canon 17 Lorenzana food corp.

vs Daria
A.C. No. 2736 May 27, 1991
LORENZANA FOOD CORPORATION represented by Mr. SOLOMON U. LORENZANA, JR., as its
President and General Manager, and/or Mrs. ELIZABETH L. DIAZ, as its Vice-Presid
ent, petitioners,
vs.
ATTY. FRANCISCO L. DARIA, respondent.
Jose Feliciano Loy, Jr. for petitioners.
R E S O L U T I O N
PER CURIAM:
The respondent lawyer, Atty. Francisco L. Daria, is administratively charged 1 o
n two counts, to wit:
1. Negligence and
2. Betrayal of his former client's confidences.
A verified complaint dated February 22, 1985 was filed by Lorenzana Food Corpora
tion LFC, hereinafter), and received by the Court on February 25, 1985. 2
The Court, on June 10, 1985, resolved to refer this case to the Office of the So
licitor General for investigation, report, and recommendation.
After proper proceedings, the Office of the Solicitor General submitted its "Rep
ort and Recommendation," dated February 21, 1990 and received by the Court on Fe
bruary 26, 1990.
From the findings made by the Solicitor General, the pertinent facts may be summ
arized as follows:
Respondent Francisco L. Daria is charged with negligence and betrayal of his for
mer client's confidences. The following facts are in connection with the charge
of negligence:
Respondent was hired by complainant Lorenzana Food Corporation (LFC) on January
8, 1981 as its legal counsel and was designated as its personnel manager six mon
ths later (tsn. pp. 6-7, Dec. 9, 1985). On May 23, 1983, LFC employee, Violeta H
anopol, filed a complaint for illegal dismissal and other monetary claims agains
t complainant before the Ministry (now Department) of Labor and Employment (MOLE
). On May 30, 1983, summons was served on the parties with the requirement that
position papers be submitted (Exh. G).
During the initial hearing on June 13, 1973 * (sic) Hanopol and respondent tried
to explore the possibility of an amicable settlement. Since no agreement was re
ached the hearing was reset to June 17, 1983. On the pretext that Hanopol was su
pposed to go to his office on that date respondent failed to appear for the seco
nd setting (tsn. pp. 14-15, Dec. 9, 1985). So, the Labor Arbiter was constrained
to further reset the hearing to June 28, 1983. Respondent received on June 23,
1983 the Order for the resetting to June 1983 (Exh. J).
In the meantime, on June 20, 1983, respondent received an Order in another labor
case, setting the hearing therein also on June 28, 1983 (Exh. H-6). Faced with
a conflicting schedule, respondent decided to move to postpone the hearing in th
e Hanopol case. However, instead of filing a written motion for postponement, he
 opted to call, through his secretary, the Office of the Labor Arbiter to move f
or postponement (Exh. H-5; tsn. p. 16, Dec. 9, 1985). Respondent's telephone mes
sage apparently failed to reach the Labor Arbiter, because at the hearing on Jun
e 28, 1983, he considered the case submitted for decision on the basis of Hanopo
l's complaint and affidavit (Exh. G-1). Respondent had not submitted a position
paper.
After a month, on July 29, 1983, the Labor Arbiter issued a Decision directing L
FC to pay Hanopol the total sum of P6,469.60 in labor benefits, on the basis of
Hanopol's evidence alone.
Respondent Daria appealed the Decision to the National Labor Relations Commissio
n (NLRC) on August 23, 1983 (Exh. 4). The case was remanded to the Labor Arbiter
for further proceedings. The case was set for hearing on June 25, 1984 and July
12, 1984 wherein attempts for an amicable settlement still proved futile. The L
abor Arbiter set two more dates for hearing: July 27, 1984 and August 8, 1984 (t
sn. pp. 21-22, Dec. 9, 1985).
In the meantime, the middle of June 1984, respondent signified to management his
intention to resign. In the light of this development, management hired Atty. R
ogelio Udarbe to take his place on July 16, 1984, the effective date of his resi
gnation (Exh. 2). Respondent endorsed the cases of complainant to Atty. Udarbe (
tsn. pp. 23-25, Dec. 9, 1985).
During the hearings in the Hanopol case on July 27, 1984 and August 8, 1984, no
one appeared for complainant.1avvphi1 So, on August 15, 1984, Hanopol filed a "M
anifestation and Motion" praying that the earlier Decision of the Labor Arbiter
dated July 29, 1983 be revived. (Exh. 5).
On September 1, 1984, Atty. Jose Loy, Jr. was hired by complainant LFC vice Atty
. Udarbe and he immediately came across the abovementioned "Manifestation and Mo
tion". On September 5, 1984, he filed an Opposition (Exh. 6) thereto, and on Sep
tember 19, 1984, he followed this up with a position paper for LFC (Exh. 7). How
ever, the Labor Arbiter had already revived his earlier Decision dated July 29,
1983 in another Decision dated September 4, 1984, thereby prompting Atty. Loy to
appeal the latter Decision (Exh. 3). In a resolution dated May 9, 1985, the NLR
C ordered anew the remand of the case for further proceedings (Exh. 8).
In connection with the other charge of betrayal by respondent of his former clie
nt's confidences, the following facts appear on record:
While respondent was still connected with complainant, its general manager, Seba
stian Cortes, issued a memorandum dated February 28, 1984 (Exh. C) to its employ
ee, Roberto San Juan, requiring him to submit a written explanation for his alle
ged double liquidation and unliquidated cash advances. Another memorandum dated
March 15, 1984 (Exh. D) was issued this time by complainant's internal auditor,
Rosario L. Bernardo, addressed to complainant's president, summing up San Juan's
unliquidated advances amounting to P9,351.15. Respondent was furnished a copy o
f this memorandum (Exh. D-3). The executive committee, to which respondent belon
gs, investigated San Juan on his unliquidated advances. On account of the gravit
y of the charge, respondent placed San Juan under preventive suspension, per his
letter to him dated April 25, 1984 (Exh. E).
On September 20, 1984, when respondent had already resigned, complainant sent a
demand letter to San Juan requiring him to restitute the amount of P9,351.15 (Ex
h. N-2). Since he failed to pay the amount demanded, a complaint for estafa was
lodged against him before the Office of the Provincial Fiscal. San Juan thereaft
er resigned and sought the assistance of respondent in the preparation of his co
unteraffidavit in January 1985 (tsn. p. 35, Nov. 5, 1985). Respondent prepared S
an Juan's counteraffidavit and signed it (Exh. F). San Juan then submitted his c
ounteraffidavit to the Office of the Provincial Fiscal (tsn. p. 42, Nov. 5, 1985
). 3
x x x x x x x x x
For failure to appear in two consecutive hearings and to submit a position paper
in the Hanopol case which resulted in complainant LFC's default and judgment ag
ainst it by the Labor Arbiter, the respondent is faulted for negligence. The res
pondent avers that Hanopol should have seen him in his office to work out a comp
romise agreement, on the scheduled day of the second hearing, June 17, 1983, but
did not. 4
It is the finding of the Solicitor General that this excuse by the respondent is
not borne by the Constancia 5 setting the case for hearing. The Constancia clea
rly states: "By agreement of the parties, case reset to June 17, 1983 at 2:00 p.
m. as previously scheduled." 6 Since it was signed by both Hanopol and the respo
ndent, the Solicitor General argues that the respondent's explanation is manifes
tly unsatisfactory.
With regard to his second non-appearance for the hearing on June 2, 1983, the re
spondent justified his absence by claiming that he had another hearing on the sa
me date and that he told his secretary to call up the Office of the Labor Arbite
r to have the hearing of the Hanopol case postponed. 7 The Solicitor General ave
rs:
. . . It is submitted that respondent's actuation was not warranted by the circu
mstances. As it turned out, the telephone request apparently did not reach the L
abor Arbiter, thereby constraining him to declare complainant in default and ren
der judgment against it. 8
In an effort to extricate himself from this charge, the respondent submits that
since he was able to persuade the National Labor Relations Commission (NLRC) on
appeal to set aside the Decision of the Labor Arbiter and to remand the case for
further proceedings, then the charge of negligence should be considered moot an
d academic already. 9 We find this submission not meritorious. Instead, we agree
,with the position of the Solicitor General:
Respondent's plea is untenable. The setting aside of the adverse Decision of the
Labor Arbiter cannot obliterate the effects of respondent's negligence. Indeed,
had respondent attended the two scheduled hearings and filed the required posit
ion paper, then at least, there would have been no delay in the resolution of th
e case, which, perhaps, would have been in favor of complainant. The delay, by i
tself, was prejudicial to complainant because it deprived successor-counsel Atty
. Loy of time which he should be devoting to other cases of complainant. In fact
he had to prepare complainant's position paper which respondent should have don
e earlier (Exh. 7). 10
From the foregoing, it is manifest that the respondent is indeed guilty of negli
gence, a clear violation of the Code of Professional Responsibility: 11
CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE
Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him and his ne
gligence in connection therewith shall render him liable.
The other accusation against the respondent by the Solicitor General was that he
had betrayed complainant LFC's confidences in violation of the then Canon 37 of
the old Canons of Professional Ethics, to wit:
It is the duty of a lawyer to preserve his client's confidences. This duty outla
sts the lawyer's employment, and extends as well to his employee's and neither o
f them should accept employment which involves or may involve the disclosure or
use of these confidences, either for the private advantages of the client, witho
ut his knowledge and consent, and even though there are other available sources
of such information. A lawyer should not continue employment when he discovers t
hat this obligation prevents the performance of his full duty to his former or t
o his new client.
x x x x x x x x x
Superseded by the Code of Professional Responsibility, the appropriate Canon now
is:
CANON 17 A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE MINDF
UL OF THE TRUST AND CONFIDENCE REPOSED IN HIM.
The Solicitor General further found that the respondent assisted Roberto San Jua
n in the preparation of the counter-affidavit, 12 submitted in defense of the la
tter in the accusation of estafa filed against San Juan by LFC As a matter of fa
ct, the respondent signed the jurat of the San Juan counter-affidavit he (respon
dent) helped prepare. It is also a fact that the respondent investigated this sa
me charge of estafa while he was still the lawyer of the complainant and San Jua
n still likewise an employee of LFC
Again, we concur with the findings and evaluation of the Office of the Solicitor
General:
. . . Respondent, however, tried to extricate himself from his predicament by te
stifying that the counteraffidavit was prepared by a lawyer-friend, Atty. Joseli
to R. Enriquez, who had his (respondent's) name typed on it; that after reading
it, he called up Atty. Enriquez so that he will delete his name and signature th
ereon; that he instructed San Juan to bring the counteraffidavit to Atty. Enriqu
ez so that he will delete his name and signature, but San Juan did not obey him;
and that San Juan filed the counteraffidavit with the office of the Provincial
Fiscal with his name and signature still on it (tsn. pp. 47-51, Dec. 9, 1985).
It is submitted that, apart from being a mere afterthought, respondent's explana
tion is incredible.1wphi1 His foregoing testimony is not reflected in his comment
on the complaint . . . 13
We are convinced that the respondent had betrayed the confidences of the complai
nant, his former client.
. . . An attorney owes loyalty to his client not only in the case in which he ha
s represented him but also after the relation of attorney and client has termina
ted, and it is not a good practice to permit him afterwards to defend in another
case other persons against his former client under the pretext that the case is
distinct from and independent of the former case. 14
WHEREFORE, premises considered, the respondent is found guilty of both the charg
e of negligence, a transgression of Rule 18.03, Canon 18, and the charge of betr
ayal of his former client's confidences, in violation of Canon 17 of the Code of
Professional Responsibility.
The respondent is hereby SUSPENDED from the practice of law for a period of six
(6) months.
Let this Decision be entered in the personal records of the respondent and copie
s thereof furnished to all courts and IBP chapters.
SO ORDERED.

A.M. No. 801 June 27, 1978

CESARIO ADARNE, complainant,
vs.
ATTY. DAMIAN V. ALDABA, respondent.

CONCEPCION JR., J.:

