MAY 5 2021

PALE DIGEST

Mercedita De jesus v. Atty. Juvy Mell Sanchez-Malit, A.C. No. 6470,

July 8, 2014

FACTS:
On 23 June 2004, a disbarment complaint filed by Mercedita De
Jesus (De Jesus)against respondent Atty. Juvy Mell Sanchez-
Malit on the following grounds: grave misconduct, dishonesty,
malpractices, and unworthiness to become an officer of the Court. The
respondent made the following acts:
1) Drafted and notarized a Real Estate Mortgage of a public market stall
that falsely named the former as its absolute and registered owner.
2) Notarization of lease agreement sometime in September 1999 without
the signature of the lessees.
3) Notarized a sale agreement over a property covered by a Certificate
of Land Ownership Award (CLOA) which was still covered by the period
within which it could not be alienated which complainant entered into
with a certain Nicomedes Tala (Tala) on 17 February 1998.
4) Three Special Powers of Attorney (SPAs) notarized by respondent which
were not signed by the principals and an Affidavit of Irene
Tolentino (Tolentino), complainant’s secretary/treasurer.

The IBP Board of Governors approved the Report and Recommendation of

the Investigating Commissioner:
a. Disqualification as notary public for two years for her violation of her
oath as such by notarizing documents without the signatures of
the parties who had purportedly appeared before her.
b. Suspension from the practice of law for one year for violation of Canon
187 and Rule18.038 of the Code of Professional Responsibility on
inaccurate crafting of the real estate mortgage contract.

Her first and second motions for reconsideration was denied so the
disbarment case was submitted to SC for final action.

ISSUE:
Whether or not respondent is guilty of violating Canon 1 and Rules 1.01,
1.02, and 10.1 of the Code of Professional Responsibility?

RULING:
Yes, espondent Atty. Juvy Mell Sanchez-Malit is found guilty of violating
Canon 1 and Rules 1.01, 1.02, and 10.01 of the Code of Professional
Responsibility as well as her oath as notary public. Hence, she is
SUSPENDED from the practice of law for ONE YEAR effective immediately.
The important role a notary public performs cannot be overemphasized.
The Court has repeatedly stressed that notarization is not an empty,
meaningless routinary act, but one invested with substantive public
interest. Notarization converts a private document into a public document,
making it admissible in evidence without further proof of its authenticity.
Thus, a notarized document is, by law, entitled to full faith and credit
upon its face. It is for this reason that a notary public must observe with
utmost care the basic requirements in the performance of his notarial
duties; otherwise, the public's confidence in the integrity of a notarized
document would be undermined.

Where the notary public admittedly has personal knowledge of a false

statement or information contained in the instrument to be notarized, yet
proceeds to affix the notarial seal on it, the Court must not hesitate to
discipline the notary public accordingly as the circumstances of the case
may dictate. Otherwise, the integrity and sanctity of the notarization
process may be undermined, and public confidence in notarial documents
diminished. In this case, respondent fully knew that complainant was not
the owner of the mortgaged market stall. That complainant comprehended
the provisions of the real estate mortgage contract does not make
respondent any less guilty. If at all, it only heightens the latter’s liability
for tolerating a wrongful act. Clearly, respondent’s conduct amounted to a
breach of Canon 1 and Rules 1.01 and 1.02 of the Code of Professional
Responsibility.

Respondent’s explanation about the unsigned lease agreement executed by

complainant sometime in September 1999 is incredulous. If, indeed, her
file copy of the agreement bore the lessees’ signatures, she could have
given complainant a certified photocopy thereof. It even appears that said
lease agreement is not a rarity in respondent’s practice as a notary public.
Records show that on various occasions from 2002 to 2004, respondent
has notarized 22 documents that were either unsigned or lacking
signatures of the parties. Technically, each document maybe a ground for
disciplinary action, for it is the duty of a notarial officer to demand that a
document be signed in his or her presence.

A notary public should not notarize a document unless the persons who
signed it are the very same ones who executed it and who personally
appeared before the said notary public to attest to the contents and truth
of what are stated therein. Thus, in acknowledging that the parties
personally came and appeared before her, respondent also violated Rule
10.01 of the Code of Professional Responsibility and her oath as a lawyer
that she shall do no falsehood.
 Amdona v. Cefra, AC, No. 5482: February 10, 2015

Whoever acts as Notary Public must ensure that the parties executing the
document be present.  Otherwise, their participation with respect to the
document cannot be acknowledged.  Notarization of a document in the
absence of the parties is a breach of duty.

