Alex Cueto vs Atty. Jose Jimenez, Jr.

Legal Ethics Canon 20 Duty to Avoid Controversies Involving Lawyers Fees

Engineer Alex Cueto, for P5,000,000.00, was contracted to build a building for Jose Jimenez III. Cueto decided to
have the contract be notarized and he chose Atty. Jose Jimenez, Jr., father of Jimenez III, to notarize said contract.
Before the notarization, Cueto did not ask how much will Atty. Jimenez be charging. So he was surprise when after
the notarization, he was being asked to pay P50,000.00. He paid the P30,000.00 and he issued a check worth
P20,000.00 to Atty. Jimenez.
Later, Cueto advised Atty. Jimenez not to encash the check yet because he has insufficient funds. Notwithstanding,
Atty. Jimenez still tried to encash the check hence it was dishonored. Atty. Jimenez then filed a criminal suit against
Cueto.
ISSUE: Whether or not what Atty. Jimenez, Jr. did is proper.
HELD: No. He violated Canon 20 of the Code of Professional Responsibility which states: [a] lawyer shall avoid
controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition,
injustice or fraud. There was no intention on the part of Cueto to commit fraud against Jimenez as he paid the P30k
downpayment. Its just that, ironically, the reason why Cueto does not have sufficient fund in his account was that
Jimenez III has failed to pay Cuetos professional services in the building project.

Case Digest: NPC v. Heirs of f Sangkay (All Surnamed

Macabangkit)
G.R. No. 165828 : August 24, 2011
NATIONAL POWER CORPORATION, Petitioner, v. HEIRS OF MACABANGKIT SANGKAY, NAMELY:
CEBU, BATOWA-AN, ET AL., ALL SURNAMED MACABANGKIT, Respondents.
BERSAMIN, J.:
FACTS:
Pursuant to its legal mandate under Republic Act No. 6395 (An Act Revising the Charter of the National
Power Corporation), NPC undertook the Agus River Hydroelectric Power Plant Project in the 1970s to
generate electricity for Mindanao. The project included the construction of several underground tunnels to
be used in diverting the water flow from the Agus River to the hydroelectric plants.
On November 21, 1997, the respondents as the owners of land with an area of 221,573 square meters
situated in Ditucalan, Iligan City, sued NPC in the RTC for the recovery of damages and of the property,
with the alternative prayer for the payment of just compensation. They alleged that they had belatedly
discovered that one of the underground tunnels of NPC that diverted the water flow of the Agus River for
the operation of the Hydroelectric Project in Agus V, Agus VI and Agus VII traversed their land; that their
discovery had occurred in 1995 after Atty. Saidali C. Gandamra, President of the Federation of Arabic

Madaris School, had rejected their offer to sell the land because of the danger the underground tunnel
might pose to the proposed Arabic Language Training Center and Muslims Skills Development Center;
that such rejection had been followed by the withdrawal by Global Asia Management and Resource
Corporation from developing the land into a housing project for the same reason; that Al-Amanah Islamic
Investment Bank of the Philippines had also refused to accept their land as collateral because of the
presence of the underground tunnel; that the underground tunnel had been constructed without their
knowledge and consent; that the presence of the tunnel deprived them of the agricultural, commercial,
industrial and residential value of their land; and that their land had also become an unsafe place for
habitation because of the loud sound of the water rushing through the tunnel and the constant shaking of
the ground, forcing them and their workers to relocate to safer grounds.
In its answer with counterclaim, NPC countered that the Heirs of Macabangkit had no right to
compensation under section 3(f) of Republic Act No. 6395, under which a mere legal easement on their
land was established; that their cause of action, should they be entitled to compensation, already
prescribed due to the tunnel having been constructed in 1979; and that by reason of the tunnel being an
apparent and continuous easement, any action arising from such easement prescribed in five years.
After trial, the RTC ruled in favor of the plaintiffs (Heirs of Macabangkit).
Earlier, on August 18, 1999, the Heirs of Macabangkit filed an urgent motion for execution of judgment
pending appeal. The RTC granted the motion and issued a writ of execution, prompting NPC to assail the
writ by petition for certiorari in the CA. On September 15, 1999, the CA issued a temporary restraining
order (TRO) to enjoin the RTC from implementing its decision.The Heirs of Macabangkit elevated the
ruling of the CA (G.R. No. 141447), but the Court upheld the CA on May 4, 2006.
On October 5, 2004, the CA affirmed the decision of the RTC.
ISSUE:

1) Whether the CA and the RTC erred in holding that there was an underground tunnel traversing the
Heirs of Macabangkits land constructed by NPC; and

2) Whether the Heirs of Macabangkits right to claim just compensation had prescribed under section 3(i)
of Republic Act No. 6395, or, alternatively, under Article 620 and Article 646 of the Civil Code.
HELD: We uphold the liability of NPC for payment of just compensation.
CIVIL LAW: attorneys fees under quantum meruit principle are fixed at 10% of the judgment
award; quantum meruit; guidelines in determining the proper attorneys fees
Based on the pending motions of Atty. Macarupung Dibaratun and Atty. Manuel D. Ballelos to assert their
respective rights to attorneys fees, both contending that they represented the Heirs of Macabangkit in this
case, a conflict would ensue from the finality of the judgment against NPC.
Both Atty. Dibaratun and Atty. Ballelos posited that their entitlement to attorney's fees was contingent. Yet,
a contract for a contingent fees is an agreement in writing by which the fees, usually a fixed percentage of
what may be recovered in the action, are made to depend upon the success in the effort to enforce or

defend a supposed right. Contingent fees depend upon an express contract, without which the attorney
can only recover on the basis of quantum meruit.With neither Atty. Dibaratun nor Atty. Ballelos presenting
a written agreement bearing upon their supposed contingent fees, the only way to determine their right to
appropriate attorney's fees is to apply the principle of quantum meruit.
Quantum meruit literally meaning as much as he deserves is used as basis for determining an attorney's
professional fees in the absence of an express agreement. The recovery of attorneys fees on the basis of
quantum meruit is a device that prevents an unscrupulous client from running away with the fruits of the
legal services of counsel without paying for it and also avoids unjust enrichment on the part of the
attorney himself. An attorney must show that he is entitled to reasonable compensation for the effort in
pursuing the clients cause, taking into account certain factors in fixing the amount of legal fees.
Rule 20.01 of the Code of Professional Responsibility lists the guidelines for determining the proper
amount of attorney fees, to wit:
Rule 20.1 A lawyer shall be guided by the following factors in determining his fees:
a) The time spent and the extent of the services rendered or required;
b) The novelty and difficult of the questions involved;
c) The important 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 he
belongs;
g) The amount involved in the controversy and the benefits resulting to the client from the service;
h) The contingency or certainty of compensation;
i) The character of the employment, whether occasional or established; and
j) The professional standing of the lawyer.
In the event of a dispute as to the amount of fees between the attorney and his client, and the intervention
of the courts is sought, the determination requires that there be evidence to prove the amount of fees and
the extent and value of the services rendered, taking into account the facts determinative
thereof.Ordinarily, therefore, the determination of the attorneys fees on quantum meruit is remanded to
the lower court for the purpose. However, it will be just and equitable to now assess and fix the attorneys
fees of both attorneys in order that the resolution of a comparatively simple controversy, as Justice
Regalado put it in Traders Royal Bank Employees Union-Independent v. NLRC, would not be needlessly
prolonged, by taking into due consideration the accepted guidelines and so much of the pertinent data as
are extant in the records.
In fairness and justice, the Court accords full recognition to Atty. Dibaratun as the counsel de parte of the
Heirs of Macabangkit who discharged his responsibility in the prosecution of the clients cause to its
successful end. It is he, not Atty. Ballelos, who was entitled to the full amount of attorneys fees that the
clients ought to pay to their attorney. Given the amount and quality of his legal work, his diligence and the
time he expended in ensuring the success of his prosecution of the clients cause, he deserves the
recognition, notwithstanding that some of the clients might appear to have retained Atty. Ballelos after the
rendition of a favorable judgment.
Atty. Ballelos may claim only from Cebu, Batowa-an, Sayana, Nasser, Manta and Edgar, the only parties

