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

RESEARCH and SERVICES REALTY, INC., petitioner, vs. COURT OF APPEALS and MANUEL S. FONACIER, JR., respondents. DECISION DAVIDE, JR., J.: This petition for review on certiorari under Rule 45 of the Rules of Court questions the propriety of the award for, and the reasonableness of the amount of, attorney's fees granted in favor of the private respondent by the Regional Trial Court (RTC) of Makati City, Branch 64,[1] in Civil Case No. 612,[2] which the Court of Appeals affirmed in its decision[3] of 31 March 1995 in CA-G.R. CV No. 44839. The undisputed facts are as follows: On 3 November 1969, the petitioner entered into a Joint Venture Agreement with Jose, Fidel, and Antonia Carreon. Under the said agreement, the petitioner undertook to develop, subdivide, administer, and promote the sale of the parcels of land owned by the Carreons. The proceeds of the sale of the lots were to be paid to the Philippine National Bank (PNB) for the landowner's mortgage obligation, and the net profits to be shared by the contracting parties on a 50-50 basis. On 4 April 1983, the Carreons and a certain Patricio C. Sarile instituted before the RTC of Makati City an action against the petitioner for rescission of the Joint Venture Agreement. They prayed therein that pending the hearing of the case, a writ of preliminary injunction be issued to enjoin the petitioner from selling the lots subject of the agreement and that after hearing, the writ be made permanent; the agreement be rescinded; and the petitioner be ordered to pay the PNB the stipulated 15% per annum of the outstanding obligation and to pay the plaintiffs attorney's fees, exemplary damages, expenses of litigation, and costs of suit. This case was docketed as Civil Case No. 612 at Branch 64 of the said court. In its answer, which was prepared and signed by Atty. Apolonio G. Reyes, the petitioner sought the denial of the writ of preliminary injunction, the dismissal of the complaint, and payment in its favor of (a) P10 million by way of actual damages; (b) P5 million by way of return to the petitioner of the amount advanced to the Carreons, payments to the PNB, and cost of the work on the subdivision; (c) P100,000.00 by way of exemplary damages; (d) any and all damages up to the amount ofP4,638,420.00 which the petitioner may suffer under the terms of its Performance Bond in favor of the National Housing Authority; (e) P50,000.00 as attorney's fees; and (f) costs of suit. On 9 April 1985, the petitioner engaged the services of private respondent Atty. Manuel S. Fonacier, Jr., [4] who then entered his appearance in Civil Case No. 612. While the said case was pending, or on 24 July 1992, the petitioner, without the knowledge of the private respondent, entered into a Memorandum of Agreement (MOA)[5] with another land developer, Filstream International, Inc. (hereinafter Filstream). Under this MOA, the former assigned its rights and

obligations under the Joint Venture Agreement in favor of the latter for a consideration of P28 million, payable within twenty-four months. On 31 March 1993, the petitioner terminated the legal services of the private respondent. At the time the petitioner had already received P7 million from Filstream. Upon knowing the existence of the MOA, the private respondent filed in Civil Case No. 612 an Urgent Motion to Direct Payment of Attorney's Fees and/or Register Attorney's Charging Lien praying, among other things, that the petitioner be ordered to pay him the sum of P700,000.00 as his contingent fee in the case.[6] After hearing the motion, the trial court issued an order dated 11 October 1993 directing the petitioner to pay the private respondent the sum of P600,000.00 as attorney's fees on the basis of quantum meruit. The trial court justified the award in this manner: Insofar as material to the resolution of this Motion the records of this case show that movant Atty. Fonacier became the counsel of defendant Research in May 1985 while this case has been in progress. (Records, p.770). By this time also, the defendant Research has been enjoined by the Court from executing Contracts To Sell involving Saranay Homes Subdivision . . . . (Order dated December 3, 1984, Records pp. 625-626). However, the said counsel for defendant Research prepared for the latter various pleadings and represented it in Court (See Records after May 1985). Until his services were terminated the lawyer client relationship between Atty. Fonacier and Research was governed by a "contract" embodied in a letter addressed to Atty. Fonacier on April 19, 1985 [sic], the pertinent portion of which is reproduced below, as follows . . . xxx Soon after said letter, cases were referred to him including this case. In accordance with their agreement, there were instances that Research gave Atty. Fonacier ten (10%) percent of the amount received as the latter's attorney's fees pursuant to their agreement. The instant case in which defendant is praying to be awarded attorney's fees, is an action for rescission of the Joint Venture Agreement between plaintiffs, Patricio Sarile, et al., as owners of a parcel of land and defendant Research & Service Realty, Inc., as developer of the land. At the time Atty. Fonacier entered his appearance as counsel for defendant Research, the Court has issued a preliminary injunction against Research. Thus all developmental and commercial activities of defendant had to stop. In this regard, Atty. Fonacier did spade work towards persuading the plaintiffs to agree to the relaxation of the effects of the injunction to pave the way to a negotiation with a third-party, the Filstream. Atty. Fonancier's efforts were complemented by the efforts of his counterpart in the plaintiff's side. The third-party Filstream Inc., became the assignee of defendant Research. In this connection, a memorandum of agreement was entered into between them. By the terms of agreement, defendant Research will be receiving from the third party Filstream International, Inc. (Filstream) the following amount. . . . xxx

The termination of the legal services of Atty. Fonacier was made definite on March 31, 1993 at which time the Memorandum of Agreement which Research entered into with Filstream, Inc., has already been effective. By this time also, defendant Research has already received the first two stipulated consideration of the agreement in the total sum of Six Million (P6,000,000.00). The necessary and legal consequence of said "Memorandum of Agreement" is the termination of the case insofar as plaintiff Patricio Sarile, et al. and defendant Research is concerned. The conclusion of the Memorandum of Agreement insofar as the cause of Research is concerned, is a legal victory for defendant Research. What could have been a loss in investment has been turned to a legal victory. Atty. Fonancier's effort contributed to defendant's victory, albeit outside the Court which would not have been possible without the legal maneuvering of a lawyer. The dismissal of the case before this Court will come in a matter of time considering that plaintiffs, with the assumption by the third party, Filstream Inc., of what were supposed to be the obligations to them of defendant Research pursuant to their Joint Venture Agreement, is no longer interested in pursuing the rescission. It is a matter of record that Atty. Fonacier is the last of the three lawyers who handled this case. Moreover it is Atty. Fonacier who contributed to the forging of the memorandum of agreement as testified to by Atty. Rogel Atienza one of the two retained counsels of plaintiffs. Considering the importance which is attached to this case, certainly it would not be fair for Atty. Fonacier if his attorney's fees in this case would be equated only to the measly monthly allowance of (P800.00) Pesos and office space and other office facilities provided by defendant Research. Ten (10%) per cent of the amount which Research had received from Filstream at the time of the termination of a lawyer-client relationship between Atty. Fonacier and Research or P600,000.00 will be a just and equitable compensation for Atty. Fonancier's legal services, by way of quantum meruit (See Cabildo v. Provincial Treasurer, Ilocos Norte, et al., 54 SCRA 26).[7] In its Order[8] of 12 January 1994, the trial court denied the petitioner's motion for reconsideration of the above order. The petitioner appealed to the Court of Appeals. In its Appellant's Brief,[9] the petitioner alleged that the private respondent was not entitled to attorney's fees under the retainer contract. Moreover, the private respondent did not exert any effort to amicably settle the case, nor was he even present during the negotiations for the settlement of the same. There was, therefore, no legal and factual justification for the private respondent's "fantastic and unreasonable claim for attorney's fees ofP600,000.00." On the other hand, the private respondent asserted that he was assured by the petitioner that noncollection cases were included in the contingent fee arrangement specified in the retainer contract wherein there was to be contingent compensation for any award arising from any lawsuit handled by him. According to him, Civil Case No. 612 was not the only "non-collection" case he handled for the petitioner. There was a "right of way" dispute where the petitioner was awardedP50,000.00, and the latter paid him P5,000.00, or 10% of the award as attorney's fees. He thus stressed that since under the memorandum of agreement the petitioner was to receive P28 million, he should be entitled to 10% thereof or P2.8 million as attorney's fees. In its decision [10] of 31 March 1995, the Court of Appeals affirmed the challenged order of the trial court. It ratiocinated as follows:

Movant-appellee, on the other hand, correctly argues that it was the clear intention of appellant and counsel to compensate the latter for any legal services rendered by him to the former. Stated otherwise, it was never the intention of the parties in the instant appeal that counsel's services shall be free or to be rendered ex gratia. xxx It must in addition be underscored that the retainer contract of April 9, 1985 is the law that governs the relationship between appellant and appellee. In fact, the following provisions squarely and categorically supports the award of P600,000.00 to counsel, to wit: Minimal allowance of P800 per month plus contingent fees and collection cases (case to case basis) aside from the attorney's fee recovered from any law suit. (Paragraph 3, Retainer Contract) In an American jurisprudence on this point cited in local annotation on the Canon of Professional Ethics, it was held that "if a lawyer renders valuable services to one who receives the benefits thereof, a promise to pay a reasonable value is presumed, unless such services were intended to be gratuitous" (Young vs. Buere, 78 Cal. Am. 127) In effect, to compensate a lawyer, we are faced with the pivotal question: "was the legal services intended to be free or not?" If it is not free, then, appellant must simply pay. The 10% contingent fee of the amount collected and/or to be collected in Civil Case No. 612 of the lower court, is, to Our mind fair and reasonable. As ruled by the Supreme Court in the case of Cosmopolitan Insurance Co. vs. Angel Reyes (G.R. L-20199, Nov. 23, 1965) 15% was even deemed reasonable. [11] The petitioner filed a motion for reconsideration [12] on the ground among other things, that the decision is contrary to the evidence, as the trial court granted the claim for attorney's fees based on quantum meruit, yet, the Court of Appeals granted the same on a contingent basis which it based on an erroneous quotation and comprehension of the following provision of the retainer contract: Minimal allowance of P800.00 per month plus contingent fees on collection cases (case to case basis) aside from the attorney's fees recovered from any law suit. (underscoring ours)[13] In its decision, the Court of Appeals substituted the word "on" after "contingent fees" with the word "and." Under the aforequoted paragraph, the private respondent was entitled to attorney's fees on contingent basis in collection cases only. In non collection cases, he was entitled only to the attorney's fees that might be recovered in the lawsuit. [14] Since Civil Case No. 612 is not a collection case but an action for rescission of a contract, then the aforequoted paragraph is not applicable as a basis for awarding attorney's fees to the private respondent. [15] Finding nothing new in the motion for reconsideration, the Court of Appeals denied it in the resolution [16] of 15 February 1996. The petitioner then came to us via this petition for review wherein it contends that I

RESPONDENT COURT OF APPEALS HAD DECIDED THE CASE NOT IN ACCORD WITH LAW AND THE UNDISPUTED FACTS OF THE CASE. II RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN AWARDING ON CONTINGENT BASIS RESPONDENT-APPELLEE'S ATTORNEY'S FEES ON THE BASIS OF A MEMORANDUM OF AGREEMENT IN WHICH HE HAD NO PARTICIPATION IN THE NEGOTIATION AND PREPARATION THEREOF. III RESPONDENT COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN AWARDING EXCESSIVE AND UNREASONABLE ATTORNEY'S FEES. IV THE TRIAL COURT AND THE RESPONDENT COURT OF APPEALS HAVE NO JURISDICTION TO SATISFY ATTORNEY'S CHARGING LIEN ON A SUM OF MONEY THAT THE COURT HAD NO AUTHORITY TO DISPOSE OF AND OVER WHICH THE TRIAL COURT HAD MADE NO FINAL ADJUDICATION. The petitioner's more important argument in support of the first error is the Court of Appeals' misquotation of the provision in the retainer contract regarding attorney's fees on contingent basis, which the petitioner had stressed in its motion for reconsideration. The petitioner maintains that under the contract, attorney's fees on contingent basis could only be awarded in collection cases, and Civil Case No. 612 is not a collection case. Hence, the Court of Appeals erred in affirming the award on that basis, while the trial court was correct in applying the principle of quantum meruit. In its second assigned error, the petitioner asserts that the private respondent admitted in his Urgent Motion to Direct Payment of Attorney's Fees and/or Register Attorney's Charging Lien that he had not participated in the negotiations and preparation of the memorandum of agreement, thus: Despite the dishonest concealment, by the light of Providence coupled with a streak of good luck, counsel discovered in the first week of March 1993 that the parties had respectively entered into a meaningful agreement with a third-party as early as July 27, 1992, which in the case of client, case in the form of a "Memorandum of Agreement" (MOA) . . . . [17] The third assigned error is but a logical consequence of the second, and the petitioner maintains that since the private respondent "did not do anything spectacular or out of the ordinary" in Civil Case No. 612, "except to ask for the suspension or postponement of the proceedings thereof from 1985 to 1993," the P600,000.00 attorney's fees, whether on contingent basis or quantum meruit, is excessive and unreasonable. In the fourth imputed error, the petitioner argues that the memorandum of agreement was never submitted to the trial court, and the trial court never made any disposition or adjudication over the proceeds of the said agreement. What would eventually happen then is the dismissal of Civil Case No. 612, as the trial court itself had intimated in its challenged order. Necessarily then, there would be no money adjudication in favor of the petitioner as the defendant therein. Since such lien is collectible only from an award of money that a court would adjudicate in a judgment rendered in favor of the attorney's client pursuant to Section 37, Rule 138 of the Rules of Court, it would follow that no attorney's charging lien could be validly entered. We uphold the petitioner, but not necessarily on the strength of it arguments.

The parties are in agreement that the lawyer-client relationship between the petitioner and the private respondent, Atty. Manuel S. Fonacier, Jr., was governed by a retainer contract dated 9 April 1985. The petitioner's undertakings thereunder are outlined as follows: I. 1. a. CORPORAT[ION]: Corporation will provide the following: Office space airconditioned b. Furnishings, tables, executive chairs, visitor's chair & steel filing cabinet Telephone facilities and partial secretarial services. 2. Legal service referrals by the corporation to its clients for additional income of the lawyer. Minimal allowance of P800 per month plus contingent fees on contingent fees on collection cases (case to case basis) aside from the attorney's fees recovered from any lawsuit. That in case of legal problems to be attended to outside Metro Manila and Suburbs, the corporation shall defray expenses for transportation, lodging and other legal expenses incidental in the case. [18]




An analysis of the contract clearly shows that it was a general retainer, since its primary purpose was to secure beforehand the services of the private respondent for any legal problem which might afterward arise. [19] The fixed retaining fee was P800.00 a month. A retaining fee is a preliminary fee paid to ensure and secure a lawyer's future services, to remunerate him for being deprived, by being retained by one party, of the opportunity of rendering services to the other party and of receiving pay from him. In the absence of an agreement to the contrary, the retaining fee is neither made nor received in consideration of the services contemplated; it is apart from what the client has agreed to pay for the services which he has retained him to perform. [20] In the retainer contract in question, there was no intention to make the retaining fee as the attorney's fees for the services contemplated. This is evident from the provision allowing additional attorney's fees in collection cases consisting of (1) a "contingent fee" and (2) whatever the petitioner might recover as attorney's fees in each case. The latter could only refer to the attorney's fees which the court might award to the petitioner in appropriate cases. While the contract did not mention non-collection cases, it is, nevertheless, clear therefrom that such cases were not excluded from the retainership, as borne out by the provision requiring the private respondent to "make appearances in Court for cases involving the corporation or any allied cases pertaining to the latter." As to such cases, there was no specific stipulation of additional attorney's fees. Nevertheless, nothing therein shows that the private respondent agreed to render professional service in such cases gratuitously. The absence then of the stipulation of additional attorney's fees cannot be construed as a bar to the collection of additional attorney's fees in non-collection cases. Two basic principles come into play. The first is as stated earlier, viz., that the retaining fee is neither made nor received in consideration of the services contemplated unless the contract itself so

provides. The second is that, unless expressly stipulated, rendition of professional services by a lawyer is for a fee or compensation and is not gratuitous. This is implicit from the opening clause of Section 24, Rule 138 of the Rules of Court, which states that "[a]n attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services . . .," and by virtue of the innominate contract of facio ut des (I do and you give), as enunciated by this Court in Corpus v. Court of Appeals, [21] thus: Moreover, the payment of attorney's fees . . . may also be justified by virtue of the innominate contract of facio ut des (I do and you give) which is based on the principle that "no one shall unjustly enrich himself at the expense of another." Innominate contracts have been elevated to a codal provision in the New Civil Code by providing under Article 1307 that such contracts shall be regulated by the stipulations of the parties, by the general provisions or principles of obligations and contracts, by the rules governing the most analogous nominate contracts, and by the customs of the people. The rationale of this article was stated in the 1903 case of Perez vs. Pomar (2 Phil. 682). In Perez v. Pomar, [22] this Court stated: [B]ut whether the plaintiff's services were solicited or whether they were offered to the defendant for his assistance, inasmuch as these services were accepted and made use of by the latter, we must consider that there was a tacit and mutual consent as to the rendition of the services. This gives rise to the obligation upon the person benefited by the services to make compensation therefor, since the bilateral obligation to render service as interpreter, on the one hand, and on the other to pay for the services rendered, is thereby incurred. (Arts. 1088, 1089, and 1262 of the Civil Code). Accordingly, as to non-collection cases where the petitioner was either a plaintiff or a defendant, the private respondent could still collect attorney's fees, apart from his regular retaining fee, on the basis of any-supplemental agreement or, in its absence, under the principle of quantum meruit. There was no such supplemental agreement in this case. We cannot sustain the private respondent's theory that he could collect attorney's fees on contingent basis because in the other "non-collection" cases he handled for the petitioner' he was paid on contingent basis at the rate of 10% of what was awarded to the petitioner. In the first place, Civil Case No. 612 is still unresolved, and no judgment has yet been rendered in favor of the petitioner. The amount in the memorandum of agreement could not be made the basis of a "contingent fee" in the said case for at least three reasons. First, in his own Urgent Motion to Direct Payment of Attorney's Fees and/or Register Attorney's Charging Lien, the private respondent based the contingent fee not only in Civil Case No. 612 but in a "multitude of peripheral cases," and the contingent fee would become due and collectible only if and when the petitioner obtains a judgment in his favor in Civil Case No. 612. The second paragraph of page 3 of the said motion reads as follows: Hence, from May 1985 and continuously thru the years without interruption and surviving a series of no less than five (5) changes of Presiding Judges, the undersigned counsel labored tirelessly in handling the defense of client. In addition to the instant lawsuit, a multitude of peripheral cases, civil, criminal and administrative, arising from the non-delivery of titles by client on fully paid lots in the subdivision project were also filed as a consequence, not only against defendant but also against its President and Chief Executive Officer (CEO). Needless to state, the undersigned was designated to handle majority of these cases for both, where he appeared and conducted trial without any "appearance fees" for more than

eight (8) long years solely relying on the contingent fee in case of recovery in the instant main case. [23] (underscoring supplied for emphasis) Second, the amount of P28 million, which Filstream agreed to pay the petitioner, was not a judgment or award in favor of the petitioner in Civil Case No. 612. It was the consideration of the assignment, transfer, and conveyance to Filstream of all the petitioner's "rights, interest and participation embodied and specified in the Joint Venture Agreement (Annex "A") and in all the eight hundred seventy-five (875) parcels of land comprising the SARANAY HOMES subdivision. . . ." The plaintiffs in Civil Case No. 612 were not parties to the memorandum of agreement, and there is no showing that they agreed to the assignment of the petitioner's rights, interest, and participation in the Joint Venture Agreement. While paragraph 10 of the memorandum of agreement provides that the petitioner shall cause to sign a JOINT MOTION TO DISMISS, together with the CARREONS regarding Civil Case No. 612 of the Regional Trial Court of Makati and to further DISMISS, the case filed against PNB docketed as Civil Case No. 6918 of the Regional Trial Court of Makati . . . [and] shall obtain the dismissal of all cases filed by lot buyers against it now pending with the HLURB the fact remains that no such motion to dismiss has been filed yet in Civil Case No. 612, and there is no assurance whatsoever that the plaintiffs therein will sign a joint motion to dismiss. Third, as correctly posited by the petitioner, the private respondent had no participation in the negotiations leading to, and in the preparation of, the memorandum of agreement. Indisputably then, the private respondent's attorney's fee on "contingent basis" in Civil Case No. 612 is unwarranted. If at all, he could only be entitled to attorney's fees on quantum meruit basis as of the expiration of his retainer contract on 31 March 1993. Quantum meruit simply means "as much as he deserves." [24] In no case, however, must a lawyer be allowed to recover more than what is reasonable pursuant to Section 24, Rule 138 of the Rules of Court, which provides: SEC. 24. Compensation of attorneys, agreement as to fees. An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject-matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable. This Court had earlier declared the following as circumstances to be considered in determining the reasonableness of a claim for attorney's fees: (1) the amount and character of the service rendered; (2) labor, time, and trouble involved; (3) the nature and importance of the litigation or business in which the services were rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property affected by the controversy or involved in the employment; (6) the skill and experience called for in the performance of the services; (7) the professional character and social standing of the attorney; (8) the results secured; and (9) whether the fee is absolute or contingent, it being recognized that an attorney may properly charge a much larger fee when it is contingent than when it is not. [25]