Administrative action against the respondent attorney for gross negligence and m
isconduct, for failure to give his entire devotion to the interest of his client
, warm zeal in the . maintenance and defense of his rights, and exertion of his
utmost learning and ability in the prosecution and defense of his client, and fo
r not taking steps to protect the interests of his client in the face of an adve
rse decision.
The record shows that sometime in 1958, Raymunda Cumpio and her husband, Rufo Cu
mpio, filed an action for forcible entry against herein complaint Cesario Adarne
, Aning Arante, and Miguel Inokando with the Justice of the Peace of Alang-alang
Leyte. The case was docketed in the said court as Civil Case No. 96. Atty. Isau
ro Marmita represented the defendants who raised the issue of ownership of the l
and in question. After hearing the parties, the Justice of the Peace dismissed t
he complaint for lack of jurisdiction. Consequently, the plaintiffs therein appe
aled to the Court of First Instance of Leyte and the case was assigned to Branch
VI of Carigara, where it was docketed as Civil Case No. 556. Resolving the issu
e interposed by the appellants, the Judge of the Court of First Instance found t
hat the Justice of the Peace Court has jurisdiction over the case and returned t
he same to the lower court for trial on the merits. After trial on the merits, t
he Justice of the Peace again dismissed the case and the plaintiffs again appeal
ed to the Court of First Instance of Leyte where the case was docketed anew as C
ivil Case No, 632. Attys. Arturo Mirales and Generoso Casimpan filed the answer
for the defendants. 1
At the hearing of the case on August 7, 1961, the herein complainant Cesario Ada
rne, one of the defendants in the aforementioned Civil Case No. 632, noting that
his attorneys had not yet arrived, prevailed upon the respondent Atty. Damian A
ldaba, who was then present in court to attend the trial of an electoral case, t
o appear as counsel for them and ask for the Postponement of the trial. The resp
ondent, who is a third degree cousin of the complainant, agreed, and entered a s
pecial appearance. Upon noticing that the plaintiffs and their counsel were not
also present in court, the respondent, instead of asking for a postponement, mov
ed for the dismissal of the case. "is motion was granted and the case was again
dismissed. Thereafter, the plaintiff filed a motion for the reconsideration of t
he order, 2 to which the respondent filed an opposition in behalf of the defenda
nts, 3 and the motion was denied. 4 Whereupon, the plaintiffs appealed to the Co
urt of Appeals. After appropriate. proceedings, the appellee court set aside the
order of dismissal and remanded the case to the lower court for further proceed
ings.
At the hearing of the case on October 23, 1964 before the Court of First Instanc
e of Leyte, the respondent was again prevailed upon by the complainant to appear
in his behalf. The respondent entered a "special appearance" for the complainan
t and thereafter argued that the interest of justice would best be served of the
defendants were allowed to file an action for quieting of title and the case he
ard jointly with the pending action for forcible entry. Finding merit in the arg
ument, the court ordered the defendant Cesario Adarne to file an action for quie
ting of title within one (1) week and the plaintiffs to answer the same within t
he reglementary period, after which both cases would be tried jointly. The heari
ng was deferred until after the filing of the action for quieting of title. 5
On June 17, 1965, the court declared the defendants in default for their failure
to appeal at the hearing set for that day and directed the plaintiffs to presen
t evidence to support their claim. 6 On September 17, 1965, the court rendered a
decision and a writ of execution was issued thereafter. 7
Because of this, Cesario Adarne filed the present complaint against the responde
nt Atty. Damian V. Aldaba on August 3, 1967, praying:
Dahil dito, isinusumbong ko po ang aking Abogado ng "Mal practice" pabaya at pah
amak sa kliente at sinisingil ko po siya ng pinsala katumbas sa sinisingil sa ki
n ng akin kalaban. O kaya lakarin niya na mapigil and decision ng Hukom sa C.F.I
. at ulitin and hearing sa Forcible Entry. Kung hindi niya magagawa ito, ipinauu
baya ko na po sa kataas taasan Hukoman and paglapat ng parusa. Sapagkat kung hin
di p susugpo-in and masamang gawa naito ng mga ibang abogado na nabibili, lalala
and sakit naito sa profession ng mga abogado, at lilikha ng maraming api, at ha
bang naghahari and pang-aapi, lalaganap and kriminalidad ng walang tigil, at wal
ang katahimikan ang ating Demukrasya, at kung magkakagayon ang mga mamamayan at
sapilitan sa kumunista sasamba.
The respondent denied that he ever had any agreement with the complainant with r
espect to the handling of the latter's case in the Court of First Instance of Le
yte, Carigara Branch, except for the "special appearance" that he entered for th
e complainant on August 7, 1961 and October 23, 1964, in view of the non-availab
ility of the complainant's lawyers on said dates.
The case referred to the Solicitor General for investigation, report and recomme
ndation, 8 after which a complaint for the disbarment of the respondent attorney
was filed. 9
The judgment by default rendered against the complainant cannot be attributed to
the respondent attorney. The blame lies with the complainant for having engaged
the services of several lawyers to handle his case without formally withdrawing
the authority he had given to them to appear in his behalf as to place the resp
onsibility upon the respondent. To add to the confusion, the complainant had als
o requested the clerk of court of the Court of First Instance of Leyte that he (
complainant) be furnished with summons and subpoena accorded to him. 10 He also
filed a motion by himself, 11 thus implying that he was handling his case person
ally.
It appears that there have been three changes made of the attorneys for the comp
lainant in the forcible entry case. The complainant was originally represented b
y Atty. Isauro Marmita who, upon his appointment to the Department of Labor, eng
aged Atty. de Veyra to take his place. 12 Then came Atty. Arturo Mirales and lat
er, Atty. Generoso Casimpan. However, no formalities whatever were observed in t
hose changes such that the respondent entered a "special appearance" for the com
plainant in order that he could ask for the dismissal of the case for the failur
e of the adverse party to prosecute. The rule followed on matters of substitutio
n of attorneys as laid down by this Court is that no substitution of attorneys w
ill be allowed unless there be filed: (1) a written application for such substit
ution; (2) the written consent of the client; (3) the written consent of the att
orney substituted; and (4) in case such written consent can not be secured, ther
e must be filed with the application proof of service of notice of such motion u
pon the attorney to be substituted, in the manner prescribed by the rules. Unles
s the foregoing formalities are complied with, substitution will not be permitte
d, and the attorney who properly appeared last in the cause, before such applica
tion for substitution, will be regarded as the attorney of record and will be he
ld responsible for the proper conduct of the cause. 13
Besides, the respondent honestly believed that he had appeared for the complaina
nt only for a special purpose and that the complainant had agreed to contact his
attorney of record to handle his case after the hearing of October 23, 1964, so
that he did nothing more about it. 14 It was neither gross negligence nor omiss
ion to have entertained such belief. An attorney is not bound to exercise extrao
rdinary diligence, but only a reasonable degree of care and skill, having refere
nce to the character of the business he undertakes to do. Prone to err like any
other human being, he is not answerable for every error or mistake, and will be
protected as long as he acts honestly and in good faith to the best of his skill
and knowledge.
It is well settled that in disbarment proceedings, the burden of proof rests upo
n the complainant and for the Court to exercise its disciplinary powers, the cas
e against the respondent attorney must be established by convincing proof. In th
e instant case, there is no sufficient proof to warrant the disbarment of the re
spondent attorney. Neither is there culpable malpractice to justify his suspensi
on.
WHEREFORE, the present administrative complaint is hereby DISMISSED.
SO ORDERED.

[A.C. No. 5835. April 15, 2005]

CARLOS B. REYES, complainant, vs. ATTY. JEREMIAS R. VITAN, respondent.
D E C I S I O N
SANDOVAL-GUTIERREZ, J.:
A lawyer shall serve his client with competence and diligence[1] and never negle
ct a legal matter entrusted to him and his negligence in connection therewith sh
all render him liable. Indeed, it is his sworn duty not to delay no man for mone
y or malice; and to conduct himself in a proper manner not only to his client, b
ut also to the court, the legal profession and society at large.[2]
This is an administrative complaint for disbarment filed by Carlos Reyes against
Atty. Jeremias Vitan for gross negligence.
The complaint alleges that sometime in June 2001, complainant Carlos Reyes hired
the services of respondent Atty. Jeremias Vitan for the purpose of filing the a
ppropriate complaint or charge against his sister-in-law, Estelita Reyes, and th
e latters niece, Julieta P. Alegonza; that both women refused to abide with the
Decision of Judge Juan C. Nabong, Jr., of the Regional Trial Court, Branch 32, M
anila, in Civil Case No. 99-92657 ordering the partition of the properties left
by complainants brother Damaso B. Reyes; and that respondent, after receiving th
e amount of P17,000.00, did not take any action on complainants case.
We referred the complaint to the Integrated Bar of the Philippines for investiga
tion, report and recommendation. IBP Commissioner Lydia A. Navarro issued severa
l orders to respondent directing him to file his answer to the complaint, but he
failed to do so. He only sent his secretary to represent him during the proceed
ings.
On April 18, 2001,[3] IBP Commissioner Navarro submitted to the IBP Board of Gov
ernors her Report and Recommendation quoted as follows:
x x x. After going over the evidence on record, the undersigned noted that respo
ndent ignored all the Orders issued by this Commission and neither did he comply
with any of those Orders. Respondent even failed to submit the responsive plead
ings he himself requested in his motion and only sent his assistant secretary to
represent him in the scheduled hearings of this case. Up to and until the prese
nt, no pleadings was submitted despite respondents allegations that he was colla
ting evidence to prove his side of the case.
It was complainant who submitted the supposed letters of the respondent Estelita
Reyes and Juliet Alegonza but there were no proofs when they sent and when the
same were received by the addressee.
Likewise, the complaint submitted by the complainant was only a format in the se
nse that it was not signed by the respondent; the RTC Branch No. was left blank;
there was no Civil Case No. and there was no proof that said pleading was filed
which amounts only to a mere scrap of paper and not a pleading or authenticated
document in the legal parlance.
As it is, nothing had been done by the respondent for the complainant as his cli
ent for the legal fees he collected which was paid by the complainant as reflect
ed in the receipts issued by the respondent in handwritten forms and signed by h
im.
Respondent not only violated Rule 18.03 and 18.04 of Cannon 18 of the Code of Pr
ofessional Responsibility for having neglected a legal matter entrusted to him a
nd did not inform complainant the status of his case but also disregarded the or
ders of the Commission without reasons which amounted to utter disrespect of aut
hority and unethical conduct in the practice of his profession, thus, should be
sanctioned.
Wherefore, in view of the foregoing, the undersigned respectfully recommends tha
t the respondent be suspended from the practice of his profession for a period o
f two (2) years from receipt hereof; and refund to the complainant the amount of
P17,000.00 paid to him for not having extended his legal services to the compla
inant on a lawyer-client relationship within six (6) months from receipt hereof.
On August 3, 2002, the IBP Board of Governors passed Resolution No. XV-2002-406
adopting and approving the above Report and Recommendation of IBP Commissioner N
avarro.
When respondent accepted the amount of P17,000.00 from complainant, it was under
stood that he agreed to take up the latters case and that an attorney-client rel
ationship between them was established. From then on, it was expected of him to
serve his client, herein complainant, with competence and attend to his cause wi
th fidelity, care and devotion.
The act of receiving money as acceptance fee for legal services in handling comp
lainants case and subsequently failing to render such services is a clear violat
ion of Canon 18 of the Code of Professional Responsibility which provides that a
lawyer shall serve his client with competence and diligence. More specifically,
Rule 18.03 states:
Rule 18.03. A lawyer shall not neglect a legal matter entrusted to him, and his
negligence in connection therewith shall render him liable.
A member of the legal profession owes his client entire devotion to his genuine
interest, warm zeal in the maintenance and defense of his rights.[4] An attorney
is expected to exert his best efforts and ability to preserve his clients cause
, for the unwavering loyalty displayed to his client likewise serves the ends of
justice. Verily, the entrusted privilege to practice law carries with it the co
rresponding duties, not only to the client, but also to the court, to the bar an
d to the public.
In Santos vs. Lazaro,[5] we held that Rule 18.03 of the Code of Professional Res
ponsibility, above-quoted, is a basic postulate in legal ethics. Indeed, when a
lawyer takes a clients cause, he covenants that he will exercise due diligence i
n protecting his rights. The failure to exercise that degree of vigilance and at
tention expected of a good father of a family makes such lawyer unworthy of the
trust reposed in him by his client and makes him answerable not just to his clie
nt but also to the legal profession, the courts and society.[6]
Significantly, respondent also violated his oath as a lawyer, which declares in
part, that he will not delay any man for money or malice and will conduct himsel
f as a lawyer according to the best of his knowledge and discretion, with all go
od fidelity as well to the courts as to his client.
However, the recommended penalty by the IBP is too harsh. Jurisprudence shows th
at lighter sanctions have been imposed for violations of this nature, taking int
o consideration the gravity of the offense and the necessity of preserving the i
ntegrity of the legal profession.
The facts of Sencio vs. Calvadores[7] bear a striking similarity to the present
case. Respondent lawyer in Sencio did not return the money to complainant despit
e demand following his failure to file the case. During the proceedings before t
he IBP, respondent did not file his answer to the complaint nor appeared during
the hearing notwithstanding his receipt of notices. We found him guilty of viola
tion of the lawyers oath, malpractice and gross misconduct and suspended him for
six (6) months, and ordered to return to his client the amount of P12,000.00 wi
th interest at 12% per annum from the date of the promulgation of our Resolution
until the return of the amount.
In Garcia vs. Manuel,[8] we suspended respondent lawyer from the practice of law
for six (6) months and ordered him to render an accounting of all monies he rec
eived from the complainant. We found him guilty of gross misconduct.
WHEREFORE, respondent Atty. Jeremias R. Vitan is hereby declared guilty of viola
tion of Canon 18 of the Code of Professional Responsibility and is SUSPENDED fro
m the practice of law for a period of six (6) months effective upon notice of th
is Decision. He is ordered to return to complainant within five (5) days from no
tice the sum of P17,000.00 with interest of 12% per annum from the date of the p
romulgation of this Decision until the full amount shall have been returned.
Let a copy of this Decision be furnished the Court Administrator for distributio
n to all courts of the land, the IBP, the Office of the Bar Confidant, and enter
ed into respondents personal records as an attorney and as a member of the Phili
ppine Bar.
SO ORDERED.

A.C. No. 4380 October 13, 1995

NICANOR GONZALES and SALUD B. PANTANOSAS, complainants,
vs.
ATTY. MIGUEL SABACAJAN, respondent.

