Legal Ethics- Cases (Canon 19-22

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Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

A.C. No. 4380 October 13, 1995

NICANOR GONZALES and SALUD B. PANTANOSAS, complainants,vs. ATTY. MIGUEL SABACAJAN, respondent.

REGALADO, J.:

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

xxx xxx xxx

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

5. That respondent admitted and confirmed to the complainants that their titles are in his custody and has evenshown the same (to) the complainant Salud B. Pantanosas but when demanded (sic ) to deliver the said titles tothe complainant in a formal demand letter, marked as ANNEX "A," respondent refused and continues to refusewithout any justification to give their titles (and) when confronted, respondent challenged the complainants tofile any case in any court even in the Honorable Supreme Court;

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

legal profession over the simplicity, innocence and ignorance of the complainants, one of whom is his bloodrelative, his aunt, for which complainants shudder with mental anguish;

7. That due to his challeng(e), the complainants sent a letter to the Honorable Supreme Court forenlightenment, copy of which is attached as ANNEX "B", for which the Honorable Supreme Court required 19legible copies of a verified complaint;

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

xxx xxx xxx

On March 22, 1995, the Court required respondent to comment on the foregoing complaint. In his unverified "Answer" thereto,respondent admitted having met Salud Pantanosas but claims that, to his recollection, "Nicanor Gonzales/Serdan" has neverbeen to his office. Respondent likewise denied that he challenged anyone to file a case in any court, much less the SupremeCourt. He also claims that he referred complainant Pantanosas to his client, Mr. Samto M. Uy of Iponan, Cagayan de Oro City,for whom he worked out the segregation of the titles, two of which are the subject of the instant case. 3

Respondent likewise denies complainants' allegation that he is arrogant, in contrast to the innocence, simplicity and ignorance ofsaid complainants. He contends that the truth of the matter is that complainants have been charged with a number of criminaland civil complaints before different courts. He also asserts that he was holding the certificates of title in behalf of his client,Samto M. Uy. 4

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

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

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



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

Respondent likewise submitted xerox copies of certain certificates of title in an effort to explain why he kept the certificates oftitle of complainants, that is, supposedly for the purpose of subdividing the property. However, an examination of the same doesnot show any connection thereof to respondent's claim. In fact, the two sets of certificates of title appear to be entirely differentfrom each other.

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

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

Apparently, respondent has disregarded Canon 15, Rule 15.07 of the Code of Professional Responsibility which provides that a

lawyer shall impress upon his client the need for compliance with the laws and principles of fairness. Instead, he unjustly refusedto give to complainants their certificates of titles supposedly to enforce payment of their alleged financial obligations to his clientand presumably to impress the latter of his power to do so.

Canon 19, Rule 19.01 ordains that a lawyer shall employ only fair and honest means to attain the lawful objectives of his clientand shall not present, participate in presenting, or threaten to present unfounded charges to obtain an improper advantage inany case or proceeding. Respondent has closely skirted this proscription, if he has not in fact transgressed the same.

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

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

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

SO ORDERED.


Manila

FIRST DIVISION

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

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

Benedicto Leviste for and in his own behalf.

Gatchalian, Ignacio & Associates for respondents de Guzman.

GRIÑO-AQUINO, J.:

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

On September 7, 1963, the petitioner, a practicing attorney, entered into a written agreement with the private respondent Rosadel Rosario to appear as her counsel in a petition for probate of the holographic will of the late Maxima C. Reselva. Under the



will, a piece of real property at Sales Street, Quiapo, Manila, was bequeathed to Del Rosario. It was agreed that petitioner'scontigent fee would be thirty-five per cent (35%) of the property that Rosa may receive upon the probate of the will (Annex "A",p. 59, Rollo).

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

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

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

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

(4) Made the proper publications;

(5) Presented at the trial the following witnesses:

a) Eleuterio de Jesus

b) Lucita de Jesus

c) Purita L. Llanes

d) Rita Banu

e) Jesus Lulod.

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

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

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

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

Although the order denying his motion to intervene had become final, petitioner continued to receive copies of the court's orders,as well the pleadings of the other parties in the case. He also continued to file pleadings. The case was submitted for decisionwithout the respondents' evidence.

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

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

Nonetheless, on August 28, 1967, the court disallowed the will, holding that the legal requirements for its validity were notsatisfied as only two witnesses testified that the will and the testatrix's signature were in the handwriting of Maxima Reselva.

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

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

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

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

On May 22, 1968, the Court of Appeals dismissed the petition for being insufficient in form and substance as the petitioner didnot appear to be the proper party to appeal the decision in Special Proceeding No. 58325 (Annex 1, p. 77, Rollo).

Upon the denial of his motion for reconsideration, petitioner appealed by certiorari to this Court, assigning the following errorsagainst the Court of Appeals' resolution:



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

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

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

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

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

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

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

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

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

This Court had ruled in the case of Recto vs. Harden, 100 Phil. 1427, that "the contract (for contingent attorney's fees) neithergives, nor purports to give, to the appellee (lawyer) any right whatsoever, personal or real, in and to her (Mrs. Harden's)aforesaid share in the conjugal partnership. The amount thereof is simply a basis for the computation of said fees."

The Court of Appeals did not err in dismissing the petition for mandamus, for while it is true that, as contended by the petitioner,public policy favors the probate of a will, it does not necessarily follow that every will that is presented for probate, should beallowed. The law lays down procedures which should be observed and requisites that should be satisfied before a will may beprobated. Those procedures and requirements were not followed in this case resulting in the disallowance of the will. Therebeing no valid will, the motion to withdraw the probate petition was inconsequential.

Petitioner was not a party to the probate proceeding in the lower court. He had no direct interest in the probate of the will. Hisonly interest in the estate is an indirect interest as former counsel for a prospective heir. In Paras vs. Narciso, 35 Phil. 244, Wehad occassion to rule that one who is only indirectly interested in a will may not interfere in its probate. Thus:

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

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

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

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

SO ORDERED.


Manila

THIRD DIVISION

G.R. No. 91958 January 24, 1991



WILFREDO D. LICUDAN and CRISTINA LICUDAN-CAMPOS, petitioners,vs.THE HONORABLE COURT OF APPEALS and ATTY. TEODORO O. DOMALANTA, respondents.

Arnold V. Guerrero & Associates for petitioners.