who engaged him. The Court considers his work in the case as very minimal. His compensation under the
quantum meruit principle is fixed at P5,000.00, and only the Heirs of Macabangkit earlier named are liable
to him.
MIRANDA vs. CARPIO
Complainant Valentin C. Miranda is one of the owners of a parcel of land consisting of 1,890
square meters located at Barangay Lupang Uno, Las Pias, Metro Manila. In 1994,
complainant initiated Land Registration Commission (LRC) Case No. M-226 for the
registration of the aforesaid property. The case was filed before the Regional Trial Court of
Las Pias City, Branch 275. During the course of the proceedings, complainant engaged the
services of respondent Atty. Carpio as counsel in the said case when his original counsel,
Atty. Samuel Marquez, figured in a vehicular accident. In complainant's Affidavit,[2]
complainant and respondent agreed that complainant was to pay respondent Twenty
Thousand Pesos (PhP20,000.00) as acceptance fee and Two Thousand Pesos (PhP2,000.00)
as appearance fee. Complainant paid respondent the amounts due him, as evidenced by
receipts duly signed by the latter. During the last hearing of the case, respondent demanded
the additional amount of Ten Thousand Pesos (PhP10,000.00) for the preparation of a
memorandum, which he said would further strengthen complainant's position in the case,
plus twenty percent (20%) of the total area of the subject property as additional fees for his
services. Complainant did not accede to respondent's demand for it was contrary to their
agreement. Moreover, complainant co-owned the subject property with his siblings, and he
could not have agreed to the amount being demanded by respondent without the
knowledge and approval of his coheirs. As a result of complainant's refusal to satisfy
respondent's demands, the latter became furious and their relationship became sore. On
January 12, 1998, a Decision was rendered which transmitted the decree of registration and
the original and owner's duplicate of the title of the property. On April 3, 2000, complainant
went to the RD to get the owner's duplicate of the Original Certificate of Title (OCT) bearing
No. 0-94. He was surprised to discover that the same had already been claimed by and
released to respondent on March 29, 2000. On May 4, 2000, complainant talked to
respondent on the phone and asked him to turn over the owner's duplicate of the OCT,
which he had claimed without complainant's knowledge, consent and authority. Respondent
insisted that complainant first pay him the PhP10,000.00 and the 20% share in the property
equivalent to 378 square meters, in exchange for which, respondent would deliver the
owner's duplicate of the OCT. Once again, complainant refused the demand, for not having
been agreed upon. On June 26, 2000, complainant learned that on April 6, 2000, respondent
registered an adverse claim on the subject OCT wherein he claimed that the agreement on
the payment of his legal services was 20% of the property and/or actual market value. To
date, respondent has not returned the owner's duplicate of OCT No. 0-94 to complainant and
his co-heirs despite repeated demands to effect the same.
ISSUE: Whether or not Atty. Carpio has violated Canon 20, Rule 20.01 of the Code of
Professional Responsibility.
HELD: An attorney's retaining lien is fully recognized if the presence of the following
elements concur: (1) lawyerclient relationship; (2) lawful possession of the client's funds,
documents and papers; and (3) unsatisfied claim for attorney's fees.[9] Further, the
attorney's retaining lien is a general lien for the balance of the account between the
attorney and his client, and applies to the documents and funds of the client which may

