Legal Ethics for Feb 1 p2

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G.R. No. L-29184 January 30, 1989BENEDICTO LEVISTE,petitioner,vs.THE COURT OF APPEALS, HON. JUDGE LUIS B. REYES, COURT OF FIRST INSTANCE OF MANILA,ROSA DEL ROSARIO, RITA BANU, CARMEN DE GUZMAN-MARQUEZ, JESUS R. DE GUZMAN, RAMDE 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.

GRIO-AQUINO, J.: The issue in this case is whether or not an attorney who was engaged on a contingent fee basis may, in order tocollect 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 privaterespondent Rosa del Rosario to appear as her counsel in a petition for probate of the holographic will of the lateMaxima C. Reselva. Under the will, a piece of real property at Sales Street, Quiapo, Manila, was bequeathed to DelRosario. It was agreed that petitioner's contigent fee would be thirty-five per cent (35%) of the property thatRosa 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 Jesusb) Lucita de Jesusc) Purita L. Llanesd) Rita Banue) Jesus Lulod.

On August 20, 1965, Leviste received a letter from Ms. Del Rosario, informing him that she was terminating hisservices as her counsel due to "conflicting interest." This consisted, according to the letter, in petitioner's moralobligation to protect the interest of his brother-in-law, Gaudencio M. Llanes, whom Del Rosario and the otherparties in the probate proceeding intended to eject as lessee of the property which was bequeathed to Del Rosariounder the will (Annex "B", p. 60, Rollo).On September 20, 1965, petitioner filed a "Motion to Intervene to Protect His Rights to Fees for ProfessionalServices." (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 claimfor attorney's fees 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 ofAttorney'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 thecourt's orders, as well the pleadings of the other parties in the case. He also continued to file pleadings. The casewas submitted for decision without the respondents' evidence.On November 23, 1966, Del Rosario and Rita Banu, the special administratrix-legatee, filed a "Motion To WithdrawPetition for Probate" alleging that Del Rosario waived her rights to the devise in her favor and agreed that the DeGuzman brothers and sisters who opposed her petition for probate, shall inherit all the properties left by thedecedent. (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 topublic policy (Annex "G", pp. 66-67, Rollo).Nonetheless, on August 28, 1967, the court disallowed the will, holding that the legal requirements for its validitywere not satisfied as only two witnesses testified that the will and the testatrix's signature were in thehandwriting of Maxima Reselva.The petitioner filed an appeal bond, notice of appeal, and record on appeal. The private respondents filed a motionto dismiss the 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 thedecision sought to be reviewed. He also asked that he be substituted as party-petitioner, in lieu of his formerclient, 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 trialcourt be ordered to 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 thepetitioner did not appear to be the proper party to appeal the decision in Special Proceeding No. 58325 (Annex 1, p.77, Rollo).


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

1. The Court of Appeals erred in finding that the petitioner appears not to be the proper party toappeal the decision 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 dismissinghis petition for mandamus; and3. The Court of Appeals erred in not reversing the decision in Sp. Proc. No. 58325 denying theprobate of the holographic will of the late Maxima C. Reselva, said decision being patentlyerroneous.

Under his first assignment of error, petitioner argues that by virtue of his contract of services with Del Rosario,he is a creditor of the 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 lattermay petition the court 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 oftheir credits. The excess, should there be any, shall in no case pertain to the renouncer, but shallbe adjudicated to the persons to whom, in accordance with the rules established in this Code, it maybelong.

he has a right to accept for his client Del Rosario to the extent of 35% thereof the devise in her favor (which shein effect repudiated) 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 provisionprotects the creditor of a repudiating heir. Petitioner is not a creditor of Rosa del Rosario. The payment of hisfees is contingent and dependent upon the successful probate of the holographic will. Since the petition forprobate was dismissed by the lower court, the contingency did not occur. Attorney Leviste is not entitled to hisfee.Furthermore, Article 1052 presupposes that the obligor is an heir. Rosa del Rosario is not a legal heir of the lateMaxima C. Reselva. Upon the dismissal of her petition for probate of the decedent's will, she lost her right toinherit any part of the latter's estate. 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'sfees) neither gives, nor purports to give, to the appellee (lawyer) any right whatsoever, personal or real, in and toher (Mrs. Harden's) aforesaid share in the conjugal partnership. The amount thereof is simply a basis forthe 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 bythe petitioner, public policy favors the probate of a will, it does not necessarily follow that every will that ispresented for probate, should be allowed. The law lays down procedures which should be observed and requisitesthat should be satisfied before a will may be probated. Those procedures and requirements were not followed inthis case resulting in the disallowance of the will. There being no valid will, the motion to withdraw the probatepetition was inconsequential.Petitioner was not a party to the probate proceeding in the lower court. He had no direct interest in the probate ofthe will. His only interest in the estate is an indirect interest as former counsel for a prospective heir. In Paras vs.Narciso, 35 Phil. 244, We had occassion to rule that one who is only indirectly interested in a will may not interferein its probate. Thus:

... the reason for the rule excluding strangers from contesting the will, is not that thereby thecourt maybe prevented from learning facts which would justify or necessitate a denial of probate,but rather that the courts and the litigants should not be molested by the intervention in theproceedings of persons with no interest in the estate which would entitle them to be heard withrelation 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 liendid not entitle the attorney-appellant to subrogate himself in lieu of his client. It only gives him theright to collect a certain amount for his services in case his client is awarded a certain sum by thecourt.

WHEREFORE, the petition for certiorari is denied for lack of merit. Costs against the petitioner.SO ORDERED.Narvasa, Cruz, Gancayco and Medialdea, JJ, concur.

G.R. No. 117438 June 8, 1995RAUL SESBREO,petitioner,vs.HON, COURT OF APPEALS, and PATRICIA GIAN, SOTERO BRANZUELA, ANDRES C. YPIL, SANTIAGBACAYO, BRIGIDO COHITMINGAO, VICTORINO DINOY, GUILLERMO MONTEJO and EMILIORETUBADO,respondents.


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ROMERO,J.: Of interest to all law practitioners is the issue at bench, namely, whether the Court of Appeals had the authorityto reduce the amount of attorney's fees awarded to petitioner Atty. Raul H. Sesbreo, notwithstanding thecontract for professional services signed by private respondents.The antecedent facts of the case follow.Fifty-two employees sued the Province of Cebu and then Governor Rene Espina for reinstatement andbackwages. 1 Herein petitioner, Raul H. Sesbreo, replaced the employees' former counsel Atty. Catalino Pacquiao.Thirty-two of the fifty-two employees signed two documents whereby the former agreed to pay petitioner 30% asattorney's fees and 20% as expenses to be taken from their back salaries.On September 12, 1974, the trial court rendered a decision ordering the Province of Cebu to reinstate thepetitioning employees and pay them back salaries. Said decision became final and executory after it was affirmed intoto by the Court of Appeals and the petition to review the appellate decision, denied by this Court in 1978. 2 A compromise agreement was entered into by the parties below in April 1979 whereby the former employeeswaived their right to reinstatement among others. Likewise, pursuant to said compromise agreement, the Provinceof Cebu released P2,300,000.00 to the petitioning employees through petitioner as "Partial Satisfaction ofJudgment." The amount represented back salaries, terminal leave pay and gratuity pay due to the employees.Sometime November and December 1979, ten employees, herein private respondents, 3 filed manifestations beforethe trial court asserting that they agreed to pay petitioner 40% to be taken only from their back salaries.The lower court issued two orders, with which petitioner complied, requiring him to release P10,000.00 to each ofthe ten private respondents and to retain 40% of the back salaries pertaining to the latter out of theP2,300,000.00 released to him.On March 28, 1980, the trial court fixed petitioner's attorney's fees at 40% of back salaries, terminal leave,gratuity pay and retirement benefits and 20% as expenses, or a total of 60% of all monies paid to the employees.Private respondents' motion for reconsideration was granted and on June 10, 1980, the trial court modified theaward after noting that petitioner's attorney's lien was inadvertently placed as 60% when it should have been only50%. The dispositive portion of the order reads:

WHEREFORE, in view of all the foregoing the order of this Court fixing 60% as attorney's fee[s]of Atty. Sesbreo should be 50% of all monies which the petitioners (Suico, et al.) may receivefrom the Provincial Government.