FACTS:
- Complainants and Jimmy’s brothers and sister co-own a 4,446-square-
meter parcel of land located in Sison, Pangasinan.
- On August 12, 1998, Atty. Cefra notarized a Deed of Absolute Sale over
the land owned by Jimmy and his siblings.  The names of Johnny Anudon
(Johnny), Alfonso Anudon (Alfonso), Benita Anudon-Esguerra (Benita), and
complainants Jimmy and Juanita appeared as vendors, while the name of
Celino Paran, Jr. (Paran) appeared as the vendee.
- Jimmy and Juanita claimed that the Deed of Absolute Sale was falsified. 
They alleged that they did not sign the Deed of Absolute Sale.  Moreover,
they did not sign it before Atty. Cefra. This is contrary to Atty. Cefra’s
acknowledgment over the document.
- In addition to the forgery of their signatures, Jimmy and Juanita stated
that it was physically impossible for their brothers and sister, Johnny,
Alfonso, and Benita, to sign the Deed of Absolute Sale.  Johnny and Benita
were in the United States on the day the Deed of Absolute Sale was
executed, while Alfonso was in Cavite.
- On August 6, 2001, Jimmy and Juanita initiated a disciplinary action by
filing a Complaint to the SC questioning the propriety of Atty. Cefra’s
conduct as lawyer and notary public.
- The SC required Atty. Cefra to comment on the administrative
complaint.  Atty. Cefra filed multiple Motions for Extension of Time.
Despite the allowance for extension of time, Atty. Cefra did not comply
with this court’s order to file a Comment.  Atty. Cefra’s continued refusal
to file his Comment caused the court to order his arrest and commitment.

ISSUE/S:
1) Whether Atty. Cefra’s act in notarizing the Deed of Sale
constitutes a violation of the 2004 Rules on Notarial Practice
2) Whether Atty. Cefra is guilty of violating the Code of
Professional Responsibility in ignoring the court’s order
directing him to comment on the complaint against him

RULING:
- The 2004 Rules on Notarial Practice reiterates that acknowledgments
require the affiant to appear in person before the notary public. 
- The rules require the notary public to assess whether the person
executing the document voluntarily affixes his or her signature.  Without
physical presence, the notary public will not be able to properly execute
his or her duty under the law. 
- Notarization is the act that ensures the public that the provisions in the
document express the true agreement between the parties.  Transgressing
the rules on notarial practice sacrifices the integrity of notarized
documents.  It is the notary public who assures that the parties appearing
in the document are the same parties who executed it.  This cannot be
achieved if the parties are not physically present before the notary public
acknowledging the document.
- Atty. Cefra claims that Jimmy and Juanita wanted to sell their
land.  Even if this is true, Jimmy and Juanita, as vendors, were not
able to review the document given for notarization.  The Deed of
Absolute Sale was brought to Atty. Cefra by Paran’s representatives,
who merely informed Atty. Cefra that the vendors signed the
document.  Atty. Cefra should have exercised vigilance and not just
relied on the representations of the vendee.

Aside from Atty. Cefra’s violation of his duty as a notary public, Atty.
Cefra is also guilty of violating Canon 1 of the Code of Professional
Responsibility.  This canon requires “[a] lawyer [to] uphold the
Constitution, obey the laws of the land and promote respect for law
and legal processes.”  He contumaciously delayed compliance with
the court’s order to file a Comment.  As early as September 19,
2001, this court already required Atty. Cefra to comment on the
Complaint lodged against him.  Atty. Cefra did not comply with this
order until he was arrested by the National Bureau of Investigation. 
- Atty. Cefra only filed his Comment on January 15, 2008, more than
seven years after this court’s order.  Atty. Cefra’s actions show utter
disrespect for legal processes.

WHEREFORE, this court finds respondent Atty. Arturo B.

Cefra GUILTY of notarizing the Deed of Absolute Sale dated August
12, 1998 in the absence of the affiants, as well as failure to comply
with an order from this court.  Accordingly, this court SUSPENDS him
from the practice of law for two (2) years, REVOKES his incumbent
notarial commission, if any, and PERPETUALLY DISQUALIFIES him
from being commissioned as a notary public.  Respondent is
also STERNLY WARNED that more severe penalties will be imposed
for any further breach of the Canons in the Code of Professional
Responsibility.
 Spouses Ray and Marcelina Zialcita v. Atty. Allan Latras

The case stemmed from an administrative complaint for disbarment filed

by spouses Ray and Marcelina Zialcita against Atty. Allan Latras for
violation of the notarial law.

The spouses obtained a loan from a certain Ester Servacio to aid in the
construction of their commercial building. As security for the loan, a Deed
of Sale with Right to Repurchase, for a period of one year, over a
commercial land and building, was executed by the spouses in favor of
Servacio in the amount of P11 Million. The spouses alleged that Servacio
and Atty. Latras fraudulently substituted the first page of the Deed of Sale
with Right to Repurchase with a Deed of Absolute Sale for P2 Million.
Furthermore, the spouses contended that Atty. Latras acted as legal
counsel and notary public for Servacio, and notarized the deed of absolute
sale without their knowledge and appearance in his office.

