before refusing to permit the attorney to represent the
consults with his attorney in his professional capacity with
adverse party. (Brown vs. Miller, 52 App. D. C. 330; 286, a distinguished member, "into public disrepute and suspicion and
F. 994.) undermine the integrity of justice."

In order that a court may prevent an attorney from There is in legal practice what called "retaining fee," the purpose of
appearing against a former client, it is unnecessary that the which stems from the realization that the attorney is disabled from
ascertain in detail the extent to which the former client's acting as counsel for the other side after he has given professional
affairs might have a bearing on the matters involved in the advice to the opposite party, even if he should decline to perform the
subsequent litigation on the attorney's knowledge thereof. contemplated services on behalf of the latter. It is to prevent undue
(Boyd vs. Second Judicial Dist. Court, 274 P., 7; 51 Nev., hardship on the attorney resulting from the rigid observance of the
264.) rule that a separate and independent fee for consultation and advice
was conceived and authorized. "A retaining fee is a preliminary fee
This rule has been so strictly that it has been held an given to an attorney or counsel to insure and secure his future
attorney, on terminating his employment, cannot thereafter services, and induce him to act for the client. It is intended to
act as counsel against his client in the same general matter, remunerate counsel for being deprived, by being retained by one
even though, while acting for his former client, he acquired party, of the opportunity of rendering services to the other and of
no knowledge which could operate to his client's receiving pay from him, and the payment of such fee, in the absence
disadvantage in the subsequent adverse employment. of an express understanding to the contrary, is neither made nor
(Pierce vs. Palmer [1910], 31 R. I., 432; 77 Atl., 201, Ann. received in payment of the services contemplated; its payment has no
Cas., 1912S, 181.) relation to the obligation of the client to pay his attorney for the
services which he has retained him to perform." (7 C.J.S., 1019.)
Communications between attorney and client are, in a great number
of litigations, a complicated affair, consisting of entangled relevant The defense that Attorney Agrava wrote the letter Exhibit A and that
and irrelevant, secret and well known facts. In the complexity of what Attorney Francisco did not take the trouble of reading it, would not
is said in the course of the dealings between an attorney and a client, take the case out of the interdiction. If this letter was written under
inquiry of the nature suggested would lead to the revelation, in the circumstances explained by Attorney Francisco and he was
advance of the trial, of other matters that might only further prejudice unaware of its contents, the fact remains that his firm did give Mrs.
the complainant's cause. And the theory would be productive of other Hilado a formal professional advice from which, as heretofore
un salutary results. To make the passing of confidential demonstrated, emerged the relation of attorney and client. This letter
communication a condition precedent; i.e., to make the employment binds and estop him in the same manner and to the same degree as if
conditioned on the scope and character of the knowledge acquired by he personally had written it. An information obtained from a client by
an attorney in determining his right to change sides, would not a member or assistant of a law firm is information imparted to the
enhance the freedom of litigants, which is to be sedulously fostered, firm. (6 C. J., 628; 7 C. J. S., 986.) This is not a mere fiction or an
to consult with lawyers upon what they believe are their rights in arbitrary rule; for such member or assistant, as in our case, not only
litigation. The condition would of necessity call for an investigation acts in the name and interest of the firm, but his information, by the
of what information the attorney has received and in what way it is or nature of his connection with the firm is available to his associates or
it is not in conflict with his new position. Litigants would in employers. The rule is all the more to be adhered to where, as in the
consequence be wary in going to an attorney, lest by an unfortunate present instance, the opinion was actually signed by the head of the
turn of the proceedings, if an investigation be held, the court should firm and carries his initials intended to convey the impression that it
accept the attorney's inaccurate version of the facts that came to him. was dictated by him personally. No progress could be hoped for in
"Now the abstinence from seeking legal advice in a good cause is by "the public policy that the client in consulting his legal adviser ought
hypothesis an evil which is fatal to the administration of justice." to be free from apprehension of disclosure of his confidence," if the
(John H. Wigmore's Evidence, 1923, Section 2285, 2290, 2291.) prohibition were not extended to the attorney's partners, employers or
assistants.
Hence the necessity of setting down the existence of the bare
relationship of attorney and client as the yardstick for testing The fact that petitioner did not object until after four months had
incompatibility of interests. This stern rule is designed not alone to passed from the date Attorney Francisco first appeared for the
prevent the dishonest practitioner from fraudulent conduct, but as defendants does not operate as a waiver of her right to ask for his
well to protect the honest lawyer from unfounded suspicion of disqualification. In one case, objection to the appearance of an
unprofessional practice. (Strong vs. Int. Bldg., etc.; Ass'n, 183 Ill., attorney was allowed even on appeal as a ground for reversal of the
97; 47 L.R.A., 792.) It is founded on principles of public policy, on judgment. In that case, in which throughout the conduct of the cause
good taste. As has been said in another case, the question is not in the court below the attorney had been suffered so to act without
necessarily one of the rights of the parties, but as to whether the objection, the court said: "We are all of the one mind, that the right of
attorney has adhered to proper professional standard. With these the appellee to make his objection has not lapsed by reason of failure
thoughts in mind, it behooves attorneys, like Caesar's wife, not only to make it sooner; that professional confidence once reposed can
to keep inviolate the client's confidence, but also to avoid the never be divested by expiration of professional employment."
appearance of treachery and double-dealing. Only thus can litigants (Nickels vs. Griffin, 1 Wash. Terr., 374, 321 A. L. R. 1316.)
be encouraged to entrust their secrets to their attorneys which is of
paramount importance in the administration of justice. The complaint that petitioner's remedy is by appeal and not by
certiorari deserves scant attention. The courts have summary
So without impugning respondent's good faith, we nevertheless can jurisdiction to protect the rights of the parties and the public from any
not sanction his taking up the cause of the adversary of the party who conduct of attorneys prejudicial to the administration of the justice.
had sought and obtained legal advice from his firm; this, not The summary jurisdiction of the courts over attorneys is not confined
necessarily to prevent any injustice to the plaintiff but to keep above to requiring them to pay over money collected by them but embraces
reproach the honor and integrity of the courts and of the bar. Without authority to compel them to do whatever specific acts may be
condemning the respondents conduct as dishonest, corrupt, or incumbent upon them in their capacity of attorneys to perform. The
fraudulent, we do believe that upon the admitted facts it is highly in courts from the general principles of equity and policy, will always
expedient. It had the tendency to bring the profession, of which he is look into the dealings between attorneys and clients and guard the
latter from any undue consequences resulting from a situation in
which they may stand unequal. The courts acts on the same principles on April 11, 1979, when in truth, she is legally married to Ruben G.
whether the undertaking is to appear, or, for that matter, not to Mercado and their marriage took place on April 11, 1978.
appear, to answer declaration, etc. (6 C.J., 718 C.J.S., 1005.) This
summary remedy against attorneys flows from the facts that they are Complainant denied the accusations of respondent against her. She
officers of the court where they practice, forming a part of the denied using any other name than "Rosa F. Mercado." She also
machinery of the law for the administration of justice and as such insisted that she has gotten married only once, on April 11, 1978, to
subject to the disciplinary authority of the courts and to its orders and Ruben G. Mercado.
directions with respect to their relations to the court as well as to their
clients. (Charest vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note
26, 7 C. J. S., 1007.) Attorney stand on the same footing as sheriffs In addition, complainant Mercado cited other charges against
and other court officers in respect of matters just mentioned. respondent that are pending before or decided upon by other tribunals
– (1) libel suit before the Office of the City Prosecutor, Pasig City;6
(2) administrative case for dishonesty, grave misconduct, conduct
We conclude therefore that the motion for disqualification should be prejudicial to the best interest of the service, pursuit of private
allowed. It is so ordered, without costs. business, vocation or profession without the permission required by
Civil Service rules and regulations, and violations of the "Anti-Graft
2.) A.C. No. 5108 May 26, 2005 and Corrupt Practices Act," before the then Presidential Commission
Against Graft and Corruption;7 (3) complaint for dishonesty, grave
misconduct, and conduct prejudicial to the best interest of the service
ROSA F. MERCADO, complainant, before the Office of the Ombudsman, where he was found guilty of
vs. misconduct and meted out the penalty of one month suspension
ATTY. JULITO D. VITRIOLO, respondent. without pay;8 and, (4) the Information for violation of Section 7(b)(2)
of Republic Act No. 6713, as amended, otherwise known as the Code
DECISION of Conduct and Ethical Standards for Public Officials and Employees
before the Sandiganbayan.9
PUNO, J.:
Complainant Mercado alleged that said criminal complaint for
Rosa F. Mercado filed the instant administrative complaint against falsification of public document (I.S. No. PSG 99-9823) disclosed
Atty. Julito D. Vitriolo, seeking his disbarment from the practice of confidential facts and information relating to the civil case for
law. The complainant alleged that respondent maliciously instituted a annulment, then handled by respondent Vitriolo as her counsel. This
criminal case for falsification of public document against her, a prompted complainant Mercado to bring this action against
former client, based on confidential information gained from their respondent. She claims that, in filing the criminal case for
attorney-client relationship. falsification, respondent is guilty of breaching their privileged and
confidential lawyer-client relationship, and should be disbarred.
Let us first hearken to the facts.
Respondent filed his Comment/Motion to Dismiss on November 3,
1999 where he alleged that the complaint for disbarment was all
Complainant is a Senior Education Program Specialist of the hearsay, misleading and irrelevant because all the allegations leveled
Standards Development Division, Office of Programs and Standards against him are subject of separate fact-finding bodies. Respondent
while respondent is a Deputy Executive Director IV of the claimed that the pending cases against him are not grounds for
Commission on Higher Education (CHED).1 disbarment, and that he is presumed to be innocent until proven
otherwise.10 He also states that the decision of the Ombudsman
Complainant's husband filed Civil Case No. 40537 entitled "Ruben finding him guilty of misconduct and imposing upon him the penalty
G. Mercado v. Rosa C. Francisco," for annulment of their marriage of suspension for one month without pay is on appeal with the Court
with the Regional Trial Court (RTC) of Pasig City. This annulment of Appeals. He adds that he was found guilty, only of simple
case had been dismissed by the trial court, and the dismissal became misconduct, which he committed in good faith.11
final and executory on July 15, 1992.2
In addition, respondent maintains that his filing of the criminal
In August 1992, Atty. Anastacio P. de Leon, counsel of complainant, complaint for falsification of public documents against complainant
died. On February 7, 1994, respondent entered his appearance before does not violate the rule on privileged communication between
the trial court as collaborating counsel for complainant.3 attorney and client because the bases of the falsification case are two
certificates of live birth which are public documents and in no way
On March 16, 1994, respondent filed his Notice of Substitution of connected with the confidence taken during the engagement of
Counsel,4 informing the RTC of Pasig City that he has been respondent as counsel. According to respondent, the complainant
appointed as counsel for the complainant, in substitution of Atty. de confided to him as then counsel only matters of facts relating to the
Leon. annulment case. Nothing was said about the alleged falsification of
the entries in the birth certificates of her two daughters. The birth
certificates are filed in the Records Division of CHED and are
It also appears that on April 13, 1999, respondent filed a criminal accessible to anyone.12
action against complainant before the Office of the City Prosecutor,
Pasig City, entitled "Atty. Julito Vitriolo, et al. v. Rose Dela Cruz F.
Mercado," and docketed as I.S. No. PSG 99-9823, for violation of In a Resolution dated February 9, 2000, this Court referred the
Articles 171 and 172 (falsification of public document) of the administrative case to the Integrated Bar of the Philippines (IBP) for
Revised Penal Code.5 Respondent alleged that complainant made investigation, report and recommendation.13
false entries in the Certificates of Live Birth of her children, Angelica
and Katelyn Anne. More specifically, complainant allegedly The IBP Commission on Bar Discipline set two dates for hearing but
indicated in said Certificates of Live Birth that she is married to a complainant failed to appear in both. Investigating Commissioner
certain Ferdinand Fernandez, and that their marriage was solemnized Rosalina R. Datiles thus granted respondent's motion to file his
memorandum, and the case was submitted for resolution based on the permanently protected (7) from disclosure by himself or by
pleadings submitted by the parties.14 the legal advisor, (8) except the protection be waived.22

On June 21, 2003, the IBP Board of Governors approved the report of In fine, the factors are as follows:
investigating commissioner Datiles, finding the respondent guilty of
violating the rule on privileged communication between attorney and (1) There exists an attorney-client relationship, or a prospective
client, and recommending his suspension from the practice of law for attorney-client relationship, and it is by reason of this relationship
one (1) year. that the client made the communication.

On August 6, 2003, complainant, upon receiving a copy of the IBP Matters disclosed by a prospective client to a lawyer are protected by
report and recommendation, wrote Chief Justice Hilario Davide, Jr., a the rule on privileged communication even if the prospective client
letter of desistance. She stated that after the passage of so many does not thereafter retain the lawyer or the latter declines the
years, she has now found forgiveness for those who have wronged employment.23 The reason for this is to make the prospective client
her. free to discuss whatever he wishes with the lawyer without fear that
what he tells the lawyer will be divulged or used against him, and for
At the outset, we stress that we shall not inquire into the merits of the the lawyer to be equally free to obtain information from the
various criminal and administrative cases filed against respondent. It prospective client.24
is the duty of the tribunals where these cases are pending to
determine the guilt or innocence of the respondent. On the other hand, a communication from a (prospective) client to a
lawyer for some purpose other than on account of the (prospective)
We also emphasize that the Court is not bound by any withdrawal of attorney-client relation is not privileged. Instructive is the case of
the complaint or desistance by the complainant. The letter of Pfleider v. Palanca,25 where the client and his wife leased to their
complainant to the Chief Justice imparting forgiveness upon attorney a 1,328-hectare agricultural land for a period of ten years. In
respondent is inconsequential in disbarment proceedings. their contract, the parties agreed, among others, that a specified
portion of the lease rentals would be paid to the client-lessors, and the
We now resolve whether respondent violated the rule on privileged remainder would be delivered by counsel-lessee to client's listed
communication between attorney and client when he filed a criminal creditors. The client alleged that the list of creditors which he had
case for falsification of public document against his former client. "confidentially" supplied counsel for the purpose of carrying out the
terms of payment contained in the lease contract was disclosed by
counsel, in violation of their lawyer-client relation, to parties whose
A brief discussion of the nature of the relationship between attorney interests are adverse to those of the client. As the client himself,
and client and the rule on attorney-client privilege that is designed to however, states, in the execution of the terms of the aforesaid lease
protect such relation is in order. contract between the parties, he furnished counsel with the
"confidential" list of his creditors. We ruled that this indicates that
In engaging the services of an attorney, the client reposes on him client delivered the list of his creditors to counsel not because of the
special powers of trust and confidence. Their relationship is strictly professional relation then existing between them, but on account of
personal and highly confidential and fiduciary. The relation is of such the lease agreement. We then held that a violation of the confidence
delicate, exacting and confidential nature that is required by necessity that accompanied the delivery of that list would partake more of a
and public interest.15 Only by such confidentiality and protection will private and civil wrong than of a breach of the fidelity owing from a
a person be encouraged to repose his confidence in an attorney. The lawyer to his client.
hypothesis is that abstinence from seeking legal advice in a good
cause is an evil which is fatal to the administration of justice.16 Thus, (2) The client made the communication in confidence.
the preservation and protection of that relation will encourage a client
to entrust his legal problems to an attorney, which is of paramount
importance to the administration of justice.17 One rule adopted to The mere relation of attorney and client does not raise a presumption
serve this purpose is the attorney-client privilege: an attorney is to of confidentiality.26 The client must intend the communication to be
keep inviolate his client's secrets or confidence and not to abuse confidential.27
them.18 Thus, the duty of a lawyer to preserve his client's secrets and
confidence outlasts the termination of the attorney-client A confidential communication refers to information transmitted by
relationship,19 and continues even after the client's death.20 It is the voluntary act of disclosure between attorney and client in confidence
glory of the legal profession that its fidelity to its client can be and by means which, so far as the client is aware, discloses the
depended on, and that a man may safely go to a lawyer and converse information to no third person other than one reasonably necessary
with him upon his rights or supposed rights in any litigation with for the transmission of the information or the accomplishment of the
absolute assurance that the lawyer's tongue is tied from ever purpose for which it was given.28
disclosing it.21 With full disclosure of the facts of the case by the
client to his attorney, adequate legal representation will result in the Our jurisprudence on the matter rests on quiescent ground. Thus, a
ascertainment and enforcement of rights or the prosecution or defense compromise agreement prepared by a lawyer pursuant to the
of the client's cause. instruction of his client and delivered to the opposing party,29 an offer
and counter-offer for settlement,30 or a document given by a client to
Now, we go to the rule on attorney-client privilege. Dean Wigmore his counsel not in his professional capacity,31 are not privileged
cites the factors essential to establish the existence of the privilege, communications, the element of confidentiality not being present.32
viz:
(3) The legal advice must be sought from the attorney in his
(1) Where legal advice of any kind is sought (2) from a professional capacity.33
professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in The communication made by a client to his attorney must not be
confidence (5) by the client, (6) are at his instance intended for mere information, but for the purpose of seeking legal
advice from his attorney as to his rights or obligations. The to be kept confidential, she disclosed personal secrets and produced
communication must have been transmitted by a client to his attorney copies of a marriage contract, a birth certificate and a baptismal
for the purpose of seeking legal advice.34 certificate, only to be informed later by the respondent that she
(respondent) would refer the matter to a lawyer friend. It was
If the client seeks an accounting service,35 or business or personal malicious, so complainant states, of respondent to have refused
assistance,36 and not legal advice, the privilege does not attach to a handling her case only after she had already heard her secrets.
communication disclosed for such purpose.
Continuing, complainant averred that her friendship with respondent
Applying all these rules to the case at bar, we hold that the evidence soured after her filing, in the later part of 2000, of criminal and
on record fails to substantiate complainant's allegations. We note that disciplinary actions against the latter. What, per complainant's
complainant did not even specify the alleged communication in account, precipitated the filing was when respondent, then a member
confidence disclosed by respondent. All her claims were couched in of the BFP promotion board, demanded a cellular phone in exchange
general terms and lacked specificity. She contends that respondent for the complainant's promotion.
violated the rule on privileged communication when he instituted a
criminal action against her for falsification of public documents According to complainant, respondent, in retaliation to the filing of
because the criminal complaint disclosed facts relating to the civil the aforesaid actions, filed a COUNTER COMPLAINT3 with the
case for annulment then handled by respondent. She did not, Ombudsman charging her (complainant) with violation of Section
however, spell out these facts which will determine the merit of her 3(a) of Republic Act No. 3019,4 falsification of public documents and
complaint. The Court cannot be involved in a guessing game as to the immorality, the last two charges being based on the disclosures
existence of facts which the complainant must prove. complainant earlier made to respondent. And also on the basis of the
same disclosures, complainant further stated, a disciplinary case was
Indeed, complainant failed to attend the hearings at the IBP. Without also instituted against her before the Professional Regulation
any testimony from the complainant as to the specific confidential Commission.
information allegedly divulged by respondent without her consent, it
is difficult, if not impossible to determine if there was any violation Complainant seeks the suspension and/or disbarment of respondent
of the rule on privileged communication. Such confidential for the latter's act of disclosing personal secrets and confidential
information is a crucial link in establishing a breach of the rule on information she revealed in the course of seeking respondent's legal
privileged communication between attorney and client. It is not advice.
enough to merely assert the attorney-client privilege.37 The burden of
proving that the privilege applies is placed upon the party asserting In an order dated October 2, 2002, the IBP Commission on Bar
the privilege.38 Discipline required respondent to file her answer to the complaint.

IN VIEW WHEREOF, the complaint against respondent Atty. In her answer, styled as COUNTER-AFFIDAVIT,5 respondent
Julito D. Vitriolo is hereby DISMISSED for lack of merit. denied giving legal advice to the complainant and dismissed any
suggestion about the existence of a lawyer-client relationship
SO ORDERED. between them. Respondent also stated the observation that the
supposed confidential data and sensitive documents adverted to are in
fact matters of common knowledge in the BFP. The relevant portions
3.) A.C. No. 6711 July 3, 2007 of the answer read:

MA. LUISA HADJULA, complainant, 5. I specifically deny the allegation of F/SUPT. MA.
vs. LUISA C. HADJULA in paragraph 4 of her AFFIDAVIT-
ATTY. ROCELES F. MADIANDA, respondent. COMPLAINT for reason that she never WAS MY
CLIENT nor we ever had any LAWYER-CLIENT
DECISION RELATIONSHIP that ever existed ever since and that
never obtained any legal advice from me regarding her
GARCIA, J.: PERSONAL PROBLEMS or PERSONAL SECRETS. She
likewise never delivered to me legal documents much more
told me some confidential information or secrets. That is
Under consideration is Resolution No. XVI-2004-472 of the Board of because I never entertain LEGAL QUERIES or
Governors, Integrated Bar of the Philippines (IBP), relative to the CONSULTATION regarding PERSONAL MATTERS
complaint for disbarment filed by herein complainant Ma. Luisa since I know as a LAWYER of the Bureau of Fire
Hadjula against respondent Atty. Roceles F. Madianda. Protection that I am not allowed to privately practice law
and it might also result to CONFLICT OF INTEREST. As
The case started when, in an AFFIDAVIT-COMPLAINT1 bearing date a matter of fact, whenever there will be PERSONAL
September 7, 2002 and filed with the IBP Commission on Bar MATTERS referred to me, I just referred them to private
Discipline, complainant charged Atty. Roceles F. Madianda with law practitioners and never entertain the same, NOR listen
violation of Article 2092 of the Revised Penal Code and Canon Nos. to their stories or examine or accept any document.
15.02 and 21.02 of the Code of Professional Responsibility.
9. I specifically deny the allegation of F/SUPT. MA.
In said affidavit-complaint, complainant alleged that she and LUISA C. HADJULA in paragraph 8 of her AFFIDAVIT-
respondent used to be friends as they both worked at the Bureau of COMPLAINT, the truth of the matter is that her ILLICIT
Fire Protection (BFP) whereat respondent was the Chief Legal RELATIONSHIP and her illegal and unlawful activities are
Officer while she was the Chief Nurse of the Medical, Dental and known in the Bureau of Fire Protection since she also filed
Nursing Services. Complainant claimed that, sometime in 1998, she CHILD SUPPORT case against her lover … where she has
approached respondent for some legal advice. Complainant further a child ….
alleged that, in the course of their conversation which was supposed
Moreover, the alleged DOCUMENTS she purportedly have It is not necessary that any retainer be paid, promised, or
shown to me sometime in 1998, are all part of public charged; neither is it material that the attorney consulted
records …. did not afterward handle the case for which his service had
been sought.
Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing
the instant case just to get even with me or to force me to If a person, in respect to business affairs or troubles of any
settle and withdraw the CASES I FILED AGAINST HER kind, consults a lawyer with a view to obtaining
since she knows that she will certainly be DISMISSED professional advice or assistance, and the attorney
FROM SERVICE, REMOVED FROM THE PRC ROLL voluntarily permits or acquiesces with the consultation,
and CRIMINALLY CONVICTED of her ILLICIT, then the professional employments is established.
IMMORAL, ILLEGAL and UNLAWFUL ACTS.
Likewise, a lawyer-client relationship exists
On October 7, 2004, the Investigating Commissioner of the IBP notwithstanding the close personal relationship between the
Commission on Bar Discipline came out with a Report and lawyer and the complainant or the non-payment of the
Recommendation, stating that the information related by complainant former's fees.
to the respondent is "protected under the attorney-client privilege
communication." Prescinding from this postulate, the Investigating Dean Wigmore lists the essential factors to establish the existence of
Commissioner found the respondent to have violated legal ethics the attorney-client privilege communication, viz:
when she "[revealed] information given to her during a legal
consultation," and accordingly recommended that respondent be
reprimanded therefor, thus: (1) Where legal advice of any kind is sought (2) from a
professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in
WHEREFORE, premises considered, it is respectfully confidence (5) by the client, (6) are at his instance
recommended that respondent Atty. Roceles Madianda be permanently protected (7) from disclosure by himself or by
reprimanded for revealing the secrets of the complainant. the legal advisor, (8) except the protection be waived.7

On November 4, 2004, the IBP Board of Governors issued With the view we take of this case, respondent indeed breached his
Resolution No. XVI-2004-472 reading as follows: duty of preserving the confidence of a client. As found by the IBP
Investigating Commissioner, the documents shown and the
RESOLVED to ADOPT and APPROVE, as it is hereby information revealed in confidence to the respondent in the course of
ADOPTED and APPROVED, the Report and the legal consultation in question, were used as bases in the criminal
Recommendation of the Investigating Commissioner of the and administrative complaints lodged against the complainant.
above-entitled case, herein made part of this Resolution as
Annex "A"; and , finding the recommendation fully The purpose of the rule of confidentiality is actually to protect the
supported by the evidence on record and the applicable client from possible breach of confidence as a result of a consultation
laws and rules, and considering the actuation of revealing with a lawyer.
information given to respondent during a legal consultation,
Atty. Roceles Madianda is hereby REPRIMANDED.
The seriousness of the respondent's offense notwithstanding, the
Court feels that there is room for compassion, absent compelling
We AGREE with the recommendation and the premises holding it evidence that the respondent acted with ill-will. Without meaning to
together. condone the error of respondent's ways, what at bottom is before the
Court is two former friends becoming bitter enemies and filing
As it were, complainant went to respondent, a lawyer who charges and counter-charges against each other using whatever
incidentally was also then a friend, to bare what she considered convenient tools and data were readily available. Unfortunately, the
personal secrets and sensitive documents for the purpose of obtaining personal information respondent gathered from her conversation with
legal advice and assistance. The moment complainant approached the complainant became handy in her quest to even the score. At the end
then receptive respondent to seek legal advice, a veritable lawyer- of the day, it appears clear to us that respondent was actuated by the
client relationship evolved between the two. Such relationship urge to retaliate without perhaps realizing that, in the process of
imposes upon the lawyer certain restrictions circumscribed by the giving vent to a negative sentiment, she was violating the rule on
ethics of the profession. Among the burdens of the relationship is that confidentiality.
which enjoins the lawyer, respondent in this instance, to keep
inviolate confidential information acquired or revealed during legal IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is
consultations. The fact that one is, at the end of the day, not inclined hereby REPRIMANDED and admonished to be circumspect in her
to handle the client's case is hardly of consequence. Of little moment, handling of information acquired as a result of a lawyer-client
too, is the fact that no formal professional engagement follows the relationship. She is also STERNLY WARNED against a repetition
consultation. Nor will it make any difference that no contract of the same or similar act complained of.
whatsoever was executed by the parties to memorialize the
relationship. As we said in Burbe v. Magulta,6 -
SO ORDERED.
A lawyer-client relationship was established from the very
first moment complainant asked respondent for legal advise 4.) A.M. No. RTJ-05-1900 January 28, 2005
regarding the former's business. To constitute professional
employment, it is not essential that the client employed the SHIRLEY LORIA TOLEDO and ROSIE LORIA DAJAC,
attorney professionally on any previous occasion. complainants,
vs.
JUDGE ALFREDO E. KALLOS, respondent.
RESOLUTION responsibilities as their lawyer, and the Order of the court dated 29
June 1994, approving the termination.
DAVIDE, JR., C.J.:
Third, the complainants pray for the removal of the respondent from
For our resolution is the verified complaint, written in the vernacular his position as RTC judge for his alleged abusive conduct
and dated 21 August 2002, of siblings Shirley Loria Toledo and unbecoming a judge.
Rosie Loria Dajac against respondent Judge Alfredo E. Kallos,
Presiding Judge of the Regional Trial Court (RTC) of Legazpi City, In his Comment dated 25 November 2002, the respondent denies the
Branch 10, for violation of the Code of Judicial Conduct, the Code of allegations against him and asserts that he is only claiming what is
Professional Responsibility, and Article 1491 (5) of the Civil Code. due him. He vehemently denies that he appeared in the case only
during the execution stage, pointing to the Minutes of Hearing and
Prior to his appointment as a judge in March 1995,1 Judge Kallos was the Order, both dated 05 October 1973, which show that he entered
complainants’ counsel of record in Civil Case No. 4879 filed with the his appearance as counsel for the complainants as early as 5 October
RTC of Legazpi City, Branch 4, involving the recovery of hereditary 1973, or two months after the complaint was filed. He continuously
shares with damages. On 25 March 1979, a judgment was rendered handled the case from then on, as shown by copies of the minutes of
ordering the defendants to, among other things, turn over to herein the hearings and orders issued by the RTC, until a favorable
complainants, the plaintiffs therein, the possession and ownership of judgment was rendered on 25 March 1979 and the subject properties
the total area of 4,514 square meters of "lot 2082 Albay Cadastre." were levied upon on execution to satisfy the judgment. He insists that
On appeal, the decision was affirmed by the Court of Appeals and he was never remiss in the performance of his duties and
became final and executory on 16 December 1985.2 responsibilities as complainants’ counsel.

Several years thereafter, or in February 2002, the respondent filed in The respondent further alleges that the existence of the agreement on
the same action, Civil Case No. 4879, before the RTC of Legazpi, attorney’s fees was admitted by complainant Shirley Loria Toledo as
Branch 4, an Omnibus Motion3 praying, inter alia, for the issuance an evidenced by the order issued by the court on 01 March 2002, which
order constituting in his favor an attorney’s lien to the extent of one- states that Ms. Toledo came to the court informally informing it that
third over the lot awarded in favor of the complainants representing she had a copy of the contract on attorney’s fees.4
his attorney’s fee. He based his motion on a written contingency
agreement on attorney’s fees for professional services rendered As regards the Deed of Absolute Sale, respondent admits that he was
whereby he is entitled to one-third share of what would be awarded to still complainants’ lawyer when the lot was transferred in his name.
the complainants. He claimed that this agreement had already been The lot was given to him by the complainants and their mother,
implemented when "one of the three (3) lots levied upon by the pursuant to their written contingency agreement, as his 1/3 share in
sheriff to answer for the award of damages was given to (him) as his the three parcels of land levied upon by the sheriff to settle the
one-third share while the other two lots went to the plaintiffs as their accrued rentals awarded in the second paragraph of the dispositive
two-third share … [as] evidenced by the Definite Deed of Sale and portion of the decision. He did not pay for it. The figure appearing on
Transfer Certificate of Titles Nos. T-77728, T-77458 and T-77459." the document was written only to facilitate the transaction. He never
However, he misplaced a copy of said written agreement. compelled the complainants and their mother to sell to him the parcel
of land. Neither did he tell them that nothing would happen to their
In the meantime, or on 5 September 2002, the complainants filed case without him.
before this Court, through the Office of the Court Administrator, the
subject verified complaint. Here, complainants pray for three things. Finally, the respondent asserts that his claim for attorney’s fees is still
First, they pray for an order directing the respondent to stop being litigated in Civil Case No. 4879. Thus, the instant complaint is
demanding his "1/3 share attorney’s fees." They assert that the premature.
respondent has no basis for his claim because he failed to show in
court proof of the alleged written contingency fee agreement. They In their Rejoinder dated 7 January 2003, the complainants insist that
also belie respondent’s insistence in his Omnibus Motion that the said there is no basis for respondent’s claim for attorney’s fees for the
agreement had already been implemented when, on execution, one of following reasons: (1) the respondent failed to present the agreement
three lots levied upon by the sheriff was given to him as his 1/3 share. on attorney’s fees; (2) attorney’s fees were not awarded by the RTC
They emphasize that all the lots levied by the sheriff were given to or the Court of Appeals; and (3) Civil Case No. 4879 is in its
them. However, the respondent "forced" them to sign a Deed of execution stage.
Absolute Sale on 16 January 1990 involving a parcel of land valued
in the document at ₱10,000, but actually worth more than ₱500,000,
in payment of his attorney’s fees. While they did not want to sign the After evaluating the pleadings submitted by the parties, the Court
document because respondent appeared in their case only during Administrator found5 that respondent was, indeed, complainants’
execution, they were constrained to do so for fear that something counsel in Civil Case No. 4879, and he should therefore be
adverse might happen to their case, as the respondent so warned compensated for his services. The act of demanding payment for his
them. The latter told them that they would not have won the case attorney’s fees is not a ground for administrative liability. However,
were it not for his services. he can be allowed only fair and reasonable attorney’s fees under
Canon 20 of the Code of Professional Responsibility. As to this, the
Court Administrator stated:
The complainants thus seek, as their second prayer, the recovery of
the property involved in said Deed of Absolute Sale. They argue that
pursuant to Article 1491(5) of the Civil Code, lawyers are prohibited On the question of whether respondent violated Article 1491(5) of the
from buying their client’s properties when the same are still the Civil Code, the Court Administrator found that this may be fairly
object of litigation. To prove that the respondent was still their resolved in an investigation, there being a factual dispute, and
counsel when the sale took place, the complainants attached to their recommended that the complaint be referred to an Associate Justice
complaint the Motion to Terminate Services dated 23 June 1994, of the Court of Appeals pursuant to Section 3, Rule 140 of the Rules
which was based on respondent’s being remiss in his duties and of Court. On the basis of this recommendation, we referred the matter
to Associate Justice Jose Mendoza of the Court of Appeals for "1/3 share of attorney’s fees in the proceeds of litigation" as claimed
investigation, report, and recommendation. in his Omnibus Motion dated 14 February 2002. This Order is the
subject of a motion for reconsideration by the complainants, as stated
In his Report,6 Justice Mendoza found that the respondent indeed in respondent’s Manifestation dated 24 January 20049 filed in the
represented the complainants in Civil Case No. 4879. Like the Court investigation proceedings conducted by Justice Mendoza. Also part
Administrator, he expresses the view that the act of demanding of the records is respondent’s Affidavit dated 1 December 2003, filed
attorney’s fees for services rendered is not a ground for in the same investigation proceedings, alluding to the complainants’
administrative sanction. He finds that when the respondent made the filing of a Petition for Certiorari and Mandamus in the Court of
demand, he did so as a lawyer who obtained a favorable judgment for Appeals, docketed as CA-G.R. SP No. 80090, seeking to reverse the
his client, and not as a judge. As a lawyer, it is but just that he be Order of the trial court denying complainants’ Motion to Dismiss
fairly compensated for his services. And his filing of a claim for respondent’s Omnibus Motion.
attorney’s fees in Civil Case No. 4879 was an appropriate legal
remedy. Considering the pendency of such claim, Justice Mendoza We, therefore, find no cogent reason for us to resolve complainants’
recommends the suspension of the determination of the instant first two issues raised in the verified complaint, for they are
administrative complaint until the rendition of a final judicial ruling inextricably inherent in the claim of the respondent in his Omnibus
on the matter of respondent’s attorney’s fees; thus: Motion, which is pending judicial determination. Since respondent’s
claim for attorney’s fees in the main case has not yet become final,
As the said issue is still being litigated in the Regional Trial Court in the objection of prematurity obtains, as a contrary holding may be
Civil Case No. 4879, it is the view of the undersigned that the preemptive of a final judicial determination of factual and evidentiary
complaint is still premature …. matters inherent in the claim.10 Clearly, the reliefs asked by the
complainants are judicial in nature.11 And, if only for an orderly
administration of justice, the proceedings in Civil Case No. 4879
In other words, the complaint is not yet ripe for administrative should be allowed to continue and take its course, and the claim of
evaluation. The hearing on the matter being conducted by the court the respondent judicially settled first.
below should be allowed to run its course as that court is the
appropriate forum for a ruling on the dispute….
But while we give deference to the wisdom of the trial court to
initially decide respondent’s claim for attorney’s fees, we deem it
…To make a determination at this time on whether the respondent appropriate to reiterate certain principles governing the payment of
violated Article 1491 (A) would be to preempt the lower court in its attorney’s fees and impart our observations on the instant claim.
resolution of the issue. Any recommendation by the undersigned in Foremost of these principles is that the act of demanding attorney’s
this administrative case and subsequent resolution by the Honorable fees for services rendered is not a ground for an administrative
Supreme Court on the matter would certainly affect or influence the sanction. On the contrary, Canon 20 of the Code of Professional
thinking of the trial court before which the matter is pending. In such Responsibility allows lawyers to charge fair and reasonable fees. As
a case, it will be unfair to either party. At any rate, the party who long as a lawyer honestly and in good faith serves and represents the
would feel aggrieved might still elevate the decision to the higher interest of the client, he should have a reasonable compensation for
courts. his service.12

This recommendation is not without precedent. In the case of Lawyers are thus as much entitled to judicial protection against
Spouses De Leon v. Hon. Bonifacio, Adm. Case No. 4467, October injustice on the part of their clients as the clients are against abuses
10, 1997, the then Deputy Court Administrator, Hon. Reynaldo on the part of counsel. The duty of the court is not only to see that
Suarez, recommended the dismissal of the case for being judicial in lawyers act in a proper and lawful manner, but also to see that
nature or, at least, premature…. lawyers are paid their just and lawful fees.13 Thus, in J.K. Mercado
and Sons Agricultural Enterprises, Inc. v. De Vera ,14 citing Albano
… v. Coloma,15 we stressed:

In this case, the respondent is not being charged for his acts or While, indeed, the practice of law is not a business venture, a lawyer,
decisions as a judge. Rather, he has been charged for dealing with the nevertheless, is entitled to be duly compensated for professional
property of his client which is prohibited by law. Nevertheless, the services rendered. So, also, he must be protected against clients who
principle is the same, in that, the matter is still judicial in nature. wrongly refuse to give him his just due. In Albano vs. Coloma, this
Court has said:
We agree with Justice Mendoza.
"Counsel, any counsel, who is worthy of his hire, is entitled to be
It is fundamental that a claim for attorney’s fees may be asserted fully recompensed for his services. With his capital consisting solely
either in the very action in which the services of a lawyer had been of his brains and with his skill, acquired at tremendous cost not only
rendered or in a separate action.7 The respondent chose to file his in money but in the expenditure of time and energy, he is entitled to
claim for attorney’s fees in the same case in which he served as the protection of any judicial tribunal against any attempt on the part
counsel for the complainants. As mentioned, this is a proper remedy of a client to escape payment of his fees. It is indeed ironic if after
under our jurisdiction and is preferred to an independent action as it putting forth the best that is in him to secure justice for the party he
avoids multiplicity of suits. Besides, the right to recover attorney’s represents, he himself would not get his due. Such an eventuality this
fees is but an incident of the case in which the services of counsel Court is determined to avoid. It views with disapproval any and every
have been rendered. Moreover, the court trying the case is to a certain effort of those benefited by counsel’s services to deprive him of his
degree already familiar with the nature and extent of the lawyer’s hard-earned honorarium. Such an attitude deserves condemnation."
services8 and is in a better position to decide the question of fees.
It should be stressed in this connection that the absence of a written
Undisputably, respondent’s claim for attorney’s fees is under contract will not preclude the finding that there was a professional
litigation. We find in the records an Order dated 7 January 2004 relationship that justifies the collection of attorney’s fees for
issued in Civil Case No. 4879 which granted respondent’s prayer for professional services rendered. Documentary formalism is not an
essential element in the employment of an attorney; the contract may private respondent shall pay P15,000.00 as initial compensation and
be express or implied. To establish the relation, it is sufficient that the twenty percent in contingent fees; that after trial, the defunct Court of
advice and assistance of an attorney is sought and received in any First Instance rendered judgment annulling foreclosure and ordering
matter pertinent to his profession.16 Hence, with or without a the Government Service Insurance System to restructure the private
contingency agreement between the complainants and the respondent, respondent’s loan; that thereafter, the System appealed; that on
the trial court must determine the propriety of respondent’s claim for appeal, the Court of Appeals affirmed the decision of the lower court;
attorney’s fees and the reasonable amount thereof. and that the Appellate Court’s judgment has since attained finality.

The third issue raised in the verified complaint deserves a short shrift. It also appears that when Atty. Armovit sought execution with the
No evidence was presented to prove respondent’s alleged abusive court a quo, he was informed by Romualdo Bengzon, president of the
conduct unbecoming a judge. The complainants do not dispute the respondent corporation, that the firm had retained the services of
fact that the respondent was not yet a judge when the assailed action Atty. Pacifico Yadao. He was also informed that the company would
or conduct was allegedly committed by him. As such, and to that pay him the agreed compensation and that Atty. Yadao’s fees were
extent, there is no reason to bind him by the strict standards of the covered by a separate agreement. The private respondent, however,
Code of Judicial Conduct for acts committed as counsel to a case later ignored his billings and over the phone, directed him allegedly
prior to his appointment as a judge. not to take part in the execution proceedings. Forthwith, he sought
the entry of an attorney’s lien in the records of the case. The lower
court allegedly refused to make the entry and on the contrary, issued
WHEREFORE, the instant administrative complaint is DISMISSED an order ordering the Philippine National Bank to "release to the
for being premature and for lack of merit. custody of Mr. Romualdo F. Bengzon and or Atty. Pacifico Yadao" 1
the sum of P2,760,000.00 (ordered by the Court of Appeals as rentals
SO ORDERED. payable by the Government Service Insurance System).