Obviously not satisfied with the attorney's fees fixed by the trial court, petitioner appealed to the Court ofAppeals claiming additional fees for legal services before the Supreme Court, reimbursement for expenses and aclear statement that the fee be likewise taken from retirement pay awarded to his clients. Unfortunately, therespondent appellate court did not agree with him as the generous award was further reduced. 4 The appellate court noted that in this jurisdiction, attorney 's fees are always subject to judicial control anddeemed the award of 20% of the back salaries awarded to private respondents as a fair, equitable and reasonableamount of attorney's fee. The decretal portion of the decision reads:

WHEREFORE, the questioned order is MODIFIED. The attorney's fees due Atty. Raul Sesbreo isfixed at an amount equivalent to 20% of all back salaries which the Province of Cebu has awarded toherein 10 petitioners. 5

Hence this petition for review where he claims that attorney's fees amounting to 50% of all monies awarded to hisclients as contingent fees should be upheld for being consistent with prevailing case law and the contract ofprofessional services between the parties. He adds that since private respondents did not appeal, they are notentitled to affirmative relief other than that granted in the regional trial court.We find no reversible error in the decision of the Court of Appeals and vote to deny the petition.Respondent court found that the contract of professional services entered into by the parties 6 authorizedpetitioner to take a total of 50% from the employees' back salaries only . The trial court, however, fixed thelawyer's fee on the basis of all monies to be awarded to private respondents.Fifty per cent of all monies which private respondents may receive from the provincial government, according tothe Court of Appeals, is excessive and unconscionable, not to say, contrary to the contract of professionalservices. 7 After considering the facts and the nature of the case, as well as the length of time and effort exertedby petitioner, respondent court reduced the amount of attorney's fees due him.It is a settled rule that what a lawyer may charge and receive as attorney's fees is always subject to judicialcontrol.8 A lawyer is primarily an officer of the court charged with the duty of assisting the court in administeringimpartial justice between the parties. When he takes his oath, he submits himself to the authority of the courtand subjects his professional fees to judicial control. 9 As stated by the Court in the case of Sumaong v. Judge : 10

A lawyer is not merely the defender of his client's cause and a trustee of his client in respect ofthe client's cause of action and assets; he is also, and first and foremost, an officer of the courtand participates in the fundamental function of administering justice in society. It follows that alawyer's compensation for professional services rendered are subject to the supervision of thecourt, not just to guarantee that the fees he charges and receives remain reasonable andcommensurate with the services rendered, but also to maintain the dignity and integrity of the legal


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profession to which he belongs. Upon taking his attorney 's oath as an officer of the court, a lawyersubmits himself to the authority of the courts to regulate his right to professional fees. 11

In the case at bench, the parties entered into a contingent fee contract. The Agreement provides:WE, the undersigned petitioners in the case of POLICRONIO BELACHO, ET AL., VS. RENEESPINA ET AL., hereby agree to pay Atty. Sesbreo, our lawyer, the following to be taken from ourback salaries:

30% as attorney's fees20% as expenses

That we enter into agreement in order to be paid our back salaries as early as possible and so thatwe may be reinstated as early as possible.

A stipulation on a lawyer's compensation in a written contract for professional services ordinarily controls theamount of fees that the contracting lawyer may be allowed, unless the court finds such stipulated amountunreasonable unconscionable. 12 A contingent fee arrangement is valid in this jurisdiction 13 and is generally recognized as valid and binding butmust be laid down in an express contract. 14 The amount of contingent fees agreed upon by the parties is subjectto the stipulation that counsel will be paid for his legal services only if the suit or litigation prospers. A muchhigher compensation is allowed as contingent fees in consideration of the risk that the lawyer may get nothing ifthe suit fails.Contingent fee contracts are under the supervision and close scrutiny of the court in order that clients may beprotected from unjust charges. 15 Its validity depends in large measure on the reasonableness of the stipulatedfees under the circumstances of each case. 16 When the courts find that the stipulated amount is excessive or the contract is unreasonable or unconscionable, orfound to have been marred by fraud, mistake, undue influence or suppression of facts on the part of the attorney,public policy demands that said contract be disregarded to protect the client from unreasonable exaction. 17 Stipulated attorney's fees are unconscionable whenever the amount is by far so disproportionate compared to thevalue of the services rendered as to amount to fraud perpetrated upon the client. This means to say that theamount of the fee contracted for, standing alone and unexplained would be sufficient to show that an unfairadvantage had been taken of the client, or that a legal fraud had been perpetrated on him. 18 The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract, will nothowever, preclude recovery. It merely justifies the court's fixing a reasonable amount for the lawyer's services.Courts may always ascertain, if the attorney's fees are found to be excessive, what is reasonable under thecircumstances. Quantum meruit , meaning "as much as he deserves," is used as the basis for determining thelawyer's professional fees in the absence of a contract. Factors such as the time spent and extent of servicesrendered; novelty and difficulty of the questions involved; importance of the subject matter; skill demanded;probability of losing other employment as a result of acceptance of the proffered case; customary charges forsimilar services; amount involved in the controversy and the benefits resulting to the client; certainty ofcompensation; character of employment; and professional standing of the lawyer, are considered in determining hisfees. 19 There is nothing irregular about the respondent court's finding that the 50% fee of petitioner is unconscionableAs aptly put by the court:

It effectively deprives the appellees of a meaningful victory of the suit they have passionatelypursued. Balancing the allocation of the monetary award, 50% of all monies to the lawyer and theother 50% to be allocated among all his 52 clients, is too lop-sided in favor of the lawyer. The ratiomakes the practice of law a commercial venture, rather than a noble profession.. . . Also, the 52 employees who are the plaintiffs in the aforementioned civil case were dismissedfrom employment, their means of livelihood. All 52 hired claimant-appellant as counsel so that theycould be reinstated and their source of income restored. It would, verily be ironic if the counselwhom they had hired to help would appropriate for himself 50% or even 60% of the total amountcollectible by these employees. Here is an instance where the courts should intervene. 20

Considering the nature of the case, which is a labor case, the amount recovered and petitioner's participation inthe case, an award of 50% of back salaries of his 52 clients indeed strikes us as excessive. Under thecircumstances, a fee of 20% of back salaries would be a fair settlement in this case. In any event, this awardpertains only to the ten private respondents herein. Petitioner has already been compensated in the amount of 50%of all monies received, by the rest of his clients in the case below.WHEREFORE, in view of the foregoing, the petition is DENIED and the appealed decision AFFIRMED.SO ORDERED.Melo, Vitug and Francisco, JJ., concur. Feliciano, J., is on leave.