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

GUTIERREZ, JR., J.:p

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

This petition for review on certiorari assails:

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

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

The grounds relied upon by the petitioners are as follows:

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

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

The respondent Court, in failing to declare the attorney's fees claimed by the private respondent-attorney asunconscionable, excessive, unreasonable, immoral and unethical, decided the question in a way not in accord

with law and with applicable decisions of this Honorable Tribunal. (Petition, pp. 12-13; Rollo, pp. 16-17)

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

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

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

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

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

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

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

Before the court for consideration is a Petition for Attorney's Lien filed by Atty. Teodoro D. Domalanta, counselfor the plaintiff, praying that his attorney's fees be annotated as a lien at the back of Transfer Certificate of TitleNo. 818 of the Register of Deeds of Quezon City, subject matter of this case.

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



Considering the manifestation of plaintiff, Aurelio Licudan and Alfredo (sic ) Licudan that they have enteredfreely and voluntarily in the said contract of professional services, let the same be annotated at the back of TCT818 of the Register of Deeds of Quezon City, upon payment of the required legal fees. (CA Decision, pp. 7-8;Rollo, pp. 36-37)

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

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

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

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

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

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

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

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

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

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

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

On November 15, 1986, the respondent lawyer filed a motion to set aside the orders dated August 29, 1986 and October 3,1986 reiterating his position that the Orders of September 6, 1985 and October 21, 1985 have become final and are alreadyimplemented. The respondent lawyer further asked for the modification of the October 21, 1985 Order to reflect 60.32 squaremeters instead of 31 square meters only since the stipulation in the Additional Contract for Professional Services entitled him to60.32 square meters.

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

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

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

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

The petitioners contend that under the award for professional services, they may have won the case but would lose the entireproperty won in litigation to their uncle-lawyer. They would be totally deprived of their house and lot and the recovered damages



considering that of the 271.5 square meters of the subject lot, the respondent lawyer is claiming 121.5 square meters and theremaining portion of 150 square meters would also go to attorney's fees since the said portion pertains to the lawyer's son byway of usufruct for ten (10) years.

The aforesaid submissions by the petitioners merit our consideration.

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

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

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

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

When the reasonableness of the appellee's lien as attorney's fees over the properties of his clients awarded tohim by the trial court had not been questioned by the client, and the said orders had already become final andexecutory, the same could no longer be disturbed, not even by the court which rendered them (Tañada v. Courtof Appeals, 139 SCRA 419). (CA Decision p. 7; Rollo, p. 36)

On the contrary, we rule that the questioned Orders dated September 19, 1979 and October 21, 1985 cannot become final asthey pertain to a contract for a contingent fee which is always subject to the supervision of the Court with regard to itsreasonableness as unequivocally provided in Section 13 of the Canons of Professional Ethics which reads:

13. Contingent Fees.—

A contract for a contingent fee, where sanctioned by law, should be reasonable under all the circumstances ofthe case including the risk and uncertainty of the compensation, but should always be subject to thesupervision of a court, as to its reasonableness. (Emphasis supplied).

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

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

but admits an exception—that the stipulations therein are not contrary to law, good morals, good customs, public policy or publicorder (see Philippine American Life Insurance Company v. Pineda, 175 SCRA 416 [1989]; Syjuco v. Court of Appeals, 172SCRA 111 [1989]).

Under Canon 20 of the Code of Professional Responsibility, a lawyer shall charge only fair and reasonable fees. In determiningwhether or not the lawyer fees are fair and reasonable, Rule 20-01 of the same Code enumerates the factors to be considered inresolving the said issue. They are as follows:

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

b) The novelty and difficulty of the questions involved;

c) The importance of the subject matter;

d) The skill demanded;

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

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

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

h) The contingency or certainty of compensation;



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

j) The professional standing of the lawyer.

A similar provision is contained under Section 24, Rule 138 of the Revised Rules of Court which partly states that:

Sec. 24. Compensation of attorneys; agreement as to fees. — An attorney shall be entitled to have and recoverfrom his client no more than a reasonable compensation for his services, with a view to the importance of thesubject matter of the controversy, the extent of the services rendered, and the professional standing of the

attorney. . . . A written contract for services shall control the amount to be paid therefor unless found by thecourt to be unconscionable or unreasonable.

All that the respondent lawyer handled for his deceased sister and brother-in-law was a simple case of partition whichnecessitated no special skill nor any unusual effort in its preparation. The subsequent case for redemption was admittedly but anoffshot of the partition case. Considering the close blood and affinal relationship between the respondent lawyer and his clients,there is no doubt that Atty. Domalanta took advantage of the situation to promote his own personal interests instead ofprotecting the legal interests of his clients. A careful perusal of the provisions of the contract for professional services in questionreadily shows that what the petitioners won was a pyrrhic victory on account of the fact that despite the successful turnout of thepartition case, they are now practically left with nothing of the whole subject lot won in the litigation. This is because aside fromthe 121.5 square meters awarded to Atty. Domalanta as attorney's fees, the said contract for professional services provides thatthe remaining portion shall pertain to the respondent lawyer's son by way of usufruct for ten (10) years. There should never bean instance where a lawyer gets as attorney's fees the entire property involved in the litigation. It is unconscionable for the victorin litigation to lose everything he won to the fees of his own lawyer.

The respondent lawyer's argument that it is not he but his son Teodoro M. Domalanta, Jr. who is claiming the usufructuary rightover the remaining portion of the subject lot is inaccurate. The records show that the matter of usufruct is tied up with this casesince the basis for the said usufructuary right is the contract for professional services the reasonableness of which is beingquestioned in this petition. We find the ten-year usufruct over the subject lot part and parcel of the attorney's fees being claimedby the respondent lawyer.

In resolving the issue of reasonableness of the attorney's fees, we uphold the time-honoured legal maxim that a lawyer shall atall times uphold the integrity and dignity of the legal profession so that his basic ideal becomes one of rendering service andsecuring justice, not money-making. For the worst scenario that can ever happen to a client is to lose the litigated property to hislawyer in whom an trust and confidence were bestowed at the very inception of the legal controversy. We find the Contract forProfessional Services dated August 30, 1979, unconscionable and unreasonable. The amount of P20,000.00 as attorney's fees,in lieu of the 121.5 square meters awarded to the respondent lawyer and the ten-year usufructuary right over the remaining

portion of 150 square meters by the respondent lawyer's son, is, in the opinion of this Court, commensurate to the servicesrendered by Atty. Domalanta.

WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is GRANTED. The Court of Appeals' decision of September12, 1989 is hereby REVERSED and SET ASIDE. Atty. Domalanta is awarded reasonable attorney's fees in the amount ofP20,000.00.

SO ORDERED.