Atty. Armovit then moved, apparently for the hearing of his motion
5.) [G.R. No. 90983. September 27, 1991.] to recognize attorney’s lien, and thereafter, the trial court issued an
order in the tenor as follows:
LAW FIRM OF RAYMUNDO A. ARMOVIT, Petitioner, v.
COURT OF APPEALS, JUDGE GENARO C. GINES, Presiding When this case was called for hearing on the petition to record
Judge of Branch XXVI, Regional Trial Court, First Judicial attorney’s charging lien, Attys. Armovit and Aglipay appeared for the
Region, San Fernando, La Union, and BENGSON petitioners.
COMMERCIAL BUILDING, INC., Respondents. Atty. Armovit informed the Court that they are withdrawing the
petition considering that they are in the process of amicably settling
Raymundo A. Armovit and Rafael R. Armovit for Petitioner. their differences with the plaintiff, which manifestation was
confirmed by Atty. Yadao as well as the plaintiffs, Romualdo
Pacifico C. Yadao for Private Respondent. Bengson and Brenda Bengson, who are present today.

In view of this development, the petition to record attorneys charging


lien, the same being in order and not contrary to law, morals and
public policy, as prayed for by Attys. Armovit and Aglipay, it is
SYLLABUS
hereby withdrawn. The parties, therefore are hereby directed to
comply faithfully with their respective obligations.
1. LEGAL ETHICS; ATTORNEY’S FEES; CONTINGENT FEES; SO ORDERED. 2
REASONABLE IN CASE AT BAR. — Contingent fees are valid in
this jurisdiction. It is true that attorney’s fees must at all times be However, upon the turnover of the money to the private respondent,
reasonable; however, we do not find Atty. Armovit’s claim for Mrs. Brenda Bengson (wife of Romualdo Bengzon) delivered to
"twenty percent of all recoveries" to be reasonable. In the case of Aro Atty. Armovit the sum of P300,000.00 only. Atty. Armovit protested
v. Nañawa, (No. L-24163, April 28, 1969, 27 SCRA 1090), this and demanded the amount of P552,000.00 (twenty percent of
Court awarded the agreed fees amid the efforts of the client to deny P2,760,000.00), for which Mrs. Bengzon made assurances that he
him fees by terminating his services. In parallel vein, we are will be paid the balance.
upholding Atty. Armovit’s claim for P252,000.00 more — pursuant
to the contingent fee agreement — amid the private respondent’s own On November 4, 1988, however, Atty. Armovit received an order
endeavors to evade its obligations. emanating from the trial court in the tenor as follows:

During the hearing on the petition to record attorney s charging lien


DECISION on October 11, 1988, Attys. Armovit and Aglipay withdrew their
petition to record attorney’s charging lien, which was duly approved
by the Court, after which the Court directed the parties to comply
SARMIENTO, J.: faithfully with their respective obligations.

In compliance with the Order of this Court, the plaintiff submitted a


Before the Court is Atty. Raymundo Armovit’s claim for attorney’s pleading denominated as compliance alleging that petitioner (Atty.
fees against the private Respondent. Armovit) has already received from the plaintiff the sum of
P300,000.00, Philippine Currency, as and by way of attorneys fees.
It appears that Atty. Armovit was engaged as counsel for the private With the receipt by the petitioner from the plaintiff of this amount,
respondent in a complaint to have an extrajudicial foreclosure of the latter has faithfully complied with its obligation.
certain properties by the Government Service Insurance System
declared null and void; that the parties allegedly agreed that the WHEREFORE, the Order of this Court dated October 11, 1988
approving the withdrawal of the petition to record attorney s charging
lien, on motion of the petitioner, is now final. The private respondent’s version however is that while it may be true
that the agreed compensation was twenty percent of all recoveries,
SO ORDERED. 3 the parties later agreed on a compromise sum approved allegedly by
the trial court, per its Order of October 11, 1988.
Reconsideration having been denied, Atty. Armovit went to the Court
of Appeals on a petition for certiorari and prohibition. The Court is inclined to believe that Atty. Armovit never agreed on
the compromise sum of P300,000.00. It is true that he did agree to
On August 25, 1989, the Court of Appeals rendered judgment withdraw his motion to annotate attorney’s lien, but because the
dismissing the petition. Reconsideration having been likewise denied parties were "in the process of amicably settling their differences"
by the Appellate Court, Atty. Armovit instituted the instant appeal. and not because Atty. Armovit had agreed to accept a lower amount
as full payment. There is nothing, on top of that, in Atty. Armovit’s
Shortly thereafter, we required the private respondent to comment. manifestation that would suggest that he was accepting the sum of
P300,000.00 as agreed final payment, other than the fact that an
The private respondent did not materially traverse Atty. Armovit’s agreement was supposedly certain.
chronicle of events but added: that the private respondent hired the
petitioner after the Government Service Insurance System had ATTY. ARMOVIT:
answered and that it was Atty. Benjamin Bernardino who prepared
the complaint; that for his appearances, Atty. Armovit was paid a Your Honor, we would like to manifest in Court that we served
total of P108,000.00, not to mention "beach resort accommodations" ; notice to the counsel of the plaintiff, Bengson Commercial Building,
that Atty. Armovit did not inform the private respondent that the a copy of the petition to record attorney’s charging lien, and together
court had rendered judgment which they would have appealed; that with the president of the corporation, Mr. Romualdo Bengson, and
they lost an appeal on account of Atty. Armovit’s indiscretion; that his wife, Mrs. Brenda Bengson, we have discussed the problem and
they forthwith engaged the services of another lawyer, Atty. Yadao; we all agreed to settle the matter amicably and as proof, and there is a
and that it was the latter who prepared the brief in the Court of certainty that this settlement we have in principle agreed upon is an
Appeals (on GSIS’s appeal). earnest one at this time, this representation is withdrawing his
petition to record charging lien.
The private respondent also alleged that it opposed Atty. Armovit’s
effort to record his attorney’s lien on grounds of alleged nullity of the ATTY. YADAO:
retainer agreement, Atty. Armovit’s negligence, and because of
excessive fees demanded. The private respondent also insisted that No objection, Your Honor, because we have to agree with Atty.
the retainer agreement was signed by only one of seven directors, and Armovit. I am in full accord with this.
it could not mind the corporation. Atty. Armovit, in any event, had
also been allegedly more than sufficiently compensated. There is nothing there that would indicate Atty. Armovit’s
willingness to accept, in fact, a lower figure in consideration of his
The private respondent alleged that Atty. Armovit had been paid withdrawal of his request to enter attorney’s lien. What the Court
P300,000.00 — an amount approved by the court, and an amount he takes his statement to mean is that he was withdrawing his request on
accepted and for which he is allegedly estopped from claiming a the certainty that the private respondent would pay him the money,
higher amount. The order of the court has the effect of res judicata, presumably, under more becoming circumstances.
the private respondent claimed, as well as a compromise agreement
which is immediately executory. The Court does not therefore see how the private respondent can hold
Atty. Armovit to have been in estoppel.
The disposition of the Court of Appeals was that since the receipt
evidencing payment to Atty. Armovit of the sum of P300,000.00 The fact that Atty. Armovit did not, after all, accept the sum of
"was without any qualification as ‘advance’ or ‘partial’ or P300,000.00 as final compensation is indeed indicated by the
‘incomplete’," the intention of the parties was that it was full behavior of the private respondent, through Mrs. Romualdo Bengson,
payment. The Appellate Court also noted Atty. Armovit’s withdrawal when she assured Atty. Armovit that the balance was forthcoming.
of his motion to record attorney’s lien and figured that Atty. Armovit According to Mrs. Bengson, she wished the rest of the Bengsons to
was satisfied with the payment of P300,000.00. witness the final payment and when the occasion was present, wished
for a postponement on account of "All Saints Day."
The only issue is whether or not Atty. Armovit is entitled to the sum
of P252,000.00 more, in addition to the sum of P300,000.00 already The parties never therefore amended their original agreement, and
paid him by the private Respondent. what appears to the Court is a clear effort on the part of a client, with
the apparent approval of the trial court, to renege on a valid
There is no question that the parties had agreed on a compensation as agreement with its lawyer.
follows:
The Court believes that the trial court, in accepting the private
a) P15,000.00 by way of acceptance and study fee, payable within respondent’s "compliance" as a final payment of Atty. Armovit’s
five (5) days from date; fees, was guilty of a grave abuse of discretion. The private
respondent had nothing with which to comply, and the parties, as
b) 20% contingent fee computed on the value to be recovered by manifested by Atty. Armovit, were "in the process [merely] of
favorable judgment in the cases; and amicably settling their differences."

c.) the execution and signing of a final retainer agreement complete It is apparent furthermore that the trial judge himself was out to deny
with all necessary details. Atty. Armovit the agreed compensation. In his order of October 4,
1988, he commanded:
(While the parties’ agreement speaks of "a final retainer agreement"
to be executed later, it does not appear that the parties did enter into a The PNB is hereby ordered and directed to release to the custody of
"final" agreement thereafter.) Mr. Romualdo F. Bengson and/or Atty. Pacifico Yadao, counsel for
the plaintiff, the sum of Two Million Seven Hundred Sixty Thousand 6.) G.R. No. 91958 January 24, 1991
Pesos (P2,760,000.00), Philippine Currency for the satisfaction of the
rentals of the Bengson Building against the GSIS. WILFREDO D. LICUDAN and CRISTINA LICUDAN-
CAMPOS, petitioners,
in spite of the fact that Atty. Armovit had remained the private vs.
respondent’s counsel of record. It is fundamental that unless a lawyer THE HONORABLE COURT OF APPEALS and ATTY.
has been validly discharged, his authority to act for his client TEODORO O. DOMALANTA, respondents.
continues and should be recognized by the court.

The fact that the receipt evidencing payment by the private Arnold V. Guerrero & Associates for petitioners.
respondent of the amount of P300,000.00 "was without any Teodoro O. Domalanta for and on his behalf as private respondent.
qualification as ‘advance’ or ‘partial’ or ‘incomplete’," as the Court
of Appeals noted and the Court of Appeals took to mean "full
payment", will not weaken Atty. Armovit’s demand for the balance.
There is nothing in that receipt that will suggest that it was full GUTIERREZ, JR., J.:
payment either, and the fact that Atty. Armovit accepted it does not
mean that he was satisfied that it was final payment. The fact of the
matter is that the private respondent had assured him that the balance The practice of law is a profession rather than trade. Courts must
was forthcoming. guard against the charging of unconscionable and excessive fees by
lawyers for their services when engaged as counsel. Whether or not
The private respondent can not justifiably downplay Atty. Armovit as the award of attorney's fees in this case is reasonable, being in the
negligent (for failing to appeal) or his demand for fees excessive (that nature of contingent fees, is the principal issue.
he had been paid enough). Atty. Armovit, after all, succeeded in
obtaining a favorable decision for his client, and although his prayer This petition for review on certiorari assails:
for various damages were denied, he succeeded in obtaining a
substantial award (P1,900,000.00 in unpaid rentals) for his client. On
1) The Decision of the public respondent dated September 12, 1989
appeal, the Court of Appeals sustained his theory. It should be noted
which dismissed the petitioners' appeal thereby upholding the
that the private respondent had in fact stood to lose substantial
reasonableness of the respondent lawyer's lien as attorney's fees over
properties on foreclosure — Atty. Armovit not only restored to the
the properties of his clients; and
private respondent its foreclosed properties, he succeeded in having
the private respondent’s loans restructured and the Government
Service Insurance System pay rentals. No client can ask a better 2) The Resolution of the public respondent dated January 30, 1990
result from a lawyer. which denied the petitioners' motion for reconsideration.

Obviously, the private respondent’s effort to downgrade Atty. The grounds relied upon by the petitioners are as follows:
Armovit’s performance is a wild, if not cheap, shot of a client out to
evade its obligations to its lawyer. The fact that Atty. Armovit may
The respondent Court, in upholding the entitlement of
have been paid substantially (in initial fees) while the case was
private respondent-attorney on the attorney's fees he
dragging is no justification for denying him the full amount under
claimed, decided the question in a manner not in accord
their agreement. It has been held that initial fees and fees paid in the
with law or with the applicable decisions of this Honorable
progress of litigation are independent of the contingent fees.
Tribunal.
That the retainer agreement was never approved by the board of the
corporation is also a poor excuse because the fact of the matter is that The respondent Court, in refusing to review and determine
the private respondent did deliver to Atty. Armovit the sum of the propriety, reasonableness and validity of the attorney's
P300,000.00 in partial payment, and the private respondent can not fees claimed by the private respondent-attorney, departed
now deny him the balance by alleging lack of authority of the from the usual course of judicial proceedings.
Bengson spouses.
The respondent Court, in failing to declare the attorney's
Contingent fees are valid in this jurisdiction. It is true that attorney’s fees claimed by the private respondent-attorney as
fees must at all times be reasonable; however, we do not find Atty. unconscionable, excessive, unreasonable, immoral and
Armovit’s claim for "twenty percent of all recoveries" to be unethical, decided the question in a way not in accord with
unreasonable. In the case of Aro v. Nañawa, decided in 1969, this law and with applicable decisions of this Honorable
Court awarded the agreed fees amid the efforts of the client to deny Tribunal. (Petition, pp. 12-13; Rollo, pp. 16-17)
him fees by terminating his services. In parallel vein, we are
upholding Atty. Armovit’s claim for P252,000.00 more — pursuant
to the contingent fee agreement — amid the private respondent’s own The following are the antecedent facts pertinent to the case at bar:
endeavours to evade its obligations.
The respondent lawyer was retained as counsel by his brother-in-law
Several times, we have come down hard on erring practitioners. We and sister, the now deceased petitioners' parents, spouses Aurelio and
will not however be slow either, in coming to the rescue of aggrieved Felicidad Licudan. His services as counsel pertained to two related
brother-lawyers in protecting the integrity of the bar from civil cases docketed as Civil Case No. Q-12254 for partition and
unscrupulous litigants. 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
WHEREFORE, premises considered, the petition is GRANTED. The Transfer Certificate of Title No. 818 of the Register of Deeds of
private respondent is ORDERED to pay the petitioner the sum of Quezon City. In both cases, the respondent lawyer obtained a
P252,000.00. Costs against the private Respondent. judgment in favor of his clients.

IT IS SO ORDERED.
On August 13,1979, the respondent lawyer filed a Petition for On September 6, 1985, the trial court ordered the respondent lawyer
Attorney's Lien with Notification to his Clients which substantially to submit a subdivision plan in conformity with his attorney's fees
alleged that his clients executed two written contracts for professional contract under which one-third (1/3) of the property or 90.5 square
services in his favor which provided that: meters was alloted to him.

a) The undersigned counsel is entitled to own 97.5 square On September 23, 1985, the respondent lawyer filed a motion for
meters of the plaintiff's share of the lot in question. reconsideration praying for the amendment of the Order dated
September 19, 1979 to conform with the Deed of Absolute Sale dated
b) The undersigned counsel shall have a usufructuary right May 1, 1983 which was executed after the annotation of the original
for a period of ten (10) years of plaintiffs' share of the lot in attorney's lien of 90.5 square meters.
question.
On September 30, 1985, the trial court denied the motion on the
c) And that all damages accruing to plaintiffs to be paid by ground that the respondent lawyer cannot collect attorney's fees for
the defendant is for the undersigned counsel.(Annex "H" of other cases in the action for partition.
the Petition, Rollo, p. 54)
On October 4, 1985, the respondent lawyer filed a second motion for
On September 19, 1979, the trial court handling Civil Case No. Q- reconsideration of the Order dated September 6, 1985 explaining that
12254 ordered the annotation at the back of TCT No. 818 of the what he sought to be included in the Order dated September 19, 1979
Register of Deeds of Quezon City of the respondent lawyer's is the additional attorney's fees for handling the redemption case
Contract for Professional Services dated August 30, 1979 signed by which was but a mere offshoot of the partition case and further
petitioner Wilfredo Licudan and Aurelio Licudan on his own behalf manifesting that the additional 31 square meters as compensation for
and on behalf of his daughter, petitioner Cristina Licudan-Campos. the redemption case must be merged with the 90.5 square meters for
The said trial court's Order, being one of two Orders being essentially the partition case to enable the said respondent lawyer to comply with
challenged in this petition, is reproduced below: the Order dated September 6,1985 which directed him to submit a
subdivision plan as required.
Before the court for consideration is a Petition for
Attorney's Lien filed by Atty. Teodoro D. Domalanta, On October 21, 1985, the trial court issued the second Order being
counsel for the plaintiff, praying that his attorney's fees be assailed in this petition. The said Order reads:
annotated as a lien at the back of Transfer Certificate of
Title No. 818 of the Register of Deeds of Quezon City, Acting on the "Second Motion for Reconsideration" filed
subject matter of this case. by Atty. Teodoro Domalanta and finding the same to be
justified, let an attorney's lien be annotated in the title of
For the protection of the plaintiffs, the court required the the property for 31 square meters as attorney's fees of said
plaintiff Aurelio Licudan as well as his son to appear this Atty. Teodoro Domalanta in addition to the original 90.5
morning. Plaintiff Aurelio Licudan together with his son square meters. (CA Decision, p. 8; Rollo, p. 37)
Wilfredo Licudan, who appears to be intelligent and in fact
he speaks (the) English language well, appeared. Both On August 22, 1986, more than ten (10) months after the Orders of
Aurelio and Wilfredo Licudan manifested that they have September 6, 1985 and October 21, 1985 had become final and
freely and voluntarily signed the Contract for Professional executory, the petitioners as substituted heirs of the respondent
Services, dated August 30, 1979 and notarized before lawyers' deceased clients filed a motion to set aside orders on the
Notary Public Amado Garrovillas as Doc. No. 32, Page 8, ground that the award of professional fees covering 121.5 square
Book No. XIX, Series of 1979. meters of the 271.5 square meter lot is unconscionable and excessive.

Considering the manifestation of plaintiff, Aurelio Licudan After the respondent lawyer filed his Opposition to the above
and Alfredo (sic) Licudan that they have entered freely and petitioners' motion, the lower court, on August 29, 1986, finding that
voluntarily in the said contract of professional services, let the petitioners as substituted plaintiffs are not in full agreement with
the same be annotated at the back of TCT 818 of the the respondent lawyer's claim for attorney's fees, set aside its Orders
Register of Deeds of Quezon City, upon payment of the dated September 6, 1985 and October 21, 1985.
required legal fees. (CA Decision, pp. 7-8; Rollo, pp. 36-
37) On September 16, 1986, the respondent lawyer filed a motion for
reconsideration stressing the fact that the payment of the professional
The Contract for Professional Services dated August 30, 1979 differs services was pursuant to a contract which could no longer be
from the earlier contractual provisions in that it entitled the disturbed or set aside because it has already been implemented and
respondent lawyer to one-third (1/3) of the subject property or 90.5 had since then become final. This motion was denied on October 3,
square meters and provided for usufructuary rights over the entire lot 1986.
in question in favor of the respondent lawyer's son, Teodoro M.
Domalanta, Jr. for an agreed consideration. (Annex "J" of the On November 15, 1986, the respondent lawyer filed a motion to set
Petition; Rollo, p. 59) aside the orders dated August 29, 1986 and October 3, 1986
reiterating his position that the Orders of September 6, 1985 and
On July 25, 1985, the respondent lawyer filed a motion ex parte to October 21, 1985 have become final and are already implemented.
amend the Order dated September 19, 1979 so as to conform with an The respondent lawyer further asked for the modification of the
additional professional fee covering 31 square meters more of the lot October 21, 1985 Order to reflect 60.32 square meters instead of 31
for services rendered in Civil Case No. Q-28655 as evidenced by a square meters only since the stipulation in the Additional Contract for
Deed of Absolute Sale dated May 1, 1983 executed by Aurelio Professional Services entitled him to 60.32 square meters.
Licudan in favor of the respondent lawyer.
After the petitioners' Opposition to the said motion was filed, the trial When the reasonableness of the appellee's lien as attorney's
court, on February 26, 1987, rendered an Order with the following fees over the properties of his clients awarded to him by the
dispositive portion: trial court had not been questioned by the client, and the
said orders had already become final and executory, the
WHEREFORE, this Court has no alternative but to set same could no longer be disturbed, not even by the court
aside its orders of 29 August 1986 and 3 October 1986 and which rendered them (Tañada v. Court of Appeals, 139
declare its Orders of 19 September 1979 and 21 October SCRA 419). (CA Decision p. 7; Rollo, p. 36)
1985 irrevocably final and executory. (CA Decision, p. 5;
Rollo, p. 34) On the contrary, we rule that the questioned Orders dated September
19, 1979 and October 21, 1985 cannot become final as they pertain to
On Appeal, the Court of Appeals ruled in favor of the respondent a contract for a contingent fee which is always subject to the
lawyer by dismissing the appeal and the prayed for writ of supervision of the Court with regard to its reasonableness as
preliminary injunction. Their subsequent motion for reconsideration unequivocally provided in Section 13 of the Canons of Professional
having been denied', the petitioners filed the instant petition. Ethics which reads:

The petitioners fault the respondent Court for its failure to exercise its 13. Contingent Fees.—
inherent power to review and determine the propriety of the
stipulated attorney's fees in favor of the respondent lawyer and A contract for a contingent fee, where sanctioned by law,
accuse the respondent lawyer of having committed an unfair should be reasonable under all the circumstances of the
advantage or legal fraud by virtue of the Contract for Professional case including the risk and uncertainty of the
Services devised by him after the trial court awarded him attorney's compensation, but should always be subject to the
fees for P1,000.00 only instead of respecting the trust and confidence supervision of a court, as to its reasonableness. (Emphasis
of the highest level reposed on him considering the close blood and supplied).
affinal relationship between him and his clients.
There is no dispute in the instant case that the attorney's fees claimed
The petitioners contend that under the award for professional by the respondent lawyer are in the nature of a contingent fee. There
services, they may have won the case but would lose the entire is nothing irregular about the execution of a written contract for
property won in litigation to their uncle-lawyer. They would be professional services even after the termination of a case as long as it
totally deprived of their house and lot and the recovered damages is based on a previous agreement on contingent fees by the parties
considering that of the 271.5 square meters of the subject lot, the concerned and as long as the said contract does not contain
respondent lawyer is claiming 121.5 square meters and the remaining stipulations which are contrary to law, good morals, good customs,
portion of 150 square meters would also go to attorney's fees since public policy or public order.
the said portion pertains to the lawyer's son by way of usufruct for ten
(10) years. Although the Contract for Professional Services dated August 30,
1979 was apparently voluntarily signed by the late Aurelio Licudan
The aforesaid submissions by the petitioners merit our consideration. for himself and on behalf of his daughter, petitioner Cristina Licudan-
Campos and by the petitioner Wilfredo Licudan who both manifested
It is a well-entrenched rule that attorney's fees may be claimed in the in open court that they gave their free and willing consent to the said
very action in which the services in question have been rendered or as contract we cannot allow the said contract to stand as the law
an incident of the main action. The fees may be properly adjudged between the parties involved considering that the rule that in the
after such litigation is terminated and the subject of recovery is at the presence of a contract for professional services duly executed by the
disposition of the court. (see Camacho v. Court of Appeals, 179 parties thereto, the same becomes the law between the said parties is
SCRA 604 [1989]; Quirante v. Intermediate Appellate Court, 169 not absolute but admits an exception—that the stipulations therein are
SCRA 769 [1989]). 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
It is an equally deeply-rooted rule that contingent fees are not per se SCRA 111 [1989]).
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 Under Canon 20 of the Code of Professional Responsibility, a lawyer
have held in the case of Tanhueco v. De Dumo (172 SCRA 760 shall charge only fair and reasonable fees.1âwphi1 In determining
[1989]): 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:
. . . 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 a) The time spent and the extent of the services rendered or
compensation is clearly excessive, the Court must and will required;
protect the aggrieved party. (Ulanday v. Manila Railroad
Co., 45 Phil. 540 [1923]; Grey v. Insular Lumber Co., 97 b) The novelty and difficulty of the questions involved;
Phil. 833 [1955]).
c) The importance of the subject matter;
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 d) The skill demanded;
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: 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 August 30, 1979, unconscionable and unreasonable. The amount of
schedule of fees of the IBP Chapter to which he belongs; 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
g) The amount involved in the controversy and the benefits over the remaining portion of 150 square meters by the respondent
resulting to the client from the service; lawyer's son, is, in the opinion of this Court, commensurate to the
services rendered by Atty. Domalanta.
h) The contingency or certainty of compensation;
WHEREFORE, IN VIEW OF THE FOREGOING, the instant
petition is GRANTED. The Court of Appeals' decision of September
i) The character of the employment, whether occasional or 12, 1989 is hereby REVERSED and SET ASIDE. Atty. Domalanta is
established; and awarded reasonable attorney's fees in the amount of P20,000.00.

j) The professional standing of the lawyer. SO ORDERED.

A similar provision is contained under Section 24, Rule 138 of the


7.) [G.R. No. 97006. February 9, 1993.]
Revised Rules of Court which partly states that:

ERNESTO F. ROLDAN and MARIETTA A. ROLDAN,


Sec. 24. Compensation of attorneys; agreement as to fees.
— An attorney shall be entitled to have and recover from Petitioners, v. THE COURT OF APPEALS and COMMERCIAL
his client no more than a reasonable compensation for his CREDIT CORPORATION OF DAVAO, Respondents.
services, with a view to the importance of the subject
matter of the controversy, the extent of the services Rodolfo B. Ta-asan, for Petitioners.
rendered, and the professional standing of the attorney. . . .
A written contract for services shall control the amount to Honesto A. Cabarroguis for Private Respondent.
be paid therefor unless found by the court to be
unconscionable or unreasonable.

All that the respondent lawyer handled for his deceased sister and SYLLABUS
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
1. REMEDIAL LAW; CIVIL PROCEDURE; PETITION FOR
case. Considering the close blood and affinal relationship between the
REVIEW ON CERTIORARI; LIMITED ONLY TO QUESTIONS
respondent lawyer and his clients, there is no doubt that Atty.
OF LAW. — Settled is the rule, that in petitions for review under
Domalanta took advantage of the situation to promote his own
Rule 45 of the Rules of Court, only questions of law may be raised
personal interests instead of protecting the legal interests of his
since factual findings of the Court of Appeals are deemed conclusive
clients. A careful perusal of the provisions of the contract for
on the Supreme Court subject to certain exceptions.
professional services in question readily shows that what the
petitioners won was a pyrrhic victory on account of the fact that
2. LEGAL ETHICS; ATTORNEY’S FEES; REASONABLENESS
despite the successful turnout of the partition case, they are now
OR UNCONSCIONABLE CHARACTER THEREOF, MAY BE
practically left with nothing of the whole subject lot won in the
REGULATED BY THE COURT. — In Radiowealth Finance Co.,
litigation. This is because aside from the 121.5 square meters
Inc. v. International Corporate Bank, petitioner Radiowealth
awarded to Atty. Domalanta as attorney's fees, the said contract for
questioned the reasonableness of the amount of attorney’s fees
professional services provides that the remaining portion shall pertain
therein and asked whether this Court has the power to modify the
to the respondent lawyer's son by way of usufruct for ten (10) years.
attorney’s fees previously agreed upon by the parties under a valid
There should never be an instance where a lawyer gets as attorney's
contractual stipulation. The Court ruled there as follows: "As a basic
fees the entire property involved in the litigation. It is unconscionable
premise, the contention of petitioners that this Court may alter,
for the victor in litigation to lose everything he won to the fees of his
modify or change even an admittedly valid stipulation between the
own lawyer.
parties regarding attorney’s fees is conceded. The high standards of
the legal profession as prescribed by law and the Canons of
The respondent lawyer's argument that it is not he but his son Professional Ethics regulate if not limit the lawyer’s freedom in
Teodoro M. Domalanta, Jr. who is claiming the usufructuary right fixing his professional fees. The moment he takes his oath, ready to
over the remaining portion of the subject lot is inaccurate. The undertake his duties first, as a practitioner in the exercise of his
records show that the matter of usufruct is tied up with this case since profession, and second, as an officer of the court in the administration
the basis for the said usufructuary right is the contract for of justice, the lawyer submits himself to the authority of the court. It
professional services the reasonableness of which is being questioned becomes axiomatic therefore, that power to determine the
in this petition. We find the ten-year usufruct over the subject lot part reasonableness or the unconscionable character of attorney’s fees
and parcel of the attorney's fees being claimed by the respondent stipulated by the parties is a matter falling within the regulatory
lawyer. prerogative of the courts (Panay Electric Co., Inc. v. Court of
Appeals, 119 SCRA 456 [1982]; De Santos v. City of Manila, 45
In resolving the issue of reasonableness of the attorney's fees, we SCRA 409 [1972]; Rolando v. Luz, 34 SCRA 337 [1970]; Cruz v.
uphold the time-honoured legal maxim that a lawyer shall at all times Court of Industrial Relations, 8 SCRA 826 [1963]). And this Court
uphold the integrity and dignity of the legal profession so that his has consistently ruled that even with the presence of an agreement
basic ideal becomes one of rendering service and securing justice, not between the parties, the court may nevertheless reduce attorney’s fees
money-making. For the worst scenario that can ever happen to a though fixed in the contract when the amount thereof appears to be
client is to lose the litigated property to his lawyer in whom an trust unconscionable or unreasonable (Borcena v. Intermediate Appellate
and confidence were bestowed at the very inception of the legal Court, 147 SCRA 111 [1987]; Mutual Paper Inc. v. Eastern Scott
controversy. We find the Contract for Professional Services dated Paper Co., 110 SCRA 481 [1981]; Gorospe v. Gochango, 106 Phil.
425 [1959]; Turner v. Casabar, 65 Phil. 490 [1938]; F.M. Yap Tico & Centavos representing the past due charges as of November 23, 1981
Co. v. Alejano, 53 Phil. 986 [1929]). For the law recognizes the with interest of 12% per annum to be computed from November 24,
validity of stipulations included in documents such as negotiable 1981 until fully paid;
instruments and mortgages with respect to attorney’s fees in the form
of penalty provided that they are not unreasonable or unconscionable 3. One Hundred Ninety Three Thousand One Hundred Sixty Nine
(Philippine Engineering Co. v. Green, 48 Phil. 466)."cralaw Pesos and Seventy Two Centavos representing liquidated damages as
virtua1aw library of November 23, 1981 with interest of 12% per annum to be
computed from November 24, 1981 until fully paid;
3. ID.; ID.; WHEN IN THE NATURE OF LIQUIDATED
DAMAGES; MUST BE AWARDED IN FAVOR OF THE 4. Attorney’s fees equivalent to 25% of the total amount due in favor
LITIGANT; CASE AT BAR. — It is worthwhile recalling what of the plaintiff;
Polytrade v. Blanco has to say on the matter of attorney’s fees, to wit:
"To be borne in mind is that the attorneys’ fees here provided is not, 5. Two Hundred Fifty Pesos and Seventy Five Centavos representing
strictly speaking, the attorneys’ fees recoverable as between attorney the value of the check which was drawn by the defendant, accepted
and client spoken of and regulated by the Rules of Court. Rather, the by the plaintiff and dishonored by the drawee bank.
attorneys’ fees here are in the nature of liquidated damages and the
stipulation therefor is aptly called a penal clause. It has been said that 6. Costs of suit.
so long as such stipulation does not contravene law, morals, or public
order, it is strictly binding upon defendant. The attorney’s fees so SO ORDERED." 2
provided are awarded in favor of the litigant, not his counsel. It is the
litigant, not counsel, who is the judgment creditor entitled to enforce Seeking appellate review, the matter was elevated to the Court of
the judgment by execution." Appeals which dismissed petitioners’ appeal for lack of merit 3 and
so with their Motion for Reconsideration. 4

DECISION Hence, this petition.

Petitioners do not dispute the facts but only that portion of the
NOCON, J.: findings of fact of the trial court, as affirmed by the appellate court on
the alleged exhorbitant attorney’s fees, excessive liquidated damages
and usurious interest on the loan.
"While in bed the sick man’s lying,
Settled is the rule, that in petitions for review under Rule 45 of the
Rules of Court, only questions of law may be raised since factual
While in Court your client’s cause you’re trying,
findings of the Court of Appeals are deemed conclusive on the
Supreme Court subject to certain exceptions. 5
That’s the time to get your fee.
Thus, the issues raised by petitioners on (1) the alleged lack of basis
For, when the sick man has recovered,
for liquidated damages imposed as a penalty for litigation as
determined by the trial court and (2) the alleged usurious interests
And the lawsuit’s won or smothered
rate they were charged on the contract of loan as evidenced by the
promissory note has been disposed of by the trial court and the Court
He will never think of thee." 1
of Appeals. Thus, the findings of fact are binding on
Us.chanrobles.com:cralaw:red
Petitioners spouses Ernesto and Marietta Roldan claim that the
attorney’s fees claimed by the private respondent, Commercial Credit
The matter, however, of the attorney’s fees — gargantuan,
Corporation of Davao City, being gargantuan, exhorbitant and
exhorbitant and unconscionable as alleged by petitioners — is what
unconscionable, should be proportionately reduced on the basis of
this Court will rule upon.
quantum meruit. Private respondent Commercial Credit Corporation
of Davao demurs and states that the amount is reasonable or
This is not the first time that the amount of attorney’s fees has been
conscionable considering the difficulty it has encountered in
questioned. In Radiowealth Finance Co., Inc. v. International
collecting from the petitioners.
Corporate Bank, 6 petitioner Radiowealth questioned the
reasonableness of the amount of attorney’s fees therein and asked
Culled from private respondent’s statement of facts are the following
whether this Court has the power to modify the attorney’s fees
antecedents of this case. On June 7, 1971, petitioners purchased
previously agreed upon by the parties under a valid contractual
fifteen (15) trucks on installment basis for P1,250,000.00 from
stipulation.
private Respondent. Since they could not fully pay their obligation,
private respondent sued them on November 21, 1981. On July 28,
The Court ruled there as follows:jgc:chanrobles.com.ph
1987, the trial court rendered its decision, which in its dispositive
portion reads as follows:jgc:chanrobles.com.ph
"As a basic premise, the contention of petitioners that this Court may
alter, modify or change even an admittedly valid stipulation between
"IN VIEW WHEREOF, judgment is hereby rendered ordering the
the parties regarding attorney’s fees is conceded. The high standards
defendants to pay in solidum the plaintiff the following
of the legal profession as prescribed by law and the Canons of
sums:chanrobles law library
Professional Ethics regulate if not limit the lawyer’s freedom in
fixing his professional fees. The moment he takes his oath, ready to
1. Five Hundred Seventy Nine Thousand Five Hundred Sixty Seven
undertake his duties first, as a practitioner in the exercise of his
Pesos and Thirteen Centavos representing the principal balance with
profession, and second, as an officer of the court in the administration
interest at 12% to be computed from November 24, 1981 until fully
of justice, the lawyer submits himself to the authority of the court. It
paid;
becomes axiomatic therefore, that power to determine the
reasonableness or the unconscionable character of attorney’s fees
2. Twenty Thousand Two Hundred Eighty Five and Forty Three
stipulated by the parties is a matter falling within the regulatory x x x
prerogative of the courts (Panay Electric Co., Inc. v. Court of
Appeals, 119 SCRA 456 [1982]; De Santos v. City of Manila, 45
SCRA 409 [1972]; Rolando v. Luz, 34 SCRA 337 [1970]; Cruz v. It is my client’s fervent wish and desire that your client will favorably
Court of Industrial Relations, 8 SCRA 826 [1963]). And this Court consider our proposal to, satisfy their respective claims and interests.
has consistently ruled that even with the presence of an agreement
between the parties, the court may nevertheless reduce attorney’s fees x x x
though fixed in the contract when the amount thereof appears to be
unconscionable or unreasonable (Borcena v. Intermediate Appellate
Court, 147 SCRA 111 [1987]; Mutual Paper Inc. v. Eastern Scott 2. Reply of Atty. Cabarroguis of even date: 11
Paper Co., 110 SCRA 481 [1981]; Gorospe v. Gochango, 106 Phil.
425 [1959]; Turner v. Casabar, 65 Phil. 490 [1938]; F.M. Yap Tico & "Atty. R. Taa-san
Co. v. Alejano, 53 Phil. 986 [1929]). For the law recognizes the
validity of stipulations included in documents such as negotiable Brgly Bldg. Davao City
instruments and mortgages with respect to attorney’s fees in the form
of penalty provided that they are not unreasonable or unconscionable Re: Your letter (Roldan Case) can we meet over coffee tomorrow at
(Philippine Engineering Co. v. Green, 48 Phil. 466)." 7 (Emphasis JALTAN Coffee Shop along A. Pichon St? Please confirm.
supplied)
Regards.
Before We proceed any further, it is worthwhile recalling what
Polytrade v. Blanco 8 has to say on the matter of attorney’s fees, to H Cabarroguis
wit:jgc:chanrobles.com.ph
11-16-90"
"To be borne in mind is that the attorneys’ fees here provided is not,
strictly speaking, the attorneys’ fees recoverable as between attorney 3. Letter of Atty. Ta-asan to petitioner Marietta A. Roldan dated
and client spoken of and regulated by the Rules of Court. Rather, the November 17, 1990: 12
attorneys’ fees here are in the nature of liquidated damages and the
stipulation therefor is aptly called a penal clause. It has been said that "MRS. MARIETTA A. ROLDAN
so long as such stipulation does not contravene law, morals, or public
order, it is strictly binding upon defendant. The attorney’s fees so MacArthur Highway, Matina,
provided are awarded in favor of the litigant, not his counsel. It is the
litigant, not counsel, who is the judgment creditor entitled to enforce Davao City, Philippines
the judgment by execution." 9 (Emphasis supplied)chanrobles virtual
lawlibrary
Dear Mrs. Roldan,
Private respondent’s counsel must have forgotten this as evident from
I wish to inform you of the outcome of my conference with Atty.
the following exchange of letters between the parties, as
Honesto A. Cabarroguis, legal counsel of the Commercial Credit
follows:chanrob1es virtual 1aw library
Corporation (CCC), last Saturday November 17, 1990. During the
conference, we made known to Atty. Cabarroguis your previous
1. Letter of Atty. Ta-asan to Atty. Cabarroguis dated November 16,
proposal which I laid down in writing. However, Atty. Cabarroguis
1990: 10
suggested some modifications. He has made the following
proposal:chanroblesvirtualawlibrary
"ATTY. HONESTO A. CABARROGUIS

Hacalex Bldg., Brokenshire x x x

Complex, A. Pichon St.,


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

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


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

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

2. To pay P50,000.00 pesos cash downpayment and balance with real Roldan, et. als.
properties located in M’lang, Cotabato, Philippines, to be paid to the
plaintiff’s counsel for his attorney’s fees and other legal fees. Dear Atty. Ta-asan,
ONGKIKO KALAW MANHIT & ACORDA LAW OFFICES,
Further to our conference yesterday afternoon and previous ones in respondent.
connection with captioned case, I just came back from the office of
the Register of Deeds of Davao City where I checked the partial list DECISION
of 334-titles in the name of Marietta A. Roldan which was furnished
me by said office and which I showed you yesterday.
CHICO-NAZARIO, J.:
x x x
This Petition for Review on Certiorari seeks to reverse the Decision1
dated 8 October 2003 of the Court of Appeals in CA-G.R. CV No.
May I suggest that the amount of One Hundred Thousand 74445, entitled, "Ongkiko Kalaw Manhit & Accorda Law Offices v.
(P100,000.00) which is ready and available be paid to me Guenter Bach."
immediately by your clients, in partial payment of my fees from them
and from my client. In turn, I could do a lot to help them get the The facts as culled from the records of the case are as follows:
waivers they are requesting from my clients through me. However,
with all of these lots available in Davao City to be levied upon on
execution or to be the subject-matter of your proposed settlement, we On 7 November 1994, petitioner Guenter Bach engaged the services
shall in the meantime, disregard their offer of lots in M’lang to settle of respondent law firm Ongkiko Kalaw Manhit & Accorda Law
an otherwise favorable judgment already by the Court of Offices to represent him in a Petition for Declaration of Nullity of
Appeals."cralaw virtua1aw library Marriage filed before the Regional Trial Court (RTC) of Makati City,
Branch 143, docketed as Civil Case No. 95-224. The parties signed a
"Fee Agreement," for the legal services to be rendered by respondent.
x x x The provision for payment of the legal services reads:

Private respondent’s counsel’s glaring cupidity is beyond Us. It could (a) seven and one-half (7 ½ % ) of all cash recoveries,
be that private respondent might have contracted with its counsel that including damages, interests, attorney's fees and costs; as
the latter would get the 25% attorney’s fees stipulated in the well as
promissory note as his attorney’s fees. 14 The record however, does
not show such an agreement. But even if this were so, it is no excuse (b) five percent (5 %) of the market value of all properties
for Atty. Cabarroguis, private respondent’s counsel, to act in such a awarded to [the petitioner] by the court or obtained through
manner as to evoke disgust from non-members of the Bar. the compromise agreement, valued at the time of recovery. 2

A lawyer is to uphold the integrity and dignity of the legal profession


However, on 5 December 1995, respondent withdrew its appearance
15 and one who acts like a middleman always out on grabs for what
as counsel of petitioner, due to policy differences. On 18 December
he can get certainly lessens the dignity of the legal profession.
1995, respondent sent the termination billing3 for the services they
rendered and billed petitioner the total amount of P1,000,000.00 plus
The trial court found:jgc:chanrobles.com.ph
2% interest for every month of delay in payment, based on the
provision for termination of services stated in their Fee Agreement,
"4. That one of the terms of Promissory Note is that in case of
thus:
litigation, ‘. . .the makers and indorsers shall in addition pay 25% of
the amount due as attorney’s fees and 33 1/3 more of the principal
due and unpaid as liquidated damages . . .’ (Exh. "F-2")" (C) Interest for late payment

Twenty-five (25%) percent of the balance of the Promissory Note due All fees mentioned herein are payable within seven (7)
which the trial court pegged at P579,576.13 is P579.576.13 x 0.25 = days from receipt of our statement of account. It is
P144,894.03, which amount would be due the private respondent — understood that all late payments shall be subject to interest
NOT its counsel — as attorney’s fees. It is clear that the liquidated payment at the rate of 2 % per month of delay, a fraction of
damages and other charges are not to be included for computation of a month being considered as one month, counted from the
the attorney’s fees. The reason why respondent’s counsel came up date the fees shall fall due, without need of prior demand.
with his attorney’s fees of P577,320.20 is that he erroneously added
the liquidated damages and other charges and interests due to the
xxxx
balance of the promissory note to get the total due to which he
applied the 25% stipulated fee.
(F) Termination Clause
WHEREFORE, in view of the foregoing, this Petition is partially
granted. The private respondent is hereby AWARDED attorney’s It is understood that you may terminate our services at any
fees in the amount of ONE HUNDRED FORTY FOUR time. In such an event, we shall be entitled to collect fees
THOUSAND, EIGHT HUNDRED NINETY FOUR PESOS AND for legal services already performed and results obtained
THREE CENTAVOS (P144,894.03). The other awards of the trial based on quantum meruit."4
court, as affirmed by the respondent Court of Appeals, are hereby
RETAINED.
On 7 March 1996, respondent filed with the RTC a Notice5 of
SO ORDERED. Charging Lien over the properties of the spouses Bach.

