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RULE 138 diligence, care and devotion regardless of whether he accepts it for a fee

Section 24. Compensation of attorneys; agreement as to fees. — An or for free. He owes fidelity to such cause and must always be mindful of
attorney shall be entitled to have and recover from his client no more the trust and confidence reposed on him. In a number of cases, the
than a reasonable compensation for his services, with a view to the Court held that a lawyer should never neglect a legal matter entrusted to
importance of the subject matter of the controversy, the extent of the him, otherwise his negligence renders him liable for disciplinary action
services rendered, and the professional standing of the attorney. No such as suspension ranging from three months to two years. In this case,
court shall be bound by the opinion of attorneys as expert witnesses as the Court finds the suspension of Atty. Agleron from the practice of law
to the proper compensation, but may disregard such testimony and base for a period of three months sufficient.
its conclusion on its own professional knowledge. A written contract for
services shall control the amount to be paid therefor unless found by the CONCHITA A. BALTAZAR, et.al vs. ATTY. JUAN B. BAÑEZ, JR.
court to be unconscionable or unreasonable. A.C. No. 9091, December 11, 2013
FACTS: Complainants are the owners of three parcels of land. They
Section 37. Attorneys' liens. — An attorney shall have a lien upon the entered into an agreement with Gerry R. Fevidal (Fevidal), a subdivision
funds, documents and papers of his client which have lawfully come into developer. Fevidal did not update complainants about the status of the
his possession and may retain the same until his lawful fees and subdivision project and failed to account for the titles to the subdivided
disbursements have been paid, and may apply such funds to the land. Thus, they revoked the Special Power of Attorney they had
satisfaction thereof. He shall also have a lien to the same extent upon all previously executed in his favor.
judgments for the payment of money, and executions issued in COMPLAINANTS:
pursuance of such judgments, which he has secured in a litigation of his Complainants engaged the services of respondent for the purpose of
client, from and after the time when he shall have the caused a assisting them in the preparation of a settlement agreement. Instead of
statement of his claim of such lien to be entered upon the records of the drafting a written settlement, respondent encouraged them to institute
court rendering such judgment, or issuing such execution, and shall have actions against Fevidal in order to recover their properties. Complainants
the caused written notice thereof to be delivered to his client and to the then signed a contract of legal services, in which it was agreed that they
adverse paty; and he shall have the same right and power over such would not pay acceptance and appearance fees to respondent, but that
judgments and executions as his client would have to enforce his lien the docket fees would instead be shared by the parties. Under the
and secure the payment of his just fees and disbursements. contract, complainants would pay respondent 50% of whatever would be
recovered of the properties.
ERMELINDA LAD VDA. DE DOMINGUEZ, REPRESENTED BY HER In preparation for the filing of an action against Fevidal, respondent
ATTORNEY-IN-FACT, VICENTE A. PICHON v. ATTY. ARNULFO M. prepared and notarized an Affidavit of Adverse Claim, seeking to
AGLERON Sr. A.C. No. 5359 March 10, 2014 annotate the claim of complainants to at least 195 titles in the possession
FACTS: Ermelinda Lad Vda. De Dominguez (complainant) was the of Fevidal. Unknown to him, the adverse claim was held in abeyance,
widow of the late Felipe Domiguez who died in a vehicular accident in because Fevidal convinced complainants to agree to another settlement.
Caraga, Davao Oriental, on October 18, 1995, involving a dump truck Respondent filed a complaint for annulment, cancellation and
owned by the Municipality of Caraga. Aggrieved, complainant decided to revalidation of titles, and damages against Fevidal. Complainants found
file charges against the Municipality of Caraga and engaged the services it hard to wait for the outcome of the action. Thus, they terminated the
of respondent Atty. Arnulfo M. Agleron, Sr. (Atty. Agleron). On three 3 services of respondent and finalized their amicable settlement with him.
occasions, Atty. Agleron requested and received from complainant the RESPONDENT:
following amounts for the payment of filing fees and sheriffs fees, to wit: Respondent filed a Manifestation and Opposition before the RTC,
(1) June 3, 1996 P3,000.00; (2) June 7, 1996 Pl,800.00; and September alleging that the termination of his services and withdrawal of the
2, 1996 -P5,250.00 or a total of P10,050.00. After the lapse of four (4) complaint had been done with the intent of defrauding counsel. He also
years, however, no complaint was filed by Atty. Agleron against the filed a Motion for Recording of Attorney’s Charging Lien in the Records.
Municipality of Caraga. After an exchange of pleadings between respondent and Fevidal, with
Defendant’s Defense: the latter denying the former’s allegation of collusion, complainants
Atty. Agleron admitted that complainant engaged his professional service sought the suspension/disbarment of respondent. Complainants alleged
and received the amount of P10,050.00. He, however, explained that that they were uneducated and underprivileged, and could not taste the
their agreement was that complainant would pay the filing fees and other fruits of their properties because the disposition thereof was “now clothed
incidental expenses and as soon as the complaint was prepared and with legal problems” brought about by respondent. In their complaint,
ready for filing, complainant would pay 30% of the agreed attorney’s fees they alleged that respondent had violated the Code of Professional
of P100,000.00. On June 7, 1996, after the signing of the complaint, he Responsibility.
advised complainant to pay in full the amount of the filing fee and IBP Commission on Bar Discipline:
sheriff’s fees and the 30% of the attorney’s fee, but complainant failed to It suspended respondent from the practice of law for a period of one year
do so. Atty. Agleron averred that since the complaint could not be filed in for entering into a champertous agreement.
court, the amount of P10,050.00 was deposited in a bank while awaiting ISSUE: Whether or not the respondent is guilty of entering into a
the payment of the balance of the filing fee and attorney’s fee. champertous contract.
ISSUE: WON Atty. Agleron violated the Code of Professional HELD: We find that respondent did not violate any of the canons cited by
Responsibility. complainants. Respondent cannot be faulted for advising complainants
HELD: to file an action against Fevidal to recover their properties, instead of
The Investigating Commissioner’s Report: agreeing to a settlement of P10,000,000 – a measly amount compared to
The Investigating Commissioner found Atty. Agleron to have violated the that in the original agreement, under which Fevidal undertook to pay
Code of Professional Responsibility when he neglected a legal matter complainants the amount of P35,000,000. Lawyers have a sworn duty
entrusted to him, and recommended that he be suspended from the and responsibility to protect the interest of any prospective client and
practice of law for a period of four (4) months. pursue the ends of justice. Any lawyer worth his salt would advise
The BOG’s Recommendation: complainants against the abuses of Fevidal under the circumstances,
The Integrated Bar of the Philippines Board of Governors adopted and and we cannot countenance an administrative complaint against a
approved the report and recommendation of the Investigating lawyer only because he performed a duty imposed on him by his oath.
Commissioner with modification that Atty. Agleron be suspended from Finally, complainants apparently refer to the motion of respondent for the
the practice of law for a period of only one 1 month. recording of his attorney’s charging lien as the “legal problem” preventing
RULING: The Court agrees with the recommendation of the IBP Board them from enjoying the fruits of their property.
of Governors except as to the penalty imposed. Atty. Agleron violated Section 26, Rule 138 of the Rules of Court allows an attorney to
Rule 18.03 of the Code of Professional Responsibility, which provides intervene in a case to protect his rights concerning the payment of his
that: compensation. According to the discretion of the court, the attorney shall
Rule 18.03-A lawyer shall not neglect a legal matter entrusted to him, have a lien upon all judgments for the payment of money rendered in a
and his negligence in connection therewith shall render him liable. case in which his services have been retained by the client. We recently
Once a lawyer takes up the cause of his client, he is duty bound to serve upheld the right of counsel to intervene in proceedings for the recording
his client with competence, and to attend to his client’s cause with of their charging lien.