Manila

SECOND DIVISION

A.M. No. 1388 March 28, 1980

ANA F. RETUYA, complainant,vs. ATTY. IÑEGO A. GORDUIZ, respondent.

AQUINO, J:

This disbarment case is linked to Administrative Case No. 1431-MJ which was filed by Ana F. Retuya against Municipal Judge

Paulo A. Equipilag of Maasin, Leyte and which was decided on July 16, 1979 (Retuya vs. Equipilag). The facts of that case,which also gave rise to this disbarment case, are as follows:

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

The employer appealed. During the pendency of the appeal, the employer proposed to compromise the claimby paying P4,396.05 or only one-half of the total award. Ana accepted the proposal and directed that the



amount be remitted to Fiscal Mamerto Daclan through the Philippine National Bank's branch at Maasin,Southern Leyte.

The employer paid the reduced award on November 16, 1972. Ana sent to the employer the receipt andrelease signed by her with a covering letter dated December 19, 1972 wherein she explained that her lawyer,Gorduiz, did not sign the joint motion to dismiss the claim because he wanted twenty percent of the award ashis attorney's fees. She was willing to give him ten percent.

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

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

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

Judge Paulo A. Equipilag denied the motion to quash. He granted the motion of Atty. Gorduiz requiring Ana to

produce a copy of the decision awarding her workmen's compensation for her husband's death.

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

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

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

Solicitor General.

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

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

The Solicitor General asked the provincial fiscal of Southern Leyte to investigate the case against Gorduiz. The fiscal in herreport of July 8, 1975 recommended the of the case.

The Solicitor General disagreeing with that recommendation, filed in this Court against Gorduiz a complaint wherein he prayedthat Gorduiz be suspended for six months because the latter, in filing the estafa case, had promoted a groundless suit againsthis client.

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

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

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

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

After reflecting on the conflicting contentions of the parties, the Court f inds that there is justification for suspending therespondent.



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

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

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

SO ORDERED.


Manila

FIRST DIVISION

A.C. No. 6210 December 9, 2004

FEDERICO N. RAMOS, complainant,

vs. ATTY. PATRICIO A. NGASEO, respondent.

D E C I S I O N

YNARES-SANTIAGO, J .:

This is a complaint for suspension of respondent Atty. Patricio A. Ngaseo for violation of the Code of Professional Responsibilityand Article 1491 of the Civil Code by demanding from his client, complainant Federico N. Ramos, the delivery of 1,000 square

meters of land, a litigated property, as payment for his appearance fees.

The facts as narrated by the complainant are as follows:

Sometime in 1998, complainant Federico Ramos went to respondent Atty. Patricio Ngaseo's Makati office to engage his servicesas counsel in a case1 involving a piece of land in San Carlos, Pangasinan. Respondent agreed to handle the case for anacceptance fee of P20,000.00, appearance fee of P1,000.00 per hearing and the cost of meals, transportation and otherincidental expenses. Complainant alleges that he did not promise to pay the respondent 1,000 sq. m. of land as appearancefees.2

On September 16, 1999, complainant went to the respondent's office to inquire about the status of the case. Respondentinformed him that the decision was adverse to them because a congressman exerted pressure upon the trial judge. Respondenthowever assured him that they could still appeal the adverse judgment and asked for the additional amount of P3,850.00 and

another P2,000.00 on September 26, 2000 as allowance for research made.3

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

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

Respondent alleged that sometime in the late 1997, a former client, Federico Ramos and his brother, Dionisio, went to hisMakati office to engage his professional services in connection with a 2-hectare parcel of land situated in San Carlos,Pangasinan which the complainant's family lost 7 years earlier through an execution sale in favor of one Alfredo T. Castro.

Complainant, who was deaf and could only speak conversational Tagalog haltingly, was assisted by his brother Dionisio. Theycame all the way from Pangasinan because no lawyer in San Carlos City was willing to handle the case. Complainant, throughDionisio, avers that he has consulted 2 local lawyers but did not engage their services because they were demanding exorbitantfees. One local lawyer was willing to handle the case for at least one-half of the land involved as his attorney's fee, plus cashexpenses, while the other asked for ¼ of the land in addition to a large sum of money. Respondent agreed to handle the casefor an acceptance fee of P60,000.00 plus an appearance fee of P3,000.00 per hearing. Complainant told him that he wouldconsult his siblings on the matter.

Six months later, i.e., in April 1998, complainant, assisted by one Jose Castillo, went to respondent's office to discuss the legalfees. Complainant, through Castillo, told respondent that he was willing to pay an acceptance fee of P40,000.00, P20,000.00 ofwhich shall be paid upon engagement and the remaining P20,000.00 to be paid after their treasure hunt operations in NuevaViscaya were terminated. Further, complainant offered, in lieu of P3,000.00 per appearance, 1,000 sq. m. of land from the land

http://www.lawphil.net/judjuris/juri2004/dec2004/ac_6210_2004.html#fnt1














subject matter of the case, if they win, or from another piece of property, if they lose. In addition, complainant also offered todefray the expenses for transportation, meals and other incidental expenses. Respondent accepted the complainant's offer.

Respondent claims that after the trial court dismissed Civil Case No. SCC 2128, he filed a timely notice of appeal and thereaftermoved to be discharged as counsel because he had colon cancer. Complainant, now assisted by one Johnny Ramos, imploredrespondent to continue handling the case, with an offer to double the 1,000 sq. m. piece of land earlier promised and theremaining balance of P20,000.00 acceptance fee. Johnny Ramos made a written commitment and gave respondent's secretaryP2,000.00 of the P3,850.00 expenses for the preparation of the appellant's brief.

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

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

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

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

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendationof the Investigating Commissioner of the above-entitled case, herein made part of this Resolution/Decision as Annex"A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, withmodification, and considering that respondent have violated the Code of Professional Responsibility for gravemisconduct and conduct unbecoming of a lawyer Atty. Patricio A. Ngaseo is hereby SUSPENDED from the practice oflaw for six (6) months.

On December 11, 2003, respondent filed a petition for review assailing IBP Resolution No. XVI-2003-47 for having been issuedwithout or in excess of jurisdiction.6

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

Respondent further contends that he can collect the unpaid appearance fee even without a written contract on the basis of theprinciple of quantum meruit . He claims that his acceptance and appearance fees are reasonable because a Makati based legalpractitioner, would not handle a case for an acceptance fee of only P20,000.00 and P1,000.00 per court appearance.

