12. Acquisition of Properties Subject of Litigation

8/16/2019 12. Acquisition of Properties Subject of Litigation

1/15

cquisition of properties

cquisition of properties

subject of litigationubject of litigation

Problem Areas in Legal Ethics

Arellano University School of Law – Arellano Law Founation!"#$%!"#&

1


2/15

'ontingent fee arrangement oes not

ontingent fee arrangement oes not

violate rticle #()# *$+ of the 'ivil 'oeiolate rticle #()# *$+ of the 'ivil 'oe

• ,ence- a contract between a lawyer an his client stipulating acontingent fee is not covere by sai prohibition uner becausethe payment of sai fee is not mae uring the penency of

the litigation but only after jugment has been renere in

the case hanle by the lawyer. /n fact- uner the #)00 'oe ofProfessional 1esponsibility- a lawyer may have a lien over funsan property of his client an may apply so much thereof as

may be necessary to satisfy his lawful fees an isbursements. %Fabillo an 2ana v. /A' 3.1. 4o. L%&0050 6#))#7

2


3/15

Limitations of contingent fee

imitations of contingent fee

• As long as the lawyer oes not e8ert unue influence on hisclient- that no frau is committe or imposition applie- orthat the compensation is clearly not e8cessive as to amount toe8tortion- a contract for contingent fee is vali anenforceable. 9oreover- contingent fees were implielysanctione by 4o. #5 of the 'anons of Professional Ethics whichgoverne lawyer%client relationships when the contract of services was entere into between the Fabillo spouses an 9urillo. %Fabillo an 2ana v. /A' 3.1. 4o. L%&0050 6#))#7

3


4/15

ppearance of impropriety if juge

ppearance of impropriety if juge

purchase property after litigation

urchase property after litigation

• Finally- while it is true that responent :uge i not violate paragraph $- Article #()# of the 4ew 'ivil 'oe in acquiring by purchase a portion ofLot ##0(%E which was in litigation in his court- it was- however- improperfor him to have acquire the same . ,e shoul be remine of 'anon 5of the 'anons of :uicial Ethics which requires that;


5/15

2he property must be the very subject

he property must be the very subject

of litigation for rticle #()# to apply

f litigation for rticle #()# to apply

• /t is true that 'anon 4o. #" of the 'anons of Professional Ethicsprohibits the lawyer from purchasing any interest in the

subject%matter of the litigation which he is conucting- an

rticle #()#- paragraph $- of the 4ew 'ivil 'oe prohibits himfrom acquiring by purchase or assignment the property an rights which may be the object of any litigation in which he may ta>e partby virtue of his profession. ?ut in those cases where theseprovisions were applie- the rights or properties purchase by

the lawyer were the very subject of the litigation hanle by

him. % 3uevara v. 'alalang- A.9. 4o. &0# 6#)0!7

•

5


6/15

Levie property in satisfaction of

evie property in satisfaction of

amages can be properly acquire by

amages can be properly acquire by

lawyerawyer

• /n the case at bar- the lot in which responent acquire rights by

assignment was not the subject of 'ivil 'ase 4o. !#@# in which heapprove *sic+ as counsel for ?ernabe Flores an others. 2he saicase was purely one for amages an i not involve the lot inquestion. 2he lot was simply levie upon on e8ecution after jugment was renere in favor of the plaintiffs. 2herefore

rticle #()# of the 4ew 'ivil 'oe i not apply .'onsequently- responent ha not violate the sai provision oflaw. % 3uevara v. 'alalang- A.9. 4o. &0# 6#)0!7

6


7/15

'ontB

• /t was not professional misconuct or unethical practice forthe responent to acquire the rights an interests of his client tothe (5) square meter parcel of lan subject of the aministrativecharges because the lan was not involve in the litigation he washanling. 2he lan was acquire by ?ernabe Flores in an e8ecutionsale conucte to satisfy the jugment secure in the course of'ivil 'ase 4o. !#@#. 2he case hanle by the responent was foramages. % 3uevara v. 'alalang- A.9. 4o. &0# 6#)0!7