Notwithstanding the foregoing, respondent is not without fault. Indeed, caused: (1) a statement of his claim to be entered in the record of the
we find that the contract for legal services he has executed with case while the court has jurisdiction over the case and before the full
complainants is in the nature of a champertous contract – an agreement satisfaction of the judgment;9 and (2) a written notice of his claim to be
whereby an attorney undertakes to pay the expenses of the proceedings delivered to his client and to the adverse party.
to enforce the client’s rights in exchange for some bargain to have a part
of the thing in dispute. Such contracts are contrary to public policy and However, the filing of the statement of the claim does not, by itself,
are thus void or inexistent. They are also contrary to Canon 16.04 of the legally determine the amount of the claim when the client disputes the
Code of Professional Responsibility, which states that lawyers shall not amount or claims that the amount has been paid.10 In these cases, both
lend money to a client, except when in the interest of justice, they have the attorney and the client have a right to be heard and to present
to advance necessary expenses in a legal matter they are handling for evidence in support of their claims.11 The proper procedure for the court
the client. is to ascertain the proper amount of the lien in a full dress trial before it
A reading of the contract for legal services shows that respondent orders the registration of the charging lien.12 The necessity of a hearing
agreed to pay for at least half of the expense for the docket fees. He also is obvious and beyond dispute.
paid for the whole amount needed for the recording of complainants’
adverse claim. In the present case, the RTC ordered the registration of Atty. Abrogar's
While lawyers may advance the necessary expenses in a legal matter lien without a hearing even though the client contested the amount of the
they are handling in order to safeguard their client’s rights, it is lien. The petitioner had the right to be heard and to present evidence on
imperative that the advances be subject to reimbursement. The purpose the true amount of the charging lien. The RTC acted with grave abuse of
is to avoid a situation in which a lawyer acquires a personal stake in the discretion because it denied the petitioner his right to be heard, i.e., the
client’s cause. Regrettably, nowhere in the contract for legal services is it right to due process.
stated that the expenses of litigation advanced by respondent shall be
subject to reimbursement by complainants. The registration of the lien should also be distinguished from the
In addition, respondent gave various amounts as cash advances (bali), enforcement of the lien. Registration merely determines the birth of the
gasoline and transportation allowance to them for the duration of their lien.14 The enforcement of the lien, on the other hand, can only take
attorney-client relationship. In fact, he admits that the cash advances place once a final money judgment has been secured in favor of the
were in the nature of personal loans that he extended to complainants. client. The enforcement of the lien is a claim for attorney's fees that may
Clearly, respondent lost sight of his responsibility as a lawyer in be prosecuted in the very action where the attorney rendered his
balancing the client’s interests with the ethical standards of his services or in a separate action
profession. Considering the surrounding circumstances in this case, an
admonition shall suffice to remind him that however dire the needs of the Lastly, the enforcement of a charging lien can only take place after a final
clients, a lawyer must always avoid any appearance of impropriety to money judgment has been rendered in favor of the client.17 The lien only
preserve the integrity of the profession. attaches to the money judgment due to the client and is contingent on
Attorney Juan B. Bañez, Jr. is hereby ADMONISHED for advancing the the final determination of the main case. Until the money judgment has
litigation expenses in a legal matter he handled for a client without become final and executory, enforcement of the lien is premature.
providing for terms of reimbursement and lending money to his client, in
violation of Canon 16.04 of the Code of Professional Responsibility. Sps San Pedro vs Atty. Mendoza

G.R. No. 191641, September 02, 2015 The Facts:


EDMUNDO NAVAREZ, Petitioner, v. ATTY. MANUEL ABROGAR
III, Respondent. Spouses Nicasio and Donelita engaged the service of Atty. Mendoza to
Facts: facilitate the transfer of title of a parcel of land from Marcaida to their
name. They gave him a check as payment for the transfer taxes, as well
Edmundo Navarez hired the law office of Abrogar Valerio Maderazo and as for professional fee. However, Mendoza failed to transfer the property
Associates Law Offices (the Firm) through Atty. Abrogar III as in their name, and despite repeated follow-ups, failed to return the
collaborating counsel to Atty. Laguio in Sp. Proc. Their agreement money, hence they referred the matter to the barangay for conciliation.
provided for acceptance fee of P100,000.00 on instalment basis, 2% of They were then issued a certificate to file action. Mendoza wrote to the
the total money value share of Edmundo as co-onwer and heir of the spouses and promised to settle the transfer of title, but reneged on the
Estata, as well as appearance fee of P2,500 per Court promise. Hence, they were forced to secure a loan to transfer the title in
hearings/administrative meetings/other meetings. On September 2, their name. Thus they filed an administrative case against Isagani. On
2008, Edmundo filed a Manifestation with the trial court that he was the other hand, Isagani belied the accusations of the spouses. It was the
terminating the services of Atty. Abrogar; he also caused the delivery to spouses’ failure to submit the needed documents which prompted the
Atty. Abrogar of a check for P220,107.51, allegedly representing one-half delay in the transfer of title, according to him. In addition, the spouses
of 7.5% of his share (P11,200,000.00) in the estate of his wife, less Atty. paid him a paltry sum for so much work involving the property; he was
Abrogar’s cash advances. Atty. Abrogar, in his manifestation, also justified in impressing a retaining lien on the money since the
manifested that the RTC had already resolved the matter favourably to spouses had receivables from the spouses in the various cases he
Edmundo due to its issuance of the release order for Edmundo to handled for them. The spouses even dared him to prove his worth as a
withdraw the amount. He also withdrew as counsel for Edmundo, lawyer by doing away with the required documents in the transfer of title.
effective upon appointment of an Administrator of the estate. On Issue: whether respondent is guilty of violating Canon 16 of the Code of
September 22, 2008, Atty. Abrogar filed a Motion to Enter into the Professional Responsibility for failing to hold in trust the money of his
Records his attorney’s lien. On January 21, 2009. The trial court issued clients.
its Order granting the motion, directing Edmundo to pay Atty. Abrogar as
follows: to enter the Attorneys Lien in the Records; for Edmundo to pay RULING:
7.5% of P11,196,675.05 to Atty. Abrogar, and P103,000.00 as A lawyer’s duty under Canon 16 of the Code of Professional
administrative costs/expenses to Atty. Abrogar. Responsibility is clear:
The fiduciary nature of the relationship between counsel and client
Issue: imposes on a lawyer the duty to account for the money or property
Whether or not the RTC properly entered the Attorney’s Lien of Atty. collected or received for or from the client.
Abrogar in the Records of the case. [The lawyer’s] failure to return the client’s money upon demand gives rise
Ruling: to the presumption that he has misappropriated it for his own use to the
prejudice of and in violation of the trust reposed in him by the client[2].
An attorney has a right to be paid a fair and reasonable compensation for (Emphasis supplied)
the services he has rendered to a client. As a security for his fees, Rule
138, Section 37 of the Rules of Court grants an attorney an equitable Respondent’s assertion of a valid lawyer’s lien is also untenable. A valid
right to a charging lien over money judgments he has secured in litigation retaining lien has the following elements:
for his client. For the lien to be enforceable, the attorney must have
An attorney’s retaining lien is fully recognized if the presence of the IBP Commissioner found that Atty. Guico had violated Rules 1.01 and
following elements concur: (1) lawyer-client relationship; (2) lawful 1.02, Canon I of the Code of Professional Responsibility for demanding
possession of the client’s funds, documents and papers; and (3) and receiving P580,000.00 from Chu; and recommended the disbarment
unsatisfied claim for attorney’s fees. Further, the attorney’s retaining lien of Atty. Guico in view of his act of extortion and misrepresentation that
is a general lien for the balance of the account between the attorney and caused dishonor to and contempt for the legal profession. The IBP Board
his client, and applies to the documents and funds of the client which of Governors adopted the findings of IBP Commissioner but modified the
may come into the attorney’s possession in the course of his recommended penalty of disbarment to three years suspension.
employment.[3] ISSUES:
1) WHETHER OR NOT ATTY. GUICO VIOLATED THE LAWYER’S
Respondent did not satisfy all the elements of a valid retaining lien. He OATH AND RULES 1.01 AND 1.02, CANON I OF THE CODE OF
did not present evidence as to an unsatisfied claim for attorney’s fees. PROFESSIONAL RESPONSIBILITY FOR DEMANDING AND
The enumeration of cases he worked on for complainants remains RECEIVING P580,000.00 FROM CHU TO GUARANTEE A
unsubstantiated. When there is no unsatisfied claim for attorney’s fees, FAVORABLE DECISION FROM THE NLRC?
lawyers cannot validly retain their client’s funds or properties.[4] 2) WHETHER THE PENALTY IMPOSED BY THE IBP WAS
COMMENSURATE BASED ON THE ACTS OF THE RESPONDENT?