Under Article 1491(5) of the Civil Code, lawyers are prohibited from acquiring either by purchase or assignment the property orrights involved which are the object of the litigation in which they intervene by virtue of their profession.7 The prohibition onpurchase is all embracing to include not only sales to private individuals but also public or judicial sales. The rationale advancedfor the prohibition is that public policy disallows the transactions in view of the fiduciary relationship involved, i.e., the relation oftrust and confidence and the peculiar control exercised by these persons.8 It is founded on public policy because, by virtue of hisoffice, an attorney may easily take advantage of the credulity and ignorance of his client and unduly enrich himself at theexpense of his client.9 However, the said prohibition applies only if the sale or assignment of the property takes place during thependency of the litigation involving the client's property. Consequently, where the property is acquired after the termination of the

case, no violation of paragraph 5, Article 1491 of the Civil Code attaches.

Invariably, in all cases where Article 1491 was violated, the illegal transaction was consummated with the actual transfer of thelitigated property either by purchase or assignment in favor of the prohibited individual. In Biascan v. Lopez, respondent wasfound guilty of serious misconduct and suspended for 6 months from the practice of law when he registered a deed ofassignment in his favor and caused the transfer of title over the part of the estate despite pendency of Special Proceedings No.98037 involving the subject property.10 In the consolidated administrative cases of Valencia v. Cabanting ,11

the Court suspendedrespondent Atty. Arsenio Fer Cabanting for six (6) months from the practice of law when he purchased his client's property whichwas still the subject of a pending certiorari proceeding.

In the instant case, there was no actual acquisition of the property in litigation since the respondent only made a written demandfor its delivery which the complainant refused to comply. Mere demand for delivery of the litigated property does not cause thetransfer of ownership, hence, not a prohibited transaction within the contemplation of Article 1491. Even assuming arguendo thatsuch demand for delivery is unethical, respondent's act does not fall within the purview of Article 1491. The letter of demand

dated January 29, 2003 was made long after the judgment in Civil Case No. SCC-2128 became final and executory on January18, 2002.

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







































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

SO ORDERED.


Manila

FIRST DIVISION

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

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

Juanito Ll. Abao for petitioners-appellants.

Alberto R Fernandez in his own behalf.

MAKASIAR, J.:

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

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

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

AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

That I, MAXIMO ABARQUEZ, Plaintiff in Case No. R-6573 of the Court of First Instance of Cebu, make knownthrough this agreement that for the services rendered by Atty. Alberto B. Fernandez who is my lawyer in thiscase, if the appeal is won up to the Supreme Court, I Promise and will guarantee that I win give to said lawyerone-half (1/2) of what I may recover from the estate of my father in Lots No. 5600 and 5602 which are located

at Bulacao Pardo, City of Cebu. That with respect to any money which may be adjudged to me from Agripina Abarquez, except 'Attorney's Fees', the same shall pertain to me and not to said lawyer.

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



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

The real Property sought to be recovered in Civil Case No. R6573 was actually the share of the petitioner in Lots 5600 and5602, which were part of the estate of his deceased parents and which were partitioned the heirs which included petitionerMaximo Abarquez and his elder sister Agripina Abarquez, the defendant in said civil case.

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

The Court of Appeals in a decision promulgated on August 27, 1963 reversed the decision of the lower court and annulled thedead of pacto de retro. Appellee Agripina Abarquez filed a motion for reconsideration but the same was denied in a resolution

dated January 7, 1964 (p. 66, Record on Appeal; p. 13, Rec.) and the judgment became final and executory on January22,1964.

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

The case having been resolved and title having been issued to petitioner, adverse claimant waited for petitioner to comply withha obligation under the document executed by him on June 10, 1961 by delivering the one-half (½) portion of the said parcels ofland.

Petitioner refused to comply with his obligation and instead offered to sell the whole parcels of land covered by TCT No. 31841to petitioner-spouses Juan Larrazabal and Marta C. de Larrazabal. Upon being informed of the intention of the petitioner,

adverse t claimant immediately took stops to protect his interest by filing with the trial court a motion to annotate Ins attorney'slien on TCT No. 31841 on June 10, 1965 and by notifying the prospective buyers of his claim over the one-half portion of theparcels of land.

Realizing later that the motion to annotate attorney's lien was a wrong remedy, as it was not within the purview of Section 37,rule 138 of the Revised Rule of Court, but before the same was by the trial court, adverse t by an affidavit of adverse claim onJuly 19, 1965 with the Register of Deeds of Cebu (p. 14, ROA; p. 13, rec.). By virtue of the petition of mid affidavit the adverseclaim for one-half (½) of the lots covered by the June 10, 1961 document was annotated on TCT No. 31841.

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

...the petition to cancel the adverse claim should be denied. The admission by the petitioners that the lawyers(Attys. Fernandez and Batiguin) are entitled to only one-third of the lot described in Transfer Certificate of TitleNo. 32966 is the best proof of the authority to maintain said adverse claim (p. 57, ROA; p. 13, rec.).

Petitioner-spouses decided to appeal the order of dismissal to this Court and correspondingly filed the notice of appeal on April1, 1966 with the trial court. On April 2, 1966, petitioner-spouses filed the appeal bond and subsequently filed the record onappeal on April 6, 1966. The records of the case were forwarded to this Court through the Land Registration Commission ofManila and were received by this Court on May 5, 1966.

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

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

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



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

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

xxx xxx xxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior and other o and employees

connected with the administration of justice, the property and rights in litigation or levied upon an executionbefore the court within whose jurisdiction or territory they exercise their respective functions; this prohibitionincludes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rightswhich may be the object of any litigation in which they may take part by virtue of their profession (Emphasissupplied).

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

Likewise, under American Law, the prohibition does not apply to "cases where after completion of litigation the lawyer acceptson account of his fee, an interest the assets realized by the litigation" (Drinker, Henry S., Legal Ethics, p. 100 [1953], citing App.

A, 280; N.Y. Ciu 714). "There is a clear distraction between such cases and one in which the lawyer speculates on the outcomeof the matter in which he is employed" (Drinker, supra, p. 100 citing A.B.A. Op. 279).

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

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

Se ha discutido si en la incapacidad de Ion Procumdam y Abogados asta o el pecto de quota litis. Consisteeste, como es sabido, en la estipulacion de que el Abogado o el Procurador ban de hacer suyos una partealicuota de In cona que se li m la son es favorable. Con es te concepto a la vista, es para nosortros que elarticulo que comentamos no menciona ese pacto; pero como la incapacidad de los Abogados y Procuradoresse extinede al acto de adquirir por cesion; y la efectividad del pacto de quota litis implica necesariamente unacesion, estimamos que con solo el num. 5 del articulo 1459 podria con exito la nulidad de ese pactotradicionalmente considerado como ilicito.

xxx xxx xxx

Debe tenerse tambien en cuenta, respecto del ultimo parrafo del articulo 1459, la sentencia del TribunalSupreme de 25 Enero de 1902, que delcara que si bien el procurador no puede adquirir para si los bienes, en

cuanto a los cuales tiene incapacidad, puede adquirirlos para otra persona en quien no concurra incapacidadalguna (Manresa, Comentarios al Codigo Civil Español, Tomo X, p. 110 [4a ed., 1931] emphasis supplied).

