HALILI V COURT OF INDUSTRIAL RELATIONS (Four Consolidated Petitions) Date: April 30, 1987 Ponente: Makasiar, J. Petitioners: 1.

Fortunato Halili (doing business inder the na e and st!le HA"#"# $%A&'#$ (substituted b! ( ilia de )era )da. de Halili* +. ( ilia de )era )da. de Halili 3. Feli,idad M. $olentino, et al. -. ( ilia de )era )da. de Halili Res ondents: 1. .ourt o/ #ndustrial %elations and Halili 0us 1ri2ers and .ondu,tors 3nion (4$567* +. .ourt o/ #ndustrial %elations and Halili 0us 1ri2ers and .ondu,tors 3nion (4$567* 3. .ourt o/ #ndustrial %elations, et al. -. Halili 0us 1ri2ers and .ondu,tors 3nion (4$567* and .ourt o/ #ndustrial %elations FACTS:

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urgent otion to ,ite Att!. 0en9a in .. 4ineda, %i,ardo .apuno and Manila 0ank (.ubao 0ran,h* in ,onte pt /or the alleged ,ontinued /ailure o/ a/orena ed parties to ,o pl! :ith the te porar! andator! restraining order ($M%7* issued b! '. also /ailed to ,o pl! :ith resolution :hi,h again dire,ted Att!. 4ineda and union ad inistrator .apuno to ,o pl! :ith the a/oresaid andator! restraining order and :hi,h ordered the Manila 0ank to trans/er the /unds allo,ated /or the :orkers to the &"%. $M%7s allo:ed the sale o/ the propert! a:arded to satis/! or ans:er /or the ,lai s o/ the union e bers in these /our ,ases and authori;ed the distribution o/ the pro,eeds o/ the pur,hase Fa,ts o/ - petitions< o disputes regarding ,lai s /or o2erti e o/ ore than /i2e hundred bus dri2ers and ,ondu,tors o/ Halili $ransit o disputes :ere e2entuall! settled :hen the ,ontending parties rea,hed an Agree ent :hereb! the Ad inistratri= :ould trans/er to the e plo!ees the title to a tra,t o/ land and pa! in addition the ,ash a ount o/ 4+>,000.00 in /ull and /inal satis/a,tion o/ all the ,lai s and ,auses o/ a,tion o/ all o/ the e plo!ees against the estate o/ Fortunato F. Halili o in ,onsideration o/ the /oregoing, the 3nion shall :ithdra: and dis iss :ith pre9udi,e the ,ase /iled. o 4ursuant to said agree ent, Ad inistratri= e=e,uted a 1eed o/ .on2e!an,e o/ %eal 4ropert!, trans/erring the a/ore entioned par,el o/ land to the Halili 0us and .ondu,tors 3nion (4$567* in trust /or the e bers o/ the union ,lai ants. o the 3nion, through Att!. 0en9a in .. 4ineda, /iled an urgent otion :ith the Ministr! o/ "abor and ( plo! ent (M7"(* re?uesting /or authorit! to sell and dispose o/ the propert!. $he otion :as granted. o 0e,ause o/ a prospe,ti2e bu!er@s isgi2ings about the 3nion@s authorit! to sell the propert! :ithout authorit! granted b! a ,ourt o/ ,o petent 9urisdi,tion, Att!. 4ineda /iled a otion :ith '., :hi,h the '. noted in a resolution. o &e2ertheless, Att!. 4ineda, :ithout authorit! /ro the 'upre e .ourt but rel!ing on the earlier authorit! gi2en hi b! the Ministr! o/ "abor, /iled another urgent otion :ith the latter, pra!ing that the 3nion be authori;ed to sell the lot to the Manila Me orial 4ark .e eter!, #n,. and to ake arrange ents :ith it su,h that pa! ent :ill be ad2an,ed /or the real estate ta=es in,lusi2e o/ penalties, attorne!As lien and ho e de2eloperAs /ee o prospe,ti2e pur,haser had de,ided to :ithdra: its ob9e,tion regarding the 3nionAs authorit! to sell o "abor Arbiter %a! undo %. )alen;uela granted the otion. 'o, the sale :as /inall! ,onsu ated. $he pur,hase pri,e :as deposited under es,ro: :ith the Manila 0ank8.ubao 0ran,h. $he 0ank then released the a ounts due the ,lai ants in a,,ordan,e :ith the es,ro: agree ent. o 6hen Att!. Jose .. (spinas ( o2ant and alleged original ,ounsel /or the 3nion* learned o/ the sale and apportion ent o/ the pro,eeds /ro past 3nion president A ado "ope;, he re?uested "abor Arbiter )alen;uela to allo: hi to look into the re,ords o/ the ,ase o "A told hi that the re,ords o/ the a/ore,ited ,ase :ere issing. $hereupon, Att!. (spinas re?uested 1ire,tor 4as,ual %e!es o/ the &"%. to lo,ate the re,ords o Att!. (spinas /iled the urgent otion :ith pra!er /or $M%7 o %e,ords :ere /inall! /ound and Att!. (spinas :as dul! in/or ed o/ the de2elop ent.