Rule 20.1, Canon 20 of the Code of Professional Responsibility enumerates the following factors which should guide a lawyer in determining his fees: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) The time spent and the extent of the services rendered or required; The novelty and difficulty of the questions involved; The importance of the subject matter; The skill demanded; The probability of losing other employment as a result of acceptance of the proffered case; The customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs; The amount involved in the controversy and the benefits resulting to the client from the service; The contingency or certainty of compensation; The character of the employment, whether occasional or established; and The professional standing of the lawyer.

It was incumbent upon the private respondent to prove the reasonable amount of attorney's fees, taking into account the foregoing factors or circumstances. The records before us and the trial court's 11 October 1993 order do not confirm that the private respondent proved by either testimonial or documentary evidence that the award of P600,000.00 was reasonable. The private respondent's testimony thereon was crucial. Yet, it does not appear from the 11 October 1993 order that he took the witness stand. From the Minutes of the trial court attached to the Rollo of CA-G.R. CV No. 44839, [26] it appears that only Atty. Atienza and Mr. Suazo gave oral testimony on the motion. It necessarily follows then that the 11 October 1993 order has insufficient factual basis, and the trial court committed grave abuse of discretion in arbitrarily fixing the private respondent's attorney's fees at P600,000.00. The affirmance of the said order by the Court of Appeals premised on the provision in the retainer contract regarding contingent fee is thus fatally flawed. The interest for both the petitioner and the private respondent demands that the trial court should conduct further proceedings in Civil Case No. 612 relative to the private respondent's motion for the payment of attorney's fees and, thereafter, fix it in light of Section 24, Rule 138 of the Rules of Court; Rule 20.1, Canon 20 of the Code of Professional Responsibility; and the jurisprudentially established guiding principles in determining attorney's fees on quantum meruit basis. WHEREFORE, the instant petition is GRANTED. The challenged Decision of 31 March 1995 of the Court of Appeals in CA-G.R. CV No. 44839 and the Order of 11 October 1993 of the Regional Trial Court of Makati, Branch 64, in Civil Case No. 612 are hereby SET ASIDE. The trial court is further DIRECTED to set for further hearing the private respondent's Urgent Motion to Direct Payment of Attorney's Fees and/or Register Attorney's Charging Lien and thereafter to fix the private respondent's attorney's fees in Civil Case No. 612 as of 31 March 1993 when his contract with the petitioner was effectively terminated, taking into account Section 24, Rule 138 of the Rules of Court; Rule 20.1, Canon 20 of the Code of Professional Responsibility; and the jurisprudentially established guiding principles in determining attorney's fees on quantum meruit basis. No pronouncement as to costs. SO ORDERED. Narvasa, C.J., (Chairman), Melo, Francisco, and Panganiban, JJ., concur.

TRADERS ROYAL BANK EMPLOYEES UNION-INDEPENDENT, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and EMMANUEL NOEL A. CRUZ, respondents. DECISION REGALADO, J.: Petitioner Traders Royal Bank Employees Union and private respondent Atty. Emmanuel Noel A. Cruz, head of the E.N.A. Cruz and Associates law firm, entered into a retainer agreement on February 26, 1987 whereby the former obligated itself to pay the latter a monthly retainer fee of P3,000.00 in consideration of the law firms undertaking to render the services enumerated in their contract.[1] Parenthetically, said retainer agreement was terminated by the union on April 4, 1990.[2] During the existence of that agreement, petitioner union referred to private respondent the claims of its members for holiday, mid-year and year-end bonuses against their employer, Traders Royal Bank (TRB). After the appropriate complaint was filed by private respondent, the case was certified by the Secretary of Labor to the National Labor Relations Commission (NLRC) on March 24, 1987 and docketed as NLRC-NCR Certified Case No. 0466.[3] On September 2, 1988, the NLRC rendered a decision in the foregoing case in favor of the employees, awarding them holiday pay differential, mid-year bonus differential, and year-end bonus differential.[4] The NLRC, acting on a motion for the issuance of a writ of execution filed by private respondent as counsel for petitioner union, raffled the case to Labor Arbiter Oswald Lorenzo.[5] However, pending the hearing of the application for the writ of execution, TRB challenged the decision of the NLRC before the Supreme Court. The Court, in its decision promulgated on August 30, 1990,[6] modified the decision of the NLRC by deleting the award of mid-year and year-end bonus differentials while affirming the award of holiday pay differential.[7] The bank voluntarily complied with such final judgment and determined the holiday pay differential to be in the amount of P175,794.32. Petitioner never contested the amount thus found by TRB.[8] The latter duly paid its concerned employees their respective entitlement in said sum through their payroll.[9] After private respondent received the above decision of the Supreme Court on September 18, 1990,[10] he notified the petitioner union, the TRB management and the NLRC of his right to exercise and enforce his attorneys lien over the award of holiday pay differential through a letter dated October 8, 1990.[11] Thereafter, on July 2, 1991, private respondent filed a motion before Labor Arbiter Lorenzo for the determination of his attorneys fees, praying that ten percent (10%) of the total award for holiday pay differential computed by TRB at P175,794.32, or the amount of P17,579.43, be declared as his attorneys fees, and that petitioner union be ordered to pay and remit said amount to him.[12] The TRB management manifested before the labor arbiter that they did not wish to oppose or comment on private respondents motion as the claim was directed against the union,[13] while petitioner union filed a comment and opposition to said motion on July 15, 1991.[14] After considering the position of the parties, the labor arbiter issued an order[15] on November 26, 1991 granting the motion of private respondent, as follows:

WHEREFORE, premises considered, it is hereby ordered that the TRADERS ROYAL BANK EMPLOYEES UNION with offices at Kanlaon Towers, Roxas Boulevard is hereby ordered (sic) to pay without delay the attorneys fees due the movant law firm, E.N.A. CRUZ and ASSOCIATES the amount of P17,574.43 or ten (10%) per cent of the P175,794.32 awarded by the Supreme Court to the members of the former. This constrained petitioner to file an appeal with the NLRC on December 27, 1991, seeking a reversal of that order.[16] On October 19, 1994, the First Division of the NLRC promulgated a resolution affirming the order of the labor arbiter.[17] The motion for reconsideration filed by petitioner was denied by the NLRC in a resolution dated May 23, 1995,[18] hence the petition at bar. Petitioner maintains that the NLRC committed grave abuse of discretion amounting to lack of jurisdiction in upholding the award of attorneys fees in the amount ofP17,574.43, or ten percent (10%) of the P175,794.32 granted as holiday pay differential to its members, in violation of the retainer agreement; and that the challenged resolution of the NLRC is null and void,[19] for the reasons hereunder stated. Although petitioner union concedes that the NLRC has jurisdiction to decide claims for attorneys fees, it contends that the award for attorneys fees should have been incorporated in the main case and not after the Supreme Court had already reviewed and passed upon the decision of the NLRC. Since the claim for attorneys fees by private respondent was neither taken up nor approved by the Supreme Court, no attorneys fees should have been allowed by the NLRC. Thus, petitioner posits that the NLRC acted without jurisdiction in making the award of attorneys fees, as said act constituted a modification of a final and executory judgment of the Supreme Court which did not award attorneys fees. It then cited decisions of the Court declaring that a decision which has become final and executory can no longer be altered or modified even by the court which rendered the same. On the other hand, private respondent maintains that his motion to determine attorneys fees was just an incident of the main case where petitioner was awarded its money claims. The grant of attorneys fees was the consequence of his exercise of his attorneys lien. Such lien resulted from and corresponds to the services he rendered in the action wherein the favorable judgment was obtained. To include the award of the attorneys fees in the main case presupposes that the fees will be paid by TRB to the adverse party. All that the non-inclusion of attorneys fees in the award means is that the Supreme Court did not order TRB to pay the opposing party attorneys fees in the concept of damages. He is not therefore precluded from filing his motion to have his own professional fees adjudicated. In view of the substance of the arguments submitted by petitioner and private respondent on this score, it appears necessary to explain and consequently clarify the nature of the attorneys fees subject of this petition, in order to dissipate the apparent confusion between and the conflicting views of the parties. There are two commonly accepted concepts of attorneys fees, the so-called ordinary and extraordinary.[20] In its ordinary concept, an attorneys fee is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis of this compensation is the fact of his employment by and his agreement with the client.

In its extraordinary concept, an attorneys fee is an indemnity for damages ordered by the court to be paid by the losing party in a litigation. The basis of this is any of the cases provided by law where such award can be made, such as those authorized in Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. It is the first type of attorneys fees which private respondent demanded before the labor arbiter. Also, the present controversy stems from petitioners apparent misperception that the NLRC has jurisdiction over claims for attorneys fees only before its judgment is reviewed and ruled upon by the Supreme Court, and that thereafter the former may no longer entertain claims for attorneys fees. It will be noted that no claim for attorneys fees was filed by private respondent before the NLRC when it acted on the money claims of petitioner, nor before the Supreme Court when it reviewed the decision of the NLRC. It was only after the High Tribunal modified the judgment of the NLRC awarding the differentials that private respondent filed his claim before the NLRC for a percentage thereof as attorneys fees. It would obviously have been impossible, if not improper, for the NLRC in the first instance and for the Supreme Court thereafter to make an award for attorneys fees when no claim therefor was pending before them. Courts generally rule only on issues and claims presented to them for adjudication. Accordingly, when the labor arbiter ordered the payment of attorneys fees, he did not in any way modify the judgment of the Supreme Court. As an adjunctive episode of the action for the recovery of bonus differentials in NLRC-NCR Certified Case No. 0466, private respondents present claim for attorneys fees may be filed before the NLRC even though or, better stated, especially after its earlier decision had been reviewed and partially affirmed. It is well settled that a claim for attorneys fees may be asserted either in the very action in which the services of a lawyer had been rendered or in a separate action.[21] With respect to the first situation, the remedy for recovering attorneys fees as an incident of the main action may be availed of only when something is due to the client.[22] Attorneys fees cannot be determined until after the main litigation has been decided and the subject of the recovery is at the disposition of the court. The issue over attorneys fees only arises when something has been recovered from which the fee is to be paid.[23] While a claim for attorneys fees may be filed before the judgment is rendered, the determination as to the propriety of the fees or as to the amount thereof will have to be held in abeyance until the main case from which the lawyers claim for attorneys fees may arise has become final. Otherwise, the determination to be made by the courts will be premature.[24] Of course, a petition for attorneys fees may be filed before the judgment in favor of the client is satisfied or the proceeds thereof delivered to the client.[25] It is apparent from the foregoing discussion that a lawyer has two options as to when to file his claim for professional fees. Hence, private respondent was well within his rights when he made his claim and waited for the finality of the judgment for holiday pay differential, instead of filing it ahead of the awards complete resolution. To declare that a lawyer may file a claim for fees in the same action only before the judgment is reviewed by a higher tribunal would deprive him of his aforestated options and render ineffective the foregoing pronouncements of this Court. Assailing the rulings of the labor arbiter and the NLRC, petitioner union insists that it is not guilty of unjust enrichment because all attorneys fees due to private respondent were covered by the retainer

fee of P3,000.00 which it has been regularly paying to private respondent under their retainer agreement. To be entitled to the additional attorneys fees as provided in Part D (Special Billings) of the agreement, it avers that there must be a separate mutual agreement between the union and the law firm prior to the performance of the additional services by the latter. Since there was no agreement as to the payment of the additional attorneys fees, then it is considered waived. En contra, private respondent contends that a retainer fee is not the attorneys fees contemplated for and commensurate to the services he rendered to petitioner. He asserts that although there was no express agreement as to the amount of his fees for services rendered in the case for recovery of differential pay, Article 111 of the Labor Code supplants this omission by providing for an award of ten percent (10%) of a money judgment in a labor case as attorneys fees. It is elementary that an attorney is entitled to have and receive a just and reasonable compensation for services performed at the special instance and request of his client. As long as the lawyer was in good faith and honestly trying to represent and serve the interests of the client, he should have a reasonable compensation for such services.[26] It will thus be appropriate, at this juncture, to determine if private respondent is entitled to an additional remuneration under the retainer agreement[27]entered into by him and petitioner. The parties subscribed therein to the following stipulations: x x x

The Law Firm shall handle cases and extend legal services under the parameters of the following terms and conditions: A. GENERAL SERVICES 1. Assurance that an Associate of the Law Firm shall be designated and be available on a day-to-day basis depending on the Unions needs; 2. Legal consultation, advice and render opinion on any actual and/or anticipatory situation confronting any matter within the clients normal course of business; 3. Proper documentation and notarization of any or all transactions entered into by the Union in its day-to-day course of business; 4. Review all contracts, deeds, agreements or any other legal document to which the union is a party signatory thereto but prepared or caused to be prepared by any other third party; 5. Represent the Union in any case wherein the Union is a party litigant in any court of law or quasi-judicial body subject to certain fees as qualified hereinafter; 6. Lia(i)se with and/or follow-up any pending application or any papers with any government agency and/or any private institution which is directly related to any legal matter referred to the Law Firm. B. SPECIAL LEGAL SERVICES

1. Documentation of any contract and other legal instrument/documents arising and/or required by your Union which do not fall under the category of its ordinary course of business activity but requires a special, exhaustive or detailed study and preparation; 2. Conduct or undertake researches and/or studies on special projects of the Union; 3. Render active and actual participation or assistance in conference table negotiations with TRB management or any other third person(s), juridical or natural, wherein the presence of counsel is not for mere consultation except CBA negotiations which shall be subject to a specific agreement (pursuant to PD 1391 and in relation to BP 130 & 227); 4. Preparation of Position Paper(s), Memoranda or any other pleading for and in behalf of the Union; 5. Prosecution or defense of any case instituted by or against the Union; and, 6. Represent any member of the Union in any proceeding provided that the particular member must give his/her assent and that prior consent be granted by the principal officers. Further, the member must conform to the rules and policies of the Law Firm. C. FEE STRUCTURE In consideration of our commitment to render the services enumerated above when required or necessary, your Union shall pay a monthly retainer fee of THREE THOUSAND PESOS (PHP 3,000.00), payable in advance on or before the fifth day of every month. An Appearance Fee which shall be negotiable on a case-to-case basis. Any and all Attorneys Fees collected from the adverse party by virtue of a successful litigation shall belong exclusively to the Law Firm. It is further understood that the foregoing shall be without prejudice to our claim for reimbursement of all out-of-pocket expenses covering filing fees, transportation, publication costs, expenses covering reproduction or authentication of documents related to any matter referred to the Law Firm or that which redound to the benefit of the Union. D. SPECIAL BILLINGS In the event that the Union avails of the services duly enumerated in Title B, the Union shall pay the Law Firm an amount mutually agreed upon PRIOR to the performance of such services. The sum agreed upon shall be based on actual time and effort spent by the counsel in relation to the importance and magnitude of the matter referred to by the Union. However, charges may be WAIVED by the Law Firm if it finds that time and efforts expended on the particular services are inconsequential but such right of waiver is duly reserved for the Law Firm. x x x