G.R. No. L-67970 January 15, 1988JOSE ABROGAR and JUANA DESEAR,petitioners,vs.INTERMEDIATE APPELLATE COURT, SOCORRO DESEAR and BRIGIDA DESEAR,respondents.


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SARMIENTO,J.: This is a Petition for Review on certiorari of the Decision of the then Intermediate Appellate Court, 1 now Court ofAppeals, affirming in toto the decision of the trial court which annulled a sheriff sale.The petitioners and private respondents were judgment plaintiffs and defendants, respectively, in a civilcase 2decided by the trial court and affirmed by the appellate court. For failure of the private respondents tosatisfy a final and executory judgment in the said civil case amounting to P2,553.00 only, their two parcels of landwith a combined market value of P75,000.00, were levied on execution and advertised for public sale by theProvincial Sheriff. 3 The auction sale was scheduled for March 27, 1971 but the same did not push through becausethe trial court, upon motion of private respondent Socorro Desear, issued an order on March 26, 1971, or one daybefore the date fixed, postponing the auction sale on condition that the publication fees would be paid by themovant. The movant did not pay as ordered. Instead of proceeding with the auction sale on March 27, 1971,considering that there was no valid postponement, the condition thereof not having been complied with, theProvincial Sheriff of Pangasinan nevertheless held the auction almost four months later, on July 16, 1971, when thetwo parcels of land were sold, for, as earlier stated, P2,553.00 only. Subsequently, a Sheriffs Certificate of Salewas issued. There was no showing that private respondent Socorro Desear agreed to the July 16, 1971 auction sale.However, it is indisputable that there was neither new notice nor new publication of the said auction sale. 4 The trial court ruled that the Sheriffs Final Sale was null and void for lack of notice and publication and awardedattorney's fees in the amount of P2,000.00 in favor of the private respondents. 5 Now before us, the petitioners assigned several errors of the respondent appellate court. We summarize theseassigned errors into two, to wit: (1) in ruling that there was no valid postponement of the date of the auction saleoriginally set for March 27, 1971; and (2) in awarding attorney's fees of P2,000.00 in the absence of any prayerand legal bases therefor. 6 As correctly pointed out by the respondent court (and the trial court), the proper notice and publication in anewspaper was made for the sale at public auction scheduled for March 27, 1971. On motion, however, of privaterespondents, the trial court in an Order dated March 26, 1971, directed the sale set for March 27, 1971 postponedprovided the movant would pay the publication fees, otherwise the public auction would continue at a date to bedesignated by the Sheriff. The movant did not pay the publication fees hence there was no postponement of thepublic auction sale since the condition precedent or suspensive condition (that of paying the publication fees) wasnot complied with. 7 There was therefore no valid postponement of the public auction sale. And there was nowritten consent of debtor and creditor and neither was there any agreement in writing by the parties authorizingthe sheriff or the officer making the sale to adjourn the same "to any date agreed upon in writing by theparties." 8 The public auction sale set for March 27, 1971, should have been held considering that the said schedule compliedwith all the requirements of law regarding a public sale, including notice and publication. The officer may adjournthe sale from day to day if it is necessary to do so for lack of time to complete the sale on the date fixed in thenotice. 9 But he may not adjourn to another date unless with the written consent of the parties. 10 This wasprecisely the point of the appellate court when it stressed the fact that there was no written agreement betweenthe debtor and the creditor to postpone the sale, and in fact there was no sale held on the scheduled date 11 towarrant the application of Section 24, Rule 39 of the Revised Rules of Court.Considering, therefore, that there was no valid postponement of the original date of the auction sale on March 27,1971, "then the alleged public auction sale on July 16, 1971 or close to four months after the original date of saleon March 27, 1971 without the proper notice and publication is null and void" as correctly pointed out by therespondent court. 12 The second issue raised by the petitioners is meritorious.There is neither an allegation nor evidence to support the award of P2,000.00 by way of attorney's fees in favor ofprivate respondents. The complaint does not pray for attorney's fees. 13 Even the transcript of stenographic notesin the trial does not contain any testimony to support an award of attorney's fees. 14 As succinctly put, the claimfor attorney's fees was neither pleaded nor proved !The exercise of judicial discretion in the award of attorney's fees under Article 2208 (ii) of the New Civil Codedemands a factual, legal, and equitable justification. Without such justification, the award is a conclusion without apremise, its basis being improperly left to speculation and conjecture. 15 Attorney's fees are recoverable not as a matter of right. 16 It is the import of Article 2208 that the award ofattorney's fees is an exception and that the decision must contain an express finding of fact to bring the casewithin the exception and justify the grant of attorney's fees. "Just and equitable" under paragraph 11, Article2208, New Civil Code is not a matter of feelings, but demonstration. 17 The reason for the award of attorney'sfees must be stated in the text of the court's decision, otherwise, if it is stated only in the dispositive portion ofthe decision, the same must be disallowed on appeal. 18 In the light of all the foregoing, the award of attorney's fees in favor of the private respondents in the casebefore us has no basis. Hence, attorney's fees must be disallowed.WHEREFORE, the Decision of the respondent court declaring null and void the public auction sale on July 16, 1971for lack of notice and publication, is hereby AFFIRMED. However, the award of attorney's fees is REVERSED.Costs against petitioners.


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This Decision is IMMEDIATELY EXECUTORY.Yap, Melencio-Herrera, Paras and Padilla, JJ., concur.

G.R. No. 97255 August 12, 1994SOLID HOMES, INC.,petitioner,vs.HON. COURT OF APPEALS, INVESTCO, INC., ANGELA PEREZ STALEY, and ANTONIOPEREZ,respondents.Rene A. Diokno for petitioner.

R E S O L U T I O N

VITUG,J.: An action for collection of sums of money, damages and attorney's fees was filed with the Regional Trial Court(Civil Case No. 40615) of Pasig by private respondents Investco, Angela Perez Staley and Antonio Perez Jr. againstpetitioner Solid Homes, Inc.Private respondents averred that, on 07 September 1976, they sold, under an agreement entitled "contract to selland to buy," to Solid Homes six (6) parcels of land in Quezon City and Marikina, with an area of 704,443 sq.m., fora total selling price of P10,211,075.00 payable (in accordance with paragraph 1 thereof), as follows:

a) P100,000.00, Philippine Currency, as part down payment upon signing and execution of thiscontract receipt of which in full is hereby acknowledged;b) P2,042,215.00, Philippine Currency, as down payment payable on the following dates:

1 July 22, 1977 P400,000.002 October 22, 1977 711,107.503 January 22, 1978 711,107.50

It is hereby agreed that the above down payment included the first down payment of P199,000.00.Should the FIRST PARTY obtain titles to the properties above-described after July 22, 1977, thedue dates of the down payment and all subsequent payments on the balance shall be adjustedaccordingly.c) The balance of P8,188,860.00 shall be payable in ten (10) semi-annual installments for a period offive (5) years and shall earn interest at the rate of twelve (12%) per annum, the first installment tobe due on July 22, 1978. The installment due together with the Schedule of Payments attachedhereto as Schedule "A" and made an integral part of this contract (Exh. A). 1

The second paragraph of Exhibit "A" stipulated that should Solid Homes fail to pay any of the installments on theirrespective due dates, an interest of one percent (1%) per month on the defaulted amount would be paid for up totwo months or pro-rata thereof; thereafter, should the installment due, as well as the interest thereon, stillremain unpaid, the entire balance of the purchase price would then become immediately due and demandable. Suchdue and demandable sum would be payable within thirty (30) days, counted from the expiration of the 2-monthperiod, without further need for judicial action.Private respondents asserted that Solid Homes violated the terms of the agreement by refusing to pay the balanceof P4,800,282.91 and by failing to negotiate a settlement with the tenants and squatters of the property despiteits receipt from Investco of P350,000.00 for that specific purpose.The trial court rendered judgment on 14 February 1985; the dispositive portion read:

WHEREFORE, judgment is hereby rendered ordering the defendant to pay the plaintiffs:1) The amount of P4,800,282.91 with interest thereof at the rate of one percent per month fromFebruary 23, 1981, until fully paid;2) The amount of P99,559.00 representing cost of science and transfer taxes which defendantcredited to its account with interest at the legal rate from the filing of the complaint;3) The amount of P250,000.00 to cover attorney's fees and litigation expenses. 2

On appeal, the Court of Appeals (CA-G.R. CV No. 13400), modified the trial court's judgment and rendered its owndecision, dated 21 January 1991, resolving thusly:

PREMISES CONSIDERED, the judgment of the trial court is hereby modified by orderingdefendant-appellant to pay plaintiff the amount of P4,800,282.91 with interest thereon at the rateof one percent per month from March 22, 1982. The amount of attorney's fees is hereby reducedfrom P250,000.00 to P50,000.00. The decision is AFFIRMED in all other aspects. 3

In the instant petition for review, petitioner Solid Homes argues (a) that the Court of Appeals should not haveawarded attorney's fees, there being an absence of any special finding of fact to justify such award, and (b) thatit erred in declaring due and demandable the entire unpaid balance still owing to private respondents.The Second Division of this Court required respondents to comment on the petition in its Resolution of 22 April1991. Meanwhile, Atty. Alejandro Barin withdrew as counsel for respondents Investco, Inc., Angela Perez Staleyand Antonio Perez, Jr. 4 We required private respondents to submit the name and address of their new counsel; tothis day, no compliance has yet been made. In our resolution, dated 01 December 1993, we required the parties to


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move in the premises and to advise the Court whether "supervening events may have rendered this case moot andacademic." 5 Petitioner submitted its compliance and manifested thusly:

In the meantime, on April 15, 1985 before judgment was rendered by the RTC in Civil Case No.40615 Investco, Inc. (respondent herein) sold the very same parcels of land involved in said case, infavor of Armed Forces of the Philippines Mutual Benefit Association, Inc. (AFPMBAI)Solid Homes, Inc. (herein petitioner) filed Civil Case No. Q-46570 RTC Quezon City entitled 'SolidHomes, Inc., plaintiff versus AFPMBAI, Investco, Inc. and the Register of Deeds of Quezon Citycovering titles registered in Quezon City and Civil Case No. 52999 Solid Homes, Inc., plaintiffversus AFPMBAI, Investco, Inc., and Register of Deeds for Pasig covering titles registered in Pasig,Metro Manila, both for nullification of the said second deed of sale over the same propertiesinvolved in the instant case.Quezon City RTC Civil Case No. 46570 was decided in favor of plaintiffs, Solid Homes, Inc.; onappeal, the Court of Appeals (CA G.R. No. 22365) reversed the decision; same was elevated to theSupreme Court where it is pending in SC G.R. No. 100437.Pasig RTC, Civil Case No. 52999 was decided in favor of plaintiff Solid Homes, Inc.; defendantsappealed to the Court of Appeals (CA G.R. No. 27398), which affirmed the RTC Decision; on themain cause of action Petition for Review by this to this Honorable Court is pending under G.R. No.104769.Under the circumstances, herein petitioner, in compliance with the Resolution dated December 1,1993, hereby manifests that supervening events since the Petition herein was filed has notrendered this case as moot and academic, considering that the issue involved is the amount to bepaid in SOLID HOMES, INC. as balance on the consideration of the original sale by Investco, Inc.to it and the concomitant transfer of titles to the latter upon payment thereof, whereas in G.R. No.100437 and G.R. No. 104769, the issue is whether the second buyer AFPMBAI had actual orconstructive notice of the prior sale by Investco, Inc. to herein Petitioner, Solid Homes, Inc. 6

As of this late date, the Court has yet to hear from private respondents. Given the premises, and in order topermit this case to be finally resolved and terminated, the required comment on the petition for review should nowbe, as it is hereby, dispensed with.Article 2208 of the Civil Code allows attorney's fees to be awarded by a court when its claimant is compelled tolitigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omissionof the party from whom it is sought. While judicial discretion is here extant, an award thereof demands,nevertheless, a factual, legal or equitable justification. The matter cannot and should not be left to speculation andconjecture (Mirasol vs. De la Cruz, 84 SCRA 337; Stronghold Insurance Company Inc. vs. Court of Appeals, 173SCRA 619).In the case at bench, the records do not show enough basis for sustaining the award for attorney's fees and toadjudge its payment by petitioner. On the contrary, the appellate court itself has found that petitioner's act ofwithholding payment could not be said to be all that unjustified. The disagreement of the parties on thedemandability of the amount still due and the accrual date of interest has persisted largely because of superveningcircumstances and the perceived inexplicitness of the contract itself. The decision of the appellate court, has, infact, reversed that of the trial court on the imposition of interest from 23 February 1981, thus upholding, whichwe similarly find to be in order, the position of petitioner that the accrual dated should instead start only on 28March 1982.Relative to the demandability of the entire unpaid balance, we agree with, and so adopt as our own that ofrespondent court; viz :

The amount actually paid on account of the contract to buy and sell (Exh. A or 1) is not an area ofcontroversy in the first cause of action. The sum of P2,042,215.00 corresponding to the downpayment, as well as P4,084,430.00 with respect to the first four semi-annual installments and aportion of the fifth installment, had been received making a total of P6,126,645.00. It is concededthat a balance of P4,800,282.91 is left unpaid. The dispute is with respect to the period whendefendant had defaulted and, consequently, when payment of interest shall begin. The plaintiffsclaim that said period should start on February 23, 1981; while the defendant contends that theperiod must be adjusted should the titles be obtained by the plaintiff corporation after July 22,1977, as provided in Par. 1(b) of the contract to sell and to buy. Considering that titles wereactually transferred to Investco, Inc. between March 21 to March 28, 1979, the defendant aversthat the original schedule of payment must not be followed and the 5th installment shall only be dueon March 22, 1982.

xxx xxx xxxIt is undisputed that appellant Solid Homes had made a total payment of P6,126,645.00 leaving abalance of P4,800,282.91, which refers to the 6th to the 10th installments. Of the 5th installmentdue on July 22, 1980, the following payments were made by appellant:

Oct. 30, 1980 to Nov. 10, 1980 P150,000.00Nov. 18, 1980 to Dec. 10, 1980 270,000.00


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Dec. 18, 1980 to Jan. 14, 1981 101,853.12Jan. 20 to Feb. 12, 1981 95,000.00Feb. 16 to Feb. 19, 1981 115,000.00 P731,853.12

Thereafter, no further payment was made by appellant contending that under the provisions ofparagraph 1(b) of the contract, the payment schedule should be adjusted. The said provisionsstates as follows:Par. 1, sub-par. (b)

Should the FIRST PARTY (plaintiff Investco) obtain titles to the properties above-described after July 22, 1977, the due dates of the downpayment and thesubsequent payments on the balance shall be adjusted accordingly.'