REGALADO, J.:
This resolves the administrative case filed by Nicanor Gonzales and Salud B. Pan
tanosas against Atty. Miguel Sabacajan on February 14, 1995, 1 the verified comp
laint wherefor alleges:
xxx xxx xxx
4. That sometime in October, 1994, complainants were informed by the Regist
er of Deeds of Cagayan de Oro City that the complainants' owner's duplicate of t
itle covering their lands, Transfer Certificate of Title Nos. T-91736 and T-9173
5 were entrusted to the office secretary of the respondent who in torn entrusted
the same to respondent;
5. That respondent admitted and confirmed to the complainants that their ti
tles are in his custody and has even shown the same (to) the complainant Salud B
. Pantanosas but when demanded (sic) to deliver the said titles to the complaina
nt in a formal demand letter, marked as ANNEX "A," respondent refused and contin
ues to refuse without any justification to give their titles (and) when confront
ed, respondent challenged the complainants to file any case in any court even in
the Honorable Supreme Court;
6. That respondent's dare or challeng(e) is a manifestation of his arroganc
e taking undue advantage of his legal profession over the simplicity, innocence
and ignorance of the complainants, one of whom is his blood relative, his aunt,
for which complainants shudder with mental anguish;
7. That due to his challeng(e), the complainants sent a letter to the Honor
able Supreme Court for enlightenment, copy of which is attached as ANNEX "B", fo
r which the Honorable Supreme Court required 19 legible copies of a verified com
plaint;
8. That in spite of repeated demands, request(s) and pleas towards (sic) re
spondent, respondent still fail(ed) and stubbornly refused without justification
to surrender the said titles to the rightful owners, the complainants here(in),
which act is tantamount to willful and malicious defiance of legal and moral ob
ligations emanating from his professional capacity as a lawyer who had sworn to
uphold law and justice, to the prejudice and damage of the complainants; 2
xxx xxx xxx
On March 22, 1995, the Court required respondent to comment on the foregoing com
plaint. In his unverified "Answer" thereto, respondent admitted having met Salud
Pantanosas but claims that, to his recollection, "Nicanor Gonzales/Serdan" has
never been to his office. Respondent likewise denied that he challenged anyone t
o file a case in any court, much less the Supreme Court. He also claims that he
referred complainant Pantanosas to his client, Mr. Samto M. Uy of Iponan, Cagaya
n de Oro City, for whom he worked out the segregation of the titles, two of whic
h are the subject of the instant case. 3
Respondent likewise denies complainants' allegation that he is arrogant, in cont
rast to the innocence, simplicity and ignorance of said complainants. He contend
s that the truth of the matter is that complainants have been charged with a num
ber of criminal and civil complaints before different courts. He also asserts th
at he was holding the certificates of title in behalf of his client, Samto M. Uy
. 4
Atty. Sabacajan stresses, by way of defense, that "the instant action was chosen
precisely to browbeat him into delivering the Certificates of Title to them wit
hout said certificates passing the hands of Mr. Samto Uy with whom the complaina
nts have some monetary obligations." 5
In its resolution dated June 26, 1995, 6 for internal administrative purposes th
e Court referred this case to the Office of the Bar Confidant for the correspond
ing evaluation, report and recommendation.
From the foregoing proceedings taken on this matter, the Court finds that respon
dent admitted having taken possession of the certificates of title of complainan
ts but refused to surrender the same despite demands made by the latter. It foll
ows, therefore, that it was incumbent upon him to show that he was legally justi
fied in doing so. Instead, all he did was to inform this Court that "his obligat
ion to deliver the certificates to Mr. Samto Uy excludes the delivery of said ce
rtificates to anyone else." 7
Respondent attached some certifications to his "Answer" to support his contentio
n that complainants are notorious characters. However, the certifications indica
te that most of the cases stated therein, especially those involving fraud, have
been dismissed. With respect to those still pending, there is no indication as
to the identity of the party who instituted the same, aside from the considerati
on that the remedy thereon is judicial in nature. At any rate, these aspersions
on the character of complainants have no bearing on the misconduct of respondent
charged in the present case.
Respondent likewise submitted xerox copies of certain certificates of title in a
n effort to explain why he kept the certificates of title of complainants, that
is, supposedly for the purpose of subdividing the property. However, an examinat
ion of the same does not show any connection thereof to respondent's claim. In f
act, the two sets of certificates of title appear to be entirely different from
each other.
As a lawyer, respondent should know that there are lawful remedies provided by l
aw to protect the interests of his client. The records do not show that he or hi
s client have availed of said remedies, instead of merely resorting to unexplain
ed, if not curt, refusals to accommodate the requests of complainants. Also, he
cannot be unaware of the imposable sanctions on a counsel who resorts to unlawfu
l means that would cause injustice to the adversaries of his client.
The Court accordingly finds that respondent has not exercised the good faith and
diligence required of lawyers in handling the legal affairs of their clients. I
f complainants did have the alleged monetary obligations to his client, that doe
s not warrant his summarily confiscating their certificates of title since there
is no showing in the records that the same were given as collaterals to secure
the payment of a debt. Neither is there any intimation that there is a court ord
er authorizing him to take and retain custody of said certificates of title.
Apparently, respondent has disregarded Canon 15, Rule 15.07 of the Code of Profe
ssional Responsibility which provides that a lawyer shall impress upon his clien
t the need for compliance with the laws and principles of fairness. Instead, he
unjustly refused to give to complainants their certificates of titles supposedly
to enforce payment of their alleged financial obligations to his client and pre
sumably to impress the latter of his power to do so.
Canon 19, Rule 19.01 ordains that a lawyer shall employ only fair and honest mea
ns to attain the lawful objectives of his client and shall not present, particip
ate in presenting, or threaten to present unfounded charges to obtain an imprope
r advantage in any case or proceeding. Respondent has closely skirted this prosc
ription, if he has not in fact transgressed the same.
On the foregoing considerations, the Court desires and directs that respondent s
hould forthwith return the certificates of title of complainants. To ensure the
same, he should be placed under suspension until he presents to the Court proof
of receipt by complainants of their respective copies of Certificates of Title N
os. T-91735 and T-91736 or a judicial order or document authorizing or justifyin
g the retention of possession thereof by respondent or his aforenamed client.
WHEREFORE, Atty. Miguel Sabacajan is hereby SUSPENDED from the practice of law u
ntil he can duly show to this Court that the disputed certificates of title have
been returned to and the receipt thereof duly acknowledged by complainants, or
can present a judicial order or appropriate legal authority justifying the posse
ssion by him or his client of said certificates. He is further WARNED that a rep
etition of the same or similar or any other administrative misconduct will be pu
nished more severely.
Let a copy of this resolution be spread on the personal records of respondent an
d have copies thereof furnished to the Integrated Bar of the Philippines and dul
y circularized to all courts in the country.
SO ORDERED.

G.R. No. L-29184 January 30, 1989

BENEDICTO LEVISTE, petitioner,
vs.
THE COURT OF APPEALS, HON. JUDGE LUIS B. REYES, COURT OF FIRST INSTANCE OF MANIL
A, ROSA DEL ROSARIO, RITA BANU, CARMEN DE GUZMAN-MARQUEZ, JESUS R. DE GUZMAN, RA
MON R. DE GUZMAN, JACINTO R. DE GUZMAN and ANTONIO R. DE GUZMAN, respondents.
Benedicto Leviste for and in his own behalf.
Gatchalian, Ignacio & Associates for respondents de Guzman.
GRIO-AQUINO, J.:
The issue in this case is whether or not an attorney who was engaged on a contin
gent fee basis may, in order to collect his fees, prosecute an appeal despite hi
s client's refusal to appeal the decision of the trial court.
On September 7, 1963, the petitioner, a practicing attorney, entered into a writ
ten agreement with the private respondent Rosa del Rosario to appear as her coun
sel in a petition for probate of the holographic will of the late Maxima C. Rese
lva. Under the will, a piece of real property at Sales Street, Quiapo, Manila, w
as bequeathed to Del Rosario. It was agreed that petitioner's contigent fee woul
d be thirty-five per cent (35%) of the property that Rosa may receive upon the p
robate of the will (Annex "A", p. 59, Rollo).
In accordance with their agreement, Leviste performed the following services as
Del Rosario's counsel:
(1) Thoroughly researched and studied the law on probate and succession;
(2) Looked for and interviewed witnesses, and took their affidavits;
(3) Filed the petition for. probate is Special Proceeding No. 58325;
(4) Made the proper publications;
(5) Presented at the trial the following witnesses:
a) Eleuterio de Jesus
b) Lucita de Jesus
c) Purita L. Llanes
d) Rita Banu
e) Jesus Lulod.
On August 20, 1965, Leviste received a letter from Ms. Del Rosario, informing hi
m that she was terminating his services as her counsel due to "conflicting inter
est." This consisted, according to the letter, in petitioner's moral obligation
to protect the interest of his brother-in-law, Gaudencio M. Llanes, whom Del Ros
ario and the other parties in the probate proceeding intended to eject as lessee
of the property which was bequeathed to Del Rosario under the will (Annex "B",
p. 60, Rollo).
On September 20, 1965, petitioner filed a "Motion to Intervene to Protect His Ri
ghts to Fees for Professional Services." (Annex "B", p. 60, Rollo.)
In an order dated November 12, 1965 the trial court denied his motion on the gro
und that he had "not filed a claim for attorney's fees nor recorded his attorney
's lien." (p. 3, Rollo.)
On November 23, 1965, petitioner filed a "Formal Statement of Claim for Attorney
's Fees and Recording of Attorney's Lien,' which was noted in the court's order
of December 20, 1965 (Annexes "D" and "E", pp. 63 & 64, Rollo).
Although the order denying his motion to intervene had become final, petitioner
continued to receive copies of the court's orders, as well the pleadings of the
other parties in the case. He also continued to file pleadings. The case was sub
mitted for decision without the respondents' evidence.
On November 23, 1966, Del Rosario and Rita Banu, the special administratrix-lega
tee, filed a "Motion To Withdraw Petition for Probate" alleging that Del Rosario
waived her rights to the devise in her favor and agreed that the De Guzman brot
hers and sisters who opposed her petition for probate, shall inherit all the pro
perties left by the decedent. (Annex "F", p. 65, Rollo.)
In an order of April 13, 1967 the trial court denied the motion to withdraw the
petition for being contrary to public policy (Annex "G", pp. 66-67, Rollo).
Nonetheless, on August 28, 1967, the court disallowed the will, holding that the
legal requirements for its validity were not satisfied as only two witnesses te
stified that the will and the testatrix's signature were in the handwriting of M
axima Reselva.
The petitioner filed an appeal bond, notice of appeal, and record on appeal. The
private respondents filed a motion to dismiss the appeal on the ground that pet
itioner was not a party in interest.
The petitioner opposed the motion to dismiss his appeal, claiming that he has a
direct and material interest in the decision sought to be reviewed. He also aske
d that he be substituted as party-petitioner, in lieu of his former client, Ms.
Del Rosario.
On March 28, 1968, the trial judge dismissed the appeal and denied petitioner's
motion for substitution.
The petitioner filed in the Court of Appeals a petition for mandamus (CA-G.R. No
. 41248) praying that the trial court be ordered to give due course to his appea
l and to grant his motion for substitution.
On May 22, 1968, the Court of Appeals dismissed the petition for being insuffici
ent in form and substance as the petitioner did not appear to be the proper part
y to appeal the decision in Special Proceeding No. 58325 (Annex 1, p. 77, Rollo)
.
Upon the denial of his motion for reconsideration, petitioner appealed by certio
rari to this Court, assigning the following errors against the Court of Appeals'
resolution:
1. The Court of Appeals erred in finding that the petitioner appears not to be t
he proper party to appeal the decision in Sp. Proc. No. 58325 of the Court of Fi
rst Instance of Manila.
2. Assuming the petitioner's right of appeal is doubtful, the Court of Appeals e
rred in dismissing his petition for mandamus; and
3. The Court of Appeals erred in not reversing the decision in Sp. Proc. No. 583
25 denying the probate of the holographic will of the late Maxima C. Reselva, sa
id decision being patently erroneous.
Under his first assignment of error, petitioner argues that by virtue of his con
tract of services with Del Rosario, he is a creditor of the latter, and that und
er Article 1052 of the Civil Code which provides:
ART. 1052. If the heir repudiates the inheritance to the prejudice of his own cr
editors, the latter may petition the court to authorize them to accept it in the
name of the heir.
The acceptance shall benefit the creditors only to an extent sufficient to cover
the amount of their credits. The excess, should there be any, shall in no case
pertain to the renouncer, but shall be adjudicated to the persons to whom, in ac
cordance with the rules established in this Code, it may belong.
he has a right to accept for his client Del Rosario to the extent of 35% thereof
the devise in her favor (which she in effect repudiated) to protect his contige
nt attorney's fees.
The argument is devoid of merit. Article 1052 of the Civil Code does not apply t
o this case. That legal provision protects the creditor of a repudiating heir. P
etitioner is not a creditor of Rosa del Rosario. The payment of his fees is cont
ingent and dependent upon the successful probate of the holographic will. Since
the petition for probate was dismissed by the lower court, the contingency did n
ot occur. Attorney Leviste is not entitled to his fee.
Furthermore, Article 1052 presupposes that the obligor is an heir. Rosa del Rosa
rio is not a legal heir of the late Maxima C. Reselva. Upon the dismissal of her
petition for probate of the decedent's will, she lost her right to inherit any
part of the latter's estate. There is nothing for the petitioner to accept in he
r name.
This Court had ruled in the case of Recto vs. Harden, 100 Phil. 1427, that "the
contract (for contingent attorney's fees) neither gives, nor purports to give, t
o the appellee (lawyer) any right whatsoever, personal or real, in and to her (M
rs. Harden's) aforesaid share in the conjugal partnership. The amount thereof is
simply a basis for the computation of said fees."
The Court of Appeals did not err in dismissing the petition for mandamus, for wh
ile it is true that, as contended by the petitioner, public policy favors the pr
obate of a will, it does not necessarily follow that every will that is presente
d for probate, should be allowed. The law lays down procedures which should be o
bserved and requisites that should be satisfied before a will may be probated. T
hose procedures and requirements were not followed in this case resulting in the
disallowance of the will. There being no valid will, the motion to withdraw the
probate petition was inconsequential.
Petitioner was not a party to the probate proceeding in the lower court. He had
no direct interest in the probate of the will. His only interest in the estate i
s an indirect interest as former counsel for a prospective heir. In Paras vs. Na
rciso, 35 Phil. 244, We had occassion to rule that one who is only indirectly in
terested in a will may not interfere in its probate. Thus:
... the reason for the rule excluding strangers from contesting the will, is not
that thereby the court maybe prevented from learning facts which would justify
or necessitate a denial of probate, but rather that the courts and the litigants
should not be molested by the intervention in the proceedings of persons with n
o interest in the estate which would entitle them to be heard with relation ther
eto. (Paras vs. Narciso, 35 Phil. 244, 246.)
Similary, in Morente vs. Firmalino, 40 O.G. 21st Supp. 1, We held:
We are of the opinion that the lower court did not err in holding that notice of
an attorney's lien did not entitle the attorney-appellant to subrogate himself
in lieu of his client. It only gives him the right to collect a certain amount f
or his services in case his client is awarded a certain sum by the court.
WHEREFORE, the petition for certiorari is denied for lack of merit. Costs agains
t the petitioner.
SO ORDERED.

G.R. No. 91958 January 24, 1991

WILFREDO D. LICUDAN and CRISTINA LICUDAN-CAMPOS, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and ATTY. TEODORO O. DOMALANTA, respondents.
Arnold V. Guerrero & Associates for petitioners.
Teodoro O. Domalanta for and on his behalf as private respondent.