come into the attorney's possession in the course of his employment. As correctly found by
the IBP-CBD, there was no proof of any agreement between the complainant and the
respondent that the latter is entitled to an additional professional fee consisting of 20% of
the total area covered by OCT No. 0-94. Clearly, there is no unsatisfied claim for attorney's
fees that would entitle respondent to retain his client's property. Respondent's unjustified act
of holding on to complainant's title with the obvious aim of forcing complainant to agree to
the amount of attorney's fees sought is an alarming abuse by respondent of the exercise of
an attorney's retaining lien, which by no means is an absolute right, and cannot at all justify
inordinate delay in the delivery of money and property to his client when due or upon
demand. Atty. Carpio failed to live up to his duties as a lawyer by unlawfully withholding and
failing to deliver the title of the complainant, despite repeated demands, in the guise of an
alleged entitlement to additional professional fees. He has breached Rule 1.01 of Canon 1
and Rule 16.03 of Canon 16 of the Code of Professional Responsibility. Further, in collecting
from complainant exorbitant fees, respondent violated Canon 20 of the Code of Professional
Responsibility, which mandates that a lawyer shall charge only fair and reasonable fees. It
is highly improper for a lawyer to impose additional professional fees upon his client which
were never mentioned nor agreed upon at the time of the engagement of his services. The
principle of quantum meruit applies if a lawyer is employed without a price agreed upon for
his services. In such a case, he would be entitled to receive what he merits for his services,
as much as he has earned. Respondent's further submission that he is entitled to the
payment of additional professional fees on the basis of the principle of quantum meruit has
no merit. "Quantum meruit, meaning `as much as he deserved' is used as a basis for
determining the lawyer's professional fees in the absence of a contract but recoverable by
him from his client." In the present case, the parties had already entered into an agreement
as to the attorney's fees of the respondent, and thus, the principle of quantum meruit does
not fully find application because the respondent is already compensated by such
agreement. WHEREFORE, Atty. Macario D. Carpio is SUSPENDED from the practice of law for
a period of six (6) months, effective upon receipt of this Decision. He is ordered to RETURN
to the complainant the owner's duplicate of OCT No. 0-94 immediately upon receipt of this
decision. He is WARNED that a repetition of the same or similar act shall be dealt with more
severely

FELICISIMO M. MONTANO vs. INTEGRATED BAR

OF THE PHILIPPINES and Atty. JUAN S. DEALCA
A.C. No. 4215

May 21, 2001

FACTS:
The complainant hired the services of Atty. Juan S. Dealca as his counsel in collaboration with Atty. Ronando L.
Gerona in a case pending before the Court of Appeals docketed wherein the complainant was the plaintiff-appellant.

The parties agreed upon attorneys fees in the amount of P15,000.00 fifty percent (50%) of which was payable upon
acceptance of the case and the remaining balance upon the termination of the case. Accordingly, complainant paid
respondent the amount of P7,500.00 representing 50% of the attorneys fee.
Thereafter, even before respondent counsel had prepared the appellants brief and contrary to their agreement that
the remaining balance be payable after the termination of the case, Atty. Dealca demanded an additional payment
from complainant obliged by paying the amount of P4,000.00.
Prior to the filing of the appellants brief, respondent counsel again demanded payment of the remaining balance of
P3,500.00. When complainant was unable to do so, respondent lawyer withdrw his appearance as complainants
counsel without his prior knowledge and/or conformity.
Thus this complaint charging respondent with misconduct and praying that he be sternly dealt with administratively.
ISSUE: W/N respondent committed misconduct and violated provisions of the CPR?
HELD:
Yes. The Court finds respondents conduct unbecoming of a member of the legal profession. Under Canon 22 of the
Code of Professional Responsibility, a lawyer shall withdraw his services only for good cause and upon notice
appropriate in the circumstances. Although he may withdraw his services when the client deliberately fails to pay the
fees for the services, under the circumstances of the present case, Atty. Dealcas withdrawal was unjustified as
complainant did not deliberately fail to pay him the attorneys fees. In fact, complainant exerted honest efforts to fulfill
his obligation. Respondents contemptuous conduct does not speak well of a member of the bar considering that the
amount owing to him was only P3,500.00. rule 20.4 of Canon 20, mandates that a lawyer shall avoid controversies
with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or
fraud. Sadly, for not so large a sum owed to him by complainant, respondent lawyer failed to act in accordance with
the demands of the Code.
The Court, however, does not agree with complainants contention that the maximum penalty of disbarment should be
imposed on respondent lawyer. In the present case, reprimand is deemed sufficient.
Respondent was REPRIMANDED.