THIRD DIVISION

[G.R. No. 124074. January 27, 1997]

RESEARCH and SERVICES REALTY, INC., petitioner, vs. COURT OF APPEALS and MANUEL S. FONACIER, JR., respondents.

D E C I S I O N

DAVIDE, JR., J.:

This petition for review on certiorari under Rule 45 of the Rules of Court questions the propriety of the award for, and the reasonableness of the amount of, attorney's fees granted in favor of the private respondent by the Regional Trial Court (RTC) of Makati City, Branch 64,i[1] in Civil Case No. 612,ii[2] which the Court of Appeals affirmed in its decisioniii[3] of 31 March 1995 in CA-G.R. CV No. 44839.

The undisputed facts are as follows:

On 3 November 1969, the petitioner entered into a Joint Venture Agreement with Jose, Fidel, and Antonia Carreon. Under the said agreement, the petitioner undertook to develop, subdivide, administer, and promote the sale of the parcels of land owned by the Carreons. The proceeds of the sale of the lots were to be paid to the Philippine National Bank (PNB) for the landowner's mortgage obligation, and the net profits to be shared by the contracting parties on a 50-50 basis.

On 4 April 1983, the Carreons and a certain Patricio C. Sarile instituted before the RTC of Makati City an action against the petitioner for rescission of the Joint Venture Agreement. They prayed therein that pending the hearing of the case, a writ of preliminary 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from selling the lots subject of the agreement and that after hearing, the writ be made permanent; the agreement be rescinded; and the petitioner be ordered to pay the PNB the stipulated 15% per annum of the outstanding obligation and to pay the plaintiffs attorney's fees, exemplary damages, expenses of litigation, and costs of suit. This case was docketed as Civil Case No. 612 at Branch 64 of the said court.

In its answer, which was prepared and signed by Atty. Apolonio G. Reyes, the petitioner sought the denial of the writ of preliminary injunction, the dismissal of the complaint, and payment in its favor of (a) P10 million by way of actual damages; (b) P5 million by way of return to the petitioner of the amount advanced to the Carreons, payments to the PNB, and cost of the work on the subdivision; (c) 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 under the terms of its Performance Bond in favor of the National Housing Authority; (e) P50,000.00 as attorney's fees; and (f) costs of suit.

On 9 April 1985, the petitioner engaged the services of private respondent Atty. Manuel S. Fonacier, Jr., iv[4] who then entered his appearance in Civil Case No. 612.

While the said case was pending, or on 24 July 1992, the petitioner, without the knowledge of the private respondent, entered into a Memorandum of Agreement (MOA)v[5] with another land developer, Filstream International, Inc. (hereinafter Filstream). Under this MOA, the former assigned its rights and obligations under the Joint Venture Agreement in favor of the latter for a consideration of P28 million, payable within twenty-four months.

On 31 March 1993, the petitioner terminated the legal services of the private respondent. At the time the petitioner had already received P7 million from Filstream.

Upon knowing the existence of the MOA, the private respondent 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.vi[6]

After hearing the motion, the trial court issued an order dated 11 October 1993 directing the petitioner to pay the private respondent the sum of P600,000.00 as attorney's fees on the basis of quantum meruit.

The trial court justified the award in this manner:

Insofar as material to the resolution of this Motion the records of this case show that movant Atty. Fonacier became the counsel of defendant Research in May 1985 while this case has been in progress. (Records, p.770). By this time also, the defendant Research has been enjoined by the Court from executing Contracts To Sell involving Saranay Homes Subdivision . . . . (Order dated December 3, 1984, Records pp. 625-626). However, the said counsel for defendant Research prepared for the latter various pleadings and represented it in Court (See Records after May 1985). Until his services were terminated the lawyer client relationship between Atty. Fonacier and Research was governed by a "contract" embodied in a letter addressed to Atty. Fonacier on April 19, 1985 [sic], the pertinent portion of which is reproduced below, as follows . . .

x x x

Soon after said letter, cases were referred to him including this case. In accordance with their agreement, there were instances that Research gave Atty. Fonacier ten (10%) percent of the amount received as the latter's attorney's fees pursuant to their agreement.

The instant case in which defendant is praying to be awarded attorney's fees, is an action for rescission of the Joint Venture Agreement between plaintiffs, Patricio Sarile, et al., as owners of a parcel of land and defendant Research & Service Realty, Inc., as developer of the land. At the time Atty. Fonacier entered his appearance as counsel for defendant Research, the Court has issued a preliminary injunction against Research. Thus all developmental and commercial activities of defendant had to stop. In this regard, Atty. Fonacier did spade work towards persuading the plaintiffs to agree to the relaxation of the effects of the injunction to pave the way to a negotiation with a third-party, the Filstream. Atty. Fonancier's efforts were complemented by the efforts of his counterpart in the plaintiff's side. The third-party Filstream Inc., became the assignee of defendant Research. In this connection, a memorandum of agreement was entered into between them. By the terms of agreement, defendant Research will be receiving from the third party Filstream International, Inc. (Filstream) the following amount. . . .

x x x

The termination of the legal services of Atty. Fonacier was made definite on March 31, 1993 at which time the Memorandum of Agreement which Research entered into with Filstream, Inc., has already been effective. By this time also, defendant Research has already received the first two stipulated

consideration of the agreement in the total sum of Six Million (P6,000,000.00). The necessary and legal consequence of said "Memorandum of Agreement" is the termination of the case insofar as plaintiff Patricio Sarile, et al. and defendant Research is concerned. The conclusion of the Memorandum of Agreement insofar as the cause of Research is concerned, is a legal victory for defendant Research. What could have been a loss in investment has been turned to a legal victory. Atty. Fonancier's effort contributed to defendant's victory, albeit outside the Court which would not have been possible without the legal maneuvering of a lawyer.

The dismissal of the case before this Court will come in a matter of time considering that plaintiffs, with the assumption by the third party, Filstream Inc., of what were supposed to be the obligations to them of defendant Research pursuant to their Joint Venture Agreement, is no longer interested in pursuing the rescission.

It is a matter of record that Atty. Fonacier is the last of the three lawyers who handled this case. Moreover it is Atty. Fonacier who contributed to the forging of the memorandum of agreement as testified to by Atty. Rogel Atienza one of the two retained counsels of plaintiffs.

Considering the importance which is attached to this case, certainly it would not be fair for Atty. Fonacier if his attorney's fees in this case would be equated only to the measly monthly allowance of (P800.00) Pesos and office space and other office facilities provided by defendant Research. Ten (10%) per cent of the amount which Research had received from Filstream at the time of the termination of a lawyer-client relationship between Atty. Fonacier and Research or P600,000.00 will be a just and equitable compensation for Atty. Fonancier's legal services, by way of quantum meruit (See Cabildo v. Provincial Treasurer, Ilocos Norte, et al., 54 SCRA 26).vii[7]

In its Orderviii[8] of 12 January 1994, the trial court denied the petitioner's motion for reconsideration of the above order.

The petitioner appealed to the Court of Appeals. In its Appellant's Brief,ix[9] the petitioner alleged that the private respondent was not entitled to attorney's fees under the retainer contract. Moreover, the private respondent did not exert any effort to amicably settle the case, nor was he even present during the negotiations for the settlement of the same. There was, therefore, no legal and factual justification for the private respondent's "fantastic and unreasonable claim for attorney's fees of P600,000.00."

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 wherein there was to be contingent compensation for any award arising from any lawsuit handled by him. According to him, Civil Case No. 612 was not the only "non-collection" case he handled for the petitioner. There was a "right of way" dispute where the petitioner was awarded P50,000.00, and the latter paid him P5,000.00, or 10% of the award as attorney's fees. He thus stressed that since under the memorandum of agreement the petitioner was to receive P28 million, he should be entitled to 10% thereof or P2.8 million as attorney's fees.

In its decision x[10] of 31 March 1995, the Court of Appeals affirmed the challenged order of the trial court. It ratiocinated as follows:

Movant-appellee, on the other hand, correctly argues that it was the clear intention of appellant and counsel to compensate the latter for any legal services rendered by him to the former. Stated

otherwise, it was never the intention of the parties in the instant appeal that counsel's services shall be free or to be rendered ex gratia.

xxx

It must in addition be underscored that the retainer contract of April 9, 1985 is the law that governs the relationship between appellant and appellee. In fact, the following provisions squarely and categorically supports the award of P600,000.00 to counsel, to wit:

Minimal allowance of P800 per month plus contingent fees and collection cases (case to case basis) aside from the attorney's fee recovered from any law suit.

(Paragraph 3, Retainer Contract)

In an American jurisprudence on this point cited in local annotation on the Canon of Professional Ethics, it was held that "if a lawyer renders valuable services to one who receives the benefits thereof, a promise to pay a reasonable value is presumed, unless such services were intended to 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 services intended to be free or not?" If it is not free, then, appellant must simply pay. The 10% contingent fee of the amount collected and/or to be collected in Civil Case No. 612 of the lower court, is, to Our mind fair and reasonable. As ruled by the Supreme Court in the case of Cosmopolitan Insurance Co. vs. Angel Reyes (G.R. L-20199, Nov. 23, 1965) 15% was even deemed reasonable. xi[11]

The petitioner filed a motion for reconsideration xii[12] on the ground among other things, that the decision is contrary to the evidence, as the trial court granted the claim for attorney's fees based on quantum meruit, yet, the Court of Appeals granted the same on a contingent basis which it based on an erroneous quotation and comprehension of the following provision of the retainer contract:

Minimal allowance of P800.00 per month plus contingent fees on collection cases (case to case basis) aside from the attorney's fees recovered from any law suit. (underscoring ours) xiii[13]

In its decision, the Court of Appeals substituted the word "on" after "contingent fees" with the word "and." Under the aforequoted paragraph, the private respondent was entitled to attorney's fees on 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 lawsuit. xiv[14] Since Civil Case No. 612 is not a collection case but an action for rescission of a contract, then the aforequoted paragraph is not applicable as a basis for awarding attorney's fees to the private respondent. xv[15]

Finding nothing new in the motion for reconsideration, the Court of Appeals denied it in the re-solution xvi[16] of 15 February 1996.

The petitioner then came to us via this petition for review wherein it contends that

I

RESPONDENT COURT OF APPEALS HAD DECIDED THE CASE NOT IN ACCORD WITH LAW AND THE UNDISPUTED FACTS OF THE CASE.