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

C. Prohibiciones impuestas a las personas encargadas, mas o menos directamente, de la administracion de justicia.—El mismo art. 1,459 del Codigo civil prohibe a los Magistrados, Jueces, individuos del Minesteriofiscal, Secretarios de Tribunales y Juzgados y Oficiales de Justicia adquirir por compra (aunque sea ensubasta publica o judicial, por si ni por persona alguna intermedia). 'Los bienes y derechos que estuviesen enlitigio ante el Tribunal en cuya jurisdicion on teritorio ejercieran sus respectivas funciones, extendiendo se estaprohibicion al acto de adquirir por cesion', y siendo tambien extensiva ' Alos Abogados y Procuradoresrespecto a los bienes y derecho que fueran objeto del un litigio en que intervengan pos su profession y oficio.'

El fundamento de esta prohibicion es clarismo. No solo se trata—dice Manresa—de quitar la ocasion al fraude;persiguese, ademas, el proposito de rodear a las personas que intervienen en la administracion de justicia detodos los prestigios que necesitan para ejercer su ministerio, librando los de toda sospecha, que, aunque fuereinfundada, redundaria en descredito de la institucion.

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

Algunos autores (Goyena, Manresa, Valverde) creen que en la prohibicion del art. 1.459 estacomprendido el pacto de quota litis (o sea el convenio por el cual se concede al Abogado o



Procurador, para el caso de obtener sentencia favorable una parte alicuota de la cosa ocantidad que se litiga), porque dicho pacto supone la venta o cesion de una parte de la cosao drecho que es objecto del litigio. Pero Mucius Scaevola oberva, conrazon, que en elrepetido pacto no hay propiamente caso de compraventa ni de cesion de derechos, y bastanpara estimario nulo otros preceptos del Codigo como los relativos a la ilicitud de la causa(Castan, Derecho Civil Espñol, Tomo 4, pp. 68-69, [9a ed., 1956], emphasis supplied).

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

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

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

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

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

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

Petitioners her contend that a contract for a contingent fee violates the Canons of Professional Ethics. this is likewise withoutmerit This posture of petitioners overlooked Canon 13 of the Canons which expressly contingent fees by way of exception to

Canon 10 upon which petitioners relied. For while Canon 10 prohibits a lawyer from purchasing ...any interest in the subjectmatter of the litigation which he is conducting", Canon 13, on the other hand, allowed a reasonable contingent fee contract, thus:"A contract for a con. tangent fee where sanctioned by law, should be reasonable under all the circumstances of the ca includingthe risk and uncertainty of the compensation, but should always be subject to the supervision of a court, as to itsreasonableness." As pointed out by an authority on Legal Ethics:

Every lawyer is intensely interested in the successful outcome of his case, not only as affecting his reputation,but also his compensation. Canon 13 specifically permits the lawyer to contract for a con tangent fee which ofitself, negatives the thought that the Canons preclude the lawyer's having a stake in his litigation. As pointedout by Professor Cheatham on page 170 n. of his Case Book, there is an inescapable conflict of interestbetween lawyer and client in the matter of fees. Nor despite some statements to the con in Committeeopinions, is it believed that, particularly in view of Canon 13, Canon 10 precludes in every case an arrangementto make the lawyer's fee payable only out of the results of the litigation. The distinction is between buying aninterest in the litigation as a speculation which Canon 10 condemns and agreeing, in a case which the lawyer

undertakes primarily in his professional capacity, to accept his compensation contingent on the outcome (Drinker, Henry S Legal Ethics, p. 99, [1953], Emphasis supplied).

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

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

PhiL 833 [1955]) and Recto vs. Harden (100 PhiL 427 [1956]).

In the 1967 case of Albano vs. Ramos (20 SCRA 171 [19671), the attorney was allowed to recover in a separate action herattomey's fee of one-third (1/3) of the lands and damages recovered as stipulated in the contingent fee contract. And this Courtin the recent case of Rosario Vda de Laig vs. Court of Appeals, et al. (supra), which involved a contingent fee of one-half (½) ofthe property in question, held than ,contingent fees are recognized in this i jurisdiction (Canon 13 of the Canons of ProfessionalEthics adopted by the Philippine Bar association in 1917 [Appendix B, Revised Rules of Court)), which contingent fees may be aportion of the property in litigation."

Contracts of this nature are permitted because they redound to the benefit of the poor client and the lawyer "especially in caseswhere the client has meritorious cause of action, but no means with which to pay for legal services unless he can, with thesanction of law, make a contract for a contingent fee to be paid out of the proceeds of the litigation" (Francisco, Legal Ethics, p.



294 [1949], citing Lipscomb vs. Adams 91 S.W. 1046, 1048 [1949]). Oftentimes, contingent fees are the only means by whichthe poor and helpless can redress for injuries sustained and have their rights vindicated. Thus:

The reason for allowing compensation for professional services based on contingent fees is that if a personcould not secure counsel by a promise of large fees in case of success, to be derived from the subject matter ofthe suit, it would often place the poor in such a condition as to amount to a practical denial of justice. It notinfrequently happens that person are injured through the negligence or willful misconduct of others, but byreason of poverty are unable to employ counsel to assert their rights. In such event their only means of redresslies in gratuitous service, which is rarely given, or in their ability to find some one who will conduct the case fora contingent fee. That relations of this king are often abused by speculative attorneys or that suits of this

character are turned into a sort of commercial traffic by the lawyer, does not destroy the beneficial result to onewho is so poor to employ counsel (id, at p. 293, citing Warvelle, Legal Ethics, p. 92, Emphasis supplied).

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

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

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

The contingent fee certainly increases the possibility that vexatious and unfounded suits will be brought. On the

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

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

Where it is shown that the contract for a contingent fee was obtained by any undue influence of the attorneyover the client, or by any fraud or imposition, or that the compensation is so clearly excessive as to amount to

extortion, the court win in a proper case protect the aggrieved party.