Furthermore, assuming that respondent had proven all the requisites for
a valid retaining lien, he cannot appropriate for himself his client’s funds HELD:
without the proper accounting and notice to the client. The rule is that 1) YES “In disbarment proceedings, the burden of proof rests on the
when there is “a disagreement, or when the client disputes the amount complainant to establish respondent attorney’s liability by clear,
claimed by the lawyer . . . the lawyer should not arbitrarily apply the convincing and satisfactory evidence. Indeed, this Court has consistently
funds in his possession to the payment of his fees. . . .”[5] required clearly preponderant evidence to justify the imposition of either
disbarment or suspension as penalty.”
FERNANDO W. CHU v. ATTY. JOSE C. GUICO, JR., The testimony of Chu, and the circumstances narrated by Chu and his
A.C. No. 10573. January 13, 2015. witnesses, especially the act of Atty. Guico of presenting to Chu the
FACTS: Fernando W. Chu filed a disbarment complaint against his supposed draft decision that had been printed on used paper emanating
former lawyer, respondent Atty. Jose C. Guico, Jr., whom he has from Atty. Guico’s office, sufficed to confirm that he had committed the
accused of gross misconduct. imputed gross misconduct by demanding and receiving P580,000.00
Chu retained Atty. Guico as counsel to handle the labor disputes from Chu to obtain a favorable decision. Atty. Guico offered only his
involving his company, CVC San Lorenzo Ruiz Corporation (CVC). Atty. general denial of the allegations in his defense, but such denial did not
Guico’s legal services included handling a complaint for illegal dismissal overcome the affirmative testimony of Chu. The SC cannot help but
brought against CVC. On September 7, 2006, Labor Arbiter Herminio V. conclude that the production of the draft decision by Atty. Guico was
Suelo rendered a decision adverse to CVC. Atty. Guico filed a timely intended to motivate Chu to raise money to ensure the chances of
appeal in behalf of CVC. obtaining the favorable result in the labor case. As such, Chu discharged
PETITIONER’S CONTENTION: his burden of proof as the complainant to establish his complaint against
According to Chu, during a Christmas party held on December 5, 2006 at Atty. Guico. In this administrative case, a fact may be deemed
Atty. Guico’s residence in Commonwealth, Quezon City, Atty. Guico established if it is supported by substantial evidence, or that amount of
asked him to prepare a substantial amount of money to be given to the relevant evidence which a reasonable mind might accept as adequate to
NLRC Commissioner handling the appeal to insure a favorable decision. justify a conclusion.
On June 10, 2007, Chu called Atty. Guico to inform him that he had In taking the Lawyer’s Oath, Atty. Guico bound himself to:
raised P300,000.00 for the purpose. Atty. Guico told him to proceed to x x x maintain allegiance to the Republic of the Philippines; x x x support
his office at Times Street, Quezon City, and to give the money to his its Constitution and obey the laws as well as the legal orders of the duly
assistant, Reynaldo (Nardo) Manahan. Chu complied and delivered the constituted authorities therein; x x x do no falsehood, nor consent to the
money to Nardo. Subsequently, Atty. Guico instructed Chu to meet him doing of any in court; x x x delay no man for money or malice x x x.
on July 5, 2007. Atty. Guico handed Chu a copy of an alleged draft The Code of Professional Responsibility echoes the Lawyer’s Oath, to
decision of the NLRC in favor of CVC. The draft decision was printed on wit:
the dorsal portion of used paper apparently emanating from the office of CANON 1 — A lawyer shall uphold the constitution, obey the laws of the
Atty. Guico. On that occasion, the latter told Chu to raise another land and promote respect for law and for legal processes.
P300,000.00 to encourage the NLRC Commissioner to issue the Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral
decision. But Chu could only produce P280,000.00, which he brought to or deceitful conduct.
Atty. Guico’s office on July 10, 2007. However, it was Nardo who Rule 1.02 — A lawyer shall not counsel or abet activities aimed at
received the amount without issuing any receipt. defiance of the law or at lessening confidence in the legal system.
Chu followed up on the status of the CVC case with Atty. Guico in The sworn obligation to respect the law and the legal processes under
December 2007. However, Atty. Guico referred him to Nardo who in turn the Lawyer’s Oath and the Code of Professional Responsibility is a
said that he would only know the status after Christmas. Chu again continuing condition for every lawyer to retain membership in the Legal
called Nardo and was invited by Nardo to meet for lunch. Chu asked Profession.
Nardo if the NLRC Commissioner had accepted the money, but Nardo Atty. Guico willingly and wittingly violated the law in appearing to counsel
replied in the negative and simply told Chu to wait. Nardo assured that Chu to raise the large sums of money in order to obtain a favorable
the money was still with Atty. Guico who would return it should the NLRC decision in the labor case. He thus violated the law against bribery and
Commissioner not accept it. corruption. He compounded his violation by actually using said illegality
On January 19, 2009, the NLRC promulgated a decision adverse to as his means of obtaining a huge sum from the client that he soon
CVC. Chu confronted Atty. Guico, who in turn referred Chu to Nardo for appropriated for his own personal interest. His acts constituted gross
the filing of a motion for reconsideration. After the denial of the motion for dishonesty and deceit, and were a flagrant breach of his ethical
reconsideration, Atty. Guico caused the preparation and filing of an commitments under the Lawyer’s Oath not to delay any man for money
appeal in the Court of Appeals. Finally, Chu terminated Atty. Guico as or malice; and under Rule 1.01 of the Code of Professional
legal counsel on May 25, 2009. Responsibility that forbade him from engaging in unlawful, dishonest,
RESPONDENT’S CONTENTION: immoral or deceitful conduct. His deviant conduct eroded the faith of the
Atty. Guico described the administrative complaint as replete with lies people in him as an individual lawyer as well as in the Legal Profession
and inconsistencies, and insisted that the charge was only meant for as a whole. In doing so, he ceased to be a servant of the law.
harassment. He denied demanding and receiving money from Chu, a “Grave misconduct is “improper or wrong conduct, the transgression of
denial that Nardo corroborated. He further denied handing to Chu a draft some established and definite rule of action, a forbidden act, a dereliction
decision printed on used paper emanating from his office, surmising that of duty, willful in character, and implies a wrongful intent and not mere
the used paper must have been among those freely lying around in his error of judgment.”