GUTIERREZ, JR., J.:

The practice of law is a profession rather than trade. Courts must guard against
the charging of unconscionable and excessive fees by lawyers for their services
when engaged as counsel. Whether or not the award of attorney's fees in this ca
se is reasonable, being in the nature of contingent fees, is the principal issue
.
This petition for review on certiorari assails:
1) The Decision of the public respondent dated September 12, 1989 which dis
missed the petitioners' appeal thereby upholding the reasonableness of the respo
ndent lawyer's lien as attorney's fees over the properties of his clients; and
2) The Resolution of the public respondent dated January 30, 1990 which den
ied the petitioners' motion for reconsideration.
The grounds relied upon by the petitioners are as follows:
The respondent Court, in upholding the entitlement of private respondent-attorne
y on the attorney's fees he claimed, decided the question in a manner not in acc
ord with law or with the applicable decisions of this Honorable Tribunal.
The respondent Court, in refusing to review and determine the propriety, reasona
bleness and validity of the attorney's fees claimed by the private respondent-at
torney, departed from the usual course of judicial proceedings.
The respondent Court, in failing to declare the attorney's fees claimed by the p
rivate respondent-attorney as unconscionable, excessive, unreasonable, immoral a
nd unethical, decided the question in a way not in accord with law and with appl
icable decisions of this Honorable Tribunal. (Petition, pp. 12-13; Rollo, pp. 16
-17)
The following are the antecedent facts pertinent to the case at bar:
The respondent lawyer was retained as counsel by his brother-in-law and sister,
the now deceased petitioners' parents, spouses Aurelio and Felicidad Licudan. Hi
s services as counsel pertained to two related civil cases docketed as Civil Cas
e No. Q-12254 for partition and Civil Case No. Q-28655 for a sum of money in con
nection with the redemption of the property subject matter of the two cases cove
red by Transfer Certificate of Title No. 818 of the Register of Deeds of Quezon
City. In both cases, the respondent lawyer obtained a judgment in favor of his c
lients.
On August 13,1979, the respondent lawyer filed a Petition for Attorney's Lien wi
th Notification to his Clients which substantially alleged that his clients exec
uted two written contracts for professional services in his favor which provided
that:
a) The undersigned counsel is entitled to own 97.5 square meters of the pla
intiff's share of the lot in question.
b) The undersigned counsel shall have a usufructuary right for a period of
ten (10) years of plaintiffs' share of the lot in question.
c) And that all damages accruing to plaintiffs to be paid by the defendant
is for the undersigned counsel.(Annex "H" of the Petition, Rollo, p. 54)
On September 19, 1979, the trial court handling Civil Case No. Q-12254 ordered t
he annotation at the back of TCT No. 818 of the Register of Deeds of Quezon City
of the respondent lawyer's Contract for Professional Services dated August 30,
1979 signed by petitioner Wilfredo Licudan and Aurelio Licudan on his own behalf
and on behalf of his daughter, petitioner Cristina Licudan-Campos. The said tri
al court's Order, being one of two Orders being essentially challenged in this p
etition, is reproduced below:
Before the court for consideration is a Petition for Attorney's Lien filed by At
ty. Teodoro D. Domalanta, counsel for the plaintiff, praying that his attorney's
fees be annotated as a lien at the back of Transfer Certificate of Title No. 81
8 of the Register of Deeds of Quezon City, subject matter of this case.
For the protection of the plaintiffs, the court required the plaintiff Aurelio L
icudan as well as his son to appear this morning. Plaintiff Aurelio Licudan toge
ther with his son Wilfredo Licudan, who appears to be intelligent and in fact he
speaks (the) English language well, appeared. Both Aurelio and Wilfredo Licudan
manifested that they have freely and voluntarily signed the Contract for Profes
sional Services, dated August 30, 1979 and notarized before Notary Public Amado
Garrovillas as Doc. No. 32, Page 8, Book No. XIX, Series of 1979.
Considering the manifestation of plaintiff, Aurelio Licudan and Alfredo (sic) Li
cudan that they have entered freely and voluntarily in the said contract of prof
essional services, let the same be annotated at the back of TCT 818 of the Regis
ter of Deeds of Quezon City, upon payment of the required legal fees. (CA Decisi
on, pp. 7-8; Rollo, pp. 36-37)
The Contract for Professional Services dated August 30, 1979 differs from the ea
rlier contractual provisions in that it entitled the respondent lawyer to one-th
ird (1/3) of the subject property or 90.5 square meters and provided for usufruc
tuary rights over the entire lot in question in favor of the respondent lawyer's
son, Teodoro M. Domalanta, Jr. for an agreed consideration. (Annex "J" of the P
etition; Rollo, p. 59)
On July 25, 1985, the respondent lawyer filed a motion ex parte to amend the Ord
er dated September 19, 1979 so as to conform with an additional professional fee
covering 31 square meters more of the lot for services rendered in Civil Case N
o. Q-28655 as evidenced by a Deed of Absolute Sale dated May 1, 1983 executed by
Aurelio Licudan in favor of the respondent lawyer.
On September 6, 1985, the trial court ordered the respondent lawyer to submit a
subdivision plan in conformity with his attorney's fees contract under which one
-third (1/3) of the property or 90.5 square meters was alloted to him.
On September 23, 1985, the respondent lawyer filed a motion for reconsideration
praying for the amendment of the Order dated September 19, 1979 to conform with
the Deed of Absolute Sale dated May 1, 1983 which was executed after the annotat
ion of the original attorney's lien of 90.5 square meters.
On September 30, 1985, the trial court denied the motion on the ground that the
respondent lawyer cannot collect attorney's fees for other cases in the action f
or partition.
On October 4, 1985, the respondent lawyer filed a second motion for reconsiderat
ion of the Order dated September 6, 1985 explaining that what he sought to be in
cluded in the Order dated September 19, 1979 is the additional attorney's fees f
or handling the redemption case which was but a mere offshoot of the partition c
ase and further manifesting that the additional 31 square meters as compensation
for the redemption case must be merged with the 90.5 square meters for the part
ition case to enable the said respondent lawyer to comply with the Order dated S
eptember 6,1985 which directed him to submit a subdivision plan as required.
On October 21, 1985, the trial court issued the second Order being assailed in t
his petition. The said Order reads:
Acting on the "Second Motion for Reconsideration" filed by Atty. Teodoro Domalan
ta and finding the same to be justified, let an attorney's lien be annotated in
the title of the property for 31 square meters as attorney's fees of said Atty.
Teodoro Domalanta in addition to the original 90.5 square meters. (CA Decision,
p. 8; Rollo, p. 37)
On August 22, 1986, more than ten (10) months after the Orders of September 6, 1
985 and October 21, 1985 had become final and executory, the petitioners as subs
tituted heirs of the respondent lawyers' deceased clients filed a motion to set
aside orders on the ground that the award of professional fees covering 121.5 sq
uare meters of the 271.5 square meter lot is unconscionable and excessive.
After the respondent lawyer filed his Opposition to the above petitioners' motio
n, the lower court, on August 29, 1986, finding that the petitioners as substitu
ted plaintiffs are not in full agreement with the respondent lawyer's claim for
attorney's fees, set aside its Orders dated September 6, 1985 and October 21, 19
85.
On September 16, 1986, the respondent lawyer filed a motion for reconsideration
stressing the fact that the payment of the professional services was pursuant to
a contract which could no longer be disturbed or set aside because it has alrea
dy been implemented and had since then become final. This motion was denied on O
ctober 3, 1986.
On November 15, 1986, the respondent lawyer filed a motion to set aside the orde
rs dated August 29, 1986 and October 3, 1986 reiterating his position that the O
rders of September 6, 1985 and October 21, 1985 have become final and are alread
y implemented. The respondent lawyer further asked for the modification of the O
ctober 21, 1985 Order to reflect 60.32 square meters instead of 31 square meters
only since the stipulation in the Additional Contract for Professional Services
entitled him to 60.32 square meters.
After the petitioners' Opposition to the said motion was filed, the trial court,
on February 26, 1987, rendered an Order with the following dispositive portion:
WHEREFORE, this Court has no alternative but to set aside its orders of 29 Augus
t 1986 and 3 October 1986 and declare its Orders of 19 September 1979 and 21 Oct
ober 1985 irrevocably final and executory. (CA Decision, p. 5; Rollo, p. 34)
On Appeal, the Court of Appeals ruled in favor of the respondent lawyer by dismi
ssing the appeal and the prayed for writ of preliminary injunction. Their subseq
uent motion for reconsideration having been denied', the petitioners filed the i
nstant petition.
The petitioners fault the respondent Court for its failure to exercise its inher
ent power to review and determine the propriety of the stipulated attorney's fee
s in favor of the respondent lawyer and accuse the respondent lawyer of having c
ommitted an unfair advantage or legal fraud by virtue of the Contract for Profes
sional Services devised by him after the trial court awarded him attorney's fees
for P1,000.00 only instead of respecting the trust and confidence of the highes
t level reposed on him considering the close blood and affinal relationship betw
een him and his clients.
The petitioners contend that under the award for professional services, they may
have won the case but would lose the entire property won in litigation to their
uncle-lawyer. They would be totally deprived of their house and lot and the rec
overed damages considering that of the 271.5 square meters of the subject lot, t
he respondent lawyer is claiming 121.5 square meters and the remaining portion o
f 150 square meters would also go to attorney's fees since the said portion pert
ains to the lawyer's son by way of usufruct for ten (10) years.
The aforesaid submissions by the petitioners merit our consideration.
It is a well-entrenched rule that attorney's fees may be claimed in the very act
ion in which the services in question have been rendered or as an incident of th
e main action. The fees may be properly adjudged after such litigation is termin
ated and the subject of recovery is at the disposition of the court. (see Camach
o v. Court of Appeals, 179 SCRA 604 [1989]; Quirante v. Intermediate Appellate C
ourt, 169 SCRA 769 [1989]).
It is an equally deeply-rooted rule that contingent fees are not per se prohibit
ed by law. They are sanctioned by Canon 13 of the Canons of Professional Ethics
and Canon 20, Rule 20.01 of the recently promulgated Code of Professional Respon
sibility. However, as we have held in the case of Tanhueco v. De Dumo (172 SCRA
760 [1989]):
. . . When it is shown that a contract for a contingent fee was obtained by undu
e influence exercised by the attorney upon his client or by any fraud or imposit
ion, or that the compensation is clearly excessive, the Court must and will prot
ect the aggrieved party. (Ulanday v. Manila Railroad Co., 45 Phil. 540 [1923]; G
rey v. Insular Lumber Co., 97 Phil. 833 [1955]).
In the case at bar, the respondent lawyer caused the annotation of his attorney'
s fees lien in the main action for partition docketed as Civil Case No. Q-12254
on the basis of a Contract for Professional Services dated August 30, 1979. We f
ind reversible error in the Court of Appeals' holding that:
When the reasonableness of the appellee's lien as attorney's fees over the prope
rties of his clients awarded to him by the trial court had not been questioned b
y the client, and the said orders had already become final and executory, the sa
me could no longer be disturbed, not even by the court which rendered them (Taada
v. Court of Appeals, 139 SCRA 419). (CA Decision p. 7; Rollo, p. 36)
On the contrary, we rule that the questioned Orders dated September 19, 1979 and
October 21, 1985 cannot become final as they pertain to a contract for a contin
gent fee which is always subject to the supervision of the Court with regard to
its reasonableness as unequivocally provided in Section 13 of the Canons of Prof
essional Ethics which reads:
13. Contingent Fees.
A contract for a contingent fee, where sanctioned by law, should be reasonable u
nder all the circumstances of the case including the risk and uncertainty of the
compensation, but should always be subject to the supervision of a court, as to
its reasonableness. (Emphasis supplied).
There is no dispute in the instant case that the attorney's fees claimed by the
respondent lawyer are in the nature of a contingent fee. There is nothing irregu
lar about the execution of a written contract for professional services even aft
er the termination of a case as long as it is based on a previous agreement on c
ontingent fees by the parties concerned and as long as the said contract does no
t contain stipulations which are contrary to law, good morals, good customs, pub
lic policy or public order.
Although the Contract for Professional Services dated August 30, 1979 was appare
ntly voluntarily signed by the late Aurelio Licudan for himself and on behalf of
his daughter, petitioner Cristina Licudan-Campos and by the petitioner Wilfredo
Licudan who both manifested in open court that they gave their free and willing
consent to the said contract we cannot allow the said contract to stand as the
law between the parties involved considering that the rule that in the presence
of a contract for professional services duly executed by the parties thereto, th
e same becomes the law between the said parties is not absolute but admits an ex
ception that the stipulations therein are not contrary to law, good morals, good c
ustoms, public policy or public order (see Philippine American Life Insurance Co
mpany v. Pineda, 175 SCRA 416 [1989]; Syjuco v. Court of Appeals, 172 SCRA 111 [
1989]).
Under Canon 20 of the Code of Professional Responsibility, a lawyer shall charge
only fair and reasonable fees.1wphi1 In determining whether or not the lawyer fe
es are fair and reasonable, Rule 20-01 of the same Code enumerates the factors t
o be considered in resolving the said issue. They are as follows:
a) The time spent and the extent of the services rendered or required;
b) The novelty and difficulty of the questions involved;
c) The importance of the subject matter;
d) The skill demanded;
e) The probability of losing other employment as a result of acceptance of
the proferred case;
f) The customary charges for similar services and the schedule of fees of t
he 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.
A similar provision is contained under Section 24, Rule 138 of the Revised Rules
of Court which partly states that:
Sec. 24. Compensation of attorneys; agreement as to fees. An attorney sha
ll be entitled to have and recover from his client no more than a reasonable com
pensation for his services, with a view to the importance of the subject matter
of the controversy, the extent of the services rendered, and the professional st
anding of the attorney. . . . A written contract for services shall control the
amount to be paid therefor unless found by the court to be unconscionable or unr
easonable.
All that the respondent lawyer handled for his deceased sister and brother-in-la
w was a simple case of partition which necessitated no special skill nor any unu
sual effort in its preparation. The subsequent case for redemption was admittedl
y but an offshot of the partition case. Considering the close blood and affinal
relationship between the respondent lawyer and his clients, there is no doubt th
at Atty. Domalanta took advantage of the situation to promote his own personal i
nterests instead of protecting the legal interests of his clients. A careful per
usal of the provisions of the contract for professional services in question rea
dily shows that what the petitioners won was a pyrrhic victory on account of the
fact that despite the successful turnout of the partition case, they are now pr
actically left with nothing of the whole subject lot won in the litigation. This
is because aside from the 121.5 square meters awarded to Atty. Domalanta as att
orney's fees, the said contract for professional services provides that the rema
ining portion shall pertain to the respondent lawyer's son by way of usufruct fo
r ten (10) years. There should never be an instance where a lawyer gets as attor
ney's fees the entire property involved in the litigation. It is unconscionable
for the victor in litigation to lose everything he won to the fees of his own la
wyer.
The respondent lawyer's argument that it is not he but his son Teodoro M. Domala
nta, Jr. who is claiming the usufructuary right over the remaining portion of th
e subject lot is inaccurate. The records show that the matter of usufruct is tie
d up with this case since the basis for the said usufructuary right is the contr
act for professional services the reasonableness of which is being questioned in
this petition. We find the ten-year usufruct over the subject lot part and parc
el of the attorney's fees being claimed by the respondent lawyer.
In resolving the issue of reasonableness of the attorney's fees, we uphold the t
ime-honoured legal maxim that a lawyer shall at all times uphold the integrity a
nd dignity of the legal profession so that his basic ideal becomes one of render
ing service and securing justice, not money-making. For the worst scenario that
can ever happen to a client is to lose the litigated property to his lawyer in w
hom an trust and confidence were bestowed at the very inception of the legal con
troversy. We find the Contract for Professional Services dated August 30, 1979,
unconscionable and unreasonable. The amount of P20,000.00 as attorney's fees, in
lieu of the 121.5 square meters awarded to the respondent lawyer and the ten-ye
ar usufructuary right over the remaining portion of 150 square meters by the res
pondent lawyer's son, is, in the opinion of this Court, commensurate to the serv
ices rendered by Atty. Domalanta.
WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is GRANTED. The Court
of Appeals' decision of September 12, 1989 is hereby REVERSED and SET ASIDE. Att
y. Domalanta is awarded reasonable attorney's fees in the amount of P20,000.00.
SO ORDERED.
A.M. No. 1388 March 28, 1980
ANA F. RETUYA, complainant,
vs.
ATTY. IEGO A. GORDUIZ, respondent.