On 5 February 1997, the RTC issued an Order6 directing the


8.) G.R. No. 160334 September 11, 2006 annotation of the charging lien in the amount of P1,000,000.00 on all
the titles of the spouses Bach's personal and real properties
GUENTER BACH, petitioner, enumerated in the notice of charging lien.
vs.
On 11 February 1999, respondent received a copy of the Order 7 dated WHETHER OR NOT THERE IS LEGAL BASIS TO
8 June 1998, granting petitioner's Motion to Withdraw his petition in AWARD P50,000.00 AS AND FOR LITIGATION
Civil Case No. 95-224. EXPENSES AND COSTS OF SUIT.14

Despite respondent's demands for his legal fees, petitioner failed and On the first issue, petitioner contends that the P750,000.00 awarded
refused to pay. Thus, respondent filed a Complaint 8 for a sum of to the respondent by way of quantum meruit, with interest of 2% a
money also before the RTC of Makati, Branch 148, docketed as Civil month from date of demand until fully paid, is excessive,
Case No. 99-514. Respondent prayed for the payment of the unreasonable and confiscatory. Thus, petitioner prays for reduction of
following: P1,000,000.00 as the latter's lawful fees for services the same.
rendered in Civil Case No. 95-224, plus 2% interest from date of final
demand until paid; P250,000.00 as exemplary damages; P200,000.00 Both the Court of Appeals and the trial court approved the attorney's
representing billable time spent in prosecuting the case, plus another fees in the total amounts of P750,000.00 plus 2 % interest for the
P150,000.00 for any appeal taken; and P50,000.00 as litigation services rendered by respondent in Civil Case No. 95-224. In this
expenses and the cost of suit. regard, the rule is that the issue of the reasonableness of attorney's
fees based on quantum meruit is a question of fact, and well-settled is
Within the period for filing an Answer, petitioner filed a Motion9 to the rule that conclusions and findings of fact by the lower courts are
dismiss on the ground that respondent's claim had already been paid, entitled to great weight on appeal and will not be disturbed except for
waived, abandoned or otherwise extinguished. Petitioner contended strong and cogent reasons. The findings of the Court of Appeals by
that prior to respondent's withdrawal as counsel in Civil Case No. 95- itself, which are supported by substantial evidence, are almost
224, petitioner had already paid respondent's services in the total beyond the power of review by the Supreme Court. 15 Thus, in the
amount of P200,000.00. On 9 August 1999, the Motion to Dismiss exercise of the Supreme Court's power of review the findings of facts
was denied10 by the RTC for lack of merit. Petitioner failed to file his of the Court of Appeals are conclusive and binding on the Supreme
Answer; thus, he was declared in default and respondent was allowed Court. There are, however, recognized exceptions to this rule,
to present its evidence ex parte.11 namely: (1) when the findings are grounded entirely on speculation,
surmises or conjectures; (2) when the inference made is manifestly
On 24 January 2002, the RTC rendered its judgment in favor of the mistaken, absurd or impossible; (3) when there is grave abuse of
respondent, the dispositive portion of which reads: discretion; (4) when the judgment is based on misapprehension of
facts; (5) when the findings of facts are conflicting; (6) when in
making the findings the Court of Appeals went beyond the issues of
WHEREFORE, premises considered, judgment is hereby the case, or its findings are contrary to the admissions of both the
rendered in favor of the plaintiff and against the defendant appellee and the appellant; (7) when the findings are contrary to the
and the latter is hereby ordered to pay the following: trial court; (8) when the findings are conclusions without citation of
specific evidence on which they are based; (9) when the facts set
1. The amount of P750,000.00 as plaintiff's lawful fees for forth in the petition as well as in the petitioner's main and reply briefs
services rendered under Civil Case No. 95-224, plus are not disputed by the respondent; (10) when the findings of facts
interest at the rate of 2% per month from the date of are premised on the supposed absence of evidence and contradicted
demand until paid; by the evidence on record; and (11) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the
2. P700,000.00 representing billable time which was spent parties, which if properly considered, would justify a different
in prosecuting this case; conclusion.16 Exceptions (4) and (11) are present in the case at bar,
and so this Court shall make its own determination of the facts
relevant for the resolution of the case.
3. P50,000.00 as and litigation expenses, and
Ordinarily, therefore, we would have remanded this case for further
4. Costs of suit.12 reception of evidence as to the extent and value of the services
rendered by respondent to petitioner. However, so as not to
Not satisfied, petitioner appealed to the Court of Appeals, which needlessly prolong the resolution of a comparatively simple
modified the RTC Decision, thus: controversy, we deem it just and equitable to fix in the present
recourse a reasonable amount of attorney's fees in favor of
respondent.
WHEREFORE, Based on the foregoing premises, the
instant appeal is PARTLY GRANTED and the appealed
January 24, 2002 Decision of the Regional Trial Court of There are two concepts of attorney's fees. In the ordinary sense,
Makati City-Branch 148 in Civil Case No. 99-514 is hereby attorney's fees represent the reasonable compensation paid to a
MODIFIED. Accordingly, the award of P700,000.00 lawyer by his client for the legal services rendered to the latter. On
representing billable time allegedly spent in the prosecution the other hand, in its extraordinary concept, attorney's fees may be
of the case a quo is hereby DELETED. All other aspects of awarded by the court as indemnity for damages to be paid by the
the appealed DECISION are UPHELD.13 losing party to the prevailing party.17

Hence, this Petition filed by petitioner Guenter Bach raising the The issue in this case concerns attorney's fees in the ordinary
following issues to wit: concept. Generally, the amount of attorney's fees due is that
stipulated in the retainer agreement which is conclusive as to the
amount of the lawyer's compensation. In the absence thereof, the
WHETHER OR NOT UNDER THE CONCEPT OF
amount of attorney's fees is fixed on the basis of quantum meruit, i.e.,
QUANTUM MERUIT, THE AMOUNT OF P750,000.00
the reasonable worth of the attorney's services. Courts may ascertain
AS FEES FOR SERVICES RENDERED WITH
also if the attorney's fees are found to be excessive, what is
INTEREST PEGGED AT 2% A MONTH FROM DATE
reasonable under the circumstances.18 In no case, however, must a
OF DEMAND UNTIL FULLY PAID IS REASONABLE
lawyer be allowed to recover more than what is reasonable, pursuant It is undisputed that respondent firm had rendered services as counsel
to Section 24, Rule 138 of the Rules of Court, which provides: for the petitioners in Civil Case No. 95-244. The services rendered
consist of the following:
SEC. 24. Compensation of attorney's fees; agreement as to
fees.- An attorney shall be entitled to have and recover 1. Respondent was able to annotate a notice20 of lis pendens
from his client no more than a reasonable compensation for on the property of Spouses Bach in Caloocan City covered
his services, with a view to the importance of the subject - by TCT No. C-12112, thereby preventing easy disposition
matter of the controversy, the extent of the services of the property by Luzviminda Bach;
rendered, and the professional standing of the attorney. No
court shall be bound by the opinion of attorneys as expert 2. Respondent was likewise able to annotate a notice21 of
witnesses as to the proper compensation, but may disregard lis pendens on the property of Spouses Bach in Pasig City
such testimony and base its conclusion on its own covered by TCT No. 48223, thereby preventing disposition
professional knowledge. A written contract for services of the property by Luzviminda Bach;
shall control the amount to be paid therefor unless
found by the court to be unconscionable or
unreasonable. (Underscoring supplied.) 3. Further, respondent annotated a notice22 of lis pendens
on the property of Spouses Bach in Dasmarinas, Cavite
covered by TCT No. T-339282, thereby preventing
We have identified the circumstances to be considered in determining disposition of the property by Luzviminda Bach;
the reasonableness of a claim for attorney's fees as follows: (1) the
amount and character of the service rendered; (2) labor, time, and
trouble involved; (3) the nature and importance of the litigation or 4. Additionally, respondent annotated a notice23 of lis
business in which the services were rendered; (4) the responsibility pendens on the property of Spouses Bach in Tanza, Cavite,
imposed; (5) the amount of money or the value of the property covered by TCT No. T-255263, thereby preventing
affected by the controversy or involved in the employment; (6) the disposition of the property by Luzviminda Bach;
skill and experience called for in the performance of the services; (7)
the professional character and social standing of the attorney; (8) the 5. Respondent also worked on the annotation of the notice24
results secured; and (9) whether the fee is absolute or contingent, it of lis pendens on the property of Spouses Bach in Makati,
being recognized that an attorney may properly charge a much larger covered by TCT No. S-62541, thereby preventing
fee when it is contingent than when it is not.19 disposition of the property by Luzviminda Bach;

Rule 20.1, Canon 20 of the Code of Professional Responsibility 6. Respondent worked on the annotation of a notice of lis
enumerates the following factors which should guide a lawyer in pendens on the property of Spouses Bach in Dasmariñas,
determining his fees: Cavite, covered by TCT No. T-380848, thereby preventing
disposition of the property by Luzviminda Bach;
(a) the time spent and extent of services rendered or
required; 7. Respondent annotated a notice25 of lis pendens on the
property of Spouses Bach situated in Tagaytay City,
(b) the novelty and difficulty of the questions involved; covered by TCT No. P-705, thereby preventing disposition
of the property by Luzviminda Bach;
(c) the importance of the subject matter;
8. Respondent filed the Petition26 for Declaration of Nullity
of Marriage and Dissolution of the Conjugal Partnership of
(d) the skill demanded; Gains of petitioner with his wife;

(e) the probability of losing other employment as a result of 9. Respondent prepared an affidavit27 in favor of petitioner
the acceptance of the proffered case; attesting to the fact of petitioner's marriage and their
properties acquired during his marriage with Luzviminda
(f) the customary charges for similar services and the Bach:
schedule of fees of the IBP Chapter to which he belongs;
10. Respondent prepared an ex parte motion28 to declare
(g) the amount involved in the controversy and the benefits petitioner's wife to have waived her right to file answer for
resulting to the client from the service; failure to file the same within the period granted by law and
to direct the public prosecutor to determine whether or not
(h) the contingency or certainty of compensation; a collusion exist;

(i) the character of the employment, whether occasional or 11. Respondent prepared a Petition29 for appointment of a
established; and receiver and to compel petitioner's wife to render an
accounting;
(j) the professional standing of the lawyer.
12. Other services included the filling of several
oppositions30 to certain motions filed by petitioner's wife;
In determining a reasonable fee to be paid to respondent as
compensation for their services on quantum meruit, based
on the factors abovequoted, it is proper to consider all the 13. Respondent filed a motion31 to set the case for
facts and circumstances obtaining in this case. preliminary investigation;
14. Respondent filed an ex parte motion32 to declare The imposition of legal interest on the amount payable to private
petitioner's wife in default; respondent as attorney's fees is unwarranted. Even as we agree that
parties can freely stipulate on the terms of payment, still the
15. Respondent submitted a supplemental comment33 on imposition of interest in the payment of attorney's fees is not
the motion for leave to withdraw funds from Certificate of justified. In the case of Cortes v. Court of Appeals,40 we ruled that
Participation filed by petitioner's wife; Article 220941 of the Civil Code does not even justify the imposition
of legal interest on the payment of attorney's fees as it is a provision
of law governing ordinary obligations and contracts. It deleted the
16. Respondent filed a manifestation and motion34 praying 6% interest imposed by the appellate court on the payment of
the court to direct petitioner's wife to designate her lead attorney's fees. It ratiocinated by citing Mambulao Lumber Co. v.
counsel in the case; Philippine National Bank,42 thus:

17. Respondent prepared a Reply35 to comments on Contracts for attorney's services in this jurisdiction
opposition of petitioner; stands upon an entirely different footing from contracts
for the payment of compensation for any other services.
18. Respondent was able to secure an Order36 from the said x x x [A]n attorney is not entitled in the absence of express
court freezing the United Coconut Planters Bank (UCPB) contract to recover more than a reasonable compensation
account in the name of petitioner's wife, Luzviminda Bach, for his services; and even when an express contract is
containing about P6,500,000.00, representing the balance made, the court can ignore it and limit the recovery to
of the proceeds from the sale of their conjugal property in reasonable compensation if the amount of the stipulated fee
Pasig City; is found by the court to be unreasonable. This is a very
different rule from that announced in section 1091 of the
19. Respondent represented petitioner in numerous Civil Code with reference to the obligation of contracts in
hearings in Civil Case No. 95-224, evidenced by the general, where it is said that such obligation has the force
signatures of the lawyers of respondent Law Firm in the of law between the contracting parties. Had the plaintiff
minutes dated 25 April 1995, 27 April, 1995, 14 June 1995, herein made an express contract to pay his attorney an
27 June 1995, 1 August 1995, 11 August 1995, 22 uncontingent fee of P2,115.25 for the services to be
September 1995,10 October 1995, 17 October 1995, 1 rendered in reducing the note here in suit to judgment, it
December 1995, 7 December 1995, 29 March 1996 and 16 would not have been enforced against him had he seen fit
January 1997;37 to oppose it, as such a fee is obviously far greater than is
necessary to remunerate the attorney for the work involved
and is therefore unreasonable. In order to enable the court
20. Conducted several preliminary and post litigation to ignore an express contract for attorney's fees, it is
conferences in the proceedings for preliminary injunction necessary to show, as in other contracts, that it is
leading to the freezing of the bank account of the parties; contrary to morality or public policy (Art.1255, Civil
and Code). It is enough that it is unreasonable or
unconscionable. (Emphases supplied.)
21. Prepared and sent out numerous letters to third parties
and entities to protect the interest of petitioner and notices We have held that lawyering is not a moneymaking venture and
to petitioner updating him of the status of the case and the lawyers are not merchants.43 Law advocacy, it has been stressed, is
courses of action taken by respondent Law Firm.38 not capital that yields profits. The returns it births are simple rewards
for a job done or service rendered. It is a calling that, unlike
In sum, the services rendered by the respondent as enumerated above mercantile pursuits which enjoy a greater deal of freedom from
and as admitted39 by Atty. Mario Ongkiko during the ex parte governmental interference, is impressed with a public interest, for
hearing, consist of annotating notice of lis pendens on the conjugal which it is subject to State regulation.44
properties of petitioner and his wife; filing the Petition for
Declaration of Nullity of Marriage; preparing and filing various A lawyer is not merely the defender of his client's cause and a trustee
pleadings and documents relevant to the case; obtaining a freeze of his client's cause of action and assets; he is also, and first and
order of petitioner's funds in the UCPB; attending hearings in Civil foremost, an officer of the court and participates in the fundamental
Case No. 05-224, and sending notices to petitioner updating the latter function of administering justice in society.45 It follows that a
of the status of the case. Nothing in Civil Case No. 95-224 so far lawyer's compensation for professional services rendered are subject
appears complicated and no extra ordinary skill was needed for to the supervision of the court, not just to guarantee that the fees he
lawyers of respondent Law Firm to accomplish what they had done in charges and receives remain reasonable and commensurate with the
the case before they withdrew their appearance. We do not find services rendered, but also to maintain the dignity and integrity of the
herein a situation so intricate that demands more than a careful legal profession to which he belongs. Upon taking his attorney's oath
scrutiny of the legal matters involved. These are simply the normal as an officer of the court, a lawyer submits himself to the authority of
duties of a lawyer that he is bound by law to render to his clients with the courts to regulate his right to charge professional fees.46
utmost fidelity for which his client must not be burdened to pay an
extra price. It bears stressing that at the time respondent firm
withdrew their appearance due to policy differences with petitioner, Though we reduced the award of attorney's fees and disallowed the
the case was still in its initial stage. imposition of interest thereon, the fact that an attorney plays a vital
role in the administration of justice underscores the need to secure to
him his honorarium lawfully earned as a means to preserve the
Guided by the above yardstick and so much of the pertinent data as decorum and respectability of the legal profession. A lawyer is as
are extant in the records of this case and in the exercise of our sound much entitled to judicial protection against injustice, imposition of
discretion, we hold that the amount of P500,000.00 is a reasonable fraud on the part of his client as the client against abuse on the part of
and fair compensation for the legal services rendered by respondent his counsel. The duty of the court is not alone to see that a lawyer
to the petitioner. acts in a proper and lawful manner; it is also its duty to see that a
lawyer is paid his just fees. With his capital consisting only of his
brains and with his skill acquired at tremendous cost not only in On November 21, 2003, the Labor Arbiter (LA) rendered a Decision
money but in expenditure of time and energy, he is entitled to the granting the monetary claims of Alexander. The dispositive portion
protection of any judicial tribunal against any attempt on the part of of the decision, as quoted in the CA Decision, reads:
his client to escape payment of his just compensation. It would be
ironic if after putting forth the best in him to secure justice for his WHEREFORE, foregoing considered, judgment is rendered finding
client, he himself would not get his due.47 the [First Victory Shipping Services and Angelakos (Hellas) S.A.]
jointly and severally liable to pay [Alexander’s] total permanent
Thus, the Court of Appeals did not err in awarding expenses of disability benefits in the amount of US$60,000.00 and his sickness
litigation. Article 2208, paragraphs 2, 5 and 11, of the Civil Code, allowance of US$2,348.00, both in Philippine currency at the
authorize the recovery of such fees "(2) When the defendant's act or prevailing rate of exchange at the time of payment; and to pay further
omission has compelled the plaintiff to litigate x x x or to incur the amount of ₱200,000.00 as moral damages, ₱100,000.00 as
expenses to protect his interest; x x x (5) Where the defendant acted exemplary damages and attorney’s fees equivalent to ten percent
in gross and evident bad faith in refusing to satisfy the plaintiff's (10%) of the total monetary award.
plainly valid, just and demandable claim; x x x and (11) In any other
case where the court deems it just and equitable that attorney's fees [Alexander’s] claim for payment of medical expenses is dismissed
and expenses of litigation should be recovered." Considering the fact for lack of basis.
that respondent was drawn into this litigation by petitioner to protect
and defend their interest and taking into account the services already
rendered by respondent to petitioner, the sum of P30,000.00 as SO ORDERED.4
expenses of litigation and cost of suit would be reasonable under the
premises. Alexander’s employer filed an appeal before the National Labor
Relations Commission (NLRC). During the pendency of the
WHEREFORE, the Decision appealed from is AFFIRMED WITH proceedings before the NLRC, Alexander died. After explaining the
MODIFICATIONS to the effect that the attorney's fees awarded to terms of the lawyer’s fees to Evangelina, Atty. Go caused her
respondent is REDUCED to P500,000.00, the legal interest of 2% on substitution as complainant. On April 30, 2004, the NLRC rendered a
the amount due to respondent is DELETED, and the award of Decision dismissing the appeal of Alexander’s employer. The
litigation expenses is REDUCED to P30,000.00. employer subsequently filed a motion for reconsideration. The NLRC
denied the same in an Order dated October 26, 2004.
SO ORDERED.
On appeal before the CA, the decision of the LA was affirmed with
modification. The award of moral and exemplary damages was
9.) G.R. No. 183385 February 13, 2009 deleted.5 Alexander’s employers filed a petition for certiorari6 before
this Court. On February 6, 2006, the Court issued a Resolution
EVANGELINA MASMUD (as substitute complainant for dismissing the case for lack of merit.
ALEXANDER J. MASMUD), Petitioner,
vs. Eventually, the decision of the NLRC became final and executory.
NATIONAL LABOR RELATIONS COMMISSION (First Atty. Go moved for the execution of the NLRC decision, which was
Division) and ATTY. ROLANDO B. GO, JR., Respondents. later granted by the LA. The surety bond of the employer was
garnished. Upon motion of Atty. Go, the surety company delivered to
RESOLUTION the NLRC Cashier, through the NLRC Sheriff, the check amounting
to ₱3,454,079.20. Thereafter, Atty. Go moved for the release of the
said amount to Evangelina.
NACHURA, J.:

On January 10, 2005, the LA directed the NLRC Cashier to release


Before the Court is a petition for review on certiorari1 assailing the the amount of ₱3,454,079.20 to Evangelina. Out of the said amount,
Decision2 dated October 31, 2007 and the Resolution dated June 6, Evangelina paid Atty. Go the sum of ₱680,000.00.
2008 of the Court of Appeals (CA) in CA-G.R. SP No. 96279.

Dissatisfied, Atty. Go filed a motion to record and enforce the


The facts of the case are as follows: attorney’s lien alleging that Evangelina reneged on their contingent
fee agreement. Evangelina paid only the amount of ₱680,000.00,
On July 9, 2003, Evangelina Masmud’s (Evangelina) husband, the equivalent to 20% of the award as attorney’s fees, thus, leaving a
late Alexander J. Masmud (Alexander), filed a complaint 3 against balance of 10%, plus the award pertaining to the counsel as attorney’s
First Victory Shipping Services and Angelakos (Hellas) S.A. for non- fees.
payment of permanent disability benefits, medical expenses, sickness
allowance, moral and exemplary damages, and attorney’s fees. In response to the motion filed by Atty. Go, Evangelina filed a
Alexander engaged the services of Atty. Rolando B. Go, Jr. (Atty. comment with motion to release the amount deposited with the
Go) as his counsel. NLRC Cashier. In her comment, Evangelina manifested that Atty.
Go’s claim for attorney’s fees of 40% of the total monetary award
In consideration of Atty. Go’s legal services, Alexander agreed to pay was null and void based on Article 111 of the Labor Code.
attorney’s fees on a contingent basis, as follows: twenty percent
(20%) of total monetary claims as settled or paid and an additional On February 14, 2005, the LA issued an Order7 granting Atty. Go’s
ten percent (10%) in case of appeal. It was likewise agreed that any motion, the fallo of which reads:
award of attorney’s fees shall pertain to respondent’s law firm as
compensation.
WHEREFORE, premises considered, and further considering the
substitute complainant’s initial payment of 20% to movant-counsel of
the monetary claims as paid, let the balance or unpaid twenty (20%)
per cent of attorney’s fees due movant-counsel (or the amount of Evangelina maintains that Article 111 of the Labor Code is the law
₱839,587.39) be recorded as lien upon all the monies that may still be that should govern Atty. Go’s compensation as her counsel and
paid to substitute complainant Evangelina Masmud. assiduously opposes their agreed retainer contract.

Accordingly, the NLRC Cashier is directed to pay movant-counsel Article 111 of the said Code provides:
the amount of ₱677,589.96 which is currently deposited therein to
partially satisfy the lien. ART. 111. Attorney's fees. — (a) In cases of unlawful withholding of
wages the culpable party may be assessed attorney's fees equivalent
SO ORDERED.8 to ten percent of the amount of the wages recovered.1avvphi1.zw+

Evangelina questioned the February 14, 2005 Order of the LA before Contrary to Evangelina’s proposition, Article 111 of the Labor Code
the NLRC. On January 31, 2006, the NLRC issued a Resolution 9 deals with the extraordinary concept of attorney’s fees. It regulates
dismissing the appeal for lack of merit. the amount recoverable as attorney's fees in the nature of damages
sustained by and awarded to the prevailing party. It may not be used
Evangelina then elevated the case to the CA via a petition for as the standard in fixing the amount payable to the lawyer by his
certiorari.10 On October 31, 2007, the CA rendered a Decision11 client for the legal services he rendered.17
partially granting the petition. The dispositive portion of the decision
reads: In this regard, Section 24, Rule 138 of the Rules of Court should be
observed in determining Atty. Go’s compensation. The said Rule
WHEREFORE, the petition is PARTIALLY GRANTED. The provides:
Resolutions dated January 31, 2006 and July 18, 2006 are hereby
AFFIRMED with MODIFICATION in that the Attorney’s fees of SEC. 24. Compensation of attorney's; agreement as to fees. — An
respondent Atty. Rolando B. Go, Jr. is declared fully compensated by attorney shall be entitled to have and recover from his client no more
the amount of ₱1,347,950.11 that he has already received. than a reasonable compensation for his services, with a view to the
importance of the subject matter of the controversy, the extent of the
SO ORDERED.12 services rendered, and the professional standing of the attorney. No
court shall be bound by the opinion of attorneys as expert witnesses
as to the proper compensation, but may disregard such testimony and
Evangelina filed a motion for reconsideration. However, on June 6, base its conclusion on its own professional knowledge. A written
2008, the CA issued a Resolution13 denying the motion for contract for services shall control the amount to be paid therefor
reconsideration for lack of merit. unless found by the court to be unconscionable or unreasonable.18

Hence, the instant petition. The retainer contract between Atty. Go and Evangelina provides for a
contingent fee. The contract shall control in the determination of the
Evangelina presented this issue, viz.: amount to be paid, unless found by the court to be unconscionable or
unreasonable.19 Attorney's fees are unconscionable if they affront
THE COURT OF APPEALS COMMITTED SERIOUS AND one's sense of justice, decency or reasonableness.20 The decree of
REVERSIBLE ERROR OF LAW IN ITS DECISION DATED 31 unconscionability or unreasonableness of a stipulated amount in a
OCTOBER 2007 AND RESOLUTION DATED 6 JUNE 2008 contingent fee contract will not preclude recovery. It merely justifies
INSOFAR AS IT UPHOLDS RESPONDENT LAWYER’S CLAIM the fixing by the court of a reasonable compensation for the lawyer's
OF FORTY PERCENT (40%) OF THE MONETARY AWARD IN services.21
A LABOR CASE AS ATTORNEY’S FEES.14
The criteria found in the Code of Professional Responsibility are also
In effect, petitioner seeks affirmance of her conviction that the legal to be considered in assessing the proper amount of compensation that
compensation of a lawyer in a labor proceeding should be based on a lawyer should receive.1avvph¡1.zw+ Canon 20, Rule 20.01 of the
Article 111 of the Labor Code. said Code provides:

There are two concepts of attorney's fees. In the ordinary sense, CANON 20 — A LAWYER SHALL CHARGE ONLY FAIR AND
attorney's fees represent the reasonable compensation paid to a REASONABLE FEES.
lawyer by his client for the legal services rendered to the latter. On
the other hand, in its extraordinary concept, attorney's fees may be Rule 20.01. — A lawyer shall be guided by the following factors in
awarded by the court as indemnity for damages to be paid by the determining his fees:
losing party to the prevailing party,15 such that, in any of the cases
provided by law where such award can be made, e.g., those (a) The time spent and the extent of the services rendered
authorized in Article 2208 of the Civil Code, the amount is payable or required;
not to the lawyer but to the client, unless they have agreed that the
award shall pertain to the lawyer as additional compensation or as
part thereof.16 (b) The novelty and difficulty of the question involved;

Here, we apply the ordinary concept of attorney’s fees, or the (c) The importance of the subject matter;
compensation that Atty. Go is entitled to receive for representing
Evangelina, in substitution of her husband, before the labor tribunals (d) The skill demanded;
and before the court.
(e) The probability of losing other employment as a result
of acceptance of the proffered case;
(f) The customary charges for similar services and the RESOLUTION
schedule of fees of the IBP Chapter to which he belongs;
DEL CASTILLO, J.:
(g) The amount involved in the controversy and the
benefits resulting to the client from the service; "The power to disbar or suspend ought always to be exercised on the
preservative and not on the vindictive principle, with great caution
(h) The contingency or certainty of compensation; and only for the most weighty reasons."1ςrνll

(i) The character of the employment, whether occasional or This is a Complaint2 for disbarment filed by Jasper Junno F. Rodica
established; and (Rodica) against Atty. Manuel "Lolong" M. Lazaro (Atty. Manuel),
Atty. Edwin M. Espejo (Atty. Espejo), Atty. Abel M. Almario, (Atty.
(j) The professional standing of the lawyer. Almario), Atty. Michelle B. Lazaro (Atty. Michelle), and Atty.
Joseph C. Tan (Atty. Tan) for gross and serious misconduct, deceit,
malpractice, grossly immoral conduct, and violation of the Code of
Contingent fee contracts are subject to the supervision and close Professional Responsibility.
scrutiny of the court in order that clients may be protected from
unjust charges.22 The amount of contingent fees agreed upon by the
parties is subject to the stipulation that counsel will be paid for his Factual Antecedents
legal services only if the suit or litigation prospers. A much higher
compensation is allowed as contingent fees because of the risk that On May 5, 2011, William Strong (Strong), an American, was arrested
the lawyer may get nothing if the suit fails.23 The Court finds nothing and detained by the operatives of the Bureau of Immigration. Strong
illegal in the contingent fee contract between Atty. Go and sought the assistance of Philip3 G. Apostol (Apostol), a friend and
Evangelina’s husband. The CA committed no error of law when it neighbor, to secure the services of a lawyer. Apostol referred him to
awarded the attorney’s fees of Atty. Go and allowed him to receive Atty. Manuel, who is a partner at the M.M. Lazaro and Associates
an equivalent of 39% of the monetary award. Law Office (Lazaro Law Office).

The issue of the reasonableness of attorney's fees is a question of fact. Atty. Manuel initially declined because his law office only handles
Well-settled is the rule that conclusions and findings of fact of the cases of its retained clients and those known to him or any of the
CA are entitled to great weight on appeal and will not be disturbed associate lawyers.4 However, he was eventually prevailed upon by
except for strong and cogent reasons which are absent in the case at Apostol who would consider it as a special favor if Atty. Manuel
bench. The findings of the CA, which are supported by substantial would handle Strong s case. Hence, Atty. Manuel, together with Atty.
evidence, are almost beyond the power of review by the Supreme Almario and Atty. Espejo, senior and junior associates, respectively,
Court.24 at the Lazaro Law Office, agreed to meet Strong at the Taguig
Detention Center of the Bureau of Immigration.5ςrνll
Considering that Atty. Go successfully represented his client, it is
only proper that he should receive adequate compensation for his During the meeting, Atty. Manuel explained to Strong the terms of
efforts. Even as we agree with the reduction of the award of the Lazaro Law Office s engagement as well as the fees. Strong
attorney's fees by the CA, the fact that a lawyer plays a vital role in assured him of his capacity to pay and offered to pay a success fee of
the administration of justice emphasizes the need to secure to him his US$100,000.00 should the said law office be able to expedite his
honorarium lawfully earned as a means to preserve the decorum and release from detention as well as his departure from the Philippines.6
respectability of the legal profession. A lawyer is as much entitled to Finding Strong to be believable and trustworthy, Atty. Manuel agreed
judicial protection against injustice or imposition of fraud on the part to handle his case.7ςrνll
of his client as the client is against abuse on the part of his counsel.
The duty of the court is not alone to ensure that a lawyer acts in a During the course of their meeting, Strong casually mentioned that he
proper and lawful manner, but also to see that a lawyer is paid his just has a property in Boracay and that he suspected his neighbors as the
fees. With his capital consisting of his brains and with his skill persons who caused his arrest. According to Strong, his live-in
acquired at tremendous cost not only in money but in expenditure of partner Rodica filed a Complaint before the Regional Trial Court
time and energy, he is entitled to the protection of any judicial (RTC) of Kalibo, Aklan, for recovery of possession and damages8
tribunal against any attempt on the part of his client to escape (against Hillview Marketing Corporation9 (Hillview),
payment of his just compensation. It would be ironic if after putting
forth the best in him to secure justice for his client, he himself would
not get his due.25 Stephanie Dornau (Dornau) as President of Hillview, the Alargo Park
Neighborhood Association, Inc. and spouses Robert and Judy
Gregoire) in connection with the 353-square meter property they
WHEREFORE, in view of the foregoing, the Decision dated October bought in Boracay. He disclosed that he and Rodica had been trying
31, 2007 and the Resolution dated June 6, 2008 of the Court of to sell the Boracay property to rid themselves of the problems but
Appeals in CA-G.R. SP No. 96279 are hereby AFFIRMED. could not find buyers because of the said case. They even offered the
property to Apostol but the latter was hesitant because of the said
SO ORDERED. pending case. Atty. Manuel averred that towards the end of the
interview with Strong, Rodica arrived. Strong described Rodica as his
"handyman" who will act as his liaison in the case.
10.) [A.C. NO. 9259 - August 23, 2012]