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$he abo2e t:o otions ?uestion the legalit! o/ the orders issued b! "abor Arbiter %a! undo )alen;uela in the ,ase be/ore the &"%. :hi,h authori;ed the sale o/ the a:arded propert! and the distribution o/ the pro,eeds /ro su,h pur,hase. $he o2ants pra! that the .ourt o %e?uire Att!. 4ineda, the 3nion 7//i,ers, and the Manila 0ank8 .ubao 0ran,h to turn o2er the pro,eeds o/ the sale (3>B att!s /ees, CB alleged union e=penses* to the &"%. /or proper disposition o 7rder the said 0ank to pre2ent /urther :ithdra:als o/ a ounts deposited b! 4ineda or the 3nion or an! o/ its o//i,ers o 'hould 4ineda or the o//i,ers ha2e alread! :ithdra:n the a ount, re?uire the to post a bond e?ual to the a ounts stated abo2e, plus >B broker@s /ee, due the 3nion and its e bers and the other ,ounsels. o &ulli/! the 7rder o/ "A )alen;uela inso/ar as it authori;es 4ineda 3>B attorne!@s /ees o 1ire,t &"%. to lo,ate the re,ords o/ the ,ase, re,onstitute the sa e and e?uitable dispose +0B as /ee to all la:!ers :ho parti,ipated and e=,ess a ts to be distributed to :orkers o %e and the ,ase to &"%. and i pose penalties on those in2ol2ed and :ho ha2e a,ted /raudulentl! and illegall! .ourt i pleaded the Manila 0ank, .ubao 0ran,h as part! respondent and dire,ted the issuan,e o/ a te porar! andator! restraining order issued a te porar! andator! restraining order on the sa e date :hi,h en9oined Att!. 0en9a in .. 4ineda or his agents or an! person a,ting in his stead to deposit :ith the &"%. the a ount o/ 471+,99+.00 paid to hi or deposited in his a,,ount at Manila 0ank, .ubao 0ran,h allegedl! representing 3>B attorne!As /ees dire,ted the 3nion thru 1o ingo .abading or his agents to deposit :ith the &"%. CB alleged union e=penses paid to the 3nion or si ilarl! deposited to its a,,ountD and ordered the &"%. and Manila 0ank, .ubao 0ran,h, or their agents or persons in their stead not to allo: :ithdra:als o/ a ounts deposited in the na e o/ Att!. 0en9a in .. 4ineda andEor the 3nion or an! o/ its o//i,ers respondent 3nion, thru Att!. 4ineda, /iled its ,o ent alleging therein that the sub9e,t atter sought to be en9oined or andated b! the restraining order ,eased to e=ist rendering the sa e oot and a,ade i,, and thus pra!ing /or the dis issal o/ the said otion and the supple ent thereto Att! "ope; /iled otion to inter2ene. Allo:ed b! '.. Att!. (spinas, in behal/ o/ the :orkers, /iled a ani/estation and otion to re?uire Att!, 4ineda and the union to ,o pl! :ith the te porar! andator! restraining order :ith pra!er that the Manila 0ank be ordered to trans/er the /unds allo,ated /or the :orkers to the &"%., :hi,h should be instru,ted to pa! the :orkers upon proper #denti/i,ation Halili /iled a ani/estation that its liabilit! had been ,o pletel! e=tinguished :ith the appro2al o/ the Me orandu o/ Agree ent :ith %elease and Fuit,lai 'ol5en re,o endations< o orders o/ Arbiter )alen;uela be nulli/ied /or ha2ing been issued :ithout due pro,essD o ,ase ust be re anded to the &"%. /or /urther pro,eedingsD o te porar! restraining order issued b! '. be aintained, pending /inal resolution b! the &"%. Att!. 4ineda< o as per %etainerAs .ontra,t he handled the ,ase be/ore the .ourt o/ #ndustrial %elations alone. o 7n the $M%7< as o/ 7,tober -, 1983, he had a balan,e o/ 4+,0++.70 in his a,,ount :ith the Manila 0ank '., in its resolution< o set, aside as null and 2oid the orders o/ "A )alen;uela o dire,ted the Manila 0ank (.ubao 0ran,h*, Att!. 0en9a in 4ineda, and the Halili 1ri2ers and .ondu,tors 3nion through 1o ingo .abading or an! o/ his representati2es, to ,o pl! :ith the $M%7 :ithin 10 da!s o re anded these ,ases to the &"%. /or /urther pro,eedings