In his Comment, Atty. Latras denied having substituted the first page of
the notarized document. He contended that the burden to prove the
allegation of such fraud rests upon the complainants. To bolster his
defense, he added that it was one of the spouses, Ray Zialcita, who asked
for the dispensation of their appearance. He further contended that as
long as there was the affirmation as to the contents and truth of what are
stated in the document, then such notarization may be considered as
substantial compliance with the requirements under the notarial law.

On July 19, 2013, the Commission on Bar Discipline of the Integrated Bar
of the Philippines (IBP) found that insofar as the violation of the notarial
law by Atty. Latras is concerned, there is no doubt that he did not act in
accordance with the law. The Commission agreed with the spouses that
the notarial act must be done in the presence of the parties personally
appearing.

However, the complainants failed to show that Atty. Latras acted

fraudulently nor was with connivance with anyone in notarizing the
document; hence, the Commission recommended that mere reprimand is
sufficient.

The IBP Board of Governors resolve to adopt and approved with

modification the report and recommendation of the Investigating
Commissioner that Atty. Latras violated the 2004 Rules on Notarial
Practice.

ISSUE:
Whether or not Atty. Latras violated the 2004 Rules on Notarial Practice?

RULING:

The court ruled in the affirmative. The Court upholds the findings and
recommendation of the IBP Board of Governors.

The 2004 Rules on Notarial Practice emphasizes the necessity of the

parties to personally appear before the notary public, which is stated
under Rule II, Section 2 of the 2004 Rules on Notarial Practice.

SECTION 1. Acknowledgment. - "Acknowledgment" refers to an act in which an

individual on a single occasion:

(a) appears in person before the notary public and presents an integrally complete
instrument or document;

(b) is attested to be personally known to the notary public or identified by the

notary public through competent evidence of identity as defined by these Rules;
and

(c) represents to the notary public that the signature on the instrument or
document was voluntarily affixed by him for the purposes stated in the instrument
or document, declares that he has executed the instrument or document as his
free and voluntary act and deed, and, if he acts in a particular representative
capacity, that he has the authority to sign in that capacity.
xxxx

SEC. 2. Prohibitions. — x x x

(b) A person shall not perform a notarial act if the person involved as signatory to
the instrument or document —
(1) is not in the notary's presence personally at the time of the notarization;
and

(2) is not personally known to the notary public or  otherwise   identified  by 
the  notary  public  through competent evidence of identity as defined by these Rules.
(Emphasis supplied.)
In the instant case, it is undisputed that Atty. Latras notarized the subject
document without the personal appearance of the spouses. In fact, in his
Comment, he admitted that he indeed notarized the deed. Atty. Latras, however,
reasoned out that he only followed the instruction of Ray Zialcita to notarize the
same without their presence and that he merely relied on the alleged assurance of
the spouses that they would be present on that weekend.
Atty. Latras' contention that there has been substantial compliance with
the notarial law holds no water. It is of no moment that he talked with the
spouses over the phone and that, through the presence of witnesses, he
was able to verify that the signatures in the said document were those of
the spouses. This Court has repeatedly stressed in a number of cases
the requirement for the parties to personally appear before the notary
public in the notarization of documents. The purpose of the
requirement of personal appearance by the acknowledging party before
the notary public is to enable the latter to verify the genuineness of
the signature of the former.

Thus, in Agagon v. Bustamante,[6] the Court explained that notarization of

documents is not an empty, meaningless or routinary act:

It cannot be overemphasized that notarization of documents is not an

empty, meaningless or routinary act. It is invested with substantive public
interest, such that only those who are qualified or authorized may act as
notaries public. It is through the act of notarization that a private
document is converted into a public one, making it admissible in evidence
without need of preliminary proof of authenticity and due execution.
Indeed, a notarial document is by law entitled to full faith and credit upon
its face, and for this reason, notaries public must observe utmost care in
complying with the elementary formalities in the performance of their
duties. Otherwise, the confidence of the public in the integrity of this form
of conveyance would be undermined.

Clearly, Atty. Latras failed to exercise the due diligence required of

him as a notary public when he notarized the document without the
spouses personally appearing before him.

As regards the alleged conspiracy of Atty. Latras and Servacio to substitute

the first page of the deed, it is elementary that in administrative
complaints for disbarment and suspension against lawyers, the required
quantum of proof is clear and preponderant evidence. In this case,
however, the complainants failed to present any evidence to
substantiate their claim of forgery and fraud on the part of Atty.
Latras. Hence, the same shall fail.