Upon inquiry with the Bureau of Immigration, it was discovered that


JASPER JUNNO F. RODICA, Complainant, v. ATTY. MANUEL Strong s arrest was made pursuant to an Interpol Red Notice; and that
"LOLONG" M. LAZARO, ATTY. EDWIN M. ESPEJO, ATTY. Strong is wanted in Brazil for Conspiracy to Commit Fraud, Setting
ABEL M. ALMARIO, ATTY. MICHELLE B. LAZARO, ATTY. Up a Gang and Other Related Crimes. Specifically, Strong is being
JOSEPH C. TAN, and JOHN DOES, Respondents. indicted for his alleged involvement in "an international gang
involved in shares fraud which led to the creation of hundreds of
millions of dollars in illegal securities."10 Strong denied any chanrobles virtual law library
participation in the alleged crime. Strong then pleaded with Atty.
Manuel to expedite his deportation to any country except Brazil and 22. RESPONDENT Atty. JOSEPH C. TAN on the other hand
reiterated his willingness to pay the success fee of US$100,000.00. performed as a willing partner of ATTY. MANUEL M. LAZARO by
acting as conduit to his Malacañang patron ("JOHN DOE") in
In her Complaint, Rodica alleged that in one of her meetings with the causing the arrest of William Strong last May 5, 2011, and in
lawyers of the Lazaro Law Office, she hinted that Atty. Tan, a senior packaging with Lolong Lazaro of the magic formula regarding
partner at the Marcos Ochoa Serapio Tan and Associates (MOST William Strong s voluntary deportation bid and the conditions
Law) and who is also the lawyer of Hillview and Dornau, was attached thereto as sufficiently explained;
instrumental in the immigration case of Strong. According to Rodica,
Atty. Manuel called up Atty. Tan. Thereafter, Atty. Manuel allegedly xxx
informed Rodica that Atty. Tan admitted having initiated the
immigration case resulting in the detention of Strong; that Atty. Tan
threatened to do something bad against Rodica and her family; and 23. RESPONDENTS also violated THEIR OATH AS x x x
that Atty. Tan demanded for Rodica to withdraw the RTC case as ATTORNEYS, especially with the phrases ". . . I will obey the laws .
part of a settlement package. . . I will do no falsehood, nor consent to the doing of any in court; . . .
I will delay no man for money or malice . . . with all good fidelity as
well to the courts as to my clients . . . ";13ςrνll
On May 25, 2011, the Bureau of Immigration, rendered its
Judgment11 granting the motion of Strong to voluntarily leave the
country. On May 31, 2011, Strong left the Philippines. Subsequently, chanrobles virtual law library
or on June 6, 2011, Rodica filed with the RTC a motion effectively
withdrawing her complaint. Otherwise stated, Rodica claimed that she is a client of the Lazaro
Law Office and that she was deceived into causing the withdrawal of
Rodica alleged that after the deportation of Strong and the withdrawal the RTC case. Further, she claimed that the Lazaro Law Office
of the RTC case, she heard nothing from the Lazaro Law Office. She collected exorbitant fees from her.
also claimed that contrary to her expectations, there was no
"simultaneous over-all settlement of her grievances x x x [with] the In their Comment, Atty. Almario and Atty. Espejo admitted being
defendants [in the RTC] case.12 Thinking that she was deceived, present in the May 13, 2011 meeting with Rodica. They denied,
Rodica filed the instant administrative case. In sum, she claimed however, that Atty. Manuel talked with Atty. Tan during the said
that:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ meeting, or conveyed the information that Atty. Tan and the group of
Dornau were the ones behind Strong s arrest and detention.
21. RESPONDENT ATTORNEYS (MANUEL, MICHELLE,
EDWIN and ABEL) of M.M. LAZARO & ASSOCIATES, Atty. Almario and Atty. Espejo disputed Rodica s assertion that the
furthermore, committed GRAVE MISCONDUCT & DECEIT to withdrawal of the RTC case was a condition sine qua non to Strong s
complainant and the courts when (among other departure from the country. They pointed out that the Manifestation
things):ςηαñrοblεš νιr†υαl lαω lιbrαrÿ with Motion to Withdraw Motion for Reconsideration 14 was filed
only on June 3, 2011,15 or nine days after the May 25, 2011 Judgment
(a.) they mis-represented to complainant that the withdrawal of her of the Bureau of Immigration was issued, and three days after Strong
case at the Regional Trial Court at Kalibo (Branch VI-Civil Case No. left the country on May 31, 2011. They insisted that Rodica withdrew
8987) was only the first step in an over-all settlement package of all the RTC case because it was one of the conditions set by Apostol
her differences with her legal adversaries (i.e. Hillview Marketing before buying the Boracay property.
Corporation and the latter s officials / Stephanie Dornau / Atty.
Joseph Tan etc.), which respondent Manuel M. Lazaro had allegedly As to the preparation of Rodica s Motion to Withdraw Motion for
already taken care of; Reconsideration relative to the RTC case, Atty. Espejo claimed that
the former begged him to prepare the said motion. Since the two
(b.) they extorted from her more than P7 MILLION for alleged already became close friends, Atty. Espejo accommodated Rodica s
professional / legal fees and PENALTIES involved in William Strong request. He admitted to acceding to Rodica s requests to put the name
s immigration case, when what actually happened was - of the Lazaro Law Office, the names of its partners, as well as his
name, in the motion and into signing the same, without the prior
knowledge and consent of the other senior lawyers of the firm. Atty.
(c.) as complainant came to know later, almost all of said amount was Espejo claimed that he did all of these out of his good intention to
allegedly used as "pay-off" to immigration, police and help and assist Rodica in making the Boracay property more saleable
Malaca[ñ]ang officials as well as Atty. Joseph Tan, and as graft by freeing it from any pending claims.
money / kotong / lagay / "tong-pats", for the expeditious approval of
Mr. William Strong s voluntary deportation plea with the Bureau of
Immigration; In his Comment,16 Atty. Manuel contended that none of the lawyers
of the Lazaro Law Office communicated with Atty. Tan relative to
the deportation proceedings or the RTC case. He claimed that it was
(d.) they even shamelessly denied the status of the complainant as highly improbable for the Lazaro Law Office to impress upon Rodica
their client, just so that they can evade their responsibility to her; that it will coordinate with Atty. Tan for the withdrawal of the RTC
case to expedite the deportation proceedings as the RTC case was
(e.) they even submitted concocted stories (re Mr. Apostol s purchase already dismissed as early as March 29, 2011 for failure to state a
bid for the Boracay villa of complainant; Atty. Espejo s attempt to cause of action. Atty. Manuel averred that the two cases are
cover-up for Lolong Lazaro and accept sole responsibility for signing incongruous with each other and one cannot be used to compromise
the questioned manifestation and withdrawal documents last May 24, the other.
2011, and many others) with the Regional Trial Court of Kalibo
(Branch VI) just so that they can hide the truth, hide their crimes and Atty. Joseph Tan s Arguments
go scot free;
For his part, Atty. Tan asserted that the allegations against him are Rodica s claim of "settlement package"
"double hearsay" because the same were based on information is devoid of merit.
allegedly relayed to Rodica by Atty. Manuel, who, in turn, allegedly
heard it from Atty. Tan.17 He denied any participation in the Rodica s assertions that Atty. Tan orchestrated Strong s arrest and
withdrawal of the RTC case and the arrest and deportation of Strong. that Atty. Manuel proposed the withdrawal of the RTC case to
facilitate the deportation of Strong, are mere allegations without
Atty. Tan stressed that Strong was deported on May 31, 2011. Three proof and belied by the records of the case. "The basic rule is that
days thereafter, or on June 3, 2011, Rodica, with the assistance of her mere allegation is not evidence, and is not equivalent to proof."20
counsel of record, Atty. Joan I. Tabanar-Ibutnande (Atty. Ibutnande), Aside from her bare assertions, Rodica failed to present even an iota
filed the Manifestation with Motion to Withdraw Motion for of evidence to prove her allegations. In fact, the records belie her
Reconsideration. He averred that if it is indeed true, as Rodica claims. The documents issued by the Bureau of Immigration showed
alleged, that the filing of the said motion was a pre-condition to that Strong was the subject of the Interpol Red Notice for being a
Strong s voluntary deportation, then the filing of the same should fugitive from justice wanted for crimes allegedly committed in
have preceded Strong s deportation. However, it was the reverse in Brazil.21 His warrant of arrest was issued sometime in February 2008.
this case. Significantly, even before Strong was arrested and eventually
deported, Atty. Tan had already obtained a favorable judgment for his
Atty. Tan also pointed out that it would be inconceivable for him to clients.
participate in Strong s arrest as he had already obtained a favorable
ruling "on the merits" for his clients in the RTC case even before We also agree that it is highly inconceivable for Atty. Tan and the
Strong was arrested and incarcerated. Besides, Strong is not a party Lazaro Law Office to concoct the scheme of "pressuring" Rodica to
and had nothing to do with the RTC case. Atty. Tan likewise denied withdraw the RTC case for the purpose of expediting the deportation
having any dealings with the rest of the respondents insofar as the proceedings of Strong. The following facts are undisputed: (1)
arrest and voluntary deportation of Strong are concerned. Neither did Rodica s counsel of record in the RTC is Atty. Ibutnande; (2) the
he receive any phone call or message from his co-respondents nor did RTC case was already dismissed in the Order22 of March 29, 2011 for
he communicate with them in any manner regarding Strong s case. failure to state a cause of action; (3) on April 18, 2011, Rodica
through her counsel of record filed a Motion for Reconsideration; (4)
Issue on May 5, 2011, Strong was arrested and detained pursuant to an
Interpol Red Notice; (5) Strong hired the Lazaro Law Office to
handle his deportation case; (6) on May 19, 2011 Strong filed a
The sole issue to be resolved is whether the allegations in Rodica s Manifestation with Omnibus Motion to voluntarily leave the country;
Complaint merit the disbarment or suspension of Respondents. (7) the Bureau of Immigration rendered a Judgment23 dated May 25,
2011 granting Strong s motion to voluntarily leave the country; (8)
Our Ruling Strong left the country on May 31, 2011; (9) Rodica s Manifestation
with Motion to Withdraw the Motion for Reconsideration was filed
In Siao v. Atty. De Guzman, Jr.,18 this Court reiterated its oft repeated on June 6, 2011; and, (8) acting on the said Manifestation with
ruling that in suspension or disbarment proceedings, lawyers enjoy Motion, the RTC on June 14, 2011 issued an Order24 granting the
the presumption of innocence, and the burden of proof rests upon the same.
complainant to clearly prove her allegations by preponderant
evidence. Elaborating on the required quantum of proof, this Court Given the chronology of events, there appears no relation between
declared thus:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ the deportation case and the withdrawal of the RTC case. Thus, it
would be specious if not far-fetched to conclude that the withdrawal
Preponderance of evidence means that the evidence adduced by one of the RTC case was a pre-condition to Strong s deportation.
side is, as a whole, superior to or has greater weight than that of the
other. It means evidence which is more convincing to the court as As regards the alleged participation of Atty. Manuel in the
worthy of belief than that which is offered in opposition thereto. "settlement package" theory of Rodica, suffice it to say that Atty.
Under Section 1 of Rule 133, in determining whether or not there is Manuel has in his favor "the presumption that, as an officer of the
preponderance of evidence, the court may consider the following: (a) court, he regularly performs the duties imposed upon him by his oath
all the facts and circumstances of the case; (b) the witnesses manner as a lawyer and by the Code of Professional Responsibility."25 Hence,
of testifying, their intelligence, their means and opportunity of absent any competent evidence to the contrary, Atty. Manuel, as
knowing the facts to which they are testifying, the nature of the facts Strong s counsel, is presumed to have worked out the release and
to which they testify, the probability or improbability of their subsequent deportation of his client in accordance with the proper
testimony; (c) the witnesses interest or want of interest, and also their procedures.
personal credibility so far as the same may ultimately appear in the
trial; and (d) the number of witnesses, although it does not mean that Preponderance of evidence shows that
preponderance is necessarily with the greater number. (Citations Rodica caused the withdrawal of the
omitted.) RTC case to facilitate the sale of the
Boracay property to Apostol.
chanrobles virtual law library
We cannot lend credence to Rodica s allegation that she was deceived
In the absence of preponderant evidence, the presumption of by Atty. Manuel, Atty. Espejo, Atty. Almario and Atty. Michelle,
innocence of the lawyer continues and the complaint against him another senior associate at the Lazaro Law Office, into believing that
must be dismissed.19ςrνll the withdrawal of the RTC case was part of a settlement package to
settle her differences with her legal adversaries. We accord more
In the present case, the totality of evidence presented by Rodica credence to the explanation of the respondents, particularly Atty.
failed to overcome the said presumption of innocence. Espejo, that in the course of rendering legal services to Strong, he had
become close to Rodica so much so that he accommodated Rodica s
request to cause the withdrawal of the RTC case to facilitate the sale party in this case, even plaintiff s counsel thought so too. From the
of the Boracay property to Apostol. Motion for Reconsideration filed by Atty. Joan Ibutnande, it was
stated in paragraph 5: "That the undersigned counsel was baffled as
In their Joint Comment,26 respondents Attys. Almario, Espejo and she did not see any connection [between] the incident surrounding the
Michelle debunked the opinion of Rodica s "well-meaning lawyer arrest of Mr. William Strong and the above-entitled case filed [by]
friends" that the withdrawal of the RTC case "absolve[d] all the [plaintiff], and told the plaintiff about it x x x." As Mr. Strong is
defendants from any wrong-doing" and made "the contents of her not a party in the instance case, his affairs whatever they are can not
original complaint practically meaningless." Atty. Almario and Atty. dictate the outcome of this case.33ςrνll
Espejo opined that since the dismissal of Rodica s complaint was
based on her failure to state a cause of action and without prejudice, chanrobles virtual law library
the same may simply be re-filed by revising her complaint and
ensuring that it states a cause of action. Moreover, it would appear from her own narration that Rodica is not
someone who is naïve or ignorant. In her complaint, she claimed to
As argued by Atty. Manuel, he and his lawyers only acted in the best be an astute businesswoman who even has some business in
interest of their client Strong and rendered services in accordance Barcelona, Spain.34 Thus, the more reason we cannot lend credence
with the latter s objective of leaving the country and not being to her claim that she was tricked into believing that the withdrawal of
deported to Brazil. The Lazaro Law Office cannot be faulted for the the RTC case was only preliminary to the complete settlement of all
dismissal of the RTC case because it had already been dismissed her differences with her perceived adversaries. If such had been the
even before the Lazaro Law Office was engaged to handle Strong s agreement, then a Compromise Agreement enumerating all the terms
immigration case. Besides, Rodica admittedly agreed to withdraw her and conditions should have been filed instead of the Manifestation
RTC case to meet Apostol s condition and to make the property with Motion to Withdraw the Motion for Reconsideration. In
marketable. addition, the withdrawal should not have been limited to the RTC
case as it appears that there are other cases pending with other
Apostol corroborated Atty. Manuel s statement in his Affidavit 27 of tribunals and agencies35 involving the same parties. If Rodica is to be
July 21, 2011. He affirmed that he told Rodica that he would only believed, then these cases should likewise have been dismissed in
consider purchasing the Boracay property if it is cleared of any order to achieve the full and complete settlement of her concerns with
pending case so that he can protect himself, as a buyer, from any her adversaries.
possible issues that may crop up involving the said property.
According to him, Rodica assured him that she would work for the From the above and by preponderance of evidence, it is clear that
termination of the RTC case and consult her lawyers in Boracay on Rodica s purpose in withdrawing the RTC case is to pave the way for
the matter so she could already sell the property. Apostol to purchase the Boracay property. In fact, Rodica eventually
executed a Deed of Absolute Sale in favor of Apostol over the
It is difficult to imagine that Rodica was deceived by some of the Boracay property.36ςrνll
respondent lawyers into believing that the withdrawal of the RTC
case was only the initial step in the settlement of her differences with Rodica s claim of paying more than P7
her adversaries.28 We went over the said Manifestation with Motion million to the Lazaro Law Office is not
to Withdraw the Motion for Reconsideration29 and we note that substantiated.
paragraph 6 thereof specifically
states:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ There is likewise no merit in Rodica s allegation that the Lazaro Law
Office extorted from her more than P7 million for alleged
6. However, the Plaintiff respectfully manifests that after much professional and legal fees and penalties relative to Strong s
serious thought and deliberation, and considering the anxieties caused immigration case. To support her claim, Rodica attached four
by the pendency of the instant case, Plaintiff is no longer interested in statements of account issued by the Lazaro Law Office for
pursuing the case. Accordingly, Plaintiff respectfully moves for the US$2,650.00 under Statement of Account No. 13837,37 US$2,400.00
withdrawal of the Motion for Reconsideration dated April 14, 2011 under Statement of Account No. 13838,38 US$1,550.00 under
of the Order dated March 29, 2011 dismissing the instant Complaint Statement of Account No. 1383939 and US$8,650.00 under Statement
filed on April 18, 2011.30ςrνll of Account No. 13835,40 or for a total amount of US$15,250.00. She
likewise presented photocopies of portions of her dollar savings
chanrobles virtual law library account passbook to show where the aforesaid funds came from.

As already noted by the RTC, Branch 6, Kalibo, Aklan in its Order 31 Considering the prevailing exchange rate at that time, the Court notes
dated April 4, 2011, in the case for recovery of possession with that the sum total of the abovementioned figures in its peso
damages:32ςηαñrοblεš νιr†υαl lαω lιbrαrÿ equivalent is far less than P7 million. In fact, the statements of
account even support the contention of Atty. Manuel that Strong
failed to fully pay the amount of US$100,000.00 as success fee.
This Manifestation was signed by plaintiff, her Manila lawyers and Anent the alleged withdrawals from Rodica s dollar savings account,
Atty. Joan Ibutnande, plaintiff s counsel on record. From the the same merely established that she made those withdrawals. They
statements made by plaintiff in her Manifestation to Withdraw do not constitute as competent proof that the amounts so withdrawn
Motion for Reconsideration that she had made serious thoughts and were indeed paid to Lazaro Law Office.
deliberation she cannot now say that she was manipulated and forced
in signing the same. The Court perceives plaintiff to be an intelligent
woman not to be swayed of her principles and beliefs and Rodica was not the client of the Lazaro
manipulated by others, she may have a fickle mind when it comes to Law Office.
other things but definitely it can not be applied to the Court.
Rodica also faulted the Lazaro Law Office lawyers for disclaiming
The Court does not see the connection between the instant case and that she is their client. However, Rodica admitted in paragraph 5 of
that of William Strong as alleged by the plaintiff. Mr. Strong is not a her unnotarized Sworn Affidavit41 that Atty. Manuel and his lawyer-
assistants were "engaged by William Strong to handle his case with Rodica s purpose or desired result and objective to convince or
the Philippine immigration authorities." Thus, this Court is more facilitate the sale to Apostol and/or to make the property more
inclined to believe that the Lazaro Law Office agreed to handle only marketable to interested buyers and to attain peace with the
the deportation case of Strong and such acceptance cannot be defendants in the RTC case. Evidently, Rodica took advantage of
construed as to include the RTC case. In fact, all the billings of Atty. Espejo s youth and naivete and manipulated him to do things on
Lazaro Law Office pertained to the immigration case, and not to the her behalf, and deliberately excluded Atty. Almario the senior
RTC case. To reiterate, the RTC case has nothing to do with Strong s lawyer. Rodica preferred to discuss matters with Atty. Espejo than
deportation case. Records also show that the RTC case was filed long with Atty. Almario as the latter often contradicts her views. Atty.
before Strong was arrested and detained. In fact, it had already been Espejo apologized to Atty. Manuel for allowing himself to be
dismissed by the trial court long before Strong engaged the legal manipulated by Rodica.42ςrνll
services of the Lazaro Law Office. More importantly, Strong is not a
party to the RTC case. Also, the counsel of record of Rodica in the chanrobles virtual law library
RTC case is Atty. Ibutnande, and not the Lazaro Law Office. There is
nothing on record that would show that respondent Attys. Manuel,
Michelle, and Almario had any participation therein. At the outset, Atty. Espejo was well aware that Rodica was
represented by another counsel in the RTC case. As a practicing
lawyer, he should know that it is the said counsel, Atty. Ibutnande,
Atty. Espejo s participation in the RTC who has the duty to prepare the said motion. In fact, he himself stated
case. that it is Atty. Ibutnande who is in a better position to evaluate the
merit of the withdrawal of the Motion for Reconsideration.
However, we cannot say the same as regards Atty. Espejo. He
admitted drafting Rodica s Manifestation and Motion to Withdraw Atty. Espejo s claim that he drafted and signed the pleading just to
Motion for Reconsideration indicating therein the firm name of the extend assistance to Rodica deserves scant consideration. It is true
Lazaro Law Office as well as his name and the names of Atty. that under Rules 2.01 and 2.02, Canon 2 of the Code of Professional
Manuel and Atty. Michelle without the knowledge and consent of his Responsibility, a lawyer shall not reject, except for valid reasons, the
superiors, and in likewise affixing his signature thereon. cause of the defenseless or the oppressed, and in such cases, even if
he does not accept a case, shall not refuse to render legal advise to the
Atty. Espejo acknowledged committing the abovementioned acts as a person concerned if only to the extent necessary to safeguard the
way of assisting Rodica who had already become his close friend. latter s right. However, in this case, Rodica cannot be considered as
Atty. Espejo s admissions are as defenseless or oppressed considering that she is properly represented
follows:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ by counsel in the RTC case. Needless to state, her rights are amply
safeguarded. It would have been different had Rodica not been
11. Atty. Espejo further recounts that after being advised to simply represented by any lawyer, which, however, is not the case.
withdraw her Motion for Reconsideration ("MR"), Rodica pleaded
with Atty. Espejo to prepare the documents required to be filed with Moreover, the Court wonders why Atty. Espejo, knowing fully well
the RTC x x x to spare her Boracay lawyers from preparing the same. that Rodica is not their law firm s client and without the knowledge
Atty. Espejo accommodated Jasper and drafted the Manifestation and consent of his superiors, gave in to Rodica s request for him to
with Motion to Withdraw Motion for Reconsideration ("Motion to indicate in the said motion the names of his law firm, Atty. Manuel
Withdraw MR") to be given to Rodica s Boracay counsel, Atty. Joan and Atty. Michelle for the purpose of "giving more weight and credit
I. Tabanar-Ibutnande, who is in a better position to evaluate the merit to the pleading." As a member of the bar, Atty. Espejo ought to know
of the withdrawal of the MR. that motions and pleadings filed in courts are acted upon in
accordance with their merit or lack of it, and not on the reputation of
11.1. Upon seeing Atty. Espejo s initial draft, Rodica requested Atty. the law firm or the lawyer filing the same. More importantly, he
Espejo to include x x x the name of the Lazaro Law Office as should have thought that in so doing, he was actually assisting Rodica
signatory allegedly to give more credence and weight to the pleading in misrepresenting before the RTC that she was being represented by
and to show the defendants in the RTC case her sincere intention to the said law firm and lawyers, when in truth she was not.
terminate the case.
It is well to remind Atty. Espejo that before being a friend to Rodica,
Due to Rodica s pleas and insistence, Atty. Espejo, who among all he is first and foremost an officer of the court.43 Hence, he is
lawyers of the Lazaro Law Office, became the most familiar and expected to maintain a high standard of honesty and fair dealings and
"chummy" with Rodica, agreed to include the Lazaro Law Office and must conduct himself beyond reproach at all times.44 He must
put his name as the signatory for the Office. Still not satisfied, Rodica likewise ensure that he acts within the bounds of reason and common
pleaded with Atty. Espejo to further revise the Motion to Withdraw sense, always aware that he is an instrument of truth and justice.45 As
MR to include the names of Atty. Manuel and Atty. Michelle as shown by his actuations. Atty. Espejo fell short of what is expected of
signatories and represented that she herself will cause them to sign it. him. Under the circumstances, Atty. Espejo should have exercised
Relying on Rodica s representations that she would speak to Atty. prudence by first diligently studying the soundness of Rodica s pleas
Manuel about the matter, Atty. Espejo obliged to include the name of and the repercussions of his acts.
Atty. Michelle and Atty. Manuel. Rodica repeatedly reminded Atty.
Espejo not to bother Atty. Manuel on the matter and that she herself We note that on August 5, 2011, or even before the filing of the
will take it up with Atty. Manuel at the proper time. disbarment complaint, Atty. Espejo already caused the filing of his
Motion to Withdraw Appearance46 before the RTC. Therein, Atty.
11.2 Atty. Espejo has a soft heart. He signed the pleading only with Espejo already expressed remorse and sincere apologies to the RTC
good intentions of helping and assisting Rodica, the common law for wrongly employing the name of the Lazaro Law Office.
wife of a client, whom he had learned to fancy because of being Considering that Atty. Espejo is newly admitted to the Bar (2010),
constantly together and attending to her. He never thought ill of we deem it proper to warm him to be more circumspect and prudent
Rodica and believed her when she said she would speak to Atty. in his actuations.
Lazaro about the matter as represented. Atty. Espejo only agreed to
sign the pleading for purposes of withdrawing Rodica s MR to attain
WHEREFORE, premises considered, the instant Complaint for
disbarment against respondents Atty. Manuel "Lolong" M. Lazaro, Petitioner filed a motion for reconsideration, but it was denied by the
Atty. Edwin M. Espejo, Atty. Abel M. Almario, Atty. Michelle B. RTC for lack of merit. Hence, this petition.
Lazaro and Atty. Joseph C. Tan is DISMISSED. Atty. Edwin M.
Espejo is WARNED to be more circumspect and prudent in his The Issues
actuations.
This petition is anchored on the following
SO ORDERED. grounds:cralavvonlinelawlibrary

I
11.) G.R. No. 191247, July 10, 2013
THE TRIAL COURT COMMITTED A REVERSIBLE ERROR IN
FRANCISCO L. ROSARIO, JR., Petitioner, v. LELLANI DE DENYING THE MOTION TO DETERMINE ATTORNEY’S FEES
GUZMAN, ARLEEN DE GUZMAN, PHILIP RYAN DE ON THE GROUND THAT IT LOST JURISDICTION OVER THE
GUZMAN, AND ROSELLA DE GUZMAN BAUTISTA, CASE SINCE THE JUDGMENT IN THE CASE HAS BECOME
Respondents. FINAL AND EXECUTORY;chanroblesvirtualawlibrary

DECISION II

MENDOZA, J.: THE TRIAL COURT SERIOUSLY ERRED IN DECLARING


THAT PETITIONER’S CLAIM FOR ATTORNEY’S FEES
WOULD RESULT IN A VARIANCE OF THE JUDGMENT THAT
HAS LONG BECOME FINAL AND
EXECUTORY;chanroblesvirtualawlibrary
This petition for review on certiorari under Rule 45 of the Rules of
Court seeks to set aside the November 23, 20091 and the February 11, III
20102 Orders of the Regional Trial Court, Branch 7, Manila (RTC), in
Civil Case No. 89-50138, entitled "Loreta A. Chong v. Sps. Pedro THE TRIAL COURT ERRED IN NOT DECLARING THAT THE
and Rosita de Guzman," denying the Motion to Determine Attorney's FINALITY OF THE DECISION DID NOT BAR PETITIONER
Fees filed by the petitioner. FROM FILING THE MOTION TO RECOVER HIS ATTORNEY’S
FEES.6nadcralavvonlinelawlibrary
The Facts
Petitioner claims that Spouses de Guzman engaged his legal services
Sometime in August 1990, Spouses Pedro and Rosita de Guzman and orally agreed to pay him 25% of the market value of the subject
(Spouses de Guzman) engaged the legal services of Atty. Francisco L. land. He argues that a motion to recover attorney’s fees can be filed
Rosario, Jr. (petitioner) as defense counsel in the complaint filed and entertained by the court before and after the judgment becomes
against them by one Loreta A. Chong (Chong) for annulment of final. Moreover, his oral contract with the deceased spouses can be
contract and recovery of possession with damages involving a parcel considered a quasi-contract upon which an action can be commenced
of land in Parañaque City, covered by Transfer Certificate of Title within six (6) years, pursuant to Article 1145 of the Civil Code.
(TCT) No. 1292, with an area of 266 square meters, more or less. Because his motion was filed on September 8, 2009, he insists that it
Petitioner’s legal services commenced from the RTC and ended up in was not yet barred by prescription.7
this Court.3 Spouses de Guzman, represented by petitioner, won their
case at all levels. While the case was pending before this Court, For their part, respondents counter that the motion was belatedly filed
Spouses de Guzman died in a vehicular accident. Thereafter, they and, as such, it could no longer be granted. In addition, the RTC had
were substituted by their children, namely: Rosella de Guzman- already resolved the issue when it awarded the amount of ?10,000.00
Bautista, Lellani de Guzman, Arleen de Guzman, and Philip Ryan de as attorney’s fees. Respondents further assert that the law,
Guzman (respondents).4 specifically Article 2208 of the Civil Code, allows the recovery of
attorney’s fees under a written agreement. The alleged understanding
On September 8, 2009, petitioner filed the Motion to Determine between their deceased parents and petitioner, however, was never
Attorney’s Fees5 before the RTC. He alleged, among others, that he put in writing. They also aver that they did not have any knowledge
had a verbal agreement with the deceased Spouses de Guzman that he or information about the existence of an oral contract, contrary to
would get 25% of the market value of the subject land if the petitioner’s claims. At any rate, the respondents believe that the
complaint filed against them by Chong would be dismissed. Despite amount of 25% of the market value of the lot is excessive and
the fact that he had successfully represented them, respondents unconscionable.8
refused his written demand for payment of the contracted attorney’s
fees. Petitioner insisted that he was entitled to an amount equivalent The Court’s Ruling
to 25% percent of the value of the subject land on the basis of
quantum meruit. Preliminarily, the Court notes that the petitioner filed this petition for
review on certiorari under Rule 45 of the Rules of Court because of
On November 23, 2009, the RTC rendered the assailed order denying the denial of his motion to determine attorney’s fees by the RTC.
petitioner’s motion on the ground that it was filed out of time. The Apparently, the petitioner pursued the wrong remedy. Instead of a
RTC stated that the said motion was filed after the judgment rendered petition for review under Rule 45, he should have filed a petition for
in the subject case, as affirmed by this Court, had long become final certiorari under Rule 65 because this case involves an error of
and executory on October 31, 2007. The RTC wrote that considering jurisdiction or grave abuse of discretion on the part of the trial court.
that the motion was filed too late, it had already lost jurisdiction over
the case because a final decision could not be amended or corrected Moreover, petitioner violated the doctrine of hierarchy of courts
except for clerical errors or mistakes. There would be a variance of which prohibits direct resort to this Court unless the appropriate
the judgment rendered if his claim for attorney’s fees would still be remedy cannot be obtained in the lower tribunals.9 In this case,
included.
petitioner should have first elevated the case to the Court of Appeals case filed by Chong against Spouses de Guzman. The award of
(CA) which has concurrent jurisdiction, together with this Court, over attorney’s fees by the RTC in the amount of P10,000.00 in favor of
special civil actions for certiorari.10 Even so, this principle is not Spouses de Guzman, which was subsequently affirmed by the CA
absolute and admits of certain exceptions, such as in this case, when and this Court, is of no moment. The said award, made in its
it is demanded by the broader interest of justice.11 extraordinary concept as indemnity for damages, forms part of the
judgment recoverable against the losing party and is to be paid
Indeed, on several occasions, this Court has allowed a petition to directly to Spouses de Guzman (substituted by respondents) and not
prosper despite the utilization of an improper remedy with the to petitioner. Thus, to grant petitioner’s motion to determine
reasoning that the inflexibility or rigidity of the application of the attorney’s fees would not result in a double award of attorney’s fees.
rules of procedure must give way to serve the higher ends of justice. And, contrary to the RTC ruling, there would be no amendment of a
The strict application of procedural technicalities should not hinder final and executory decision or variance in judgment.
the speedy disposition of the case on the merits.12 Thus, this Court
deems it expedient to consider this petition as having been filed under The Court now addresses two (2) important questions: (1) How can
Rule 65. attorney’s fees for professional services be recovered? (2) When can
an action for attorney’s fees for professional services be filed? The
With respect to the merits of the case, the Court finds in favor of case of Traders Royal Bank Employees Union-Independent v.
petitioner. NLRC15 is instructive:cralavvonlinelawlibrary

In order to resolve the issues in this case, it is necessary to discuss the As an adjunctive episode of the action for the recovery of bonus
two concepts of attorney’s fees – ordinary and extraordinary. In its differentials in NLRC-NCR Certified Case No. 0466, private
ordinary sense, it is the reasonable compensation paid to a lawyer by respondent’s present claim for attorney’s fees may be filed before the
his client for legal services rendered. In its extraordinary concept, it is NLRC even though or, better stated, especially after its earlier
awarded by the court to the successful litigant to be paid by the losing decision had been reviewed and partially affirmed. It is well settled
party as indemnity for damages.13 Although both concepts are similar that a claim for attorney’s fees may be asserted either in the very
in some respects, they differ from each other, as further explained action in which the services of a lawyer had been rendered or in a
below:cralavvonlinelawlibrary separate action.

The attorney’s fee which a court may, in proper cases, award to a With respect to the first situation, the remedy for recovering
winning litigant is, strictly speaking, an item of damages. It differs attorney’s fees as an incident of the main action may be availed of
from that which a client pays his counsel for the latter’s professional only when something is due to the client. Attorney’s fees cannot be
services. However, the two concepts have many things in common determined until after the main litigation has been decided and
that a treatment of the subject is necessary. The award that the the subject of the recovery is at the disposition of the court. The
court may grant to a successful party by way of attorney’s fee is issue over attorney’s fees only arises when something has been
an indemnity for damages sustained by him in prosecuting or recovered from which the fee is to be paid.
defending, through counsel, his cause in court. It may be decreed
in favor of the party, not his lawyer, in any of the instances While a claim for attorney’s fees may be filed before the
authorized by law. On the other hand, the attorney’s fee which a judgment is rendered, the determination as to the propriety of
client pays his counsel refers to the compensation for the latter’s the fees or as to the amount thereof will have to be held in
services. The losing party against whom damages by way of abeyance until the main case from which the lawyer’s claim for
attorney’s fees may be assessed is not bound by, nor is his liability attorney’s fees may arise has become final. Otherwise, the
dependent upon, the fee arrangement of the prevailing party with his determination to be made by the courts will be premature. Of
lawyer. The amount stipulated in such fee arrangement may, course, a petition for attorney’s fees may be filed before the
however, be taken into account by the court in fixing the amount of judgment in favor of the client is satisfied or the proceeds thereof
counsel fees as an element of damages. delivered to the client.

The fee as an item of damages belongs to the party litigant and It is apparent from the foregoing discussion that a lawyer has two
not to his lawyer. It forms part of his judgment recoveries against options as to when to file his claim for professional fees. Hence,
the losing party. The client and his lawyer may, however, agree that private respondent was well within his rights when he made his
whatever attorney’s fee as an element of damages the court may claim and waited for the finality of the judgment for holiday pay
award shall pertain to the lawyer as his compensation or as part differential, instead of filing it ahead of the award’s complete
thereof. In such a case, the court upon proper motion may require the resolution. To declare that a lawyer may file a claim for fees in
losing party to pay such fee directly to the lawyer of the prevailing the same action only before the judgment is reviewed by a higher
party. tribunal would deprive him of his aforestated options and render
ineffective the foregoing pronouncements of this Court.
The two concepts of attorney’s fees are similar in other respects. [Emphases and underscoring supplied]
They both require, as a prerequisite to their grant, the intervention of
or the rendition of professional services by a lawyer. As a client may In this case, petitioner opted to file his claim as an incident in the
not be held liable for counsel fees in favor of his lawyer who never main action, which is permitted by the rules. As to the timeliness of
rendered services, so too may a party be not held liable for attorney’s the filing, this Court holds that the questioned motion to determine
fees as damages in favor of the winning party who enforced his rights attorney’s fees was seasonably filed.
without the assistance of counsel. Moreover, both fees are subject to
judicial control and modification. And the rules governing the The records show that the August 8, 1994 RTC decision became final
determination of their reasonable amount are applicable in one as in and executory on October 31, 2007. There is no dispute that
the other.14 [Emphases and underscoring supplied] petitioner filed his Motion to Determine Attorney’s Fees on
September 8, 2009, which was only about one (1) year and eleven
In the case at bench, the attorney’s fees being claimed by the (11) months from the finality of the RTC decision. Because petitioner
petitioner refers to the compensation for professional services claims to have had an oral contract of attorney’s fees with the
rendered, and not as indemnity for damages. He is demanding deceased spouses, Article 1145 of the Civil Code16 allows him a
payment from respondents for having successfully handled the civil period of six (6) years within which to file an action to recover
professional fees for services rendered. Respondents never asserted Rule 20.1 – A lawyer shall be guided by the following factors in
or provided any evidence that Spouses de Guzman refused determining his fees:cralavvonlinelawlibrary
petitioner’s legal representation. For this reason, petitioner’s cause of
action began to run only from the time the respondents refused to pay a) The time spent and the extent of the services rendered or
him his attorney’s fees, as similarly held in the case of Anido v. required;chanroblesvirtualawlibrary
Negado:17
b) The novelty and difficulty of the questions
In the case at bar, private respondent’s allegation in the complaint involved;chanroblesvirtualawlibrary
that petitioners refused to sign the contract for legal services in
October 1978, and his filing of the complaint only on November 23, c) The importance of the subject matter;chanroblesvirtualawlibrary
1987 or more than nine years after his cause of action arising from
the breach of the oral contract between him and petitioners point to d) The skill demanded;chanroblesvirtualawlibrary
the conclusion that the six-year prescriptive period within which to
file an action based on such oral contract under Article 1145 of the e) The probability of losing other employment as a result of
Civil Code had already lapsed. acceptance of the proffered case;chanroblesvirtualawlibrary

As a lawyer, private respondent should have known that he only f) The customary charges for similar services and the schedule of fees
had six years from the time petitioners refused to sign the of the IBP chapter to which he belongs;chanroblesvirtualawlibrary
contract for legal services and to acknowledge that they had
engaged his services for the settlement of their parents’ estate g) The amount involved in the controversy and the benefits resulting
within which to file his complaint for collection of legal fees for to the client from the service;chanroblesvirtualawlibrary
the services which he rendered in their favor. [Emphases supplied]
h) The contingency or certainty of
At this juncture, having established that petitioner is entitled to compensation;chanroblesvirtualawlibrary
attorney’s fees and that he filed his claim well within the prescribed
period, the proper remedy is to remand the case to the RTC for the i) The character of the employment, whether occasional or
determination of the correct amount of attorney’s fees. Such a established; and
procedural route, however, would only contribute to the delay of the
final disposition of the controversy as any ruling by the trial court on j) The professional standing of the lawyer.
the matter would still be open for questioning before the CA and this
Court. In the interest of justice, this Court deems it prudent to Petitioner unquestionably rendered legal services for respondents’
suspend the rules and simply resolve the matter at this level. The deceased parents in the civil case for annulment of contract and
Court has previously exercised its discretion in the same way in recovery of possession with damages. He successfully represented
National Power Corporation v. Heirs of Macabangkit Sangkay:18 Spouses de Guzman from the trial court level in 1990 up to this Court
in 2007, for a lengthy period of 17 years. After their tragic death in
In the event of a dispute as to the amount of fees between the attorney 2003, petitioner filed a notice of death and a motion for substitution
and his client, and the intervention of the courts is sought, the of parties with entry of appearance and motion to resolve the case
determination requires that there be evidence to prove the amount of before this Court.21 As a consequence of his efforts, the respondents
fees and the extent and value of the services rendered, taking into were substituted in the place of their parents and were benefited by
account the facts determinative thereof. Ordinarily, therefore, the the favorable outcome of the case.
determination of the attorney’s fees on quantum meruit is remanded
to the lower court for the purpose. However, it will be just and As earlier mentioned, petitioner served as defense counsel for
equitable to now assess and fix the attorney’s fees of both deceased Spouses de Guzman and respondents for almost seventeen
attorneys in order that the resolution of “a comparatively simple (17) years. The Court is certain that it was not an easy task for
controversy,” as Justice Regalado put it in Traders Royal Bank petitioner to defend his clients’ cause for such a long period of time,
Employees Union-Independent v. NLRC, would not be needlessly considering the heavy and demanding legal workload of petitioner
prolonged, by taking into due consideration the accepted guidelines which included the research and preparation of pleadings, the
and so much of the pertinent data as are extant in the records. 19 gathering of documentary proof, the court appearances, and the
[Emphasis supplied] various legal work necessary to the defense of Spouses de Guzman. It
cannot be denied that petitioner devoted much time and energy in
With respect to petitioner’s entitlement to the claimed attorney’s fees, handling the case for respondents. Given the considerable amount of
it is the Court’s considered view that he is deserving of it and that the time spent, the diligent effort exerted by petitioner, and the quality of
amount should be based on quantum meruit. work shown by him in ensuring the successful defense of his clients,
petitioner clearly deserves to be awarded reasonable attorney’s fees
Quantum meruit – literally meaning as much as he deserves – is used for services rendered. Justice and equity dictate that petitioner be paid
as basis for determining an attorney’s professional fees in the absence his professional fee based on quantum meruit.
of an express agreement. The recovery of attorney’s fees on the basis
of quantum meruit is a device that prevents an unscrupulous client The fact that the practice of law is not a business and the attorney
from running away with the fruits of the legal services of counsel plays a vital role in the administration of justice underscores the need
without paying for it and also avoids unjust enrichment on the part of to secure him his honorarium lawfully earned as a means to preserve
the attorney himself. An attorney must show that he is entitled to the decorum and respectability of the legal profession. A layer is as
reasonable compensation for the effort in pursuing the client’s cause, much entitled to judicial protection against injustice, imposition or
taking into account certain factors in fixing the amount of legal fraud on the part of his client as the client against abuse on the part of
fees.20 his counsel. The duty of the court is not alone to see that a lawyer
acts in a proper and lawful manner; it is also its duty to see that a
Rule 20.01 of the Code of Professional Responsibility lists the lawyer is paid his just fees. With his capital consisting of his brains
guidelines for determining the proper amount of attorney fees, to and with his skill acquired at tremendous cost not only in money but
wit:cralavvonlinelawlibrary in expenditure of time and energy, he is entitled to the protection of
any judicial tribunal against any attempt on the part of his client to
escape payment of his just compensation. It would be ironic if after return to the petitioner of the amount advanced to the Carreons,
putting forth the best in him to secure justice for his client he himself payments to the PNB, and cost of the work on the subdivision; (c)
would not get his due.22 P100,000.00 by way of exemplary damages; (d) any and all damages
up to the amount of P4,638,420.00 which the petitioner may suffer
The Court, however, is resistant in granting petitioner's prayer for an under the terms of its Performance Bond in favor of the National
award of 25% attorney's fees based on the value of the property Housing Authority; (e) P50,000.00 as attorney's fees; and (f) costs of
subject of litigation because petitioner failed to clearly substantiate suit.
the details of his oral agreement with Spouses de Guzman. A fair and
reasonable amount of attorney's fees should be 15% of the market On 9 April 1985, the petitioner engaged the services of private
value of the property. respondent Atty. Manuel S. Fonacier, Jr.,4 who then entered his
appearance in Civil Case No. 612.
WHEREFORE, the petition is GRANTED. Accordingly, the Court
grants the Motion to Determine Attorney's Fees filed by petitioner
Atty. Francisco L. Rosario, Jr. Based on quantum meruit, the amount While the said case was pending, or on 24 July 1992, the petitioner,
of attorney's fees is at the rate of 15% of the market value of the without the knowledge of the private respondent, entered into a
parcel of land, covered by Transfer Certificate of Title No. 1292, at Memorandum of Agreement (MOA)5 with another land developer,
the time of payment. Filstream International, Inc. (hereinafter Filstream). Under this MOA,
the former assigned its rights and obligations under the Joint Venture
SO ORDERED. Agreement in favor of the latter for a consideration of P28 million,
payable within twenty-four months.