'ergio de 4edro, as representati2e o/ the :orkers and assisted b! Att!. (spinas, thus /iled the urgent otion to ,ite Att!. 4ineda, %i,ardo .apuilo and Manila 0ank (.ubao 0ran,h* in ,onte pt alleging that a/ter + letters to the &"%. asking :hether or not ,o plian,e :ith the $M%7 has been ade, .o lssion ,erti/ied that no deposits ha2e been a//e,ted b! the parties so dire,ted. ISSUE:

67& 4ineda, .apuilo, the 3nion 7//i,ers, Manila 0ank (.ubao 0ran,h*, and "A )alen;uela should be ,ited /or ,onte pt HELD:

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Manila 0ank Mani/ested that it has trans itted to the &"%. the a ounts in the 3nion@s and 4ineda@s a,,ounts respe,ti2el! and pra!ed that these be dee ed su//i,ient ,o plian,e and that otion to ,ite the in ,onte pt be ,onsidered oot and a,ade i,. 4ineda and 3nion adopt the ani/estation o/ Manila 0ank. %ep 'ergio de 4edro< out o/ the 4+,037,1+0.00 pur,hase pri,e, onl! 4l,9-0,1+7.+9 :as deposited :ith the Manila 0ankD that Att!. 4ineda has !et to return the balan,e and that the 3nion has still to a,,ount /or 4111,->+.18 respondent 3nion< alleged issing a ount o/ 49C.99+.71 :as used /or the pa! ent o/ outstanding real estate ta=es on real propert! o/ said 3nion Mr. de 4edro and Att!. (spinas, /or the :orkers in2ol2ed, /iled their re9oinder to the ,o ent o/ Att!. 4ineda and Mr. .apuno reiterating therein their plea to de,lare Att!. 4ineda and Mr. .apuno in ,onte pt o/ ,ourt and to ete out the proper penalt! (spinas< as per report o/ the Manila 0ank to the &"%., Att!. 4ineda has not !et ,o plied :ith the said order. He thus o2ed that Att!. 4ineda be re?uired to post a bond on the undeposited balan,e in the a ounts o/ 4710,9C9.30 and that Mr. .apuno be also re?uired to post a bond be/ore the &"%. on the undeposited balan,e o/ 4>+,+3C.0- during the penden,! o/ the otion /or ,onte pt 1e 4edro< there are still ?uestions to be resol2ed on the erits be/ore the &"%. and hen,e, pra!s that Arbiter Antonio $irona be re?uired to ,ontinue hearing the erits o/ the ,ase pending in the said .o ission 3nion 4resident "ope;< in/or ed J... (spinas and Asso,iates that the general e bership o/ the said 3nion had authori;ed a +0B ,ontingent /ee /or the la: /ir based on :hate2er a ount :ould be a:arded the 3nion (spinas, the original ,ounsel, established the a:ard o/ 897 :orkersA ,lai in the ain ,ases be/ore the de/un,t .#% and the 'upre e .ourt. &oti,e o/ Judg ents :ere ser2ed on Messrs. J... (spinas G Asso,iatesE Att!. A4ineda appeared /or the 3nion in these ,ases, still an asso,iate o/ the la: /ir , his appearan,e ,arried the /ir na e 0... 4ineda and Asso,iates,H gi2ing the i pression that he :as the prin,ipal la:!er in these ,ases 4ineda handled the 3nion@s ,ases as a e ber o/ the (spinas /ir . He did not re2eal to his partners that he had a retainer@s ,ontra,t :ith the 3nion. 7nl! the o//i,ers kne: o/ its e=isten,e. Alleged retainerDs ,ontra,t appears unethi,al, illegal and ano alous ,onsidering that o it :as e=e,uted onl! bet:een Att!. 4ineda and the o//i,ers o/ the 3nion ,hosen b! about 1+> e bers onl!. #t :as not a ,ontra,t :ith the general e bership, 7nl! 1-B o/ the total e bership o/ 897 :as represented. $his 2iolates Arti,le +-+ (d* o/ the "abor .ode o ,ontingent /ee o/ 30B /or those :ho :ere still :orking :ith Halili $ransit and the ->B /ee /or those :ho :ere no longer :orking :orked to the pre9udi,e o/ the latter group :ho should and :ere entitled to ore bene/its. (:hen the alleged retainerAs ,ontra,t :as e=e,uted in 19C7, the Halili $ransit had alread! stopped operations in Metro Manila. 0! then, Att!. 4ineda kne: that all the :orkers :ould be out o/ :ork :hi,h :ould ean that the ->B ,ontingent /ee :ould appl! to all.* o ,ontra,t :as e=e,uted :hen Att!. (spinas :as still handling the appeal o/ Halili $ransit in the ain ,ase be/ore the 'upre e .ourt. Att!. 4ineda :ould ha2e but did not substitute hi sel/ in pla,e o/ Att!. (spinas or the la: /ir on the basis o/ su,h ,ontra,t o 6hen Att!. 4ineda /iled his otion /or appro2al o/ his attorne!As lien :ith Arbiter )alen;uela on Februar! 8, 1983, he did not atta,h the retainerAs ,ontra,t. o ,ontra,t :as not e2en notari;ed :ithout noti,e to the other la:!ers and parties, Att!. 4ineda ,o en,ed the pro,eeds be/ore the &"%. :ith the /iling o/ a otion and ani/estation on August 9, 198+ :ith Arbiter )alen;uela o/ the &"%. 7//i,e o/ the "abor Ministr! :herein he asked /or authorit! to sell the propert! again :ithout noti,e to Att!. (spinas and Att!. "ope;, Att!. 4ineda /iled a otion :ith Arbiter )alen;uela :herein he asked /or authorit! to distribute the pro,eeds o/ the sale o/ the propert!. $his distribution :ould in,lude his attorne!As /ee :hi,h :as allegedl! the sub9e,t o/ a retainer ,ontra,t entered into bet:een hi and the alleged 3nion o//i,ers