AQUINO, J:
This disbarment case is linked to Administrative Case No. 1431-MJ which was file
d by Ana F. Retuya against Municipal Judge Paulo A. Equipilag of Maasin, Leyte a
nd which was decided on July 16, 1979 (Retuya vs. Equipilag). The facts of that
case, which also gave rise to this disbarment case, are as follows:
Ana F. Retuya, a widow with four minor children, filed a claim for workmen's com
pensation against Eastern Shipping Lines, Inc., the employer of her husband who
died in 1968. In a decision dated December 4, 1970 the Workmen's Compensation Un
it at Tacloban City awarded to Ana the sum of P8,792.10 consisting of (a) P6,000
as compensation benefits, (b) P2,292.10 for medical and hospitalization expense
s, (c) P200 as burial expenses and (d) P300 as attorney's fees of Atty. Iego Gord
uiz (Case No. 9728).
The employer appealed. During the pendency of the appeal, the employer proposed
to compromise the claim by paying P4,396.05 or only one-half of the total award.
Ana accepted the proposal and directed that the amount be remitted to Fiscal Ma
merto Daclan through the Philippine National Bank's branch at Maasin, Southern L
eyte.
The employer paid the reduced award on November 16, 1972. Ana sent to the employ
er the receipt and release signed by her with a covering letter dated December 1
9, 1972 wherein she explained that her lawyer, Gorduiz, did not sign the joint m
otion to dismiss the claim because he wanted twenty percent of the award as his
attorney's fees. She was willing to give him ten percent.
After she had cashed the check for P4,396.05, she was not able to contact Gordui
z and pay his fee. Then, unexpectedly, in February, 1973, she was served with a
warrant of arrest issued in Criminal Case No. R-2362 of the municipal court of M
aasin. To avoid detention, she had to post bail in the sum of one thousand pesos
.
It turned out that on January 12, 1973 Atty. Gorduiz executed an affidavit stati
ng that Ana had misappropriated his attorney's fees amounting to three hundred p
esos and that he had demanded payment of the amount from her but, she refused to
make payment and. instead, she went to Cebu and starved there for a long time.
On the basis of that affidavit, the acting chief of police filed against Ana a c
omplaint for estafa in the municipal court of Maasin. After posting bail, she fi
led a motion to quash wherein she explained that she did not pay the fees of Att
y. Gorduiz because he was demanding one-third of the award: that when she did no
t accede to his demand, he lowered his claim to eight hundred pesos, and that sh
e bargained for six hundred fifty pesos but he refused to accept that amount. An
a averred that the estafa case was filed just to harass her.
Judge Paulo A. Equipilag denied the motion to quash. He granted the motion of At
ty. Gorduiz requiring Ana to produce a copy of the decision awarding her workmen
's compensation for her husband's death.
The estafa case was not tried. Atty. Erasmo M. Diola, as lawyer of Ana, offered
to Atty. Gorduiz the sum of five hundred pesos as settlement of the case. The of
fer was accepted.
On November 22, 1973, the acting child of police filed a motion to dismiss the c
ase on the basis of the affidavit of Atty. Gorduiz ex. executed on that date sta
ting that the prosecution witnesses had allegedly become hostile and that he was
no longer interested in further prosecuting the case. Also, on that day, Judge
Equipilag dismissed the case.
In spite of the dismissal of the estafa case Ana F. Retuya felt aggrieved by the
proceedings therein. In a complaint dated July 24, 1974 but filed in this Court
on October 30, 1974, she asked for the disbarment or suspension of Atty. Gordui
z and Judge Equipilag. The disbarment case against Gorduiz was referred to the S
olicitor General.
The case against Judge Equipilag was investigated by the Judge of the Court of F
irst Instance of Southern Leyte.
This Court found that there was no justification for suspending respondent Judge
. However, he was admonished to be more prudent and circumspect in the discharge
of his duties so as to obviate the suspicion that, for an ulterior motive, he w
all in cahoots with the offended party in a criminal case for the purpose of usi
ng the strong arm of the law that the accused in an oppressive and vindictive ma
nner.
The Solicitor General asked the provincial fiscal of Southern Leyte to investiga
te the case against Gorduiz. The fiscal in her report of July 8, 1975 recommende
d the of the case.
The Solicitor General disagreeing with that recommendation, filed in this Court
against Gorduiz a complaint wherein he prayed that Gorduiz be suspended for six
months because the latter, in filing the estafa case, had promoted a groundless
suit against his client.
Ana F. Retuya testified before the investigation Fiscal that in December, 1972 s
he was willing to pay Gorduiz six hundred fifty pesos as his attorney's few but
he demanded a bigger amount.He lodged a complaint for estafa against her and was
arrests She had to post bail in the sum of one thousand pesos. As already state
d above, the estafa case was later dismissed when Ana paid Gorduiz sum of five h
undred pesos.
In his testimony before the investigating fiscal and this Court's legal officer,
respondent Gorduiz denied that he demanded as attorney's fees an amount higher
than three hundred pesos. He explained that he filed the estafa cam because afte
r Ana had received payment of the award, she did not turn over to him the attorn
ey's fees of three hundred pesos in spite of her promises to pay the same and hi
s demands for payment (Exh. 7 and 8).
Gorduiz declared that Ana filed the disbarment case against him in order that sh
e could evade the payment of his attorney's fees in the other cases which he had
handled for her. It was also possible that someone who had a score to settle wi
th Gorduiz had instigated the filing of this case against him.
He further declared that he filed the estafa case because he thought that Ana ha
d absconded when she stayed in Cebu City for a long time (23-24 tsn, June 26, 19
79). He claimed that he spent one hundred pesos of his own money in gathering ev
idence which was presented in the workmen's compensation case. He had also advan
ced around two hundred pesos to cover the expenses in the other cases which he h
ad handled for Ana.
After reflecting on the conflicting contentions of the parties, the Court finds
that there is justification for suspending the respondent.
Respondent acted precipitately in filing a criminal action against his client fo
r the supposed misappropriation of his attomey's fees. It is not altogether clea
r that his client had swindled him and, therefore, there is some basis for concl
uding that, contrary to his lawyer's oath, he had filed a suit against her and h
ad harassed and embarrassed her.
Paragraph 14 of the Canons of Legal Ethics prescribes that "controversies with c
lients concerning compensation are to be avoided by the lawyer so far as shall b
e compatible with his self- respect and with his right to receive reasonable rec
ompense for his services; and lawsuits with clients should be resorted to only t
o prevent injustice, imposition or fraud."
WHEREFORE, the respondent is from the practice of law for a period of six months
counted from notice of this decision. A copy of this decision should be attache
d to his record in the Bar Confidant's office.
SO ORDERED.

[A.C. No. 6210. December 9, 2004]

FEDERICO N. RAMOS, complainant, vs. ATTY. PATRICIO A. NGASEO, respondent.
D E C I S I O N
YNARES-SANTIAGO, J.:
This is a complaint for suspension of respondent Atty. Patricio A. Ngaseo for vi
olation of the Code of Professional Responsibility and Article 1491 of the Civil
Code by demanding from his client, complainant Federico N. Ramos, the delivery
of 1,000 square meters of land, a litigated property, as payment for his appeara
nce fees.
The facts as narrated by the complainant are as follows:
Sometime in 1998, complainant Federico Ramos went to respondent Atty. Patricio N
gaseos Makati office to engage his services as counsel in a case[1] involving a
piece of land in San Carlos, Pangasinan. Respondent agreed to handle the case fo
r an acceptance fee of P20,000.00, appearance fee of P1,000.00 per hearing and t
he cost of meals, transportation and other incidental expenses. Complainant alle
ges that he did not promise to pay the respondent 1,000 sq. m. of land as appear
ance fees.[2]
On September 16, 1999, complainant went to the respondents office to inquire abo
ut the status of the case. Respondent informed him that the decision was adverse
to them because a congressman exerted pressure upon the trial judge. Respondent
however assured him that they could still appeal the adverse judgment and asked
for the additional amount of P3,850.00 and another P2,000.00 on September 26, 2
000 as allowance for research made.[3]
Although an appeal was filed, complainant however charges the respondent of purp
osely failing to submit a copy of the summons and copy of the assailed decision.
Subsequently, complainant learned that the respondent filed the notice of appea
l 3 days after the lapse of the reglementary period.
On January 29, 2003, complainant received a demand-letter from the respondent as
king for the delivery of the 1,000 sq. m. piece of land which he allegedly promi
sed as payment for respondents appearance fee. In the same letter, respondent al
so threatened to file a case in court if the complainant would not confer with h
im and settle the matter within 30 days.
Respondent alleged that sometime in the late 1997, a former client, Federico Ram
os and his brother, Dionisio, went to his Makati office to engage his profession
al services in connection with a 2-hectare parcel of land situated in San Carlos
, Pangasinan which the complainants family lost 7 years earlier through an execu
tion sale in favor of one Alfredo T. Castro. Complainant, who was deaf and could
only speak conversational Tagalog haltingly, was assisted by his brother Dionis
io. They came all the way from Pangasinan because no lawyer in San Carlos City w
as willing to handle the case. Complainant, through Dionisio, avers that he has
consulted 2 local lawyers but did not engage their services because they were de
manding exorbitant fees. One local lawyer was willing to handle the case for at
least one-half of the land involved as his attorneys fee, plus cash expenses, wh
ile the other asked for of the land in addition to a large sum of money. Respond
ent agreed to handle the case for an acceptance fee of P60,000.00 plus an appear
ance fee of P3,000.00 per hearing. Complainant told him that he would consult hi
s siblings on the matter.
Six months later, i.e., in April 1998, complainant, assisted by one Jose Castill
o, went to respondents office to discuss the legal fees. Complainant, through Ca
stillo, told respondent that he was willing to pay an acceptance fee of P40,000.
00, P20,000.00 of which shall be paid upon engagement and the remaining P20,000.
00 to be paid after their treasure hunt operations in Nueva Viscaya were termina
ted. Further, complainant offered, in lieu of P3,000.00 per appearance, 1,000 sq
. m. of land from the land subject matter of the case, if they win, or from anot
her piece of property, if they lose. In addition, complainant also offered to de
fray the expenses for transportation, meals and other incidental expenses. Respo
ndent accepted the complainants offer.
Respondent claims that after the trial court dismissed Civil Case No. SCC 2128,
he filed a timely notice of appeal and thereafter moved to be discharged as coun
sel because he had colon cancer. Complainant, now assisted by one Johnny Ramos,
implored respondent to continue handling the case, with an offer to double the 1
,000 sq. m. piece of land earlier promised and the remaining balance of P20,000.
00 acceptance fee. Johnny Ramos made a written commitment and gave respondents s
ecretary P2,000.00 of the P3,850.00 expenses for the preparation of the appellan
ts brief.
On July 18, 2001, the Court of Appeals rendered a favorable decision ordering th
e return of the disputed 2-hectare land to the complainant and his siblings. The
said decision became final and executory on January 18, 2002. Since then compla
inant allegedly failed to contact respondent, which compelled him to send a dema
nd letter on January 29, 2003.
On February 14, 2003, complainant filed a complaint before the IBP charging his
former counsel, respondent Atty. Ngaseo, of violation of the Code of Professiona
l Responsibility for demanding the delivery of 1,000 sq. m. parcel of land which
was the subject of litigation.
In a report dated July 18, 2003, IBP Commissioner Rebecca Villanueva-Maala found
the respondent guilty of grave misconduct and conduct unbecoming of a lawyer in
violation of the Code of Professional Responsibility and recommended that he be
suspended from the practice of law for 1 year.[4]
On August 30, 2003, the IBP Board of Governors passed Resolution No. XVI-2003-47
the full text of which reads:[5]
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report
and Recommendation of the Investigating Commissioner of the above-entitled case,
herein made part of this Resolution/Decision as Annex A; and, finding the recom
mendation fully supported by the evidence on record and the applicable laws and
rules, with modification, and considering that respondent have violated the Code
of Professional Responsibility for grave misconduct and conduct unbecoming of a
lawyer Atty. Patricio A. Ngaseo is hereby SUSPENDED from the practice of law fo
r six (6) months.
On December 11, 2003, respondent filed a petition for review assailing IBP Resol
ution No. XVI-2003-47 for having been issued without or in excess of jurisdictio
n.[6]
Respondent argues that he did not violate Article 1491 of the Civil Code because
when he demanded the delivery of the 1,000 sq. m. of land which was offered and
promised to him in lieu of the appearance fees, the case has been terminated, w
hen the appellate court ordered the return of the 2-hectare parcel of land to th
e family of the complainant.
Respondent further contends that he can collect the unpaid appearance fee even w
ithout a written contract on the basis of the principle of quantum meruit. He cl
aims that his acceptance and appearance fees are reasonable because a Makati bas
ed legal practitioner, would not handle a case for an acceptance fee of only P20
,000.00 and P1,000.00 per court appearance.
Under Article 1491(5) of the Civil Code, lawyers are prohibited from acquiring e
ither by purchase or assignment the property or rights involved which are the ob
ject of the litigation in which they intervene by virtue of their profession.[7]
The prohibition on purchase is all embracing to include not only sales to priva
te individuals but also public or judicial sales. The rationale advanced for the
prohibition is that public policy disallows the transactions in view of the fid
uciary relationship involved, i.e., the relation of trust and confidence and the
peculiar control exercised by these persons.[8] It is founded on public policy
because, by virtue of his office, an attorney may easily take advantage of the c
redulity and ignorance of his client and unduly enrich himself at the expense of
his client.[9] However, the said prohibition applies only if the sale or assign
ment of the property takes place during the pendency of the litigation involving
the clients property. Consequently, where the property is acquired after the te
rmination of the case, no violation of paragraph 5, Article 1491 of the Civil Co
de attaches.
Invariably, in all cases where Article 1491 was violated, the illegal transactio
n was consummated with the actual transfer of the litigated property either by p
urchase or assignment in favor of the prohibited individual. In Biascan v. Lopez
, respondent was found guilty of serious misconduct and suspended for 6 months f
rom the practice of law when he registered a deed of assignment in his favor and
caused the transfer of title over the part of the estate despite pendency of Sp
ecial Proceedings No. 98037 involving the subject property.[10] In the consolida
ted administrative cases of Valencia v. Cabanting,[11] the Court suspended respo
ndent Atty. Arsenio Fer Cabanting for six (6) months from the practice of law wh
en he purchased his client's property which was still the subject of a pending c
ertiorari proceeding.
In the instant case, there was no actual acquisition of the property in litigati
on since the respondent only made a written demand for its delivery which the co
mplainant refused to comply. Mere demand for delivery of the litigated property
does not cause the transfer of ownership, hence, not a prohibited transaction wi
thin the contemplation of Article 1491. Even assuming arguendo that such demand
for delivery is unethical, respondents act does not fall within the purview of A
rticle 1491. The letter of demand dated January 29, 2003 was made long after the
judgment in Civil Case No. SCC-2128 became final and executory on January 18, 2
002.
We note that the report of the IBP Commissioner, as adopted by the IBP Board of
Governors in its Resolution No. XVI-2003-47, does not clearly specify which acts
of the respondent constitute gross misconduct or what provisions of the Code of
Professional Responsibility have been violated. We find the recommended penalty
of suspension for 6 months too harsh and not proportionate to the offense commi
tted by the respondent. The power to disbar or suspend must be exercised with gr
eat caution. Only in a clear case of misconduct that seriously affects the stand
ing and character of the lawyer as an officer of the Court and member of the bar
will disbarment or suspension be imposed as a penalty.[12] All considered, a re
primand is deemed sufficient and reasonable.
WHEREFORE, in view of the foregoing, respondent Atty. Patricio A. Ngaseo is foun
d guilty of conduct unbecoming a member of the legal profession in violation of
Rule 20.04 of Canon 20 of the Code of Professional Responsibility. He is REPRIMA
NDED with a warning that repetition of the same act will be dealt with more seve
rely.
SO ORDERED.