12.) G.R. No. 124074 January 27, 1997


On 31 March 1993, the petitioner terminated the legal services of the
private respondent. At the time the petitioner had already received P7
RESEARCH and SERVICES REALTY, INC., petitioner, million from Filstream.
vs.
COURT OF APPEALS and MANUEL S. FONACIER, JR.,
Upon knowing the existence of the MOA, the private respondent
respondents.
filed in Civil Case No. 612 an Urgent Motion to Direct Payment of
Attorney's Fees and/or Register Attorney's Charging Lien praying,
among other things, that the petitioner be ordered to pay him the sum
of P700,000.00 as his contingent fee in the case.6
DAVIDE, JR., J.:
After hearing the motion, the trial court issued an order dated 11
This petition for review on certiorari under Rule 45 of the Rules of October 1993 directing the petitioner to pay the private respondent
Court questions the propriety of the award for, and the the sum of P600,000.00 as attorney's fees on the basis of quantum
reasonableness of the amount of, attorney's fees granted in favor of meruit.
the private respondent by the Regional Trial Court (RTC) of Makati
City, Branch 64,1 in Civil Case No. 612,2 which the Court of The trial court justified the award in this manner:
Appeals affirmed in its decision3 of 31 March 1995 in CA-G.R. CV
No. 44839.
Insofar as material to the resolution of this
Motion the records of this case show that movant
The undisputed facts are as follows: Atty. Fonacier became the counsel of defendant
Research in May 1985 while this case has been in
On 3 November 1969, the petitioner entered into a Joint Venture progress. (Records, p. 770). By this time also, the
Agreement with Jose, Fidel, and Antonia Carreon. Under the said defendant Research has been enjoined by the
agreement, the petitioner undertook to develop, subdivide, Court from executing Contracts To Sell involving
administer, and promote the sale of the parcels of land owned by the Saranay Homes Subdivision. . . . (Order dated
Carreons. The proceeds of the sale of the lots were to be paid to the December 3, 1984, Records pp. 625-626).
Philippine National Bank (PNB) for the landowner's mortgage However, the said counsel for defendant
obligation, and the net profits to be shared by the contracting parties Research prepared for the latter various pleadings
on a 50-50 basis. and represented it in Court (See Records after
May 1985). Until his services were terminated
the lawyer client relationship between Atty.
On 4 April 1983, the Carreons and a certain Patricio C. Sarile Fonacier and Research was governed by a
instituted before the RTC of Makati City an action against the "contract" embodied in a letter addressed to Atty.
petitioner for rescission of the Joint Venture Agreement. They prayed Fonacier on April 19, 1985 [sic], the pertinent
therein that pending the hearing of the case, a writ of preliminary portion of which is reproduced below, as follows.
injunction be issued to enjoin the petitioner from selling the lots ...
subject of the agreement and that after hearing, the writ be made
permanent; the agreement be rescinded; and the petitioner be ordered
to pay the PNB the stipulated 15% per annum of the outstanding xxx xxx xxx
obligation and to pay the plaintiffs attorney's fees, exemplary
damages, expenses of litigation, and costs of suit. This case was Soon after said letter, cases were referred to him
docketed as Civil Case No. 612 at Branch 64 of the said court. including this case. In accordance with their
agreement, there were instances that Research
In its answer, which was prepared and signed by Atty. Apolonio G. gave Atty. Fonacier ten (10%) percent of the
Reyes, the petitioner sought the denial of the writ of preliminary amount received as the latter's attorney's fees
injunction, the dismissal of the complaint, and payment in its favor of pursuant to their agreement.
(a) P10 million by way of actual damages; (b) P5 million by way of
The instant case in which defendant is praying to of (P800.00) Pesos and office space and other
be awarded attorney's fees, is an action for office facilities provided by defendant Research.
rescission of the Joint Venture Agreement Ten (10%) per cent of the amount which
between plaintiffs, Patricio Sarile, et al., as Research had received from Filstream at the time
owners of a parcel of land and defendant of the termination of a lawyer-client relationship
Research & Service Realty, Inc., as developer of between Atty. Fonacier and Research or
the land. At the time Atty. Fonacier entered his P600,000.00 will be a just and equitable
appearance as counsel for defendant Research, compensation for Atty. Fonacier's legal services,
the Court has issued a preliminary injunction by way of quantum meruit (See Cabildo v.
against Research. Thus all developmental and Provincial Treasurer, Ilocos Norte, et al., 54
commercial activities of defendant had to stop. In SCRA 26).7
this regard, Atty. Fonacier did spade work
towards persuading the plaintiffs to agree to the In its Order8 of 12 January 1994, the trial court denied the petitioner's
relaxation of the effects of the injunction to pave motion for reconsideration of the above order.
the way to a negotiation with a third-party, the
Filstream. Atty. Fonacier's efforts were
complemented by the efforts of his counterpart in The petitioner appealed to the Court of Appeals. In its Appellant's
the plaintiff's side. The third-party Filstream Inc., Brief, 9 the petitioner alleged that the private respondent was not
became the assignee of defendant Research. In entitled to attorney's fees under the retainer contract. Moreover, the
this connection, a memorandum of agreement private respondent did not exert any effort to amicably settle the case,
was entered into between them. By the terms of nor was he even present during the negotiations for the settlement of
agreement, defendant Research will be receiving the same. There was, therefore, no legal and factual justification for
from the third-party Filstream International, Inc. the private respondent's "fantastic and unreasonable claim for
(Filstream) the following amount. . . . attorney's fees of P600,000.00.

xxx xxx xxx On the other hand, the private respondent asserted that he was
assured by the petitioner that non-collection cases were included in
the contingent fee arrangement specified in the retainer contract
The termination of the legal services of Atty. wherein there was to be contingent compensation for any award
Fonacier was made definite on March 31, 1993 at arising from any lawsuit handled by him. According to him, Civil
which time the Memorandum of Agreement Case No. 612 was not the only "non-collection" case he handled for
which Research entered into with Filstream, Inc., the petitioner. There was a "right of way" dispute where the petitioner
has already been effective. By this time also, was awarded P50,000.00, and the latter paid him P5,000.00, or 10%
defendant Research has already received the first of the award as attorney's fees. He thus stressed that since under the
two stipulated consideration of the agreement in memorandum of agreement the petitioner was to receive P28 million,
the total sum of Six Million (P6,000,000.00). The he should be entitled to 10% thereof or P2.8 million as attorney's
necessary and legal consequence of said fees.
"Memorandum of Agreement" is the termination
of the case insofar as plaintiff Patricio Sarile, et
al. and defendant Research is concerned. The In its decision 10 of 31 March 1995, the Court of Appeals affirmed
conclusion of the Memorandum of Agreement the challenged order of the trial court. It ratiocinated as follows:
insofar as the cause of Research is concerned, is a
legal victory for defendant Research. What could Movant-appellee, on the other hand, correctly
have been a loss in investment has been turned to argues that it was the clear intention of appellant
a legal victory. Atty. Fonacier's effort contributed and counsel to compensate the latter for any legal
to defendant's victory, albeit outside the Court services rendered by him to the former. Stated
which would not have been possible without the otherwise, it was never the intention of the parties
legal maneuvering of a lawyer. in the instant appeal that counsel's services shall
be free or to be rendered ex gratia.
The dismissal of the case before this Court will
come in a matter of time considering that xxx xxx xxx
plaintiffs, with the assumption by the third party,
Filstream Inc., of what were supposed to be the It must in addition be underscored that the
obligations to them of defendant Research retainer contract of April 9, 1985 is the law that
pursuant to their Joint Venture Agreement, is no governs the relationship between appellant and
longer interested in pursuing the rescission. appellee. In fact, the following provisions
squarely and categorically supports the award of
It is a matter of record that Atty. Fonacier is the P600,000.00 to counsel, to wit:
last of the three lawyers who handled this case.
Moreover it is Atty. Fonacier who contributed to Minimal allowance of P800
the forging of the memorandum of agreement as per month plus contingent
testified to by Atty. Rogel Atienza one of the two fees and collection cases
retained counsels of plaintiffs. (case to case basis) aside
from the attorney's fee
Considering the importance which is attached to recovered from any law suit.
this case, certainly it would not be fair for Atty.
Fonacier if his attorney's fees in this case would (Paragraph 3, Retainer Contract)
be equated only to the measly monthly allowance
In an American jurisprudence on this point cited III
in local annotation on the Canon of Professional
Ethics, it was held that "if a lawyer renders RESPONDENT COURT OF APPEALS
valuable services to one who receives the benefits GRAVELY ABUSED ITS DISCRETION IN
thereof, a promise to pay a reasonable value is AWARDING EXCESSIVE AND
presumed, unless such services were intended to UNREASONABLE ATTORNEY'S FEES.
be gratuitous" (Young vs. Buere, 78 Cal. Am.
127). In effect, to compensate a lawyer, we are
faced with the pivotal question: "was the legal IV
services intended to be free or not?" If it is not
free, then, appellant must simply pay. The 10% THE TRIAL COURT AND THE
contingent fee of the amount collected and/or to RESPONDENT COURT OF APPEALS HAVE
be collected in Civil Case No. 612 of the lower NO JURISDICTION TO SATISFY
court, is, to Our mind fair and reasonable. As ATTORNEY'S CHARGING LIEN ON A SUM
ruled by the Supreme Court in the case of OF MONEY THAT THE COURT HAD NO
Cosmopolitan Insurance Co. vs. Angel Reyes AUTHORITY TO DISPOSE OF AND OVER
(G.R. L-20199, Nov. 23, 1965) 15% was even WHICH THE TRIAL COURT HAD MADE NO
deemed reasonable. 11 FINAL ADJUDICATION.

The petitioner filed a motion for reconsideration 12 on the ground, The petitioner's more important argument in support of the first error
among other things, that the decision is contrary to the evidence, as is the Court of Appeals' misquotation of the provision in the retainer
the trial court granted the claim for attorney's fees based on quantum contract regarding attorney's fees on contingent basis, which the
meruit, yet, the Court of Appeals granted the same on a contingent petitioner had stressed in its motion for reconsideration. The
basis which it based on an erroneous quotation and comprehension of petitioner maintains that under the contract, attorney's fees on
the following provision of the retainer contract: contingent basis could only be awarded in collection cases, and Civil
Case No. 612 is not a collection case. Hence, the Court of Appeals
Minimal allowance of P800.00 per month plus erred in affirming the award on that basis, while the trial court was
contingent fees on collection cases (case to case correct in applying the principle of quantum meruit.
basis) aside from the attorney's fees recovered
from any law suit. (emphasis ours) 13 In its second assigned error, the petitioner asserts that the private
respondent admitted in his Urgent Motion to Direct Payment of
In its decision, the Court of Appeals substituted the word "on" after Attorney's Fees and/or Register Attorney's Charging Lien that he had
"contingent fees" with the word "and". Under the aforequoted not participated in the negotiations and preparation of the
paragraph, the private respondent was entitled to attorney's fees on memorandum of agreement, thus:
contingent basis in collection cases only. In non-collection cases, he
was entitled only to the attorney's fees that might be recovered in the Despite the dishonest concealment, by the light of
lawsuit. 14 Since Civil Case No. 612 is not a collection case but an Providence coupled with a streak of good luck,
action for rescission of a contract, then the aforequoted paragraph is counsel discovered in the first week of March
not applicable as a basis for awarding attorney's fees to the private 1993 that the parties had respectively entered into
respondent. 15 a meaningful agreement with a third-party as
early as July 27, 1992, which in the case of client,
Finding nothing new in the motion for reconsideration, the Court of case in the form of a "Memorandum of
Appeals denied it in the resolution 16 of 15 February 1996. Agreement" (MOA). . . . 17

The petitioner then came to us via this petition for review wherein it The third assigned error is but a logical consequence of the second,
contends that and the petitioner maintains that since the private respondent "did not
do anything spectacular or out of the ordinary" in Civil Case No. 612,
"except to ask for the suspension or postponement of the proceedings
I thereof from 1985 to 1993," the P600,000.00 attorney's fees, whether
on contingent basis or quantum meruit, is excessive and
RESPONDENT COURT OF APPEALS HAD unreasonable.
DECIDED THE CASE NOT IN ACCORD
WITH LAW AND THE UNDISPUTED FACTS In the fourth imputed error, the petitioner argues that the
OF THE CASE. memorandum of agreement was never submitted to the trial court,
and the trial court never made any disposition or adjudication over
II the proceeds of the said agreement. What would eventually happen
then is the dismissal of Civil Case No. 612, as the trial court itself had
RESPONDENT COURT OF APPEALS intimated in its challenged order. Necessarily then, there would be no
COMMITTED GRAVE ABUSE OF money adjudication in favor of the petitioner as the defendant therein.
DISCRETION IN AWARDING ON Since such lien is collectible only from an award of money that a
CONTINGENT BASIS RESPONDENT- court would adjudicate in a judgment rendered in favor of the
APPELLEE'S ATTORNEY'S FEES ON THE attorney's client pursuant to Section 37, Rule 138 of the Rules of
BASIS OF A MEMORANDUM OF Court, it would follow that no attorney's charging lien could be
AGREEMENT IN WHICH HE HAD NO validly entered.
PARTICIPATION IN THE NEGOTIATION
AND PREPARATION THEREOF. We uphold the petitioner, but not necessarily on the strength of its
arguments.
The parties are in agreement that the lawyer-client relationship Two basic principles come into play. The first is as stated earlier, viz.,
between the petitioner and the private respondent, Atty. Manuel S. that the retaining fee is neither made nor received in consideration of
Fonacier, Jr., was governed by a retainer contract dated 9 April 1985. the services contemplated unless the contract itself so provides. The
The petitioner's undertakings thereunder are outlined as follows: second is that, unless expressly stipulated, rendition of professional
services by a lawyer is for a fee or compensation and is not
I. CORPORAT[ION]: gratuitous. This is implicit from the opening clause of Section 24,
Rule 138 of the Rules of Court, which states that "[an] attorney shall
be entitled to have and recover from his client no more than a
I. Corporation will provide the following: reasonable compensation for his services. . . ," and by virtue of the
innominate contract of facio ut des (I do and you give), as enunciated
a. Office space — air by this Court in Corpus v. Court of Appeals, 21 thus:
conditioned
Moreover, the payment of attorney's fees . . . may
b. Furnishings, tables, also be justified by virtue of the innominate
executive chairs, visitor's contract of facio ut des (I do and you give) which
chair & steel filing cabinet is based on the principle that "no one shall
unjustly enrich himself at the expense of
c. Telephone facilities and another." Innominate contracts have been
partial secretarial services. elevated to a codal provision in the New Civil
Code by providing under Article 1307 that such
contracts shall be regulated by the stipulations of
2. Legal service referrals by the corporation to its the parties, by the general provisions or principles
clients for additional income of the lawyer. of obligations and contracts, by the rules
governing the most analogous nominate
3. Minimal allowance of P800 per month plus contracts, and by the customs of the people. The
contingent fees on contingent fees on collection rationale of this article was stated in the 1903
cases (case to case basis) aside from the case of Perez vs. Pomar (2 Phil. 682).
attorney's fees recovered from any lawsuit.
In Perez v. Pomar, 22 this Court stated:
4. That in case of legal problems to be attended to
outside Metro Manila and Suburbs, the [B]ut whether the plaintiffs services were
corporation shall defray expenses for solicited or whether they were offered to the
transportation, lodging and other legal expenses defendant for his assistance, inasmuch as these
incidental in the case. 18 services were accepted and made use of by the
latter, we must consider that there was a tacit and
An analysis of the contract clearly shows that it was a general mutual consent as to the rendition of the services.
retainer, since its primary purpose was to secure beforehand the This gives rise to the obligation upon the person
services of the private respondent for any legal problem which might benefited by the services to make compensation
afterward arise. 19 The fixed retaining fee was P800.00 a month. A therefor, since the bilateral obligation to render
retaining fee is a preliminary fee paid to ensure and secure a lawyer's service as interpreter, on the one hand, and on the
future services, to remunerate him for being deprived, by being other to pay for the services rendered, is thereby
retained by one party, of the opportunity of rendering services to the incurred. (Arts. 1088, 1089, and 1262 of the Civil
other party and of receiving pay from him. In the absence of an Code).
agreement to the contrary, the retaining fee is neither made nor
received in consideration of the services contemplated; it is apart Accordingly, as to non-collection cases where the petitioner was
from what the client has agreed to pay for the services which he has either a plaintiff or a defendant, the private respondent could still
retained him to perform. 20 collect attorney's fees, apart from his regular retaining fee, on the
basis of any supplemental agreement or, in its absence, under the
In the retainer contract in question, there was no intention to make principle of quantum meruit. There was no such supplemental
the retaining fee as the attorney's fees for the services contemplated. agreement in this case.
This is evident from the provision allowing additional attorney's fees
in collection cases consisting of (1) a "contingent fee" and (2) We cannot sustain the private respondent's theory that he could
whatever the petitioner might recover as attorney's fees in each case. collect attorney's fees on contingent basis because in the other "non-
The latter could only refer to the attorney's fees which the court collection" cases he handled for the petitioner, he was paid on
might award to the petitioner in appropriate cases. contingent basis at the rate of 10% of what was awarded to the
petitioner. In the first place, Civil Case No. 612 is still unresolved,
While the contract did not mention non-collection cases, it is, and no judgment has yet been rendered in favor of the petitioner. The
nevertheless, clear therefrom that such cases were not excluded from amount in the memorandum of agreement could not be made the
the retainership, as borne out by the provision requiring the private basis of a "contingent fee" in the said case for at least three reasons.
respondent to "make appearances in court for cases involving the First, in his own Urgent Motion to Direct Payment of Attorney's Fees
corporation or any allied cases pertaining to the latter." As to such and/or Register Attorney's Charging Lien, the private respondent
cases, there was no specific stipulation of additional attorney's fees. based the contingent fee not only in Civil Case No. 612 but in a
Nevertheless, nothing therein shows that the private respondent "multitude of peripheral cases," and the contingent fee would become
agreed to render professional service in such cases gratuitously. The due and collectible only if and when the petitioner obtains a judgment
absence then of the stipulation of additional attorney's fees cannot be in his favor in Civil Case No. 612. The second paragraph of page 3 of
construed as a bar to the collection of additional attorney's fees in the said motion reads as follows:
non-collection cases.
Hence, from May 1985 and continuously thru the attorney. No court shall be bound by the opinion
years without interruption and surviving a series of attorneys as expert witnesses as to the proper
of no less than five (5) changes of Presiding compensation, but may disregard such testimony
Judges, the undersigned counsel labored tirelessly and base its conclusion on its own professional
in handling the defense of client. In addition to knowledge. A written contract for services shall
the instant lawsuit, a multitude of peripheral control the amount to be paid therefor unless
cases, civil, criminal and administrative, arising found by the court to be unconscionable or
from the non-delivery of titles by client on fully unreasonable.
paid lots in the subdivision project were also filed
as a consequence, not only against defendant but This Court had earlier declared the following as circumstances to be
also against its President and Chief Executive considered in determining the reasonableness of a claim for attorney's
Officer (CEO). Needless to state, the undersigned fees: (1) the amount and character of the service rendered; (2) labor,
was designated to handle majority of these cases time, and trouble involved; (3) the nature and importance of the
for both, where he appeared and conducted trial litigation or business in which the services were rendered; (4) the
without any "appearance fees" for more than responsibility imposed; (5) the amount of money or the value of the
eight (8) long years solely relying on the property affected by the controversy or involved in the employment;
contingent fee in case of recovery in the instant (6) the skill and experience called for in the performance of the
main case. 23 (emphasis supplied) services; (7) the professional character and social standing of the
attorney; (8) the results secured; and (9) whether the fee is absolute or
Second, the amount of P28 million, which Filstream agreed to pay contingent, it being recognized that an attorney may properly charge
the petitioner, was not a judgment or award in favor of the petitioner a much larger fee when it is contingent than when it is not. 25
in Civil Case No. 612. It was the consideration of the assignment,
transfer, and conveyance to Filstream of all the petitioner's "rights, Rule 20.1, Canon 20 of the Code of Professional Responsibility
interest and participation embodied and specified in the Joint Venture enumerates the following factors which should guide a lawyer in
Agreement (Annex "A") and in all the eight hundred seventy-five determining his fees:
(875) parcels of land comprising the SARANAY HOMES
subdivision. . . ." The plaintiffs in Civil Case No. 612 were not
parties to the memorandum of agreement, and there is no showing (a) The time spent and the extent of the services
that they agreed to the assignment of the petitioner's rights, interest, rendered or required;
and participation in the Joint venture Agreement. While paragraph 10
of the memorandum of agreement provides that the petitioner (b) The novelty and difficulty of the questions
involved;
shall cause to sign a JOINT MOTION TO
DISMISS, together with the CARREONS (c) The importance of the subject matter;
regarding Civil Case No. 612 of the Regional
Trial Court of Makati and to further DISMISS, (d) The skill demanded;
the case filed against PNB docketed as Civil Case
No. 6918 of the Regional Trial Court of Makati .
. . [and] shall obtain the dismissal of all cases (e) The probability of losing other employment as
filed by lot buyers against it now pending with a result of acceptance of the proffered case;
the HLURB
(f) The customary charges for similar services
the fact remains that no such motion to dismiss has been and the schedule of fees of the IBP Chapter to
filed yet in Civil Case No. 612, and there is no assurance which he belongs;
whatsoever that the plaintiffs therein will sign a joint
motion to dismiss. Third, as correctly posited by the (g) The amount involved in the controversy and
petitioner, the private respondent had no participation in the the benefits resulting to the client from the
negotiations leading to, and in the preparation of, the service;
memorandum of agreement.
(h) The contingency or certainty of
Indisputably then, the private respondent's attorney's fee on compensation;
"contingent basis" in Civil Case No. 612 is unwarranted. If at all, he
could only be entitled to attorney's fees on quantum meruit basis as of
(i) The character of the employment, whether
the expiration of his retainer contract on 31 March 1993.
occasional or established; and

Quantum meruit simply means "as much as he deserves." 24 In no


(j) The professional standing of the lawyer.
case, however, must a lawyer be allowed to recover more than what
is reasonable, pursuant to Section 24, Rule 138 of the Rules of Court,
which provides: It was incumbent upon the private respondent to prove the reasonable
amount of attorney's fees, taking into account the foregoing factors or
circumstances. The records before us and the trial court's 11 October
Sec. 24. Compensation of attorneys, agreement
1993 order do not confirm that the private respondent proved by
as to fees. — An attorney shall be entitled to have
either testimonial or documentary evidence that the award of
and recover from his client no more than a
P600,000.00 was reasonable. The private respondent's testimony
reasonable compensation for his services, with a
thereon was crucial. Yet, it does not appear from the 11 October 1993
view to the importance of the subject-matter of
order that he took the witness stand. From the Minutes of the trial
the controversy, the extent of the services
court attached to the Rollo of CA-G.R. CV No. 44839, 26 it appears
rendered, and the professional standing of the
that only Atty. Atienza, and Mr. Suazo gave oral testimony on the The Facts
motion.

It necessarily follows then that the 11 October 1993 order has In giving due course to the petition, we carefully considered the facts
insufficient factual basis, and the trial court committed grave abuse of attendant to the case. On August 28, 1987, Eastern
discretion in arbitrarily fixing the private respondent's attorney's fees Telecommunications Philippines, Inc. (ETPI) represented by the law
at P600,000.00. The affirmance of the said order by the Court of firm San Juan, Africa, Gonzales and San Agustin (SAGA), filed with
Appeals premised on the provision in the retainer contract regarding the Regional Trial Court, Makati, a complaint for recovery of revenue
contingent fee is thus fatally flawed. shares against Philippine Long Distance Telephone Company
(PLDT). Atty. Francisco D. Rilloraza, a partner of the firm appeared
for ETPI.
The interest for both the petitioner and the private respondent
demands that the trial court should conduct further proceedings in After ETPI rested its case, it paid SAGA the billed amount of One
Civil Case No. 612 relative to the private respondent's motion for the Hundred Thousand Pesos (P100,000.00). On September 18, 1987, the
payment of attorney's fees and, thereafter, fix it in light of Section 24, trial court issued a resolution granting ETPI’s application for
Rule 138 of the Rules of Court; Rule 20.1, Canon 20 of the Code of preliminary restrictive and mandatory injunctions. During this period,
Professional Responsibility; and the jurisprudentially established SAGA was dissolved and four of the junior partners formed the law
guiding principles in determining attorney's fees on quantum meruit firm Rilloraza, Africa, De Ocampo & Africa (RADA), which took
basis. over as counsel in the case for ETPI. The latter signed a retainer
agreement with counsel dated October 1, 1987. 1
WHEREFORE, the instant petition is GRANTED. The challenged
Decision of 31 March 1995 of the Court of Appeals in CA-G.R. CV Petitioners presented the three aspects of the main case in the trial
No. 44839 and the Order of 11 October 1993 of the Regional Trial court. First, the traffic revenue shares which ETPI sought to recover
Court of Makati, Branch 64, in Civil Case No. 612 are hereby SET from PLDT in accordance with the contract between them. Second,
ASIDE. The trial court is further. DIRECTED to set for further ETPI sought preventive injunctive relief against the PLDT’s threats
hearing the private respondent's Urgent Motion to Direct Payment of to deny ETPI access to the Philippines international gateway switch.
Attorney's Fees and/or Register Attorney's Charging Lien and Third, ETPI called this the "foreign correspondentships aspect"
thereafter to fix the private respondent's attorney's fees in Civil Case where ETPI sought preventive injunctive relief against PLDT’s
No. 612 as of 31 March 1993 when his contract with the petitioner incursions and inducements directed at ETPI’s foreign
was effectively terminated, taking into account Section 24, Rule 138 correspondents in Hongkong, Taiwan and Singapore, to break their
of the Rules of Court; Rule 20.1, Canon 20 of the Code of correspondentship contracts with PLDT, using the threat of denying
Professional Responsibility; and the jurisprudentially established them access to the international gateway as leverage.
guiding principles in determining attorney's fees on quantum meruit
basis. In this connection, ETPI filed with the trial court two urgent motions
for restraining order, one on October 30, 1987 and another on
No pronouncement as to costs. November 4, 1987. As the applications were not acted upon, ETPI
brought the case up to the Court of Appeals by petition for certiorari.

SO ORDERED. On June 28, 1988, petitioner received a letter from ETPI signed by E.
M. Villanueva, President and Chief Executive Officer. In substance,
13.) the letter stated that ETPI was terminating the retainer contract dated
October 1, 1987, effective June 30, 1988.
[G.R. No. 104600. July 2, 1999.]
On June 29, 1988, petitioner filed with the Regional Trial Court a
RILLORAZA, AFRICA, DE OCAMPO and AFRICA, notice of attorney’s lien, furnishing copies to the plaintiff ETPI, to
Petitioners, v. EASTERN TELECOMMUNICATIONS PHILS., the signatory of the termination letter and PLDT. On the same date,
INC. and PHILIPPINE LONG DISTANCE COMPANY, petitioner additionally sent a letter to ETPI attaching its partial billing
Respondents. statement. In its notice, RADA informed the court that there were
negotiations toward a compromise between ETPI and PLDT.

In April 1990, petitioner confirmed that indeed the parties arrived at


an amicable settlement and that the same was entered as a judgment.
DECISION
On April 26, 1990, petitioner filed a motion for the enforcement of
attorney’s lien with the Regional Trial Court of Makati and then
appraised the Supreme Court thereof by manifestation. 2 We noted
PARDO, J.: the manifestation in a resolution dated July 23, 1990.

On May 24, 1990, PLDT filed with the trial court a manifestation that
The Issue it is not a party to nor in any manner involved in the attorney’s lien
being asserted by Atty. Rilloraza for and in behalf of the law firm, 3
The basic issue submitted for consideration of the Court is whether or while ETPI filed its opposition thereto on June 11, 1990.
not petitioner is entitled to recover attorney’s fees amounting to
Twenty Six Million Three Hundred Fifty Thousand Seven Hundred The Lower Court’s Ruling
Seventy Nine Pesos and Ninety One Centavos (P26,350,779.91) for
handling the case for its client Eastern Telecommunications The trial court in its resolution dated September 14, 1990 denied the
Philippines, Inc. filed with the Regional Trial Court, Makati, though motion for enforcement of attorney’s lien.
its services were terminated in midstream and the client directly Thus:jgc:chanrobles.com.ph
compromised the case with the adverse
party.chanroblesvirtual|awlibrary "WHEREFORE, premises considered, the court finds that the Notice
of Attorney’s Lien filed by the law firm of Rilloraza, Africa, De
Ocampo and Africa has no basis in fact and in law, and therefore "(s/t) JOSE A. R. MELO" (s/t) EMETERIO C. CUI
denies the Motion for Enforcement of Attorney’s
Lien.chanroblesvirtual|awlibrary "Associate Justice "Associate Justice" 7

"SO ORDERED. DISCUSSION

"Makati, Metro Manila, September 4, 1990. A. The Procedural Aspect

"(s/t) ZEUS C. ABROGAR There is nothing sacrosanct about procedural rules, which are
liberally construed in order to promote their objectives and assist the
"Judge" 4 parties in obtaining just, speedy and inexpensive determination of
every action or proceeding. 8 In an analogous case, 9 we ruled that
On October 10, 1990, petitioner filed with the trial court a notice of where the rigid application of the rules would frustrate substantial
appeal from the above-mentioned order to the Supreme Court. On justice 10 , or bar the vindication of a legitimate grievance, the courts
November 6, 1990, ETPI filed a Motion to Dismiss Appeal are justified in exempting a particular case from the operation of the
contending that the case could be brought to the Supreme Court only rules.
via a petition for review on certiorari, not by a mere notice of appeal.
In an order dated January 16, 1991, the trial court dismissed RADA’s In A-One Feeds, Inc. v. Court of Appeals, we said —
appeal.
"Litigations should, as much as possible, be decided on the merits
The trial court said:jgc:chanrobles.com.ph and not on technicality. Dismissal of appeals purely on technical
grounds is frowned upon, and the rules of procedure ought not to be
"There is no more regular appeal from the Regional Trial Court to the applied in a very rigid, technical sense, for they are adopted to help
Supreme Court. Under the amendment of Section 17 of the Judiciary secure, not override, substantial justice and thereby defeat their very
Act by R.A. 5440, orders and judgments of the Regional Trial Court claims. As has been the constant ruling of this Court, every party
may be elevated to the Supreme Court only by petition for review on litigant should be afforded the amplest opportunity for the proper and
certiorari. just determination of his cause, free from the constraints of
technicalities." 11
x x x
A basic legal principle is that no one shall be unjustly enriched at the
expense of another. 12 This principle is one of the mainstays of every
"Wherefore, premises considered, the order dated September 14, legal system for centuries and which the Civil Code
1990 is hereby reconsidered and set aside. The Notice of Appeal filed echoes:jgc:chanrobles.com.ph
by movant RADA is dismissed.
"ARTICLE 22. Every person who through an act of performance by
"SO ORDERED. another, or any other means, acquires or comes into possession of
something at the expense of the latter without just or legal ground,
"Given this 16th day of January, 1991, at Makati, Metro Manila. shall return the same to him." 13

"(s/t) ZEUS C. ABROGAR The Code Commission, its report, emphasized


that:jgc:chanrobles.com.ph
"Judge" 5
"It is most needful that this ancient principle be clearly and
Hence, on February 9, 1991, petitioner filed a petition for certiorari specifically consecrated in the proposed Civil Code to the end that in
with the Supreme Court, which we remanded to the Court of cases not foreseen by the lawmaker, no one may unjustly benefit
Appeals. The latter dismissed the petition in a decision promulgated himself to the prejudice of another. The German Civil Code has a
on November 14, 1991, 6 ruling that the judge committed no abuse of similar provision (Art. 812)." 14
discretion in denying petitioner’s motion for enforcement of
attorney’s lien. Thus:jgc:chanrobles.com.ph With this in mind, one could easily understand why, despite technical
deficiencies, we resolved to give due course to this petition. More
"We therefore rule that respondent judge committed no abuse of importantly, the case on its face appears to be impressed with
discretion, much less a grave one, in denying petitioner’s motion for merit.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
enforcement of attorney’s lien.
B. The Attorney’s Fees
"Assuming that respondent judge committed an error in denying
petitioner’s motion for enforcement of attorney’s lien, it cannot be We understand that Atty. Francisco Rilloraza handled the case from
corrected by certiorari. its inception until ETPI terminated the law firm’s services in 1988.
Petitioner’s claim for attorney’s fees hinges on two grounds: first, the
"WHEREFORE, the writs prayed for are DENIED, and the petition is fact that Atty. Rilloraza personally handled the case when he was
hereby DISMISSED, with cost against petitioner. working for SAGA; and second, the retainer agreement dated
October 1, 1987.
"SO ORDERED.
We agree that petitioners are entitled to attorneys’ fees. We, however,
"(s/t) REGINA G. ORDOÑEZ-BENITEZ are not convinced with the petitioner’s arguments that the services
RADA rendered merit the amount they are claiming.
"Associate Justice"
First, petitioner contends that Atty. Rilloraza initiated the filing of the
"WE CONCUR:jgc:chanrobles.com.ph complaint. When a client employs the services of a law firm, he does
not employ the services of the lawyer who is assigned to personally Petitioner contends that pursuant to Rule 138 of the Revised Rules of
handle the case. Rather, he employs the entire law firm. In the event Court, it is entitled to a charging lien. The rule
that the counsel appearing for the client resigns, the firm is bound to provides:jgc:chanrobles.com.ph
provide a replacement. Thus, RADA could not claim to have initiated
the filing of the complaint considering that ETPI hired SAGA. What "SECTION 37. Attorney’s liens. — An attorney shall have a lien
is more, on September 17, 1987, ETPI paid SAGA the amount of upon the funds, documents and papers of his client, which have
One Hundred Thousand Pesos (P100,000.00) 15 representing lawfully come into his possession and may retain the same until his
services performed prior to September 17, 1987. SAGA assigned one lawful fees and disbursements have been paid, and may apply such
of its associates, Atty. Francisco Rilloraza, to handle the case for the funds to the satisfaction thereof. He shall also have a lien to the same
firm. Although Atty. Rilloraza handled the case personally, he did so extent upon all judgments for the payment of money, and executions
for and in behalf of SAGA. issued in pursuance of such judgments, which he has secured in a
litigation of his client, from and after the time when he shall have
Second, petitioner claims that under the retainer agreement, which caused a statement of his claim of such lien to be entered upon the
provides:jgc:chanrobles.com.ph records of the court rendering such judgment, or issuing such
execution, and shall have caused written notice thereof to be
"6.2 B. Court Cases:chanrob1es virtual 1aw library delivered to his client and to the adverse party; and he shall have the
same right and power over such judgments and executions as his
Should recourse to judicial action be necessary to effect collection or client would have to enforce his lien and secure the payment of his
judicial action be taken by adverse party, our attorney’s fees shall be just fees and disbursements." (Emphasis supplied)
fifteen percent (15%) of the amounts collected or the value of the
property acquired or liability saved." 16cralawnad We do not agree. A charging lien to be enforceable as security for the
payment of attorney’s fees requires as a condition sine qua non a
the firm is entitled to the fees agreed upon. judgment for money and execution in pursuance of such judgment
secured in the main action by the attorney in favor of his client 23 . A
However, the retainer agreement has been terminated. True, Attorney charging lien presupposes that the attorney has secured a favorable
Rilloraza played a vital role during the inception of the case and in money judgment for his client. 24 From the facts of the case it would
the course of the trial. We cannot also ignore the fact that an attorney- seem that petitioner had no hand in the settlement that occurred, nor
client relationship between petitioner and respondent no longer did it ever obtain a favorable judgment for ETPI.
existed during its culmination by amicable agreement. To award the
attorneys’ fees amounting to 15% of the sum of One Hundred ETPI entered into a compromise agreement when it ended the
Twenty Five Million Six Hundred Seventy One Thousand Eight services of petitioner and through the effort of ETPI’s new lawyers,
Hundred Eighty Six Pesos and Four Centavos (P125,671,886.04) plus the law firm Romulo, Mabanta, Buenaventura, Sayoc and De los
Fifty Million Pesos (P50,000,000.00) paid by PLDT to ETPI would Angeles. Whether there was bad faith in the substitution of the
be too unconscionable. lawyers to avoid compliance with the retainer agreement could only
be determined after a trial of the case on the merits.
"In any case, whether there is an agreement or not, the courts shall fix
a reasonable compensation which lawyers may receive for their This decision, however, should not be interpreted as to impose upon
professional services." 17 "A lawyer has the right to be paid for the petitioner any additional burden in collecting its attorney’s fees. The
legal services he has extended to his client, which compensation must petitioner must avail itself of the proper remedy in order to forestall
be reasonable." 18 A lawyer would be entitled to receive what he the possibility of any injustice on or unjust enrichment of any of the
merits for his services. Otherwise stated, the amount must be parties.
determined on a quantum meruit basis.
The Judgment (Fallo)
"Quantum meruit, meaning ‘as much as he deserved’ is used as a
basis for determining the lawyer’s professional fees in the absence of ACCORDINGLY, the Court GRANTS the petition, REVERSES the
a contract but recoverable by him from his client." 19 Recovery of decision of the Court of Appeals in CA-G.R. SP No. 24463 and
attorney’s fees on the basis of quantum meruit is authorized when (1) REMANDS the case to the court of origin for the determination of
there is no express contract for payment of attorney’s fees agreed the amount of attorney’s fees to which petitioner is
upon between the lawyer and the client; (2) when although there is a entitled.chanrobles virtual lawlibrary
formal contract for attorney’s fees, the fees stipulated are found
unconscionable or unreasonable by the court; and (3) when the No costs.
contract for attorney’s fees is void due to purely formal defects of
execution; (4) when the counsel, for justifiable cause, was not able to SO ORDERED.
finish the case to its conclusion; (5) when lawyer and client disregard
the contract for attorney’s fees. 20
14.) G.R. No. 137680 February 6, 2004
In fixing a reasonable compensation for the services rendered by a
lawyer on the basis of quantum meruit, the elements to be considered CONCEPT PLACEMENT RESOURCES, INC., petitioner,
are generally (1) the importance of the subject matter in controversy, vs.
(2) the extent of services rendered, and (3) the professional standing RICHARD V. FUNK, respondent.
of the lawyer. A determination of these factors would indispensably
require nothing less than a full-blown trial where private respondents
can adduce evidence to establish the right to lawful attorney’s fees
and for petitioner to oppose or refute the same. 21 The trial court has
the principal task of fixing the amount of attorney’s fees 22 . Hence, DECISION
the necessity of a hearing is beyond cavil.

C. Charging Lien
SANDOVAL-GUTIERREZ, J.:
This is a petition for review on certiorari assailing the Decision1 Respondent filed a motion for reconsideration but was denied by the
dated February 18, 1999 of the Court of Appeals in CA-G.R. SP No. RTC in an Order3 dated December 29, 1997.
46703, entitled "Richard V. Funk vs. Hon. Santiago Ranada, Jr.,
Presiding Judge of RTC, Makati, Branch 137 and Concept Placement Thus, respondent filed with the Court of Appeals a petition for review
Resources, Inc." ascribing to the RTC the following errors: (1) in reversing the MTC
Decision on the ground of res judicata; and (2) in disregarding the
The antecedent facts giving rise to the controversy at bar are as compulsory counterclaim as basis for respondent’s action for
follows: attorney’s fees.

On June 25, 1994, Concept Placement Resources, Inc., petitioner, In due course, the Court of Appeals promulgated its Decision4 dated
engaged the legal services of Atty. Richard V. Funk, respondent. February 18, 1999 reversing the assailed RTC Decision and affirming
the MTC Decision, thereby sustaining the award to respondent of his
On July 1, 1994, the parties executed a retainer contract wherein they attorney’s fees in the amount of P50,000.00.
agreed that respondent will be paid regular retainer fee for various
legal services, except litigation, quasi-judicial and administrative Hence, this petition for review on certiorari wherein petitioner raises
proceedings and similar actions. In these services, there will be the following assignments of error:
separate billings.
"I. A QUESTION OF LAW IS BEING RAISED ON
Meanwhile, one Isidro A. Felosopo filed with the Philippine WHETHER AN ALLEGATION IN PLEADING
Overseas Employment Administration (POEA) a complaint for DRAFTED BY COUNSEL ON BEHALF OF HIS
illegal dismissal against petitioner, docketed as POEA Case No. 94- CLIENT FILED IN A LABOR CASE CAN BE USED AS
08-2370. Petitioner referred this labor case to respondent for legal THE SOLE BASIS OF A COLLECTION SUIT BY
action. COUNSEL IN THE ABSENCE OF ANY WRITTEN
CONTRACT; AND,
Immediately, respondent, as counsel for petitioner, filed with the
POEA its answer with counterclaim for P30,000.00 as damages and "II. ON A QUESTION OF LAW ON WHETHER THERE
P60,000.00 as attorney’s fees. IS A DISTINCTION BETWEEN THE PRINCIPLE OF
RES JUDICATA PER SE FROM THE PRINCIPLE THAT
On March 1, 1995, while the labor case was still pending, petitioner THE DISMISSAL OF THE MAIN CASE CARRIES
terminated its retainer agreement with respondent. Nevertheless, WITH IT THE DISMISSAL OF THE COMPULSORY
respondent continued handling the case. COUNTERCLAIM AND SAID DISMISSAL
CONSTITUTES RES JUDICATA WITH RESPECT TO
THE COMPULSORY COUNTERCLAIM.5
On October 30, 1995, the POEA rendered a Decision dismissing
Felosopo’s complaint with prejudice. The POEA, however, failed to
rule on petitioner’s counterclaim for damages and attorney’s fees. The basic issue to be resolved is whether or not respondent is entitled
Thereafter, the Decision became final and executory. to attorney’s fees for assisting petitioner as counsel in the labor case.