Admittedly, the subject titles were obtained during the period of March 21, to March 28, 1979, orafter July 22, 1977 (Exhs. D to 1 and Exhs. 2 to 10). Thus, implementing par. 1(b) of the Contract,the due dates of payments should have been adjusted as follows:Due DatesPer Contract Installment AdjustedSchedule A Number Due DatesDownpaymentJuly 22, 1977 March 28, 1979October 22, 1977 June 08, 1979January 22, 1978 September 28, 1979BalanceJuly 22, 1978 No. 1 March 08, 1980January 22, 1979 No. 2 September 28, 1980July 22, 1979 No. 3 March 28, 1981January 22, 1981 No. 4 September 28, 1981July 22, 1980 No. 5 March 28, 1982January 22, 1981 No. 6 September 28, 1982July 22, 1981 No. 7 March 28, 1983January 22, 1982 No. 8 September 28, 1983July 22, 1982 No. 9 March 28, 1984January 22, 1983 No. 10 September 28, 1984In view of the adjustment of due dates in accordance with par. 1(b) of the Contract payments madeshould correspond to the adjusted dates. Thus, the payment on the 4th installment which issupposed to have been made on January 22, 1980, should be credited on September 28, 1981, andthe next payment on the 5th installment which should have been made on July 22, 1981 under thecontract would have to be credited on March 28, 1981, the adjusted due date. 7

It is but proper, therefore, to indeed declare 28 March 1982 to be the due date for the payment of the 5thinstallment. The total amount of P731,853.12, representing payments for the 5th installment made by petitioner,should rightly be credited on 28 March 1982, the adjusted due date. Since no payment appears to have been madeafter 1981, petitioner should thereby be likewise held in default in the payment of the 6th to the 10thinstallments. Under the terms of the contract, hereinbefore recited, petitioner's default has effectively activatedthe acceleration clause of the contract, and we see no error on the part of the appellate court in orderingpetitioner to pay the entire unpaid balance of P4,800,282.91 with interest thereon at the rate of 1% per month tobe computed from 22 March 1982.WHEREFORE, except on the award of attorney's fees which is hereby DELETED, the decision of the Court ofAppeals is AFFIRMED. No costs.SO ORDERED.

Bidin, Romero and Melo, JJ., concur. Feliciano, J. concurs in the result.

G.R. No. L-41862 February 7, 1992B. R. SEBASTIAN ENTERPRISES, INC.,petitioner,vs.HON. COURT OF APPEALS, EULOGIO B. REYES, NICANOR G. SALAYSAY, in his capacity as ProvincialSheriff of Rizal, and ANTONIO MARINAS, in his capacity as Deputy Sheriff,respondents.Benito P. Fabie for petitioner.Ildefonso de Guzman-Mendiola for private respondents.

DAVIDE, JR., J.:


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This is a petition for prohibition and mandamus , with prayer for preliminary injunction, to review the Resolutiondated 10 November 1975 of respondent Court of Appeals in C.A.-G.R. No. 53546-R denying petitioner's motion toreinstate its appeal, earlier dismissed for failure to file the Appellant's Brief.The material operative facts of this case, as gathered from the pleadings of the parties, are not disputed.Eulogio B. Reyes, now deceased, filed an action for damages with the then Court of First Instance (now RegionalTrial Court) of Rizal, Pasay City Branch, against the Director of Public Works, the Republic of the Philippines andpetitioner herein, B. R. Sebastian Enterprises, Inc. The case was docketed as Civil Case No. 757-R. 1 On 7 May 1973, the trial court rendered a decision finding petitioner liable for damages but absolving the otherdefendants. 2 Petitioner, thru its counsel, the law firm of Baizas, Alberto and Associates, timely appealed the adverse decision tothe respondent Court of Appeals, which docketed the case as C.A.-G.R. No. 53546-R. 3 During the pendency of the appeal, the plaintiff-appellee therein, Eulogio B. Reyes, died. Upon prior leave of therespondent Court, he was substituted by his heirs Enrique N. Reyes, Felicisima R. Natividad, Donna Marie N.Reyes and Renne Marie N. Ryes who are now the private respondents in this present petition.On 19 February 1974, petitioner, thru its then counsel of record, received notice to file Appellant's Brief within 45days from receipt thereof. It had, therefore, until 5 April 1974 within which to comply.Counsel for petitioner failed to file the Brief; thus, on 9 July 1974, respondent Court issued a Resolution requiringsaid counsel to show cause why the appeal should not be dismissed for failure to file the Appellant's Brief withinthe reglementary period. 4 A copy of this Resolution was received by counsel for petitioner on 17 July 1974. 5 As the latter failed to comply with the above Resolution, respondent Court, on 9 September 1974, issued anotherResolution this time dismissing petitioner's appeal:

It appearing that counsel for defendant-appellant failed to show cause why the appeal should not bedismissed (for failure to file the appellant's brief within the reglementary period which expired onApril 5, 1974) within the period of 10 days fixed in the resolution of July 9, 1974, copy of whichwas received by said counsel on July 17, 1974; . . . 6

On 28 September 1974, petitioner, this time thru the BAIZAS LAW OFFICE, filed a motion forreconsideration 7 of the resolution dismissing its appeal alleging that as a result of the death of Atty. CrispinBaizas, senior partner in the law firm of BAIZAS, ALBERTO & ASSOCIATES, the affairs of the said firm are stillbeing settled between Atty. Jose Baizas (son of Crispin Baizas) and Atty. Ruby Alberto, the latter havingestablished her own law office; furthermore, Atty. Rodolfo Espiritu, the lawyer who handled this case in the trialcourt and who is believed to have also attended to the preparation of the Appellant's Brief but failed to submit itthrough oversight and inadvertence, had also left the firm.In its Resolution of 9 October 1974, respondent Court denied the motion for reconsideration, stating that:

Upon consideration of the motion of counsel for defendant-appellant, praying, on the groundstherein stated, that the resolution of September 9, 1974, dismissing the appeal, be set aside, andthat appellant be granted a reasonable period of time within which to file its brief: considering thatsix (6) months had elapsed since the expiration of the original period and more than two and one-half (2-) months since counsel received copy of the resolution requiring him to show cause why theappeal should not be dismissed for failure to file brief; Motion Denied. 8

No action having been taken by petitioner from the above Resolution within the period to file a petition for review,the same became final and executory, and the records of the case were remanded to the court of origin forexecution.The trial court issued a writ of execution on 21 October 1975. 9 Pursuant thereto, respondent Provincial Sheriffand Deputy Sheriff attached petitioner's Hough Pay Loader with Hercules Diesel Engine and issued on 5 November1975 a Notice of Sheriff's Sale, scheduling for Friday, 14 November 1975 at 10:00 o'clock in the morning, theauction sale thereof. 10 On 6 November 1975, petitioner filed with respondent Court a Motion to Reinstate Appeal with Prayer forIssuance of a Writ of Preliminary Injunction 11 dated 5 November 1975, and containing the following allegations:

1. That late as it may be, this Honorable Court has the inherent power to modify and set aside itsprocesses, in the interest of justice, especially so in this case when the case was dismissed onaccount of the untimely death of Atty. Crispin D. Baizas, counsel of BRSEI (B.R. SebastianEnterprises, Inc.).2. That to dismiss the case for failure to file the appellant's brief owing to the untimely death ofthe late Atty. Crispin D. Baizas would be tantamount to denying BRSEI its ( sic ) day in court, and is,therefore, a clear and unmistakable denial of due process on the part of BRSEI.3. That to reinstate BRSEI's appeal would not impair the rights of the parties, since all that BRSEIis asking for, is a day in court to be heard on appeal in order to have the unfair, unjust and unlawfuldecision, set aside and reversed.