In line with the foregoing principles, the Court finds Atty. Latras
administratively liable for notarizing the subject document without
the spouses personally appearing before him. He cannot avoid
responsibility by pointing out that he merely complied with the
instruction of the complainants to notarize the document without
their presence.
WHEREFORE, in view of the foregoing, the Court SUSPENDS Atty. Allan
Latras from the practice of law for six (6) months, REVOKES his notarial
commission, if presently commissioned, and DISQUALIFIES him from
being commissioned as a notary public for a period of two (2) years, all
effective upon receipt of this Resolution. The Court further WARNS him
that a repetition of the same or similar offense shall be dealt with more
severely.

Let copies of this Resolution be included in the personal records of Atty.

Allan Latras and entered in his file in the Office of the Bar Confidant.
Further, let copies of this Resolution be disseminated to all lower courts by
the Office of the Court Administrator, as well as to the Integrated Bar of
the Philippines, for their information and guidance.

SO ORDERED.
 Pineda v. De Jesus, 499 scra 608

APPLICABLE RULE: Canon 20.04- A lawyer shall avoid controversies

with clients concerning his compensation and shall resort to judicial
action only to prevent imposition, injustice or fraud.

FACTS:
On April 6, 1993, Aurora Pineda filed an action for declaration of nullity of
marriage against petitioner Vinson Pineda in the RTC of Pasig City,
docketed as JDRC Case No. 2568. Petitioner was represented by
respondents Attys. Clodualdo de Jesus, Carlos Ambrosio and Emmanuel
Mariano.
During the pendency of the case, Aurora proposed a settlement to
petitioner regarding her visitation rights over their minor child and the
separation of their properties. The proposal was accepted by the petitioner
and both parties subsequently filed a motion for approval of their
agreement. This was approved by the trial court. On November 25, 1998,
the marriage between the petitioner and Aurora Pineda was declared null
and void.
Throughout the proceedings, respondent counsels were well-
compensated. They including their relatives and friends, even availed of
free products and treatments from petitioner’s dermatology clinic. This
notwithstanding, they billed petitioner additional legal fees amounting to
P16.5 million which the latter, however, refused to pay. Instead, petitioner
issued them several checks totaling P1.12 million as “full payment for
settlement.”
Still not satisfied, respondents filed in the same trial court a motion
for payment of lawyers’ fees for P50 million.
On April 14, 2000, trial court ordered petitioner to pay P5 million to
Atty. De Jesus, P2 million to Atty. Ambrosio and P2 million to Atty.
Mariano.
On appeal, the Court of Appeals reduced the amount as follows: P1
million to Atty. de Jesus, P500,000 to Atty. Ambrosio and P500,000 to
Atty. Mariano. The motion for reconsideration was denied. Hence, this
recourse.

ISSUE:
Whether the lawyers are entitled to additional legal fees?

RULING:
NO. The professional engagement between petitioner and respondents was
governed by the principle of quantum meruit which means “as much as the
lawyer deserves.” The recovery of attorney’s fees on this basis is permitted,
as in this case, where there is no express agreement for the payment of
attorney’s fees. Basically, it is a legal mechanism which prevents an
unscrupulous client from running away with the fruits of the legal services
of counsel without paying for it. In the same vein, it avoids unjust
enrichment on the part of the lawyer himself.
Further, Rule 20.4 of the Code of Professional Responsibility advises
lawyers to avoid controversies with clients concerning their compensation
and to resort to judicial action only to prevent imposition, injustice or
fraud. Suits to collect fees should be avoided and should be filed only
when circumstances force lawyers to resort to it. In the case at bar,
respondents’ motion for payment of their lawyers’ fees was not meant to
collect what was justly due them; the fact was, they had already been
adequately paid. Demanding P50 million on top of the generous sums and
perks already given to them was an act of unconscionable greed which is
shocking to this Court.
As lawyers, respondents should be reminded that they are members
of an honorable profession, the primary vision of which is justice. It is
respondents’ despicable behavior which gives lawyering a bad name in the
minds of some people. The vernacular has a word for it: nagsasamantala.
The practice of law is a decent profession and not a money- making trade.
Compensation should be but a mere incident. Respondents’ claim for
additional legal fees was not justified. They could not charge petitioner a
fee based on percentage, absent an express agreement to that effect. The
payments to them in cash, checks, free products and services from
petitioner’s business–all of which were not denied by respondents–more
than sufficed for the work they did. The “full payment for settlement”
should have discharged petitioner’s obligation to them.
The power of this Court to reduce or even delete the award of attorney’s
fees cannot be denied. Lawyers are officers of the Court and they
participate14in the fundamental function of administering justice.