On December 8, 1995, respondent advised petitioner of the POEA’s While it is true that the retainer contract between the parties expired
favorable Decision and requested payment of his attorney’s fees. during the pendency of the said labor case, it does not follow that
petitioner has no more obligation to pay respondent his attorney’s
fees. The Court of Appeals found that petitioner engaged the legal
In reply, petitioner rejected respondent’s request for the following services of respondent and agreed to pay him accordingly, thus:
reasons: (1) the retainer agreement was terminated as early as March
1995; (2) there is no separate agreement for the handling of the labor
case; and (3) the POEA did not rule on petitioner’s counterclaim for "Anent the first issue, the Petitioner resolutely avers that he
attorney’s fees. This prompted respondent to file with the and the Private Respondent had agreed on the latter paying
Metropolitan Trial Court (MTC), Branch 67, Makati City a complaint him the amount of P60,000.00 by way of attorney’s fees for
for sum of money (attorney’s fees) and damages against petitioner, his professional services as its counsel in POEA Case No.
docketed as Civil Case No. 51552. 94-08-2370 the Petitioner relying on his ‘Retainer
Agreement’ in tandem with the ‘Compulsory Counterclaim’
of the Private Respondent to the complaint of Isidro
During the pre-trial on September 3, 1996, the MTC, upon Felosopo.
respondent’s motion, declared petitioner as in default. Its motion for
reconsideration was denied in an Order dated September 13, 1996.
Forthwith, respondent was allowed to present his evidence ex-parte. "We agree with the Petitioner’s pose. It bears stressing that
the ‘Retainer Agreement’ of the Petitioner and the Private
Respondent (Exhibit ‘A’) envisaged two (2) species of
On October 27, 1996, the MTC rendered a Decision2 ordering professional services of the Petitioner, namely, those
petitioner to pay respondent P50,000.00 as attorney’s fees. professional services covered by the regular retainer fee
and those covered by separate billings. Petitioner’s services
On appeal, the Regional Trial Court (RTC), Branch 137, Makati City, not covered by the regular retainer fee and, hence, subject
reversed the MTC Decision, holding inter alia that since the MTC, in to separate billing include:
the same Decision, did not resolve petitioner’s counterclaim for
attorney’s fees, which constitutes res judicata, respondent is not ‘x x x
entitled thereto.
5. Services not covered by the regular retainer
fee and therefore, subject to separate billing:
a) litigation, quasi-judicial proceedings, WHEREFORE, the petition is GRANTED. The assailed Decision of
administrative investigation, and similar the Court of Appeals is AFFIRMED with MODIFICATION in the
proceedings legal in nature; sense that the award of P50,000.00 as attorney’s fees to herein
respondent is reduced to only P10,000.00. No costs.
x x x’
SO ORDERED.
"x x x While admittedly, the Petitioner and the Private
Respondent did not execute a written agreement on 15.) A.C. No. 7337 September 29, 2014
Petitioner’s fees in said case apart from the ‘Retainer
Agreement’, however, the Private Respondent did
categorically and unequivocally admit in its ‘Compulsory ROLANDO VIRAY, Complainant,
Counterclaim’ embodied in its Answer to the Complaint, in vs.
POEA Case No. 94-08-2370, that it engaged the services of ATTY. EUGENIO T. SANICAS, Respondent.
the Petitioner as its counsel ‘For a fee in the amount of
P60,000.00, Etc.’: RESOLUTION

‘COMPULSORY COUNTERCLAIM DEL CASTILLO, J.:

1. Respondent reproduces herein by reference all This is a verified Complaint for Disbarment/Gross Immoral Conduct1
the material allegations in the foregoing Answer. filed with this Court on September 18, 2006 by complainant Rolando
Viray (complainant) against respondent Atty. Eugenio T. Sanicas
2. As shown by the allegation in the Answer the (respondent).
complaint is factually and legally unfounded. To
defend itself against this baseless suit, respondent Factual Antecedents
suffered and continues to suffer actual damage in
the amount of P30,000.00 and was compelled to Complainant alleges that he engaged the services of respondent
hire the services of counsel for a fee in the relative to a labor case2 he filed against Ester Lopez and Teodoro
amount of P60,000.00 plus P1,500.00 Lopez III (spouses Lopez). On February 26, 2001, the Labor Arbiter
honorarium per appearance and litigation ruled in favor of complainant and disposed of the case as follows:
expenses in the amount of not less than
P10,000.00 plus cost of
WHEREFORE, premises considered, judgment is hereby rendered
ordering respondents Ester Lopez and Teodoro Lopez III to pay
3. suit." (Exhibit ‘B-1’: underscoring supplied) complainant Rolando Viray of the following, to wit:

Petitioner, in order to evade its obligation, invoked the principle of 1. Backwages ........................... ₱146,726.67
res judicata. Citing BA Finance Corporation vs. Co6 , petitioner
contends that since the complaint in the labor case was dismissed, the
counterclaim for attorney’s fees was likewise dismissed. 2. Separation Pay ......................... 24,000.00
Consequently, the dismissal of the counterclaim has the effect of res
judicata on respondent’s complaint for attorney’s fees. Necessarily, it 3. Service Incentive Leave Pay ......... .1,538.46
must also be dismissed.
4. Attorney's Fees ........................ .17,226.51
Petitioner’s invocation of res judicata7 is utterly misplaced. The
labor case and the instant complaint for collection of attorney’s fees or a total amount of One Hundred Eighty Nine Thousand Fom
are entirely different. Obviously, in the two cases, there is no identity Hw1dred Ninety One Pesos & 64/100 (Pl89,491.60) [sic] to be
of parties, identity of subject matter, and identity of causes of action. deposited with the Cashier of this Office, wjthin ten (10) days from
Also, the Order in the labor case dismissing the complaint with receipt hereof
prejudice is not on the merits.
All other claims are hereby denied for lack of merit.
Significantly, in German Marine Agencies, Inc. vs. NLRC,8 we held
that there must always be a factual basis for the award of attorney’s
fees. Here, since petitioner agreed to be represented by respondent as SO ORDERED.3
counsel in the labor case and to pay him his attorney’s fees, it must
abide with its agreement which has the force of law between them.9 Subsequently, an Alias Writ of Execution4 was issued relative to
aforesaid decision. During the implementation of said writ, however,
We observe, however, that respondent did not encounter difficulty in complainant discovered that respondent had already collected the
representing petitioner. The complaint against it was dismissed with total amount of ₱95,000.00 from spouses Lopez. Respondent
prejudice. All that respondent did was to prepare the answer with received said amount in the following manner:
counterclaim and possibly petitioner’s position paper. Considering
respondent’s limited legal services and the case involved is not Voucher
complicated, the award of P50,000.00 as attorney’s fees is a bit Date
No.
Amount Purpose
excessive. In First Metro Investment Corporation vs. Este del Sol
Mountain Reserve, Inc.,10 we ruled that courts are empowered to 0210512004 7802 ₱20,000.00 Attorney's fees
reduce the amount of attorney’s fees if the same is iniquitous or
unconscionable. Under the circumstances obtaining in this case, we 02/13/2004 7833 10,000.00 Partial payment for
consider the amount of P20,000.00 reasonable.
judgment In view of the foregoing, it is respectfully recommended that the
respondent be meted the penalty of two (2) years suspension.
0212612004 7848 10,000.00 Partial payment for Respondent is also ordered to return, in restitution all the amounts in
judgment his possession which are due to complainant, less his rightful
attorney's fees.10 On October 28, 2011, the IBP Board of Governors
03/12/2004 7894 20,000.00 Partial payment for adopted Resolution No. XX-2011-139,11 which approved the Report
judgment and Recommendation of the Investigating Commissioner suspending
respondent from the practice of law for two years, but with the
0410212004 7932 5,000.00 Partial payment for
modification that respondent should restitute the sum of
judgment
₱85,500.0012 to the complainant.
0410612004 7941 5,000.00 Partial payment for
judgment Issue
04/13/2004 7944 5,000.00 Partial payment for
judgment The essential issue in this case is whether the respondent is guilty of
gross misconduct for his failure to promptly account to his client the
04/16/2004 7954 10,000.00 Partial payment for funds received in the course of his professional engagement and
judgment return the same upon demand.

0413012004 7977 10,000.00 Partial payment for


judgment The Court's Ruling

Total Amount: ₱95,000.00 "The Code of Professional Responsibility demands the utmost degree
of fidelity and good faith in dealing with the moneys entrusted to
lawyers because of their fiduciary relationship."13 Specifically, Rule
Complainant also discovered that respondent misrepresented to
16.01 of the Code imposes upon the lawyer the duty to "account for
spouses Lopez that he is authorized to receive payments on his
all money or property collected or received for or from the client."
behalf, when in truth and in fact he is not. Consequently, complainant
Rule 16.03 thereof, on the other hand, mandates that "[a] lawyer shall
made several verbal demands to the respondent to remit to him the
deliver the funds xx x of his client when due or upon demand."
amount of ₱95,000.00, less his attorney's fees of ₱20,000.00. But
respondent did not budge. Thus, complainant lodged a complaint
before the Office of the Punong Barangay of Brgy. Felisa, Bacolod In this case, respondent on nine separate occasions from February 5,
City. Respondent, however, ignored the summons to attend a 2004 to April 30, 2004 received payments for attorney's fees and
conference before the barangay to resolve the issues. partial payments for monetary awards on behalf of complainant from
spouses Lopez. But despite the number of times over close to three
months he had been receiving payment, respondent neither informed
In his Comment,5 respondent admits that he received ₱95,000.00
the complainant of such fact nor rendered an accounting thereon. It
from spouses Lopez on installments, but denies that he was not
was only when an Alias Writ of Execution was issued and being
authorized to accept it. He explains that complainant agreed to pay
implemented when complainant discovered that spouses Lopez had
him additional attorney's fees equivalent to 25o/o of the total
already given respondent the total amount of ₱95,000.00 as partial
monetary award, on top of the attorney's fees that may be awarded by
payment for the monetary awards granted to him by the labor
the labor tribunal, and to refund all expenses respondent incurred
tribunal.
relative to the case. Thus, from the total award of ₱189,491.60, the
sum of ₱17,226.57 representing respondent's professional fees has to
be deducted, leaving a balance of ₱172,275.13.6 Then from said To make matters worse, respondent withheld and refused to deliver to
amount, complainant proposed that he will get ₱100,000.00 and the the complainant said amount, which he merely received on behalf of
balance of ₱72,275.13 shall belong to respondent as and for his his client, even after demand. Complainant brought the matter before
additional 25o/o attorney's fees and reimbursement for all expenses the barangay, but respondent simply ignored the same. Such failure
he incurred while handling the case. However, after receiving the and inordinate refusal on the part of the respondent to render an
amount of ₱95,000.00 and deducting therefrom the amounts of accounting and return the money after demand raises the presumption
₱20,000.007 attorney's fees, ₱17,000.00 earlier given to complainant, that he converted it to his own use.14 His unjustified withholding of
and ₱2,000.00 paid to the sheriff, what was left to respondent was the funds also warrants the imposition of disciplinary action against
only ₱56,000.00. Respondent whines that this amount is way below him.15
the promised 25o/o attorney's fees and refund of expenses in the total
amount of ₱72,275.13. Respondent justifies his action by asserting that complainant
authorized him to receive payment. He implies that he is also
Respondent asserts that, in any event, complainant will still be authorized to apply the sum of money he received from spouses
receiving a sum greater than what he expects to receive. He avers that Lopez to his additional 25o/o attorney's fees and reimbursement for
complainant is still entitled to receive from spouses Lopez the sum of all expenses he incurred for the case, in the total amount of
₱93,491.60. Adding the Pl 7,000.00 respondent previously remitted ₱72,275.13. However, after deducting from the amount of
to complainant, the latter will get a total amount of ₱110,491.60. This ₱95,000.00 the amounts of ₱20,000.00, ₱17,000.00, and ₱2,000.00,
amount, according to respondent, exceeds the amount of ₱100,000.00 what was left to respondent, to his dismay was only ₱56,000.00.
complainant agreed to and expected to receive.
The Court is not impressed. As aptly observed by the Investigating
IBP's Report and Recommendation Commissioner, other than his self-serving statements, there is nothing
in the records which would support respondent's claim that he was
authorized to receive the payments. Neither is there proof that
On February 26, 2007,8 we referred this case to the Integrated Bar of
complainant agreed to pay him additional 25% attorney's fees and
the Philippines (IBP) for investigation, report and recommendation.
reimburse him for all expenses he allegedly incurred in connection
On January 31, 2011, the Investigating Commissioner issued his
with the case. Respondent did not present any document, retainer's
Report and Recommendation9 with the following recommendation:
agreement, or itemized breakdown of the amount to be reimbursed to (Atty. Daquis) filed, on her behalf, a Petition for Declaration of
support his claim.1âwphi1 In any event, even assuming that Nullity of Marriage without her consent and forged her signature on
respondent was authorized to receive payments, the same does not the Petition.1 She also alleged that Atty. Daquis signed the Petition
exempt him from his duty of promptly informing his client of the for Declaration of Nullity of Marriage as "counsel for petitioner,"
amounts he received in the course of his professional employment. referring to Vasco-Tamaray.2
"The fiduciary nature of the relationship between counsel and client
imposes on a lawyer the duty to account for the money or property Vasco-Tamaray stated that Atty. Daquis was not her counsel but that
collected or received for or from the client. He is obliged to render a of her husband, Leomarte Regala Tamaray.3 To support her
prompt accounting of all the property and money he has collected for allegation, she attached the Affidavit4 of Maritess Marquez-
his client."16 "The fact that a lawyer has a lien for his attorney's fees Guerrero. The Affidavit states:
on the money in his hands collected for his client does not relieve
him from the obligation to make a prompt accounting."17 Moreover,
a lawyer has no right "to unilaterally appropriate his client's money 1. Sometime in October 2006, I accompanied Cheryl
for himself by the mere fact alone that the client owes him attorney's Tamaray in going to East Cafe at Rustan's Makati to meet
fees."18 with her husband Leomarte Tamaray;

In sum, "[r]espondent's failure to immediately account for and return 2. We arrived at the said place at around 7:00 pm and
the money when due and upon demand violated the trust reposed in Leomarte introduced to us (Cheryl and I) Atty. Deborah Z.
him, demonstrated his lack of integrity and moral soundness, and Daquis as his lawyer. He further told us that Atty. Daquis'
warrants the imposition of disciplinary action."19 husband also worked in Japan and that's how he got to
know the latter and got her services;
The Penalty
3. Among other things, Leomarte told Cheryl that the
reason for that meeting and the presence of Atty. Daquis
"The penalty for gross misconduct consisting in the failure or refusal was because he had decided to file a case to annul his
despite demand of a lawyer to account for and to return money or marriage with Cheryl;
property belonging to a client has been suspension from the practice
of law for two years."20 Thus, the IBP Board of Governors did not
err in recommending the imposable penalty. Considering, however, 4. Cheryl was shocked and just cried. After awhile [sic],
that this is respondent's first offense and he is already a Leomarte's brother arrived and shortly after, the group left;
nonagenarian,21 the Court, in the exercise of its compassionate
judicial discretion, finds that a penalty of one year suspension is 5. The next instance that I saw Atty. Daquis was when we
sufficient. WHEREFORE, the Court finds respondent Atty. Eugenio (Cheryl and I) went to McDonald's-Greenbelt where Atty.
T. Sanicas GUILTY of gross misconduct and accordingly Daquis tried to convince her not to oppose Leomarte's
SUSPENDS him from the practice of law for one (1) year upon the decision to have their marriage annulled[.]5 (Emphasis
finality of this Resolution, with a warning that a repetition of the supplied)
same or similar act or offense shall be dealt with more severly.
Vasco-Tamaray narrated that in December 2006, Atty. Daquis
Atty. Sanicas is ordered to return to complainant, within 90 days informed her "that a Petition for Declaration of Nullity of Marriage
from finality of this Resolution, the net amount of ₱85,500.00 with was filed before the Regional Trial Court of Muntinlupa City."6 In
interest at the rate of 6% per annum from finality of this Resolution February 2007, Atty. Daquis asked her to appear before the City
until the full amount is returned. Failure to comply with the foregoing Prosecutor's Office of Muntinlupa City.7
directive will warrant the imposition of a more severe penalty.
On March 5, 2007, Vasco-Tamaray appeared before the City
Let copies of this Resolution be furnished the Office of the Bar Prosecutor's Office and met Atty. Daquis. She asked Atty. Daquis to
Confidant and noted in Atty. Sanicas' record as a member of the Bar. give her a copy of the Petition but Atty. Daquis refused.8

SO ORDERED. Vasco-Tamaray stated that she obtained a copy of the Petition for
Declaration of Nullity of Marriage from Branch 207 of the Regional
Trial Court of Muntinlupa City. She was surprised to see that the
16.) A.C. No. 10868
Petition was allegedly signed and filed by her.9
[Formerly CBD Case No. 07-2041]

Vasco-Tamaray alleged that she did not file the Petition, that her
CHERYLE. VASCO-TAMARAY, Complainant,
signature was forged by Atty. Daquis, and that her purported
vs.
community tax certificate appearing on the jurat was not hers because
ATTY. DEBORAH Z. DAQUIS, Respondent.
she never resided in Muntinlupa City.10 She attached a Certification
issued by the Sangguniang Barangay of Putatan, Muntinlupa City
RESOLUTION stating that she was "never . . . a resident of #9 Daang Hari Street,
Umali Compound, Summitville Subdivision, Barangay Putatan."11
PERCURIAM: She also attached a Certification issued by Barangay Talipapa stating
that she has been a resident of "#484-J Saguittarius St., Solville
Subd., Barangay Talipapa, Novaliches, Quezon City... from 2000 till
Pretending to be counsel for a party in a case and using a forged present."12
signature in a pleading merit the penalty of disbarment.

Vasco-Tamaray also alleged that the Petition for Declaration of


Cheryl E. Vasco-Tamaray (Vasco-Tamaray) filed a Nullity of Marriage was Atty. Daquis' idea, consented to by Leomarte
ComplaintAffidavit before the Integrated Bar of the Philippines on Tamaray.13
July 30, 2007, alleging that respondent Atty. Deborah Z. Daquis
She further alleged that she had never received any court process. By pretending to be counsel for complainant, respondent violated
The Petition states that her postal address is "09 Daang Hari St., Canon 1, Rule 1.01 of the Code of Professional Responsibility and
Umali Comp., Summitville Subd., Putatan, Muntinlupa City[,]"14 failed to uphold her duty of doing no falsehood nor consent to the
which is the address of her husband's family. The return slips of the doing of any falsehood in court as stated in the Lawyer's Oath.27
notices sent by the trial court were received by Encarnacion T.
Coletraba and Almencis Cumigad, relatives ofLeomarte Tamaray.15 Canon 1, Rule 1.01 of the Code of Professional Responsibility
provides:
Atty. Daquis filed an Answer countering that her client was Vasco-
Tamaray, complainant herself, and not complainant's husband. She CANON 1 - A lawyer shall uphold the constitution, obey the laws of
alleged that Vasco-Tamaray knew of the Petition as early as October the land and promote respect for law and for legal processes.
2006, not December 2006.16
RULE 1.01 - A lawyer shall not engage in unlawful, dishonest,
With regard to the community tax certificate, Atty. Daquis explained immoral or deceitful conduct.
that when she notarized the Petition, the community tax certificate
number was supplied by Vasco-Tamaray.17 Atty. Daquis' allegation
was supported by the Joint Affidavit of her staff, Ma. Dolor E. In this case, respondent merely denied complainant's allegation that
Purawan (Purawan) and Ludy Lorena (Lorena).18 she was Leomarte Tamaray's counsel28 but was unable to rebut the
other allegations against her.
Purawan and Lorena detailed in their Joint Affidavit that they knew
Vasco-Tamaray to be a client of Atty. Daquis and that they never saw Respondent admitted that she met complainant in October 2006,29
Atty. Daquis forge Vasco-Tamaray's signature. Purawan stated that but did not refute30 the statement in Maritess Marquez-Guerrero's
she typed the Petition for Declaration of Nullity of Marriage and that Affidavit that Leomarte Tamaray introduced her as his lawyer.31
the community tax certificate was provided by Vasco-Tamaray.19 Likewise, respondent admitted that she met with complainant
subsequently,32 but did not refute Maritess Marquez-Guerrero's
statement that in one of the meetings, she tried to convince
Atty. Daquis alleged that Vasco-Tamaray wanted her to call and complainant not to oppose Leomarte Tamaray's decision to annul
demand money from Leomarte Tamaray but she refused to do so.20 their marriage.33

Atty. Daquis argued that Vasco-Tamaray had a copy of the Petition. Respondent argued in her Answer that she was the counsel for
When Vasco-Tamaray requested another copy on March 5, 2007, complainant.34 Yet, there is no explanation how she was referred to
Atty. Daquis was unable to grant her client's request because she did complainant or how they were introduced. It appears, then, that
not have a copy of the Petition with her at that time.21 respondent was contacted by Leomarte Tamaray to file a Petition for
Declaration of Nullity of Marriage on the ground of bigamy. As
Atty. Daquis further alleged that Vasco-Tamaray conceived an stated in Maritess Marquez-Guerrero's Affidavit, "Leomarte told
illegitimate son with a certain Reuel Pablo Aranda. The illegitimate Cheryl that the reason for that meeting and the presence of Atty.
son was named Charles Dino Vasco. Reuel Pablo Aranda signed the Daquis was because he had decided to file a case to annul his
Affidavit of Acknowledgment/ Admission of Paternity portion of the marriage with Cheryl[. ]"35
birth certificate.22
Based on this, it seems Leomarte Tamaray intended to file the
The Commission on Bar Discipline required the parties to submit petition for declaration of nullity of marriage. However, respondent
their position papers,23 but based on the record, only Vasco-Tamaray made it appear that complainant, not her client Leomarte Tamaray,
complied.24 was the petitioner. There is a probability that respondent did not want
Leomarte Tamaray to be the petitioner because he would have to
The Commission on Bar Discipline recommended the dismissal of admit that he entered into a bigamous marriage, the admission of
the Complaint because Vasco-Tamaray failed to prove her which may subject him to criminal liability.
allegations. The Commission on Bar Discipline noted that Vasco-
Tamaray should have questioned the Petition or informed the In addition, if it is true that complainant was respondent's client, then
prosecutor that she never filed any petition, but she failed to do so.25 there appears to be no reason for respondent to advise her "not to
oppose Leomarte's decision to have their marriage annulled."36
The Board of Governors of the Integrated Bar of the Philippines
adopted and approved the Report and Recommendation of the The records of this case also support complainant's allegation that she
Commission on Bar Discipline in the Resolution dated September 27, never received any court process because her purported address in the
2014.26 Petition is the address of Leomarte Tamaray. The Petition states that
complainant is "of legal age, Filipino citizen, married with postal
The issue for resolution is whether respondent Atty. Deborah Z. address at 09 Daang Hari St., Umali Comp., Summitville Subd.,
Daquis should be held administratively liable for making it appear Putatan, Muntinlupa City[.]"37
that she is counsel for complainant Cheryl Vasco-Tamaray and for
the alleged use of a forged signature on the Petition for Declaration of The Certificate of Marriage of complainant and Leomarte Tamaray
Nullity of Marriage. states that Leomarte's residence is at "Summitvil[l]e Subv [sic],
Muntinlupa," while complainant's residence is at "Hermosa St.
This court finds that respondent violated Canons 1, 7, 10, and 17 of Gagalangin, Tondo, Manila."38 Assuming that complainant lived
the Code of Professional Responsibility. The charge against with her husband after they were married, complainant most likely
respondent for violation of Canon 15 is dismissed. did not receive court processes because she left their home before the
filing of the Petition for Declaration of Nullity of Marriage. As
written in the Minutes of the meeting before the Office of the City
I Prosecutor:
P[etitioner] & R[espondent] met sometime in 1993 through his The Petition for Declaration of Nullity of Marriage was signed by a
secretary. They became sweethearts in 1993 and their relationship as certain "CVasco."47 The records of this case show that complainant
steadies lasted until 1996; has used two signatures. In her identification cards issued by the
University of the East, she used a signature that spelled out
During the 3 years of their union, petitioner knew respondent's family "CVasco."48 In her Complaint-Affidavit against respondent,
as she even sleeps in their house; Theirs was also a long distance complainant used a signature that spelled out "CTamaray."49
relationship as respondent worked in Japan;
A comparison of the signatures appearing on the Petition for
Upon respondents [sic] return to the Philippines they got married in Declaration of Nullity of Marriage and on complainant's
Feb, 1996. They had no children, as respondent immediately left for identification cards show a difference in the stroke of the letters "c"
Japan on March 11, 1996; and "o." Further, complainant's signatures in the documents50
attached to the records consistently appear to be of the same height.
On the other hand, her alleged signature on the Petition for
Respondent returned to the Philippines but unfortunately he brought Declaration of Nullity of Marriage has a big letter "c."51 Hence, it
another woman. As a result, petitioner left their house.39 (Emphasis seems that complainant's signature on the Petition for Declaration
supplied) ofNullity of Marriage was forged.

Further, complainant cannot be faulted for her failure to inform the While there is no evidence to prove that respondent forged
prosecutor that she did not file any petition for declaration of nullity complainant's signature, the fact remains that respondent allowed a
of marriage because during the meeting on March 5, 2007, forged signature to be used on a petition she prepared and
complainant had no knowledge that the Petition was filed in her notarized.52 In doing so, respondent violated Canon 7, Rule 7.03 and
name.40 She obtained a copy of the Petition after the March 5, 2007 Canon 10, Rule 10.01. These canons state:
meeting.41
CANON 7 - A lawyer shall at all times uphold the integrity and
In Yupangco-Nakpil v. Uy,42 this court discussed Canon 1, Rule dignity of the legal profession, and support the activities of the
1.01, as follows: integrated bar.

Rule 1.01, Canon 1 of the Code, as it is applied to the members of the RULE 7.03 - A lawyer shall not engage in conduct that adversely
legal professions, engraves an overriding prohibition against any reflects on his fitness to practice law, nor shall he, whether in public
form of misconduct, viz: or private life, behave in a scandalous manner to the discredit of the
legal profession.
CANON 1 - A LA WYER SHALL UPHOLD THE
CONSTITUTION, OBEY THE LAWS OF THE LAND AND ....
PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES
CANON 10 - A lawyer owes candor, fairness and good faith to the
Rule 1.01 - A lawyer shall not engage in unlawful, dishonest, court.
immoral or deceitful conduct.
RULE 10.01 -A lawyer shall not do any falsehood, nor consent to the
The gravity of the misconduct- determinative as it is of the errant doing of any in Court; nor shall he mislead or allow the Court to be
lawyer's penalty- depends on the factual circumstances of each case . misled by any artifice.

.... In Embido v. Pe, Jr.,53 Assistant Provincial Prosecutor Salvador N.


Pe, Jr. was found guilty of violating Canon 7, Rule 7.03 and was
. . . Verily, members of the Bar are expected at all times to uphold the meted the penalty of disbarment for falsifying a court decision "in a
integrity and dignity of the legal profession and refrain from any act non-existent court proceeding."54 This court discussed that:
or omission which might lessen the trust and confidence reposed by
the public in the fidelity, honesty, and integrity of the legal Gross immorality, conviction of a crime involving moral turpitude, or
profession. By no insignificant measure, respondent blemished not fraudulent transactions can justify a lawyer's disbarment or
only his integrity as a member of the Bar, but also that of the legal suspension from the practice of law. Specifically, the deliberate
profession. In other words, his conduct fell short of the exacting falsification of the court decision by the respondent was an act that
standards expected of him as a guardian of law and justice.43 reflected a high degree of moral turpitude on his part. Worse, the act
made a mockery of the administration of justice in this country, given
When respondent filed the Petition as counsel for complainant when the purpose of the falsification, which was to mislead a foreign
the truth was otherwise, she committed a falsehood against the trial tribunal on the personal status of a person. He thereby became
court and complainant. unworthy of continuing as a member of the Bar.55

II In a similar manner, respondent's act of allowing the use of a forged


signature on a petition she prepared and notarized demonstrates a
Respondent violated Canon 7, Rule 7.03 and Canon 10, Rule 10.01 lack of moral fiber on her part.
when she allowed the use of a forged signature on a petition she
prepared and notarized.44 Other acts that this court has found violative of Canon 7, Rule 7.03
are: engaging in a scuffle inside court chambers;56 openly doubting
Complainant alleged that her signature on the Petition was forged.45 paternity of his own son;57 hurling invectives at a Clerk of Court;58
Respondent merely denied complainant's allegation.46 harassing occupants of a property;59 using intemperate language;60
and engaging in an extramarital affair.61
Furthermore, allowing the use of a forged signature on a petition filed even though she was engaged as counsel by Leomarte Tamaray.69
before a court is tantamount to consenting to the commission of a Canon 15, Rule 15.03 of the Code of Professional Responsibility
falsehood before courts, in violation of Canon 10. provides:

In Spouses Umaguing v. De Vera,62 this court discussed the CANON 15 - A lawyer shall observe candor, fairness and loyalty in
importance of Canon 10, Rule 10.01, as follows: all his dealings and transactions with his client.

The Lawyer's Oath enjoins every lawyer not only to obey the laws of ....
the land but also to refrain from doing any falsehood in or out of
court or from consenting to the doing of any in court, and to conduct Rule 15.03 - A lawyer shall not represent conflicting interests except
himself according to the best of his knowledge and discretion with all by written consent of all concerned given after a full disclosure of the
good fidelity to the courts as well as to his clients. Every lawyer is a facts.
servant of the law, and has to observe and maintain the rule of law as
well as be an exemplar worthy of emulation by others. It is by no
means a coincidence, therefore, that the core values of honesty, The rationale for Canon 15 was discussed in Samson v. Era:70
integrity, and trustworthiness are emphatically reiterated by the
Code of Professional Responsibility. In this light, Rule 10.01, Canon The rule prohibiting conflict of interest was fashioned to prevent
10 of the Code of Professional Responsibility provides that "[a] situations wherein a lawyer would be representing a client whose
lawyer shall not do any falsehood, nor consent to the doing of any in interest is directly adverse to any of his present or former clients. In
Court; nor shall he mislead, or allow the Court to be misled by any the same way, a lawyer may only be allowed to represent a client
artifice."63 (Emphasis supplied) involving the same or a substantially related matter that is materially
adverse to the former client only if the former client consents to it
III after consultation. The rule is grounded in the fiduciary obligation of
loyalty. Throughout the course of a lawyer-client relationship, the
lawyer learns all the facts connected with the client's case, including
This court further finds that respondent violated Canon 17, which the weak and strong points of the case. Knowledge and information
states: gathered in the course of the relationship must be treated as sacred
and guarded with care. It behooves lawyers not only to keep inviolate
CANON 17 - A lawyer owes fidelity to the cause of his client and he the client's confidence, but also to avoid the appearance of treachery
shall be mindful of the trust and confidence reposed in him. and double-dealing, for only then can litigants be encouraged to
entrust their secrets to their lawyers, which is paramount in the
Respondent failed to protect the interests of her client when she administration of justice. The nature of that relationship is, therefore,
represented complainant, who is the opposing party of her client one of trust and confidence of the highest degree .
Leomarte Tamaray, in the same case.
....
The responsibilities of a lawyer under Canon 17 were discussed in
Penilla v. Alcid, Jr.:64 . . . The spirit behind this rule is that the client's confidence once
given should not be stripped by the mere expiration of the
The legal profession dictates that it is not a mere duty, but an professional employment.1âwphi1 Even after the severance of the
obligation, of a lawyer to accord the highest degree of fidelity, zeal relation, a lawyer should not do anything that will injuriously affect
and fervor in the protection of the client's interest. The most thorough his former client in any matter in which the lawyer previously
groundwork and study must be undertaken in order to safeguard the represented the client. Nor should the lawyer disclose or use any of
interest of the client. The honor bestowed on his person to carry the the client's confidences acquired in the previous relation. In this
title of a lawyer does not end upon taking the Lawyer's Oath and regard, Canon 17 of the Code of Professional Responsibility
signing the Roll of Attorneys. Rather, such honor attaches to him for expressly declares that: "A lawyer owes fidelity to the cause of his
the entire duration of his practice of law and carries with it the client and he shall be mindful of the trust and confidence reposed in
consequent responsibility of not only satisfying the basic him."
requirements but also going the extra mile in the protection of the
interests of the client and the pursuit of justice[. ]65 The lawyer's highest and most unquestioned duty is to protect the
client at all hazards and costs even to himself. The protection given to
Respondent is reminded of the duties and responsibilities of members the client is perpetual and does not cease with the termination of the
of the legal profession, as discussed in Tenoso v. Echanez:66 litigation, nor is it affected by the client's ceasing to employ the
attorney and retaining another, or by any other change of relation
between them. It even survives the death of the client.71
Time and again, this Court emphasizes that the practice of law is
imbued with public interest and that "a lawyer owes substantial duties
not only to his client, but also to his brethren in the profession, to the The test to determine whether conflict of interest exists was discussed
courts, and to the nation, and takes part in one of the most important in Hornilla v. Salunat:72
functions of the State-the administration of justice-as an officer of the
court." Accordingly, "[l]awyers are bound to maintain not only a high There is conflict of interest when a lawyer represents inconsistent
standard of legal proficiency, but also of morality, honesty, integrity interests of two or more opposing parties. The test is "whether or not
and fair dealing. "67 (Citations omitted) in behalf of one client, it is the lawyer's duty to fight for an issue or
claim, but it is his duty to oppose it for the other client. In brief, if he
IV argues for one client, this argument will be opposed by him when he
argues for the other client." This rule covers not only cases in which
confidential communications have been confided, but also those in
This court notes that respondent may have violated Canon 15, Rule which no confidence has been bestowed or will be used. Also, there is
15.03 when she entered her appearance as counsel for complainant68 conflict of interests if the acceptance of the new retainer will require
the attorney to perform an act which will injuriously affect his first The amendments to Rule 139-B is a reiteration that only this court
client in any matter in which he represents him and also whether he has the power to impose disciplinary action on members of the bar.
will be called upon in his new relation to use against his first client The factual findings and recommendations of the Commission on Bar
any knowledge acquired through their connection. Another test of the Discipline and the Board of Governors of the Integrated Bar of the
inconsistency of interests is whether the acceptance of a new relation Philippines are recommendatory, subject to review by this court.80
will prevent an attorney from the full discharge of his duty of
undivided fidelity and loyalty to his client or invite suspicion of WHEREFORE, respondent Atty. Deborah Z. Daquis is found
unfaithfulness or double dealing in the performance thereof.73 GUILTY of violating Canon 1, Rule 1.01, Canon 7, Rule 7.03,
(Emphasis supplied, citations omitted) Canon 10, Rule 10.01, and Canon 17 of the Code of Professional
Responsibility.
Respondent was engaged by Leomarte Tamaray to be his counsel.74
When the Petition for Declaration of Nullity of Marriage was filed, The charge for violation of Canon 15, Rule 15.03 against respondent
respondent signed the Petition as counsel for complainant.75 If Atty. Deborah Z. Daquis is DISMISSED.
respondent was indeed engaged as counsel by complainant, then there
is conflict of interest, in violation of Canon 15, Rule 15.03.
The penalty of DISBARMENT is imposed upon respondent Atty.
Deborah Z. Daquis. The Office of the Bar Confidant is directed to
However, there is nothing on record to show that respondent was remove the name of Deborah Z. Daquis from the Roll of Attorneys.
engaged as counsel by complainant. Hence, this court finds that
respondent did not commit conflict of interest.
Let a copy of this Resolution be furnished to the Office of the Bar
Confidant to be appended to respondent's personal record as attorney,
V to the Integrated Bar of the Philippines, and to the Office of the Court
Administrator for dissemination to all courts throughout the country
On a final note, Rule 139-B has been amended by Bar Matter No. for their information and guidance.
1645 dated October 13, 2015. Section 12 of Rule 139-B now
provides that: This Resolution takes effect immediately.

Rule 139-B. Disbarment and Discipline of Attorneys SO ORDERED.

....
17.) A.C. No. 5408

Section 12. Review and recommendation by the Board of Governors.


ANITA SANTOS MURRAY, Complainant
vs.
(a) Every case heard by an investigator shall be reviewed ATTY. FELICITO J. CERVANTES, Respondent
by the IBP Board of Governors upon the record and
evidence transmitted to it by the Investigator with his
report. We sustain, with modification, the Integrated Bar of the Philippines
Board of Governors' Resolution No. XVI-2004-4811 and Resolution
No. XVIII-2008-711.2
(b) After its review, the Board, by the vote of a majority of
its total membership, shall recommend to the Supreme
Court the dismissal of the complaint or the imposition of Resolution No. XVI-2004-481 modified the Board of Governors'
disciplinary action against the respondent. The Board shall Resolution No. XV-2002-599.3 The latter ruled that respondent Atty.
issue a resolution setting forth its findings and Felicito J. Cervantes must be reprimanded and ordered to return to
recommendations, clearly and distinctly stating the facts complainant Anita Santos Murray the sum of ₱80,000.00.4
and the reasons on which it is based. The resolution shall be Resolution No. XVI-2004-481 modified this with the penalty of one
issued within a period not exceeding thirty (30) days from (1)-year suspension from the practice of law, with an additional three
the next meeting of the Board following the submission of (3)-month suspension for every month (or fraction) that respondent is
the Investigator's report. unable to deliver to complainant the sum of ₱80,000.00.5 Resolution
No. XVIII-2008-711 denied respondent's Motion for
Reconsideration.6
(c) The Board's resolution, together with the entire records
and all evidence presented and submitted, shall be
transmitted to the Supreme Court for final action within ten On February 2, 2001, complainant filed before this Court a
(10) days from issuance of the resolution. Complaint7 charging respondent with violating Canon 188 of the
Code of Professional Responsibility.

(d) Notice of the resolution shall be given to all parties


through their counsel, if any.76 Complainant alleged that sometime in June 2000, she sought the
services of a lawyer to assist in the naturalization (that is, acquisition
of Philippine citizenship) of her son, Peter Murray, a British national.
Under the old rule, the Board of Governors of the Integrated Bar of Respondent was later introduced to her. On June 14, 2000, she and
the Philippines was given the power to "issue a decision"77 if the respondent agreed on the latter's services, with complainant handing
lawyer complained of was exonerated or meted a penalty of "less respondent the sum of ₱80,000.00 as acceptance fee.9
than suspension or disbarment."78 In addition, the case would be
deemed terminated unless an interested party filed a petition before
this court.79 About three (3) months passed without respondent doing "anything
substantial."10 Thus, on September 11, 2000, complainant wrote
respondent to inform him that she was terminating his services. She
explained:
I am not satisfied with the way things are going regarding my progress of the services that he was supposed to render. Not only did
petition. I am expecting that you keep me abreast of your activities he fail in taking his own initiative to communicate; he also failed to
but I am left in the dark as to what have you done so far. You do not respond to complainant's queries and requests for updates.
show up on our scheduled appointments nor do you call me up to let
me know why you cannot come. You stood me up twice already Respondent's failure to timely and diligently deliver on his
which shows that you are not even interested in my case. professional undertaking justifies the Integrated Bar of the
Philippines' conclusion that he must restitute complainant the amount
.... of ₱80,000.00.

Since I already paid the ₱80,000.00 acceptance fee in full, I expect to Luna v. Galarrita28 has explained the parameters for ordering
get a refund of the same from you.11 restitution in disciplinary proceedings:

As respondent failed to return the ₱80,000.00 acceptance fee, In Ronquillo v. Atty. Cezar, the parties entered a Deed of Assignment
complainant instituted the Complaint in this case. She also instituted after which respondent received ₱937,500.00 from complainant as
criminal proceedings against respondent for violation of Article partial payment for the townhouse and lot. However, respondent did
315(1)(b)12 of the Revised Penal Code.13 not turn over this amount to developer Crown Asia, and no copy of
the Contract to Sell was given to complainant. This court suspended
This case was subsequently referred to the Integrated Bar of the Atty. Cezar from the practice of law for three (3) years, but did not
Philippines for its investigation, report, and recommendation.14 grant complainant's prayer for the return of the ₱937,500.00.