office that had been pilfered (stolen) by Chu’s witnesses in the criminal Atty. Guico committed grave misconduct and disgraced the Legal
complaint he had handled for Chu. Profession. There is no question that any gross misconduct by an
IBP FINDINGS & RECOMMENDATION: attorney in his professional or private capacity renders him unfit to
manage the affairs of others, and is a ground for the imposition of the On January 31, 1997, the complainant paid the respondent the
penalty of suspension or disbarment, because good moral character is remaining balance of P5,000 for his acceptance fee. When the
an essential qualification for the admission of an attorney and for the complainant asked for an Official Receipt from the respondent, the latter
continuance of such privilege. refused saying that there was no need for the issuance of a receipt. On
2) NO The recommendation of the IBP Board of Governors to suspend that same day, the complainant also paid the respondent P500 for his
him from the practice of law for three (3) years would be too soft a appearance fee in the preliminary conference and arraignment which
penalty. Instead, he should be disbarred, for he exhibited his occurred on the same day.
unworthiness of retaining his membership in the legal profession. As the Thereafter, the complainant alleged that the respondent neglected his
Court has reminded in Samonte v. Abellana: duties as counsel and failed to attend any of the hearings before the
Disciplinary proceedings against lawyers are designed to ensure that MTC. In view of the respondent’s repeated absences before the MTC,
whoever is granted the privilege to practice law in this country should Judge Jocelyn S. Dilig issued an Order which appointed a counsel de
remain faithful to the Lawyer’s Oath. Only thereby can lawyers preserve oficio to represent the complainant.
their fitness to remain as members of the Law Profession. Any resort to Aggrieved, the complainant filed the instant complaint for disbarment
falsehood or deception, including adopting artifices to cover up one’s against the respondent.
misdeeds committed against clients and the rest of the trusting public, On the other hand, in his comment6, the respondent denied all the
evinces an unworthiness to continue enjoying the privilege to practice allegations of the complainant.
law and highlights the unfitness to remain a member of the Law The respondent allege that the complainant approached him and
Profession. It deserves for the guilty lawyer stern disciplinary sanctions. represented herself as an indigent party in the following cases for which
Additional ISSUE on Restitution: Whether or not Atty. Guico can be she sought to engage the legal services of the respondent: (1) Criminal
ordered to return the amount of money to Chu in a disbarment case? Case No. 12586, People of the Philippines v. Corazon Dalupan, et al. for
HELD: YES. Grave Slander, (2) Criminal Case No. 12585, People of the Philippines v.
The recommendation of the IBP Board of Governors that Atty. Guico be Wilmer Dalupan for Malicious Mischief, (3) I.S. No. 96-1104, Custodio
ordered to return the amount of P580,000.00 to Chu is well-taken. That Family v. Cesar Dalupan, et al. for Frustrated Murder, (4) I.S. No. 97-54,
amount was exacted by Atty. Guico from Chu in the guise of serving the Dalupan Family v. Romulo Custodio, et al. for Physical Injuries, and (5)
latter’s interest as the client. Although the purpose for the amount was I.S. No. 9760 Dalupan Family v. Romulo Custodio for Frustrated Murder.
unlawful, it would be unjust not to require Atty. Guico to fully account for The respondent agreed to represent the complainant in the
and to return the money to Chu. It did not matter that this proceeding is aforementioned cases subject to the payment of an acceptance fee
administrative in character, for, as the Court has pointed out in Bayonla of P5,000 per case and an appearance fee of P500 for each court
v. Reyes: appearance.
“Although the Court renders this decision in an administrative proceeding On August 20, 1996, the complainant paid the respondent P5,000 for his
primarily to exact the ethical responsibility on a member of the Philippine acceptance fee.
Bar, the Court’s silence about the respondent lawyer’s legal obligation to On August 27, 1996, the respondent filed a Motion for Reduction of Bail
restitute the complainant will be both unfair and inequitable. No victim of in favor of the complainant before the MTC of Puerto Princesa City. On
gross ethical misconduct concerning the client’s funds or property should that same day, the complainant proceeded to the law office of the
be required to still litigate in another proceeding what the administrative respondent and demanded that the latter negotiate with the MTC judge
proceeding has already established as the respondent’s liability. x x x to ensure the grant of the Motion of Bail. When the respondent refused
The Court FINDS and DECLARES respondent ATTY. JOSE S. GUICO, the demand of the complainant, the latter replied at the top of her voice:
JR. GUILTY of the violation of the Lawyer’s Oath, and Rules 1.01 and "Binabayaran kita, bakit hindi mo ginagawa ang gusto ko?" The
1.02, Canon I of the Code of Professional Responsibility, and DISBARS respondent answered her with, "Hindi po lahat ng gusto ninyo ay
him from membership in the Integrated Bar of the Philippines. gagawin ko, sa tama lamang po tayo, abogado po ninyo ako, hindi ako
fixer."7 This irked the complainant who then made verbal threats that she
CORAZON M. DALUPAN, Complainant, will replace the respondent with a certain Atty. Roland Pay who held
vs. office nearby. However, when the MTC of Puerto Princesa City
ATTY. GLENN C. GACOTT1, Respondent. eventually ruled in favor of the complainant and granted the motion, the
DECISION latter revoked her threat that she will replace the respondent.
VILLARAMA, JR., J.: On August 19, 1997, the MTC of Puerto Princesa City issued a Notice of
Before us is a petition for review under Rule 139-B, Section 12 (c) of the Hearing to the complainant and her son Wilmer Dalupan which ordered
Rules of Court assailing Resolution No. XVII-20072 dated March 17, them to appear before the court on September 9, 1997 in connection
2007 and Resolution No. XIX-201005443 dated October 8, 2010 of the with their criminal cases pending therein. However, the respondent failed
Board of Governors of the Integrated Bar of the Philippines (IBP) which to attend the scheduled hearing as he allegedly failed to receive a copy
adopted and approved the Report and Recommendation4 dated of the Notice of Hearing. Thus, in his written explanation dated October
December 12, 2006 of the Investigating Commissioner of the 7, 1997, the respondent attributed his failure to appear before the MTC
Commission on Bar Discipline of the IBP. Although the IBP Board of to the inefficiency of the process server of the said court.
Governors dismissed the complaint for disbarment filed against the On October 10, 1997, the complainant told the respondent that she was
respondent, it ordered the latter to return the payment of the attorney’s terminating the latter’s services on the ground of loss of trust and
fee to the complainant in the amount of P5,000. This order to return the confidence. Furthermore, the complainant also told the respondent that
attorney’s fee is subject of the present petition. she engaged the services of Atty. Roland Pay to replace the respondent.
The salient facts of the case follow: As a result, on October 30, 1997, the complainant withdrew all her
In her affidavit-complaint5 dated April 20, 1999, the complainant claimed records from the law office of the respondent.
that she was a defendant in a criminal case for grave slander pending On January 29, 1998, the MTC of Puerto Princesa City issued an Order
before the Municipal Trial Court (MTC) of Puerto Princesa City, Palawan. which relieved the respondent of any responsibility in Criminal Case Nos.
Meanwhile, her son, Wilmer Dalupan, was also a defendant in a 12585 and 12586:
separate criminal case for grave slander and malicious mischief pending Acting on what the counsel of record of all the accused in the above-
before the same court. In order to represent the complainant and her entitled cases call "Compliance", where obvious on the face of which is
son, the complainant engaged the legal services of the respondent who his desire to withdraw as Counsel, and it appearing that said intention to
then charged an acceptance fee of P10,000. withdraw is not only with the full conformity of all the accused but at their
On August 20, 1996, the complainant paid the respondent P5,000 as own initiative, Atty. Glenn Gacott is hereby relieved of any responsibility
initial payment for his acceptance fee. in the further prosecution of the above-captioned cases.8
On August 27, 1996, the complainant requested the respondent to draft In view of the above Order, the respondent argued that he was not guilty
a Motion to Reduce Bail Bond. However, the respondent allegedly of abandonment or neglect of duty because it was the complainant who
denied the request and claimed that it was beyond the scope of his willfully terminated his services even without fault or negligence on his
retainer services. Thus, the complainant alleged that she caused a part.
certain Rolly Calbento to draft the same which was however signed by We referred this case to the IBP for its investigation, report, and
the respondent. recommendation.