The respondent Court denied the said motion in its Resolution of 10 November 1975: 12 . . . it appearing that appellant was represented by the law firm of Baizas, Alberto & Associates, andwhile Atty. Baizas died on January 16, 1974, his law firm was not dissolved since it received thenotice to file brief on February 19, 1974, and the copy of the Resolution of July 9, 1974, requiring


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appellant to show cause why the appeal should not be dismissed was received by the law firm on July17, 1974 and no cause was shown; . . .

Hence, on 13 November 1975, petitioner filed the original petition 13 in this case against the Court of Appeals,Eulogio B. Reyes, Nicanor G. Salaysay, as Provincial Sheriff of Rizal, and Antonio Marinas, as Deputy Sheriff. Thepetition likewise prayed for the issuance of a Temporary Restraining Order.In the Resolution of 13 November 1975, this Court required respondents to comment on the petition within ten (10)days from receipt thereof, and issued a Temporary Restraining Order. 14 On 12 January 1976, respondents filed a Partial Comment on the Petition with a Motion to Suspend theProceedings 15 on the ground that respondent Eulogio B. Reyes is already dead and his lawful heirs had already beenordered substituted for him during the pendency of the appeal before the respondent Court of Appeals.In the Resolution of 21 January 1976, this Court ordered petitioner to amend its petition within then (10) daysfrom receipt of notice, and suspended the filing of respondents' Comment until after the amendment is presentedand admitted. 16 In compliance therewith, petitioner filed on 9 February 1976 a Motion for Leave to Admit Amended Petition towhich it attached the said Amended Petition. 17 The amendment consists in the substitution of Eulogio B. Reyeswith his heirs.This Court admitted the Amended Petition 18 and required the respondents to file their Comment within ten (10)days from notice thereof, which they complied with on 5 April 1976. 19 Petitioner filed its Reply to the Comment on29 April 1976.20 In the Resolution of 12 May 1976, this Court denied the petition for lack of merit: 21

L-41862 (B.R. Sebastian Enterprises, Inc. vs. Court of Appeals, et. al.). Considering theallegations, issues and arguments adduced in the amended petition for review on certiorari of thedecision of the Court of Appeals, respondents' comment thereon, as well as petitioner's reply tosaid comment, the Court Resolved to DENY the petition for lack of merit.

However, on 31 May 1976, petitioner filed a motion for its reconsideration 22 claiming that since it was deprived ofthe right to appeal without fault on its part, the petition should be given due course.Respondents submitted on 22 July 1976 their Comment 23 to said Motion for Reconsideration.On 10 September 1976, this Court resolved to reconsider 24 its Resolution of 12 May 1976 and required bothparties to submit simultaneously their respective Memoranda within thirty (30) days from notice thereof.Petitioner submitted its Memorandum on 5 November 1976 25 while respondents submitted theirs on 22 November1976. 26 On 29 November 1976, this Court deemed the present case submitted for decision. 27 The sole issue to be addressed is whether or not the respondent Court of Appeals gravely abused its discretion indenying petitioner's motion to reinstate its appeal, previously dismissed for failure to file the Appellant's Brief.Petitioner, in its Memorandum, extensively expounds on respondent Court's authority to reinstate dismissedappeals and cites as basis thereof the decision of this Court in Heirs of Clemente Celestino vs. Court of Appeals, etal., 28 Indeed, in said case, this Court affirmed the resolution of the Court of Appeals reinstating an appeal afterbeing dismissed for failure by the appellants therein to file their brief, and after entry of judgment and remand ofthe records to the lower court and cancelled the entry of judgment, requiring the lower court to return therecords to the Court of Appeals and admit appellant's brief. Said case, however, had a peculiar or singular factualsituation" which prompted the Court of Appeals to grant the relief and which this Court found sufficient to justifysuch action. As this Court, through Associate Justice Ramon Aquino, said:

We are of the opinion that under the peculiar or singular factual situation in this case and toforestall a miscarriage of justice the resolution of the Court of Appeals reinstating the appealshould be upheld.That Court dismissed the appeal of the Pagtakhans in the mistaken belief that they had abandonedit because they allegedly failed to give to their counsel the money needed for paying the cost ofprinting their brief.But presumably the Appellate Court realized later that fraud might have been practised onappellants Pagtakhans since their oppositions were not included in the record on appeal. In ( sic )sensed that there was some irregularity in the actuations of their lawyer and that Court ( sic ) itselfhad been misled into dismissing the appeal.Counsel for the Pagtakhans could have furnished them with copies of his motions for extension oftime to file brief so that they would have known that the Court of Appeals had been apprised oftheir alleged failure to defray the cost of printing their brief and they could have articulated theirreaction directly to the Court. Counsel could have moved in the Appellate Court that he be allowedto withdraw from the case or that the Pagtakhans be required to manifest whether they were stilldesirous of prosecuting their appeal or wanted a mimeographed brief to be filed for them(See People vs. Cawili, L-30543, August 31, 1970, 34 SCRA 728). Since counsel did none of thosethings, his representation that the appellants had evinced lack of interest in pursuing their appeal isdifficult to believe.If the appellate court has not yet lost its jurisdiction, it may exercise its discretion in reinstatingan appeal, having in mind the circumstances obtaining in each case and the demands of substantial


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justice (Alquiza vs. Alquiza, L-23342, February 10, 1968, 22 SCRA 494, 66 O.G. 276; C. Vda. deOrdoveza vs. Raymundo, 62 Phil. 275; Chavez vs. Ganzon, 108 Phil. 6).But even if it has already lost jurisdiction over the appeal by reason of the remand of the record tothe lower court, it, nevertheless, has the inherent right to recall the remittitur or the remand ofthe record to the lower court if it had rendered a decision or issued a resolution which was inducedby fraud practised upon it. Such a right is not affected by the statutory provision that after therecord has been remanded, the appellate court has no further jurisdiction over the appeal (5 AmJur. 2nd 433 citing Lovett vs. State, 29 Fla. 384, 11 So. 176; 84 ALR 595; State vs. Ramirez, 34Idaho 623, 203 Pac. 279).

In the instant case, no fraud is involved; what obtain is simple negligence on the part of petitioner's counsel, whichis neither excusable nor unavoidable. Petitioner thus failed to demonstrate sufficient cause to warrant a favorableaction on its plea.As held in Chavez, et al. vs. Ganzon, et al., 29 and reiterated in Negros Stevedoring Co., Inc. vs. Court ofAppeals, 30We said:

Granting that the power or discretion to reinstate an appeal that had been dismissed is included inor implied from the power or discretion to dismiss an appeal, still such power or discretion must beexercised upon a showing of good and sufficient cause, in like manner as the power or discretionvested in the appellate court to allow extensions of time for the filing of briefs. There must besuch a showing which would call for, prompt and justify its exercise ( sic ). Otherwise, it cannot andmust not be upheld.