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Att!. 4inedaAs a,t o/ /iling a otion :ith this .ourt on 1e,e ber 1, 198+ pra!ing /or authorit! to sell :as b! itsel/ an ad ission on his part that he did not possess the authorit! to sell the propert! and that this .ourt :as the proper bod! :hi,h had the po:er to grant su,h authorit!. He ,ould not and did not e2en :ait /or su,h 2alid authorit! but instead pre2iousl! obtained the sa e /ro the labor arbiter :ho he kne: :as not e po:ered to so authori;e. 3nder Arti,le ++- (a* o/ the "abor .ode, onl! /inal de,isions or a:ards o/ the &"%., the "abor Arbiter, or ,o pulsor! or 2oluntar! arbitrators a! be i ple ented or a! be the sub9e,t o/ i ple enting orders b! a/orena ed bod! or o//i,ers. $he ->B attorne!As lien on the a:ard o/ those union e bers :ho :ere no longer :orking and the 30B lien on the bene/its o/ those :ho :ere still :orking as pro2ided /or in the alleged retainerAs ,ontra,t are 2er! e=orbitant and un,ons,ionable in 2ie: o/ 'e,tion 11, %ule )### o/ 0ook ### :hi,h e=pli,itl! pro2ides that Attorne!As /ees on an! 9udi,ial or ad inistrati2e pro,eedings /or the re,o2er! o/ :ages shall not e=,eed 10B o/ the a ount a:arded. $he /ees a! be dedu,ted /ro the total a ount due the :inning part!. the sale o/ the 3nion propert! and the distribution o/ the pro,eeds there/ro had been e//e,ted :ithout authorit! and, there/ore, illegal .onse?uentl!. Att!. 4ineda and Arbiter )alen;uela be,o e liable /or their unauthori;ed a,ts Att!" Pineda s#ould $e %ited &or indire%t %onte' t and s#ould $e su$(e%t to dis$ar'ent ro%eedin)s .onte pt o/ ,ourt is a de/ian,e o/ the authorit!, 9usti,e or dignit! o/ the ,ourtD su,h ,ondu,t as tends to bring the authorit! and ad inistration o/ the la: into disrespe,t or to inter/ere :ith or pre9udi,e parties litigant or their :itnesses during litigation o de/ined as a disobedien,e to the ,ourt b! a,ting in opposition to its authorit!, 9usti,e and dignit!. #t signi/ies not onl! a :ill/ul disregard or disobedien,e o/ the ,ourtAs orders, but su,h ,ondu,t as tends to bring the authorit! o/ Athe ,ourt and the ad inistration o/ la: into disrepute or in so e anner to i pede the due ad inistration o/ 9usti,e o reason /or the inherent po:er o/ ,ourts to punish /or ,onte pt is that respe,t o/ the ,ourts guarantees the stabilit! o/ the 9udi,ial institution. 