DISPOSITIVE PORTION: WHEREFORE, the petition is hereby

PARTIALLY GRANTED. The decision of the Court of Appeals dated April
30, 2002 in CA-G.R. CV No. 68080 is hereby MODIFIED. The award of
additional attorney’s fees in favor of respondents is hereby DELETED.
 Reparations Commission v. Visayan Packing Corporation, 193 scra
540

FACTS:
Plaintiff Reparations Commission (Repacom, for short) is a government
entity created by virtue of Republic Act No. 1789, with offices at the 5th
Floor, Development Bank of the Philippines Building No. 2, Port Area,
Manila while the defendants, Visayan Packing Corporation (Vispac, for
short) and the Fieldmen's Insurance Co., Inc. (FICI, for short) are
corporations duly organized and registered under the laws of the
Philippines, with offices in Bacolod City, Philippines and Singson Bldg.,
Plaza Moraga, Manila, respectively.

On May 19, 1960, plaintiff Repacom adopted Resolution No. 262 awarding
to the defendant Vispac by way of a contract of conditional purchase and
sale subsequently executed on November 15, 1960 the following
reparations goods with a total F.O.B. value of P1,242,424.67: one (1)
Cannery Plant, divested from M/S "Estancia"; two (2) Fishing Boats M/S
"SONIA" and M/S "ANA LARES", 75 G.T. and one (1) Fishing Boat M/S
"SALVADOR "B"", 100 G.T.; including all its corresponding accessories and
appurtenances. These reparations goods were delivered to the defendant
Vispac, on May 30, 1960 (Exhibit "A-2").

Defendant-appellant FICI is impleaded as bondsman for the principal

defendant Vispac,

On September 27, 1962, Repacom filed a complaint for specific

performance with the court a quo against Vispac seeking collection of the
amount of P124,242.47 allegedly due on May 30, 1962 as payment of the
1st installment of the reparations goods and impleaded the FICI as
defendant.

In its answer dated November 8, 1962, Vispac claimed that the Schedule
of Payments (Exhibit "A") is vague and ambiguous with respect to the date
when the first installment falls due and that by reason thereof, the
ambiguity should be construed against Repacom, the party which drafted
the contract.

Thus, while Repacom maintains that the 1st installment is due on May 30,
1962, Vispac, on the other hand, argues that it is due on May 30, 1963.

On January 13, 1964, Repacom and Vispac submitted a "Stipulation of

Facts" and both prayed that this case be submitted for decision after their
respective memoranda have been filed. FICI joined with this move and
request of the principal parties.
On the basis of the said Stipulations of Facts and the pleadings submitted
by the parties, the court a quo rendered judgment ordering the defendant
to play the plaintiff the sum of P124,242.47 with interest at the legal rate
from the date of filing of the complaint until fully paid. However, the
plaintiffs prayer for attorney's fees is denied, inasmuch as there is no
showing that the defendants were motivated with bad faith in failing to pay
plaintiffs claim. While with respect to the cross-claim of defendant
Fieldmen's Insurance Co., Inc., the Court hereby orders defendant Visayan
Packing Corporation to pay defendant Fieldmen's Insurance Co., Inc.,
such amount which the latter may pay to the plaintiff by reason of this
judgment.

From said decision, Vispac and FICI filed a motion for reconsideration of
the said decision. On August 8, 1 964, the court a quo issued its order
denying the said motion. Feeling aggrieved, Vispac and FICI appealed the
case to the Court of Appeals. The Court of Appeals ** certified the instant
case to this Court for proper disposition for being pure question of law.

ISSUE:
Whether or not the Schedule of payment is correctly interpreted?

RULING:
The court ruled in the affirmative.
It is the contention of the Repacom that under the abovequoted Schedule
of Payments, the amount of P124,242.47 representing the 1st installment
without interest, which is equivalent to 10% of the entire F.O.B. costs, has
already become due and demandable on May 30, 1962. However, Vispac
and FICI argue that as there are two dates given for the first installment in
the said Schedule of Payment, the lst installment should be on May 30,
1963 considering that it was Repacom which prepared the contract and
therefore such ambiguity should be taken against the latter which caused
the ambiguity.

The petition is devoid of merit.

Section 12, Republic Act 1789, reads as follows:

Section 12 –– Terms of Sale ––
Capital goods and complimentary services disposed to private parties as provided
for in sub-section (1) of Section 2 hereof, shall be sold on a cash or credit basis
under the rules and regulations as maybe determined by the Commission. Sales
on credit basis shall be paid in installments. Provided that the lst installment shall
be paid within 24 months after complete delivery of the capital goods and the
balance within a period not exceeding 10 years. (Emphasis supplied)
As indicated in the Schedule of Payments, Exhibit "A-1", the amount of
P124,242.47, now being claimed by the Repacom from Vispac, represents
the 1st installment or initial payment without interest as said amount is
equivalent to 10% of the total F.O.B. cost of the reparation goods received
by Vispac which is P1,242,424.67. Exhibit "A-2" of the Schedule of
Payments specifically states the date when the reparations goods in
question were delivered which was on May 30, 1960. This particular date
was not denied by Vispac as per their Stipulation of Facts. Consequently,
as reflected in the Schedule of Payments, Exhibit "A-1 ", the 1st
installment without interest in the amount of P124,242.47 representing
10% of the F.O.B. cost of reparations goods, became due and demandable
on May 30, 1962, or exactly 24 months from the date of the complete
delivery of the reparations goods to Vispac.