II

RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN AWARDING ON CONTINGENT BASIS RESPONDENT-APPELLEE'S ATTORNEY'S FEES ON THE BASIS OF A MEMORANDUM OF AGREEMENT IN WHICH HE HAD NO PARTICIPATION IN THE NEGOTIATION AND PREPARATION THEREOF.

III

RESPONDENT COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN AWARDING EXCESSIVE AND UNREASONABLE ATTORNEY'S FEES.

IV

THE TRIAL COURT AND THE RESPONDENT COURT OF APPEALS HAVE NO JURISDICTION TO SATISFY ATTORNEY'S CHARGING LIEN ON A SUM OF MONEY THAT THE COURT HAD NO AUTHORITY TO DISPOSE OF AND OVER WHICH THE TRIAL COURT HAD MADE NO FINAL ADJUDICATION.

The petitioner's more important argument in support of the first error is the Court of Appeals' misquotation of the provision in the retainer contract regarding attorney's fees on contingent basis, which the petitioner had stressed in its motion for reconsideration. The petitioner maintains that under the contract, attorney's fees on contingent basis could only be awarded in collection cases, and Civil Case No. 612 is not a collection case. Hence, the Court of Appeals erred in affirming the award on that basis, while the trial court was correct in applying the principle of quantum meruit.

In its second assigned error, the petitioner asserts that the private respondent admitted in his Urgent Motion to Direct Payment of Attorney's Fees and/or Register Attorney's Charging Lien that he had not participated in the negotiations and preparation of the memorandum of agreement, thus:

Despite the dishonest concealment, by the light of Providence coupled with a streak of good luck, counsel discovered in the first week of March 1993 that the parties had respectively entered into a meaningful agreement with a third-party as early as July 27, 1992, which in the case of client, case in the form of a "Memorandum of Agreement" (MOA) . . . . xvii[17]

The third assigned error is but a logical consequence of the second, 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 thereof from 1985 to 1993," the P600,000.00 attorney's fees, whether on contingent basis or quantum meruit, is excessive and unreasonable.

In the fourth imputed error, the petitioner argues that the memorandum of agreement was never submitted to the trial court, and the trial court never made any disposition or adjudication over 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 intimated in its challenged order. Necessarily then, there would be no money adjudication in favor of the petitioner as the defendant therein. Since such lien is collectible only from an award of money that a court would adjudicate in a judgment rendered in favor of the attorney's client pursuant to Section 37, Rule 138 of the Rules of Court, it would follow that no attorney's charging lien could be validly entered.

We uphold the petitioner, but not necessarily on the strength of it arguments.

The parties are in agreement that the lawyer-client relationship between the petitioner and the private respondent, Atty. Manuel S. Fonacier, Jr., was governed by a retainer contract dated 9 April 1985. The petitioner's undertakings thereunder are outlined as follows:

I. CORPORAT[ION]:

1. Corporation will provide the following:

a. Office space — airconditioned

b. Furnishings, tables, executive chairs, visitor's chair & steel filing cabinet

c. Telephone facilities and partial secretarial services.

2. Legal service referrals by the corporation to its clients for additional income of the lawyer.

3. Minimal allowance of P800 per month plus contingent fees on contingent fees on collection cases (case to case basis) aside from the attorney's fees recovered from any lawsuit.

4. That in case of legal problems to be attended to outside Metro Manila and Suburbs, the corporation shall defray expenses for transportation, lodging and other legal expenses incidental in the case. xviii[18]

An analysis of the contract clearly shows that it was a general retainer, since its primary purpose was to secure beforehand the services of the private respondent for any legal problem which might afterward arise. xix[19] The fixed retaining fee was P800.00 a month. A retaining fee is a preliminary fee paid to ensure and secure a lawyer's future services, to remunerate him for being deprived, by being retained by one party, of the opportunity of rendering services to the other party and of receiving pay from him. In the absence of an agreement to the contrary, the retaining fee is neither made nor received in consideration of the services contemplated; it is apart from what the client has agreed to pay for the services which he has retained him to perform. xx[20]

In the retainer contract in question, there was no intention to make the retaining fee as the attorney's fees for the services contemplated. This is evident from the provision allowing additional attorney's fees in collection cases consisting of (1) a "contingent fee" and (2) whatever the petitioner might recover as attorney's fees in each case. The latter could only refer to the attorney's fees which the court might award to the petitioner in appropriate cases.

While the contract did not mention non-collection cases, it is, nevertheless, clear therefrom that such cases were not excluded from the retainership, as borne out by the provision requiring the private respondent to "make appearances in Court for cases involving the corporation or any allied cases pertaining to the latter." As to such cases, there was no specific stipulation of additional attorney's fees. Nevertheless, nothing therein shows that the private respondent agreed to render professional service in such cases gratuitously. The absence then of the stipulation of additional attorney's fees cannot be construed as a bar to the collection of additional attorney's fees in non-collection cases.

Two basic principles come into play. The first is as stated earlier, viz., that the retaining fee is neither made nor received in consideration of the services contemplated unless the contract itself so provides. The second is that, unless expressly stipulated, rendition of professional services by a lawyer is for a fee or compensation and is not gratuitous. This is implicit from the opening clause of Section 24, Rule 138

of the Rules of Court, which states that "[a]n attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services . . .," and by virtue of the innominate contract of facio ut des (I do and you give), as enunciated by this Court in Corpus v. Court of Appeals, xxi[21] thus:

Moreover, the payment of attorney's fees . . . may also be justified by virtue of the innominate contract of facio ut des (I do and you give) which is based on the principle that "no one shall unjustly enrich himself at the expense of another." Innominate contracts have been 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 the parties, by the general provisions or principles of obligations and contracts, by the rules governing the most analogous nominate contracts, and by the customs of the people. The rationale of this article was stated in the 1903 case of Perez vs. Pomar (2 Phil. 682).

In Perez v. Pomar , xxii[22] this Court stated:

[B]ut whether the plaintiff's services were solicited or whether they were offered to the defendant for his assistance, inasmuch as these services were accepted and made use of by the latter, we must consider that there was a tacit and mutual consent as to the rendition of the services. This gives rise to the obligation upon the person benefited by the services to make compensation therefor, since the bilateral obligation to render service as interpreter, on the one hand, and on the other to pay for the services rendered, is thereby incurred. (Arts. 1088, 1089, and 1262 of the Civil Code).

Accordingly, as to non-collection cases where the petitioner was either a plaintiff or a defendant, the private respondent could still collect attorney's fees, apart from his regular retaining fee, on the basis of any-supplemental agreement or, in its absence, under the principle of quantum meruit. There was no such supplemental agreement in this case.

We cannot sustain the private respondent's theory that he could collect attorney's fees on contingent basis because in the other "non-collection" cases he handled for the petitioner' he was paid on 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, and no judgment has yet been rendered in favor of the petitioner. The amount in the memorandum of agreement could not be made the basis of a "contingent fee" in the said case for at least three reasons. First, in his own Urgent Motion to Direct Payment of Attorney's Fees and/or Register Attorney's Charging Lien, the private respondent based the contingent fee not only in Civil Case No. 612 but in a "multitude of peripheral cases," and the contingent fee would become due and collectible only if and when the petitioner obtains a judgment in his favor in Civil Case No. 612. The second paragraph of page 3 of the said motion reads as follows:

Hence, from May 1985 and continuously thru the years without interruption and surviving a series of no less than five (5) changes of Presiding Judges, the undersigned counsel labored tirelessly in handling the defense of client. In addition to the instant lawsuit, a multitude of peripheral cases, civil, criminal and administrative, arising from the non-delivery of titles by client on fully paid lots in the subdivision project were also filed as a consequence, not only against defendant but also against its President and Chief Executive Officer (CEO). Needless to state, the undersigned was designated to handle majority of these cases for both, where he appeared and conducted trial without any "appearance fees" for more than eight (8) long years solely relying on the contingent fee in case of recovery in the instant main case. xxiii[23] (underscoring supplied for emphasis)

Second, the amount of P28 million, which Filstream agreed to pay the petitioner, was not a judgment or award in favor of the petitioner in Civil Case No. 612. It was the consideration of the assignment, transfer, and conveyance to Filstream of all the petitioner's "rights, interest and participation embodied and specified in the Joint Venture Agreement (Annex "A") and in all the eight hundred seventy-five (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 that they agreed to the assignment of the petitioner's rights, interest, and participation in the Joint Venture Agreement. While paragraph 10 of the memorandum of agreement provides that the petitioner

shall cause to sign a JOINT MOTION TO DISMISS, together with the CARREONS regarding Civil Case No. 612 of the Regional Trial Court of Makati and to further DISMISS, 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 filed by lot buyers against it now pending with the HLURB

the fact remains that no such motion to dismiss has been filed yet in Civil Case No. 612, and there is no assurance whatsoever that the plaintiffs therein will sign a joint motion to dismiss. Third, as correctly posited by the petitioner, the private respondent had no participation in the negotiations leading to, and in the preparation of, the memorandum of agreement.

Indisputably then, the private respondent's attorney's fee on "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 the expiration of his retainer contract on 31 March 1993.

Quantum meruit simply means "as much as he deserves." xxiv[24] In no case, however, must a lawyer be allowed to recover more than what is reasonable pursuant to Section 24, Rule 138 of the Rules of Court, which provides:

SEC. 24.Compensation of attorneys, agreement as to fees. — An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject-matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable.

This Court had earlier declared the following as circumstances to be considered in determining the reasonableness of a claim for attorney's fees: (1) the amount and character of the service rendered; (2) labor, time, and trouble involved; (3) the nature and importance of the litigation or business in which the services were rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property affected by the controversy or involved in the employment; (6) the skill and experience called for in the performance of the services; (7) the professional character and social standing of the attorney; (8) the results secured; and (9) whether the fee is absolute or contingent, it being recognized that an attorney may properly charge a much larger fee when it is contingent than when it is not. xxv[25]

Rule 20.1, Canon 20 of the Code of Professional Responsibility enumerates the following factors which should guide a lawyer in determining his fees:

(a) The time spent and the extent of the services rendered or required;

(b) The novelty and difficulty of the questions involved;

(c) The importance of the subject matter;

(d) The skill demanded;

(e) The probability of losing other employment as a result of acceptance of the proffered case;

(f) The customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs;

(g) The amount involved in the controversy and the benefits resulting to the client from the service;

(h) The contingency or certainty of compensation;

(i) The character of the employment, whether occasional or established; and

(j) The professional standing of the lawyer.