To justify its failure to file the Appellant's Brief, petitioner relies mainly on the death of Atty. Crispin Baizas andthe supposed confusion it brought to the firm of BAIZAS, ALBERTO & ASSOCIATES. It says: 31

Petitioner, thru its president Bernardo R. Sebastian, engaged the services of Atty. Crispin D. Baizasto handle its defense in Civil Case No. 757-R; however, it appears that Atty. Baizas enteredpetitioner's case as a case to be handled by his law firm operating under the name and style"Crispin D. Baizas & Associates." Hence, the Answer to the complaint, Answer to Cross-Claim, andAnswer to Fourth-party Complaint filed for petitioner in said case, evince that the law firm "CrispinD. Baizas & Associates" represents petitioner in the action.After rendition of the assailed Decision of the trial court, petitioner's counsel appears to havechanged its firm name to "Baizas, Alberto & Associates." The appeal was thus pursued forpetitioner by the law firm "Baizas, Alberto & Associates."On January 16, 1974, Atty. Crispin D. Baizas died as a result of a brief heart attack. Inconsequence (sic ) of his death, the law firm "Baizas, Alberto & Associates" was in a terriblyconfused state of affairs. In effect, said law firm was dissolved. Atty. Ruby Alberto formed herown law office and other associates left the dissolved law firms ( sic ) joining other offices orputting up their own. Atty. Jose Baizas, son of deceased Crispin D. Baizas, took over themanagement of why may have been left of his father's office, it appearing that some, if not many,cases of the defunct office were taken over by the associates who left the firm upon itsdissolution.But, none of the former partners and associates/assistants of the dissolved law firm filed therequired appellant's brief for herein petitioner in its appealed case before the respondent Court ofAppeals. No notice was served upon petitioner by any of the surviving associates of the defunct lawfirm that its appellant's brief was due for filing or that the law office had been dissolved and thatthe law office had been dissolved and that none of the lawyers herein formerly connected desiredto handle the appealed case of petitioner. . . .The circumstances that the law firm "Baizas, Alberto & Associates" was dissolved and that none ofthe associates took over petitioner's case, and no notice of such state of affairs was given topetitioner who could have engaged the services of another lawyer to prosecute its appeal beforerespondent Court, constitutes ( sic ) an UNAVOIDABLE CASUALTY that entitles petitioner to therelief prayed for. On the other hand, the non-dissolution of said law firm "Baizas, Alberto &Associates" will not defeat petitioner's claim for relief since, in such event, the said firm hadABANDONED petitioner's cause, which act constitutes fraud and/or reckless inattention the resultof which is deprivation of petitioner's day in court. In the abovementioned Yuseco case, thisHonorable Court had emphatically and forcefully declared that it will always be disposed to grantrelief to parties aggrieved by perfidy, fraud, reckless inattention and downright incompetence oflawyers, which has the consequence of depriving their day ( sic ) in court.

We find no merit in petitioner's contentions. Petitioner's counsel was the law firm of BAIZAS, ALBERTO &ASSOCIATES and not merely Atty. Crispin Baizas. Hence, the death of the latter did not extinguish the lawyer-client relationship between said firm and petitioner.In Gutierrez & Sons, Inc. vs. Court of Appeals, 32 the appeal filed by the law firm of BAIZAS, ALBERTO &ASSOCIATES on behalf of respondent therein was dismissed for failure to comply with the requisites enumeratedin the Rules of Court; the excuse presented by said counsel was also the death of Atty. Crispin Baizas. This Courtheld therein that:


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The death of Attorney Baizas was not a valid excuse on the part of his associates for not attendingto Alvendia's appeal, supposing arguendo that his office was solely entrusted with the task ofrepresenting Alvendia in the Court of Appeals. Attorney Espiritu (not Attorney Baizas) was the oneactually collaborating with Viola in handling Alvendia's case. He did not file a formal appearance inthe Court of Appeals.

Undoubtedly, there was inexcusable negligence on the part of petitioner's counsel in failing to file the Appellant'sBrief. As revealed by the records, petitioner's counsel, the BAIZAS ALBERTO & ASSOCIATES law firm, receivedthe notice to file Brief on 19 February 1974. It failed to do so within the 45 days granted to it. Said law firm alsoreceived a copy of the respondent Court's Resolution of 9 July 1974 requiring it to show cause why the appealshould not be dismissed for failure to file the Brief within the reglementary period. Petitioner chose not to complywith it, thus compelling the respondent Court to issue on 9 September 1974 a Resolution dismissing the appeal, acopy of which the former also received. Then, on 28 September 1974, the BAIZAS LAW OFFICE moved forreconsideration of the said Resolution which respondent Court denied in its Resolution of 9 October 1974. Nothingmore was heard from petitioner until after a year when, on 6 November 1975, it filed the instant petition inreaction to the issuance of a writ of execution by the trial court following receipt of the records for therespondent Court.The "confusion" in the office of the law firm following the death of Atty. Crispin Baizas is not a valid justificationfor its failure to file the Brief. With Baizas' death, the responsibility of Atty. Alberto and his Associates to thepetitioner as counsel remained until withdrawal by the former of their appearance in the manner provided by theRules of Court. This is so because it was the law firm which handled the case for petitioner before both the trialand appellate courts. That Atty. Espiritu, an associate who was designated to handle the case, later left the officeafter the death of Atty. Baizas is of no moment since others in the firm could have replaced him.. Upon receipt ofthe notice to file Brief, the law firm should have re-assigned the case to another associate or, it could havewithdrawn as counsel in the manner provided by the Rules of Court so that the petitioner could contract theservices of a new lawyer.In the Negros Stevedoring case, supra., this Court held:

The negligence committed in the case at bar cannot be considered excusable, nor ( sic ) is itunavoidable. Time and again the Court has admonished law firms to adopt a system of distributingpleadings and notices, whereby lawyers working therein receive promptly notices and pleadingsintended for them, so that they will always be informed of the status of their cases. Their Courthas also often repeated that the negligence of clerks which adversely affect the cases handled bylawyers, is binding upon the latter.

Compounding such negligence is the failure of the BAIZAS LAW OFFICE, which filed on 28 September 1974 themotion for reconsider the Resolution of 9 September 1974, to take any further appropriate action after therespondent Court denied said motion on 9 October 1974. The appearance of said counsel is presumed to be dulyauthorized by petitioner. The latter has neither assailed nor questioned such appearance.The rule is settled that negligence of counsel binds the client. 33 Moreover, petitioner itself was guilty of negligence when it failed to make inquiries from counsel regarding its case.As pointed out by respondents, the president of petitioner corporation claims to be the intimate friend of Atty.Crispin Baizas; hence, the death of the latter must have been known to the former. 34 This fact should have madepetitioner more vigilant with respect to the case at bar. Petitioner failed to act with prudence and diligence, thus,its plea that they were not accorded the right to procedural due process cannot elicit either approval orsympathy. 35 Based on the foregoing, it is clear that there was failure to show a good and sufficient cause which would justifythe reinstatement of petitioner's appeal. Respondent Court of Appeals did not them commit any grave abuse ofdiscretion when it denied petitioner's motion to reinstate its appeal.WHEREFORE, the Petition is hereby DISMISSED and the temporary restraining order issued in this case is lifted.Costs against petitioner.IT SO ORDERED.Gutierrez, Jr., Feliciano, Bidin and Romero, JJ., concur.

[A.C. No. 3773. September 24, 1997]ANGELITA C. ORCINO,complainant , vs . ATTY. JOSUE GASPAR,respondent.

R E S O L U T I O NPUNO,J .:

On June 14, 1992, complainant Angelita C. Orcino filed with this Court a letter-complaint dated December 10,1991 against respondent Atty. Josue Gaspar, her former counsel. Complainant prayed that this Court imposedisciplinary sanctions on respondent for abandoning his duties and for failing to return the legal fees she fully paidfor his services.