After the proceedings before the Integrated Bar of the Philippines, Ronquillo held that "[d]isciplinary proceedings against lawyers do
Investigating Commissioner Demaree J.B. Raval (Commissioner not involve a trial of an action, but rather investigations by the court
Raval) furnished a Report15 dated September 9, 2002 recommending into the conduct of one of its officers." Thus, disciplinary
that respondent be reprimanded and required to return the sum of proceedings are limited to a determination of "whether or not the
₱80,000.00 to complainant. In its Resolution No. XV-2002-599,16 attorney is still fit to be allowed to continue as a member of the Bar."
the Integrated Bar of the Philippines Board of Governors adopted
Commissioner Raval's recommendations. Later jurisprudence clarified that this rule excluding civil liability
determination from disciplinary proceedings "remains applicable
Respondent filed before this Court a Motion for Leave to Admit only to claimed liabilities which are purely civil in nature - for
Additional Evidence with Motion to Dismiss.17 He asserted that he instance, when the claim involves moneys received by the lawyer
never required complainant to immediately pay him ₱80,000.00 as from his client in a transaction separate and distinct [from] and not
acceptance fee.18 This Motion was forwarded to the Integrated Bar intrinsically linked to his professional engagement." This court has
of the Philippines19 and was treated as respondent's Motion for thus ordered in administrative proceedings the return of amounts
Reconsideration20. For her part, complainant filed several representing legal fees.
manifestations and motions asking that a heavier penalty be imposed
on respondent.21 This court has also ordered restitution as concomitant relief in
administrative proceedings when respondent's civil liability was
Acting on the pending incidents of the case, Investigating already established:
Commissioner Dennis A.B. Funa (Commissioner Funa) furnished a
Report22 recommending that respondent be suspended from the Although the Court renders this decision in an administrative
practice of law for one (1) year, with an additional three (3)-month proceeding primarily to exact the ethical responsibility on a member
suspension for every month (or fraction) that respondent fails to of the Philippine Bar, the Court's silence about the respondent
deliver to complainant the sum of ₱80,000.00. lawyer's legal obligation to restitute the complainant will be both
unfair and inequitable. No victim of gross ethical misconduct
Commissioner Funa justified the penalty of suspension by concerning the client's funds or property should be required to still
emphasizing that, in a hearing conducted by the Integrated Bar of the litigate in another proceeding what the administrative proceeding has
Philippines on August 18, 2004, respondent was "orally directed" to already established as the respondent's liability. That has been the
return the ₱80,000.00 not later than the end of August 2004.23 reason why the Court has required restitution of the amount involved
Respondent acceded to this; however, he failed to return the as a concomitant relief in the cited cases of Mortera v. Pagatpatan,
₱80,000.00.24 Almendarez, Jr. v. Langit, Small v. Banares.29 (Citations and
emphases omitted)
In its Resolution No. XVI-2004-481,25 the Board of Governors
adopted Commissioner Funa' s recommendation.1âwphi1 It is proper, in the course of these disciplinary proceedings, that
respondent be required to return to complainant the amount of
₱80,000.00. This amount was delivered to respondent during
The Board of Governors' Resolution No. XVIII-2008-711 later complainant's engagement of his professional services, or in the
denied respondent's Motion for Reconsideration.26 context of an attorney-client relationship. This is neither an
extraneous nor purely civil matter.
It is evident from the records that respondent failed to deliver on the
services that he committed to complainant despite receiving the By the same failure to timely and diligently deliver on his
amount of ₱80,000.00 as acceptance fee. Although respondent professional undertaking (despite having received fees for his
asserted that he did not actively solicit this amount from complainant, services), as well as by his failure to keep complainant abreast of
it remains, as Commissioner Funa underscored, that respondent relevant developments in the purposes for which his services were
accepted this amount as consideration for his services.27 Moreover, engaged, respondent falls short of the standards imposed by Canon
following complainant's engagement of his services, respondent 18 of the Code of Professional Responsibility:
failed to communicate with complainant or update her on the
CANON 18 - A LA WYER SHALL SERVE HIS CLIENT WITH For this reason, we exact upon respondent a penalty more severe than
COMPETENCE AND DILIGENCE. that initially contemplated by the Integrated Bar of the Philippines
Board of Governors. Moreover, to impress upon respondent the
Rule 18.01 - A lawyer shall not undertake a legal service which he urgency of finally returning to complainant the amount he received,
knows or should know that he is not qualified to render. However, he we impose on him an additional penalty corresponding to the
may render such service if, with the consent of his client, he can duration for which he fails to make restitution. We adopt the
obtain as collaborating counsel a lawyer who is competent on the Integrated Bar of the Philippines Board of Governors' position in
matter. Resolution No. XVI-2004-481 that an additional period of suspension
must be imposed on respondent for every month (or fraction) that he
fails to pay in full the amount he owes complainant. However,
Rule 18.02 - A lawyer shall not handle any legal matter without instead of a three (3)-month suspension for every month (or fraction)
adequate preparation. of non-payment or incomplete payment, he is to be suspended for one
(1) month for every such period of failure to make full payment.
Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to
him, and his negligence in connection therewith shall render him This approach hopefully underscores the burden that respondent must
liable. justly carry. By automatically extending his suspension should he not
return the amount, we save complainant, the victim from the
Rule 18.04 - A lawyer shall keep the client informed of the status of additional costs of having to find and retain another counsel to
his case and shall respond within a reasonable time to the client's compel the return of what is due her. Counsels who have caused
request for information. (Emphasis supplied) harm on their clients must also suffer the costs of restitution.

Disciplinary sanctions more severe than those considered proper by WHEREFORE, respondent Atty. Felicito J.Cervantes is
the Integrated Bar of the Philippines are warranted. SUSPENDED from the practice of law for one (1) year and six (6)
months. He is ORDERED to restitute complainant Anita Santos
We emphasize that, during the proceedings before the Integrated Bar Murray the sum of ₱80,000.00. For every month (or fraction) the he
of the Philippines, respondent acknowledged his duty to compensate fails to fully restitute complainant the sum of ₱80,000.00, respondent
complainant for the amount of ₱80,000.00. He then made a shall suffer an additional suspension of one (1) month.
commitment to return that sum to her. To date, however, he has failed
to deliver on the commitment made almost twelve and a half years He is likewise WARNED that a repetition of similar acts shall be
ago. dealt with more severely.

We clarify that the oral instruction given to respondent in the Let copies of this Resolution be served on the Office of the Bar
Integrated Bar of the Philippines' August 18, 2004 hearing was not a Confidant, the Integrated Bar of the Philippines, and all courts in the
juridically binding order. Rule 139-B of the Rules of Court sanctions country for their information and guidance. Let a copy of this
and spells out the terms of the Integrated Bar of the Philippines' Resolution be attached to respondent's personal record as attorney.
involvement in cases involving the disbarment and/or discipline of
lawyers. The competence of the Integrated Bar of the Philippines is SO ORDERED.
only recommendatory. Under Article VIII, Section 5(5)30 of the
1987 Constitution, only this Court has the power to actually rule on
disciplinary cases of lawyers, and to impose appropriate penalties. 18.) A.C. No. 11668, July 17, 2017

Rule 139-B merely delegates investigatory functions to the Integrated JOY T. SAMONTE, Complainant, v. ATTY. VIVENCIO V.
Bar of the Philippines. With the exercise of its delegated JUMAMIL, Respondent.
investigatory power, the Integrated Bar of the Philippines refers
proposed actions to this Court. Recognizing the Integrated Bar of the RESOLUTION
Philippines' limited competence in disciplinary cases impels a
concomitant recognition that, pending favorable action by this Court
on its recommendations, its determinations and conclusions are only PERLAS-BERNABE, J.:
provisional. Therefore, rulings on disciplinary cases attain finality
and are enforceable only upon this Court's own determination that For the Court's resolution is a Complaint1 dated March 15, 2013, filed
they must be imposed. before the Integrated Bar of the Philippines (IBP), by complainant
Joy T. Samonte (complainant) against respondent Atty. Vivencio V.
The oral instruction given to respondent in the August 18, 2004 Jumamil (respondent), praying that the latter be disbarred for acts
hearing has, thus, not attained such a degree of finality as would unbecoming of a lawyer and betrayal of trust.
immutably require him to comply, such that failure to comply
justifies additional or increased penalties. Penalizing him for non- The Facts
compliance is premature.

Complainant alleged that sometime in October 2012, she received


Nevertheless, respondent acknowledged his duty to compensate summons from the National Labor Relations Commission (NLRC),
complainant for the amount of ₱80,000.00 and made his own Regional Arbitration Branch XI, Davao City, relative to an illegal
commitment to make this compensation.31 He may not have been dismissal case, i.e., NLRC Case RAB-XI-10-00586-12, filed by four
bound by a juridical instruction, but he was certainly bound by his (4) persons claiming to be workers in her small banana plantation.2
own honor. That he has failed to adhere to his own freely executed Consequently, complainant engaged the services of respondent to
commitment after more than a decade speaks volumes of how he has prepare her position paper, and paid him the amount of P8,000.00 3 as
miserably failed to live up to the "high standard of ... morality, attorney's fees.4 Despite constantly reminding respondent of the
honesty, integrity and fair dealing"32 that is apropos to members of deadline for the submission of her position paper, complainant
the legal profession.
discovered that he still failed to file the same.5 As such, on January 10 and Rule 18.03 of Canon 18 of the CPR, which respectively read
25, 2013, the Labor Arbiter rendered a Decision 6 based on the as follows:
evidence on record, whereby complainant was held liable to the
workers in the total amount of P633,143.68.7 When complainant CANON 10 – A LAWYER OWES CANDOR, FAIRNESS AND
confronted respondent about the said ruling, the latter casually told GOOD FAITH TO THE COURT.
her to just sell her farm to pay the farm workers.8 Because of
respondent's neglect, complainant claimed that she was left Rule 10.01 – A lawyer shall not do any falsehood, nor consent to the
defenseless and without any remedy to protect her interests against doing of any in court; nor shall he mislead, or allow the Court to be
the execution of the foregoing judgment;9 hence, she filed the instant misled by any artifice.
complaint.
CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH
In an Order10 dated March 26, 2013, the IBP Commission on Bar COMPETENCE AND DILIGENCE.
Discipline (IBP-CBD) directed respondent to submit his Answer to
the complaint. Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to
him, and his negligence in connection therewith shall render him
In his Answer11 dated April 19, 2013, respondent admitted that he liable.
indeed failed to file a position paper on behalf of complainant.
However, he maintained that said omission was due to complainant's In this case, it is undisputed that a lawyer-client relationship was
failure to adduce credible witnesses to testify in her favor. In this forged between complainant and respondent when the latter agreed to
relation, respondent averred that complainant instructed her to file a position paper on her behalf before the NLRC and, in
prepare an Affidavit12 for one Romeo P. Baol (Romeo), who was connection therewith, received the amount of P8,000.00 from
intended to be her witness; nevertheless, respondent was instructed complainant as payment for his services. Case law instructs that a
that the contents of Romeo's affidavit were not to be interpreted in lawyer-client relationship commences when a lawyer signifies his
the Visayan dialect so that the latter would not know what he would agreement to handle a client's case and accepts money representing
be testifying on. Respondent added that complainant's uncle, Nicasio legal fees from the latter,19 as in this case. From then on, as the CPR
Ticong, who was also an intended witness, refused to execute an provides, a lawyer is duty-bound to "serve his client with competence
affidavit and testify to her lies. Thus, it was complainant who was and diligence," and in such regard, "not neglect a legal matter
deceitful in her conduct and that the complaint against him should be entrusted to him."
dismissed for lack of merit.13
However, it is fairly apparent that respondent breached this duty
The IBP's Report and Recommendation when he admittedly failed to file the necessary position paper before
the NLRC, which had, in fact, resulted into an adverse ruling against
his client, i.e., herein complainant. To be sure, it is of no moment that
In its Report and Recommendation14 dated March 14, 2014, the IBP- complainant purportedly failed to produce any credible witnesses in
CBD found respondent administratively liable and, accordingly, support of her position paper; clearly, this is not a valid justification
recommended that he be suspended from the practice of law for a for respondent to completely abandon his client's cause. By
period of one (1) year. Essentially, the IBP-CBD found respondent voluntarily taking up complainant's case, respondent gave his
guilty of violating Rule 10.01, Canon 10, and Rule 18.03, Canon 18 unqualified commitment to advance and defend the latter's interest
of the Code of Professional Responsibility (CPR), as well as the 2004 therein. Verily, he owes fidelity to such cause and must be mindful of
Rules on Notarial Practice.15 the trust and confidence reposed in him.20 In Abay v. Montesino,21 it
was explained that regardless of a lawyer's personal view, the latter
In a Resolution16 dated December 13, 2014, the IBP Board of must still present every remedy or defense within the authority of the
Governors adopted and approved the aforesaid Report and law to support his client's cause:
Recommendation, finding the same to be fully supported by the
evidence on record and the applicable laws and rules. Once a lawyer agrees to take up the cause of a client, the lawyer owes
fidelity to such cause and must always be mindful of the trust and
The Issue Before the Court confidence reposed in him. He must serve the client with competence
and diligence, and champion the latter's cause with wholehearted
fidelity, care, and devotion. Otherwise stated, he owes entire devotion
The sole issue in this case is whether or not respondent should be to the interest of the client, warm zeal in the maintenance and defense
held administratively liable. 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,
The Court's Ruling 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
The Court concurs with and affirms the findings of the IBP, with expect his lawyer to assert every such remedy or defense. If much
modification, however, as to the penalty in order to account for his is demanded from an attorney, it is because the entrusted privilege to
breach of the rules on notarial practice. 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
The relationship between a lawyer and his client is one imbued with performs his duty with diligence and candor not only protects the
utmost trust and confidence. In this regard, clients are led to expect interest of his client; he also serves the ends of justice, does honor to
that lawyers would be ever-mindful of their cause, and accordingly, the bar, and helps maintain the respect of the community to the legal
exercise the required degree of diligence in handling their affairs. profession.22 (Emphasis and underscoring supplied)
Accordingly, lawyers are required to maintain, at all times, a high
standard of legal proficiency, and to devote their full attention, skill, In light of the foregoing, the Court therefore agrees with the IBP that
and competence to their cases, regardless of their importance, and respondent should be held administratively liable for violation of
whether they accept them for a fee or for free.17 To this end, lawyers Rule 18.03, Canon 18 of the CPR.
are enjoined to employ only fair and honest means to attain lawful
objectives.18 These principles are embodied in Rule 10.01 of Canon Likewise, the IBP correctly found that respondent violated Rule
10.01, Canon 10 of the CPR. Records show that he indeed indulged WHEREFORE, respondent Atty. Vivencio V. Jumamil is found
in deliberate falsehood when he admittedly prepared23 and notarized24 GUlLY of violating Rule 10.01, Canon 10 and Rule 18.03, Canon 18
the affidavit of complainant's intended witness, Romeo, despite his of the Code of Professional Responsibility. Accordingly, he is hereby
belief that Romeo was a perjured witness. In Spouses Umaguing v. SUSPENDED for a period of one (1) year, effective upon his receipt
De Vera,25 the Court highlighted the oath undertaken by every lawyer of this Resolution. Moreover, in view of his violation of the 2004
to not only obey the laws of the land, but also to refrain from doing Rules on Notarial Practice, his notarial commission, if still existing,
any falsehood, viz.: is hereby REVOKED, and he is DISQUALIFIED from being
commissioned as a notary public for a period of two (2) years.
The Lawyer's Oath enjoins every lawyer not only to obey the laws of Finally, he is STERNLY WARNED that a repetition of the same or
the land but also to refrain from doing any falsehood in or out of similar offense shall be dealt with more severely.
court or from consenting to the doing of any in court, and to
conduct himself according to the best of his knowledge and Let a copy of this Decision be furnished the Office of the Bar
discretion with all good fidelity to the courts as well as to his Confidant to be appended to respondent's personal record as a
clients. Every lawyer is a servant of the law, and has to observe and member of the Bar. Likewise, let copies of the same be served on the
maintain the rule of law as well as be an exemplar worthy of Integrated Bar of the Philippines and the Office of the Court
emulation by others. It is by no means a coincidence, therefore, that Administrator, which is directed to circulate them to all courts in the
the core values of honesty, integrity, and trustworthiness are country for their information and guidance.
emphatically reiterated by the Code of Professional Responsibility. In
this light, Rule 10.01, Canon 10 of the Code of Professional SO ORDERED.
Responsibility provides that "[a] lawyer shall not do any
falsehood, nor consent to the doing of any in Court; nor shall he 19.) A.C. No. 10580
mislead, or allow the Court to be misled by any artifice."26
(Emphases supplied)
SPOUSES GERALDY AND LILIBETH VICTORY,
Notably, the notarization of a perjured affidavit also constituted a Complainants
violation of the 2004 Rules on Notarial Practice. Section 4 (a), Rule vs.
IV thereof pertinently provides: ATTY. MARIAN JOS. MERCADO, Respondent

SEC. 4. Refusal to Notarize. – A notary public shall not perform any DECISION
notarial act described in these Rules for any person requesting such
an act even if he tenders the appropriate fee specified by these Rules TIJAM, J.:
if:
This is a disbarment case against respondent Atty. Marian Jo S.
(a) the notary knows or has good reason to believe that the Mercado for violation of the Code of Professional Responsibility and
notarial act or transaction is unlawful or immoral[.] the Lawyer's Oath.
(Emphasis supplied)
The Facts
On this score, it is well to stress that "notarization is not an empty,
meaningless routinary act. It is invested with substantive public Sometime in 2009, Spouses Geraldy and Lilibeth Victory (Spouses
interest. It must be underscored that the notarization by a notary Victory) were enticed by respondent to enter into a financial
public converts a private document into a public document, making transaction with her with a promise of good monetary returns. As
that document admissible in evidence without further proof of respondent is a lawyer and a person of reputation, Spouses Victory
authenticity thereof. A notarial document is, by law, entitled to full entrusted their money to respondent to invest, manage, and
faith and credit upon its face. For this reason, a notary public must administer into some financial transactions that would earn good
observe with utmost care the basic requirements in the performance profit for the parties.1
of their duties; otherwise, the confidence of the public in the integrity
of this form of conveyance would be undermined."27 Respondent called and asked Geraldy Victory (Geraldy) whether he
wanted to invest his money. The respondent promised that for an
Having established respondent's administrative liability, the Court investment of PhP 400,000, she will give Geraldy PhP 600,000 in 30
now determines the proper penalty. days; and for PhP 500,000, she will give Geraldy PhP 625,000.2

The appropriate penalty to be meted against an errant lawyer depends


The investment transactions went well for the first 10 months.
on the exercise of sound judicial discretion based on the surrounding
Spouses Victory received the agreed return of profit. Some of such
facts. In Del Mundo v. Capistrano,28 the Court suspended the lawyer
financial transactions were covered by Memoranda of Agreement.3
for a period of one (1) year for his failure to perform his undertaking
under his retainership agreement with his client. Similarly, in Conlu
v. Aredonia, Jr.,29 the same penalty was imposed on a lawyer for his Later on, respondent became evasive in returning to Spouses Victory
inexcusable negligence in failing to file the required pleading to the the money that the latter were supposed to receive as part of the
prejudice of his client. Hence, consistent with existing jurisprudence, agreement. Respondent failed to settle and account the money
the Court adopts the penalty recommended by the IBP and entrusted to her by Spouses Victory.4
accordingly suspends respondent from the practice of law for a period
of one (1) year. Moreover, as in the case of Dela Cruz v. Zabala,30 Spouses Victory alleged that the outstanding obligation of respondent
where the notary public therein notarized an irregular document, the is PhP 5 Million plus interest or a total of PhP 8.3 Million.5
Court hereby revokes respondent's notarial commission and further
disqualifies him from being commissioned as a notary public for a
Spouses Victory filed a criminal complaint for estafa and violation of
period of two (2) years.
Batas Pambansa Blg. 22 with the Office of the City Prosecutor of Sta.
Rosa, Laguna.6
After the filing of said criminal case, respondent met with Spouses his duties to society, to the bar, to the courts and to his clients.12
Victory. Respondent proposed to reduce her obligation from PhP 8.3 Canon 1, Rule 1.01, and Canon 7 provides:
Million to PhP 7.5 Million in staggered payments, to which Spouses
Victory agreed. Respondent then issued three postdated checks in the CANON 1 - A LA WYER SHALL UPHOLD THE
amount of PhP 300,000 each. However, said checks bounced.7 CONSTITUTION, OBEY THE LAWS OF THE LAND AND
PROMOTE RESPECT FOR LAW AND FOR LEGAL
Report and Recommendation PROCESSES.
of the Integrated Bar of the Philippines
Commission on Bar Discipline Rule 1.01 - A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
The Integrated Bar of the Philippines (IBP)-Commission on Bar
Discipline (CBD) found that respondent indeed lured Spouses CANON 7 - A LAWYER SHALL AT ALL TIMES UPHOLD THE
Victory in entering into a series of financial transactions with a INTEGRITY AND DIGNITY OF THE LEGAL PROFESSION
promise of return of profit. Respondent, however, failed to deliver AND SUPPORT THE ACTIVITIES OF THE INTEGRATED BAR.
such promise. On such premise, the IBP-CBD recommended
respondent's suspension, to wit:
Exercising its disciplinary authority over the members of the bar, this
Court has imposed the penalty of suspension or disbarment for any
On the basis of the foregoing, it is respectfully recommended that gross misconduct that a lawyer committed, whether it is in his
respondent Atty. Marian Jo S. Mercado be SUSPENDED for SIX (6) professional or in his private capacity. Good character is an essential
MONTHS from the practice of law.8 qualification for the admission to and continued practice of law.
Thus, any wrongdoing, whether professional or non-professional,
Resolutions of the IBP Board of Governors indicating unfitness for the profession justifies disciplinary action.13

On March 20, 2013, the IBP Board of Governors issued Resolution In this case, it is without dispute that respondent has an outstanding
No. XX-2013-199, which reads: obligation with Spouses Victory, as the latter's investments which
they coursed through the respondent fell through. To make matters
RESOLVED to ADOPT and APPROVE, as it is hereby unanimously worse, respondent issued several checks to settle her obligation;
ADOPTED and APPROVED, with modification, the Report and unfortunately, said checks bounced.
Recommendation of the Investigating Commissioner in the above-
entitled case, herein made part of this Resolution as Annex "A ", and As a lawyer, respondent is expected to act with the highest degree of
finding the recommendation fully supported by the evidence on integrity and fair dealing. She is expected to maintain not only legal
record and the applicable laws and rules and considering proficiency, but also a high standard of morality, honesty, integrity
Respondent's violation of Canon 7 of the Code of Professional and fair dealing so that the people's faith and confidence in the
Responsibility for evading the settlement of her financial obligations judicial system is ensured. She must, at all times, faithfully perform
to the complainants and for not bothering to appear in the her duties to society, to the bar, to the courts and to her clients, which
investigation of this case, Atty. Marian Jo S. Mercado is hereby include prompt payment of financial obligations.14
DISBARRED.9 (Emphasis supplied)
It must be considered that the deliberate failure to pay just debts and
Respondent filed a motion for reconsideration,10 which was denied the issuance of worthless checks constitute gross misconduct, for
in Resolution No. XXI-2014-158, to wit: which a lawyer may be sanctioned with suspension from the practice
of law. Lawyers are instruments for the administration of justice and
RESOLVED to DENY Respondent's Motion for Reconsideration, vanguards of our legal system.15
there being no cogent reason to reverse the findings of the
Commission and it being a mere reiteration of the matters which had We cannot exempt respondent from liability just because she
already been threshed out and taken into consideration. However, encountered financial difficulties in the course of her investment
considering that Respondent is currently settling her financial deals. Respondent even admitted that she continued to do business
obligations to Complainants and very apologetic and granting her despite such financial hardships; as such, her monetary obligations
good faith in her investment transaction with Complainants, with different investors accumulated at an alarming rate. In an
Resolution No. XX-2013-199 dated March 20, 2013 is hereby attempt to settle her obligations, respondent issued checks, which all
AFFIRMED, with modification, and accordingly the penalty earlier bounced.
imposed on Atty. Marian Jo S. Mercado is hereby reduced to
SUSPENSION from the practice of law for one (1) year. 11 To Our mind, the actuations of respondent fell short of the exacting
(Emphasis supplied) standards expected of every member of the bar.

Issue In this case, while respondent admitted her responsibility and


signified her intention of complying with the same, We cannot close
Should the respondent be held administratively liable based on the our eyes to the fact that respondent committed infractions. To uphold
allegations in the pleadings of all parties on record? the integrity of the legal profession, We deem it proper to uphold the
findings as well as the sanction imposed by the IBP Board of
Our Ruling Governors.

Emphatically, a lawyer shall at all times uphold the integrity and WHEREFORE, premises considered, We resolve to SUSPEND
dignity of the legal profession. The bar should maintain a high Atty. Marian Jo S. Mercado from the practice of law for one (1) year
standard of legal proficiency as well as honesty and fair dealing. A to commence immediately from the receipt of this Decision, with a
lawyer brings honor to the legal profession by faithfully performing
WARNING that a repetition of the same or similar offense will failed to pay the loan, the same property was foreclosed by Prudential
warrant a more severe penalty. Bank; thus, the 8 cases handled by Atty. De Jesus stemmed from such
premise.
Let copies of this Decision be furnished all courts, the Office of the
Bar Confidant, and the Integrated Bar of the Philippines for their While acting as lawyer for petitioner, Atty. De Jesus was able to
information and guidance. The Office of the Bar Confidant is obtain a favorable judgment by having the Decision of the
directed to append a copy of this Decision to respondent's record as Metropolitan Trial Court (MeTC) of Quezon City in Civil Case No,
member of the Bar. 43-12872 reversed by the RTC of Quezon City, Branch 85 in Civil
Case No. 43-12872. Petitioner has also retained, and is still enjoying,
SO ORDERED. the possession of the said property. Atty. De Jesus was also able to
obtain favorable decision for petitioner when the RTC of Makati City
declared him to be the owner of the subject property to the extent of
20.) G.R. No. 217004 70%, the remaining 30% of which was adjudged in favor of
Prudential Bank.
RAMON R. VILLARAMA, Petitioner,
vs. As such, Atty. De Jesus claims that the first condition for the
ATTY. CLODUALDO C. DE JESUS, Respondent payment of the success fee, petitioner's retention of possession, had
been fulfilled. Thus, Atty. De Jesus was able to pave the way for the
DECISION partial fulfillment of the second condition to the extent of70% of the
property. According to Atty. De Jesus, what remains to be titled is
only the 30% portion of the property from Prudential Bank. Hence,
PERALTA, J.: Atty. De Jesus feels that he is entitled to claim the success fee
provided under the contract for legal services.
Before this Court is the Petition for Review on Certiorari under Rule
45 of the Rules of Court dated, April 20, 2015, of petitioner Ramon Subsequently, Atty. De Jesus stopped rendering legal services to
R. Villarama that seeks to reverse and set aside the Decision 1 dated petitioner after the former drafted the letter offer dated November 30,
March 31, 2014 and the Resolution2 dated February 18, 2015 of the 2005 stating that petitioner is offering to buy Prudential Bank's
Court of Appeals (CA) reversing the Decision3 dated May 25, 2011 ownership of the 30% portion of the subject property. Atty. De Jesus
of the Regional Trial Court (RTC), Branch 100, Quezon City in a further made a formal demand for petitioner to settle at least 50% of
case for collection of sum of money with damages. the ₱1,000,000.00 stipulated in the contract as success fee.

The facts follow. Petitioner, on the other hand, claims that he has not paid the success
fee because one condition for the payment thereof - the property
Respondent Atty. Clodualdo De Jesus (Atty. De Jesus) and petitioner, being titled to his name has not yet been fulfilled. According to
sometime in October 1996, entered into a contract denominated as petitioner, he cannot yet transfer the title of the subject property to his
"Contract for Legal Services" and "Professional Fees" wherein it was name because there are pending cases initiated by the Spouses Guno
agreed upon that Atty. De Jesus shall render legal services for that involves the same property. Petitioner also avers that there is a
petitioner in order for the latter to take full possession of a property Decision of the RTC of Quezon City, Branch 95, in Civil Case No.
located at No. 19 Jose Escaler St., Loyola Heights, Quezon City and Q-52422 annulling Prudential Bank's title over the property and
the titling of the same property under petitioner's name; thus, under ordering the reinstatement thereof to the Spouses Guno. The said
the heading, "Scope of Legal Work," it reads: decision has already been affirmed by this Court and attained its
finality. However, petitioner still paid Atty. De Jesus the amount of
1.1 The main objective in this case is to see to it that the property ₱100,000.00 after the latter made a demand.
involved in this case (a parcel ofland located at #19 Jose Escaler St.,
Loyola Heights, Quezon City, with an area of 1,754 square meters) Thus, Atty. De Jesus filed a complaint for the collection of sum of
shall remain in the possession and be titled under the name of the money with damages with the RTC of Quezon City and, on May 25,
Client.4 2011, the said court found in favor of petitioner. The dispositive
portion of the Decision reads:
The contract also provides for a provision on Success Fee which
reads as follows: WHEREFORE, premises considered, the complaint is hereby ordered
dismissed for lack of cause of action and prematurity. Likewise
2.3 Success Fee: dismissed is the defendant's claim for attorney's fees, moral damages
and exemplary damages.
In the event Client is successful in retaining possession and having
said property titled under the name of the Client, Counsel shall be SO ORDERED.6
paid ONE MILLION (₱l,000,000.00) PESOS.5
Atty. De Jesus elevated the case to the CA and, on March 31, 2014,
Thereafter, in conformance to the contract, Atty. De Jesus handled the CA reversed and set aside the Decision of the RTC, thus:
eight (8) cases that involved petitioner in relation to the property
mentioned in the contract. WHEREFORE, in view of the foregoing premises, the Appeal is
PARTIALLY GRANTED. Accordingly, the Decision dated May 25,
To be clear, the subject property was formerly registered in the name 2011 of the Regional Trial Court of Quezon City, Branch 100 in Civil
of petitioner's sister, Rita Reyes, and her husband Marcial Reyes. The Case No. Q-06-57463 is hereby ANNULLED AND SET ASIDE and
property was then sold to Crisantomas Guno. Prudential Bank lent a new one is entered declaring Atty. Clodualdo C. De Jesus entitled
Guno some amount as partial payment for the purchase of the subject to fifty percent (50%) of the success fee as stated in the Contract of
property secured by a mortgage of the same property. After Guno Legal Services or FIVE HUNDRED THOUSAND (PhpS00,000.00)
PESOS. The amount of ONE HUNDRED THOUSAND PESOS However, these rules do admit of exceptions.16 Over time, the
(Phpl00,000.00) earlier paid to him by Ramon R. Villarama as exceptions to these rules have expanded. At present, there are 10
advanced payment is ordered deducted therefrom. recognized exceptions that were first listed in Medina v. Mayor
Asistio, Jr.: 17
SO ORDERED.7
(1) When the conclusion is a finding grounded entirely on
His motion for reconsideration having been denied by the CA, speculation, surmises or conjectures; (2) When the inference made is
petitioner thus filed the present petition with this Court raising the manifestly mistaken, absurd or impossible; (3) Where there is a grave
following issues: abuse of discretion; (4) When the judgment is based on a
misapprehension of facts; (5) When the findings of fact are
conflicting; (6) When the Court of Appeals, in making its findings,
A. Whether the Court of Appeals is correct in holding that went beyond the issues of the case and the same is contrary to the
the respondent is discharged from fulfilling the second admissions of both appellant and appellee; (7) The findings of the
condition for the entitlement of the ₱1,000,000.00 success Court of Appeals are contrary to those of the trial court; (8) When the
fee because the same has been rendered legally impossible findings of fact are conclusions without citation of specific evidence
due to the final decision annulling Prudential Bank's title to on which they are based; (9) When the facts set forth in the petition
the subject property. as well as in the petitioner's main and reply briefs are not disputed by
the respondents; and (10) The finding of fact of the Court of Appeals
B. Whether respondent is entitled to fifty percent (50%) of is premised on the supposed absence of evidence and is contradicted
the success fee less the ₱100,000.00 previously paid by the by the evidence on record. 18
petitioner to respondent. 8
In the present case, the findings of facts of the R TC and the CA are
Petitioner argues that the CA is not correct in discharging Atty. De apparently in contrast, hence, this Court deems it proper to rule on the
Jesus from fulfilling the second condition for the entitlement of the issues raised in the petition.
₱1,000,000.00 success fee because there is no legal impossibility for
the transfer of title to the property to petitioner. The CA, in its After careful consideration, this Court finds the petition
Decision, ruled that due to the facts of the case and the attendant unmeritorious.
circumstances, the happening of the second condition was
jeopardized, placed beyond performance, became legally impossible
and manifestly difficult to perform. Petitioner, however, claims that The payment of the success fee, as contained in the Contract for
there were still several remedies that Atty. De Jesus could have Legal Services, is dependent on the fulfillment of two conditions,
utilized in order to meet the second condition but the latter had given namely: 1) petitioner retaining possession of the subject property, and
up and abandoned such task. As such, according to petitioner, Atty. 2) the property being titled under the name of petitioner. Clearly, this
De Jesus is not entitled to fifty (50%) of the success fee less the falls under a contingent fee contract. In The Conjugal Partnership of
₱100,000.00 previously paid by petitioner. the Spouses Cadavedo v. Lacaya, 19 this Court defined a contingent
fee contract as "an agreement in writing where the fee, often a fixed
percentage of what may be recovered in the action, is made to depend
In his Comment9 dated September 11, 2015, Atty. De Jesus contends upon the success of the litigation. "Contingent fee contracts are
that while it is true that there was no legal impossibility to have the permitted in this jurisdiction because they redound to the benefit of
title of the property transferred to petitioner, it was petitioner upon the poor client and the lawyer "especially in cases where the client
the advice of his counsel who refused to pay the value of the 30% has meritorious cause of action, but no means with which to pay for
equity of the property in the amount of ₱1,325,000.00. Thus, the legal services unless he can, with the sanction of law, make a contract
second condition is deemed fulfilled because petitioner voluntarily for a contingent fee to be paid out of the proceeds of litigation.
prevented its fulfillment. Atty. De Jesus further asserts that it was Oftentimes, the contingent fee arrangement is the only means by
only him who secured for petitioner permanent possession of the which the poor clients can have their rights vindicated and upheld."
property and paved the way for petitioner to get a complete title by Further, such contracts are sanctioned by Canon 13 of the Canons of
merely paying the 30% equity of the property. Professional Ethics.20

The Rules of Court require that only questions of law should be In this case, it is beyond dispute that the first condition stipulated in
raised in petitions filed under Rule 45. 10 This Court is not a trier of the Contract for Legal Services, through the services of Atty. De
facts. It will not entertain questions of fact as the factual findings of Jesus, petitioner was able to retain possession of the subject property.
the appellate courts are "final, binding[,] or conclusive on the parties The second condition, the transfer of title of the property under the
and upon this [c]ourt" 11 when supported by substantial evidence. 12 name of petitioner, however, is yet to be fulfilled. According to the
Factual findings of the appellate courts will not be reviewed nor CA, the second condition has been rendered legally impossible to
disturbed on appeal to this Court. 13 fulfill or considered manifestly difficult to perform, thus:

In Cheesman v. Intermediate Appellate Court, 14 this Court With respect to the second condition, however, the trial court's
distinguished questions of law from questions of fact, thus: assessment is that the same is yet to be fulfilled and Atty. De Jesus'
claim is premature.1âwphi1 We disagree.
As distinguished from a question of law - which exists "when the
doubt or difference arises as to what the law is on a certain state of The facts of the case reveal that the second condition ·has been
facts" - "there is a question of fact when the doubt or difference arises rendered legally impossible to fulfill or considered manifestly
as to the truth or the falsehood of alleged facts;" or when the "query difficult to perform. The trial court failed to take into consideration
necessarily invites calibration of the whole evidence considering the manifestation in Villarama's evidence particularly Exhibit "4"
mainly the credibility of witnesses, existence and relevancy of which states that:
specific surrounding circumstances, their relation to each other and to
the whole and the probabilities of the situation." 15
On 1 December 1987, [Crisantomas Guno] and his wife filed the lawyer's compensation shall be based on quantum meruit, which
complaint for nullification of defendant Bank's title due to defect in means "as much as he deserved."23 The determination of attorney's
foreclosure proceedings, entitled 'Spouses Crisantomas and Carmelita fees on the basis of quantum meruit is also authorized "when the
Guno vs. Prudential Bank and Trust Company docketed as Civil Case counsel, for justifiable cause, was not able to finish the case to its
No. Q-52422 in the Regional Trial Court Branch 95 of Quezon City. conclusion."24 Moreoyer, quantum meruit becomes the basis of
On 18 October 1991, the RTC rendered a Decision annulling recovery of compensation by the attorney where the circumstances of
defendant Bank's Title and ordering the reinstatement of the spouses the engagement indicate that it will be contrary to the parties'
Guno's title. The RTC Decision was affirmed on appeal by the expectation to deprive the attorney of all compensation. 25 In this
Supreme Court and became final and executory on 11 March 1997. case, since respondent was not able to fulfill one of the conditions
This the Decision which [Crisantomas Guno] seeks to enforce in this provident in the Contract for Legal Services, his attorney's fees shall
action. be based on quantum meruit.

It must also be noted that when the terms of the agreement was Quantum meruit- literally meaning as much as he deserves - is used
drafted in 1996, the prevailing circumstance then was that the 30% as basis for determining an attorney's professional fees in the absence
portion of the property was titled in the name of Prudential Bank. of an express agreement. The recovery of attorney's fees on the basis
Later, however, spouses Guno was able to obtain a final and of quantum meruit is a device that prevents an unscrupulous client
favourable judgment in 1997 ordering the cancellation of Prudential from running away with the fruits of the legal services of counsel
Bank's title. Spouses Guno has yet to implement said Decision. Thus, without paying for it and also avoids unjust enrichment on the part of
the previous understanding that after Atty. De Jesus shall have the attorney himself. An attorney must show that he is entitled to
ensured the ownership of Villarama over the 70% portion of the reasonable compensation for the effort in pursuing the client's cause,
property and the latter shall buy the remaining 30% of said property taking into account certain factors in fixing the amount of legal
from the bank so that Atty. De Jesus can now have it fully titled to fees.26
Villarama' s name was also rendered legally impossible because of
the final Decision annulling Prudential Bank's title to the subject Rule 20.01 of the Code of Professional Responsibility lists the
property. guidelines for determining the proper amount of attorney's fees, to
wit:
Accordingly, under the foregoing subsequent circumstances, the
happening of the second condition was jeopardized and placed Rule 20.1 - A lawyer shall be guided by the following factors in
beyond performance because of these intervening legal determining his fees:
developments. Had the trial court been more circumspect and
receptive of the present factual circumstances it would have
considered that our laws on contract admit certain exceptions in order a) The time spent and the extent of the services rendered or
to discharge the obligor from fulfilling the condition when said required;
condition is rendered beyond performance or it has become so
difficult to perform. b) The novelty and difficulty of the questions involved;

xxxx c) The importance of the subject matter;

Here, there is no dispute that the legal developments that transpired in d) The skill demanded;
the string of cases of Villarama relative to the subject property has
rendered the second condition impossible to perform which factor e) The probability of losing other employment as a result of
cannot be attributed to Atty. De Jesus. Thus, the condition should be acceptance of the proffered case;
annulled excuse atty. De Jesus from the obligation of fulfilling the
same before he could obtain the success fee.21
f) The customary charges for similar services and the
schedule of fees of the IBP chapter to which he belongs;
Upon consideration of the arguments of both parties, this Court finds
that the above-reasoning of the CA is erroneous. There is no legal
impossibility in the fulfillment of the second condition. There is still g) The amount involved in the controversy and the benefits
a remedy upon which petitioner may be able to transfer the title of the resulting to the client from the service;
subject property under his name. In fact, respondent admitted in his
Comment that there was no legal impossibility and that the only h) The contingency or certainty of compensation;
hindrance was the refusal of petitioner to pay Prudential Bank the
value of the 30% equity of the property in the amount of
i) The character of the employment, whether occasional or
₱1,325,000.00. Although petitioner insists that it has already taken
established; and
steps in offering Prudential Bank an amount to settle the issue, this
still negates the finding of the CA that it is legally impossible for
petitioner to transfer the title of the property under his name. j) The professional standing of the lawyer.