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 1993 order do not confirm that the private respondent proved by either testimonial or documentary evidence that the award of P600,000.00 was reasonable. The private respondent's testimony thereon was crucial. Yet, it does not appear from the 11 October 1993 order that he took the witness stand. From the Minutes of the trial court attached to the Rollo of CA-G.R. CV No. 44839, xxvi[26] it appears that only Atty. Atienza and Mr. Suazo gave oral testimony on the motion.

It necessarily follows then that the 11 October 1993 order has insufficient factual basis, and the trial court committed grave abuse of discretion in arbitrarily fixing the private respondent's attorney's fees at P600,000.00. The affirmance of the said order by the Court of Appeals premised on the provision in the retainer contract regarding contingent fee is thus fatally flawed.

The interest for both the petitioner and the private respondent demands that the trial court should conduct further proceedings in Civil Case No. 612 relative to the private respondent's motion for the payment of attorney's fees and, thereafter, fix it in light of Section 24, Rule 138 of the Rules of Court; Rule 20.1, Canon 20 of the Code of Professional Responsibility; and the jurisprudentially established guiding principles in determining attorney's fees on quantum meruit basis.

WHEREFORE, the instant petition is GRANTED. The challenged Decision of 31 March 1995 of the Court of Appeals in CA-G.R. CV No. 44839 and the Order of 11 October 1993 of the Regional Trial Court of Makati, Branch 64, in Civil Case No. 612 are hereby SET ASIDE. The trial court is further DIRECTED to set for further hearing the private respondent's Urgent Motion to Direct Payment of Attorney's Fees and/or Register Attorney's Charging Lien and thereafter to fix the private respondent's attorney's fees in Civil Case No. 612 as of 31 March 1993 when his contract with the petitioner was effectively terminated, taking into account Section 24, Rule 138 of the Rules of Court; Rule 20.1, Canon 20 of the Code of Professional Responsibility; and the jurisprudentially established guiding principles in determining attorney's fees on quantum meruit basis.

i

iiUlep vs. Legal Clinic A.C. No. L-533

Topics:

“A lawyer, making known his legal services shall only use true, honest, fair, dignified and objective information or statement of facts.”—Canon 3, Code of Professional Responsibility

“A lawyer shall not use or permit the use of any false, fraudulent, misleading, deceptive, undignified, self-laudatory or unfair statement or claim regarding his qualifications for legal services.”—Rule 3.01., Code of Professional Responsibility

Facts of the Case:

In 1984, The Legal Clinic was formed by Atty. Rogelio Nogales. Its aim, according to Nogales, was to move toward specialization and to cater to clients who cannot afford the services of big law firms.

Atty. Ulep files a complaint against The Legal Clinic because of its advertisements which states undignified phrases like-- “Secret Marriage? P560.00 for a valid marriage. Information on DIVORCE, ANNULMENT, ABSENCE, VISA. The Legal Clinic, Inc. Please call: 5210767, 5217232, 5222041 8:30am to 6:00pm 7th Floor Victoria Bldg. UN Avenue, Manila.”

It is also alleged that The Legal Clinic published an article entitled Rx for Legal Problems in The Philippine Star because it is composed of specialists that can take care of a client’s situation no matter how complicated it is, especially on marriage problems like the Sharon and Gabby situation.

Citing John Bates vs. The State Bar of Arizona, Atty. Nogales said that it should be allowed based on this American Jurisprudence. According to him, there is nothing wrong with making known the legal services his Legal Clinic has to offer.

Issue:

Whether or not such advertisement may be allowed.

Ruling:

The Legal Clinic is composed mainly of paralegals, which is undoubtedly beyond the domain of the paralegals. As stated in a previous jurisprudence, practice of law is only reserved for the members of the Philippine bar, and not to paralegals. As with the Legal Clinic’s advertisements, the Code of Professional Responsibility provides that “a lawyer in making known his legal services must use only honest, fair, dignified and objective information or statement of facts.

A lawyer cannot advertise his talents in a manner that a merchant advertise his goods. The Legal Clinic promotes divorce, secret marriages, bigamous marriages which are undoubtedly contrary to law.

The only allowed form of advertisements would be 1. Citing your involvement in a reputable law list, 2. An ordinary professional card 3. Phone directory listing without designation to a lawyer’s specialization.

TOPIC: Legal Ethics, attorney’s fees

FACTS:

Fifty-two employees sued the Province of Cebu and Governor Rene Espina for reinstatement and backwages imploring Atty. Pacquiao as counsel who was later replaced by Atty. Sesbreno. The employees and Atty. Sesbreno agreed that he is to be paid 30% as attorney’s fees and 20% as expenses taken from their back salaries. Trial court decided in favor of the employees and ordered the Province of Cebu to reinstate them and pay them back salaries. The same was affirmed in toto by the Court of Appeals and ultimately the Supreme Court. A compromise agreement was entered into by the parties in April 1979. The former employees waived their right to reinstatement among others. The Province of Cebu released P2,300,000.00 to the petitioning employees through Atty. Sesbreno as “Partial Satisfaction of Judgment.” The amount represented back salaries, terminal leave pay and gratuity pay due to the employees. Ten employees filed manifestations before the trial court asserting that they agreed to pay Atty. Sesbreno 40% to be taken only from their back salaries. The lower court issued two orders, with which petitioner complied, requiring him to release P10,000.00 to each of the ten private respondents and to retain 40% of the back salaries pertaining to the latter out of the P2,300,000.00 released to him. On March 28, 1980, the trial court fixed the attorney’s fees a total of 60% of all monies paid to the employees. However, trial court modified the award after noting that petitioner’s attorney’s lien was inadvertently placed as 60% when it should have been only 50%. Atty. Sesbreno appealed to the Court of Appeals claiming additional fees for legal services but was even further reduced to 20%.

ISSUE:

Whether the Court of Appeals had the authority to reduce the amount of attorney’s fees awarded to petitioner Atty. Raul H. Sesbreño, notwithstanding the contract for professional services signed by private respondents

HELD:

Yes. The Supreme Court noted that the contract of professional services entered into by the parties 6 authorized petitioner to take a total of 50% from the employees’ back salaries only. The trial court, however, fixed the lawyer’s fee on the basis of all monies to be awarded to private respondents. Fifty per cent of all monies which private respondents may receive from the provincial government, according to the Court of Appeals, is excessive and unconscionable, not to say, contrary to the contract of professional services. What a lawyer may charge and receive as attorney’s fees is always subject to judicial control. A stipulation on a lawyer’s compensation in a written contract for professional services ordinarily controls the amount of fees that the contracting lawyer may be allowed, unless the court finds such stipulated amount unreasonable unconscionable. A contingent fee arrangement is valid in this jurisdiction and is generally recognized as valid and binding but must be laid down in an express contract. if the attorney’s fees are found to be excessive, what is reasonable under the circumstances. Quantum meruit, meaning “as much as he deserves,” is used as the basis for determining the lawyer’s professional fees in the absence of a contract. The Supreme Court averred that in balancing the allocation of the monetary award, 50% of all monies to the lawyer and the other 50% to be allocated among all his 52 clients, is too lop-sided in favor of the lawyer. The ratio makes the practice of law a commercial venture, rather than a noble profession. It would, verily be ironic if the counsel whom they had hired to help would appropriate for himself 50% or even 60% of the total amount collectible by these employees. 20% is a fair settlement.

Petition is DENIED

Entitlement to Attorney’s FeesRILLORAZA, AFRICA, DE OCAMPO AND AFRICA vs.EASTERN TELECOMMUNICATIONS, PHILS., INC.G.R. No. 104600, July 2, 1999FACTS:

Eastern Telecommunications, Phils., Inc. (ETPI) represented by thelaw firm SAGA, filed with the Regional Trial court a complaint for the recovery or revenue shares against PLDT. Atty. Rilloraza, a partner of the firm, appeared for ETPI.

After ETPI rested its case, it paid SAGA the billed amount. The latter wasdissolved and the junior partners formed RADA, which took over as counsel in the casefor ETPI. ETPI signed a retainer agreement with counsel wherein it was stated that incases of collection or judicial action, “our attorney’s fees shall be 15% of the amountscollected or the value of the property acquired or liability saved.” The retainer agreementwas terminated in 1988. the next day, RADA filed a notice of attorney’s lien. In its notice,RADA informed the court that there were negotiations toward a compromise betweenETPI and PLDT.In 1990, the parties arrived at an amicable settlement and the same wasentered as a judgment. The petitioner (RADA) filed a motion for the enforcement of attorney’s lien.

ISSUE:

Is RADA entitled to the awards of attorney’s fees they are claiming?

HELD:

RADA is entitled to attorney’s fees but the Supreme Court remanded thecase to the court of origin for the determination of the amount of attorney’s fees to whichthe petitioner is entitled.Atty. Rilloraza handled the case from its inception until ETPI terminated thelaw firm’s services in 1988. Petitioner’s claim for attorney’s fees hinges on two grounds:first, the fact that Atty. Rilloraza personally handled the case when he was working for SAGA, and second, the retainer agreement.Whether there is an agreement or not, the courts shall fix a

reasonablecompensation which lawyers may receive for their professional services.” “A lawyer hasthe right to be paid for the legal services he has extended to his client, whichcompensation must be reasonable.” A lawyer would be entitled to receive what he meritsfor his services. Otherwise stated, the amount must be determined on aquantum meruit basis.

iiiFACTS: This is a case of a lawyer who borrowed money without paying it back. Atty. Erlinda Abalos obtained a loan of P20,000.00 from Priscila Toledo, payable within six months from date, plus interest of 5% per month. Respondent executed a Promissory Note to guarantee the payment of said obligation. Respondent failed to pay her obligation despite repeated demands of the complainant. Ms.Toledo sought the help of the Integrated Bar of the Philippines (IBP), which referred the matter to the Commission on Bar Discipline. Although, the respondent received an order from the Commission, she did not do anything about it. The Commission passed a resolution recommending the suspension from the practice of law of respondent for a period of six months “for her flouting resistance to lawful orders of the Court and illustrating her despiciency of her oath of office as a lawyer.”

ISSUE: Whether or not IBP has jurisdiction to suspend Atty. Abalos.