On December 12, 2006, Investigating Commissioner Wilfredo E.J.E which is therefore indemnified by the payment of acceptance fee. Since
Reyes recommended the dismissal of the complaint for disbarment the acceptance fee only seeks to compensate the lawyer for the lost
against the respondent. At the same time, he also recommended that the opportunity, it is not measured by the nature and extent of the legal
respondent return the payment of the attorney’s fee to the complainant in services rendered.
the amount of P5,000.9 In the present case, based on a simple reading of the Official Receipt
The Investigating Commissioner opined that the respondent cannot be dated August 20, 1996, the parties clearly intended the payment
held liable for abandonment or neglect of duty because it was the of P5,000 to serve as acceptance fee of the respondent, and not
complainant who discharged the respondent for loss of trust and attorney’s fee. Moreover, both parties expressly claimed that they
confidence. This was confirmed by the act of the complainant in intended such payment as the acceptance fee of the respondent. Absent
withdrawing all her records from the law office of the respondent. any other evidence showing a contrary intention of the parties, we find
Furthermore, the Investigating Commissioner said that absent evidence that the Investigating Commissioner gravely erred in referring to the
showing that the respondent committed abandonment or neglect of duty, amount to be returned by the respondent as attorney’s fee.
the presumption of regularity should prevail in favor of the respondent. Since the Investigating Commissioner made an erroneous reference to
Although there was no evidence to support the claim of the complainant attorney’s fee, he therefore mistakenly concluded that the respondent
that she paid the respondent the remaining balance of P5,000 as should return the same as he did not perform any substantial legal work
acceptance fee and an appearance fee of P500 on January 31, 1997, on behalf of the complainant. As previously mentioned, the payment of
the Investigating Commissioner gave credence to an Official Receipt acceptance fee does not depend on the nature and extent of the legal
dated August 20, 1996 which proved that the complainant indeed paid services rendered.
the respondent an amount of P5,000. However, the Investigating Secondly, the respondent did not commit any fault or negligence which
Commissioner found that the respondent did not perform any substantial would entail the return of the acceptance fee.
legal work on behalf of the complainant. For this reason, and in the Once a lawyer receives the acceptance fee for his legal services, he is
interest of justice, the Investigating Commissioner recommended that the expected to serve his client with competence, and to attend to his client’s
respondent return the amount of P5,000 to the complainant. cause with diligence, care and devotion.13 In Carino v. Atty. De Los
On March 17, 2007, the IBP Board of Governors passed Resolution No. Reyes,14 the respondent lawyer who failed to file a complaint-affidavit
XVII-2007-115 which adopted and approved in toto the Report and before the prosecutor’s office, returned the P10,000 acceptance fee paid
Recommendation of the Investigating Commissioner. to him. Moreover, he was admonished by the Court to be more careful in
On October 8, 2010, the IBP Board of Governors passed Resolution No. the performance of his duty to his clients. Meanwhile, in Voluntad-
XIX-2010-544 which denied the Motion for Reconsideration dated July Ramirez v. Baustista,15 we ordered the respondent lawyer to return
27, 2007 filed by the respondent. the P14,000 acceptance fee because he did nothing to advance his
Hence, the present petition10 which raises the sole issue of whether the client’s cause during the six-month period that he was engaged as
respondent should return the payment of the attorney’s fee to the counsel.
complainant in the amount of P5,000. In the present case, the complainant alleged that she requested the
Firstly, the respondent argued that when the MTC of Puerto Princesa respondent to draft a Motion to Reduce Bail Bond which was denied by
City issued the Order dated January 29, 1998 which relieved the the latter.1âwphi1 She also claimed that the respondent failed to attend
respondent of any responsibility in Criminal Case Nos. 12585 and 12586, any of the hearing before the MTC. Thus, the complainant filed the
the trial court did not require the respondent to reimburse the payment of present complaint for disbarment on the ground of abandonment or
the attorney’s fee to the complainant. Thus, the IBP Board of Governors neglect of duty. On the other hand, the respondent denied the allegation
exceeded its authority in ordering the respondent to return such fees to that he failed to draft the Motion to Reduce Bail Bond and submitted a
the complainant. copy of the MTC Order16 dated August 28, 1996 granting the motion to
Secondly, the respondent argued that a plain reading of the Official reduce bail. He also justified his failure to attend the hearings before the
Receipt dated August 20, 1996 would reveal that the parties intended the MTC to the failure of the process server to provide him with a Notice of
payment of P5,000 to serve as acceptance fee which is different from Hearing.
attorney’s fee. According to the respondent, the acceptance fee Other than her bare allegations, the complainant failed to present any
corresponds to the opportunity cost incurred by the lawyer for not evidence to support her claim that the respondent committed
representing other potential clients due to a conflict of interest with the abandonment or neglect of duty. Thus, we are constrained to affirm the
present client. Thus, the payment of acceptance fee to the lawyer does factual findings of the Investigating Commissioner that the presumption
not depend on the latter’s performance of legal services. of regularity should prevail in favor of the respondent. Absent any fault or
Since the complainant failed to file any comment on the petition for negligence on the part of the respondent, we see no legal basis for the
review, we proceed to resolve the sole issue raised, and rule in favor of order of the Investigating Commissioner to return the attorney’s fee
the respondent. (acceptance fee) of P5,000.
We find that the respondent did not commit any fault or negligence in the WHEREFORE, premises considered, the petition is hereby GRANTED.
performance of his obligations under the retainer agreement which was Resolution No.XVII-2007-115 and Resolution No. XIX-2010-544 of the
wilfully terminated by the complainant on the ground of loss of trust and IBP Board of Governors insofar as they ordered the respondent to return
confidence. As held by the Investigating Commissioner, the evidence on the attorney’s fee (acceptance fee) to the complainant in the amount of
record shows that the respondent is not liable for abandonment or Five Thousand Pesos (P5,000) are REVERSED and SET ASIDE.
neglect of duty. SO ORDERED.
However, we disagree with the conclusion of the Investigating
Commissioner that the respondent should return the payment of the
attorney’s fee to the complainant in the amount of P5,000. THE CONJUGAL PARTNERSHIP OF SPOUSES VICENTE
Firstly, the Investigating Commissioner seriously erred in referring to the CADAVEDO vs. VICTORINO LACAYA
amount to be returned by the respondent as attorney’s fee. Relevantly, G.R. No. 173188 January 15, 2014
we agree with the respondent that there is a distinction between FACTS: Spouses Vicente Cadavedo and Benita Arcoy-Cadavedo
attorney’s fee and acceptance fee. (Spouses Cadavedo) acquired a homestead grant over a land in Gumay,
It is well-settled that attorney’s fee is understood both in its ordinary and Piñan, Zamboanga del Norte. On April 30, 1955, the spouses Cadavedo
extraordinary concept.11 In its ordinary sense, attorney’s fee refers to the sold the lot to the spouses Vicente Ames and Martha Fernandez (the
reasonable compensation paid to a lawyer by his client for legal services spouses Ames).
rendered. Meanwhile, in its extraordinary concept, attorney’s fee is Spouses Cadavedo filed an action before the RTC of Zamboanga City
awarded by the court to the successful litigant to be paid by the losing against the spouses Ames for sum of money and/or voiding of contract of
party as indemnity for damages.12 In the present case, the Investigating sale of homestead after the latter failed to pay the balance of the
Commissioner referred to the attorney’s fee in its ordinary concept. purchase price. The spouses Cadavedo initially engaged the services of
On the other hand, acceptance fee refers to the charge imposed by the Atty. Rosendo Bandal who, for health reasons, later withdrew from the
lawyer for merely accepting the case. This is because once the lawyer case; he was substituted by Atty. Lacaya. Spouses Cadavedo hired Atty.