The provisions of the above contract are clear and need no further interpretation; all that is required to be done in the instant controversy is its application. TheP3,000.00 which petitioner pays monthly to private respondent does not cover the services the latter actually rendered before the labor arbiter and the NLRC in behalf of the former. As stipulated in Part C of the agreement, the monthly fee is intended merely as a consideration for the law firms commitment to render the services enumerated in Part A (General Services) and Part B (Special Legal Services) of the retainer agreement. The difference between a compensation for a commitment to render legal services and a remuneration for legal services actually rendered can better be appreciated with a discussion of the two kinds of retainer fees a client may pay his lawyer. These are a general retainer, or a retaining fee, and a special retainer.[28] A general retainer, or retaining fee, is the fee paid to a lawyer to secure his future services as general counsel for any ordinary legal problem that may arise in the routinary business of the client and referred to him for legal action. The future services of the lawyer are secured and committed to the retaining client. For this, the client pays the lawyer a fixed retainer fee which could be monthly or otherwise, depending upon their arrangement. The fees are paid whether or not there are cases referred to the lawyer. The reason for the remuneration is that the lawyer is deprived of the opportunity of rendering services for a fee to the opposing party or other parties. In fine, it is a compensation for lost opportunities. A special retainer is a fee for a specific case handled or special service rendered by the lawyer for a client. A client may have several cases demanding special or individual attention. If for every case there is a separate and independent contract for attorneys fees, each fee is considered a special retainer. As to the first kind of fee, the Court has had the occasion to expound on its concept in Hilado vs. David[29] in this wise: There is in legal practice what is called a retaining fee, the purpose of which stems from the realization that the attorney is disabled from acting as counsel for the other side after he has given professional advice to the opposite party, even if he should decline to perform the contemplated services on behalf of the latter. It is to prevent undue hardship on the attorney resulting from the rigid observance of the rule that a separate and independent fee for consultation and advice was conceived and authorized. A retaining fee is a preliminary fee given to an attorney or counsel to insure and secure his future services, and induce him to act for the client. It is intended to remunerate counsel for being deprived, by being retained by one party, of the opportunity of rendering services to the other and of receiving pay from him, and the payment of such fee, in the absence of an express understanding to the contrary, is neither made nor received in payment of the services contemplated; its payment has no relation to the obligation of the client to pay his attorney for the services for which he has retained him to perform. (Emphasis supplied). Evidently, the P3,000.00 monthly fee provided in the retainer agreement between the union and the law firm refers to a general retainer, or a retaining fee, as said monthly fee covers only the law firms pledge, or as expressly stated therein, its commitment to render the legal services enumerated. The fee is not payment for private respondents execution or performance of the services listed in the contract, subject to some particular qualifications or permutations stated there. Generally speaking, where the employment of an attorney is under an express valid contract fixing the compensation for the attorney, such contract is conclusive as to the amount of compensation.[30] We

cannot, however, apply the foregoing rule in the instant petition and treat the fixed fee of P3,000.00 as full and sufficient consideration for private respondents services, as petitioner would have it. We have already shown that the P3,000.00 is independent and different from the compensation which private respondent should receive in payment for his services. While petitioner and private respondent were able to fix a fee for the latters promise to extend services, they were not able to come into agreement as to the law firms actual performance of services in favor of the union. Hence, the retainer agreement cannot control the measure of remuneration for private respondents services. We, therefore, cannot favorably consider the suggestion of petitioner that private respondent had already waived his right to charge additional fees because of their failure to come to an agreement as to its payment. Firstly, there is no showing that private respondent unequivocally opted to waive the additional charges in consonance with Part D of the agreement. Secondly, the prompt actions taken by private respondent, i.e., serving notice of charging lien and filing of motion to determine attorneys fees, belie any intention on his part to renounce his right to compensation for prosecuting the labor case instituted by the union. And, lastly, to adopt such theory of petitioner may frustrate private respondents right to attorneys fees, as the former may simply and unreasonably refuse to enter into any special agreement with the latter and conveniently claim later that the law firm had relinquished its right because of the absence of the same. The fact that petitioner and private respondent failed to reach a meeting of the minds with regard to the payment of professional fees for special services will not absolve the former of civil liability for the corresponding remuneration therefor in favor of the latter. Obligations do not emanate only from contracts.[31] One of the sources of extra-contractual obligations found in our Civil Code is the quasi-contract premised on the Roman maxim that nemo cum alterius detrimento locupletari protest. As embodied in our law,[32] certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another. A quasi-contract between the parties in the case at bar arose from private respondents lawful, voluntary and unilateral prosecution of petitioners cause without awaiting the latters consent and approval. Petitioner cannot deny that it did benefit from private respondents efforts as the law firm was able to obtain an award of holiday pay differential in favor of the union. It cannot even hide behind the cloak of the monthly retainer of P3,000.00 paid to private respondent because, as demonstrated earlier, private respondents actual rendition of legal services is not compensable merely by said amount. Private respondent is entitled to an additional remuneration for pursuing legal action in the interest of petitioner before the labor arbiter and the NLRC, on top of theP3,000.00 retainer fee he received monthly from petitioner. The law firms services are decidedly worth more than such basic fee in the retainer agreement. Thus, in Part C thereof on Fee Structure, it is even provided that all attorneys fees collected from the adverse party by virtue of a successful litigation shall belong exclusively to private respondent, aside from petitioners liability for appearance fees and reimbursement of the items of costs and expenses enumerated therein. A quasi-contract is based on the presumed will or intent of the obligor dictated by equity and by the principles of absolute justice. Some of these principles are: (1) It is presumed that a person agrees

to that which will benefit him; (2) Nobody wants to enrich himself unjustly at the expense of another; and (3) We must do unto others what we want them to do unto us under the same circumstances.[33] As early as 1903, we allowed the payment of reasonable professional fees to an interpreter, notwithstanding the lack of understanding with his client as to his remuneration, on the basis of quasicontract.[34] Hence, it is not necessary that the parties agree on a definite fee for the special services rendered by private respondent in order that petitioner may be obligated to pay compensation to the former. Equity and fair play dictate that petitioner should pay the same after it accepted, availed itself of, and benefited from private respondents services. We are not unaware of the old ruling that a person who had no knowledge of, nor consented to, or protested against the lawyers representation may not be held liable for attorneys fees even though he benefited from the lawyers services.[35] But this doctrine may not be applied in the present case as petitioner did not object to private respondents appearance before the NLRC in the case for differentials. Viewed from another aspect, since it is claimed that petitioner obtained respondents legal services and assistance regarding its claims against the bank, only they did not enter into a special contract regarding the compensation therefor, there is at least the innominate contract of facio ut des (I do that you may give).[36] This rule of law, likewise founded on the principle against unjust enrichment, would also warrant payment for the services of private respondent which proved beneficial to petitioners members. In any case, whether there is an agreement or not, the courts can fix a reasonable compensation which lawyers should receive for their professional services.[37]However, the value of private respondents legal services should not be established on the basis of Article 111 of the Labor Code alone. Said article provides: ART. 111. Attorneys fees. - (a) In cases of unlawful withholding of wages the culpable party may be assessed attorneys fees equivalent to ten percent of the amount of the wages recovered. x x x The implementing provision[38] of the foregoing article further states: Sec. 11. Attorneys fees. - Attorneys fees in any judicial or administrative proceedings for the recovery of wages shall not exceed 10% of the amount awarded. The fees may be deducted from the total amount due the winning party. In the first place, the fees mentioned here are the extraordinary attorneys fees recoverable as indemnity for damages sustained by and payable to the prevailing part. In the second place, the ten percent (10%) attorneys fees provided for in Article 111 of the Labor Code and Section 11, Rule VIII, Book III of the Implementing Rules is the maximum of the award that may thus be granted.[39] Article 111 thus fixes only the limit on the amount of attorneys fees the victorious party may recover in any judicial or administrative proceedings and it does not even prevent the NLRC from fixing an amount lower than the ten percent (10%) ceiling prescribed by the article when circumstances warrant it.[40] The measure of compensation for private respondents services as against his client should properly be addressed by the rule of quantum meruit long adopted in this jurisdiction. Quantum meruit, meaning

as much as he deserves, is used as the basis for determining the lawyers professional fees in the absence of a contract,[41] but recoverable by him from his client. Where a lawyer is employed without a price for his services being agreed upon, the courts shall fix the amount on quantum meruit basis. In such a case, he would be entitled to receive what he merits for his services.[42] It is essential for the proper operation of the principle that there is an acceptance of the benefits by one sought to be charged for the services rendered under circumstances as reasonably to notify him that the lawyer performing the task was expecting to be paid compensation therefor. The doctrine of quantum meruit is a device to prevent undue enrichment based on the equitable postulate that it is unjust for a person to retain benefit without paying for it.[43] Over the years and through numerous decisions, this Court has laid down guidelines in ascertaining the real worth of a lawyers services. These factors are now codified in Rule 20.01, Canon 20 of the Code of Professional Responsibility and should be considered in fixing a reasonable compensation for services rendered by a lawyer on the basis of quantum meruit. These are: (a) the time spent and the extent of services rendered or required; (b) the novelty and difficulty of the questions involved; (c) the importance of the subject matter; (d) the skill demanded; (e) the probability of losing other employment as a result of acceptance of the proffered case; (f) the customary charges for similar services and the schedule of fees of the IBP chapter to which the lawyer belongs; (g) the amount involved in the controversy and the benefits resulting to the client from the services; (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. Here, then, is the flaw we find in the award for attorneys fees in favor of private respondent. Instead of adopting the above guidelines, the labor arbiter forthwith but erroneously set the amount of attorneys fees on the basis of Article 111 of the Labor Code. He completely relied on the operation of Article 111 when he fixed the amount of attorneys fees at P17,574.43.[44] Observe the conclusion stated in his order.[45] x x x FIRST. Art. 111 of the Labor Code, as amended, clearly declares movants right to a ten (10%) per cent of the award due its client. In addition, this right to ten (10%) per cent attorneys fees is supplemented by Sec. 111, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code, as amended. x x x As already stated, Article 111 of the Labor Code regulates the amount recoverable as attorneys fees in the nature of damages sustained by and awarded to the prevailing party. It may not be used therefore, as the lone standard in fixing the exact amount payable to the lawyer by his client for the legal services he rendered. Also, while it limits the maximum allowable amount of attorneys fees, it does not direct the instantaneous and automatic award of attorneys fees in such maximum limit. It, therefore, behooves the adjudicator in questions and circumstances similar to those in the case at bar, involving a conflict between lawyer and client, to observe the above guidelines in cases calling for the operation of the principles of quasi-contract and quantum meruit, and to conduct a hearing for the proper determination of attorneys fees. The criteria found in the Code of Professional Responsibility are to be considered, and not disregarded, in assessing the proper amount. Here, the records do not

reveal that the parties were duly heard by the labor arbiter on the matter and for the resolution of private respondents fees. It is axiomatic that the reasonableness of attorneys fees is a question of fact.[46] Ordinarily, therefore, we would have remanded this case for further reception of evidence as to the extent and value of the services rendered by private respondent to petitioner. However, so as not to needlessly prolong the resolution of a comparatively simple controversy, we deem it just and equitable to fix in the present recourse a reasonable amount of attorneys fees in favor of private respondent. For that purpose, we have duly taken into account the accepted guidelines therefor and so much of the pertinent data as are extant in the records of this case which are assistive in that regard. On such premises and in the exercise of our sound discretion, we hold that the amount of P10,000.00 is a reasonable and fair compensation for the legal services rendered by private respondent to petitioner before the labor arbiter and the NLRC. WHEREFORE, the impugned resolution of respondent National Labor Relations Commission affirming the order of the labor arbiter is MODIFIED, and petitioner is hereby ORDERED to pay the amount of TEN THOUSAND PESOS (P10,000.00) as attorneys fees to private respondent for the latters legal services rendered to the former. SO ORDERED. Romero, Puno, Mendoza, and Torres, Jr., JJ., concur.

PEOPLE OF THE PHILIPPINES, petitioner, vs. HONORABLE SANDIGANBAYAN, MANSUETO V. HONRADA, CEFERINO S. PAREDES, JR. and GENEROSO S. SANSAET, respondents. DECISION REGALADO, J.: Through the special civil action for certiorari at bar, petitioner seeks the annulment of the resolution of respondent Sandiganbayan, promulgated on December 22, 1993, which denied petitioners motion for the discharge of respondent Generoso S. Sansaet to be utilized as a state witness, and its resolution of March 7, 1994 denying the motion for reconsideration of its preceding disposition.[1] The records show that during the dates material to this case, respondent Honrada was the Clerk of Court and Acting Stenographer of the First Municipal Circuit Trial Court, San Francisco-Bunawan-Rosario in Agusan del Sur. Respondent Paredes was successively the Provincial Attorney of Agusan del Sur, then Governor of the same province, and is at present a Congressman. Respondent Sansaet was a practicing attorney who served as counsel for Paredes in several instances pertinent to the criminal charges involved in the present recourse. The same records also represent that sometime in 1976, respondent Paredes applied for a free patent over Lot No. 3097-A, Pls-67 of the Rosario Public Land Subdivision Survey. His application was approved and, pursuant to a free patent granted to him, an original certificate of title was issued in his favor for that lot which is situated in the poblacion of San Francisco, Agusan del Sur.

However, in 1985, the Director of Lands filed an action[2] for the cancellation of respondent Paredes patent and certificate of title since the land had been designated and reserved as a school site in the aforementioned subdivision survey. The trial court rendered judgment[3] nullifying said patent and title after finding that respondent Paredes had obtained the same through fraudulent misrepresentations in his application. Pertinently, respondent Sansaet served as counsel of Paredes in that civil case.[4] Consequent to the foregoing judgment of the trial court, upon the subsequent complaint of the Sangguniang Bayan and the preliminary investigation conducted thereon, an information for perjury[5] was filed against respondent Paredes in the Municipal Circuit Trial Court.[6] On November 27, 1985, the Provincial Fiscal was, however, directed by the Deputy Minister of Justice to move for the dismissal of the case on the ground inter alia of prescription, hence the proceedings were terminated.[7] In this criminal case, respondent Paredes was likewise represented by respondent Sansaet as counsel. Nonetheless, respondent* Paredes was thereafter haled before the Tanodbayan for preliminary investigation on the charge that, by using his former position as Provincial Attorney to influence and induce the Bureau of Lands officials to favorably act on his application for free patent, he had violated Section 3(a) of Republic Act No. 3019, as amended. For the third time, respondent Sansaet was Paredes counsel of record therein. On August 29, 1988, the Tanodbayan, issued a resolution[8] recommending the criminal prosecution of respondent Paredes. Atty. Sansaet, as counsel for his aforenamed co-respondent, moved for reconsideration and, because of its legal significance in this case, we quote some of his allegations in that motion: x x x respondent had been charged already by the complainants before the Municipal Circuit Court of San Francisco, Agusan del Sur, went to jail on detention in 1984 under the same set of facts and the same evidence x x x but said case after arraignment, was ordered dismissed by the court upon recommendation of the Department of Justice. Copy of thedismissal order, certificate of arraignment and the recommendation of the Department of Justice are hereto attached for ready reference; thus the filing of this case will be a case of double jeopardy for respondent herein x x x.[9] (Italics supplied.) A criminal case was subsequently filed with the Sandiganbayan[10] charging respondent Paredes with a violation of Section 3(a) of Republic Act No. 3019, as amended. However, a motion to quash filed by the defense was later granted in respondent courts resolution of August 1, 1991 [11] and the case was dismissed on the ground of prescription. On January 23, 1990, one Teofilo Gelacio, a taxpayer who had initiated the perjury and graft charges against respondent Paredes, sent a letter to the Ombudsman seeking the investigation of the three respondents herein for falsification of public documents.[12] He claimed that respondent Honrada, in conspiracy with his herein co-respondents, simulated and certified as true copies certain documents purporting to be a notice of arraignment, dated July 1, 1985, and transcripts of stenographic notes supposedly taken during the arraignment of Paredes on the perjury charge.[13] These falsified documents were annexed to respondent Paredes motion for reconsideration of the Tanodbayan resolution for the filing of a graft charge against him, in order to support his contention that the same would constitute double jeopardy.

In support of his claim, Gelacio attached to his letter a certification that no notice of arraignment was ever received by the Office of the Provincial Fiscal of Agusan del Sur in connection with that perjury case; and a certification of Presiding Judge Ciriaco Ario that said perjury case in his court did not reach the arraignment stage since action thereon was suspended pending the review of the case by the Department of Justice.[14] Respondents filed their respective counter-affidavits, but Sansaet subsequently discarded and repudiated the submissions he had made in his counter-affidavit. In a so-called Affidavit of Explanations and Rectifications,[15] respondent Sansaet revealed that Paredes contrived to have the graft case under preliminary investigation dismissed on the ground of double jeopardy by making it that the perjury case had been dismissed by the trial court after he had been arraigned therein. For that purpose, the documents which were later filed by respondent Sansaet in the preliminary investigation were prepared and falsified by his co-respondents in this case in the house of respondent Paredes. To evade responsibility for his own participation in the scheme, he claimed that he did so upon the instigation and inducement of respondent Paredes. This was intended to pave the way for his discharge as a government witness in the consolidated cases, as in fact a motion therefor was filed by the prosecution pursuant to their agreement. Withal, in a resolution[16] dated February 24, 1992, the Ombudsman approved the filing of falsification charges against all the herein private respondents. The proposal for the discharge of respondent Sansaet as a state witness was rejected by the Ombudsman on this evaluative legal position: x x x Taking his explanation, it is difficult to believe that a lawyer of his stature, in the absence of deliberate intent to conspire, would be unwittingly induced by another to commit a crime. As counsel for the accused in those criminal cases, Atty. Sansaet had control over the case theory and the evidence which the defense was going to present. Moreover, the testimony or confession of Atty. Sansaet falls under the mantle of privileged communication between the lawyer and his client which may be objected to, if presented in the trial. The Ombudsman refused to reconsider that resolution[17] and, ostensibly to forestall any further controversy, he decided to file separate informations for falsification of public documents against each of the herein respondents. Thus, three criminal cases,[18] each of which named one of the three private respondents here as the accused therein, were filed in the graft court. However, the same were consolidated for joint trial in the Second Division of the Sandiganbayan. As stated at the outset, a motion was filed by the People on July 27, 1993 for the discharge of respondent Sansaet as a state witness. It was submitted that all the requisites therefor, as provided in Section 9, Rule 119 of the Rules of Court, were satisfied insofar as respondent Sansaet was concerned. The basic postulate was that, except for the eyewitness testimony of respondent Sansaet, there was no other direct evidence to prove the confabulated falsification of documents by respondents Honrada and Paredes. Unfortunately for the prosecution, respondent Sandiganbayan, hewing to the theory of the attorney-client privilege adverted to by the Ombudsman and invoked by the two other private respondents in their opposition to the prosecutions motion, resolved to deny the desired discharge on this ratiocination: From the evidence adduced, the opposition was able to establish that client and lawyer relationship existed between Atty. Sansaet and Ceferino Paredes, Jr., before, during and after the period alleged in

the information. In view of such relationship, the facts surrounding the case, and other confidential matter must have been disclosed by accused Paredes, as client, to accused Sansaet, as his lawyer in his professional capacity. Therefore, the testimony of Atty. Sansaet on the facts surrounding the offense charged in the information is privileged.[19] Reconsideration of said resolution having been likewise denied,[20] the controversy was elevated to this Court by the prosecution in an original action for the issuance of the extraordinary writ of certiorari against respondent Sandiganbayan. The principal issues on which the resolution of the petition at bar actually turns are therefore (1) whether or not the projected testimony of respondent Sansaet, as proposed state witness, is barred by the attorney-client privilege; and (2) whether or not, as a consequence thereof, he is eligible for discharge to testify as a particeps criminis. I As already stated, respondent Sandiganbayan ruled that due to the lawyer-client relationship which existed between herein respondents Paredes and Sansaet during the relevant periods, the facts surrounding the case and other confidential matters must have been disclosed by respondent Paredes, as client, to respondent Sansaet, as his lawyer. Accordingly, it found no reason to discuss it further since Atty. Sansaet cannot be presented as a witness against accused Ceferino S. Paredes, Jr. without the latters consent.[21] The Court is of a contrary persuasion. The attorney-client privilege cannot apply in these cases, as the facts thereof and the actuations of both respondents therein constitute an exception to the rule. For a clearer understanding of that evidential rule, we will first sweep aside some distracting mental cobwebs in these cases. 1. It may correctly be assumed that there was a confidential communication made by Paredes to Sansaet in connection with Criminal Cases Nos. 17791-93 for falsification before respondent court, and this may reasonably be expected since Paredes was the accused and Sansaet his counsel therein. Indeed, the fact that Sansaet was called to witness the preparation of the falsified documents by Paredes and Honrada was as eloquent a communication, if not more, than verbal statements being made to him by Paredes as to the fact and purpose of such falsification. It is significant that the evidentiary rule on this point has always referred to any communication, without distinction or qualification.[22] In the American jurisdiction from which our present evidential rule was taken, there is no particular mode by which a confidential communication shall be made by a client to his attorney. The privilege is not confined to verbal or written communications made by the client to his attorney but extends as well to information communicated by the client to the attorney by other means.[23] Nor can it be pretended that during the entire process, considering their past and existing relations as counsel and client and, further, in view of the purpose for which such falsified documents were prepared, no word at all passed between Paredes and Sansaet on the subject matter of that criminal act. The clincher for this conclusion is the undisputed fact that said documents were thereafter filed by Sansaet in behalf of Paredes as annexes to the motion for reconsideration in the preliminary investigation of the graft case before the Tanodbayan.[24] Also, the acts and words of the parties during the period when the documents were being falsified were necessarily confidential since Paredes would not have invited Sansaet to his house and allowed him to witness the same except under conditions of secrecy and confidence.