HELD: YES. The general rule is that a lawyer may not be suspended or disbarred, and the court may not ordinarily assume jurisdiction to discipline him, for misconduct in his non-professional or private capacity. The recommendation to suspend respondent from the practice of law for six months to be grossly disproportionate to the act complained of , i.e., her failure to appear before the Commission on Bar Discipline of the IBP. IBP does not ignore the fact that by virtue of one’s membership in the IBP, a lawyer thus submits himself to the disciplinary authority of the organization. It was, however, still necessary for respondent to acknowledge the orders of the Commission in deference to its authority over her as a member of the IBP. Her wanton disregard of its lawful orders subjects her to disciplinary sanction.

WHEREFORE, respondent Atty. Erlinda Abalos is hereby SUSPENDED from the practice of law for a period of ONE MONTH from the date of the finality of this Resolution.

ADEZ REALTY, INCORPORATED, petitioner

vs.

HONORABLE COURT OF APPEALS, PRESIDING JUDGE, RTC, BR.79, Morong, Rizal, PROVINCIAL SHERIFF OF RIZAL, Morong, Rizal, REGISTER OF DEEDS, Quezon City,

and AGUENDO EUGENIO, respondents.

FACTS:

The case originates from a petition for reconstitution of title over a parcel of land. Section 13 of R.A. 26 (An Act providing for special procedure for the reconstitution of Torrens certificates of title lost or destroyed) on which the petitioner bases one of his causes of action, provides among others that notice should be given to the occupants or persons in possession of the property. Compliance therewith is a material requirement for granting the petition.

ALDEZ Realty represented by Atty. Benjamin M. Dacanay lost the case in CA and on appeal for certiorari to the Highest Tribunal, by negligence or mistake inserted the phrase “without notice to the actual occupants of the property, ALDEZ Realty.” This action, certainly, making it appear that respondent Court of Appeals found that no notice was given to the occupants of subject property- when in fact it did not make such finding. Atty. Dacanay intercalates a material fact in the judgment of the court a quo thereby altering and modifying its factual findings with the apparent purpose of misleading the Court in order to obtain favorable judgment, and thus failing to live up to the standards expected of a member of the Bar.

ISSUES:

I. WON, Intercalating material fact in the judgment of a court a quo a valid ground for disbarment.

II. WON, lawyers are bound by the mistakes made by their office employees.

RULING:

I.

It is the bounded duty of lawyers to check, review and recheck the allegation in their pleadings, more particularly the quoted portions, and ensure that the statements therein are accurate and the reproductions faithful, down to the last word and even punctuation mark. Material intercalating of facts is a clear indication not merely of carelessness in lifting a portion of the assailed decision but a malicious attempt to gain advantage in the sporting arena of fairplay and, more importantly, to deceive and misguide the Court, which is the final arbiter of litigations.

The distortion of facts committed by counsel, with the willing assistance of his secretary, is a grave offense and should not be treated lightly, not only because it may set a dangerous precedent, rather, because it is a clear and serious violation of one’s oath as member of the Bar. Rule 10.02, Canon 10, Chapter III, of the Code of Professional Responsibility directs that “a lawyer shall not willingly misquote or misrepresent the contents of a paper, the language or the argument of opposing counsel, or the text of a decision or authority, or knowingly cite as a law a provision already rendered inoperative by repeal or amendment, or assert as a fact that which has not been proved”. Misquoting or intercalating phrases in the text of a count decision constitutes willful disregard of the lawyer’s solemn duty to act at all times in manner consistent with the truth. A lawyer should never venture to mislead the court by false statements or quotations of facts or laws. The repercussions in this case are far-reaching and more serious.

II.

The legal profession demands that lawyers thoroughly go over pleadings, motions, and other documents dictated or prepared by them, type or transcribed by their secretaries or clerks, before filing them with the court. If a client is bound by the acts of his counsel, with more reason should counsel be bound by the acts of his secretary who merely follows his orders.

The passing of the buck stance of the counsel was brushed off as simply unsatisfactorily and incredible. Making the law secretary, clerk or messenger the scapegoat or patsy for the delay in filing of the pleading, motion and

other paper and for the lawyer’s dereliction of duty is a common alibi of practicing lawyer. Like the alibi of the accused in criminal cases, counsel’s shifting of the blame to his office employee is usually a concoction utilized to cover up his own negligence, incompetence, indolence and ineptitude.

WHEREFORE, the Court find Atty. Benjamin M. Dacanay, counsel for petitioner, guilty of intercalating a material fact in a judicial decision elevated to the court on certiorari, thereby altering its factual findings with the apparent purpose, and no other, of misleading the Court in order to obtain a favorable judgment, and thus miserably failing up to the standards expected of him as members of the Philippines Bar. CONSEQUENTLY, Atty. Benjamin M. Dacaday is hereby DISBARRED effective immediately from the practice of law.

Case Digest by: ANLIZA B. REFUGIO LLB-III

Subject: Problem Areas in Legal Ethics

JESUS M. FERRER v. ATTY. JOSE ALLAN M. TEBELIN

[A.C. No. 6590 June 27, 2005]

FACTS: On December 3, 2001, the jeepney of Jesus M. Ferrer (complainant) was involved in a vehicular accident allegedly due to the reckless driving of the driver of Global Link Multimodal Transport, Inc. (Global Link). As a result of the vehicular accident, complainant claimed to have suffered damages in the amount of P34,650.00 representing cost of repair of the jeepney and P800.00 per day representing lost earnings. The complainant sought the services of Atty. Tebelin and the latter charged the respondent and received from him the amount of P5,000.00 as acceptance fee and all the pertinent documents for his case.

The complainant later on brought to the attention of the Integrated Bar of the Philippines (IBP) his complaint against the respondent for allegedly abandoning his case and refusing to talk or see him.

Atty. Tebelin, in his answer, however expressed his willingness to return the money and denied having abandoned the case. However, again, during the proceedings, the complainant died and Atty. Tebelin was nowhere to be found in his given address.

ISSUE: Whether or not the lawyer (Atty. Tebelin) is guilty of abandoning the client’s case.

RULING: The Court held that Tebelin is liable for abandoning the case of the client by ignoring the notices sent to him at his address which he himself furnished, or to notify the IBP-CBD his new address if indeed he had moved out of his given address. His actuation betrays his lack of courtesy, his irresponsibility as a lawyer. This Court faults respondent too for welching on his manifestation-undertaking to return the P5,000.00, not to mention the documents bearing on the case, to complainant or his heirs. Such is reflective of his reckless disregard of the duty imposed on him by Rule 22.02 of the Code of Professional Responsibility:

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

Thus, the court suspended Atty. Jose Allan M. Tebelin from the practice of law for Two (2) Months and is ordered to return to complainant’s heirs the amount of P5, 000.00, with legal interest.

APEX MINING, INC. vs. CA [G.R. No. 133750 November 29, 1999]

FACTS:

The case stemmed from a complaint for damages filed against Apex Mining Corporation (hereafter APEX) and/or two (2) of its engineers. It was alleged in the complaint that the bulldozer owned by APEX, due to its negligence, damaged private respondents’ mining claim known as Tunnel T-45, thereby putting a stop to private respondents' mining operations.

During the trial for the case, an order was issued by the trial court setting the reception of evidence for the defendants, who are now the petitioners in the current case, to a later date. However, upon the arrival of the date set by the court, the petitioners’ counsel did not appear. This resulted to the court issuing an order declaring the defendants to have waived their right to present evidence in their defense. Despite due notice of the order, counsel for petitioners did not move for reconsideration of the order. This resulted to the trial court to render a decision finding APEX liable for damages but absolving the other defendants.

The counsel for the petitioners appealed from the decision to the Court of Appeals. However, it was subsequently dismissed in a resolution issued by the CA for failure to pay the docket fees within the reglementary period. Again, despite due notice, counsel for petitioners did not move for reconsideration of the dismissal of the appeal. Accordingly, the resolution became final, and an entry of judgment was made. Again petitioner's counsel was duly notified of the entry of judgment but APEX only found out about the dismissal of its petition for appeal when it was informed by a company with which it was in a joint venture. This is because the said company was ordered by the court to turn over to the clerk of court and/or the sheriff all the money & machineries due in favor of APEX.

This then leads to APEX filing a Petition for Annulment of Judgement contending that the actuation of their former counsel constituted professional chicanery (or trickery/ deception) amounting to extrinsic or collateral fraud and gross negligence properly warranting the prayed for annulment of the judgment of the trial court and that by reason of said actuation of their former counsel they have been unduly deprived of their right to be heard and to due process of law through no fault of their own.

ISSUE:

Whether or not the negligence of counsel can justify annulment of judgment.

RULING:

Yes. It is settled that the negligence of counsel binds the client. This is based on the rule that any act performed by a counsel within the scope of his general or implied authority is regarded as an act of his client. Consequently, the mistake or negligence of counsel may result in the rendition of an unfavorable judgment against the client. However, the application of the general rule to a given case should be looked into and adopted according to the surrounding circumstances obtaining. Thus, exceptions to the foregoing have been recognized by the court in cases where reckless or gross negligence of counsel deprives the client of due process of law, or when its application will result in outright deprivation of the client's liberty or property or where the interests of justice so require, and accord relief to the client who suffered by reason of the lawyer's gross or palpable mistake or negligence.

The instant case falls within the exception. Petitioners' counsel is in guilty of gross negligence in handling their case before the trial court. Records show that petitioners' former counsel did not attend the scheduled hearing for the reception of the evidence for the defense despite due notice. The law firm did not even bother to inform its client of the scheduled hearing, as a result of which both counsel and petitioners were unable to

attend the same. Worse, after the trial court issued an order declaring defendants [petitioners herein] as having waived their right to present evidence, their counsel did not take steps to have the same set aside. Although after a decision against APEX was rendered by the trial court, petitioners' counsel was able to file a timely notice of appeal. However, it failed to pay the docket fee and refused to do so despite repeated notice to pay was given by the Court of Appeals, by reason of which the appeal was dismissed. The situation was further aggravated by the fact that no action was taken by the counsel on the said dismissal, thereby allowing it to become final and executory.

If the incompetence, ignorance or inexperience of counsel is so great and the error committed as a result thereof is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the litigation may be reopened to give the client another chance to present his case. Similarly, when an unsuccessful party has been prevented from fully and fairly presenting his case as a result of his lawyer's professional delinquency or infidelity the litigation may be reopened to allow the party to present his side. Where counsel is guilty of gross ignorance, negligence and dereliction of duty, which resulted in the client's being held liable for damages in a damage suit, the client is deprived of his day in court and the judgment may be set aside on such ground.