agrees to represent a client, he is precluded from handling cases of the Lacaya on a contingency fee basis. The spouses Cadavedo and Atty.
opposing party based on the prohibition on conflict of interest. Thus, the Lacaya agreed on a contingent fee of P2,000.00
incurs an opportunity cost by merely accepting the case of the client
While Atty. Lacaya was handling the cases of petitioners, Atty. Lacaya between the spouses Cadavedo and Atty. Lacaya which is not contrary
asked for one-half of the subject lot as attorney’s fees. He caused the to law, morals, good customs, public order and public policy.
subdivision of the subject lot into two equal portions, based on area, and Issue: Whether or not the attorney’s fee consisting of one-half of the
selected the more valuable and productive half for himself; and assigned subject lot is valid and reasonable, and binds the petitioners?
the other half to the spouses Cadavedo. HELD: No, the attorney’s fees consisting of the one half of the subject lot
Vicente Cadavedo and his sons-in-law entered the portion assigned to is not valid for the following reasons:
the respondents and ejected them by filing a counter-suit for forcible 1) The written agreement providing for a contingent fee of P2,000.00
entry. Vicente and Atty. Lacaya entered into an amicable settlement, re- should prevail over the oral agreement providing for one-half of the
adjusting the area and portion obtained by each. Atty. Lacaya acquired subject lot.
10.5383 hectares pursuant to the agreement. The MTC approved the
compromise agreement. An agreement between the lawyer and his client, providing for the
The spouses Cadavedo filed before the RTC an action against the former’s compensation, is subject to the ordinary rules governing
respondents, assailing the MTC-approved compromise agreement. The contracts in general. As the rules stand, controversies involving written
spouses Cadavedo prayed, among others, that the respondents be and oral agreements on attorney’s fees shall be resolved in favor of the
ejected from their one-half portion of the subject lot; that they be ordered former. Hence, the contingency fee of P2,000.00 stipulated in the
to render an accounting of the produce of this one-half portion from amended complaint prevails over the alleged oral contingency fee
1981;and that the RTC fix the attorney’s fees on a quantum meruit basis, agreement of one-half of the subject lot.
with due consideration of the expenses that Atty. Lacaya incurred while The spouses Cadavedo and Atty. Lacaya agreed on a contingent fee of
handling the civil cases. P2,000.00 and not one-half of the subject lot. The stipulation contained in
Ruling of the RTC: the amended complaint filed by Atty. Lacaya clearly stated that the
RTC declared the contingent fee of 10.5383 hectares as excessive and spouses Cadavedo hired the former on a contingency basis; the
unconscionable. RTC reduced the land area to 5.2691 hectares and Spouses Cadavedo undertook to pay their lawyer P2,000.00 as
ordered the respondents to vacate and restore the remaining 5.2692 attorney’s fees should the case be decided in their favor.
hectares to the spouses Cadavedo. The RTC noted that the agreed Contrary to the respondents’ contention, this stipulation is not in the
attorney’s fee on contingent basis was P2,000.00. The RTC was nature of a penalty that the court would award the winning party, to be
convinced that the issues involved in the Civil Case handled by Atty. paid by the losing party. The stipulation is a representation to the court
Lacuya were not sufficiently difficult and complicated to command such concerning the agreement between the spouses Cadavedo and Atty.
an excessive award; neither did it require Atty. Lacaya to devote much of Lacaya, on the latter’s compensation for his services in the case; it is not
his time or skill, or to perform extensive research. However, the RTC the attorney’s fees in the nature of damages which the former prays from
deemed the respondents’ possession, prior to the judgment, of the the court as an incident to the main action.
excess portion of their share in the subject lot to be in good faith. The 2) The contingent fee agreement between the spouses Cadavedo and
respondents were thus entitled to receive its fruits. Atty. Lacaya, awarding the latter one-half of the subject lot, is
The respondents appealed the case before the CA. champertous.
Ruling of the CA:
CA reversed and set aside the RTC’s decision and maintained the Granting arguendo that the spouses Cadavedo and Atty. Lacaya indeed
partition and distribution of the subject lot under the compromise entered into an oral contingent fee agreement securing to the latter one-
agreement. Consistent with Canon 20.01 of the Code of Professional half of the subject lot, the agreement is nevertheless void. This
Responsibility (enumerating the factors that should guide the agreement is champertous and is contrary to public policy.
determination of the lawyer’s fees), the CA ruled that the time spent and “The rule of the profession that forbids a lawyer from contracting with his
the extent of the services Atty. Lacaya rendered for the spouses client for part of the thing in litigation in exchange for conducting the case
Cadavedo in the three cases, the probability of him losing other at the lawyer’s expense is designed to prevent the lawyer from acquiring
employment resulting from his engagement, the benefits resulting to the an interest between him and his client. To permit these arrangements is
spouses Cadavedo, and the contingency of his fees justified the to enable the lawyer to "acquire additional stake in the outcome of the
compromise agreement and rendered the agreed fee under the action which might lead him to consider his own recovery rather than that
compromise agreement reasonable. of his client or to accept a settlement which might take care of his
Petitioner’s Contention: interest in the verdict to the sacrifice of that of his client in violation of his
The petitioners argue that stipulations on a lawyer’s compensation for duty of undivided fidelity to his client’s cause."
professional services, especially those contained in the pleadings filed in In addition to its champertous character, the contingent fee arrangement
courts, control the amount of the attorney’s fees to which the lawyer shall in this case expressly transgresses the Canons of Professional Ethics
be entitled and should prevail over oral agreements. In this case, the and, impliedly, the Code of Professional Responsibility. Under Rule 42 of
spouses Cadavedo and Atty. Lacaya agreed that the latter’s contingent the Canons of Professional Ethics, a lawyer may not properly agree with
attorney’s fee was P2,000.00 in cash, not one-half of the subject lot. This a client that the lawyer shall pay or beat the expense of litigation.
agreement was clearly stipulated in the amended complaint filed in Civil 3) The attorney’s fee consisting of one-half of the subject lot is excessive
Case No. 1721. Thus, Atty. Lacaya is bound by the expressly stipulated and unconscionable.
fee and cannot insist on unilaterally changing its terms without violating
their contract. The contingent fee of one-half of the subject lot was allegedly agreed to
Respondent’s Contention: secure the services of Atty. Lacaya. Plainly, it was intended for only one
Respondents counter that the attorney’s fee stipulated in the amended action as the two other civil cases had not yet been instituted at that
complaint was not the agreed fee of Atty. Lacaya for his legal services. time. While Civil Case No. 1721 took twelve years to be finally resolved,
They argue that the questioned stipulation for attorney’s fees was in the that period of time, as matters then stood, was not a sufficient reason to
nature of a penalty that, if granted, would inure to the spouses Cadavedo justify a large fee in the absence of any showing that special skills and
and not to Atty. Lacaya. additional work had been involved. The issue involved in that case, as
The respondents point out that: (1) both Vicente and Atty. Lacaya observed by the RTC was simple and did not require of Atty. Lacaya
caused the survey and subdivision of the subject lot immediately after extensive skill, effort and research. The issue simply dealt with the
the spouses Cadavedo reacquired its possession with the RTC’s prohibition against the sale of a homestead lot within five years from its
approval of their motion for execution of judgment in Civil Case No. acquisition.