G.R. No. L-26096 February 27, 1979

THE DIRECTOR OF LANDS, petitioner,
vs.
SILVERETRA ABABA, ET AL., claimants, JUAN LARRAZABAL, MARTA C. DE LARRAZABAL, MA
XIMO ABAROQUEZ and ANASTACIA CABIGAS, petitioners-appellants, ALBERTO FERNANDEZ,
adverse claimant-appellee.
Juanito Ll. Abao for petitioners-appellants.
Alberto R Fernandez in his own behalf.

MAKASIAR, J.:
This is an appeal from the order of the Court of First Instance of Cebu dated Ma
rch 19, 1966 denying the petition for the cancellation of an adverse claim regis
tered by the adverse claimant on the transfer certificate of title of the petiti
oners.
The adverse claimant, Atty. Alberto B. Fernandez was retained as counsel by peti
tioner, Maximo Abarquez, in Civil Case No. R-6573 of the Court of First Instance
of Cebu, entitled "Maximo Abarquez vs. Agripina Abarquez", for the annulment of
a contract of sale with right of repurchase and for the recovery of the land wh
ich was the subject matter thereof. The Court of First Instance of Cebu rendered
a decision on May 29, 1961 adverse to the petitioner and so he appealed to the
Court of Appeals.
Litigating as a pauper in the lower court and engaging the services of his lawye
r on a contingent basis, petitioner, liable to compensate his lawyer whom he als
o retained for his appeal executed a document on June 10, 1961 in the Cebuano-Vi
sayan dialect whereby he obliged himself to give to his lawyer one-half (1/2) of
whatever he might recover from Lots 5600 and 5602 should the appeal prosper. Th
e contents of the document as translated are as follows:
AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
That I, MAXIMO ABARQUEZ, Plaintiff in Case No. R-6573 of the Court of First Inst
ance of Cebu, make known through this agreement that for the services rendered b
y Atty. Alberto B. Fernandez who is my lawyer in this case, if the appeal is won
up to the Supreme Court, I Promise and will guarantee that I win give to said l
awyer one-half (1/2) of what I may recover from the estate of my father in Lots
No. 5600 and 5602 which are located at Bulacao Pardo, City of Cebu. That with re
spect to any money which may be adjudged to me from Agripina Abarquez, except 'A
ttorney's Fees', the same shall pertain to me and not to said lawyer.
IN WITNESS WHEREOF, I have caused my right thumb. mark to be affixed hereto this
10th of June, 1961, at the City of Cebu.
THUMBMARK
MAXIMO ABARQUEZ
(p. 5, Petitioner-Appellant's Brief, p. 26, rec.)
The real Property sought to be recovered in Civil Case No. R6573 was actually th
e share of the petitioner in Lots 5600 and 5602, which were part of the estate o
f his deceased parents and which were partitioned the heirs which included petit
ioner Maximo Abarquez and his elder sister Agripina Abarquez, the defendant in s
aid civil case.
This partition was made pursuant to a project of partition approved by the Court
which provided am other that Lots Nos. 5600 and 5602 were to be divided into th
ree equal Parts, one third of which shall be given to Maximo Abarquez. However,
Agripina Abarquez the share of her brother stating that the latter executed an i
nstrument of pacto de retro prior to the partition conveying to her any or all r
ights in the estate of their parents. Petitioner discovered later that the claim
of his sister over his share was based on an instrument he was believe all alon
g to be a mere acknowledgment of the receipt of P700.00 which his sister gave to
him as a consideration for g care of their father during the latter's illness a
nd never an instrument of pacto de retro. Hence, he instituted an action to annu
l the alleged instrument of pacto de retro.
The Court of Appeals in a decision promulgated on August 27, 1963 reversed the d
ecision of the lower court and annulled the dead of pacto de retro. Appellee Agr
ipina Abarquez filed a motion for reconsideration but the same was denied in a r
esolution dated January 7, 1964 (p. 66, Record on Appeal; p. 13, Rec.) and the j
udgment became final and executory on January 22,1964.
Subsequently, Transfer Certificate of Title No. 31841 was issued on May 19,1965
in the name of Maximo Abarquez, married to Anastacia Cabigas, over his adjudged
share in Lots Nos. 5600 and 5602 containing an area of 4,085 square meters (p. 1
10, ROA; p. 13, rec.). These parcels of land later by the subject matter of the
adverse claim filed by the claimant.
The case having been resolved and title having been issued to petitioner, advers
e claimant waited for petitioner to comply with ha obligation under the document
executed by him on June 10, 1961 by delivering the one-half () portion of the sa
id parcels of land.
Petitioner refused to comply with his obligation and instead offered to sell the
whole parcels of land covered by TCT No. 31841 to petitioner-spouses Juan Larra
zabal and Marta C. de Larrazabal. Upon being informed of the intention of the pe
titioner, adverse t claimant immediately took stops to protect his interest by f
iling with the trial court a motion to annotate Ins attorney's lien on TCT No. 3
1841 on June 10, 1965 and by notifying the prospective buyers of his claim over
the one-half portion of the parcels of land.
Realizing later that the motion to annotate attorney's lien was a wrong remedy,
as it was not within the purview of Section 37, rule 138 of the Revised Rule of
Court, but before the same was by the trial court, adverse t by an affidavit of
adverse claim on July 19, 1965 with the Register of Deeds of Cebu (p. 14, ROA; p
. 13, rec.). By virtue of the petition of mid affidavit the adverse claim for on
e-half () of the lots covered by the June 10, 1961 document was annotated on TCT
No. 31841.
Notwithstanding the annotation of the adverse claim, petitioner-spouse Maximo Ab
arquez and Anastacia Cabigas conveyed by deed of absolute sale on July 29, 1965
two-thirds (2/3) of the lands covered by TCT No. 31841 to petitioner-spouses Jua
n Larrazabal and Marta C. de Larrazabal. When the new transfer certificate of ti
tle No. 32996 was issued, the annotation of adverse claim on TCT No. 31841 neces
sarily had to appear on the new transfer certificate of title. This adverse clai
m on TCT No. 32996 became the subject of cancellation proceedings filed by herei
n petitioner-spouses on March 7, 1966 with the Court of First Instance of Cebu (
p. 2 ROA; p. 13, rec.). The adverse claimant, Atty. Alberto B. Fernandez, filed
his opposition to the petition for cancellation on March 18, 1966 (p. 20, ROA; p
. 13 rec.). The trial court resolved the issue on March 19, 1966, when it declar
ed that:
...the petition to cancel the adverse claim should be denied. The admission by t
he petitioners that the lawyers (Attys. Fernandez and Batiguin) are entitled to
only one-third of the lot described in Transfer Certificate of Title No. 32966 i
s the best proof of the authority to maintain said adverse claim (p. 57, ROA; p.
13, rec.).
Petitioner-spouses decided to appeal the order of dismissal to this Court and co
rrespondingly filed the notice of appeal on April 1, 1966 with the trial court.
On April 2, 1966, petitioner-spouses filed the appeal bond and subsequently file
d the record on appeal on April 6, 1966. The records of the case were forwarded
to this Court through the Land Registration Commission of Manila and were receiv
ed by this Court on May 5, 1966.
Counsel for the petitioner-spouses filed the printed record on appeal on July 12
, 1966. Required to file the appellants' brief, counsel filed one on August 29,
1966 while that of the appellee was filed on October 1, 1966 after having been g
ranted an extension to file his brief.
The case was submitted for decision on December 1, 1966. Counsel for the petitio
ners filed a motion to expunge appellees' brief on December 8, 1966 for having b
een filed beyond the reglementary period, but the same was denied by this Court
in a resolution dated February 13, 1967.
The pivotal issue to be resolved in the instant case is the validity or nullity
of the registration of the adverse claim of Atty. Fernandez, resolution of which
in turn hinges on the question of whether or not the contract for a contingent
fee, basis of the interest of Atty. Fernandez, is prohibited by the Article 1491
of the New Civil Code and Canon 13 of the Canons of Professional Ethics.
Petitioners contend that a contract for a contingent fee violates Article 1491 b
ecause it involves an assignment of a property subject of litigation. That artic
le provides:
Article 1491. The following persons cannot acquire by purchase even at a publi
c or judicial auction, either in person or through the petition of another.
xxx xxx xxx
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior
and other o and employees connected with the administration of justice, the pro
perty and rights in litigation or levied upon an execution before the court with
in whose jurisdiction or territory they exercise their respective functions; thi
s prohibition includes the act of acquiring by assignment and shall apply to law
yers, with respect to the property and rights which may be the object of any lit
igation in which they may take part by virtue of their profession (Emphasis supp
lied).
This contention is without merit. Article 1491 prohibits only the sale or assign
ment between the lawyer and his client, of property which is the subject of liti
gation. As WE have already stated. "The prohibition in said article a only to ap
plies stated: " The prohibition in said article applies only to a sale or assign
ment to the lawyer by his client of the property which is the subject of litigat
ion. In other words, for the prohibition to operate, the sale or t of the proper
ty must take place during the pendency of the litigation involving the property"
(Rosario Vda. de Laig vs. Court of Appeals, et al., L-26882, November 21, 1978)
.
Likewise, under American Law, the prohibition does not apply to "cases where aft
er completion of litigation the lawyer accepts on account of his fee, an interes
t the assets realized by the litigation" (Drinker, Henry S., Legal Ethics, p. 10
0 [1953], citing App. A, 280; N.Y. Ciu 714). "There is a clear distraction betwe
en such cases and one in which the lawyer speculates on the outcome of the matte
r in which he is employed" (Drinker, supra, p. 100 citing A.B.A. Op. 279).
A contract for a contingent fee is not covered by Article 1491 because the tranf
er or assignment of the property in litigation takes effect only after the final
ity of a favorable judgment. In the instant case, the attorney's fees of Atty. F
ernandez, consisting of one-half (1/2) of whatever Maximo Abarquez might recover
from his share in the lots in question, is contingent upon the success of the a
ppeal. Hence, the payment of the attorney's fees, that is, the transfer or assig
nment of one-half (1/2) of the property in litigation will take place only if th
e appeal prospers. Therefore, the tranfer actually takes effect after the finali
ty of a favorable judgment rendered on appeal and not during the pendency of the
litigation involving the property in question. Consequently, the contract for a
contingent fee is not covered by Article 1491.
While Spanish civilists differ in their views on the above issue whether or not
a contingent fee contract (quota litis agreement) is covered by Article 1491 wit
h Manresa advancing that it is covered, thus:
Se ha discutido si en la incapacidad de Ion Procumdam y Abogados asta o el pecto
de quota litis. Consiste este, como es sabido, en la estipulacion de que el Abo
gado o el Procurador ban de hacer suyos una parte alicuota de In cona que se li
m la son es favorable. Con es te concepto a la vista, es para nosortros que el a
rticulo que comentamos no menciona ese pacto; pero como la incapacidad de los Ab
ogados y Procuradores se extinede al acto de adquirir por cesion; y la efectivid
ad del pacto de quota litis implica necesariamente una cesion, estimamos que con
solo el num. 5 del articulo 1459 podria con exito la nulidad de ese pacto tradi
cionalmente considerado como ilicito.
xxx xxx xxx
Debe tenerse tambien en cuenta, respecto del ultimo parrafo del articulo 1459, l
a sentencia del Tribunal Supreme de 25 Enero de 1902, que delcara que si bien el
procurador no puede adquirir para si los bienes, en cuanto a los cuales tiene i
ncapacidad, puede adquirirlos para otra persona en quien no concurra incapacidad
alguna (Manresa, Comentarios al Codigo Civil Espaol, Tomo X, p. 110 [4a ed., 193
1] emphasis supplied).
Castan, maintaining that it is not covered, opines thus;
C. Prohibiciones impuestas a las personas encargadas, mas o menos directame
nte, de la administracion de justicia. El mismo art. 1,459 del Codigo civil prohib
e a los Magistrados, Jueces, individuos del Minesterio fiscal, Secretarios de Tr
ibunales y Juzgados y Oficiales de Justicia adquirir por compra (aunque sea en s
ubasta publica o judicial, por si ni por persona alguna intermedia). 'Los bienes
y derechos que estuviesen en litigio ante el Tribunal en cuya jurisdicion on te
ritorio ejercieran sus respectivas funciones, extendiendo se esta prohibicion al
acto de adquirir por cesion', y siendo tambien extensiva ' Alos Abogados y Proc
uradores respecto a los bienes y derecho que fueran objeto del un litigio en que
intervengan pos su profession y oficio.'
El fundamento de esta prohibicion es clarismo. No solo se trata dice Manresa de quit
ar la ocasion al fraude; persiguese, ademas, el proposito de rodear a las person
as que intervienen en la administracion de justicia de todos los prestigios que
necesitan para ejercer su ministerio, librando los de toda sospecha, que, aunque
fuere infundada, redundaria en descredito de la institucion.
Por no dor lugar a recelos de ninguna clase, admite el Codigo (en el apartado pe
nutimo del art. 1.459) algunos casos en que, por excepcion, no se aplica el pric
ipio prohibitivo de que venimos hablando. Tales son los de que se trate de accio
nes hereditarias entre coheredero, de cesion en pago de creditos, o de garantia
de los bienes que posean los funcionarios de justicia.
Algunos autores (Goyena, Manresa, Valverde) creen que en la prohibicion del art.
1.459 esta comprendido el pacto de quota litis (o sea el convenio por el cual s
e concede al Abogado o Procurador, para el caso de obtener sentencia favorable u
na parte alicuota de la cosa o cantidad que se litiga), porque dicho pacto supon
e la venta o cesion de una parte de la cosa o drecho que es objecto del litigio.