In view of the foregoing circumstances, higher interests of justice and equity demand that petitioners be allowed to present evidence on their defense. Petitioners may not be made to suffer for the lawyer's mistakes and should be afforded another opportunity, at least, to introduce evidence on their behalf. To cling to the general rule in this case is only to condone rather than rectify a serious injustice to a party whose only fault was to repose his faith and entrust his innocence to his previous lawyers.

JOSE A. ROLDAN v. ATTY. NATALIO PANGANIBAN and ATTY. JUANITO NOEL

administrative case for disbarment

FACTS:

A Complaint for Recovery of Possession and Ownership with Damages was filed by the complainant, Civil Case No. 144860-CV M.I.T. Branch 25 “Jose A. Roldan vs. Ramon Montano & Robert Montano” which the MTC dismissed. In this case, complainant stated that his lawyers were Atty. Panganiban and Atty. Noel. It is also in this case that complainant claims that Atty. Noel failed to present a receipt showing that complainant made a partial payment of P10,000.00 of the P40,000.00 price of the subject property. Atty. Noel alleged that such receipt does not exist. Complainant, however, claims that he gave the receipt to Atty. Noel and this piece of document proves that complainant bought the subject property ahead of the defendants. Thus, to the mind of the complainant, the non-presentation of the subject receipt is suppression of evidence.

The RTC on appeal, dismissed it again. Atty. Noel received the adverse RTC decision on November 13, 1995 and on the following day, he instructed his secretary to contact the complainant to inform him of the adverse RTC decision with the directive for the complainant to call up Atty. Noel. Atty. Noel, through his secretary, called the complainant only 11 days after the receipt of the adverse RTC decision and was given the impression that he has still one month within which to file an appeal. Complainant instructed Atty. Noel to prepare an appeal to the higher court but the latter told the former that there is no need to appeal the case because, first, the decision of the court is “correct,” and second, he is obligated by the code of professional responsibilities to refrain from filing a frivolous and unmeritorious appeal. The complainant said that he paid the respondents visits on December 1, 4, 5, 7 and 8, 1995, to follow up the filing of the appeal to the higher court but that he was not able to talk to Atty. Noel; the last of this instance was when complainant took all the records of the

case and never came back, which according to Atty. Noel led him to believe that complainant will not appeal the adverse RTC decision. Atty. Noel further states that, in any event, his relationship with the complainant ended upon the issuance of the decision and that the complainant should not expect that he would still appeal the case. It was only when complainant went to the RTC that he learned that he lost the case because the period of the appeal has lapsed.

Complainant filed an administrative case for disbarment and charges that respondent lawyers reneged in their duties and obligations towards him as their client, especially in the complainant’s right to appeal to the higher court after losing his case in the lower courts.

ISSUE:

1. Should Atty. Panganiban be disbarred?

2. Whether there was a deliberate attempt to suppress evidence on the part of Atty. Noel, to the prejudice of complainant.

3. Whether it was correct for Atty. Noel to refuse to file a further appeal of the case to the Court of Appeals by way of petition for review despite the manifest desire of the complainant to do so. Should Atty. Noel be disbarred?

RULING:

1. No. From a careful reading of the records of this case, it appears that Atty. Panganiban and Atty. Noel used to be law associates. However, Atty. Panganiban went on leave from the practice of law since October 18, 1993 when he was designated as acting mayor of Laurel, Batangas due to the indefinite leave of absence filed by the mayor and by reason of his election as mayor of the said municipality in 1995. It is thus clear that Atty. Panganiban was not an active associate of the law firm, since at that time, he was already on leave from the practice of law. Not once did Atty. Panganiban appear for the complainant nor did he sign any document pertaining with the aforesaid case. Probably, complainant included him as respondent because he thought that he is practicing law and is still an associate of Atty. Juanito P. Noel, due to the fact that on some occasions complainant might have seen him or they might have talked casually in the law office from which he was on leave in his practice of law because he drops there from time to time to meet visitors from Laurel who are living and who have problems in Metro Manila; and he has not received any single centavo from the complainant. Hence,

there was no lawyer-client relationship between Roldan and Atty. Panganiban. Necessarily, the complaint against Atty. Panganiban must be dismissed.

2. No. We find credence to the allegation of Atty. Noel that the subject receipt was not in existence at the time he prepared the complaint or even at the time of presentation of evidence. The complaint was verified by the complainant stating the fact that he caused its preparation, that he read the same and attested that the contents thereof are true and correct. If complainant’s allegation that he gave the receipt to Atty. Noel at that time, and considering the importance of the subject receipt to his case, he should have called the attention of Atty. Noel that there was no allegation of the existence of the subject receipt.

3. Yes. We find for the complainant. It is noted that the complainant has been very diligent in following up the status of the case. From the time, complainant filed the case with the MTC up to the time he appealed with the RTC, complainant was vigilant with his rights constantly in contact with Atty. Noel. As stated elsewhere, Atty. Noel received the adverse RTC decision on November 13, 1995 and the complainant was informed about the adverse RTC decision on November 24, 1995. Hence, complainant has still four days to file an appeal. However,

Atty. Noel failed to ensure that the client was advised appropriately. Atty. Noel entrusted entirely with his secretary the duty to inform the complainant about the adverse decision. And the secretary informed the complainant rather late and worse with the wrong information that the complainant has still a month within which to file an appeal. This resulted to the lapse of the prescriptive period to appeal without complainant having availed of the said remedy.

A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. If only Atty. Noel’s position of not filing an appeal because it would only be frivolous has been properly communicated to the complainant at the earliest possible time so that the complainant would be able to seek the services of another lawyer for help, it would have been commendable. A lawyer’s duty is not to his client but to the administration of justice; to that end, his client’s success is wholly subordinate; and his conduct ought to and must always be scrupulously observant of law and ethics.”

We cannot also accept the reasoning of Atty. Noel that he should not be expected to file an appeal for the complainant because their lawyer-client relationship ended with the RTC decision. First, a lawyer continues to be a counsel of record until the lawyer-client relationship is terminated either by the act of his client or his own act, with permission of the court. Until such time, the lawyer is expected to do his best for the interest of his client. Second, Atty. Noel admitted that complainant instructed him to file an appeal with the higher court. Even assuming that their contract does not include filing of an appeal with the higher courts, it is still the duty of Atty. Noel to protect the interest of the complainant by informing and discussing with the complainant of the said decision and his assessment of the same. A lawyer shall represent his client with zeal within the bounds of the law. It is the obligation of counsel to comply with his client’s lawful request. Counsel should exert all effort to protect the interest of his client.

The facts of the case show that Atty. Noel failed to live up to his duties as a lawyer pursuant to the Code of Professional Responsibility. We conclude that a suspension from the practice of law for one month is just penalty under the circumstances.

JESUS M. FERRER v. ATTY. JOSE ALLAN M. TEBELIN

[A.C. No. 6590 June 27, 2005]

FACTS: On December 3, 2001, the jeepney of Jesus M. Ferrer (complainant) was involved in a vehicular accident allegedly due to the reckless driving of the driver of Global Link Multimodal Transport, Inc. (Global Link). As a result of the vehicular accident, complainant claimed to have suffered damages in the amount of P34,650.00 representing cost of repair of the jeepney and P800.00 per day representing lost earnings. The complainant sought the services of Atty. Tebelin and the latter charged the respondent and received from him the amount of P5,000.00 as acceptance fee and all the pertinent documents for his case.

The complainant later on brought to the attention of the Integrated Bar of the Philippines (IBP) his complaint against the respondent for allegedly abandoning his case and refusing to talk or see him.

Atty. Tebelin, in his answer, however expressed his willingness to return the money and denied having abandoned the case. However, again, during the proceedings, the complainant died and Atty. Tebelin was nowhere to be found in his given address.

ISSUE: Whether or not the lawyer (Atty. Tebelin) is guilty of abandoning the client’s case.

RULING: The Court held that Tebelin is liable for abandoning the case of the client by ignoring the notices sent to him at his address which he himself furnished, or to notify the IBP-CBD his new address if indeed he had moved out of his given address. His actuation betrays his lack of courtesy, his irresponsibility as a lawyer. This Court faults respondent too for welching on his manifestation-undertaking to return the P5,000.00, not to mention the documents bearing on the case, to complainant or his heirs. Such is reflective of his reckless disregard of the duty imposed on him by Rule 22.02 of the Code of Professional Responsibility:

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

Thus, the court suspended Atty. Jose Allan M. Tebelin from the practice of law for Two (2) Months and is ordered to return to complainant’s heirs the amount of P5, 000.00, with legal interest.

iv

vSpouses Serafin Aquino and Rumelia Aquino vs. Court of Appeals, Government of Service Insurance System, Et. al

FACTS: Petitioners filed a civil case against the Government Service Insurance System (GSIS) for specific performance, damages and annulment with prayer for preliminary injunction with the RTC of Malolos, Bulacan but was dismissed on the ground that it failed to state a cause of action against the GSIS. Petitioners filed a notice of appeal with the RTC but was dismissed as well for failure to file an appellant’s brief within the reglementary period. They then filed a motion to “recall Entry and Judgment and to reinstate appeal etc.,” with the Court of Appeals, but the same was denied. A motion for reconsideration was filed but also denied by the CA on the ground that it was beyond the power of the Court to modify the dismissal since the order dismissing the appeal had become final and executory. Hence, this Petition for Review in Certiorari under Rule 45 of the Rules of Court.

Petitioners argue that they were never notified by their counsel of record, Atty. Mala, of the notice to file an appellant’s brief since he was incapacitated as he was in coma when said notice was served upon him and added that although Atty. Rosalino Barican continued to be served with the copies of the resolutions, Atty. Barican withdrew as their counsel of record while the case was still pending before the RTC of Malolos, Bulacan.

ISSUES: 1. Whether or not there was a change of attorney in the case at bar.

2. Whether or not the CA erred in serving copies of resolution upon the appellant’s former counsel de parte.

RULING: 1. NO. Sec. 26, Rule 38 of the Rules of Court states the proper procedure for the withdrawal of a lawyer as counsel in a case.