1721; (2) Vicente expressly ratified and confirmed the agreement on the Also, with respect to the two subsequent cases, it did not and could not
contingent attorney’s fee consisting of one-half of the subject lot; (3) the otherwise justify an attorney’s fee of one-half of the subject lot. The
MTC in Civil Case No. 215 (ejectment case) approved the compromise spouses Cadavedo and Atty. Lacaya made separate arrangements for
agreement; (4) Vicente is the legally designated administrator of the the costs and expenses for each of these two cases. Thus, the expenses
conjugal partnership, hence the compromise agreement ratifying the for the two subsequent cases had been considered and taken cared of.
transfer bound the partnership and could not have been invalidated by 4) Atty. Lacaya’s acquisition of the one-half portion contravenes Article
the absence of Benita’s acquiescence; and (5) the compromise 1491 (5) of the Civil Code
agreement merely inscribed and ratified the earlier oral agreement
Article 1491 (5) of the Civil Code forbids lawyers from acquiring, by and ordered her reinstatement, and the payment of her full backwages,
purchase or assignment, the property that has been the subject of inclusive of allowances and other benefits, plus attorney’s fees.
litigation in which they have taken part by virtue of their profession. The On October 22, 2001, the NLRC affirmed the decision of the Labor
same proscription is provided under Rule 10 of the Canons of Arbiter but additionally ruled that Malvar was entitled to "any and all stock
Professional Ethics. options and bonuses she was entitled to or would have been entitled to
While contingent fee agreements are indeed recognized in this had she not been illegally dismissed from her employment," as well as to
jurisdiction as a valid exception to the prohibitions under Article 1491(5) moral and exemplary damages.
of the Civil Code. however, this recognition does not apply to the present While her appeal was pending in the Supreme Court, she and
case. A contingent fee contract is an agreement in writing where the fee, respondents entered into a compromise agreement, whereby she was
often a fixed percentage of what may be recovered in the action, is made paid P40,000,000 in addition to the P14,252,192.12 earlier paid to her.
to depend upon the success of the litigation. The payment of the She later filed a motion to dismiss/withdraw case but before it could be
contingent fee is not made during the pendency of the litigation involving acted upon, a motion for intervention to protect attorney’s rights was filed
the client’s property but only after the judgment has been rendered in the by the law firm of Dasal, Llasos and Associates, through its Of counsel,
case handled by the lawyer. retired Supreme Court Associate Justice Josue N. Bellosillo. The motion
In the present case, the transfer or assignment of the disputed one-half sought, among others, that both Malvar and KFPI be held and ordered to
portion to Atty. Lacaya took place while the subject lot was still under pay jointly and severally the intervenor’s contingent fees.
litigation and the lawyer-client relationship still existed between him and In opposing the motion, Malvar claimed that the intervenor lacked the
the spouses Cadavedo. Thus, the general prohibition provided under legal capacity to intervene because it had ceased to exist after Atty.
Article 1491 of the Civil Code, rather than the exception provided in Marwil N. Llasos resigned from the intervenor and Atty. Richard B. Dasal
jurisprudence, applies. The CA seriously erred in upholding the became barred from private practice upon his appointment to a position
compromise agreement on the basis of the unproved oral contingent fee in a government subsidiary. They both personally handled her case.
agreement. Besides, their dismissal was based on a justifiable cause.
5) Atty. Lacaya is entitled to receive attorney’s fees on a quantum meruit ISSUE: Whether or not the contention of Malvar is tenable.
basis "Quantum meruit—meaning ‘as much as he deserves’—is used as HELD: No.
basis for determining a lawyer’s professional fees in the absence of a In the absence of the lawyer’s fault, consent or waiver, a client cannot
contract x x x taking into account certain factors in fixing the amount of deprive the lawyer of his just fee already earned in the guise of a
legal fees." The doctrine of quantum meruit is a device to prevent undue justifiable reason.
enrichment based on the equitable postulate that it is unjust for a person As a final word, it is necessary to state that no court can shirk from
to retain benefit without paying for it. enforcing the contractual stipulations in the manner they have agreed
Under Section 24, Rule 138 of the Rules of Court and Canon 20 of the upon and written. As a rule, the courts, whether trial or appellate, have
Code of Professional Responsibility, factors such as the importance of no power to make or modify contracts between the parties. Nor can the
the subject matter of the controversy, the time spent and the extent of courts save the parties from disadvantageous provisions. The same
the services rendered, the customary charges for similar services, the precepts hold sway when it comes to enforcing fee arrangements
amount involved in the controversy and the benefits resulting to the client entered into in writing between clients and attorneys. In the exercise of
from the service, to name a few, are considered in determining the their supervisory authority over attorneys as officers of the Court, the
reasonableness of the fees to which a lawyer is entitled. courts are bound to respect and protect the attorney’s lien as a
In the present case, the following considerations guide this Court in necessary means to preserve the decorum and respectability of the Law
considering and setting Atty. Lacaya’s fees based on quantum meruit: (1) Profession. Hence, the Court must thwart any and every effort of clients
the questions involved in these civil cases were not novel and did not already served by their attorneys’ worthy services to deprive them of
require of Atty. Lacaya considerable effort in terms of time, skill or the their hard-earned compensation. Truly, the duty of the courts is not only
performance of extensive research; (2) Atty. Lacaya rendered legal to see to it that attorneys act in a proper and lawful manner, but also to
services for the Spouses Cadavedo in three civil cases beginning in see to it that attorneys are paid their just and lawful fees.
1969 until 1988 when the petitioners filed the instant case; (3) the first of WHEREFORE, the Court APPROVES the compromise agreement;
these civil cases (Cadavedo v. Ames) lasted for twelve years and GRANTS the Motion for Intervention to Protect Attorney's Rights; and
reaching up to this Court; the second (Ames v. Cadavedo) lasted for ORDERS Czarina T. Malvar and respondents Kraft Food Philippines Inc.
seven years; and the third (Cadavedo and Lacaya v. DBP) lasted for six and Kraft Foods International to jointly and severally pay to Intervenor
years, reaching up to the CA; and (4) the property subject of these civil Law Firm, represented by Retired Associate Justice Josue N. Bellosillo,
cases is of a considerable size of 230,765 square meters or 23.0765 its stipulated contingent fees of 10% of P41,627,593.75, and the further
hectares. sum equivalent to 10% of the value of the stock option. No
The Supreme Court ruled that respondents are entitled only to two (2) pronouncement on costs of suit.
hectares (or approximately one-tenth [1/10] of the subject lot), with the
fruits previously received from the disputed one-half portion, as PALM v. ATTY. FELIPE ILEDAN, Jr. A.C. No. 8243, July 24, 2009
attorney’s fees. They shall return to the petitioners the remainder of the FACTS: Complainant is the President of Comtech, a corporation
disputed one-half portion. engaged in the business of computer software development. From
February 2003 to November 2003, respondent served as Comtechs
CZARINA T. MALVAR v. KRAFT FOODS PHILS., INC., et.al., G.R. No. retained corporate counsel for the amount of P6,000 per month as
183952, September 9, 2011 retainer fee. From September to October 2003, complainant personally
FACTS: On August 1, 1988, Kraft Foods (Phils.), Inc. (KFPI) hired met with respondent to review corporate matters, including potential
Czarina Malvar (Malvar) as its Corporate Planning Manager. From then amendments to the corporate by-laws. In a meeting held on 1 October
on, she gradually rose from the ranks, becoming in 1996 the Vice 2003, respondent suggested that Comtech amend its corporate by-laws
President for Finance in the Southeast Asia Region of Kraft Foods to allow participation during board meetings, through teleconference, of
International (KFI),KFPI’s mother company. On November 29, 1999, members of the Board of Directors who were outside the Philippines.
respondent Bienvenido S. Bautista, as Chairman of the Board of KFPI Prior to the completion of the amendments of the corporate by-laws,
and concurrently the Vice President and Area Director for Southeast Asia complainant became uncomfortable with the close relationship between
of KFI, sent Malvar a memo directing her to explain why no respondent and Elda Soledad (Soledad), a former officer and director of
administrative sanctions should be imposed on her for possible breach of Comtech, who resigned and who was suspected of releasing
trust and confidence and for willful violation of company rules and unauthorized disbursements of corporate funds. Thus, Comtech decided
regulations. Following the submission of her written explanation, an to terminate its retainer agreement with respondent effective November
investigating body was formed. In due time, she was placed under 2003.