6ithout su,h guarantee said institution :ould be resting on a 2er! shak! /oundation $he .ourt a! suspend or disbar a la:!er /or an! ,ondu,t on his part sho:ing his un/itness /or the ,on/iden,e and trust :hi,h ,hara,teri;e the attorne! and ,lient relations, and the pra,ti,e o/ la: be/ore the ,ourts, or sho:ing su,h a la,k o/ personal honest! or o/ good oral ,hara,ter as to render hi un:orth! o/ publi, ,on/iden,e Finall!* Att!" Pineda %ould $e rose%uted &or $etra!al o& trust $! an attorne! under Arti%le +,- o& t#e Re.ised Penal Code and %ould also $e #eld lia$le under Se%tion /($) o& R"A" No" 0,1- (Anti23ra&t and Corru t Pra%ti%es A%t) o ,ri inal san,tion /or unpro/essional ,ondu,t o/ an attorne! is :ithout pre9udi,e to proper ad inistrati2e a,tion, su,h as disbar ent or suspension o/ attorne!s o unla:/ul /or an! person kno:ingl! to indu,e or ,ause an! publi, o//i,ial to ,o it an! o/ the o//enses de/ined in 'e,tion 3 o/ said a,t La$or Ar$iter Ra!'undo Valen4uela s#ould $e 'ade to ans5er &or #a.in) a%ted 5it#out or $e!ond #is aut#orit! in ro er ad'inistrati.e %#ar)es. He ,ould also be prose,uted be/ore the $anodba!an under the pro2isions o/ the Anti85ra/t "a:. #ndependentl! o/ his liabilities as a go2ern ent o//i,er, he ,ould be the sub9e,t o/ disbar ent pro,eedings $he Manila 0anking .orporation@s (.ubao 0ran,h* turno2er o/ the a/ore,ited a ounts is a su//i,ient ,o plian,e :ith $M%7 and hen,e, %an no lon)er $e lia$le &or %onte' t o& %ourt Mr. .apuno ,lari/ies that :ith regard to attorne!sA /ees, Att!. 4ineda ade the 3nion o//i,ers belie2e that he :ould be the one to pa! the /ees o/ Att!s. (spinas and "ope; /or :hi,h reason, the 3>B in,reased /ees :as appro2ed b! the 3nionAs board in good /aith. $he 3nion like:ise ,on/ir s that Att!. 4ineda ,a e into the pi,ture onl! :hen he :as assigned b! Att!. (spinas in, 19C> to e=e,ute the .#% de,ision :hi,h, thru Att!. (spinas handling, :as upheld b! this .ourt in "8+-8C- in 19C8. $he 3nion o//i,ers :ere a:are that Att!. (spinas :as the prin,ipal ,ounsel e2en a/ter Att!. 4inedaAs assign ent. $he! also kne: o/ the original ,ontra,t /or +0B attorne!As /ees :hi,h :as in,reased to 3>B b! Att!. 4ineda upon the arrange ent that :ith the in,rease, he :ould ans:er /or the pa! ent o/ Att!s. (spinas and "ope;A /ees and /or ne,essar! representation e=penses o A,ting on the a/oresaid otion, this .ourt dro ed t#e Union and its o&&i%ers &ro' t#e 5it#in %onte' t %#ar)e

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8 DECISION: Att!. 0en9a in 4ineda is /ound 53#"$I o/ indire,t ,onte pt o/ ,ourt. 'enten,ed to i prison ent in Manila .it! Jail until the orders o/ the .ourt. He is also dire,ted to sho: ,ause :h! he should not be disbarred.

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