2. It is postulated that despite such complicity of Sansaet at the instance of Paredes in the criminal act for which the latter stands charged, a distinction must be made between confidential communications relating to past crimes already committed, and future crimes intended to be committed, by the client. Corollarily, it is admitted that the announced intention of a client to commit a crime is not included within the confidences which his attorney is bound to respect. Respondent court appears, however, to believe that in the instant case it is dealing with a past crime, and that respondent Sansaet is set to testify on alleged criminal acts of respondents Paredes and Honrada that have already been committed and consummated. The Court reprobates the last assumption which is flawed by a somewhat inaccurate basis. It is true that by now, insofar as the falsifications to be testified to in respondent court are concerned, those crimes were necessarily committed in the past. But for the application of the attorney-client privilege, however, the period to be considered is the date when the privileged communication was made by the client to the attorney in relation to either a crime committed in the past or with respect to a crime intended to be committed in the future. In other words, if the client seeks his lawyers advice with respect to a crime that the former has theretofore committed, he is given the protection of a virtual confessional seal which the attorney-client privilege declares cannot be broken by the attorney without the clients consent. The same privileged confidentiality, however, does not attach with regard to a crime which a client intends to commit thereafter or in the future and for purposes of which he seeks the lawyers advice. Statements and communications regarding the commission of a crime already committed, made by a party who committed it, to an attorney, consulted as such, areprivileged communications. Contrarily, the unbroken stream of judicial dicta is to the effect that communications between attorney and client having to do with the clients contemplated criminal acts, or in aid or furtherance thereof, are not covered by the cloak of privileges ordinarily existing in reference to communications between attorney and client.[25] (Emphases supplied.) 3. In the present cases, the testimony sought to be elicited from Sansaet as state witness are the communications made to him by physical acts and/or accompanying words of Paredes at the time he and Honrada, either with the active or passive participation of Sansaet, were about to falsify, or in the process of falsifying, the documents which were later filed in the Tanodbayan by Sansaet and culminated in the criminal charges now pending in respondent Sandiganbayan. Clearly, therefore, the confidential communications thus made by Paredes to Sansaet were for purposes of and in reference to the crime of falsification which had not yet been committed in the past by Paredes but which he, in confederacy with his present co-respondents, later committed. Having been made for purposes of a futureoffense, those communications are outside the pale of the attorney-client privilege. 4. Furthermore, Sansaet was himself a conspirator in the commission of that crime of falsification which he, Paredes and Honrada concocted and foisted upon the authorities. It is well settled that in order that a communication between a lawyer and his client may be privileged, it must be for a lawful purpose or in furtherance of a lawful end. The existence of an unlawful purpose prevents the privilege from attaching.[26] In fact, it has also been pointed out to the Court that the prosecution of the honorable relation of attorney and client will not be permitted under the guise of privilege, and every communication made to an attorney by a client for a criminal purpose is a conspiracy or attempt at a conspiracy which is not only lawful to divulge, but which the attorney under certain circumstances may be bound to disclose at once in the interest of justice.[27] It is evident, therefore, that it was error for respondent Sandiganbayan to insist that such unlawful communications intended for an illegal purpose contrived by conspirators are nonetheless covered by

the so-called mantle of privilege. To prevent a conniving counsel from revealing the genesis of a crime which was later committed pursuant to a conspiracy, because of the objection thereto of his conspiring client, would be one of the worst travesties in the rules of evidence and practice in the noble profession of law. II On the foregoing premises, we now proceed to the consequential inquiry as to whether respondent Sansaet qualifies, as a particeps criminis, for discharge from the criminal prosecution in order to testify for the State. Parenthetically, respondent court, having arrived at a contrary conclusion on the preceding issue, did not pass upon this second aspect and the relief sought by the prosecution which are now submitted for our resolution in the petition at bar. We shall, however, first dispose likewise of some ancillary questions requiring preludial clarification. 1. The fact that respondent Sandiganbayan did not fully pass upon the query as to whether or not respondent Sansaet was qualified to be a state witness need not prevent this Court from resolving that issue as prayed for by petitioner. Where the determinative facts and evidence have been submitted to this Court such that it is in a position to finally resolve the dispute, it will be in the pursuance of the ends of justice and the expeditious administration thereof to resolve the case on the merits, instead of remanding it to the trial court.[28] 2. A reservation is raised over the fact that the three private respondents here stand charged in three separate informations. It will be recalled that in its resolution of February 24, 1992, the Ombudsman recommended the filing of criminal charges for falsification of public documents against all the respondents herein. That resolution was affirmed but, reportedly in order to obviate further controversy, one information was filed against each of the three respondents here, resulting in three informations for the same acts of falsification. This technicality was, however, sufficiently explained away during the deliberations in this case by the following discussion thereof by Mr. Justice Davide, to wit: Assuming no substantive impediment exists to block Sansaets discharge as state witness, he can, nevertheless, be discharged even if indicted under a separate information. I suppose the three cases were consolidated for joint trial since they were all raffled to the Second Division of the Sandiganbayan. Section 2, Rule XV of the Revised Rules of the Sandiganbayan allows consolidation in only one Division of cases arising from the same incident or series of incidents, or involving common questions of law and fact. Accordingly, for all legal intents and purposes, Sansaet stood as co-accused and he could be discharged as state witness. It is of no moment that he was charged separately from his co-accused. While Section 9 of Rule 119 of the 1985 Rules of Criminal Procedure uses the word jointly, which was absent in the old provision, the consolidated and joint trial has the effect of making the three accused co-accused or joint defendants, especially considering that they are charged for the same offense. In criminal law, persons indicted for the same offense and tried together are called joint defendants. As likewise submitted therefor by Mr. Justice Francisco along the same vein, there having been a consolidation of the three cases, the several actions lost their separate identities and became a single action in which a single judgment is rendered, the same as if the different causes of action involved had originally been joined in a single action.[29]

Indeed, the former provision of the Rules referring to the situation (w)hen two or more persons are charged with the commission of a certain offense was too broad and indefinite; hence the word joint was added to indicate the identity of the charge and the fact that the accused are all together charged therewith substantially in the same manner in point of commission and time. The word joint means common to two or more, as involving the united activity of two or more, or done or produced by two or more working together, or shared by or affecting two or more.[30] Had it been intended that all the accused should always be indicted in one and the same information, the Rules could have said so with facility, but it did not so require in consideration of the circumstances obtaining in the present case and the problems that may arise from amending the information. After all, the purpose of the Rule can be achieved by consolidation of the cases as an alternative mode. 2. We have earlier held that Sansaet was a conspirator in the crime of falsification, and the rule is that since in a conspiracy the act of one is the act of all, the same penalty shall be imposed on all members of the conspiracy. Now, one of the requirements for a state witness is that he does not appear to be the most guilty.[31] not that he must be the least guilty[32] as is so often erroneously framed or submitted. The query would then be whether an accused who was held guilty by reason of membership in a conspiracy is eligible to be a state witness. To be sure, in People vs. Ramirez, et al.[33] we find this obiter: It appears that Apolonio Bagispas was the real mastermind. It is believable that he persuaded the others to rob Paterno, not to kill him for a promised fee. Although he did not actually commit any of the stabbings, it was a mistake to discharge Bagispas as a state witness. All the perpetrators of the offense, including him, were bound in a conspiracy that made them equally guilty. However, prior thereto, in People vs. Roxas, et al.,[34] two conspirators charged with five others in three separate informations for multiple murder were discharged and used as state witnesses against their confederates. Subsequent thereto, in Lugtu, et al. vs. Court of Appeals, et al.,[35] one of the coconspirators was discharged from the information charging him and two others with the crime of estafa. The trial court found that he was not the most guilty as, being a poor and ignorant man, he was easily convinced by his two co-accused to open the account with the bank and which led to the commission of the crime. On appeal, this Court held that the finding of respondent appellate court that Lugtu was just as guilty as his co-accused, and should not be discharged as he did not appear to be not the most guilty, is untenable. In other words, the Court took into account the gravity or nature of the acts committed by the accused to be discharged compared to those of his co-accused, and not merely the fact that in law the same or equal penalty is imposable on all of them. Eventually, what was just somehow assumed but not explicitly articulated found expression in People vs. Ocimar, et al.,[36] which we quote in extenso: Ocimar contends that in the case at bar Bermudez does not satisfy the conditions for the discharge of a co-accused to become a state witness. He argues that no accused in a conspiracy can lawfully be discharged and utilized as a state witness, for not one of them could satisfy the requisite of appearing not to be the most guilty. Appellant asserts that since accused Bermudez was part of the conspiracy, he is equally guilty as the others.

We do not agree. First, there is absolute necessity for the testimony of Bermudez. For, despite the presentation of four (4) other witnesses, none of them could positively identify the accused except Bermudez who was one of those who pulled the highway heist which resulted not only in the loss of cash, jewelry and other valuables, but even the life of Capt. Caeba, Jr. It was in fact the testimony of Bermudez that clinched the case for the prosecution. Second, without his testimony, no other direct evidence was available for the prosecution to prove the elements of the crime. Third, his testimony could be, as indeed it was, substantially corroborated in its material points as indicated by the trial court in its well-reasoned decision. Fourth, he does not appear to be the most guilty. As the evidence reveals, he was only invited to a drinking party without having any prior knowledge of the plot to stage a highway robbery. But even assuming that he later became part of the conspiracy, he does not appear to be the most guilty. What the law prohibits is that the most guilty will be set free while his co-accused who are less guilty will be sent to jail. And by most guilty we mean the highest degree of culpability in terms of participation in the commission of the offense and not necessarily the severity of the penalty imposed. While all the accused may be given the same penalty by reason of conspiracy, yet one may be considered least guilty if We take into account his degree of participation in the perpetration of the offense. Fifth, there is no evidence that he has at any time been convicted of any offense involving moral turpitude. x x x

Thus, We agree with the observations of the Solicitor General that the rule on the discharge of an accused to be utilized as state witness clearly looks at his actual and individual participation in the commission of the crime, which may or may not have been perpetrated in conspiracy with the other accused. Since Bermudez was not individually responsible for the killing committed on the occasion of the robbery except by reason of conspiracy, it cannot be said then that Bermudez appears to be the most guilty. Hence, his discharge to be a witness for the government is clearly warranted. (Italics ours.) The rule of equality in the penalty to be imposed upon conspirators found guilty of a criminal offense is based on the concurrence of criminal intent in their minds and translated into concerted physical action although of varying acts or degrees of depravity. Since the Revised Penal Code is based on the classical school of thought, it is the identity of the mens rea which is considered the predominant consideration and, therefore, warrants the imposition of the same penalty on the consequential theory that the act of one is thereby the act of all. Also, this is an affair of substantive law which should not be equated with the procedural rule on the discharge of particeps criminis. This adjective device is based on other considerations, such as the need for giving immunity to one of them in order that not all shall escape, and the judicial experience that the candid admission of an accused regarding his participation is a guaranty that he will testify truthfully. For those reasons, the Rules provide for certain qualifying criteria which, again, are based on judicial experience distilled into a judgmental policy. III The Court is reasonably convinced, and so holds, that the other requisites for the discharge of respondent Sansaet as a state witness are present and should have been favorably appreciated by the Sandiganbayan. Respondent Sansaet is the only cooperative eyewitness to the actual commission of the falsification charged in the criminal cases pending before respondent court, and the prosecution is faced with the

formidable task of establishing the guilt of the two other co-respondents who steadfastly deny the charge and stoutly protest their innocence. There is thus no other direct evidence available for the prosecution of the case, hence there is absolute necessity for the testimony of Sansaet whose discharge is sought precisely for that purpose. Said respondent has indicated his conformity thereto and has, for the purposes required by the Rules, detailed the substance of his projected testimony in his Affidavit of Explanations and Rectifications. His testimony can be substantially corroborated on its material points by reputable witnesses, identified in the basic petition with a digest of their prospective testimonies, as follows: Judge Ciriaco C. Ario, Municipal Circuit Trial Court in San Francisco, Agusan del Sur; Provincial Prosecutor and Deputized Ombudsman Prosecutor Claudio A. Nistal; Teofilo Gelacio, private complainant who initiated the criminal cases through his letter-complaint; Alberto Juvilan of the Sangguniang Bayan of San Fernando, Agusan del Sur, who participated in the resolution asking their Provincial Governor to file the appropriate case against respondent Paredes, and Francisco Macalit, who obtained the certification of non-arraignment from Judge Ario. On the final requirement of the Rules, it does not appear that respondent Sansaet has at any time been convicted of any offense involving moral turpitude. Thus, with the confluence of all the requirements for the discharge of this respondent, both the Special Prosecutor and the Solicitor General strongly urge and propose that he be allowed to testify as a state witness. This Court is not unaware of the doctrinal rule that, on this procedural aspect, the prosecution may propose but it is for the trial court, in the exercise of its sound discretion, to determine the merits of the proposal and make the corresponding disposition. It must be emphasized, however, that such discretion should have been exercised, and the disposition taken on a holistic view of all the facts and issues herein discussed, and not merely on the sole issue of the applicability of the attorney-client privilege. This change of heart and direction respondent Sandiganbayan eventually assumed, after the retirement of two members of its Second Division [37]and the reconstitution thereof. In an inversely anticlimactic Manifestation and Comment [38] dated June 14, 1995, as required by this Court in its resolution on December 5, 1994, the chairman and new members thereof [39] declared: 4) That the questioned Resolutions of December 22, 1993 and March 7, 1994 upon which the Petition for Certiorari filed by the prosecution are based, was penned by Associate Justice Narciso T. Atienza and concurred in by the undersigned and Associate Justice Augusto M. Amores; 5) That while the legal issues involved had been already discussed and passed upon by the Second Division in the aforesaid Resolution, however, after going over the arguments submitted by the SolicitorGeneral and re-assessing Our position on the matter, We respectfully beg leave of the Honorable Supreme Court to manifest that We are amenable to setting aside the questioned Resolutions and to grant the prosecutions motion to discharge accused Generoso Sansaet as state witness, upon authority of the Honorable Supreme Court for the issuance of the proper Resolution to that effect within fifteen (15) days from notice thereof. WHEREFORE, the writ of certiorari prayed for is hereby granted SETTING ASIDE the impugned resolutions and ORDERING that the present reliefs sought in these cases by petitioner be allowed and given due course by respondent Sandiganbayan. SO ORDERED.