 Pero Mucius Scaevola oberva, conrazon, que en el repetido pacto no hay propiame
nte caso de compraventa ni de cesion de derechos, y bastan para estimario nulo o
tros preceptos del Codigo como los relativos a la ilicitud de la causa (Castan,
Derecho Civil Espol, Tomo 4, pp. 68-69, [9a ed., 1956], emphasis supplied).
The Supreme Court of Spain, in its sentencia of 12 November 1917, has ruled that
Article 1459 of the Spanish Civil Code (Article 1491 of our Civil Code) does no
t apply to a contract for a contingent fee because it is not contrary to morals
or to law, holding that:
... que no es susceptible de aplicarse el precepto contenido en el num. 5 del ar
t. 1.459 a un contrato en el que se restrigen los honorarios de un Abogado a un
tanto por ciento de lo que se obtuviera en el litigio, cosa no repudiada por la
moral ni por la ley (Tolentino, Civil Code of the Philippines, p. 35, Vol. V [19
59]; Castan, supra; Manresa, supra).
In the Philippines, among the Filipino commentators, only Justice Capistrano ven
tured to state his view on the said issue, thus:
The incapacity to purchase or acquire by assignment, which the law also extends
to lawyers with t to the property and rights which may be the object of any liti
gation in which they may take part by virtue of their profession, also covers co
ntracts for professional services quota litis. Such contracts, however, have bee
n declared valid by the Supreme Court" (Capistrano, Civil Code of the Philippine
s, p. 44, Vol. IV [1951]).
Dr. Tolentino merely restated the views of Castan and Manresa as well as the sta
te of jurisprudence in Spain, as follows:
Attorneys-at-law Some writers, like Goyena, Manresa and Valverde believe that this
article covers quota litis agreements, under which a lawyer is to be given an a
liquot part of the property or amount in litigation if he should win the case fo
r his client. Scaevola and Castan, however, believe that such a contract does no
t involve a sale or assignment of right but it may be void under other articles
of the Code, such as those referring to illicit cause- On the other hand the Spa
nish Supreme Court has held that this article is not applicable to a contract wh
ich limits the fees of a lawyer to a certain percentage of what may be recovered
in litigation, as this is not contrary to moral or to law. (Tolentino, Civil Co
de of the Philippines, p. 35, Vol. V [1959]; Castan, supra, Emphasis supplied).
Petitioners her contend that a contract for a contingent fee violates the Canons
of Professional Ethics. this is likewise without merit This posture of petition
ers overlooked Canon 13 of the Canons which expressly contingent fees by way of
exception to Canon 10 upon which petitioners relied. For while Canon 10 prohibit
s a lawyer from purchasing ...any interest in the subject matter of the litigati
on which he is conducting", Canon 13, on the other hand, allowed a reasonable co
ntingent fee contract, thus: "A contract for a con. tangent fee where sanctioned
by law, should be reasonable under all the circumstances of the ca including th
e risk and uncertainty of the compensation, but should always be subject to the
supervision of a court, as to its reasonableness." As pointed out by an authorit
y on Legal Ethics:
Every lawyer is intensely interested in the successful outcome of his case, not
only as affecting his reputation, but also his compensation. Canon 13 specifical
ly permits the lawyer to contract for a con tangent fee which of itself, negativ
es the thought that the Canons preclude the lawyer's having a stake in his litig
ation. As pointed out by Professor Cheatham on page 170 n. of his Case Book, the
re is an inescapable conflict of interest between lawyer and client in the matte
r of fees. Nor despite some statements to the con in Committee opinions, is it b
elieved that, particularly in view of Canon 13, Canon 10 precludes in every case
 an arrangement to make the lawyer's fee payable only out of the results of the
litigation. The distinction is between buying an interest in the litigation as a
speculation which Canon 10 condemns and agreeing, in a case which the lawyer un
dertakes primarily in his professional capacity, to accept his compensation cont
ingent on the outcome (Drinker, Henry S Legal Ethics, p. 99, [1953], Emphasis su
pplied).
These Canons of Professional Ethics have already received "judicial recognition
by being cited and applied by the Supreme Court of the Philippines in its opinio
n" Malcolm, Legal and Judicial Ethics, p. 9 [1949]). And they have likewise been
considered sources of Legal Ethics. More importantly, the American Bar Associat
ion, through Chairman Howe of the Ethics Committee, opined that "The Canons of P
rofessional Ethics are legislative expressions of professional opinion ABA Op. 3
7 [1912])" [See footnote 25, Drinker, Legal Ethics, p. 27]. Therefore, the Canon
s have some binding effect
Likewise, it must be noted that this Court has already recognized this type of a
contract as early as the case of Ulanday vs. Manila Railroad Co. (45 PhiL 540 [
1923]), where WE held that "contingent fees are not prohibited in the Philippine
s, and since impliedly sanctioned by law 'Should be under the supervision of the
court in order that clients may be protected from unjust charges' (Canons of Pr
ofession 1 Ethics)". The same doctrine was subsequently reiterated in Grey vs. I
nsular Lumber Co. (97 PhiL 833 [1955]) and Recto vs. Harden (100 PhiL 427 [1956]
).
In the 1967 case of Albano vs. Ramos (20 SCRA 171 [19671), the attorney was allo
wed to recover in a separate action her attomey's fee of one-third (1/3) of the
lands and damages recovered as stipulated in the contingent fee contract. And th
is Court in the recent case of Rosario Vda de Laig vs. Court of Appeals, et al.
(supra), which involved a contingent fee of one-half () of the property in questi
on, held than ,contingent fees are recognized in this i jurisdiction (Canon 13 o
f the Canons of Professional Ethics adopted by the Philippine Bar association in
1917 [Appendix B, Revised Rules of Court)), which contingent fees may be a port
ion of the property in litigation."
Contracts of this nature are permitted because they redound to the benefit of th
e poor client and the lawyer "especially in cases where the client has meritorio
us cause of action, but no means with which to pay for legal services unless he
can, with the sanction of law, make a contract for a contingent fee to be paid o
ut of the proceeds of the litigation" (Francisco, Legal Ethics, p. 294 [1949], c
iting Lipscomb vs. Adams 91 S.W. 1046, 1048 [1949]). Oftentimes, contingent fees
are the only means by which the poor and helpless can redress for injuries sust
ained and have their rights vindicated. Thus:
The reason for allowing compensation for professional services based on continge
nt fees is that if a person could not secure counsel by a promise of large fees
in case of success, to be derived from the subject matter of the suit, it would
often place the poor in such a condition as to amount to a practical denial of j
ustice. It not infrequently happens that person are injured through the negligen
ce or willful misconduct of others, but by reason of poverty are unable to emplo
y counsel to assert their rights. In such event their only means of redress lies
in gratuitous service, which is rarely given, or in their ability to find some
one who will conduct the case for a contingent fee. That relations of this king
are often abused by speculative attorneys or that suits of this character are tu
rned into a sort of commercial traffic by the lawyer, does not destroy the benef
icial result to one who is so poor to employ counsel (id, at p. 293, citing Warv
elle, Legal Ethics, p. 92, Emphasis supplied).
Justice George Malcolm, writing on contingent fees, also stated that:
... the system of contingent compensation has the merit of affording to certain
classes of persons the opportunity to procure the prosecution of their claims wh
ich otherwise would be beyond their means. In many cases in the United States an
d the Philippines, the contingent fee is socially necessary (Malcolm, Legal and
Judicial Ethics, p. 55 [1949], emphasis supplied).
Stressing further the importance of contingent fees, Professor Max Radin of the
University of California, said that:
The contingent fee certainly increases the possibility that vexatious and unfoun
ded suits will be brought. On the other hand, it makes possible the enforcement
of legitimate claims which otherwise would be abandoned because of the poverty o
f the claimants. Of these two possibilities, the social advantage seems clearly
on the side of the contingent fee. It may in fact be added by way of reply to th
e first objection that vexations and unfounded suits have been brought by men wh
o could and did pay substantial attorney's fees for that purpose (Radin, Conting
ent Fees in California, 28 Cal. L. Rev. 587, 589 [1940], emphasis supplied).
Finally, a contingent fee contract is always subject to the supervision of the c
ourts with respect to the stipulated amount and may be reduced or nullified. So
that in the event that there is any undue influence or fraud in the execution of
the contract or that the fee is excessive, the client is not without remedy bec
ause the court will amply protect him. As held in the case of Grey vs. Insular L
umber Co., supra, citing the case of Ulanday vs. Manila Railroad Co., supra:
Where it is shown that the contract for a contingent fee was obtained by any und
ue influence of the attorney over the client, or by any fraud or imposition, or
that the compensation is so clearly excessive as to amount to extortion, the cou
rt win in a proper case protect the aggrieved party.
In the present case, there is no iota of proof to show that Atty. Fernandez had
exerted any undue influence or had Perpetrated fraud on, or had in any manner ta
ken advantage of his client, Maximo Abarquez. And, the compensation of one-half
of the lots in question is not excessive nor unconscionable considering the cont
ingent nature of the attorney's fees.
With these considerations, WE find that the contract for a contingent fee in que
stion is not violative of the Canons of Professional Ethics. Consequently, both
under the provisions of Article 1491 and Canons 10 and 13 of the Canons of Profe
ssion Ethics, a contract for a contingent fee is valid
In resolving now the issue of the validity or nullity for the registration of th
e adverse claim, Section 110 of the Land Registration Act (Act 496) should be co
nsidered. Under d section, an adverse claim may be registered only by..
Whoever claims any part or interest in registered land adverse to the registered
owner, arising subsequent to the date of the o registration ... if no other pro
vision is made in this Act for registering the same ...
The contract for a contingent fee, being valid, vested in Atty Fernandez an inte
rest or right over the lots in question to the extent of one-half thereof. Said
interest became vested in Atty. Fernandez after the case was won on appeal becau
se only then did the assignment of the one-half () portion of the lots in questio
n became effective and binding. So that when he filed his affidavit of adverse c
laim his interest was already an existing one. There was therefore a valid inter
est in the lots to be registered in favor of Atty. Fernandez adverse to Mo Abarq
uez.
Moreover, the interest or claim of Atty. Fernandez in the lots in question arose
long after the original petition which took place many years ago. And, there is
 no other provision of the Land Registration Act under which the interest or cla
im may be registered except as an adverse claim under Section 110 thereof. The i
nterest or claim cannot be registered as an attorney's charging lien. The lower
court was correct in denying the motion to annotate the attomey's lien. A chargi
ng lien under Section 37, Rule 138 of the Revised Rules of Court is limited only
to money judgments and not to judgments for the annulment of a contract or for
delivery of real property as in the instant case. Said Section provides that:
Section 37. An attorney shall have a lien upon the funds, documents and pape
rs of his client which have lawfully come into his oppossession and may retain t
he same until his lawful fees and disbursements have been paid, and may apply su
ch funds to the satisfaction thereof. He shall also have a lien to the same exte
nt upon all judgments, for the payment of money, and executions issued in pursua
nce of such judgments, which he has secured in a litigation of his client ... (e
mphasis supplied).
Therefore, as an interest in registered land, the only adequate remedy open to A
tty. Fernandez is to register such interest as an adverse claim. Consequently, t
here being a substantial compliance with Section 110 of Act 496, the registratio
n of the adverse claim is held to be valid. Being valid, its registration should
not be cancelled because as WE have already stated, "it is only when such claim
is found unmeritorious that the registration thereof may be cancelled" (Paz Ty
Sin Tei vs. Jose Lee Dy Piao 103 Phil. 867 [1958]).
The one-half () interest of Atty. Fernandez in the lots in question should theref
ore be respected. Indeed, he has a better right than petitioner-spouses, Juan La
rrazabal and Marta C. de Larrazabal. They purchased their two-thirds (2/3) inter
est in the lots in question with the knowledge of the adverse claim of Atty. Fer
nandez. The adverse claim was annotated on the old transfer certificate of title
and was later annotated on the new transfer certificate of title issued to them
. As held by this Court:
The annotation of an adverse claim is a measure designed to protect the interest
of a person over a piece of real property where the registration of such intere
st or right is not otherwise provided for by the Land Registration Act, and serv
es as a notice and warning to third parties dealing with said property that some
one is claiming an interest on the same or a better right than the registered ow
ner thereof (Sanchez, Jr. vs. Court of Appeals, 69 SCRA 332 [1976]; Paz Ty Sin T
ei vs. Jose Le Dy Piao supra).
Having purchased the property with the knowledge of the adverse claim, they are
therefore in bad faith. Consequently, they are estopped from questioning the val
idity of the adverse claim.