“Section 26- Change of Attorneys- An attorney may retire at anytime from an action or special proceeding, by the written consent of his client filed in the court. He may also retire at anytime from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be

entered on the docket of the court in place of the former one, and the written notice of the change shall be given to the adverse party.”

Unless the procedure above mentioned is complied with, the attorney of record is regarded as the counsel who should be served with the copies of the judgments, orders and pleadings and who should be held responsible for the case.

Again, in cases of substitution of attorneys the following requisites must be complied with:

1. Written application for substitution;

2. Written consent of the client; and

3. A written consent of the attorney to be substituted.

In the case at bar, no proof was presented by the petitioners to show compliance with the above procedural requirements for the withdrawal of Atty. Barican and the substitution of Atty. Mala on his stead, no written application for substitution or written consent of the client was filed in the court.

2. NO. There was a proper service of the resolution of the CA on the petitioners since there was no proper change of attorneys in the case at bar. There was effective service upon the petitioners, Atty. Barican continued to be their counsel of record. The dismissal then, became final and executory after the lapse of fifteen days.

Petition DENIED.

The Court's Ruling

We agree with the Commissioner.

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

Rule 16.01 of the Code of Professional Responsibility ("the Code") provides that a lawyer shall account for all money or property collected for or from the client. Acceptance of money from a client establishes an attorney-client relationship and gives rise to the duty of fidelity to the client's cause.7 Money entrusted to a lawyer for a specific purpose, such as for filing fee, but not used for failure to file the case must immediately be returned to the client on demand.8 Paguinto returned the money only after Pariñas filed this administrative case for disbarment.

Paguinto should know that as a lawyer, he owes fidelity to the cause of his client. When a lawyer accepts a case, his acceptance is an implied representation that he possesses the requisite academic learning, skill and ability to handle the case. The lawyer has the duty to exert his best judgment in the prosecution or defense of the case entrusted to him and to exercise reasonable and ordinary care and diligence in the pursuit or defense of the case.

A lawyer should give adequate attention, care and time to his case. Once he agrees to handle a case, he should undertake the task with dedication and care. If he fails in this duty, he is not true to his oath as a lawyer. Hence, a lawyer must accept only as much cases as he can efficiently handle, otherwise his clients' interests will suffer.9 It is not enough that a lawyer possesses the qualification to handle the legal matter. He must also give

adequate attention to his legal work.

The lawyer owes it to his client to exercise his utmost learning and ability in handling his cases. A license to practice law is a guarantee by the courts to the public that the licensee possesses sufficient skill, knowledge and diligence to manage their cases.10 The legal profession demands from a lawyer the vigilance and attention expected of a good father of a family.

In Gamalinda vs. Alcantara,11 we ruled:

A lawyer owes fidelity to the cause of his client and must be mindful of the trust and confidence reposed in him. He shall serve his client with competence and diligence, and his duty of entire devotion to his client's cause not only requires, but entitles him to employ every honorable means to secure for the client what is justly due him or to present every defense provided by law to enable the latter's cause to succeed. An attorney's duty to safeguard the client's interests commences from his retainer until his effective release from the case or the final disposition of the whole subject matter of the litigation. During that period, he is expected to take such reasonable steps and such ordinary care as his client's interests may require.

And failure to do so violates Canon 18 of the Code.12

Rule 18.01 of the Code is clear. A lawyer shall not undertake a legal service that he is not qualified to render. Rule 18.02 of the Code provides that a lawyer shall not handle any legal matter without adequate preparation. He has the duty to prepare for trial with diligence and deliberate speed. Rule 18.03 of the Code also provides that a lawyer shall not neglect a legal matter entrusted to him and his negligence shall render him liable.

One last point. Pariñas executed an Affidavit of Withdrawal13 of the complaint stating that she was withdrawing the administrative complaint against Paguinto after realizing that "said complaint against the respondent arose due to misapprehension of facts, misunderstanding and miscommunication." Paguinto, on the other hand, submitted a Manifestation and Motion apologizing to Pariñas for his actuations and admitting that he was "solely to be blamed." A compromise or withdrawal of charges does not terminate an administrative complaint against a lawyer,14 especially in this case where the lawyer admitted his misconduct.

Pariñas's affidavit of withdrawal of the disbarment case does not exonerate Paguinto in any way. We reiterate our ruling in Rayos-Ombac v. Rayos15 that –

[A] proceeding for suspension or disbarment is not in any sense a civil action where the complainant is a plaintiff and the respondent lawyer is a defendant. Disciplinary proceedings involve no private interest and afford no redress for private grievance. They are undertaken solely for the public welfare. x x x The attorney is called upon to answer to the court for his conduct as an officer of the court. The complainant or the person who called the attention of the court to the attorney's alleged misconduct is in no sense a party, and has generally no interest in the outcome except as all good citizens may have in the proper administration of justice

WHEREFORE, we find respondent Atty. Oscar P. Paguinto GUILTY of violation of the Code of Professional Responsibility. Accordingly, we penalize Atty. Oscar P. Paguinto with SUSPENSION for SIX (6) MONTHS from the practice of law effective upon receipt of this Decision.

Let copies of this Decision be furnished the Office of the Bar Confidant, to be appended to respondent's personal record as an attorney; the Integrated Bar of the Philippines; and all courts in the country for their information and guidance.

The Case

This is a complaint for disbarment filed by Melvin D. Small (complainant) against Atty. Jerry Banares1 (respondent) for failure to render legal services and to return the money received for his legal services.

The Facts

On 30 August 2001, complainant engaged the services of respondent in connection with several complaints to be filed against one Lyneth Amar (Amar). Complainant paid respondent P20,000 as acceptance fee.2

On 4 September 2001, complainant gave respondent P60,000 as filing fees for the cases against Amar.3 Respondent then wrote a demand letter for Amar and talked to Amar on the phone. Respondent also informed complainant that he would be preparing the documents for the cases. Complainant consistently communicated with respondent regarding the status of the cases. But respondent repeatedly told complainant to wait as respondent was still preparing the documents.

On 5 January 2002, complainant required respondent to present all the documents respondent had prepared for the cases against Amar. Respondent was not able to present any document. This prompted complainant to demand for a full refund of the fees he had paid respondent.4 Complainant even hired the services of Atty. Rizalino Simbillo to recover the money from respondent. But respondent failed to return the money. Hence, complainant filed a case for disbarment before the Integrated Bar of the Philippines (IBP) against respondent.

On 15 October 2004, IBP Director for Bar Discipline Rogelio A. Vinluan ordered respondent to submit his answer to the complaint. Respondent did not file an answer despite receipt of the order.

On 21 January 2005, IBP Investigating Commissioner Wilfredo E.J.E. Reyes (IBP Commissioner Reyes) notified the parties to appear before him for a mandatory conference on 3 March 2005. Only complainant appeared at the conference. As there was no proof that respondent received the notice, IBP Commissioner Reyes reset the mandatory conference to 30 March 2005 and, later, to 14 April 2005. Respondent was warned that, if he fails to appear at the conference, the case will be considered submitted for resolution.1awphi1.net

On the 14 April 2005 conference, only complainant appeared despite respondent’s receipt of the notice. The Commission on Bar Discipline considered the case submitted for resolution.

The IBP’s Report and Recommendation

On 14 July 2005, IBP Commissioner Reyes submitted his Report and Recommendation (Report) with the finding that respondent failed to render any legal service to complainant despite having been paid for his services. The Report considered complainant’s evidence sufficient to find respondent guilty of violating Canons 16,5 18,6 and 197 of the Code of Professional Responsibility (Code). IBP Commissioner Reyes recommended the imposition on respondent of a penalty of suspension from the practice of law for two years and that respondent be ordered to return complainant’s P80,000.

In a Resolution dated 12 November 2005, the IBP Board of Governors adopted and approved the Report. The IBP Board of Governors forwarded the instant case to the Court as provided under Section 12(b), Rule 139-B8 of the Rules of Court.

The Court’s Ruling

We sustain the findings and recommendation of the IBP.

The Code provides that a lawyer shall serve his client with competence and diligence.9 The Code states that a lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the client’s request for information.10

The records show that after receiving P80,000 respondent was never heard from again. Respondent failed to give complainant an update on the status of the cases. Moreover, it appears that respondent failed to file the appropriate cases against Amar. Respondent’s failure to communicate with complainant was an unjustified denial of complainant’s right to be fully informed of the status of the cases. When respondent agreed to be complainant’s counsel, respondent undertook to take all the necessary steps to safeguard complainant’s interests.11 By his inaction, respondent disregarded his duties as a lawyer.

The Code also mandates that every lawyer shall hold in trust all moneys of his client that may come into his possession.12 Furthermore, a lawyer shall account for all money received from the client and shall deliver the funds of the client upon demand.13

In Meneses v. Macalino,14 the Court ruled that:

When a lawyer receives money from the client for a particular purpose, the lawyer is bound to render an accounting to the client showing that the money was spent for the intended purpose. Consequently, if the lawyer does not use the money for the intended purpose, the lawyer must immediately return the money to the client.15

Respondent specifically received P80,000 for his legal services and the filing fees for the cases against Amar. Since respondent failed to render any legal service to complainant and he failed to file a case against Amar, respondent should have promptly accounted for and returned the money to complainant. But even after demand, respondent did not return the money. Respondent’s failure to return the money to complainant upon demand is a violation of the trust reposed on him and is indicative of his lack of integrity.16

Moreover, respondent’s misconduct is aggravated by his failure to file an answer to the complaint and his refusal to appear at the mandatory conference. The IBP rescheduled the mandatory conference twice to give respondent a chance to answer the complaint. Still, respondent failed to appear, exhibiting his lack of respect for the IBP and its proceedings.17

The relation of attorney and client is highly fiduciary, requiring utmost good faith, loyalty, and fidelity on the part of the attorney. In this case, respondent clearly fell short of the demands required of him as a member of the Bar.

WHEREFORE, we find respondent Atty. Jerry Banares GUILTY of violating Canons 16 and 18 and Rules 16.01, 16.03, and 18.04 of the Code of Professional Responsibility. Accordingly, we SUSPEND respondent from the practice of law for two years effective upon finality of this Decision. We ORDER respondent to RETURN, within 30 days from notice of this decision, complainant’s P80,000, with interest at 12% per annum from the date of promulgation of this decision until full payment. We DIRECT respondent to submit to the Court proof of payment within fifteen days from payment of the full amount.