ULEP V LEGAL CLINIC In 1984, The Legal Clinic was formed by Atty. Rogelio Nogales. Its aim, according to Nogales was to move toward specialization and to cater to clients who cannot afford the services of big law firms. Now, Atty. Mauricio Ulep filed a complaint against The Legal Clinic because of the latters advertisements which contain the following: SECRET MARRIAGE? P560.00 for a valid marriage. Info on DIVORCE. ABSENCE. ANNULMENT. VISA. THE LEGAL CLINIC, INC. Please call: 521-0767; 521-7232; 522-2041 8:30am 6:00pm 7th Flr. Victoria Bldg., UN Ave., Manila GUAM DIVORCE DON PARKINSON An attorney in Guam is giving FREE BOOKS on Guam Divorce through The Legal Clinic beginning Monday to Friday during office hours. Guam divorce. Annulment of Marriage. Immigration Problems, Visa Ext. Quota/Non-quota Res. & Special Retirees Visa. Declaration of Absence. Remarriage to Filipina Fiancees. Adoption. Investment in the Phil. US/Foreign Visa for Filipina Spouse/Children. Call Marivic. THE LEGAL CLINIC, INC. 7th Flr. Victoria Bldg., UN Ave., Manila nr. US Embassy Tel. 521-7232, 521-7251, 522-2041, 521-0767 It is also alleged that The Legal Clinic published an article entitled Rx for Legal Problems in Star Week of Philippine Star wherein Nogales stated that they The Legal Clinic is composed of specialists that can take care of a clients problem no matter how complicated it is even if it is as complicated as the Sharon Cuneta-Gabby Concepcion situation. He said that he and his staff of lawyers, who, like doctors, are specialists in various fields, can take care of it. The Legal Clinic, Inc. has specialists in taxation and criminal law, medico-legal problems, labor, litigation and family law. These specialists are backed up by a battery of paralegals, counselors and attorneys. As for its advertisement, Nogales said it should be allowed in view of the jurisprudence in the US which now allows it (John Bates vs The State Bar of Arizona). And that besides, the advertisement is merely making known to the public the services that The Legal Clinic offers. ISSUE: Whether or not The Legal Clinic is engaged in the practice of law; whether such is allowed; whether or not its advertisement may be allowed. HELD: Yes, The Legal Clinic is engaged in the practice of law however, such practice is not allowed. The Legal Clinic is composed mainly of paralegals. The services it offered include various legal problems wherein a client may avail of legal services from simple documentation to complex litigation and corporate undertakings. Most of these services are undoubtedly beyond the domain of paralegals, but rather, are exclusive functions of lawyers engaged in the practice of law. Under Philippine jurisdiction

however, the services being offered by Legal Clinic which constitute practice of law cannot be performed by paralegals. Only a person duly admitted as a member of the bar and who is in good and regular standing, is entitled to practice law. Anent the issue on the validity of the questioned advertisements, the Code of Professional Responsibility provides that a lawyer in making known his legal services shall use only true, honest, fair, dignified and objective information or statement of facts. The standards of the legal profession condemn the lawyers advertisement of his talents. A lawyer cannot, without violating the ethics of his profession, advertise his talents or skills as in a manner similar to a merchant advertising his goods. Further, the advertisements of Legal Clinic seem to promote divorce, secret marriage, bigamous marriage, and other circumventions of law which their experts can facilitate. Such is highly reprehensible. The Supreme Court also noted which forms of advertisement are allowed. The best advertising possible for a lawyer is a well-merited reputation for professional capacity and fidelity to trust, which must be earned as the outcome of character and conduct. Good and efficient service to a client as well as to the community has a way of publicizing itself and catching public attention. That publicity is a normal byproduct of effective service which is right and proper. A good and reputable lawyer needs no artificial stimulus to generate it and to magnify his success. He easily sees the difference between a normal byproduct of able service and the unwholesome result of propaganda. The Supreme Court also enumerated the following as allowed forms of advertisement: 1. Advertisement in a reputable law list 2. Use of ordinary simple professional card 3. Listing in a phone directory but without designation as to his specialization

ATTY. PRUDENCIO S. PENTICOSTES, complainant, vs. PROSECUTOR DIOSDADO S. IBAEZ, respondent. RESOLUTION ROMERO, J.: Sometime in 1989, Encarnacion Pascual, the sister-in-law of Atty. Prudencio S. Penticostes (herein complainant) was sued for non-remittance of SSS payments. The complaint was docketed as I.S. 89-353 and assigned to Prosecutor Diosdado S. Ibaez (herein respondent) for preliminary investigation. In the course of the investigation, Encarnacion Pascual gave P1,804.00 to respondent as payment of her Social Security System (SSS) contribution in arrears. Respondent, however, did not remit the amount to the system. The fact of non-payment was certified to by the SSS on October 2, 1989. On November 16, 1990 or over a year later, complainant filed with the Regional Trial Court of Tarlac a complaint for professional misconduct against Ibaez due to the latters failure to remit the SSS contributions of his sister-in-law. The complaint alleged that respondents misappropriation of Encarnacion Pascuals SSS contributions amounted to a violation of his oath as a lawyer. Seven days later, or on November 23, 1990, respondent paid P1,804.00 to the SSS on behalf of Encarnacion Pascual. In the meantime, the case was referred to the Integrated Bar of the Philippines-Tarlac Chapter, the court observing that it had no competence to receive evidence on the matter. Upon receipt of the case, the Tarlac Chapter forwarded the same to IBPs Commission on Bar Discipline.

In his defense, respondent claimed that his act of accommodating Encarnacion Pascuals request to make payment to the SSS did not amount to professional misconduct but was rather an act of Christian charity. Furthermore, he claimed that the action was moot and academic, the amount of P1,804.00 having already been paid by him to the SSS. Lastly, he disclaimed liability on the ground that the acts complained were not done by him in his capacity as a practicing lawyer but on account of his office as a prosecutor. On September 3, 1998, the Commission recommended that the respondent be reprimanded, with a warning that the commission of the same or similar offense would be dealt with more severely in the future. On November 5, 1998, the Board of Governors of the Integrated Bar of the Philippines adopted and approved its Commissions recommendation. This Court adopts the recommendation of the IBP and finds respondent guilty of professional misconduct. While there is no doubt that payment of the contested amount had been effected to the SSS on November 23, 1990, it is clear however, that the same was made only after a complaint had been filed against respondent. Furthermore, the duties of a provincial prosecutor do not include receiving money from persons with official transactions with his office. This Court has repeatedly admonished lawyers that a high sense of morality, honesty and fair dealing is expected and required of a member of the bar. Rule 1.01 of the Code of Professional Responsibility provides that *a+ lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. It is glaringly clear that respondents non-remittance for over one year of the funds coming from Encarnacion Pascual constitutes conduct in gross violation of the above canon. The belated payment of the same to the SSS does not excuse his misconduct. While Pascual may not strictly be considered a client of respondent, the rules relating to a lawyers handling of funds of a client is applicable. In Daroy v. Legaspi,[1] this court held that (t)he relation between an attorney and his client is highly fiduciary in nature...[thus] lawyers are bound to promptly account for money or property received by them on behalf of their clients and failure to do so constitutes professional misconduct. The failure of respondent to immediately remit the amount to the SSS gives rise to the presumption that he has misappropriated it for his own use. This is a gross violation of general morality as well as professional ethics; it impairs public confidence in the legal profession and deserves punishment.[2] Respondents claim that he may not be held liable because he committed such acts, not in his capacity as a private lawyer, but as a prosecutor is unavailing. Canon 6 of the Code of Professional Responsibility provides: These canons shall apply to lawyers in government service in the discharge of their official tasks. As stated by the IBP Committee that drafted the Code, a lawyer does not shed his professional obligations upon assuming public office. In fact, his public office should make him more sensitive to his professional obligations because a lawyers disreputable conduct is more likely to be magnified in the publics eye.[3] Want of moral integrity is to be more severely condemned in a lawyer who holds a responsible public office.[4] ACCORDINGLY, this Court REPRIMANDS respondent with a STERN WARNING that a commission of the similar offense will be dealt with more severely in the future. LET copies of this decision be spread in his records and copies be furnished the Department of Justice and the Office of the Bar Confidant.



The Issue

The basic issue submitted for consideration of the Court is whether or not petitioner is entitled to recover attorneys fees amounting to Twenty Six Million Three Hundred Fifty Thousand Seven Hundred Seventy Nine Pesos and Ninety One Centavos (P26,350,779.91) for handling the case for its client Eastern Telecommunications Philippines, Inc. filed with the Regional Trial Court, Makati, though its services were terminated in midstream and the client directly compromised the case with the adverse party.

The Facts

In giving due course to the petition, we carefully considered the facts attendant to the case. On August 28, 1987, Eastern Telecommunications Philippines, Inc. (ETPI) represented by the law firm San Juan, Africa, Gonzales and San Agustin (SAGA), filed with the Regional Trial Court, Makati, a complaint for recovery of revenue shares against Philippine Long Distance Telephone Company (PLDT). Atty. Francisco D. Rilloraza, a partner of the firm appeared for ETPI. After ETPI rested its case, it paid SAGA the billed amount of One Hundred Thousand Pesos (P100,000.00). On September 18, 1987, the trial court issued a resolution granting ETPIs application for preliminary restrictive and mandatory injunctions. During this period, SAGA was dissolved and four of the junior partners formed the law firm Rilloraza, Africa, De Ocampo & Africa (RADA), which took over as counsel in the case for ETPI. The latter signed a retainer agreement with counsel dated October 1, 1987.[1] Petitioners presented the three aspects of the main case in the trial court. First, the traffic revenue shares which ETPI sought to recover from PLDT in accordance with the contract between them. Second, ETPI sought preventive injunctive relief against the PLDTs threats to deny ETPI access to the Philippines international gateway switch. Third, ETPI called this the foreign correspondentships aspect where ETPI sought preventive injunctive relief against PLDTs incursions and inducements directed at ETPIs foreign correspondents in Hongkong, Taiwan and Singapore, to break their correspondentship contracts with PLDT, using the threat of denying them access to the international gateway as leverage.

In this connection, ETPI filed with the trial court two urgent motions for restraining order, one on October 30, 1987 and another on November 4, 1987. As the applications were not acted upon, ETPI brought the case up to the Court of Appeals by petition for certiorari. On June 28, 1988, petitioner received a letter from ETPI signed by E. M. Villanueva, President and Chief Executive Officer. In substance, the letter stated that ETPI was terminating the retainer contract dated October 1, 1987, effective June 30, 1988. On June 29, 1988, petitioner filed with the Regional Trial Court a notice of attorneys lien, furnishing copies to the plaintiff ETPI, to the signatory of the termination letter and PLDT. On the same date, petitioner additionally sent a letter to ETPI attaching its partial billing statement. In its notice, RADA informed the court that there were negotiations toward a compromise between ETPI and PLDT. In April 1990, petitioner confirmed that indeed the parties arrived at an amicable settlement and that the same was entered as a judgment. On April 26, 1990, petitioner filed a motion for the enforcement of attorneys lien with the Regional Trial Court of Makati and then appraised the Supreme Court thereof by manifestation.[2] We noted the manifestation in a resolution dated July 23, 1990. On May 24, 1990, PLDT filed with the trial court a manifestation that it is not a party to nor in any manner involved in the attorneys lien being asserted by Atty. Rilloraza for and in behalf of the law firm,[3] while ETPI filed its opposition thereto on June 11, 1990.

The Lower Courts Ruling

The trial court in its resolution dated September 14, 1990 denied the motion for enforcement of attorneys lien. Thus: WHEREFORE, premises considered, the court finds that the Notice of Attorneys Lien filed by the law firm of Rilloraza, Africa, De Ocampo and Africa has no basis in fact and in law, and therefore denies the Motion for Enforcement of Attorneys Lien. SO ORDERED. Makati, Metro Manila, September 4, 1990. (s/t) ZEUS C. ABROGAR J u d g e[4] On October 10, 1990, petitioner filed with the trial court a notice of appeal from the abovementioned order to the Supreme Court. On November 6, 1990, ETPI filed a Motion to Dismiss Appeal contending that the case could be brought to the Supreme Court only via a petition for review on certiorari, not by a mere notice of appeal. In an order dated January 16, 1991, the trial court dismissed RADAs appeal. The trial court said:

There is no more regular appeal from the Regional Trial Court to the Supreme Court. Under the amendment of Section 17 of the Judiciary Act by R.A. 5440, orders and judgments of the Regional Trial Court may be elevated to the Supreme Court only by petition for review on certiorari. xxx Wherefore, premises considered, the order dated September 14, 1990 is hereby reconsidered and set aside. The Notice of Appeal filed by movant RADA is dismissed. SO ORDERED. Given this 16th day of January, 1991, at Makati, Metro Manila. (s/t) ZEUS C. ABROGAR Judge[5] Hence, on February 9, 1991, petitioner filed a petition for certiorari with the Supreme Court, which we remanded to the Court of Appeals. The latter dismissed the petition in a decision promulgated on November 14, 1991,[6] ruling that the judge committed no abuse of discretion in denying petitioners motion for enforcement of attorneys lien. Thus: We therefore rule that respondent judge committed no abuse of discretion, much less a grave one, in denying petitioners motion for enforcement of attorneys lien. Assuming that respondent judge committed an error in denying petitioners motion for enforcement of attorneys lien, it cannot be corrected by certiorari. WHEREFORE, the writs prayed for are DENIED, and the petition is hereby DISMISSED, with cost against petitioner. SO ORDERED. (s/t) REGINA G. ORDOEZ-BENITEZ Associate Justice WE CONCUR: (s/t) JOSE A. R. MELO (s/t) EMETERIO C. CUI Associate Justice Associate Justice[7]


A. The Procedural Aspect

There is nothing sacrosanct about procedural rules, which are liberally construed in order to promote their objectives and assist the parties in obtaining just, speedy and inexpensive determination of every action or proceeding.[8] In an analogous case,[9] we ruled that where the rigid application of the rules would frustrate substantial justice[10], or bar the vindication of a legitimate grievance, the courts are justified in exempting a particular case from the operation of the rules. In A-One Feeds, Inc. vs. Court of Appeals, we said Litigations should, as much as possible, be decided on the merits and not on technicality. Dismissal of appeals purely on technical grounds is frowned upon, and the rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice and thereby defeat their very claims. As has been the constant ruling of this Court, every party litigant should be afforded the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities.[11] A basic legal principle is that no one shall be unjustly enriched at the expense of another.[12] This principle is one of the mainstays of every legal system for centuries and which the Civil Code echoes: ART. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.[13] The Code Commission, its report, emphasized that: It is most needful that this ancient principle be clearly and specifically consecrated in the proposed Civil Code to the end that in cases not foreseen by the lawmaker, no one may unjustly benefit himself to the prejudice of another. The German Civil Code has a similar provision (Art. 812).[14] With this in mind, one could easily understand why, despite technical deficiencies, we resolved to give due course to this petition. More importantly, the case on its face appears to be impressed with merit.

B. The Attorneys Fees

We understand that Atty. Francisco Rilloraza handled the case from its inception until ETPI terminated the law firms services in 1988. Petitioners claim for attorneys fees hinges on two grounds: first, the fact that Atty. Rilloraza personally handled the case when he was working for SAGA; and second, the retainer agreement dated October 1, 1987. We agree that petitioners are entitled to attorneys fees. We, however, are not convinced with the petitioners arguments that the services RADA rendered merit the amount they are claiming. First, petitioner contends that Atty. Rilloraza initiated the filing of the complaint. When a client employs the services of a law firm, he does not employ the services of the lawyer who is assigned to personally handle the case. Rather, he employs the entire law firm. In the event that the counsel

appearing for the client resigns, the firm is bound to provide a replacement. Thus, RADA could not claim to have initiated the filing of the complaint considering that ETPI hired SAGA. What is more, on September 17, 1987, ETPI paid SAGA the amount of One Hundred Thousand Pesos (P100,00.00)[15] representing services performed prior to September 17, 1987. SAGA assigned one of its associates, Atty. Francisco Rilloraza, to handle the case for the firm. Although Atty. Rilloraza handled the case personally, he did so for and in behalf of SAGA. Second, petitioner claims that under the retainer agreement, which provides: 6.2 B. Court Cases:

Should recourse to judicial action be necessary to effect collection or judicial action be taken by adverse party, our attorneys fees shall be fifteen percent (15%) of the amounts collected or the value of the property acquired or liability saved.[16] the firm is entitled to the fees agreed upon. However, the retainer agreement has been terminated. True, Attorney Rilloraza played a vital role during the inception of the case and in the course of the trial. We cannot also ignore the fact that an attorney-client relationship between petitioner and respondent no longer existed during its culmination by amicable agreement. To award the attorneys fees amounting to 15% of the sum of One Hundred Twenty Five Million Six Hundred Seventy One Thousand Eight Hundred Eighty Six Pesos and Four Centavos (P125,671,886.04) plus Fifty Million Pesos (P50,000,000.00) paid by PLDT to ETPI would be too unconscionable. In any case, whether there is an agreement or not, the courts shall fix a reasonable compensation which lawyers may receive for their professional services.[17] A lawyer has the right to be paid for the legal services he has extended to his client, which compensation must be reasonable.[18] A lawyer would be entitled to receive what he merits for his services. Otherwise stated, the amount must be determined on a quantum meruit basis. Quantum meruit, meaning as much as he deserved is used as a basis for determining the lawyers professional fees in the absence of a contract but recoverable by him from his client.[19] Recovery of attorneys fees on the basis of quantum meruit is authorized when (1) there is no express contract for payment of attorneys fees agreed upon between the lawyer and the client; (2) when although there is a formal contract for attorneys fees, the fees stipulated are found unconscionable or unreasonable by the court; and (3) when the contract for attorneys fees is void due to purely formal defects of execution; (4) when the counsel, for justifiable cause, was not able to finish the case to its conclusion ; (5) when lawyer and client disregard the contract for attorneys fees.[20] In fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum meruit, the elements to be considered are generally (1) the importance of the subject matter in controversy, (2) the extent of services rendered, and (3) the professional standing of the lawyer. A determination of these factors would indispensably require nothing less than a full-blown trial where private respondents can adduce evidence to establish the right to lawful attorneys fees and for petitioner to oppose or refute the same.[21] The trial court has the principal task of fixing the amount of attorneys fees[22]. Hence, the necessity of a hearing is beyond cavil.

C. Charging Lien

Petitioner contends that pursuant to Rule 138 of the Revised Rules of Court, it is entitled to a charging lien. The rule provides: Section 37. Attorneys liens. An attorney shall have a lien upon the funds, documents and papers of his client, which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgements for the payment of money, and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements. (Emphasis supplied) We do not agree. A charging lien to be enforceable as security for the payment of attorneys fees requires as a condition sine qua non a judgment for money and execution in pursuance of such judgment secured in the main action by the attorney in favor of his client[23]. A charging lien presupposes that the attorney has secured a favorable money judgment for his client.[24] From the facts of the case it would seem that petitioner had no hand in the settlement that occurred, nor did it ever obtain a favorable judgment for ETPI. ETPI entered into a compromise agreement when it ended the services of petitioner and through the effort of ETPIs new lawyers, the law firm Romulo, Mabanta, Buenaventura, Sayoc and De los Angeles. Whether there was bad faith in the substitution of the lawyers to avoid compliance with the retainer agreement could only be determined after a trial of the case on the merits. This decision, however, should not be interpreted as to impose upon petitioner any additional burden in collecting its attorneys fees. The petitioner must avail itself of the proper remedy in order to forestall the possibility of any injustice on or unjust enrichment of any of the parties.

The Judgment (Fallo)

ACCORDINGLY, the Court GRANTS the petition, REVERSES the decision of the Court of Appeals in CA-G. R. SP No. 24463 and REMANDS the case to the court of origin for the determination of the amount of attorneys fees to which petitioner is entitled. No costs. SO ORDERED.