The complaint arose from the following facts: Complainant engaged the services of respondent to prosecute acriminal case she intended to file against several suspects in the slaying of her husband. In consideration thereof,complainant bound herself to pay respondent legal fees of P20,000.00 -- P10,000.00 to be paid upon signing of the


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contract and the balance to be paid on or before the conclusion of the case. Complainant was also to pay P500.00per appearance of respondent before the court and fiscal. This agreement was embodied in a contract executed onFebruary 22, 1991 .[1]

In accordance with the contract, complainant paid respondent the sum of P5,000.00 on February 25,1991,[2] another P5,000.00 on March 31, 1991 ,[3] and P10,000.00 on May 21, 1991,[4] for a total of P20,000.00.

Forthwith, respondent entered into his duties. He interviewed witnesses and gathered evidence to build acase against the suspects. He drew up the necessary sworn statements and dutifully attended the preliminaryinvestigation. The case was thereafter filed with the Regional Trial Court, Branch 37, Baloc, Sto. Domingo, NuevaEcija.[5]

As private prosecutor, respondent religiously attended the bail hearings for the accused although thesehearings were postponed on motion of the accused's counsel. Respondent however failed to attend the hearingscheduled in August 1991. It was at this hearing that the court, over complainant's objections, granted bail to allthe accused. After the hearing, complainant immediately went to respondent's residence and confronted him withhis absence .[6] Respondent explained that he did not receive formal notice of the hearing .[7] Complainant becamebelligerent and started accusing him of jeopardizing the case by his absence. Respondent said that her suspicionswere based on rumors and intrigues fed to her by her relatives .[8] Complainant, however, continued accusing himbelligerently. She asked for the records of the case saying that she could refer them to another lawyer. Stung byher words, respondent gave her the records .[9]

Complainant never returned the records nor did she see respondent. On September 18, 1991, respondent filedbefore the trial court a "Motion to Withdraw as Counsel. "[10] The motion did not bear the consent of complainant.

On October 23, 1991, the court issued an order directing respondent to secure complainant's consent to themotion "and his appearance as private prosecutor shall continue until he has secured this consent." [11]

Complainant refused to sign her conformity to respondent's withdrawal .[12] Meanwhile, the hearings in thecriminal case continued. Respondent did not appear at the hearings nor did he contact complainant. Complainantwas thus compelled to engage the services of another lawyer. Hence, the letter-complaint.

We referred the letter-complaint to the Integrated Bar of the Philippines, Commission on Bar Discipline, forinvestigation, report and recommendation.

The rule in this jurisdiction is that a client has the absolute right to terminate the attorney-client relation atany time with or without cause .[13] The right of an attorney to withdraw or terminate the relation other than forsufficient cause is, however, considerably restricted .[14] Among the fundamental rules of ethics is the principlethat an attorney who undertakes to conduct an action impliedly stipulates to carry it to its conclusion .[15] He is notat liberty to abandon it without reasonable cause .[16] A lawyer's right to withdraw from a case before its finaladjudication arises only from the client's written consent or from a good cause .[17]

Section 26 of Rule 138 of the Revised Rules of Court provides:"Sec. 26. Change of attorneys -- An attorney may retire at any time from any action or specialproceeding, by the written consent of his client filed in court. He may also retire at any time from anaction or special proceeding, without the consent of his client, should the court, on notice to the clientand attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution,the name of the attorney newly employed shall be entered on the docket of the court in place of theformer one, and written notice of the change shall be given to the adverse party.

x x x."A lawyer may retire at any time from any action or special proceeding with the written consent of his client

filed in court and copy thereof served upon the adverse party. Should the client refuse to give his consent, thelawyer must file an application with the court. The court, on notice to the client and adverse party, shall determinewhether he ought to be allowed to retire. The application for withdrawal must be based on a good cause .[18]

In the instant case, complainant did not give her written consent to respondent's withdrawal. The court thusordered respondent to secure this consent. Respondent allegedly informed the court that complainant had becomehostile and refused to sign his motion .[19] He, however, did not file an application with the court for it to determinewhether he should be allowed to withdraw.

Granting that respondent's motion without complainant's consent was an application for withdrawal with thecourt, we find that this reason is insufficient to justify his withdrawal from the case. Respondent's withdrawal wasmade on the ground that "there no longer exist[ed] the xxx confidence" between them and that there had been"serious diffferences between them relating to the manner of private prosecution." [20]

Rule 22.01 of Canon 22 of the Code of Professional Responsibility provides:"CANON 22 -- A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR GOOD CAUSE AND UPON NOTICEAPPROPRIATE IN THE CIRCUMSTANCES.Rule 22.01-- A lawyer may withdraw his services in any of the following cases:a) When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling;b) When the client insists that the lawyer pursue conduct violative of these canons and rules;c) When his inability to work with co-counsel will not promote the best interest of the client;d) When the mental or physical condition of the lawyer renders it difficult for him to carry out the employmenteffectively;
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e) When the client deliberately fails to pay the fees for the services or fails to comply with the retaineragreement;f) When the lawyer is elected or appointed to public office; andg) Other similar cases."A lawyer may withdraw his services from his client only in the following instances: (a) when a client insists upon anunjust or immoral conduct of his case; (b) when the client insists that the lawyer pursue conduct violative of theCode of Professional Responsibility; (c) when the client has two or more retained lawyers and the lawyers could notget along to the detriment of the case; (d) when the mental or physical condition of the lawyer makes him incapableof handling the case effectively; (e) when the client deliberately fails to pay the attorney's fees agreed upon; (f)when the lawyer is elected or appointed to public office; (g) other similar cases.

The instant case does not fall under any of the grounds mentioned. Neither can this be considered analogousto the grounds enumerated. As found by the Commission on Bar Discipline, this case arose from a simplemisunderstanding between complainant and respondent. Complainant was upset by respondent's absence at thehearing where bail was granted to the suspected killers of her husband. She vehemently opposed the grant ofbail. It was thus a spontaneous and natural reaction for her to confront respondent with his absence. Herbelligerence arose from her overzealousness, nothing more. Complainant's words and actions may have hurtrespondent's feelings considering the work he had put into the case. But her words were uttered in a burst ofpassion. And even at that moment, complainant did not expressly terminate respondent's services. She made thisclear when she refused to sign his "Motion to Withdraw as Counsel."

Assuming, nevertheless, that respondent was justified in terminating his services, he, however, cannot just doso and leave complainant in the cold unprotected. The lawyer has no right to presume that his petition forwithdrawal will be granted by the court .[21] Until his withdrawal shall have been approved, the lawyer remainscounsel of record who is expected by his client as well as by the court to do what the interests of his clientrequire .[22] He must still appear on the date of hearing [23] for the attorney-client relation does not terminateformally until there is a withdrawal of record .[24]

Respondent expressly bound himself under the contract to bring the criminal case to its termination. He wasin fact paid in full for his services. Respondent failed to comply with his undertaking, hence, it is but fair that hereturn to complainant half of the amount paid him. The peculiar circumstances of the case have rendered itimpossible for respondent and complainant to continue their relation under the contract.

IN VIEW WHEREOF, respondent is admonished to exercise more prudence and judiciousness in dealing withhis clients. He is also ordered to return to complainant within fifteen (15) days from notice the amount of tenthousand pesos (P10,000.00) representing a portion of his legal fees received from the latter with a warning thatfailure on his part to do so will result in the imposition of stiffer disciplinary action.

SO ORDERED.Regalado, (Chairman) and Torres, Jr., JJ., concur.Mendoza, J., on official leave.
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