7


8/15

Cithrawal of the amount eposite in

ithrawal of the amount eposite in

orer to pay attorneyAs fees violates

rer to pay attorneyAs fees violates

rticle #()# of the 4''rticle #()# of the 4''

• 2he withrawal of the amount eposite in orer to pay attorneys fees topetitioners counsel- Atty. De 3uman- :r.- violates Article #()# of the 'ivil'oe which forbis lawyers from acquiring by assignment- property an

rights which are the object of any litigation in which they may ta>e part byvirtue of their profession. Furthermore- 1ule #" of the 'anons ofProfessional Ethics provies that the lawyer shoul not purchase anyinterest in the subject matter of the litigation which he is conucting.G2he assaile transaction falls within the prohibition because the Deeassigning the amount of P&@!-)""."" to Atty. De 3uman- :r.- as part of his

attorneys fees was e8ecute uring the penency of this case with the'ourt of Appeals. /n his 9otion to /ntervene- Atty. De 3uman- :r.- notonly asserte ownership over sai amount- but li>ewise praye that thesame be release to him. % Pabugais v. Sahijwani 3.1. 4o. #$&0(& 6!""(7

8


9/15

Even if litigant voluntarily assigne the

ven if litigant voluntarily assigne the

amount

mount

• 2hat petitioner >nowingly an voluntarily assigne the subjectamount to his counsel i not remove their agreement withinthe ambit of the prohibitory provisions. % Pabugais v. Sahijwani3.1. 4o. #$&0(& 6!""(7

9


10/15

ssignment of property violates

ssignment of property violates

rticle #()#

rticle #()#

• Ce agree with the /nvestigating 'ommissioner=s opinion that theprohibition applies when the lawyer has not pai money for it anthe property was merely assigne to him in consieration of legalservices renere at a time when the property is still the subject ofa pening case. % Hronio v. Atty. Euarte- A.9. 4o. 5!#& 6#))!7

10


11/15

Prohibition still applies even if lessee is

rohibition still applies even if lessee is

a separate juriical person

separate juriical person

• 2hus- even if the parties esignate as lessees in the assaile leasecontracts were the


12/15

9ortgage contract inclue in the

prohibition

• 2o state that mortgages are not inclue within the prohibition isto open the oor to an inirect circumvention of that statutoryinjunction- acquisition of the property being merely

postpone till eventual foreclosure .• 1esponent asserts further that Article #()#6$7 oes not apply to

jugment creitors of which- he claims- he was one. Unerorinary circumstances- the argument of responent coul beconsiere plausible. Unfortunately- however- as heretofore

e8plaine- the mortgage was e8ecute in violation of rticle#()#6$7 so that this Article has a irect bearing on this case anresponent cannot escape its provision. ,aving violate the same-he cannot be consiere in the general run of a jugment creitor.% Fornila- et. al. v. 12' ?ranch #&(- 3.1.4o. L%@!5"& 6#)0)7

12


13/15

9ere eman for elivery of the

ere eman for elivery of the

litigate property oes not

itigate property oes not

violate the ruleiolate the rule

• /n the instant case- there was no actual acquisition of the property

in litigation since the responent only mae a written eman forits elivery which the complainant refuse to comply. 9ereeman for elivery of the litigate property oes not cause

the transfer of ownership- hence- not a prohibite transaction within the contemplation of Article #()#. Even assuming arguenothat such eman for elivery is unethical- responent=s act oesnot fall within the purview of Article #()#. % 1amos v. Atty. 4gaseo- A.'. 4o. &!#" 6!""(7

13


14/15

'ertiorari proceeing still bars

ertiorari proceeing still bars

purchase of property uner rticle #()#

urchase of property uner rticle #()#

• /n the case at bar- while it is true that Atty. Arsenio Fer. 'abantingpurchase the lot after finality of jugment- there was still apening certiorari proceeing. thing is sai to be inlitigation not only if there is some contest or litigation over it

in court- but also from the moment that it becomes subject to

the juicial action of the juge . % Ialencia v. Atty. 'abanting- A.9. 4o. #5"!- #5)# an #$(5 6#))#7

14


15/15

2han> you for your attentionJJ

15

Documents

12. Acquisition of Properties Subject of Litigation