The rest of the schedule clearly refers to the payment of the balance of the
sales on credit which in accordance with law (Section 12, Rep. Act 1789)
must be paid within a period not exceeding ten (10) years, and chargeable
with interest at 3% per annum. Said schedule of payment for the
balance i.e., after payment of the first installment is, in turn, payable in
ten (10) equal yearly installments.

While it is a statutory and decisional rule in this jurisdiction that the

contract is the law between the contracting, there is a proviso that nothing
therein must be contrary to law, morals, good customs public policy, or
public.

To sustain the contention of Vispac and FICI that the 1st installment
should be due on May 30, 1963, instead of May 30, 1962. would render
the said installment payment unenforceable as it would run counter to the
provision of the said law (Section 12, R.A. 1789) which specifically
provides that "the 1st installment shall be paid within 24 months after
complete delivery of the capital goods", or on May 30, 1962, the complete
delivery thereof having been made on May 30, 1960.

Finally, it is basic that a contract is what the law defines it to be, and not
what it is called by the contracting parties.

Anent the contention of FICI that the trial court erred in ordering Vispac to
pay to FICI attorney's fees equivalent to only 10% of the amount due
despite the fact that Vispac bound itself to pay to FICI attorney's fees
equivalent to 20% of the total amount due but in no case less than
P200.00 as per their Indemnity Agreement (Exhibit "1-FICI"), it has been
held that a stipulation regarding the payment of attorney's fees is neither
illegal nor immoral and is enforceable as the law between the parties, as
long as such stipulation does not contravene law, good morals, good
customs, public order or public policy.

Considering, therefore, that the 20% attorney's fees provided under the
parties' Indemnity Agreement (Exhibit "1-FICI") is not contrary to the
existing jurisprudence on the matter *** and is not considered excessive
nor unconscionable, the same should be awarded to FICI.

WHEREFORE, the decision appealed from is Affirmed with the

modification that the amount of the attorney's fees due from Vispac
to FICI should be 20% of the amount due as per Indemnity
Agreement.
SO ORDERED.
 People vs Juco

FACTS:
Narciso Mendiola, agent of BIR, filed for a search warrant based on the
information from a reliable source alleging that certain fraudulent
bookletters and papers or records were being kept in the building No. 482
in Binondo, Manila occupied by Santiago Sy Juco. CFI Manila through
Judge Albert issued a search warrant directing peace officers to seize the
above-stated articles to deliver them to the court, for the proper action to
be taken in due time. After making the required search the officers
concerned seized, among things, an art metal filing cabinet claimed by
Attorney Teopisto B. Remo to be his and to contain some letters,
documents and papers belonging to his clients.

Remo filed a petition in CFI Manila, praying that the Collector of Internal
Revenue and his agents be prohibited from opening said art metal filing
cabinet and that the sheriff of the City of Manila likewise be ordered to
take charge of said property in the meantime, on the ground that the
warrant by virtue of which the search was made is null and void, being
illegal and against the Constitution. A similar petition was later filed in the
same case by the Salakan Lumber Co., Inc., the same agents of the
Bureau of Internal Revenue having also seized some books belonging to it
by virtue of the above-mentioned search warrant.

CFI Manila through Judge Jaranilla overrule both petitions, declaring that
the art metal filing cabinet and the books and papers claimed by the
Salakan Lumber Co., Inc., would be returned to Attorney Teopisto B. Remo
and to the company, respectively, as soon as it be proven, by means of an
examination thereof to be made in the presence of the interested parties,
that they contain nothing showing that they have been used to commit
fraud against the Government. Remo appealed.

ISSUE:
WON the search warrant was valid.

RULING:
No.

The search warrant in question could not and should not in any way affect
the appellant attorney on the ground that he is not the person against
whom it had been sought. It is Santiago Sy Juco alone against whom the
search warrant could be used, because it had been obtained precisely
against him; so much so that Narciso Mendiola, who applied for it,
mentioned him expressly in his affidavit and again did so in his report to
his superior, that is, the Collector of Internal Revenue and at the trial of
this case, it was insisted that there was necessity of making the search in
the premises occupied by Santiago Sy Juco because an investigation was
then pending against him, for having defrauded the Government in its
public revenue. The doctrine laid down in the case of People vs. Rubio (57
Phil., 384), invoked against the appellant, is not applicable to the case at
bar because, unlike in the above-cited case, neither books nor record
indicating fraud were found in his possession, and it is not he against
whom the warrant was issued.