preventive suspension with pay. Ultimately, on March 16, 2000, she was In a stockholders meeting held on 10 January 2004, respondent
served a notice of termination. attended as proxy for Gary Harrison (Harrison). teven C. Palm (Steven)
Obviously aggrieved, Malvar filed a complaint for illegal suspension and and Deanna L. Palm, members of the Board of Directors, were present
illegal dismissal against KFPI and Bautista in the National Labor through teleconference. When the meeting was called to order,
Relations Commission (NLRC). In a decision dated April 30, 2001,1 the respondent objected to the meeting for lack of quorum. Respondent
Labor Arbiter found and declared her suspension and dismissal illegal, asserted that Steven and Deanna Palm could not participate in the
meeting because the corporate by-laws had not yet been amended to transactions that occurred beyond the lawyers employment with the
allow teleconferencing. client. The intent of the law is to impose upon the lawyer the duty to
Later, Comtech’s new counsel sent a demand letter to Soledad to return protect the clients interests only on matters that he previously handled
or account for the amount of P90,466.10 representing her unauthorized for the former client and not for matters that arose after the lawyer-client
disbursements when she was the Corporate Treasurer of Comtech. On relationship has terminated.[17]
22 April 2004, Comtech received Soledads reply, signed by respondent. WHEREFORE, we DISMISS the complaint against Atty. Felipe Iledan,
Due to Soledads failure to comply with Comtech's written demands, Jr. for lack of merit.
Comtech filed a complaint for Estafa against Soledad. Thereafter,
dibarment was filed against the respondent. DE LEON v. CASTELO A.C. No. 8620, January 12, 2011
On the other hand, respondent alleged that in January 2002, Soledad FACTS: On January 2, 2006, the Government brought suit for the
consulted him on process and procedure in acquiring property. In April purpose of correcting the transfer certificates of title (TCTs) covering two
2002, Soledad again consulted him about the legal requirements of parcels of land located in Malabon City then registered in the names of
putting up a domestic corporation. In February 2003, Soledad engaged defendants Spouses Lim Hio and Dolores Chu due to their encroaching
his services as consultant for Comtech. Respondent alleged that from on a public callejon and on a portion of the Malabon-Navotas River
February to October 2003, neither Soledad nor Palm consulted him on shoreline. De Leon, having joined the civil case as a voluntary intervenor
confidential or privileged matter concerning the operations of the two years later, now accuses the respondent, the counsel of record of
corporation. Respondent further alleged that he had no access to any the defendants, with the serious administrative offenses of dishonesty
record of Comtech. Respondent admitted that during the months of and falsification warranting his disbarment or suspension as an attorney.
September and October 2003, complainant met with him regarding the The respondent’s error was allegedly committed by his filing for
procedure in amending the corporate by-laws to allow board members defendants Spouses Lim Hio and Dolores Chu of various pleadings that
outside the Philippines to participate in board meetings. is, answer with counterclaim and cross-claim in relation to the main
Respondent further alleged that Harrison, then Comtech President, complaint; and answer to the complaint in intervention with counterclaim
appointed him as proxy during the 10 January 2004 meeting. and cross-claim despite said spouses being already deceased at the
Respondent alleged that Harrison instructed him to observe the conduct time of filing.
of the meeting. Respondent admitted that he objected to the participation Defendant’s Defense:
of Steven and Deanna Palm because the corporate by-laws had not yet In his defense, he averred that he was engaged to represent the Lim
been properly amended to allow the participation of board members by family by William and Leonardo Lim, the children of Spouses Hio and
teleconferencing. Dolores Chu. That by virtue of a deed of absolute sale executed in their
Respondent alleged that there was no conflict of interest when he favor by their parents, William and Leonardo had assumed that the TCTs
represented Soledad in the case for Estafa filed by Comtech. He alleged were already transferred to their names. He prepared the initial pleading
that Soledad was already a client before he became a consultant for based on his honest belief that Spouses Lim Hio and Dolores Chu were
Comtech. He alleged that the criminal case was not related to or then still living. Had he known that they were already deceased; he
connected with the limited procedural queries he handled with Comtech. would have most welcomed the information and would have moved to
IBP ruled that respondent guilty of violation of Canon 21 of the Code of substitute Leonardo and William Lim as defendants for that reason.
Professional Responsibility and of representing interest in conflict with ISSUE: WON respondent violated the Code of Professional
that of Comtech as his former client. Thus, recommending suspending Responsibility or Lawyer’s Oath.
respondent from the practice of law for two years. HELD: No. The Court found that the respondent, as attorney, did not
ISSUE: commit any falsehood or falsification in his pleadings. The records
Is respondent guilty of violation of Canon 21? indicated that the respondent did not misrepresent that Spouses Lim Hio
Is there a conflict of interest when respondent represented Soledad? and Dolores Chu were still living. On the contrary, the respondent directly
HELD: stated in the answer to the complaint in intervention with counterclaim
1). No and cross-claim, and in the clarification and submission, supra, that the
Canon 21 provides that a lawyer shall preserve the confidence and Spouses Lim Hio and Dolores Chu were already deceased.
secrets of his client even after the attorney-client relationship is Even if any of the respondent’s pleadings might have created any
terminated. impression that the Spouses Lim Hio and Dolores Chu were still living,
It is settled that the mere relation of attorney and client does not raise a the Court still cannot hold the respondent guilty of any dishonesty or
presumption of confidentiality. The client must intend the communication falsification. For one, the respondent was acting in the interest of the
to be confidential. Since the proposed amendments must be actual owners of the properties when he filed the answer with
approved by at least a majority of the stockholders, and copies of counterclaim and cross-claim on April 17, 2006. As such, his pleadings
the amended by-laws must be filed with the SEC, the information were privileged and would not occasion any action against him as an
could not have been intended to be confidential. The documents attorney. Secondly, having made clear at the start that the Spouses Lim
are public records and could not be considered confidential. Thus, Hio and Dolores Chu were no longer the actual owners of the affected
the disclosure made by respondent during the stockholders meeting properties due to the transfer of ownership even prior to the institution of
could not be considered a violation of his clients secrets and confidence the action, and that the actual owners needed to be substituted in lieu of
within the contemplation of Canon 21 of the Code of Professional said spouses, whether the Spouses Lim Hio and Dolores Chu were still
Responsibility. living or already deceased as of the filing of the pleadings became
2. No. immaterial. And, lastly, De Leon could not disclaim knowledge that the
Rule 15.03 provides that a lawyer shall not represent conflicting interest Spouses Lim Hio and Dolores Chu were no longer living. His joining in
except by written consent of all concerned given after a full disclosure of the action as a voluntary intervenor charged him with notice of all the
the facts. other persons interested in the litigation. He also had an actual
The Court enumerated various tests to determine conflict of interests. awareness of such other persons, as his own complaint in intervention,
One test of inconsistency of interests is whether the lawyer will be asked bear out in its specific allegations against Leonardo Lim and William Lim,
to use against his former client any confidential information acquired and their respective spouses. Thus, he could not validly insist that the
through their connection or previous employment. The Court has ruled respondent committed any dishonesty or falsification in relation to him or
that what a lawyer owes his former client is to maintain inviolate the to any other party.
client’s confidence or to refrain from doing anything which will injuriously
affect him in any matter in which he previously represented him. Court
finds no conflict of interest when respondent represented Soledad in a
case filed by Comtech. The case where respondent represents Soledad
is an Estafa case filed by Comtech against its former officer. There was
nothing in the records that would show that respondent used
against Comtech any confidential information acquired while he
was still Comtechs retained counsel. Further, respondent made the
representation after the termination of his retainer agreement with
Comtech. A lawyer’s immutable duty to a former client does not cover

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