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

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

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

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

The contract for a contingent fee, being valid, vested in Atty Fernandez an interest or right over the lots in question to the extentof one-half thereof. Said interest became vested in Atty. Fernandez after the case was won on appeal because only then did theassignment of the one-half (½) portion of the lots in question became effective and binding. So that when he filed his affidavit ofadverse claim his interest was already an existing one. There was therefore a valid interest in the lots to be registered in favor of Atty. Fernandez adverse to Mo Abarquez.

Moreover, the interest or claim of Atty. Fernandez in the lots in question arose long after the original petition which took placemany years ago. And, there is no other provision of the Land Registration Act under which the interest or claim may beregistered except as an adverse claim under Section 110 thereof. The interest or claim cannot be registered as an attorney'scharging lien. The lower court was correct in denying the motion to annotate the attomey's lien. A charging lien under Section

37, Rule 138 of the Revised Rules of Court is limited only to money judgments and not to judgments for the annulment of acontract or for delivery of real property as in the instant case. Said Section provides that:

Section 37. An attorney shall have a lien upon the funds, documents and papers of his client which havelawfully come into his oppossession and may retain the same until his lawful fees and disbursements havebeen paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extentupon all judgments, for the payment of money, and executions issued in pursuance of such judgments, whichhe has secured in a litigation of his client ... (emphasis supplied).

Therefore, as an interest in registered land, the only adequate remedy open to Atty. Fernandez is to register such interest as anadverse claim. Consequently, there being a substantial compliance with Section 110 of Act 496, the registration of the adverseclaim is held to be valid. Being valid, its registration should not be cancelled because as WE have already stated, "it is only when





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

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

On account of that testimony, Magno Dinglasan charged complainant on July 29, 1977 with the crime of false testimony andgrave oral defamation (Exhibits G and G-1).

During the preliminary investigation of the case by the Office of the Provincial Fiscalof Bulacan, respondent acted as counsel for Magno Dinglasan. When the case was dismissed by the Office of the ProvincialFiscal of Bulacan and it was elevated to the Ministry of Justice on appeal, respondent continued to be the lawyer of MagnoDinglasan.

Complainant testified in this disbarment proceeding that he consulted respondent, who was then his counsel, about the demandmade in 1957 or 1958 by Magno Dinglasan for P150,000.00 as consideration for the destruction of complainant’s record in the

Bureau of Internal Revenue. Respondent’s advice was for complainant to disregard the demand as it was improper. Later, whenMagno Dinglasan reduced the amount to P50,000.00, complainant again consulted respondent. Respondent likewise advisedcomplainant not to heed the demand (pp. 61-62, tsn, May 21, 1981).

Respondent’s representation of Magno Dinglasan in I.S. No. 77-1523 constitutes malpractice (Section 27, Rule 138, Rules ofCourt) for respondent was previously the lawyer of complainant and respondent was consulted by complainant regarding the

very matter which was the subject of the case. By serving as the lawyer of Magno Dinglasan, in I.S. No. 77-1523, respondentthus represented an interest which conflicted with the interest of his former client.

2. Respondent again committed malpractice when he served as lawyer of Magno Dinglasan in Civil Case No. 112764 before theCourt of First Instance of Manila.

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

For the same reasons set forth above, respondent’s representation of Magno Dinglasan in Civil Case No. 112764 constitutesmalpractice as thereby he represented conflicting interests.

3.

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

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

"Witness

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

"ATTY. AQUINO:

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

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

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

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

In 1974, the Ministry of Public Works conducted a relocation survey of the fishpond.1âwphi1 The relocation survey disclosedthat there were no more creeks traversing the fishpond. Sapang Malalim and Sapang Caluang had disappeared.

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

From the foregoing facts, it is clear that respondent made use of the information he gained while he was the lawyer ofcomplainant as basis for his complaint for the building of illegal dikes. His possession and examination of Transfer Certificate ofTitle No. T-15674 and the blueprint plan provided him the information that there used to be two creeks traversing the fishpond



covered by the title. Since he helped in the administration of the fishpond, he also came to know that the two creeks haddisappeared. Thus, he gained the data which became the basis of his complaint when he was a lawyer and part administrator ofcomplainant. Under the circumstances, there is a violation of professional confidence.

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

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

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

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

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

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

While there may be validity to respondent’s contention that it is not improper for a lawyer to file a case against a former client,especially when the professional relationship had ended several years before, yet under the over-all circumstances of the case

at bar it can not be said that respondent acted ethically. Complainant was not a mere client of respondent. He is an uncle and apolitical benefactor. The parties for whom respondent filed cases against complainant were former friends or associates ofcomplainant whom respondent met when he was serving as the lawyer and general adviser of complainant. The cases filed byrespondent were about properties which respondent had something to do with as counsel and administrator of complainant.

x x x x

IN VIEW OF THE FOREGOING, undersigned respectfully submit that the evidence establishes commission by respondent ofmalpractice for violating the confidentiality of client-lawyer relationship and engaging in unethical conduct x x x x5

Resolution of this case was delayed despite receipt of the foregoing Report and Recommendation in view of the OmnibusMotion to Remand Case to the Office of the Solicitor General; Motion to Disqualify Solicitor Rogelio Dancel to Act on this Caseand Motion to Suspend Period to File Answer dated 18 January 1983 filed by respondent principally accusing handling Solicitor

Dancel of having given unwarranted advantage and preference to the complainant in the investigation of the case.

After several pleadings on the issue were filed by both respondent and Solicitor Rogelio Dancel, the Court in its Resolution dated 22 August 1983 denied respondent's motion to disqualify Solicitor Dancel and required the OSG to proceed with theinvestigation of this case.1âwphi1 However, no further proceedings were conducted by the OSG until the records of the casetogether with other cases were turned over to the Integrated Bar of the Philippines (IBP) on 19 May 1988.

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

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

On the other hand, I.S. No. 77-1523 for false testimony and grave oral defamation before the Office of the Provincial Fiscal ofBulacan, and Civil Case No. 112764 for damages before the then Court of First Instance of Manila, were filed in behalf of MagnoDinglasan, a former Bureau of Internal Revenue (BIR) official, regarding whose alleged demand for P150,000.00 fromcomplainant in exchange for the destruction of the latter's record in the BIR, respondent had previously advised complainant todisregard. Civil Case No. 117624 and I.S. No. 77-1523 were precisely filed against complainant because the latter had

previously testified on the alleged demand made by Dinglasan. Although respondent denied that there was ever such a demandmade by Dinglasan, the point is that his word on the matter, i.e., whether there was in fact such a demand, would carry muchweight against complainant considering that he was the latter's counsel in 1957 or 1958 when the alleged demand was made. Inaddition, respondent initiated the prosecution of complainant in I.S. No. 74-193 for violation of P.D. No. 2967 for thedisappearance of the two (2) creeks, namely, Sapang Malalim and Sapang Caluang, previously traversing complainant'sfishpond in Bulacan covered by TCT No. T-15674 by using information obtained while he was in possession of the certificate oftitle and the blueprint plan of the property.