Let copies of this decision be furnished the Office of the Bar Confidant, to be appended to respondent’s personal record as attorney. Likewise, copies shall be furnished to the Integrated Bar of the Philippines and all courts in the country for their information and guidance.

For alleged gross negligence in handling two civil cases, a complaint1 for disbarment was filed by complainant spouses Antonio and Norma Soriano against Atty. Reynaldo P. Reyes.

Complainants alleged that sometime in the latter part of 1990, they engaged the services of respondent in a case they filed against Peninsula Development Bank entitled, "Norton Resources and Development Corporation, et al. v. Peninsula Development Bank." The case was for Declaration of Nullity with Injunction and/or Restraining Order before the Regional Trial Court (RTC) of Davao City, Br. 13, docketed as Civil Case No. 20-465-90.2 While the case was pending, respondent reassured complainants that he was diligently attending to the case and will inform them of the status of their case.

In 1994, complainants again engaged the services of respondent in a case they filed against the Technology and Livelihood Resource Center entitled, "Spouses Antonio M. Soriano and Norma Soriano v. Technology and Livelihood Resource Center" for Declaration of Nullity with Injunction and Temporary Restraining Order before the RTC of Davao City, Br. 16, docketed as Civil Case No. 22-674-94.3 During the pendency of the second case, complainants inquired from respondent the status of the earlier Civil Case No. 20-465-90, the latter informed them that the same was still pending and/or ongoing.

Later, complainants learned that Civil Case No. 20-465-90 was dismissed4 on 16 December 1991 for failure of the respondent to file a pre-trial brief. The dismissal reads:

On record is a pre-trial brief filed by defendant, thru counsel, Atty. Marlon B. Llauder, and this morning a supplemental pre-trial brief was submitted by defendant’s counsel. Atty. Reynaldo Reyes, counsel for the plaintiffs is present in Court but he moved for a suspension of the pre-trial conference this morning for the reason that plaintiffs are proposing to amicably settle this case. Defendant’s counsel vehemently objected to the postponement of the pre-trial conference and instead moved for a declaration of plaintiffs as non-suited for the reason that up to this time, plaintiffs have not submitted their pre-trial brief in violation of the Order of the Court, dated October 11, 1991, wherein plaintiffs’ counsel was afforded five (5) days from said date within which to submit to Court plaintiffs’ pre-trial brief.

The said motion is well-taken for the reason that the records failed to show that plaintiffs filed pre-trial brief. They are thus, declared as non-suited.

This case is hereby ordered dismissed.5 (Underscoring supplied.)

A motion6 for reconsideration was filed but the same was denied in an Order dated 27 April 1992.

As to Civil Case No. 22-674-94, complainants likewise found out that the case was dismissed for failure to prosecute. The order reads:

The records show that summons with a copy of the complaint have been served upon the defendant on May 11, 1994, but plaintiffs did not file the necessary pleadings in order to prosecute the same.

IN VIEW HEREOF, for failure to prosecute this case is ordered DISMISSED.

Furnish copy of this order, Atty. Reynaldo P. Reyes, plaintiffs’ counsel and defendant’s counsel, Atty. Francisco Figura.7 (Underscoring supplied.)

Upon filing of a Motion for Reconsideration, though, the case was reconsidered and reinstated8 on 15 August 1995.

Claiming that the acts of respondent greatly prejudiced and damaged them, complainants filed a Complaint for disbarment against respondent before this Court.

On 20 October 1997, the Supreme Court referred9 the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation or decision.

In his Comment,10 respondent admitted that he was hired by the complainants in the case against the Peninsula Development Bank in the latter part of 1990. He averred that Peninsula Development Bank foreclosed the property of the complainants for failure to pay monetary obligations amounting to several millions of pesos. He said that some of the properties of the complainants were foreclosed in 1989, and the one-year redemption period was to expire in the latter part of 1990. About one week before the expiration of the redemption period, the complainants, through the respondent, filed a case against the Peninsula Development Bank before the RTC of Davao City, which was docketed as Civil Case No. 20-465-90. From the time of the filing of the complaint up to the present, herein complainants are in continuous possession of the already foreclosed properties, consisting of a Ford Econovan and farm tractors. According to respondent, complainants are still holding office in the real properties subject of the foreclosure and a portion thereof is being rented by a big taxi company. He disclosed that at the time he was hired in 1990, the agreement was that he would be paid the amount of Three Hundred Thousand Pesos (P300,000.00) as attorney’s fees in five years. Respondent claimed that he assisted complainants in applying for a loan to pay off their obligations with Peninsula Development Bank but because of the numerous estafa cases filed against complainants, said loans did not materialize. Respondent further claimed that their agreed strategy was to arrange a settlement with regard to Civil Case No. 20-465-90. Respondent said he later realized that the complainants had no interest in paying their obligations to Peninsula Development Bank, and his attorney’s fees. Respondent added that they differed in opinion with regard to the handling of the case and that complainants did not understand that the filing of the case had already helped them gain time to negotiate with the bank especially on the matter of interest incurred by their loans. Finally, respondent concluded by saying that his attorney’s fees, paid in meager installments, remain outstanding and unpaid.

In their reply,11 complainants refuted respondent’s allegation of the alleged "numerous estafa cases" filed against them. Complainants averred that the certification attached by respondent showing that there were estafa cases filed against them has no bearing insofar as the disbarment case is concerned. They likewise denied that respondent assisted them in their loan application. They engaged the services of the respondent to prevent them from losing their properties to the Peninsula Development Bank and for no other reason. Finally, complainants maintained that respondent was paid his attorney’s fees.

As early as 27 June 2000, the case had already been scheduled for hearing by Commissioner Agustine V. Gonzaga of the Commission on Bar Discipline. On 18 January 2002, after several hearings, the Commission admitted the documentary evidence offered as part of the testimony of complainants. On 1 March 2002, the day respondent was ordered to present his defense evidence, he failed to appear. Counsel for the complainants moved that the respondent be deemed to have waived his right to present his evidence for failure to appear on scheduled hearing despite due notice. In the interest of substantial justice, respondent was given a period of 10 days to comment on the complainants’ motion and scheduled the case for hearing on 19 April 2002. Despite due notice, however, respondent again failed to appear, thus, the Hearing Commissioner declared that respondent was considered to have waived his right to present his defense evidence. The parties were given 20 days from 19 April 2002 to file their respective memoranda, after which the case will be deemed submitted for resolution.

Only complainants filed a memorandum.

On 28 May 2003, Investigating Commissioner Milagros V. San Juan found respondent negligent in handling the cases of complainants; hence, said Investigating Commissioner recommended that he be disbarred. The pertinent portions of the report read:

There is no question that the respondent was engaged by the complainants as their counsel in two cases, namely Civil Case No. 20-465-90 and Civil Case No. 22-674-94. The respondent accepted both cases by filing a case of Nullity with Injunction and/or Restraining Order before the Regional Trial Court Br. 13, Davao City, against Peninsula Development Bank and against Livelihood Resource Center for Declaration of Nullity with Injunction and/or Temporary Restraining Order docketed as 22-674-94, Br. 16 RTC Davao City. The failure and negligence of respondent in handling the aforementioned cases is fully reflected in the Order of the Court re: Civil Case No. 20-465-90 which reads:

On record is a pre–trial brief filed by defendant thru counsel, Atty. Marlon B. Llander and this morning a supplemental pre–trial brief was submitted by defendants’ counsel, Atty. Reynaldo Reyes, counsel for the plaintiff is present in court but he moved for a suspension of the pre–trial conference this morning for the reason that plaintiffs are proposing to amicably settle this case. Defendants’ counsel vehemently objected to the postponement of the pre–trial conference and instead moved for a declaration of plaintiff’s as non–suited for the reason that up to this time, plaintiff have not submitted their pre–trial brief in violation of the Order of the Court, dated October 11, 1991 wherein plaintiff’s counsel was afforded five (5) days time from date within which to submit to court plaintiff’s pre–trial brief.

The motion is well taken for the reason that the records failed to show that plaintiffs filed pre–trial brief. They are thus declared as non–suited.

This case is hereby ordered dismissed. "x x x Regarding Civil Case No. 22-674-94, Regional Trial Court Br. 16, Davao City in the case filed against Technology and Livelihood Resource Center the court issued an Order dated May 5, 1995 which reads:

"The record show that summons with a copy of the Complaint have been served upon the defendant on May 11, 1994, but plaintiffs did not file the necessary pleadings in order to prosecute the same."

In view hereof, for failure to prosecute this case is ordered Dismissed. "x x x The records show that the real status of the cases were kept from the complainants by respondent. Despite the dismissal of both cases due to respondent’s negligence and irresponsibility he continued receiving compensation from complainants are evidenced by the receipts and vouchers which respondent acknowledged with his signatures. (Exhibits "F", "G", "H", "H-1" and "I"). Likewise, the respondent deceived the complainant by giving them false hopes that everything was alright and there was no problem regarding the cases.

All the foregoing show that there is clear violation of his oath as a lawyer particularly Canon 17 and Canon 18 of the Code of Professional Responsibility. Thus, it is submitted that Atty. Reynaldo P. Reyes be meted the penalty of Disbarment.12

On 21 June 2003, the IBP Board of Governors adopted and approved13 the recommendation of the Investigating Commissioner.

In the interregnum, a Motion to Withdraw Testimony and Evidence14 was filed by complainant Norma B. Soriano before this Court, stating that:

1. That although the complainant in this case names the spouses Antonio Soriano and Norma B. Soriano as the complainants, it is only complainant Norma B. Soriano who has testified and presented evidence during the hearing of this case due to the untimely demise of her husband, complainant Antonio Soriano;

2. That subsequently to the undersigned complainants testimony and presentation of evidence, she has come upon information and facts that need to be reviewed and re-examine[d] in the highest interests of justice;

3. That before going into those information and facts that she came to learn after she gave her testimony before this Honorable Board, it is important to stress the following antecedent circumstances:

(a) That it was undersigned complainant’s late husband who conferred constantly with respondent Atty. Reynaldo P. Reyes;

(b) That herein complainant was not present in a conference with Atty. Reyes at the time his professional services were hired. So, it was only the deceased complainant Antonio Soriano who was familiar with the scope of professional engagement;

(c) That undersigned complainant did not participate in the conference between her late husband and respondent counsel on the agreed strategy because the late husband was the one actively managing the affairs of the family. Moreover, herein complainant was not really knowledgeable of the facts and details involved in the cases handled by respondent counsel;

(d) That for example, it was only later after her testimony that she learned that respondent was also attending to and handling the other cases of the late complainant Antonio Soriano, especially those cases filed in Makati, Complainant herein had the mistaken impression that the complainant-decedent had availed of the services of lawyers in Makati. Hence, the fees that respondent Atty. Reyes received after the cases below were for those cases in Makati;

(e) That it was a surprise for herein undersigned complainant to also learn that respondent Atty. Reyes went out of his way to accompany her late husband to a financier, who was an intimate friend of respondent, in Quezon City for the purpose (sic) sourcing the necessary funds to pay off our obligations to some creditors as the agreed strategy at the very start. Thus, it appears that respondent counsel went out of his way to help the late complainant Antonio Soriano solve his problems; and

(f) That I likewise subsequently learned that when respondent counsel became a city councilor of Davao City, he did what he can to help the late complainant Antonio Soriano have a council clearance over a parcel of land that he was selling for a memorial park.