The court could not and cannot order the opening of the art metal filing
cabinet in question because, it having been proven that it belongs to the
appellant attorney and that in it he keeps the records and documents of
his clients, to do so would be in violation of his right as such attorney,
since it would be tantamount to compelling him to disclose or divulge facts
or things belonging to his clients, which should be kept secret, unless she
is authorized by them to make such disclosure, it being a duty imposed by
law upon an attorney to strictly preserve the secrets or communications
made to him.

It is manifest that the objection to the testimony of the plaintiff's attorney

as to his authority to compromise was properly overruled. The testimony
was to the effect that when the attorney delivered the policies to the
administrator, he understood that there was a compromise to be effected,
and that when he informed the plaintiff of the surrender of the policies for
that purpose the plaintiff made no objection whatever. The evidence is
sufficient to show that the plaintiff acquiesced in the compromise
settlement of the policies. Having agreed to the compromise, he cannot
now disavow it and maintain an action for the recovery of their face value.

For the foregoing reasons the judgment appealed from is affirmed,

with costs. So ordered.
 Uy chico v. Union Life Assurance Society

FACTS:
The plaintiff and his brother took over the business and continued it
under the same name, “Uy Layco.” The plaintiff purchased his brother’s
interest in the business and continued to carry on the business under the
father’s name. Sometime before the date of the fire, “Uy Layco” was heavily
indebted and subsequent thereto the creditors of the estate of the
plaintiff’s father. During the course of these proceedings, the plaintiff’s
attorney surrendered the policies of insurance to the administrator of the
estate, who compromised with the insurance company for one-half their
face value, or P6,000. This money was paid into court and is now being
held by the sheriff. The plaintiff seeks to recover the face value of two
insurance policies upon a stock of dry goods destroyed by fire. The plaintiff
now brings this action, maintaining that the policies and goods insured
belonged to him and not to the estate of his deceased father and alleges
that he is not bound by the compromise effected by the administrator of
his father’s estate.
The defendant insurance company sought to show that the plaintiff had
agreed to compromise settlement of the policies, and for that purpose
introduced evidence showing that the plaintiff’s attorney had surrendered
the policies to the administrator with the understanding that such a
compromise was to be effected. The plaintiff was asked, while on the
witness stand, if he had any objection to his attorney’s testifying
concerning the surrender of the policies, to which he replied in the
negative. The attorney was then called for that purpose. Whereupon,
counsel for the plaintiff formally withdrew the waiver previously given by
the plaintiff and objected to the testimony of the attorney on the ground
that it was privileged.

ISSUE:
Whether the testimony in question is privilege communication?

HELD:
Of the very essence of the veil of secrecy which surrounds communications
made between attorney and client, is that such communications are not
intended for the information of third persons or to be acted upon by them,
put of the purpose of advising the client as to his rights. It is evident that a
communication made by a client to his attorney for the express purpose of
its being communicated to a third person is essentially inconsistent with
the confidential relation. When the attorney has faithfully carried out his
instructions be delivering the communication to the third person for whom
it was intended and the latter acts upon it, it cannot, by any reasoning
whatever, be classified in a legal sense as a privileged communication
between the attorney and his client. It is plain that such a communication,
after reaching the party for whom it was intended at least, is a
communication between the client and a third person, and that the
attorney simply occupies the role of intermediary or agent.
 Rinconada Telephone Co., Inc. v. Buenviaje

FACTS:
For and in consideration of the sum of P12,500. 00 in the form of shares of
stocks totalling 125 at P100.00 per share, respondent Francisco Imperial,
on July 30, 1971, orally conveyed to petitioner, a certificate of public
convenience and necessity to operate a telephone company in Iriga City
issued to him by the defunct Public Service Commission (now Land
Transportation Franchising and Regulatory Board). After the agreement,
petitioner started to operate under the strength of said certificate. It was
only on October 14, 1971 that petitioner and respondent Imperial,
executed the deed of sale pursuant to their earlier agreement.
On September 21, 1972, respondent Imperial again sold the same
certificate to herein respondent Iriga Telephone Company, Inc. (ITELCO)

This second sale was approved by the then Public Service Commission. By
reason of the second sale, petitioner charged respondent Imperial of Estafa
before the then CFI (now RTC) of Manila. Petitioner also filed with the then
CFI of Iriga City two (2) actions against respondent Imperial, one for
breach of contract with damages and the other, for annulment of Deed of
Sale with damages. Both cases were assigned to respondent judge and
petitioner was represented by Atty. Luciano Maggay.