Be that as it may, the fact still remains that petitioner was already Having established that petitioner is entitled to attorney's fees and
awarded 70% of the subject property by virtue of the RTC's decision that he filed his claim well within the prescribed period, the proper
in Civil Case No. 95-973 through the services of Atty. De Jesus. remedy is to remand the case to the R TC for the determination of the
Thus, this Court finds that Atty. De Jesus, as well as every attorney, correct amount of attorney's fees. Such a procedural route, however,
is entitled to have and receive a just and reasonable compensation for would only contribute to the delay of the final disposition of the
services performed at the special instance and request of his client. controversy as any ruling by the trial court on the matter would still
Once the attorney has performed the task assigned to him in a valid be open for questioning before the CA and this Court. In the interest
agreement, his compensation is determined on the basis of what he of justice, this Court deems it prudent to suspend the rules and simply
and the client agreed.22 In the absence of the written agreement, the resolve the matter at this level.27
Based on the considerations set forth in Rule 20.01 of the Code of Atty. Cortes prosecuted his claims for illegal dismissal which was
Professional Responsibility, this Court rules that the CA was correct decided in favor of complainant. The Court of Appeals affirmed the
in its determination that Atty. De Jesus is entitled to the extent of decision of the National Labor Relations Commission ordering PEC
50% of the Php1,000,000.00 success fee stipulated in the contract. As to pay complainant the total amount of One Million One Hundred
ruled by the CA: Thousand Pesos (P1,100,000) three staggered payments. PEC then
Issued City Bank Check No. 1000003986 dated March 31, 2005 in
At any rate, Atty. De Jesus cannot claim the entire Phpl,000,000.00 the amount of Five Hundred Fifty Thousand Pesos (P550,000),
success fee because the fact remains that Villarama has yet to place Check No. 1000003988 in the amount of Two Hundred Seventy-Five
the entire subject property to his name. Thus, applying the quantum Thousand Pesos (P275,000) dated April 15, 2005, and Check No.
meruit principle in this case, Atty. De Jesus is deemed to be entitled 1000003989 also in the amount of Two Hundred Seventy-Five
only to half of the success fee for the effort and legal services he had Thousand Pesos (P275,000) dated April 30, 2005, all payable in the
provided to Villarama. xxx name of complainant.4

Complainant narrated that after the maturity of the first check, he


In fine, Villarama, under the Contract of Legal Services, is obliged to went to China Bank, Southmall Las Pinas with Atty. Cortes and his
pay Atty. De Jesus his success fee to a fair and reasonable extent of wife to open an account to deposit the said check. Atty. Cortes asked
50% or Php500,000.00 considering the latter's substantial complainant to wait outside the bank while he personally, for and in
performance of his part of the contract. The previous payment made his behalf, facilitated the opening of the account. After thirty minutes,
by Villarama in the amount of Php100,000.00 shall be considered as he was asked to go inside and sign a joint savings account with Atty.
an advanced payment deductible from the Php500,000.00 of which Cortes.5
Atty. De Jesus is entitled.28
On April 7, 2005, complainant alleged that when he was about to
It must always be remembered that the fact that the practice of law is withdraw the amount of the initial check deposited, Atty. Cortes
not a business and the attorney plays a vital role in the administration arrived with his wife and ordered the bank teller to hold off the
of justice underscores the need to secure him his honorarium lawfully transaction. When complainant asked why he did that, Atty. Cortes
earned as a means to preserve the decorum and respectability of the answered that 50% of the total awarded claims belongs to him as
legal profession. A lawyer is as much entitled to judicial protection attorney's fees. When complainant questioned him, Atty. Cortes
against injustice, imposition or fraud on the part of his client as the became hysterical and imposingly maintained that 50% of the total
client against abuse on the part of his counsel. The duty of the court awarded claims belongs to him.6
is not alone to see that a lawyer acts in a proper and lawful manner; it
is also its duty to see that a lawyer is paid his just fees. With his Complainant then tried to pacify Atty. Cortes and his wife and
capital consisting of his brains and with his skill acquired at offered to pay P200,000, and when Atty. Cortes rejected it, he offered
tremendous cost not only in money but in expenditure of time and the third check amounting to P275,000, but Atty. Cortes still insisted
energy, he is entitled to the protection of any judicial tribunal against on the 50% of the total award. Complainant was then forced to
any attempt on the part of his client to escape payment of his just endorse the second and third checks to Atty. Cortes, after which he
compensation. It would be ironic if after putting forth the best in him was able to withdraw the proceeds of the first check. With the help of
to secure justice for his client he himself would not get his due.29 the lawyers in the Integrated Bar of the Philippines (IBP),
complainant was able to have the drawer of the checks cancel one of
WHEREFORE:, the Petition for Review on Certiorari under Rule the checks endorsed to Atty. Cortes before he was able to encash the
45 of the Rules of Court, dated April 20, 2015, of petitioner Ramon same.
R. Villarama is DENIED for lack of merit. Consequently, the
Decision dated March 31, 2014 and the Resolution dated February Atty. Cortes, in his Answer, admitted that his services were engaged
18, 2015 of the Court of Appeals are AFFIRMED. by complainant to pursue the labor claims. He, however, denied that
they agreed on a 12% contingency fee by way of attorney's fees. 7

SO ORDERED. Atty. Cortes claimed that complainant is a relative of his, but


considering that the case was to be filed in Pampanga and he resided
21.) A.C. No. 9119, March 12, 2018 in Las Pinas, he would only accept the case on a fifty-fifty sharing
arrangement.8
EUGENIO E. CORTEZ, Complainant, v. ATTY. HERNANDO P. Atty. Cortes alleged that the checks were issued pursuant to the pre-
CORTES, Respondent. execution agreement reached by the parties at the office of Labor
Arbiter Herminio V. Suelo. He and complainant agreed that the
DECISION amount of the first check be divided fifty-fifty, the whole of the
second check would be the complainant's, and the third check would
TIJAM, J.: be his.9

Atty. Cortes further alleged that he had to assist complainant in the


The instant controversy arose from a Complaint-Affidavit1 filed by opening of an account to deposit the checks. Atty. Cortes had to
complainant Eugenio E. Cortez2 against respondent Atty. Hernando convince the bank manager to accept the checks issued in the name of
P. Cortes (Atty. Cortes) for grave misconduct, and violation of the Eugene E. Cortez despite the fact that complainant's ID's are all in the
Lawyer's Oath and the Code for Professional Responsibility. name of Eugenio E. Cortez.10 He claimed that anyone in his place
would have demanded for the holding off of the transaction because
Complainant alleged that he engaged the services of Atty. Cortes as of the base ingratitude, patent deception and treachery of
his counsel in an illegal dismissal case against Philippine Explosives complainant.11
Corporation (PEC). He further alleged that he and Atty. Cortes had a
handshake agreement on a 12% contingency fee as and by way of Atty. Cortes posited that the check forms part and parcel of the
attorney's fees.3 judgment award to which he had a lien corresponding to his
attorney's fees and complainant should have at least invited him to
witness the "harvest of the fruits."12 which the poor and helpless can seek redress for injuries sustained
and have their rights vindicated.19 (Emphasis Ours)
Atty. Cortes insisted that the alleged 12% agreement is false, being
merely a concoction of complainant's fertile and unstable mind. He
also pointed out that the fifty-fifty sharing arrangement is not In this case, We note that the parties did not have an express contract
unconscionably high because the complainant was given the option to as regards the payment of fees. Complainant alleges that the
hire other lawyers, but still he engaged his services.13 contingency fee was fixed at 12% via a handshake agreement, while
Atty. Cortes counters that the agreement was 50%.
After hearing and submission of position papers, the IBP
Commission on Bar Discipline, in a Report and Recommendation The IBP Commission on Discipline pointed out that since what
dated April 11, 2007, recommended the six-month suspension of respondent handled was merely a labor case, his attorney's fees
Atty. Cortes. It ruled that a contingent fee arrangement should should not exceed 10%, the rate allowed under Article 11120 of the
generally be in writing, and that contingent fees depend upon an Labor Code.
express contract without which the lawyer can only recover on the
basis of quantum meruit. It also pointed out that the Labor Code Although we agree that the 50% contingency fee was excessive, We
establishes a limit as to the amount of attorney's fees that a lawyer do not agree that the 10% limitation as provided in Article 111 is
may collect or charge his client in labor cases. automatically applicable.

The report and recommendation was adopted and approved by the The case of Masmud v. NLRC (First Division), et al.,21 discussed the
IBP Board of Governors in an August 17, 2007 Resolution: matter of application of Article 111 of the Labor Code on attorney's
fees:
RESOLUTION NO. XVIII-2007-74
CBD Case No. 05-1482 There are two concepts of attorney's fees. In the ordinary sense,
Eugenio E. Cortez vs. attorney's fees represent the reasonable compensation paid to a
Atty. Hernando P. Cortes lawyer by his client for the legal services rendered to the latter.
On the other hand, in its extraordinary concept, attorney's fees
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED may be awarded by the court as indemnity for damages to be
and APPROVED the Report and Recommendation of the paid by the losing party to the prevailing party, such that, in any
Investigating Commissioner of the above-entitled case, herein made of the cases provided by law where such award can be made, e.g.,
part of this Resolution as Annex "A"; and, finding the those authorized in Article 2208 of the Civil Code, the amount is
recommendation fully supported by the evidence on record and the payable not to the lawyer but to the client, unless they have agreed
applicable laws and rules, and for violation of Article 11(b) of the that the award shall pertain to the lawyer as additional compensation
Labor Code, Atty. Hernando P. Cortes is hereby SUSPENDED from or as part thereof.
the practice of law for six (6) months and Ordered to Return to
complainant whatever amount he received in excess of the 10% xxxx
allowable attorney's fees in labor case (sic).
Contrary to Evangelina's proposition, Article 111 of the Labor Code
TOMAS N. PRADO deals with the extraordinary concept of attorneys fees. It
National Secretary14 regulates the amount recoverable as attorney's fees in the nature
of damages sustained by and awarded to the prevailing party. It
may not be used as the standard in fixing the amount payable to
the lawyer by his client for the legal services he rendered.22
A motion for reconsideration15 was filed by Atty. Cortes, which was (Emphasis Ours)
denied by the IBP Board of Governors.16

The issue, plainly, is whether or not the acts complained of constitute It would then appear that the contingency fees that Atty. Cortes
misconduct on the part of Atty. Cortes, which would subject him to required is in the ordinary sense as it represents reasonable
disciplinary action. compensation for legal services he rendered for complainant.
Necessarily, the 10% limitation of the Labor Code would not be
We rule in the affirmative. applicable. Beyond the limit fixed by Article 111, such as between
the lawyer and the client, the attorney's fees may exceed 10% on the
We have held that a contingent fee arrangement is valid in this basis of quantum meriut.23 We, however, are hard-pressed to accept
jurisdiction. It is generally recognized as valid and binding, but must the justification of the 50% contingency fee that Atty. Cortes is
be laid down in an express contract.17 The case of Rayos v. Atty. insisting on for being exorbitant.
Hernandez18 discussed the same succinctly, thus:
Generally, the amount of attorney's fees due is that stipulated in the
A contingent fee arrangement is valid in this jurisdiction and is retainer agreement which is conclusive as to the amount of the
generally recognized as valid and binding but must be laid down lawyers compensation. In the absence thereof, the amount of
in an express contract. The amount of contingent fee agreed upon attorney's fees is fixed on the basis of quantum meruit, i.e., the
by the parties is subject to the stipulation that counsel will be paid for reasonable worth of the attorneys services.24 Courts may ascertain
his legal services only if the suit or litigation prospers. A much also if the attorney's fees are found to be excessive, what is
higher compensation is allowed as contingent fee in consideration of reasonable under the circumstances. In no case, however, must a
the risk that the lawyer may get nothing if the suit fails. Contracts of lawyer be allowed to recover more than what is reasonable, pursuant
this nature are permitted because they redound to the benefit of the to Section 24, Rule 13825 of the Rules of Court.26
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 Canon 20 of the Code of Professional Responsibility states that "A
services unless he can, with the sanction of law, make a contract for a lawyer shall charge only fair and reasonable fees." Rule 20.01 of the
contingent fee to be paid out of the proceeds of the litigation. same canon enumerates the following factors which should guide a
Oftentimes, the contingent fee arrangement is the only means by lawyer in determining his fees:
(a) The time spent and the extent of the services rendered or required; ATTY. JUAN PAULO VILLONCO, Complainant, v. ATTY.
(b) The novelty and difficulty of the questions involved; ROMEO G. ROXAS, Respondent.
(c) The importance of the subject matter;
(d) The skill demanded; DECISION
(e) The probability of losing other employment as a result of
acceptance of the proffered case;
(f) The customary charges for similar services and the schedule of PERALTA, J.:
fees of the IBP Chapter to which he belongs;
(g) The amount involved in the controversy and the benefits resulting The present case stemmed from the complaint of Atty. Juan Paolo T.
to the client from the service; Villonco against respondent Atty. Romeo G. Roxas for gross
(h) The contingency or certainty of compensation; misconduct and for violating the Code of Professional Responsibility
(i) The character of the employment, whether occasional or (CPR).
established; and
(j) The professional standing of the lawyer. The factual and procedural antecedents of the case are as follows:

Here, as set out by Atty. Cortes himself, the complainant's case was Republic Real Estate Corporation (RREC), with complainant Atty.
merely grounded on complainant's alleged absence without leave for Juan Paolo T. Villonco as its president, hired respondent Atty.
the second time and challenging the plant manager, the complainant's Romeo G. Roxas as its counsel on a contingent basis in its case
immediate superior, to a fist fight. He also claimed that the travel against the Republic of the Philippines with respect to a reclaimed
from his home in Las Pinas City to San Fernando, Pampanga was land which is now the Cultural Center of the Philippines (CCP)
costly and was an ordeal. We likewise note that Atty. Cortes admitted complex. Subsequently, RREC was awarded around P10,926,071.29
that complainant was a close kin of his, and that complainant representing the sum spent in the reclamation of the CCP complex.
appealed to his services because, since his separation from work, he
had no visible means of income and had so many mouths to feed. The case was later remanded to the Regional Trial Court (RTC) of
These circumstances cited by Atty. Cortes to justify the fees; to Our Pasay City for the execution of the decision. RREC's Board of
mind, does not exculpate Atty. Cortes, but in fact, makes Us question Directors enjoined Atty. Roxas to defer the filing of the motion for
all the more, the reasonableness of it. the issuance of a Writ of Execution until further instruction, but he
still filed the same. Thereafter, the Republic filed a Petition for
We believe and so hold that the contingent fee here claimed by Atty. Certiorari against the Writ of Execution eventually issued by the trial
Cortes was, under the facts obtaining in this case, grossly excessive court. On February 27, 2009, the Court of Appeals (CA) issued an
and unconscionable. The issues involved could hardly be said to be Order granting said petition and declared the Writ of Execution null
novel and Atty. Cortes in fact already knew that complainant was and void. Aggrieved, Atty. Roxas, without first securing RREC 's
already hard up. We have held that lawyering is not a moneymaking consent and authority, filed a Motion for Reconsideration and a
venture and lawyers are not merchants.27 Law advocacy, it has been Motion for Inhibition with the CA.
stressed, is not capital that yields profits.28 The returns it births are
simple rewards for a job done or service rendered. It is a calling that,
Without being approved or authorized by the RREC's Board of
unlike mercantile pursuits which enjoy a greater deal of freedom
Directors, he likewise filed a complaint for serious misconduct
from governmental interference, is impressed with a public interest,
against CA Justices Sesinando E. Villon, Andres B. Reyes, Jr. and
for which it is subject to State regulation.29
Jose Catral Mendoza, and a petition assailing the constitutionality of
Presidential Decree No. 774, both on RREC's behalf. For his
Here, considering that complainant was amenable to a 12%
foregoing unauthorized acts, RREC's Board requested Atty. Roxas to
contingency fee, and which we likewise deem to be the reasonable
voluntarily withdraw as counsel for the corporation. When Atty.
worth of the attorney's services rendered by Atty. Cortes under the
Roxas refused, RREC terminated its retainer agreement with Atty.
circumstances, Atty. Cortes is hereby adjudged to return to
Roxas and engaged the services of another lawyer to replace him in
complainant the amount he received in excess of 12% of the total
the representation of the company.
award. If the Law has to remain an honorable profession and has to
attain its basic ideal, those enrolled in its ranks should not only
master its tenets and principles but should also, by their lives, accord However, despite his termination, Atty. Roxas still appeared for
continuing fidelity to such tenets and principles.30 RREC and continued to argue for the corporation in the case. He also
threatened to sue the members of the RREC Board unless they
We, however, find that the recommended suspension of six months is reinstated him as counsel. Thus, Atty. Villonco was compelled to file
too harsh and considering that Atty. Cortes is nearing ninety years old the instant administrative complaint against Atty. Roxas.
and that there was no question that Atty. Cortes was able to get a
favorable outcome, a reduction of the suspension is proper. We then For his part, Atty. Roxas denied the accusations and claimed that
reduce and sanction Atty. Cortes to a three-month suspension from from August 1992 up to the time of the filing of the complaint, or a
the practice of law. period of twenty-one (21) years, his law firm had been competently
rendering legal services for RREC. Through those years, he
WHEREFORE, premises considered, respondent Atty. Hernando P. singlehandedly advanced the necessary expenses to sustain and
Cortes is found GUILTY of violation of Canon 20 of the Code of pursue the case. He claimed that he could not be removed as counsel
Professional Responsibility and is hereby SUSPENDED from the for RREC since they had a contract for a contingency fee coupled
practice of law for three (3) months, and is ordered to return to with interest. He argued that his appearance before the CA was
complainant Eugenio E. Cortez the amount he received in excess of proper since his removal by the RREC Board was illegal and unfair.
the 12% allowable attorney's fees. Securing the Board's approval before he could file pleadings on
RREC's behalf was unnecessary since he had been explicitly given
SO ORDERED. the blanket authority to exercise his sound discretion in the pursuit of
the case. He pointed out that he filed the administrative complaint
22.) .C. No. 9186, April 11, 2018 against the CA Justices only to further RREC's case.
On May 17, 2013, the Commission on Bar Discipline of the matters, as in the case at bar, if he would be contradicting his client's
Integrated Bar of the Philippines (IBP) recommended the penalty of trust and confidence in the process. Atty. Roxas clearly disregarded
censure: 1 the express commands of the Code of Professional Responsibility
(CPR), specifically Canon 17.
Foregoing premises considered, the undersigned believes and so
holds that the Respondent had violated Sec. 27 of Rule 138 of the Canon 17 of the CPR states:
Rules of Court and Canon 15 of the CPR. Accordingly, he
recommends that he be meted with the penalty of CENSURE with a CANON 17 - A lawyer owes fidelity to the cause of his client and
warning that a repetition of the same would invite a stiffer penalty. he shall be mindful of the trust and confidence reposed in him.

On September 27, 2014, the IBP Board of Governors issued The Court upholds the IBP's finding that Atty. Roxas was so
Resolution No. XXI-2014-660,2 adopting the foregoing principally moved by his desire to be compensated for the advanced
recommendation but with modification, thus: expenses of litigation and his professional fees that he proceeded with
the filing of the motion for the issuance of a Writ of Execution
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED against the express advice of his client. Then he later filed the motion
and APPROVED, with modification, the Report and for inhibition and administrative complaints against the CA Justices
Recommendation of the Investigating Commissioner in the above- out of extreme exasperation and disappointment.
entitled case, herein made part of this Resolution as Annex "A ", and
for Respondent's blatant violation of Section 27 of Rule 138 of the The Court has repeatedly emphasized that the practice of law is
Rules of Court and Canon 15 of the Code of Professional imbued with public interest and that a lawyer owes substantial duties,
Responsibility, instead of Censure Atty. Romeo G. Roxas is hereby not only to his client, but also to his brethren in the profession, to the
SUSPENDED from the practice of law for six (6) months. courts, and to the public, and takes part in the administration of
justice, one of the most important functions of the State, as an officer
The Court's Ruling of the court. Accordingly, lawyers are bound to maintain, not only a
high standard of legal proficiency, but also of morality, honesty,
The Court finds no cogent reason to depart from the findings and integrity, and fair dealing.5
recommendation of the IBP that Atty. Roxas must be held
administratively liable. Atty. Roxas has fallen short of the high standard of morality, honesty,
integrity, and fair dealing expected of him. Thus, RREC's termination
It is settled that the relationship between a lawyer and his client is of his retainer is proper and justified. A client may absolutely
one imbued with utmost trust and confidence. In this regard, clients discharge his lawyer at any time, with or without cause, and without
are led to expect that lawyers would be ever-mindful of their cause, need of the lawyer's consent or the court's approval. He may, at any
and accordingly, exercise the required degree of diligence in handling time, dismiss his attorney or substitute another in his stead. Such
their affairs.3 right, however, is subject to the lawyer's right to be compensated. In
the discretion of the court, the attorney may intervene in the case to
protect his rights and he shall have a lien upon all judgments for the
Here, RREC's Board of Directors specifically instructed Atty. Roxas payment of money and executions issued in pursuance of such
to postpone the filing of the motion for the issuance of a Writ of judgment, rendered in the case where his services had been retained
Execution until further notice, but he defied the same and still filed by the client, for the payment of his compensation.6
the motion. He then filed a Motion for Reconsideration and a Motion
for Inhibition with the CA without first securing RREC's consent and
authority. Again, without being authorized, he likewise filed an There can be no question that a lawyer is guilty of misconduct
administrative complaint against several CA Justices and a petition sufficient to justify his suspension or disbarment if he so acts as to be
assailing the constitutionality of Presidential Decree No. 774, both on unworthy of the trust and confidence involved in his official oath and
RREC's behalf. Said unauthorized acts caused RREC's Board to is found to be wanting in that honesty and integrity that must
request Atty. Roxas to voluntarily withdraw as counsel for the characterize the members of the Bar in the performance of their
corporation and to finally terminate its retainer agreement with him professional duties. Although a six (6)-month suspension from the
when he refused. Even after he was terminated, Atty. Roxas still practice of law would suffice for violating Canon 17 of the CPR, the
continued to appear and argue for RREC. Worse, he also threatened Court deems it proper to increase the penalty of suspension in this
to sue the members of the RREC Board unless they reinstated him as case to one (1) year, as that would be more proportionate to the
the company's counsel. offense charged and established.7 The Court notes that in 2007, Atty.
Roxas was also found guilty of indirect contempt and was fined the
amount of P30,000.00 for insinuating that then Associate Justice
In engaging the services of an attorney, the client reposes on him Minita V. Chico-Nazario had decided his cases on considerations
special powers of trust and confidence. Their relationship is strictly other than the pure merits of the case, and called the Supreme Court a
personal and highly confidential and fiduciary. The relation is of such "dispenser of injustice." The Court warned him that a repetition of a
delicate, exacting, and confidential nature that is required by similar act will warrant a more severe penalty.8 Verily, for the
necessity and public interest. Only by such confidentiality and constant display of contumacious attitude on the part of Atty. Roxas,
protection will a person be encouraged to repose his confidence in an not only against his very own client, but likewise against the courts, a
attorney. Thus, the preservation and protection of that relation will more serious penalty is warranted.
encourage a client to entrust his legal problems to an attorney, which
is of paramount importance to the administration of justice.4
WHEREFORE, IN VIEW OF THE FOREGOING, the Court
SUSPENDS Atty. Romeo G. Roxas from the practice of law for a
In the instant case, Atty. Roxas's defiant attitude ultimately caused period of one (1) year and WARNS him that a repetition of the same
his client to lose its trust in him. He intentionally denied his client's or similar offense shall be dealt with more severely.
requests on how to proceed with the case and insisted on doing it his
own way. He could not possibly use the supposed blanket authority
given to him as a valid justification, especially on non-procedural
Let copies of this Decision be included in the personal records of Gancayco; (2) their attorney's fees equivalent to 35%; and (3) other
Atty. Romeo G. Roxas and entered in his file in the Office of the Bar expenses, leaving the net amount of US$18,132.43 for complainant. 11
Confidant.
Respondents tendered the amount of US$20,756.05 (representing the
Let copies of this Decision be disseminated to all lower courts by the US$18,132.43) to complainant, which the latter refused.12 As
Office of the Court Administrator, as well as to the Integrated Bar of complainant contested the amount comprised of the expenses and
the Philippines, for their information and guidance. attorney's fees deducted, the following civil actions ensued between
complainant and respondents:
SO ORDERED.
(1) On September 12, 2005, respondents filed an action for
23.) Sorongon Jr. v. Gargantos, Sr. AC No. 11326 June 27, 2018 preliminary mandatory injunction (Civil Case No. 05113475)
(cannot be found) before the Regional Trial Court (RTC) of Manila to compel
complainant to receive the amount tendered.13 This case was
dismissed by the RTC, and the dismissal was eventually upheld
24.) A.C. No. 10557 (Formerly CBD Case No. 07-1962), July by this Court on July 7, 2008.14
10, 2018

JERRY M. PALENCIA, Complainant, v. ATTY. PEDRO L. (2) On September 22, 2005, complainant filed with the RTC of
LINSANGAN, ATTY. GERARD M. LINSANGAN, AND ATTY. Ligao City an action for accounting, remittance of settlement
GLENDA M. LINSANGAN-BINOYA, Respondents. amounts and damages (Civil Case No. 2401 or accounting
case).15 On June 16, 2011, the RTC ruled in favor of
DECISION complainant and ordered respondents to make proper
accounting, among others.16 Although the RTC upheld the
stipulated attorney's fees as binding between the parties, it
PER CURIAM: determined that the fees are lumped for both respondents and
Gurbani & Co.17 On appeal, the CA affirmed the RTC's
Before us is a complaint1 filed by Jerry M. Palencia (complainant) Decision but reduced the rate of attorney's fees to 10%.18 This
against Attorneys (Attys.) Pedro L. Linsangan, Gerard M. Linsangan 2 Court affirmed the CA Decision in our Resolution dated
and Glenda Linsangan-Binoya (respondents) for disciplinary action. February 20, 2013 in G.R. No. 205088. An Entry of Judgment
was issued on August 8, 2013.
Complainant was an overseas Filipino worker seafarer who was
seriously injured during work when he tell into the elevator shaft of
the vessel M/T "Panos G" flying a Cyprus flag.3 After initial On March 28, 2007, complainant also filed the subject letter--
treatment in Singapore, complainant was discharged and flown to the Complaint19 with the Integrated Bar of the Philippines (IBP)
Philippines to continue his medical treatment and rehabilitation. Commission on Bar Discipline (CBD). He requested that an
While confined at the Manila Doctors Hospital, one "Moises," and investigation be conducted and the corresponding disciplinary action
later Jesherel L. Millena (Jesherel), paralegals in respondents' law be imposed upon respondents for committing the following unethical
office, approached complainant. They convinced him to engage the acts: (1) refusing to remit the amount collected in the Singapore case
services of respondents' law office in order to file a suit against his worth US$95,000.00, and in offering only US$20,756.05; (2)
employers for indemnity.4 After several visits from the paralegals and depositing complainant's money into their own account; and (3)
respondent Atty. Pedro Linsangan, complainant executed (1) an engaging in "ambulance chasing" by deploying their agents to
Attorney-Client Contract,5 and (2) a Special Power of Attorney,6 convince complainant to hire respondents' services while the former
where he engaged the legal services of respondents and Gurbani & was still bedridden in the hospital.
Co., a law firm based in Singapore, and agreed to pay attorney's fees
of 35% of any recovery or settlement obtained for both. In their answer,20 respondents explained that complainant retained
respondents and Gurbani & Co.'s services in 2004 for purposes of
After execution of the contract, complainant, through the efforts of filing a claim against the ship owner, its agents and principals. This
respondents, was paid by his employer the following amounts: led to the filing of a claim before the Singapore High Court. They
US$60,000.00 as indemnity and US$20,000.00 under their collective averred that on April 29, 2005, Gurbani & Co. advised respondents of
bargaining agreement. From these amounts, respondents charged the settlement of the claim in Singapore for US$95,000.00. 21 On June
complainant attorney's fees of 35%.7 20, 2005, respondents sent a letter to complainant informing him that
they already received the settlement amount and requested him to
come to the former's office to get his net share.22 Complainant went
Respondents and Gurbani & Co. also filed a tort case against the to respondents' law office on June 28, 2005 where respondents
owners of "Panos G" before the High Court of Singapore (Singapore tendered to the former his net share of US$20,756.05.23 However,
case). For this case, respondents engaged the services of complainant unjustly refused to accept the amount. Complainant also
Papadopoulos, Lycourgos & Co., a law firm based in Cyprus, to draft refused their tender of payment in their letter dated August 3, 2005.24
a written opinion on the issues involving Cyprus law, among others. 8 On September 12, 2005, respondents even filed a "consignation case"
They also engaged the services of retired Justice Emilio Gancayco (Civil Case No. 05113475) before the RTC of Manila.25
(Justice Gancayco) for his expert opinion regarding various issues
raised by defendant's lawyer and representatives.9
Respondents denied that they deposited the amount to their own
account. They claimed that the amount of US$20,756.05 has been
Thereafter, negotiations led to a settlement award in favor of placed for safekeeping in a vault located inside their office ever
complainant in the amount of US$95,000.00. Gurbani & Co. remitted since.26 On May 3, 2007, after their receipt of the complaint and the
to respondents the amount of US$59,608.40.10 From this amount, IBP-CBD's Order dated April 3, 2007, they decided to deposit the
respondents deducted: (l) US$5,000.00 as payment to Justice money with Bank of the Philippine Islands in an interest savings
account, in trust for complainant.27
As to the allegations of ambulance chasing, respondents averred that The relationship between a lawyer and his client is highly fiduciary.46
they provide free legal advice to the public. It was in the course of This relationship holds a lawyer to a great degree of fidelity and good
this public service when they met complainant.28 faith especially in handling money or property of his clients.47 Thus,
Canon 16 and its rules remind a lawyer to: (1) hold in trust all
After proceedings, the IBP-CBD in its Report and Recommendation29 moneys and properties of his client that may come into his
ruled that respondents violated the canons of the Code of Professional possession;48 (2) deliver the funds and property of his client when
Responsibility (CPR): ( l) in soliciting legal business through their due or upon demand subject to his retaining lien;49 and (3) account
agents while complainant was in the hospital; (2) in failing to account for all money or property collected or received for or from his
for, and deliver the funds and property of his client when due or upon client.50
demand; and (3) in hiring the services of a foreign law firm and
another lawyer without prior knowledge and consent of complainant Money collected by a lawyer on a judgment rendered in favor of his
of the fees and expenses to be incurred.30 The IBP-CBD found that client constitutes trust funds and must be immediately paid over to
all three respondents connived and thus recommended that all the client.51 As he holds such funds as agent or trustee, his failure to
respondents be suspended from the practice of law for a period of one pay or deliver the same to the client after demand constitutes
year. It also directed respondents to comply with the Decision in the conversion.52 Thus, whenever a lawyer collects money as a result of a
accounting case (Civil Case No. 2401) in favor of complainant.31 favorable judgment, he must promptly report and account the money
collected to his client.53
The IBP Board of Governors adopted the Report and
Recommendation.32 After respondents' motion for reconsideration33 It is the lawyer's duty to give a prompt and accurate account to his
and complainant's opposition34 thereto, the IBP Board of Governors client. Upon the collection or receipt of property or funds for the
modified the penalty and increased respondents' suspension from the benefit of the client, his duty is to notify the client promptly and,
practice of law to two years with warning, and ordered respondents to absent a contrary understanding, pay or remit the same to the client,
return the 5% of the amount assessed to complainant as attorney's less only proper fees and disbursements, as soon as reasonably
fees.35 possible.54 He is under absolute duty to give his client a full, detailed,
and accurate account of all money and property which has been
We adopt the findings of the IBP on the unethical conduct of received and handled by him, and must justify all transactions and
respondents Attys. Pedro L. Linsangan and, Gerard M. Linsangan. dealings concerning them.55 And while he is in possession of the
We, however, absolve respondent Atty. Glenda M. Linsangan-Binoya client's funds, he should not commingle it with his private property or
for lack of any evidence as to her participation in the acts complained use it for his personal purposes without his client's consent.56
of.
Here, respondents claim that they promptly accounted for the total
I award of US$95,000.00, and after deducting their fees, tendered the
amount of US$20,756.05. Complainant, however, refused to accept
the amount because he contested both the expenses and the separate
The practice of law is a profession and not a business. 36 Lawyers are deduction of attorney's fees by respondents and Gurbani & Co.
reminded to avoid at all times any act that would tend to lessen the
confidence of the public in the legal profession as a noble calling,
including, among others, the manner by which he makes known his We find that while respondents gave prompt notice to complainant of
legal services. their receipt of money collected in the latter's favor, they were amiss
in their duties to give accurate accounting of the amounts due to
complainant, and to return the money due to client upon demand.
A lawyer in making known his legal services must do so in a
dignified manner.37 They are prohibited from soliciting cases for the
purpose of gain, either personally or through paid agents or brokers. 38 The Attorney-Client Contract between the parties states: "We/I
The CPR explicitly states that "[a] lawyer shall not do or permit to be hereby voluntarily agree and bind ourselves, our heirs and assigns to
done any act designed primarily to solicit legal business."39 Corollary pay Atty. Pedro L. Linsangan and his collaborating Singapore
to this duty is for lawyers not to encourage any suit or proceeding for counsels, the sum equivalent to thirty-five [35%] percent of any
any corrupt motive or interest.40 Thus, "ambulance chasing," or the recovery or settlement obtained."57 Clearly, the stipulated rate
solicitation of almost any kind of business by an attorney, personally referred to the combined professional fees of both respondents and
or through an agent, in order to gain employment, is proscribed. 41 their collaborating Singapore counsel, Gurbani & Co.58 Nevertheless,
respondents proceeded to deduct separate fees on top of the amount
already deducted by Gurbani & Co. Complainant contested this
Here, there is sufficient evidence to show that respondents violated deduction and refused to accept the amount being tendered by
these rules. No less than their former paralegal Jesherel admitted that respondents. Since a claim for attorney's fees may be asserted either
respondent Atty. Pedro Linsangan came with her and another in the very action in which the services of a lawyer had been
paralegal named Moises, to Manila Doctors Hospital several times to rendered, or in a separate action,59 respondents, instead of forcibly
convince complainant to hire their services.42 This is a far cry from deducting their share, should have moved for the judicial
respondents' claim that they were merely providing free legal advice determination and collection of their attorney's fees. The fact alone
to the public. Moreover, while respondents deny Jesherel 's that a lawyer has a lien for his attorney's fees on money in his hands
connection with their law firm, this was sufficiently rebutted by collected for his client does not entitle him to unilaterally appropriate
complainant when he presented Jesherel's resignation letter as his client's money for himself.60
received by respondents' firm.43 In employing paralegals to
encourage complainant to file a lawsuit against his employers,
respondents indirectly solicited legal business and encouraged the Worse, respondents allegedly kept the money inside the firm's vault
filing of suit. These constitute malpractice44 which calls for the for two years until they were made aware of the disciplinary
exercise of the court's disciplinary powers and warrants serious complaint against them before the IBP-CBD. However, as noted by
sanctions.45 the IBP-CBD in its Report and Recommendation:

II [T]he defense of respondents that they kept in their office vault the
share of complainant as computed by them in the amount of
US$18,132.43, hence, they forgot the same and remembered it only penalty. In Cerdan v. Gomez,74 respondent there was still suspended
when they received the Order of this Commission for them to file an for a period of one year, after already taking into account that it was
Answer to complainant's Complaint [which is more than 2 years] is his first offense. More, there are several decisions which support the
rather highly incredible considering that it involves a substantial imposition of the one year suspension for similar violations.75 In
amount, the series of communications between the parties, and the Viray v. Sanicas,76 the court imposed a one year penalty for the same
Civil cases subsequently filed.61 (Italics in the original.) infraction even after exercising its "compassionate judicial
discretion."77
Even if we give credence to this explanation, it is improper for the
lawyer to put his client's funds in his personal safe deposit vault.62 More importantly, respondents' acts do not merely constitute a
Funds belonging to the client should be deposited in a separate trust violation of Canon 16 and its rules, but already amounts to gross
account in a bank or trust company of good repute for safekeeping. 63 misconduct.78First, respondents breached the trust reposed in them
when they betrayed the express language of their Attorney-Client
It is apparent from the foregoing that respondents failed to handle Contract that they are only entitled to a single 35% attorney's fees
their client's money with great degree of fidelity. Respondents also together with the Singapore counsels. In the process, respondents
showed their lack of good faith when they appropriated for have also unjustly retained for themselves the 35% of the settlement
themselves more than what is allowed under their contract. They award amounting to US$95,000.00—which is more or less
have demonstrated that the payment of their attorney's fees is more US$33,250.00 or roughly around P1.5 million pocketed, and also
important than their fiduciary and faithful duty of accounting and immensely disparaging to the US$20,756.05 they tendered to
returning what is rightfully due to their client. More, they also failed complainant. Second, their actions following complainant's objection
to observe proper safekeeping of their client's money. Respondents manifests their disregard of their fiduciary duties. For two years,
violated the trust reposed in them, and demonstrated their lack of respondents insisted on, and forcibly deducted the amount when there
integrity and moral soundness.64 Respondents' flagrant and malicious are alternative avenues to determine the correct amount of attorney's
refusal to comply with the CPR amounts to gross misconduct. 65 This fees. They instead treaded to a path where they advanced their own
warrants the imposition of disciplinary sanctions.66 interests ahead of their client's. Third, respondents also mishandled
their client's money when they did not exercise proper safekeeping
over it; they failed to deposit it in a separate trust account in a bank or
III trust company of good repute for safekeeping but co-mingled it with
their own funds. Undoubtedly, the gravity of these acts amounts to
The practice of law is a profession, a form of public trust, the gross misconduct that warrants, at the very least, a suspension. 79
performance of which is entrusted to those who are qualified and who
possess good moral character.67 Thus, the violation of the lawyer's For both violations, we adopt the recommendation of the IBP Board
oath and/or breach of the ethics of the legal profession embodied in of Governors of the imposition of two-year suspension for
the CPR may, depending on the exercise of sound judicial discretion respondents Attys. Pedro L. Linsangan and Gerard M. Linsangan. We
based on the surrounding facts, result in the suspension or disbarment emphasize that this penalty of two years of suspension corresponds to
of a member of the Bar.68 the compounded infractions of the violations of Rule 1.03, Rule 2.03,
Canon 3, Canon 16, Rule 16.01, and Rule 16.03 of the CPR: (1) the
While we find respondents Attys. Pedro Linsangan and Gerard penalty of suspension of one year is imposed for the violation of the
Linsangan to have violated Rule 1.03, Rule 2.03, Canon 3, Canon 16, proscription on ambulance chasing; and (2) the penalty of one year
Rule 16.01, and Rule 16.03 of the CPR, the records do not support suspension for gross misconduct consisting in the failure or refusal,
respondent Atty. Glenda Linsangan-Binoya's participation in their despite demand, of a lawyer to account for and return money or
unethical activities. Complainant himself admits that he only dealt property belonging to a client.
with respondents Attys. Pedro and Gerard Linsangan.69 Thus, we
hold that the case against Atty. Glenda Linsangan-Binoya be To reiterate, there is no basis, and would even be unjust under the
dismissed. circumstances, to reduce the penalty imposed on respondents. Quite
the contrary, respondents should find themselves so fortunate that for
For his violation of the proscription on ambulance chasing, we have all their exploits, including their ambulance chasing, this Court would
previously imposed the penalty of suspension of one year.70 We find only impose a two-year suspension.
no reason not to impose the same penalty here.
Finally, we note that this Court, in G.R. No. 205088, has already
On the other hand, the penalty for violation of Canon 16 of the CPR affirmed the CA's ruling as to the issue of how much respondents can
usually ranges from suspension for six months, to suspension for one collect from complainant as attorney's fees. This judgment has long
year, or two years, and even disbarment depending on the amount attained finality and, in fact, appears to be set for execution. For this
involved and the severity of the lawyer's misconduct. 71 In addition, reason, we do not adopt the IBP Board of Governors'
the penalty for gross misconduct consisting in the failure or refusal, recommendation for respondents to return to complainant 5% of the
despite demand, of a lawyer to account for and to return money or amount assessed. The principle of immutability of judgments
property belonging to a client has been suspension from the practice behooves us from making any further statements on this particular
of law for two years.72 Complainant, who was impaired for life, was issue
constrained to file this complaint and the action for accounting
because of his lawyers' lack of fidelity and good faith in handling the WHEREFORE, we find respondents Attys. Pedro L. Linsangan and
award he received. We recognize, however, respondents' efforts in Gerard M. Linsangan GUILTY. Accordingly, we SUSPEND
tendering payment, albeit of an improper amount, to complainant, as respondents Attys. Pedro Linsangan and Gerard Linsangan from the
well as the fact that this is their first offense. The imposition of a one practice of law for TWO YEARS effective upon finality of this
year suspension is sufficient under the circumstances.73 Decision, with a WARNING that a repetition of the same or similar
act in the future will be dealt with more severely. The complaint
This penalty of one year suspension for the second infraction is against Atty. Glenda M. Linsangan-Binoya is DISMISSED.
justified, and does not deserve a further reduction. The fact that it is
respondents' first administrative case cannot serve to mitigate the SO ORDERED.
25.) Goopio v. Maglalang AC No. 10S55 July 31, 2018 En Banc
(cannot be found)

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


(cannot be found)