GONZAGA-REYES, J.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court from the Resolution[1] of the Court of Appeals dated July 25, 1991, which dismissed the appeal of herein petitioners. It appears that Civil Case No. 38-M-89 filed by herein petitioners against the Government Service Insurance System (GSIS) for specific performance, damages and annulment with prayer for preliminary injunction with the Regional Trial Court of Malolos, Bulacan, Branch 12 was dismissed on March 27, 1989 on the ground that the complaint failed to state a cause of action against the GSIS.[2] The petitioners filed a notice of appeal[3] with the RTC. Their appeal was dismissed on July 25, 1991 for failure to file an appellants brief within the reglementary period which expired on May 29, 1991 pursuant to Section 1 (f), Rule 50 of the Rules of Court.[4] On September 1, 1992, the Court of Appeals[5] denied the motion of herein petitioners to recall Entry of Judgment and to reinstate appeal etc., there being no showing therein of any reason to justify the failure of appellants counsel to file appellants brief within the reglementary period and considering that the resolution dated July 25, 1991 dismissing the appeal became final xxx[6]. On March 15, 1993, the Court of Appeals[7] denied the petitioners motion for reconsideration of its September 1, 1992 Resolution on the ground that it was beyond the power of the Court to modify the dismissal since the order dismissing the appeal had become final and executory on August 19, 1991 and Entry of Judgment was issued on November 4, 1991.[8] Hence, this petition where the petitioners assign the following errors: I. IT WAS ERROR FOR THE COURT OF APPEALS NOT TO HAVE SERVED A COPY OF ITS RESOLUTION OF DISMISSAL UPON THE APPELLANT DESPITE KNOWLEDGE THAT THEIR FORMER COUNSEL OF RECORD HAD DIED. II. IT WAS ERROR FOR THE COURT OF APPEALS TO SERVE COPIES OF RESOLUTIONS UPON THE APPELLANTS FORMER COUNSEL DE PARTE. III. IT WAS ERROR FOR THE COURT OF APPEALS TO DENY APPELLANTS MOTION FOR RECONSIDERATION ON THESE GROUNDS. IV. IT WAS ERROR FOR THE COURT OF APPEALS TO DENY ADMISSION OF THE BRIEF FOR THE APPELLANT WHICH WAS ALREADY APPENDED TO THEIR MOTION FOR RECONSIDERATION. V. THERE ARE COMPELLING REASONS AS ENUMERATED IN THE APPELLANTS BRIEF FOR THE COURT OF APPEALS TO RESOLVE THE ISSUES ON THE MERITS.[9] The petitioners argue that they were never notified by their counsel of record, Atty. Mala, of the notice to file an appellants brief. Atty. Mala was incapacitated to notify the petitioners of their obligation as he was in a coma when said notice was served upon him. They argue that when the Court of Appeals was notified of the death of Atty. Mala when it received the return of the assailed Resolution of July 25, 1991[10] bearing the notation RETURN TO SENDER, REASON: Deceased 8-1-81, it should have sent resolutions, notices and other processes to the petitioners themselves for the reason that when the case was brought to the Court of Appeals, they had no counsel of record and were filing and signing the

pleadings themselves. They add that although Atty. Rosalino Barican continued to be served with copies of resolutions, etc., Atty. Barican withdrew as their counsel of record while the case was still pending before the RTC of Malolos, Bulacan. The petitioners also argue that substantial justice demands that they be allowed to continue their appeal for the reason that as soon as they learned of the dismissal of their appeal, they immediately procured the services of new counsel who filed an appeal brief together with a motion for reconsideration. As the procedural lapses were attributable to the Court of Appeals and their former counsel, they should still be accorded their right to appeal. Finally, they claim that on the merits, there are compelling grounds to allow the appeal.[11] The respondents, on the other hand, argue that Atty. Barican did not make a formal withdrawal as counsel of record of the petitioners. It is true that Atty. Mala assisted the petitioners in filing their notice of appeal but said notice was signed by Serafin Aquino himself. Moreover, Atty. Mala never entered his appearance as their counsel. In addition, the Motion for the Issuance of a Writ of Preliminary Injunction[12] filed by the petitioners was signed by the petitioner spouses and only notarized by Atty. Mala. If it was intended that he should be their counsel of record, he should have signed the motion. The respondents also claim that this petition is already res judicata as their appeal was dismissed and the decision became final and executory; an entry of judgment was issued and the case was remanded to the lower court for execution. Finally, the respondents maintain that the petitioners are guilty of forum shopping and contemptuous behavior as shown by the different cases filed by the petitioner against them. In reply[13], the petitioners reiterate that there was a failure of service of a copy of the resolution of the Court of Appeals in CA G.R. CV No. 21553 dated July 25, 1991 dismissing their appeal since it never reached their lawyer, Atty. Mala, who died on June 3, 1991; and that Atty. Barican was no longer their counsel of record[14]. They also claim that CA-G.R. No. 21533 is not res judicata to G.R. No. 109493 since: 1. There was no judgment on the merits in CA-G.R. No. 21533 since it was dismissed on a mere technicality. 2. There is no identity of subject matter since CA-G.R. No. 21533 sought a review of the decision of the RTC-Malolos while G.R. No. 109493 seeks a review of the dismissal of their appeal by the Court of Appeals. Petitioners also claim that they are not guilty of forum shopping since there was no pending action when the second and subsequent cases were filed; and that it was the GSIS who initiated one of the cases, Civil Case No. 301 for unlawful detainer; and that the cases they filed involve different subject matters, which negates a finding of forum shopping.[15] In their rejoinder[16], respondents assert that Atty. Baricans withdrawal was never approved by the Court despite his certification that he withdrew as counsel for petitioners. We rule that there was a proper service of the Resolution of the Court of Appeals in CA G.R. CV No. 21553 dated July 25, 1991 on the petitioners. Section 26, Rule 138 of the Rules of Court states the proper procedure for the withdrawal of a lawyer as counsel in a case. It provides: Section 26 - Change of Attorneys - An attorney may retire at anytime from an action or special proceeding, by the written consent of his client filed in court. He may also retire at anytime from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution,

the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and the written notice of the change shall be given to the adverse party xxx. Unless the procedure prescribed in the above mentioned section is complied with, the attorney of record is regarded as the counsel who should be served with copies of the judgments, orders and pleadings and who should be held responsible for the case.[17] Cortez vs. Court of Appeals, 83 SCRA 31 at p. 35 [1978].17 In cases of substitution of attorneys the following requisites must be complied with: 1. Written application for substitution; 2. written consent of the client; and 3. a written consent of the attorney to be substituted. In case the consent of the attorney to be substituted cannot be obtained, there must at least be proof that notice of the motion for substitution has been served upon him in the manner prescribed by our rules.[18] In the present case, petitioners admit that Atty. Barican represented them in the proceedings before the lower court but that Atty. Mala substituted Atty. Barican when the case was elevated to the Court of Appeals.[19] No proof was presented by the petitioners to show compliance with the above procedural requirements for the withdrawal of Atty. Barican and the substitution of Atty. Mala in his stead; no written application for substitution or written consent of the client was filed in court. The Certification made by Atty. Rosalino C. Barican to the effect that he was the former counsel of record of the petitioners but that he withdrew as their counsel is not controlling in the absence of compliance with the above procedural requirements. It is therefore irrelevant that Atty. Mala did not receive the copy of the resolution of the Court of Appeals dated July 25, 1991 which dismissed their appeal since he was not the counsel of record and had never entered his appearance as counsel of the petitioners. Accordingly, the resolution of the Court of Appeals in CA G.R. CV No. 21533 dated July 25, 1991, dismissing the petitioners appeal became final and executory because their lawyer of record, Atty. Barican, was duly served with a copy of that resolution. There was an effective service upon the petitioners for as far as the Court of Appeals was concerned, Atty. Barican continued to be their counsel of record. The failure of an appellant to file an appellants brief is ground for the dismissal of the appeal.[20] The dismissal becomes final and executory after fifteen days from receipt of the judgment or order. In the present case, since it is not denied that Atty. Barican, the counsel of record, received the copy of the resolution of the Court of Appeals dismissing the petitioners appeal, the dismissal became final and executory after the lapse of fifteen days. We agree with the petitioners that they are not guilty of forum shopping. There is forum shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another.[21] The rule on forum shopping applies only when two (or more) cases are still pending.[22] There is only one case, G.R. No. 109493, the present Petition for Review on Certiorari, pending between the parties in the present case. In view of the above conclusions, we deem it unnecessary to discuss the issue of res judicata. IN VIEW OF THE FOREGOING, the instant Petition is hereby DENIED. No pronouncement as to costs.





INC., complainant,





DECISION PER CURIAM: On April 19, 1993, Gatchalian Promotions Talents Pool, Inc., filed before this Court a Petition for disbarment against Attorney Primo R. Naldoza. The precursor of this Petition was the action of respondent, as counsel for complainant, appealing a Decision of the Philippine Overseas Employment Agency (POEA). In relation to the appeal, complainant asserts that respondent should be disbarred for the following acts: 1. Appealing a decision, knowing that the same was already final and executory 2. Deceitfully obtaining two thousand, five hundred and fifty-five US dollars (US$2,555) from complainant, allegedly for cash bond in the appealed case 3. Issuing a spurious receipt to conceal his illegal act.[1] In his Answer,[2] respondent denies that he persuaded complainant to file an appeal. On the contrary, he asserts that it was the complainant who insisted on appealing the case in order to delay the execution of the POEA Decision.[3] He also controverts complainants allegation that he asked for a cash bond and that he issued the fake receipt.[4] In a Resolution dated May 17, 1993, this Court referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. The pertinent portions of the complaint were summarized by the IBP in this wise: Under its petition, complainant alleges that the respondent was given the task to defend the interest of the complainant corporation in POEA Case No. 8888-06-468, entitled Olano, et al. versus Gatchalian Promotions Talents Pool, Inc., et al.; that when the said case was resolved in favor of the complainant therein on October 5, 1992, the respondent Atty. Naldoza knowing fully well that the said decision had already become final and unappealable[,] through malpractice in [an] apparent desire to collect or to bleed his client of several thousand pesos of attorneys fees, convinced the complainant to appeal the case before the Supreme Court. Thus, on December 14, 1992, the respondent filed with the Supreme Court a Petition for Review which was docketed as G.R. No. 107984 and that two (2) days thereafter misrepresented to the complainant corporation that the complainant ha[d] to pay, which it did, [a] Cash Bond in UNITED STATES DOLLAR amounting to TWO THOUSAND FIVE HUNDRED FIFTY FIVE (U.S. $2,555.00) to the Supreme Court in order that the said appealed case could be heard or acted upon by the Supreme Court. The said amount was given to the respondent. x x x *S+ubsequently the complainant corporation came to know that the fees to be paid to the Supreme Court consist[ed] only of normal filing and docket fees for such kind of appeal but in order to

cover up respondents misrepresentation, Atty. Naldoza presented complainant a fake xerox copy of an alleged Supreme court receipt representing payment of U.S. $2,555.00. Subsequent verification from the Supreme Court made by the complainant corporation revealed that the said receipt issued by the treasurers office of the Supreme Court x x x *was+ spurious, meaning a fake receipt. The said verification revealed that what was only paid by the respondent to the Supreme court was the amount of P622.00 as shown by the enumerated legal fees of the Supreme Court DocketReceiving Section showing the handwritten name of the respondent for purpose of showing that the said computation was requested by and addressed to the respondent.[5] (citations omitted) Meanwhile, a criminal case[6] for estafa based on the same facts was filed against herein respondent before the Regional Trial Court (RTC) of Makati City, Branch 141. Although acquitted on reasonable doubt, he was declared civilly liable in the amount of US$ 2,555. Thereafter, respondent filed before the IBP a Manifestation with Motion to Dismiss on July 22, 1996, on the ground that he had already been acquitted in the criminal case for estafa. Complainant opposed the Motion.[7] On February 16, 1998, this Court received the IBP Board of Governors Resolution, which approved the investigating commissioners report[8] and recommendation that respondent be suspended from the practice of law for one (1) year. In his Report, Investigating Commissioner Plaridel Jose justified his recommendation in this manner: x x x *R+espondent fails to rebut the position of the complainant that the signature [on the receipt for the amount of $2,555.00] was his. Hence, respondent anchors his position on a mere denial that it is not his signature. Likewise, the respondent denies the check voucher dated December 15, 1992, and the encircled signature of the respondent, which x x x according to him is falsified and irregular. No evidence, however, was presented by the respondent that his signature therein was falsified and irregular. [As to the altered Supreme Court Official Receipt, the respondent denied] that he ha[d] anything to do with it because it was the complainant who signed the Petition for Review and tried to explain that his name appear[ed] to be the payee because he [was] the counsel of record of the petitioner. But while it is true that the affiant in the said Petition for Review [was] Mr. Rogelio G. Gatchalian, president of the complainant company, the respondent does not deny that he signed the said petition as counsel of the petitioner corporation and that he was actually the one who prepared the same and the notary public before whom the affiant subscribed and *swore+ as the one who caused the preparation of the said petition. The legal form (Exh. G) of the legal fees for the Petition for Review re G.R. 107984 was denied by the respondent because according to him he was never given a chance to cross-examine the person who issued the [certification] x x x. However, respondent does not deny that he is the person referred to by the handwritten name P.R. Naldoza who paid the legal fees of P622.00. In addition to the said respondents Formal Offer of Evidence, he submitted to this Commission as his most important piece of evidence the Decision of acquittal in Criminal Case No. 93-8748 entitled People of the Philippines versus Primo R. Naldoza, the copy of which Decision is appended to his Manifestation with Motion to Dismiss dated July 22, 1996 praying for the dismissal of the present administrative case in view of his being exonerated in the said criminal case based on the same facts and evidence.[9] (citations omitted)

Commissioner Jose brushed aside respondents contention that his acquittal in the companion criminal case should result in the dismissal of this administrative complaint. The commissioner emphasized that the criminal case for estafa[10] was completely different from the proceedings before him; acquittal in the former did not exonerate respondent in the latter.[11] He further noted that the RTC Decision itself hinted at the administrative liability of respondent, since it found him civilly liable to herein complainant for $2,555.[12] We agree with the IBP Board of Governors that respondent should be sanctioned. However, the recommended penalty is not commensurate to the gravity of the wrong perpetrated. At the outset, the Court agrees with the IBP that respondents Motion to Dismiss should be denied. In that Motion, he maintains that he should be cleared of administrative liability, because he has been acquitted of estafa which involved the same facts. He argues that the issue involved there was the very same issue litigated in this case,[13] and that his exoneration was a result a full blown trial on the merits of this case.[14] In a similar case, we have said: x x x The acquittal of respondent Ramos *of+ the criminal charge is not a bar to these *administrative+ proceedings. The standards of legal profession are not satisfied by conduct which merely enables one to escape the penalties of xxx criminal law. Moreover, this Court in disbarment proceedings is acting in an entirely different capacity from that which courts assume in trying criminal cases.[15] Administrative cases against lawyers belong to a class of their own.[16] They are distinct from and they may proceed independently of civil and criminal cases. The burden of proof for these types of cases differ. In a criminal case, proof beyond reasonable doubt is necessary;[17] in an administrative case for disbarment or suspension, clearly preponderant evidence is all that is required.[18] Thus, a criminal prosecution will not constitute a prejudicial question even if the same facts and circumstances are attendant in the administrative proceedings.[19] It should be emphasized that a finding of guilt in the criminal case will not necessarily result in a finding of liability in the administrative case.[20] Conversely, respondents acquittal does not necessarily exculpate him administratively. In the same vein, the trial courts finding of civil liability against the respondent will not inexorably lead to a similar finding in the administrative action before this Court. Neither will a favorable disposition in the civil action absolve the administrative liability of the lawyer.[21] The basic premise is that criminal and civil cases are altogether different from administrative matters, such that the disposition in the first two will not inevitably govern the third and vice versa. For this reason, it would be well to remember the Courts ruling in In re Almacen,[22] which we quote: x x x Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not involve a trial of an action or a suit, but are rather investigations by the Court into the conduct of one of its officers. Not being intended to inflict punishment, [they are] in no sense a criminal prosecution. Accordingly, there is neither a plaintiff nor a prosecutor therein. [They] may be initiated by the Court motu proprio. Public interest is [their] primary objective, and the real question for determination is whether or not the attorney is still a fit person to be allowed the privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal profession and the proper and honest administration of justice by purging the profession of

members who by their misconduct have prove[n] themselves no longer worthy to be entrusted with the duties and responsibilities pertaining to the office of an attorney. x x x (emphasis ours) We shall now discuss seriatim the specific charges against respondent. First. Complainant alleges that respondent appealed the POEA Decision, despite knowing that it had already become final and executory. The IBP investigating commissioner had no explicit finding on this point. Rogelio G. Gatchalian testified that during the pendency of the appeal, his company had received from the POEA a Writ of Execution which led him to the conlcusion that they *had+ lost the case before the Supreme Court.[23] This, however, does not substantiate the charge. Complainant has failed to present proof regarding the status of the appeal. Neither has there been any showing that the appeal was dismissed on the ground that the POEA Decision had become final and executory. Worse, there has been no evidence that respondent knew that the case was unappealable. Indeed, the records of this Court shows that the Petition for Review was dismissed for petitioners failure to submit an Affidavit of Service and a legible duplicate of the assailed Order. Clearly, this charge has no leg to stand on. Second. Be that as it may, we agree with the IBP that respondent obtained from complainant the amount of $2,555, on the false representation that it was needed for the appeal before this Court. According to Gatchalian,[24] respondent explained that the amount would cover all the expenses to be incurred in the Petition for Review with the Supreme Court and which amount also will answer for the payment as sort of deposit so that if our case is lost, the money will be given or paid to the complainant in that case so that our deposit with the bank would not be garnished. [25] Corroborating Gatchalians testimony, Edna Deles declared that respondent received the amount on the representation that it would be paid to the Supreme Court in connection with the Olano case.[26] The defense of denial proferred by respondent is not convincing. Quite the contrary, when he paid P10,000 and issued a check to complainant as his moral obligation, he indirectly admitted the charge. Normally, this is not the actuation of one who is falsely accused of appropriating the money of another. This is an admission of misconduct.[27] In his Answer submitted to this Court, he declared: (8). That I have no knowledge, information or belief as to truthfulness of the allegation of the Petitioner, on his allegation no. 8 and no. 9, the truth being that in all the cases and assignments made by the Petitioner to me, I was made to report to him personally and to his Board of Directors the progress of the cases both orally and in writing. I even [went] to the extent of paying him P10,000.00 as my moral obligation only to find after accounting that he still owes me P180,000.00 as attorneys fee [to] which I am entitled under rule 130 of the rules of court sec. 24, and under sec. 37 of the above-cited rules, I have the right to apply the funds received from Gatchalian in satisfaction of my claim for Professional Services, otherwise known as Attorneys Lien, as shown in my Service Billings and Statement of Accounts.[28] (emphasis ours) Contrary to respondents claim, the amount of $2,555 was not a part of his attorneys lien. He demanded the money from his client on the pretext that it was needed for the Petition before the Supreme Court, but he actually converted it to his personal gain. This act clearly constitutes malpractice.[29] The claim that respondent merely applied his lien over the funds of his client is just an afterthought, the accounting being made after the fact. It is settled that the conversion by a lawyer of funds entrusted to him is a gross violation of professional ethics and a betrayal of public confidence in the legal profession.[30]

Third. In an effort to conceal his misappropriation of the money entrusted to him, respondent gave complainant a photocopy of a receipt purportedly showing that the Supreme Court had received the sum of $2,555 from him. Again, the testimonies of Gatchalian[31] and Deles[32] were equally clear on this point. After respondent had presented the false receipt, Gatchalian learned that no such payment was made. Ms Araceli Bayuga of the Supreme Court Cash Collection and Disbursement Division issued a certification that respondent had paid the amount of P622 only, not $2,555. In fact, the records of the said case[33] contain no indication at all the Court has required the payment of the latter sum, or that it has been paid at all. Juxtaposed to the complainants evidence, the bare denials of respondent cannot overturn the IBPs findings that he has indeed presented a false receipt to conceal his misappropriation of his clients money. We agree with the IBP that it is unbelievable that the complainant in the person of Rogelio Gatchalian, being a layman as he is without any knowledge in the procedure of filing a case before the Supreme court, could spuriously weave such documents which are denied by the respondent.[34] In view of the foregoing, respondent has clearly failed the standards of his noble profession. As we have stated in Resurrecion v. Sayson:[35] *L+awyers must at all times conduct themselves, especially in their dealings with their clients and the public at large, with honesty and integrity in a manner beyond reproach. Clearly reprehensible are the established facts that he demanded money from his client for a bogus reason, misappropriated the same, and then issued a fake receipt to hide his deed. In Dumadag v. Lumaya,[36] the Court ordered the indefinite suspension of a lawyer for not remitting to his client the amount he had received pursuant to an execution, viz.: *E+ven as respondent consistently denied liability to Dumadag, his former client, the records abundantly point to his receipt of and failure to deliver the amount of P4,344.00 to his client, the herein complainant, a clear breach of the canons of professional responsibility. In Obia v. Catimbang,[37] we meted out the same penalty to a lawyer who had misappropriated the money entrusted to him: The acts committed by respondent definitely constitute malpractice and gross misconduct in his office as attorney. These acts are noted with disapproval by the Court; they are in violation of his duty, as a lawyer, to uphold the integrity and dignity of the legal profession and to engage in no conduct that adversely reflects on his fitness to practice law. Such misconduct discredits the legal profession." Respondents acts are more despicable. Not only did he misappropriate the money entrusted to him; he also faked a reason to cajole his client to part with his money. Worse, he had the gall to falsify an official receipt of this Court to cover up his misdeeds. Clearly, he does not deserve to continue being a member of the bar. WHEREFORE, Primo R. Naldoza is hereby DISBARRED. The Office of the Clerk of Court is directed to strike out his name from the Roll of Attorneys and to inform all courts of this Decision. SO ORDERED.