4. That the foregoing facts and information that herein undersigned complainant learned after she gave her testimony seriously prompts her to seek the withdrawal of her testimony and her evidence in order that she can re-evaluate the same; and

5. That complainant herein is filing the instant motion in the interests of truth and justice as it is farthest from her intention to have this case resolved through an inadvertent presentation of facts that do not exactly reflect the entirety of the story and the truth, no matter how innocently and in good faith they were presented.15

The above quoted motion is tantamount to a withdrawal or desistance of the complaint.

As we have previously ruled, the affidavit of withdrawal of the disbarment case executed by a complainant does not automatically exonerate the respondent.

A case of suspension or disbarment may proceed regardless of interest or lack of interest of the complainant.16 What matters is whether, on the basis of the facts borne out by the record, the charge of negligence has been duly proved. This rule is premised on the nature of disciplinary proceedings. A proceeding for suspension or disbarment is not in any sense a civil action where the complainant is a plaintiff and the respondent lawyer is a defendant. Disciplinary proceedings involve no private interest and afford no redress for private grievance. They are undertaken and prosecuted solely for the public welfare. They are undertaken for the purpose of preserving courts of justice from the official ministration of persons unfit to practice in them. The attorney is

called to answer to the court for his conduct as an officer of the court. The complainant or the person who called the attention of the court to the attorney’s alleged misconduct is in no sense a party, and has generally no interest in the outcome except as all good citizens may have in the proper administration of justice. Hence, if the evidence on record warrants, the respondent may be suspended or disbarred despite the desistance of complainant or his withdrawal of the charges.17 Accordingly, notwithstanding the motion to withdraw evidence and testimony, the disbarment proceeding should proceed.

Looking into the merits of the complaint against respondent, we decide to modify the findings of the IBP.

As to Civil Case No. 20-465-90, records show that it was dismissed for failure of respondent to file the pre-trial brief.

Respondent’s failure to file the pre-trial brief constitutes inexcusable negligence.18 The importance of filing a pre-trial brief cannot be gainsaid. For one, the lawyers are compelled to prepare their cases in advance. They eliminate haphazard preparation. Since pre-trial is a serious business of the court, preparation of the lawyers and parties for the pre-trial in both questions of fact and of law cannot be overemphasized as an essential requirement for a pre-trial conference. They enable both parties to view the documentary evidence of the other even before they are presented in court. They enable the parties to know the testimonies of each other’s witnesses. Pre-trial briefs also apprise the courts of the additional points the parties are willing to stipulate upon, or the additional points which could be inquired into for the purpose of additional stipulations. They also apprise the court of the respective demands of the parties, thus, enabling the court to discuss more intelligently an amicable settlement between or among the parties.19 The failure to submit a pre-trial brief could very well, then, be fatal to the case of the client as in fact it is a ground for dismissal of the case. 20 For this reason, respondent’s failure to submit the pre-trial brief to the court within the given period constitutes negligence which entails disciplinary action. Not only is it a dereliction of duty to his client but to the court as well. Hence, this Court, in Spouses Galen v. Atty. Paguirigan,21 explained:

An attorney is bound to protect his client’s interest to the best of his ability and with utmost diligence. A failure to file brief for his client certainly constitutes inexcusable negligence on his part. The respondent has indeed committed a serious lapse in the duty owed by him to his client as well as to the Court not to delay litigation and to aid in the speedy administration of justice.

In this case, respondent did not only fail to file the pre-trial brief within the given period. Worse, he had not submitted the required pre-trial brief even at the time he filed a motion for reconsideration of the order of dismissal several months later. Expectedly, the motion for reconsideration was denied by the court. Respondent’s negligence is apparent in the trial court’s denial of the motion for reconsideration, to wit:

The court, in the exercise of sound discretion, afforded the plaintiffs who were then present, five (5) days from October 11, 1991, within which to submit to the Court plaintiff pre-trial brief, but despite the order, and until December 16, 1991, a period of more than two (2) months has elapsed, yet herein plaintiffs still failed to file or submit the required pre-trial brief, which to the mind of this Court, is an obstinate refusal on the part of the plaintiffs to file said pre-trial brief, despite counsel’s knowledge of the importance of the same.

The plaintiffs, even in the filing of their Motion for reconsideration did not even care to attach pre-trial brief if indeed they are sincere in their intention to do so.

Clearly, respondent was not able to protect his client’s interest through his own fault.

A lawyer is expected to be familiar with the rudiments of law and procedure and anyone who acquires his service is entitled to, not just competent service, but also whole-hearted devotion to his client’s cause. It is the

duty of a lawyer to serve his client with competence and diligence and he should exert his best efforts to protect, within the bounds of law, the interest of his client. A lawyer should never neglect a legal matter entrusted to him, otherwise his negligence in fulfilling his duty will render him liable for disciplinary action.22

Canon 18, Rule 18.03 of the Code of Professional Responsibility provides that a lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. In this case, by reason of Atty. Reyes’s negligence, complainant suffered actual loss. He should have given adequate attention, care and time to his cases. This is why a practicing lawyer may accept only so many cases that he can efficiently handle. Otherwise, his clients will be prejudiced. Once he agrees to handle a case, he should undertake the task with dedication and care. If he should do any less, then he is not true to his lawyer’s oath.23

Respondent’s excuse that complainants, from the time of filing of the complaint up to the time of filing his comment, were in continuous possession of the foreclosed property is flimsy. It only shows the cavalier attitude which respondent took towards his client’s cause.

Anent Civil Case No. 22-624-94, the case was indeed dismissed for failure to prosecute although the said dismissal was later on reconsidered. However, this does not detract to the conclusion that, truly, respondent failed to demonstrate the required diligence in handling the case of complainants.24

Quite apart from the above, respondent also lacked candor in dealing with his clients as he omitted to apprise complainants of the status of the two cases and even assured the complainants that he was diligently attending to said cases.25

In Garcia v. Atty. Manuel,26 this Court found therein respondent lawyer in bad faith for failing to inform his client of the status of the case. In said decision, the court has adamantly stressed that the lawyer-client relationship is highly fiduciary.27 There is always a need for the client to receive from the lawyer periodic and full updates on developments affecting the case. The lawyer should apprise the client on the mode and manner that the lawyer is utilizing to defend the client’s interests.28

In failing to inform his clients of the status of their cases, respondent failed to exercise such skill, care, and diligence as men of the legal profession commonly possess and exercise in such manners of professional employment.29

Time and again we have stated that disbarment is the most severe form of disciplinary sanction, and, as such, the power to disbar must always be exercised with great caution for only the most imperative reasons and in clear cases of misconduct affecting the standing and moral character of the lawyer as an officer of the court and a member of the bar. Accordingly, disbarment should not be decreed where any punishment less severe – such as a reprimand, suspension, or fine – would accomplish the end desired.30

The appropriate penalty on an errant lawyer depends on the exercise of sound judicial discretion based on the surrounding facts. The penalties for a lawyer’s failure to file the required brief or pleading range from reprimand, warning with fine, suspension and in grave cases, disbarment. In one case,31 the penalty for a lawyer’s failure to file a pre-trial brief and other pleadings such as position papers leading to the dismissal of the case, is suspension of six months. Therefore, we find the penalty of disbarment as recommended by the IBP to be unduly harsh and we deem it appropriate to impose the penalty of one (1) year suspension, taking into account that this appears to be his first offense.

Wherefore, in view of the foregoing, respondent Atty. Reynaldo Reyes is found GUILTY of violating Canons 17 and 18 of the Code of Professional Responsibility and is SUSPENDED from the practice of law for one (1) year effective upon finality hereof with WARNING that a repetition of the same negligent act charged in this

complaint will be dealt with more severely.

Let copies of this Decision be furnished the Office of the Bar Confidant, to be appended to respondent’s personal records as attorney; the

Sebastian vs. Calis, A.C. No. 5118. September 9, 1999

In the light of the foregoing, we find that the respondent is guilty of gross misconduct for violating Canon 1 Rule 1.01 of the Code of Professional Responsibility which provides that a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

Deception and other fraudulent acts by a lawyer are disgraceful and dishonorable. They reveal moral flaws in a lawyer. They are unacceptable practices. A lawyer’s relationship with others should be characterized by the highest degree of good faith, fairness and candor. This is the essence of the lawyer’s oath. The lawyer’s oath is not mere facile words, drift and hollow, but a sacred trust that must be upheld and keep inviolable. The nature of the office of an attorney requires that he should be a person of good moral character.This requisite is not only a condition precedent to admission to the practice of law, its continued possession is also essential for remaining in the practice of law.We have sternly warned that any gross misconduct of a lawyer, whether in his professional or private capacity, puts his moral character in serious doubt as a member of the Bar, and renders him unfit to continue in the practice of law.

The practice of law is not a right but a privilege bestowed by the State on those who show that they possess, and continue to possess, the qualifications required by law for the conferment of such privilege.We must stress that membership in the bar is a privilege burdened with conditions. A lawyer has the privilege to practice law only during good behavior. He can be deprived of his license for misconduct ascertained and declared by judgment of the court after giving him the opportunity to be heard.

Here, it is worth noting that the adamant refusal of respondent to comply with the orders of the IBP and his total disregard of the summons issued by the IBP are contemptuous acts reflective of unprofessional conduct. Thus, we find no hesitation in removing respondent Dorotheo Calis from the Roll of Attorneys for his unethical, unscrupulous and unconscionable conduct toward complainant.

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