As the Code of Professional Responsibility provides:

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

http://lawphil.net/judjuris/juri2002/aug2002/ac_1890_2002.html#fnt5














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

b) When required by law;

c) When necessary to collect his fees or to defend himself, his employees or associates or by judicial action.

Rule 21.01. - A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, norshall he use the same to his own advantage or that of a third person, unless the client with full knowledge of the circumstancesconsents thereto.

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

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

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

WHEREFORE, in view of the foregoing, IBP Resolution No. XIV-2001-169 dated 29 April 2001 is adopted and approved. For

violating the confidentiality of lawyer-client relationship and for unethical conduct, respondent Atty. Rafael G. Suntay isSUSPENDED from the practice of law for two (2) years effective upon the finality hereof.

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

SO ORDERED.


Manila

FIRST DIVISION

A.C. No. 4215 May 21, 2001

FELICISIMO M. MONTANO, complainant,vs.INTEGRATED BAR OF THE PHILIPPINES and Atty. JUAN S. DEALCA, respondents.

KAPUNAN, J .:

In a verified complaint filed before this Court on March 9, 1994, complaint Felicisimo M. Montano charged Atty. Juan Dealca withmisconduct and prays that he be "sternly dealt with administratively." The complaint1 is summarized as follows:

1. On November 14, 1992, the complainant hired the services of Atty. Juan S. Dealca as his counsel in collaboration with Atty.Ronando L. Gerona in a case pending before the Court of Appeals docketed as CA-G.R. CV No. 3767 wherein the complainantwas the plaintiff-appellant.

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

3. Thereafter, even before respondent counsel had prepared the appellant's brief and contrary to their agreement that theremaining balance be payable after the termination of the case, Atty. Dealca demanded an additional payment from complainantobliged by paying the amount of P4,000.00.











4. Prior to the filing of the appellant's brief, respondent counsel again demanded payment of the remaining balance ofP3,500.00. When complainant was unable to do so, respondent lawyer withdraw his appearance as complainant's counselwithout his prior knowledge and/or conformity. Returning the case folder to the complainant, respondent counsel attached aNote dated February 28, 1993,2 stating:

28 February 1994

Pepe and Del Montano,

For breaking your promise, since you do not want to fulfill your end of the

bargain, here's your reward:Henceforth, you lawyer for yourselves. Here are your papers.

Johnny

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

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

The Investigating Commissioner found respondent counsel guilty of unprofessional conduct and recommended that he be

"severely reprimanded." However, in a Resolution3

by the IBP Board of Governors on July 26, 1997, it was resolved that thepenalty recommended by the Investigating Commissioner meted to respondent be amended to "three (3) months suspensionfrom the practice of law for having been found guilty of misconduct, which eroded the public confidence regarding his duty as alawyer."

Respondent counsel sought reconsideration of the aforementioned resolution of the IBP, alleging that the latter misapprehendedthe facts and that, in any case, he did not deserve the penalty imposed. The true facts, according to him, are the following.

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

2. Due to the ailment of Atty. Gerona's daughter, he could not prepare and submit complainant's appellant's brief ontime;

3. Complainant wen to the respondent to do just that, i.e., prepare and submit his appellant's brief on time at the agreedfee of P15,000.00, 50% down and 50% upon its completion;

4. Working overtime, respondent was able to finish the appellant's brief ahead of its deadline, so he advised thecomplainant about its completion with the request that the remaining balance of P7,500.00 be paid. Complainant paidP4,000.00 only, promising to pay the P3,500.00 "tomorrow" or on "later particular date." Please take note that, at this juncture, there was already a breach of the agreement on complainant's part.

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

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

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

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

9. However, instead of seeing the respondent, complainant filed this case;

10. Respondent was constrained to file his withdrawal with the Court of Appeals because of this case to avoid furthermisunderstanding since he was the one who signed the appellant's brief although Atty. Gerona was his counsel ofrecord. Such withdrawal was accordingly granted by the appellate court;

xxx xxx xxx.4

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

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

xxx



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

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

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

(a) complainant's motion praying for the imposition of the maximum penalty of disbarment;

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

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

(d) comment of complainant praying that the penalty of three (3) months suspension from the practice of law asrecommended by the Integrated Bar of the Philippines pursuant to resolution No. XII-97-154 be raised to a heavierpenalty;

(e) comment/manifestation/opposition of complainant praying that the respondent be disbarred; and

(g) rejoinder of respondent praying that this case be dismissed for being baseless.6

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

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

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

RESOLUTION NO. XIII-99-48

xxx

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

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

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

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

Thus, when the IBP was informed of the said Court resolution, it construed the same as granting Atty. Dealca's motion forreconsideration and as an order for IBP to conduct a re-evaluation of the case. The IBP assumed that its resolution of October25, 1997 was already considered by this Court when it referred the case back to the IBP. It failed to notice that its resolutiondenying the motion for reconsideration was not among those pleadings and resolution referred back to it.

Hence, on the strength of this Court's resolution which it had inadvertently misconstrued, the IBP conducted a re-evaluation ofthe case and came up with the assailed resolution now sought to be reversed. The Court holds that the error is not attributableto the IBP. It is regrettable that the procedural infirmity alleged by complainant actually arose from a mere oversight which wasattributable to neither party.



Going into the merits, we affirm the findings made by the IBP that complainant engaged the services of respondent lawyer onlyfor the preparation and submission of the appellant's brief and the attorney's fees was payable upon the completion andsubmission of the appellant's brief and not upon the termination of the case.

There is sufficient evidence which indicates complainant's willingness to pay the attorney's fees. AS agreed upon, complainantpaid half of the fees in the amount of P7,500.00 upon acceptance of the case. And while the remaining balance was not yet dueas it was agreed to be paid only upon the completion and submission of the brief, complainant nonetheless delivered torespondent lawyer P4,000.00 as the latter demanded. This, notwithstanding, Atty. Dealca withdrew his appearance simplybecause of complainant's failure to pay the remaining balance of P3,500.00 which does not appear to be deliberate. Thesituation was aggravated by respondent counsel's note to complainant withdrawing as counsel which was couched in impolite

and insulting language.10

Given the above circumstances, was Atty. Dealca's conduct just and proper?