APEX MINING, INC., ENGR. PANFILO FRIAS and ENGR. REY DIONISIO, petitioners, vs. HON. COURT OF APPEALS, HON. PEDRO CASIA, as Judge of Branch 2, Tagum, Davao del Norte, MIGUEL BAGAIPO, ALFREDO ROA, EDGAR BARERA, BONIFACIO BARIUS, JR., FRANCISCO BELLO and LEOPOLDO CAGATIN, respondents. DECISION DAVIDE, JR., C.J.: This appeal by certiorari of the decision[1] of the Court of Appeals dated 30 April 1993 and its Resolution[2] dated 7 May 1998 in CA-G.R. SP No. 39872 raised the issue of whether the negligence of counsel can justify annulment of judgment. The present petition stemmed from a complaint for damages filed on 9 December 1987 by herein private respondents, Miguel Bagaipo, Alfredo Roa, Edgar Barrera, Bonifacio Baruis, Jr., Francisco Bello, and Leopoldo I. Cagatin, against herein petitioners Apex Mining Corporation (hereafter APEX) and/or Engr. Panfilo Frias and Engr. Rey Dionisio before the Regional Trial Court of Davao del Norte. The case was raffled to Branch 11 of Tagum, 11th Judicial Regional and was docketed as Civil Case No. 2131. The complaint alleged in substance that sometime in November 1987, the bulldozer owned by APEX, due to its negligence, damaged private respondents mining claim known as Tunnel T-45, thereby putting a stop to private respondents mining operations.[3] Petitioners through their retained counsel filed an answer denying the material allegations in the complaint and alleging that the claims of private respondents were without factual and legal bases since they constructed the tunnel within the mining claim area of APEX without any authority from or approval of the latter.[4] During trial on the merits, plaintiffs (private respondents herein) presented three witnesses who were cross-examined by the petitioners retained law firm through Atty. Gerardo C. Olaguer, a partner of the firm. After private respondents rested their case, petitioners counsel filed a demurrer to evidence, which was denied by the trial court in its order of 23 June 1992. In the same order the trial court set the reception of evidence for the defendants (herein petitioners) on 18 February 1993. Notice of the order was received by petitioners counsel; however, when the case was called on 18 February 1993, petitioners counsel did not appear. On motion of the plaintiffs, the trial court issued an order declaring defendants to have waived their right to present evidence in their defense. Despite due notice of the order, counsel for petitioners did not move for reconsideration of the order. On 24 June 1993, the trial court rendered a decision finding APEX liable for damages but absolving the other defendants. The dispositive portion thereof reads: From the evidence presented by the plaintiffs which has not been disputed as no evidence was presented by the defendant, judgment is hereby rendered in favor of the plaintiffs and against defendant Apex Mining Corporation ordering the latter as follows:

1. To pay the plaintiffs the amount of P100,000.00 representing expenses that will be incurred by the plaintiffs in the rehabilitation of Tunnel No. 45; 2. To pay the plaintiffs the unearned income equivalent to P72,000.00 a day from November 14, 1987 until Tunnel No. 45 shall have been completely rehabilitated; 3. To pay P5,000.00 representing expenses in the preparation of the complaint and P10,000.00 attorneys fees; and 4. To pay the costs. Given this 24th day of June 1993 at Tagum Davao, Philippines.[5] Counsel for the petitioners appealed from the decision to the Court of Appeals.[6] The appeal was entered as CA-G.R. CV No. UDK-7265. However, it was subsequently dismissed by the Court of Appeals in its Resolution[7] of 13 May 1994 for failure to pay the docket fees within the reglementary period. Again, despite due notice, counsel for petitioners did not move for reconsideration of the dismissal of the appeal. Accordingly, the resolution of 13 May 1994 became final, and entry of judgment[8] was made on August 10, 1994. Again, petitioners counsel was duly notified of the entry of judgment. The case was remanded to the court of origin and upon motion of private respondents, a writ of execution[9] was issued on 15 February 1995. However, it appearing that APEX was in a joint venture with Base Metals Mineral Resources Corporation under a Memorandum of Agreement, the trial court issued on 7 September 1995 an order[10]directing the Base Metals Mineral Resources Corporation, through its officers, to turn over to the clerk of court and/or the sheriff all money and machineries due in favor of APEX, by reason of said Memorandum of Agreement. Upon its receipt of said order sometime in December 1995, Base Metals Mineral Resources Corporation informed APEX about the same. Thereafter, APEX confronted its retained counsel about the matter and it was only then that APEX learned that its appeal of the judgment against it in Civil Case No. 2131 had been dismissed by the Court of Appeals. On 26 February 1996, APEX and/or Engr. Panfilo Frias and Engr. Rey Dionisio, through their new counsel, filed a Petition for Annulment of Judgment with application for the issuance of a writ of preliminary injunction and/or temporary restraining order before the Court of Appeals. Petitioners contended that the actuation of their former counsel constituted professional chicanery amounting to extrinsic or collateral fraud properly warranting the annulment of the judgment of the trial court and that by reason of said actuation of their former counsel they have been unduly deprived of their right to be heard and to due process of law through no fault of their own. On 2 February 1996, the Court of Appeals issued a temporary restraining order. On 8 March 1996, a hearing on the application for preliminary injunction was conducted wherein the vicepresident of APEX testified not only on the propriety of the issuance of the injunction but also on the alleged sell-out and gross negligence of their former counsel. On the said hearing, pieces of documentary evidence were marked and formally offered.[11] On 13 March 1998, private respondents filed an answer wherein they argued that the petition for annulment should be dismissed because it is not the proper remedy, that the grounds invoked

do not warrant the annulment of the challenged decision, and that petitioners are guilty of forumshopping.[12] On 21 March 1996, the Court of Appeals granted the issuance of the writ of preliminary injunction.[13] Thereafter, the case was set for preliminary conference pursuant to Sec. 1 (c), Rule 6 of the Revised Internal Rules of the Court of Appeals.[14] At the preliminary conference, attorneys for both parties expounded on their respective positions. Respondents marked and offered in evidence four court certifications and official receipt. The parties also agreed to file simultaneous memoranda within 20 days from 10 May 1996. The parties also informed the Court that they were open to an amicable settlement so the Court of Appeals granted them an additional 20 days within to submit their compromise agreement, if one is reached. Otherwise, the petition for annulment shall be deemed submitted for decision.[15] The parties failed to reach a compromise agreement; hence, they filed their respective memoranda. On 30 April 1997, the Court of Appeals rendered a decision[16] dismissing the petition for annulment of judgment on the ground that it has no jurisdiction to annul or set aside its own decision and that petitioners are bound by the negligence, mistake or lack of competence of their counsel. The Court of Appeals also dissolved the writ of preliminary injunction previously issued. A timely motion for reconsideration was filed by petitioners but was likewise denied by the Court of Appeals in its Resolution[17] of 7 May 1998, wherein it ruled that: xxx. Suffice it to repeat that generally, a client will suffer the consequences of the negligence, mistake or lack of competence of his counsel. But where a party was given every opportunity to present his evidence and to pursue appeal from the adverse judgment but counsels negligence resulted in the loss of said appeal, the defeated party cannot raise the alleged gross negligence of his counsel resulting in the denial of due process to warrant the reversal of the lower courts decision. In the first place, the neglect or failure of counsel to inform his client of an adverse judgment resulting in the loss of his right to appeal will not justify setting aside a judgment that is valid and regular on its face (Mayuga vs. Court of Appeals, 261 SCRA 309, 317-318, citing Tuason v. Court of Appeals, G.R. No. 116607, April 10, 16 and other cases). Secondly, there would be no end to litigation if this was allowed as every error of counsel could be the subject of challenge by the client through another counsel who, if he is also found wanting, would likewise be disowned by the same client through another counsel, and so on ad infinitum. There would be no end to litigation since court proceedings would be subject to reopening at any time by the mere subterfuge of replacing counsel.[18] Petitioners are now before us reiterating the same arguments they raised before the Court of Appeals. They contended that the Court of Appeals erred in disregarding the significant and uncontroverted acts of petitioners counsel amounting to a sell-out of his clients interest which are sufficient reasons to annul the adverse decision of the trial court, to wit: 1. he failed to inform his clients, herein petitioners of the scheduled hearing for reception of their evidence, despite due notice to him, precluding the submission of their evidence which would have disproved the material allegations in plaintiffs complaints; 2. he failed to attend the scheduled hearing for reception of petitioners evidence for which reason the case was deemed submitted for decision without this evidence;

3. he never bothered to verify what transpired at the hearing he failed to attend, and thus, was not able to file the necessary pleadings to lift the order considering the case submitted for decision without petitioners evidence; 4. after receiving the court a quos adverse decision awarding in toto everything plaintiffs prayed for in their complaint, he did not notify or inform his clients, herein petitioners, opting to appeal the said decision to the Court of Appeals without prior consultation with them; 5. he did not pay the docketing fees to perfect his appeal for which reason the undocketed appeal was dismissed by the Court of Appeals; 6. after receiving the Resolution of the Court of Appeals dismissing his appeal, he did not file a motion to reinstate the dismissed appeal with a tender of the unpaid docketing fees; 7. he hid from the petitioners the dismissal by the Court of appeals of his Appeal, resulting in the Entry of Judgment on 10 August 1994; 8. when his law firm submitted a progress report to petitioner APEX on the status of the case handled by the firm, it was misrepresented that the instant case was still pending on appeal with the Court of Appeals when as of the date the report was submitted, the appeal had already been dismissed fifteen (15) months earlier; and 9. when asked on 17 October 1995 for the second time the status of the instant case, a partner of the law firm assured APEX (thru it Makati City corporate lawyer) that the case was still pending resolution and that the company will be advised accordingly of whatever developments, stressing that the more urgent cases are those which have been decided with finality and that the case is not one that merits Apexs immediate concern and attention.[19] At the outset, error was committed by the Court of Appeals in holding that it has no jurisdiction over the petition for annulment. It is clear under Section 9 (2) of the Batas Pambansa Blg. 129 (now Rule 47 of the 1997 Rules of Civil Procedure) that exclusive original jurisdiction over actions for annulment of judgment of the decision of the Regional Trial Courts is vested on the Court of Appeals. The fact that petitioners appealed the decision of the Regional Trial Court of Davao del Norte in Civil Case No. 2131 with the Court of Appeals is immaterial. The said appeal was dismissed for non-payment of docket fees within the reglementary period. An appeal is not deemed perfected if the appellate courts docket fee is not fully paid.[20] Perfection of an appeal in the manner and within the period laid down by law is not only mandatory but also jurisdictional, and that the failure to perfect an appeal as required by the rules has the effect of defeating the right of appeal of a party and precluding the appellate court from acquiring jurisdiction over the case.[21] It follows then that the Court of Appeals did not acquire appellate jurisdiction over the decision of the trial court. On the merit, we are persuaded by petitioners contention. A judgment can be annulled only on two grounds: (1) lack of jurisdiction and (2) extrinsic fraud.[22] Fraud is regarded as extrinsic or collateral where it has prevented a party from having a trial or from presenting all of his case to the court.[23] It is the kind of fraud which denied the party the opportunity to fully litigate upon the trial all the rights or defenses he was entitled to assert.[24]

It is settled that the negligence of counsel binds the client. This is based on the rule that any act performed by a counsel within the scope of his general or implied authority is regarded as an act of his client. Consequently, the mistake or negligence of counsel may result in the rendition of an unfavorable judgment against the client.[25] However, the application of the general rule to a given case should be looked into and adopted according to the surrounding circumstances obtaining. Thus, exceptions to the foregoing have been recognized by the court in cases where reckless or gross negligence of counsel deprives the client of due process of law,[26] or when its application will result in outright deprivation of the clients liberty or property or where the interests of justice so require, and accord relief to the client who suffered by reason of the lawyers gross or palpable mistake or negligence.[27] The instant case falls within the exception. Petitioners counsel is guilty of gross negligence in handling their case before the trial court. Records show that petitioners former counsel did not attend the scheduled hearing for the reception of the evidence for the defense despite due notice. The law firm did not even bother to inform its client of the scheduled hearing, as a result of which both counsel and petitioners were unable to attend the same. Worse, after the trial court issued an order declaring defendants [petitioners herein] as having waived their right to present evidence, their counsel did not take steps to have the same set aside. Although after a decision against APEX was rendered by the trial court, petitioners counsel was able to file a timely notice of appeal. However, it failed to pay the docket fee and refused to do so despite repeated notice to pay was given by the Court of Appeals, by reason of which the appeal was dismissed. The situation was further aggravated by the fact that no action was taken by the counsel on the said dismissal, thereby allowing it to become final and executory. Petitioners cannot be faulted in not inquiring into the records and status of the case. They expected that their counsel would amply protect their interest since they were their retained counsel which handled a majority, if not all of the cases of petitioners, including the case subject of this petition.[28] A client may reasonably expect that his counsel will make good his representations and has the right to expect that his lawyer will protect his interests during the trial of his case. For the general employment of an attorney to prosecute or defend a case or proceeding ordinarily vests in a plaintiffs attorney the implied authority to take all steps or do all acts necessary or incidental to the regular and orderly prosecution and management of the suit, and in a defendants attorney, the power to take such steps as he deems necessary to defend the suit and protect the interests of the defendant.[29] Further, there is ample showing that petitioners previous counsel misrepresented to the former about the true status of the damage suit filed by herein private respondents. They were made to believe, per the Progress Report submitted by the said Law Firm, that Civil Case 2131 was still pending on appeal with the Court of Appeals when in truth, the appeal has already been dismissed sixteen months ago.[30] The foregoing incompetence or negligence of petitioners counsel is so great which prevented them from fairly presenting their defense as interposed in the answer that they could not be liable for damages, considering that the plaintiffs tunnel was constructed within the claim area of the petitioners without permission, and that the award of P72,000 a day by the trial court is excessive and without basis since the tunnels daily production was of low grade ore and was practically nil due to the hardness of the vein materials and excessive flow of water aggravated by the withdrawal of plaintiffs financier of his generator and water pumps.[31]

If the incompetence, ignorance or inexperience of counsel is so great and the error committed as a result thereof is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the litigation may be reopened to give the client another chance to present his case.[32] Similarly, when an unsuccessful party has been prevented from fully and fairly presenting his case as a result of his lawyers professional delinquency or infidelity the litigation may be reopened to allow the party to present his side.[33] Where counsel is guilty of gross ignorance, negligence and dereliction of duty, which resulted in the clients being held liable for damages in a damage suit, the client is deprived of his day in court and the judgment may be set aside on such ground.[34] In view of the foregoing circumstances, higher interests of justice and equity demand that petitioners be allowed to present evidence on their defense. Petitioners may not be made to suffer for the lawyers mistakes and should be afforded another opportunity, at least, to introduce evidence on their behalf. To cling to the general rule in this case is only to condone rather than rectify a serious injustice to a party whose only fault was to repose his faith and entrust his innocence to his previous lawyers.[35] What should guide judicial action is that a party be given the fullest opportunity to establish the merits of his action or defense rather than for him to lose life, liberty, honor or property on mere technicalities.[36] In cases involving gross or palpable negligence of counsel the courts must step in and accord relief to a client who has suffered thereby.[37] This Court will always be disposed to grant relief to parties aggrieved by perfidy, fraud, reckless inattention and downright incompetence of lawyers, which has the consequence of depriving their clients, of their day in court.[38] WHEREFORE, the petition is GRANTED. The questioned decision and resolution of the Court of Appeals in CA-G.R.- S.P. No. 39872 are hereby SET ASIDE. The decision of the trial court in Civil Case No. 2131 and the writ of execution and the Order dated 7 September 1998 issued pursuant thereto are hereby ANNULLED. The Regional Trial Court of Davao del Norte, Branch II is hereby directed to REOPEN Civil Case No. 2131, for the reception of evidence for the defendants (petitioners herein), and of rebuttal and surrebuttal evidence if warranted, and as the case may be, and to dispose of the case with reasonable dispatch. No pronouncement as to costs. SO ORDERED.