Because his guilt was not proven beyond reasonable doubt, respondent
Imperial was absolved in the criminal case. He then moved for the
dismissal of the civil cases pending before respondent judge on the ground
of res judicata. 5 Petitioner opposed the motion but nevertheless
respondent judge granted the same in two (2) orders dated September 16
and 29, 1977.
Petitioner sought reconsideration but respondent judge refused to
reconsider the orders of dismissal. Thus petitioner filed a notice of appeal
and appeal bond. Respondent Imperial opposed the appeal because the
same was filed out of time. Respondent judge in an order dated January
23, 1978 denied the notice of appeal. In agreement with respondent
Imperial, the trial court said.

This is so for the order of dismissal dated September 18, 1977 (sic) was
shown to have been received by Atty. Luciano Maggay for Rinconada
Telephone Co. on October 11, 1977, and 28 days thereafter, or on
November 8, 1978, Atty. Benjamin Santos, another counsel for the same
party filed a Motion for Reconsideration which was denied by proper order
on January 23, 1978. The aforesaid latest order was received for
Rinconada Telephone Co., Inc. through Atty. Maggay, who has been shown
in the records to be still a counsel of record for the same party on
February 2, 1978. Since the notice of Appeal and Appeal Bond appear to
have been filed on April 19, 1978 and the Record on Appeal only on June
7, 1978, and not on February 4, 1978, which was the last and 30th day
reglementary period for interposing the contemplated.

ISSUE:
Whether or not respondent judge committed grave abuse of discretion,
amounting to lack of jurisdiction in denying petitioner's notice of appeal.

RULING:
The court ruled in the affirmative.

The right of client to terminate his relations with his counsel is universally
recognized. Such termination may be with or without cause. The light of a
client to terminate the authority of his counsel includes the right to make
a change or substitution at any stage of the proceedings. To be valid, any
such change or substitution must be made: a) upon written application; b)
with written consent of the client; c) upon written consent of the attorney
to be substituted; d) in case the consent of attorney to be substituted
cannot be obtained there must be at least a proof of notice that the motion
for substitution has been served upon him in the manner prescribed by
the rules (Section 26, Rule 138, Rules of Court).

Undisputedly, there was no valid substitution in cases at bar. Neither can

it be said that Atty. Maggay formally withdrew as counsel for petitioner in
the cases. Therefore, he continued to represent petitioner and he remained
the counsel of record and was for all legal purposes, petitioners' attorney
upon whom respondent court's processes may be served. When a party is
represented by counsel, notice should be made upon the counsel of record
at his given address in the absence of notice of change of address. Since
he was the last to appear before any application for substitution was filed,
Atty. Maggay remained responsible for the conduct of petitioner's cause.
Despite the filing of Atty. Santos of a motion for reconsideration, copy of
which he furnished the opposing counsel, Atty. Maggay is still considered
counsel of record. Not having formally withdrawn as counsel, the order
denying the notice of appeal and appeal bond was deemed properly served
upon Atty. Maggay.

However, to the mind of the Court, there are circumstances present in

these cases which warrant a relaxation of the foregoing rule and
jurisprudence. It cannot be denied that respondent judge recognized Atty.
Santos as petitioner's new counsel. This is apparent when the trial court
sent Atty. Santos a copy of the order considering the motion for
reconsideration for resolution and also when it referred to Attys. Maggay
and Raneses as petitioner's former counsels and Atty. Santos as the new
counsel of petitioner in its order denying reconsideration. Having
acknowledged Atty. Santos as the new counsel of petitioner, there is
a clear case of negligence when said lawyer was not furnished copy of
the order denying reconsideration as a copy of the order considering
that motion for resolution was furnished to petitioner thru said
lawyer.

In view of respondent judge's recognition of Atty. Santos as new counsel

for petitioner without even a valid substitution or withdrawal of
petitioner's former counsel, said new counsel logically awaited for service
to him of any action taken on his motion for reconsideration. Respondent
judge's sudden change of posture in insisting that Atty. Maggay is the
counsel of record is, therefore, a whimsical and capricious exercise of
discretion that prevented petitioner and Atty. Santos from taking a timely
appeal from said order. Clearly, respondent judge committed grave
abuse of discretion, amounting to lack of jurisdiction in denying
petitioner's notice of appeal. While it is desirable that the Rules of Court
be faithfully and even meticulously observed, courts should not be so
strict about procedural lapses that do not really impair the administration
of justice especially when such strict compliance was apparently relaxed
by the trial court itself. If the rules are intended to insure the orderly
conduct of litigation it is because of the higher objective they seek which is
the protection of substantive right of the parties.

ACCORDINGLY, the writs prayed for are GRANTED. Respondent trial

court is hereby ordered to allow the appeal of petitioner from the
orders dismissing Civil Cases No. IR-265 and IR-578.
SO ORDERED.