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

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

WHEREFORE, in view of the foregoing, respondent Atty. Juan S. Dealca is REPRIMANDED with a warning that repetition of thesame act will be dealt with more severely.1âwphi1.nêt

SO ORDERED.

Republic of the Philippines

SUPREME COURTManila

SECOND DIVISION

A.C. No. 5485 March 16, 2005

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

D E C I S I O N

TINGA, J.:

There are no good reasons that would justify a lawyer virtually abandoning the cause of the client in the midst of litigation withouteven informing the client of the fact or cause of desertion. That the lawyer forsook his legal practice on account of what might beperceived as a higher calling, election to public office, does not mitigate the dereliction of professional duty. Suspension from thepractice is the usual penalty, and there is no reason to deviate from the norm in this case.

A Complaint 1 dated 10 April 2001 was filed with the Office of the Bar Confidant by Elmer Canoy (Canoy) accusing Atty. Jose

Max Ortiz (Atty. Ortiz) of misconduct and malpractice. It was alleged that Canoy filed a complaint for illegal dismissal against hisformer employer, Coca Cola Bottlers Philippines. The complaint was filed with the National Labor Relations Commission (NLRC)Regional Arbitration Board VI in Bacolod City.2 Atty. Ortiz appeared as counsel for Canoy in this proceeding. In 1998, the laborarbiter hearing the complaint ordered the parties to submit their respective position papers. Canoy submitted all the necessarydocuments and records to Atty. Ortiz for the preparation of the position paper. Thereafter, he made several unfruitful visits to the

office of Atty. Ortiz to follow-up the progress of the case. After a final visit at the office of Atty. Ortiz in April of 2000, during whichCanoy was told to come back as his lawyer was not present, Canoy decided to follow-up the case himself with the NLRC. Hewas shocked to learn that his complaint was actually dismissed way back in 1998, for failure to prosecute, the parties not havingsubmitted their position papers.3 The dismissal was without prejudice. Canoy alleged that Atty. Ortiz had never communicated tohim about the status of the case, much less the fact that he failed to submit the position paper.

The Comment 4 filed by Atty. Ortiz is the epitome of self-hagiography. He informs the Court that since commencing his law

practice in 1987, he has mostly catered to indigent and low-income clients, at considerable financial sacrifice to himself. Atty.Ortiz claims that for more than ten years, his law office was a virtual adjunct of the Public Attorney's Office with its steady streamof non-paying clients in the "hundreds or thousands."5 At the same time, he hosted a legal assistance show on the radio,catering to far-flung municipalities and reaching "the people who need legal advice and assistance."6 Atty. Ortiz pursued on with

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this lifestyle until his election as Councilor of Bacolod City, a victory which he generously attributes to the help "of the samepeople whom he had helped by way of legal assistance before."7

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

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

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

The matter was referred to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation .13 Canoy

eventually submitted a motion withdrawing the complaint, but this was not favorably acted upon by the IBP in view of the rulethat the investigation of a case shall not be interrupted or terminated by reason of withdrawal of the charges .14 Eventually, theinvestigating commissioner concluded that "clearly, the records show that [Atty. Ortiz] failed to exercise that degree ofcompetence and diligence required of him in prosecuting his clients' (sic) claim," and recommended that Atty. Ortiz bereprimanded.15 The IBP Commission on Discipline adopted the recommendation, with the slight modification that Atty. Ortiz belikewise warned that a repetition of the same negligence shall be dealt with more severely in the future.

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

Yet, the problem of under-representation of indigent or low-income clients is just as grievous as that of non-representation. Admirable as the apparent focus of Atty. Ortiz's legal practice may have been, his particular representation of Canoy in thelatter's illegal dismissal case leaves much to be desired.

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

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

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

. . .

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

Rule 18.04 – A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable timeto the client's request for information.

. . .

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

. . .

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

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

Once he agrees to take up the cause of a client, a lawyer owes fidelity to such cause and must always be mindful of thetrust and confidence reposed in him. He must serve the client with competence and diligence and champion the latter'scause with wholehearted fidelity, care and devotion. Elsewise stated, he owes entire devotion to the interest of the







































client, warm zeal in the maintenance and defense of his client's rights, and the exertion of his utmost learning and abilityto the end that nothing be taken or withheld from his client, save by the rules of law, legally applied. This simply meansthat his client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land andhe may expect his lawyer to assert every such remedy or defense. If much is demanded from an attorney, it is becausethe entrusted privilege to practice law carries with it the correlative duties not only to the client but also to the court, tothe bar and to the public. A lawyer who performs his duty with diligence and candor not only protects the interest of hisclient; he also serves the ends of justice, does honor to the bar and helps maintain the respect of the community to thelegal profession.16

If indeed Atty. Ortiz's schedule, workload, or physical condition was such that he would not be able to make a timely filing, he

should have informed Canoy of such fact. The relationship of lawyer-client being one of confidence, there is ever present theneed for the client to be adequately and fully informed of the developments of the case and should not be left in the dark as tothe mode and manner in which his/her interests are being defended.17

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

That the case was dismissed without prejudice, thus allowing Canoy to refile the case, hardly serves to mitigate the liability of Atty. Ortiz, as the failure to file the position paper is per se a violation of Rule 18.03.18

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

Assuming that Atty. Ortiz was justified in terminating his services, he, however, cannot just do so and leave complainant in thecold unprotected.25 Indeed, Rule 22.02 requires that a lawyer who withdraws or is discharged shall, subject to a lien,immediately turn over all papers and property to which the client is entitled, and shall cooperate with his successor in the orderly

transfer of the matter. Atty. Ortiz claims that the reason why he took no further action on the case was that he was informed thatCanoy had acquired the services of another counsel. Assuming that were true, there was no apparent coordination between Atty. Ortiz and this new counsel.

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

The appropriate sanction is within the sound discretion of this Court. In cases of similar nature, the penalty imposed by the Courtconsisted of either a reprimand, a fine of five hundred pesos with warning, suspension of three months, six months, and even

disbarment in aggravated cases.28

Given the circumstances, the Court finds the penalty recommended by the IBP too lenientand instead suspends Atty. Ortiz from the practice of law for one (1) month. The graver penalty of suspension is warranted inlieu of an admonition or a reprimand considering that Atty. Ortiz's undisputed negligence in failing to timely file the position paperwas compounded by his failure to inform Canoy of such fact, and the successive dismissal of the complaint.

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

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

SO ORDERED.





















































Documents

Legal Ethics- Cases (Canon 19-22