IN RE: PETITION TO TAKE THE LAWYERS OATH BY ARTHUR M. CUEVAS, JR. RESOLUTION FRANCISCO, J.: Petitioner Arthur M. Cuevas, Jr., recently passed the 1996 Bar Examinations.[1] His oath-taking was held in abeyance in view of the Courts resolution dated August 27, 1996 which permitted him to take the Bar Examinations subject to the condition that should (he) pass the same, (he) shall not be allowed

to take the lawyers oath pending approval of the Court x x x due to his previous conviction for Reckless Imprudence Resulting In Homicide. The conviction stemmed from petitioners participation in the initiation rites of the LEX TALIONIS FRATERNITAS, a fraternity in the SAN BEDA COLLEGE OF LAW, sometime in September 1991, where Raul I. Camaligan, a neophyte, died as a result of the personal violence inflicted upon him. Thereafter, petitioner applied for and was granted probation. On May 16, 1995, he was discharged from probation and his case considered closed and terminated. In this petition , received by the Court on May 5, 1997, petitioner prays that he be allowed to take his lawyers oath at the Courts most convenient time[2]attaching thereto the Order dated May 16, 1995 of the Regional Trial Court, Branch 10 of Antique discharging him from his probation, and certifications attesting to his righteous, peaceful and law abiding character issued by: (a) the Mayor of the Municipality of Hamtic, Antique; (b) the Officer-in-Charge of Hamtic Police Station; (c) the Sangguniang Kabataan of Pob. III, Hamtic, through its chairman and officers; (d) a member of the IBP Iloilo Chapter; (e) the Parish Priest and Vicar General of St. Joseph Cathedral, San Jose, Antique, and (f) the President of the Parish Pastoral Council, Parish of Sta. Monica, Hamtic, Antique. On July 15, 1997, the Court, before acting on petitioners application, resolved to require Atty. Gilbert D. Camaligan, father of the deceased hazing victim Raul I. Camaligan, to comment thereon. In compliance with the Courts directive, Atty. Gilbert D. Camaligan filed his comment which states as follows: 1 He fully appreciates the benign concern given by this Hon. Court in allowing him to comment to the pending petition of Arthur M. Cuevas to take the lawyers oath, and hereby expresses his genuine gratitude to such gesture. 2 He conforms completely to the observation of the Hon. Court in its resolution dated March 19, 1997 in Bar Matter No.712 that the infliction of severe physical injuries which approximately led to the death of the unfortunate Raul Camaligan was deliberate (rather than merely accidental or inadvertent) thus, indicating serious character flaws on the part of those who inflicted such injuries. This is consistent with his stand at the outset of the proceedings of the criminal case against the petitioner and his codefendants that they are liable not only for the crime of homicide but murder, since they took advantage of the neophytes helpless and defenseless condition when they were beaten and kicked to death like a useless stray dog, suggesting the presence of abuse of confidence, taking advantage of superior strength and treachery (People vs. Gagoco, 58 Phil. 524). 3 He, however, has consented to the accused-students plea of guilty to the lesser offense of reckless imprudence resulting to the homicide, including the petitioner, out of pity to their mothers and a pregnant wife of the accused who went together at his house in Lucena City, literally kneeling, crying and begging for forgiveness for their sons, on a Christmas day in 1991 and on Maundy Thursday in 1992, during which they reported that the father of one of the accused died of heart attack upon learning of his sons involvement in the case. 4 As a Christian, he has forgiven the petitioner and his co-defendants in the criminal case for the death of his son. But as a loving father, who lost a son in whom he has a high hope to become a good lawyer to succeed him, he still feels the pain of his untimely demise, and the stigma of the gruesome manner of taking his life. This he cannot forget. 5 He is not, right now, in a position to say whether petitioner, since then has become morally fit for admission to the noble profession of the law. He politely submits this matter to the sound and judicious discretion of the Hon. Court. [3]

At the outset, the Court shares the sentiment of Atty. Gilbert D. Camaligan and commiserates with the untimely death of his son. Nonetheless, Atty. Gilbert D. Camaligan admits that *h+e is not, right now, in a position to say whether petitioner since then has become morally fit x x x and submits petitioners plea to be admitted to the noble profession of law to the sound and judicious discretion of the Court. The petition before the Court requires the balancing of the reasons for disallowing petitioners admission to the noble profession of law. His deliberate participation in the senseless beatings over a helpless neophyte which resulted to the latters untimely demise indicates absence of that moral fitness required for admission to the bar. And as the practice of law is a privilege extended only to the few who possess the high standards of intellectual and moral qualifications the Court is duty bound to prevent the entry of undeserving aspirants, as well as to exclude those who have been admitted but have become a disgrace to the profession. The Court, nonetheless, is willing to give petitioner a chance in the same manner that it recently allowed Al Caparros Argosino, petitioners co-accused below, to take the lawyers oath.[4] Petitioner Arthur M. Cuevas, Jr.s discharge from probation without any infraction of the attendant conditions therefor and the various certifications attesting to his righteous, peaceful and civic-oriented character prove that he has taken decisive steps to purge himself of his deficiency in moral character and atone for the unfortunate death of Raul I. Camaligan. The Court is prepared to give him the benefit of the doubt, taking judicial notice of the general tendency of the youth to be rash, temerarious and uncalculating.[5] Let it be stressed to herein petitioner that the lawyers oath is not a mere formality recited for a few minutes in the glare of flashing cameras and before the presence of select witnesses. Petitioner is exhorted to conduct himself beyond reproach at all times and to live strictly according to his oath and the Code of Professional Responsibility. And, to paraphrase Mr. Justice Padillas comment in the sister case of Re: Petition of Al Argosino To Take The Lawyers Oath, Bar Matter No. 712, March 19, 1997, *t+he Court sincerely hopes that Mr. Cuevas, Jr., will continue with the assistance he has been giving to his community. As a lawyer he will now be in a better position to render legal and other services to the more unfortunate members of society.[6] ACCORDINGLY, the Court hereby resolved to allow petitioner Arthur M. Cuevas, Jr., to take the lawyers oath and to sign the Roll of Attorneys on a date to be set by the Court, subject to the payment of appropriate fees. Let this resolution be attached to petitioners personal records in the Office of the Bar Confidant. SO ORDERED.

COMMISSION ON ELECTIONS, petitioner, vs. HON. TOMAS B. NOYNAY, Acting Presiding Judge, Regional Trial Court, Branch 23, Allen, Northern Samar, and DIOSDADA F. AMOR, ESBEL CHUA, and RUBEN MAGLUYOAN, respondents. DECISION DAVIDE, JR., J.:

The pivotal issue raised in this special civil action for certiorari with mandamus is whether R.A. No. 7691[1] has divested Regional Trial Courts of jurisdiction over election offenses, which are punishable with imprisonment of not exceeding six (6) years. The antecedents are not disputed. In its Minute Resolution No. 96-3076 of 29 October 1996, the Commission on Elections (COMELEC) resolved to file an information for violation of Section 261(i) of the Omnibus Election Code against private respondents Diosdada Amor, a public school principal, and Esbel Chua and Ruben Magluyoan, both public school teachers, for having engaged in partisan political activities. The COMELEC authorized its Regional Director in Region VIII to handle the prosecution of the cases. Forthwith, nine informations for violation of Section 261(i) of the Omnibus Election were filed with Branch 23 of the Regional Trial Court of Allen, Northern Samar, and docketed therein as follows: a) Criminal Cases Nos. A-1439 and A-1442, against private respondents Diosdada Amor, Esbel Chua, and Ruben Magluyoan. b) Criminal Case No. A-1443, against private respondents Esbel Chua and Ruben Magluyoan. c) Criminal Cases Nos. A-1444 and A-1445, against private respondent Esbel Chua only; d) Criminal Cases Nos. A-1446 to A-1449, against private respondent Diosdada Amor only. In an Order[2] issued on 25 August 1997, respondent Judge Tomas B. Noynay, as presiding judge of Branch 23, motu proprio ordered the records of the cases to be withdrawn and directed the COMELEC Law Department to file the cases with the appropriate Municipal Trial Court on the ground that pursuant to Section 32 of B.P. Blg. 129 as amended by R.A. No. 7691,[3] the Regional Trial Court has no jurisdiction over the cases since the maximum imposable penalty in each of the cases does not exceed six years of imprisonment. Pertinent portions of the Order read as follows: [I]t is worth pointing out that all the accused are uniformly charged for [sic] Violation of Sec. 261(i) of the Omnibus Election Code, which under Sec. 264 of the same Code carries a penalty of not less than one (1) year but not more than six (6) years of imprisonment and not subject to Probation plus disqualification to hold public office or deprivation of the right of suffrage. Sec. 31 [sic] of the Judiciary Reorganization Act of 1980 (B.P.) Blg. 129 as Amended by Rep. Act. 6691 [sic] (Expanded Jurisdiction) states: Sec. 32. Jurisdiction Metropolitan Trial Courts, Municipal Circuit Trial Courts, Municipal Trial Courts in Criminal Cases Except [in] cases falling within the exclusive original jurisdiction of the Regional Trial Courts and the Sandiganbayan, the Municipal Trial Courts, Metropolitan Trial Courts and the Municipal Circuit Trial Courts shall exercise: (1) Exclusive original jurisdiction over all violations of city or municipal ordinance committed within their respective territorial jurisdiction; and (2) Exclusive original jurisdiction over all offenses punishable with an imprisonment of not exceeding six (6) years irrespective of the amount or fine and regardless of other imposable accessory and other penalties including the civil liability arising from such offenses or predicated thereon, irrespective of time [sic], nature, value and amount thereof, Provided, However, that in offenses including damages to property through criminal negligence, they shall have exclusive original jurisdiction thereof.

In light of the foregoing, this Court has therefore, no jurisdiction over the cases filed considering that the maximum penalty imposable did not exceed six (6) years. The two motions[4] for reconsideration separately filed by the COMELEC Regional Director of Region VIII and by the COMELEC itself through its Legal Department having been denied by the public respondent in the Order of 17 October 1997,[5] the petitioner filed this special civil action. It contends that public respondent has erroneously misconstrued the provisions of Rep. Act No. 7691 in arguing that the Municipal Trial Court has exclusive original jurisdiction to try and decide election offenses because pursuant to Section 268 of the Omnibus Election Code and this Courts ruling in Alberto [sic] vs. Judge Juan Lavilles, Jr., Regional Trial Courts have the exclusive original jurisdiction over election offenses. On 17 February 1998, we required the respondents and the Office of the Solicitor General to comment on the petition. In its Manifestation of 5 March 1998, the Office of the Solicitor General informs us that it is adopting the instant petition on the ground that the challenged orders of public respondent are clearly not in accordance with existing laws and jurisprudence. In his Manifestation of 12 March 1998, public respondent avers that it is the duty of counsel for private respondents interested in sustaining the challenged orders to appear for and defend him. In their Comment, private respondents maintain that R.A. No. 7691 has divested the Regional Trial Courts of jurisdiction over offenses where the imposable penalty is not more than 6 years of imprisonment; moreover, R.A. 7691 expressly provides that all laws, decrees, and orders inconsistent with its provisions are deemed repealed or modified accordingly. They then conclude that since the election offense in question is punishable with imprisonment of not more than 6 years, it is cognizable by Municipal Trial Courts. We resolved to give due course to the petition. Under Section 268 of the Omnibus Election Code, Regional Trial Courts have exclusive original jurisdiction to try and decide any criminal action or proceedings for violation of the Code except those relating to the offense of failure to register or failure to vote.[6] It reads as follows: SEC. 268. Jurisdiction of courts. - The regional trial court shall have the exclusive original jurisdiction to try and decide any criminal action or proceedings for violation of this Code, except those relating to the offense of failure to register or failure to vote which shall be under the jurisdiction of the metropolitan or municipal trial courts. From the decision of the courts, appeal will lie as in other criminal cases. Among the offenses punished under the Election Code are those enumerated in Section 261 thereof. The offense allegedly committed by private respondents is covered by paragraph (i) of said Section, thus: SEC. 261. Prohibited Acts. The following shall be guilty of an election offense: (i) Intervention of public officers and employees. Any officer or employee in the civil service, except those holding political offices; any officer, employee, or member of the Armed Forces of the Philippines, or any police forces, special forces, home defense forces, barangay self-defense units and all other paramilitary units that now exist or which may hereafter be organized who, directly or indirectly, intervenes

in any election campaign or engages in any partisan political activity, except to vote or to preserve public order, if he is a peace officer. Under Section 264 of the Code the penalty for an election offense under the Code, except that of failure to register or failure to vote, is imprisonment of not less than one year but not more than six years and the offender shall not be subject to probation and shall suffer disqualification to hold public office and deprivation of the right of suffrage. Section 32 of B.P. Blg. 129 as amended by Section 2 of R.A. No. 7691, provides as follows: SEC. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Criminal Cases. Except in cases falling within the exclusive original jurisdiction of Regional Trial Court and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: (1) Exclusive original jurisdiction over all violations of city or municipal ordinances committed within their respective territorial jurisdiction; and (2) Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine, and regardless of other imposable accessory or other penalties, including the civil liability arising from such offenses or predicated thereon, irrespective of kind, nature, value or amount thereof: Provided, however, That in offenses involving damage to property through criminal negligence, they shall have exclusive original jurisdiction thereof. We have explicitly ruled in Morales v. Court of Appeals[7] that by virtue of the exception provided for in the opening sentence of Section 32, the exclusive original jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts does not cover those criminal cases which by specific provisions of law fall within the exclusive original jurisdiction of Regional Trial Courts and of the Sandiganbayan, regardless of the penalty prescribed therefor. Otherwise stated, even if those excepted cases are punishable by imprisonment of not exceeding six (6) years (i.e., prision correccional, arresto mayor, or arresto menor), jurisdiction thereon is retained by the Regional Trial Courts or the Sandiganbayan, as the case may be. Among the examples cited in Morales as falling within the exception provided for in the opening sentence of Section 32 are cases under (1) Section 20 of B.P. Blg. 129; (2) Article 360 of the Revised Penal Code, as amended; (3) the Decree on Intellectual Property;[8] and (4) the Dangerous Drugs Act of 1972,[9] as amended. Undoubtedly, pursuant to Section 268 of the Omnibus Election Code, election offenses also fall within the exception. As we stated in Morales, jurisdiction is conferred by the Constitution or by Congress. Outside the cases enumerated in Section 5(2) of Article VIII of the Constitution, Congress has the plenary power to define, prescribe, and apportion the jurisdiction of various courts. Congress may thus provide by law that a certain class of cases should be exclusively heard and determined by one court. Such law would be a special law and must be construed as an exception to the general law on jurisdiction of courts, namely, the Judiciary Act of 1948, as amended, and the Judiciary Reorganization Act of 1980. R.A. No. 7691 can by no means be considered as a special law on jurisdiction; it is merely an amendatory law intended to amend specific sections of the Judiciary Reorganization Act of 1980. Hence, R.A. No. 7691

does not have the effect of repealing laws vesting upon Regional Trial Courts or the Sandiganbayan exclusive original jurisdiction to hear and decide the cases therein specified. That Congress never intended that R.A. No. 7691 should repeal such special provisions is indubitably evident from the fact that it did not touch at all the opening sentence of Section 32 of B.P. Blg. 129 providing for the exception. It is obvious that respondent judge did not read at all the opening sentence of Section 32 of B.P. Blg. 129, as amended. It is thus an opportune time, as any, to remind him, as well as other judges, of his duty to be studious of the principles of law,[10] to administer his office with due regard to the integrity of the system of the law itself,[11] to be faithful to the law, and to maintain professional competence.[12] Counsel for petitioner, Atty. Jose P. Balbuena, Director IV of petitioners Law Department, must also be admonished for his utter carelessness in his reference to the case against Judge Juan Lavilles, Jr. In the motion for Reconsideration[13] he filed with the court below, Atty. Balbuena stated: As a matter of fact, the issue on whether the Regional Trial Court has exclusive jurisdiction over election offenses is already a settled issue in the case of Alberto Naldeza vs- Judge Juan Lavilles, Jr., A.M. No. MTJ-94-1009, March 5, 1996, where the Supreme Court succinctly held: A review of the pertinent provision of law would show that pursuant to Sec. 265 and 267 of the Omnibus Election Code, the COMELEC, has the exclusive power to conduct preliminary investigation of all election offenses punishable under the Code and the RTC shall have the exclusive original jurisdiction to try and decide any criminal action or proceedings for violation of the same. The Metropolitan, or MTC, by way of exception exercises jurisdiction only on offenses relating to failure to register or to vote. Noting that these provisions stand together with the provisions that any election offense under the code shall be punishable with imprisonment of one (1) year to six (6) years and shall not be subject to probation (Sec. 263, Omnibus Election Code), we submit that it is the special intention of the Code to vest upon the RTC jurisdiction over election cases as a matter of exception to the general provisions on jurisdiction over criminal cases found under B.P. 129 by RA 7691 does not vest upon the MTC jurisdiction over criminal election offenses despite its expanded jurisdiction. (Underscoring ours) Also, in this petition, Atty. Balbuena states: 16. This Honorable Supreme Court, in the case of Alberto -vs- Judge Juan Lavilles, Jr., 245 SCRA 286 involving the same issue of jurisdiction between the lower courts and Regional Trial Court on election offenses, has ruled, thus: With respect to the other charges, a review of the Pertinent Provision of Law would show that pursuant to Section 265 and 267 of the Omnibus Election Code the Comelec has the exclusive power to conduct preliminary investigations all election offenses punishable under the code and the Regional Trial Court shall have the exclusive original jurisdiction to try and decide any criminal action or proceedings for violation of the same. The Metropolitan Trial Court, by way of exception exercise jurisdiction only on offenses relating to failure to register or to vote. Noting that these provisions stands together with the provision that any election offense under the code shall be punishable with imprisonment for one (1) year to six (6) years and shall not be subject to probation (Section 264, Omnibus Election Code). We submit that it is the special intention of the code to vest upon the Regional Trial Court jurisdiction over election cases as matter of exemption to the provisions on jurisdiction over criminal cases found under B.P. Reg.

129, as amended. Consequently, the amendment of B.P. Reg. 129 by Republic Act No. 7691 does not vest upon the MTC jurisdiction over criminal election offenses despite its expanded jurisdiction. If Atty. Balbuena was diligent enough, he would have known that the correct name of the complainant in the case referred to is neither Alberto Naldeza as indicated in the motion for reconsideration nor Alberto alone as stated in the petition, but ALBERTO NALDOZA. Moreover, the case was not reported in volume 245 of the Supreme Court Reports Annotated (SCRA) as falsely represented in the paragraph 16 of the petition, but in volume 254 of the SCRA. Worse, in both the motion for reconsideration and the petition, Atty. Balbuena deliberately made it appear that the quoted portions were our findings or rulings, or, put a little differently, our own words. The truth is, the quoted portion is just a part of the memorandum of the Court Administrator quoted in the decision. Rule 10.02 of Canon 10 of the Code of Professional Responsibility[14] mandates that a lawyer shall not knowingly misquote or misrepresent the text of a decision or authority. IN VIEW OF ALL THE FOREGOING, the instant petition is GRANTED. The challenged orders of public respondent Judge Tomas B. Noynay of 25 August 1997 and 17 October 1997 in Criminal Cases Nos. A1439 and A-1442 to A-1449 are SET ASIDE. Respondent Judge is DIRECTED to try and decide said cases with purposeful dispatch and, further, ADMONISHED to faithfully comply with Canons 4 and 18 of the Canons of Judicial Ethics and Rule 3.01, Canon 3 of the Code of Judicial Conduct. Atty. Jose P. Balbuena is ADMONISHED to be more careful in the discharge of his duty to the court as a lawyer under the Code of Professional Responsibility. No costs. SO ORDERED.