WHEREFORE, THE DECISION OF THE LOWER COURT DENYING THE PETITION FOR THE CANCELLA
TION OF THE ADVERSE CLAIM SHOULD BE, AS IT IS HEREBY AFFIRMED, WITH COSTS AGAINS
T PETITIONER-APPELLANTS JUAN LARRAZABAL AND MARTA C. DE LARRAZABAL.
SO ORDERED.
[A.C. No. 1890. August 7, 2002]
FEDERICO C. SUNTAY, complainant, vs. ATTY. RAFAEL G. SUNTAY, respondent.
D E C I S I O N
BELLOSILLO, J.:
This Complaint for disbarment was filed by Federico C. Suntay against his nephew
, Atty. Rafael G. Suntay, alleging that respondent was his legal counsel, advise
r and confidant who was privy to all his legal, financial and political affairs
from 1956 to 1964. However, since they parted ways because of politics and respo
ndent's overweening political ambitions in 1964, respondent had been filing comp
laints and cases against complainant, making use of confidential information gai
ned while their attorney-client relationship existed, and otherwise harassing hi
m at every turn.
Complainant enumerated the following cases filed by respondent to harass him: (a
) Civil Case No. 4306-M[1] for injunction and damages in 1975, "Carlos Panganiba
n v. Dr. Federico Suntay," where respondent appeared as counsel for the plaintif
f involving fishponds which respondent had previously helped to administer; (b)
Civil Case No. 4726-M,[2] "Narciso Lopez v. Federico Suntay," in 1970 where resp
ondent appeared as counsel for the plaintiff to determine the real contract betw
een the parties likewise involving the two (2) fishponds which respondent had pr
eviously helped to administer; (c) Civil Case No. 112764,[3] "Magno Dinglasan v.
Federico Suntay," for damages where respondent appeared as counsel for the plai
ntiff; and, (d) I.S. No. 77-1523, "Magno Dinglasan v. Federico Suntay," for fals
e testimony and grave oral defamation before the Office of the Provincial Fiscal
of Bulacan involving complainant's same testimony subject of the complaint for
damages in Civil Case No. 112764.
In addition, complainant alleged that respondent relentlessly pursued a case aga
inst him for violation of PD No. 296[4] for the alleged disappearance of two (2)
creeks traversing complainant's fishpond in Bulacan covered by TCT No. T-15674.
Complainant alleged that respondent's possession and examination of the TCT and
the blueprint plan of the property while he was still counsel for complainant p
rovided him with the information that there used to be two (2) creeks traversing
the fishpond, and that since respondent helped in the administration of the fis
hpond, he also came to know that the two (2) creeks had disappeared.
Required to answer the charges respondent filed a "Motion to Order Complainant t
o Specify His Charges" alleging that complainant failed to specify the alleged "
confidential information or intelligence" gained by him while the attorney-clien
t relationship existed but which he allegedly used against complainant when the
relationship terminated. Complainant filed his Comments thereon as required in o
ur Resolution of 26 July 1978. Thereafter this case was referred to the Office o
f the Solicitor General (OSG) for investigation, report, and recommendation in o
ur Resolution dated 23 October 1978.
After almost four (4) years the OSG submitted its Report and Recommendation date
d 14 October 1982 enumerating the following findings against respondent, to wit:
The evidence presented by complainant which was largely unrebutted by respondent
establish two counts of malpractice against respondent, one count of violating
the confidentiality of client-lawyer relationship and one count of engaging in u
nethical conduct.
1. Respondent committed malpractice when he represented Magno Dinglasan in the c
ase for false testimony and grave oral defamation filed by Magno Dinglasan again
st complainant before the Office of the Provincial Fiscal of Bulacan (I.S. No. 7
7-1523).
The case stemmed from the testimony given by complainant on December 21, 1976, b
efore the Court of First Instance of Bulacan in Civil Case No. 3930-M. When aske
d why Magno Dinglasan had testified against him in that case, complainant stated
that he once declined the demand of Magno Dinglasan, a former official of the B
ureau of Internal Revenue, for P150,000.00 as consideration for the destruction
of complainants record in the Bureau.
On account of that testimony, Magno Dinglasan charged complainant on July 29, 19
77 with the crime of false testimony and grave oral defamation (Exhibits G and G
-1). During the preliminary investigation of the case by the Office of the Provi
ncial Fiscal of Bulacan, respondent acted as counsel for Magno Dinglasan. When t
he case was dismissed by the Office of the Provincial Fiscal of Bulacan and it w
as elevated to the Ministry of Justice on appeal, respondent continued to be the
lawyer of Magno Dinglasan.
Complainant testified in this disbarment proceeding that he consulted respondent
, who was then his counsel, about the demand made in 1957 or 1958 by Magno Dingl
asan for P150,000.00 as consideration for the destruction of complainants record
in the Bureau of Internal Revenue. Respondents advice was for complainant to di
sregard the demand as it was improper. Later, when Magno Dinglasan reduced the a
mount to P50,000.00, complainant again consulted respondent. Respondent likewise
advised complainant not to heed the demand (pp. 61-62, tsn, May 21, 1981).
Respondents representation of Magno Dinglasan in I.S. No. 77-1523 constitutes ma
lpractice (Section 27, Rule 138, Rules of Court) for respondent was previously t
he lawyer of complainant and respondent was consulted by complainant regarding t
he very matter which was the subject of the case. By serving as the lawyer of Ma
gno Dinglasan, in I.S. No. 77-1523, respondent thus represented an interest whic
h conflicted with the interest of his former client.
2. Respondent again committed malpractice when he served as lawyer of Magno Ding
lasan in Civil Case No. 112764 before the Court of First Instance of Manila.
Civil Case No. 112764 was an action for damages filed by Magno Dinglasan against
complainant based, among others, on the same testimony that complainant gave on
December 21, 1976 before the Court of First Instance of Bulacan in Civil Case N
o. 3930-M.
For the same reasons set forth above, respondents representation of Magno Dingla
san in Civil Case No. 112764 constitutes malpractice as thereby he represented c
onflicting interests.
3. In filing a charge against complainant for alleged illegal destruction of dik
es, respondent violated the confidentiality of information obtained out of a cli
ent-lawyer relationship.
In his capacity as lawyer of complainant from 1956 to 1964, respondent had the f
ollowing functions:
Witness
A: He was my lawyer from 1956 from the time he passed the bar up to sometime in
1964 and my legal adviser on political matters and legal matters.
ATTY. AQUINO:
Q: As your lawyer from 1956 to 1964, will you kindly inform the Honorable Hearin
g Officer what was the nature of the work of Atty. Suntay?
A: He handled my cases on the titling of our properties. He served as my legal c
ounsel in the Hagonoy Rural Bank of which my family is the majority stockholders
. He used to help me manage my fishpond. He is our legal adviser on legal matter
s. He is our confidant. We have no secrets between us. He has complete access in
our papers (tsn, May 21, 1981)
Complainant owned several fishponds in Bulacan, among them, the fishpond covered
by Transfer Certificate of Title No. T-15674. This fishpond was previously trav
ersed by two creeks, Sapang Malalim and Sapang Caluang. The existence of the cre
eks is shown by the certificate of title and the blue print plan of the fishpond
. In the certificate of title, the fishpond is bounded on the north and northeas
t by Sapang Caluang and on the west by Sapang Malalim (please see Exhibit 6).
In a letter dated March 17, 1973, respondent reported the disappearance of the t
wo creeks to the authorities. The Chief State Prosecutor referred the letter to
the Office of the Provincial Fiscal of Bulacan. The Office of the Provincial Fis
cal of Bulacan required the Public Works to conduct a re-survey. (Exhibit 6).
In 1974, the Ministry of Public Works conducted a relocation survey of the fishp
ond. The relocation survey disclosed that there were no more creeks traversing t
he fishpond. Sapang Malalim and Sapang Caluang had disappeared.
Respondent was requested to file a formal complaint with supporting affidavits,
for violation of Presidential Decree No. 296. Respondent did so and the complain
t was docketed as I.S. No. 74-193. (Exhibit 6)
From the foregoing facts, it is clear that respondent made use of the informatio
n he gained while he was the lawyer of complainant as basis for his complaint fo
r the building of illegal dikes. His possession and examination of Transfer Cert
ificate of Title No. T-15674 and the blueprint plan provided him the information
that there used to be two creeks traversing the fishpond covered by the title.
Since he helped in the administration of the fishpond, he also came to know that
the two creeks had disappeared. Thus, he gained the data which became the basis
of his complaint when he was a lawyer and part administrator of complainant. Un
der the circumstances, there is a violation of professional confidence.
4. The evidence also establishes the commission of unethical conduct by responde
nt for serving as lawyer of Panganiban and Lopez x x x and for himself filing cr
iminal charges against complainant which were later dismissed. The cases wherein
respondent served as lawyer for the adversary of complainant or filed by respon
dent himself against complainant are the following:
1. Carlos Panganiban v. Federico Suntay, Civil Case No. 4306-M, CFI, Branch VII,
Malolos, Bulacan;
2. Narciso Lopez v. Federico Suntay, Civil Case No. 4726-M, CFI, Branch II, Malo
los, Bulacan;
3. Magno Dinglasan v. Federico Suntay, I.S. No. 77-1523, Office of the Provincia
l Fiscal of Bulacan;
4. Magno Dinglasan v. Federico Suntay, Civil Case No. 112764, CFI, Branch XX, Ma
nila; and
5. Rafael G. Suntay and Magno Dinglasan v. Federico C. Suntay, I.S. No. 74-193,
Office of the Provincial Fiscal of Bulacan, for violation of P.D. 296.
While there may be validity to respondents contention that it is not improper fo
r a lawyer to file a case against a former client, especially when the professio
nal relationship had ended several years before, yet under the over-all circumst
ances of the case at bar it can not be said that respondent acted ethically. Com
plainant was not a mere client of respondent. He is an uncle and a political ben
efactor. The parties for whom respondent filed cases against complainant were fo
rmer friends or associates of complainant whom respondent met when he was servin
g as the lawyer and general adviser of complainant. The cases filed by responden
t were about properties which respondent had something to do with as counsel and
administrator of complainant.
x x x x
IN VIEW OF THE FOREGOING, undersigned respectfully submit that the evidence esta
blishes commission by respondent of malpractice for violating the confidentialit
y of client-lawyer relationship and engaging in unethical conduct x x x x[5]
Resolution of this case was delayed despite receipt of the foregoing Report and
Recommendation in view of the Omnibus Motion to Remand Case to the Office of the
Solicitor General; Motion to Disqualify Solicitor Rogelio Dancel to Act on this
Case and Motion to Suspend Period to File Answer dated 18 January 1983 filed by
respondent principally accusing handling Solicitor Dancel of having given unwar
ranted advantage and preference to the complainant in the investigation of the c
ase.
After several pleadings on the issue were filed by both respondent and Solicitor
Rogelio Dancel, the Court in its Resolution dated 22 August 1983 denied respond
ent's motion to disqualify Solicitor Dancel and required the OSG to proceed with
the investigation of this case. However, no further proceedings were conducted
by the OSG until the records of the case together with other cases were turned o
ver to the Integrated Bar of the Philippines (IBP) on 19 May 1988.
After almost three (3) years from the time the records of this case were turned
over to it, the IBP Commission on Bar Discipline submitted to this Court on 11 M
ay 2001 Resolution No. XIV-2001-169 adopting and approving the Report and Recomm
endation of the Investigating Commissioner finding respondent guilty as charged.
The IBP recommended that respondent Atty. Suntay be suspended from the practice
of law for two (2) years for immoral conduct. In so recommending the Investigat
ing Commissioner adopted in toto the findings of the OSG in its Report and Recom
mendation dated 14 October 1982. In our Resolution of 5 September 2001 we noted
the foregoing IBP Resolution. However, in view of the penalty involved, this cas
e was referred to the Court En Banc for final action pursuant to our Resolution
dated 18 January 2000, Sec. 2, par. (b), in A.M. No. 99-12-08-SC.[6]
After a review of the records of this case, the Court finds the IBP Recommendati
on to be well taken. As found by both the OSG and the IBP Investigating Commissi
oner, respondent Atty. Rafael G. Suntay acted as counsel for clients in cases in
volving subject matters regarding which he had either been previously consulted
by complainant or which he had previously helped complainant to administer as th
e latter's counsel and confidant from 1956 to 1964. Thus in Civil Cases Nos. 430
6-M and 4726-M respondent acted as counsel for estranged business associates of
complainant, namely, Carlos Panganiban and Narciso Lopez, the subject matter of
which were the two (2) fishponds which respondent had previously helped to admin
ister.
On the other hand, I.S. No. 77-1523 for false testimony and grave oral defamatio
n before the Office of the Provincial Fiscal of Bulacan, and Civil Case No. 1127
64 for damages before the then Court of First Instance of Manila, were filed in
behalf of Magno Dinglasan, a former Bureau of Internal Revenue (BIR) official, r
egarding whose alleged demand for P150,000.00 from complainant in exchange for t
he destruction of the latter's record in the BIR, respondent had previously advi
sed complainant to disregard. Civil Case No. 117624 and I.S. No. 77-1523 were pr
ecisely filed against complainant because the latter had previously testified on
the alleged demand made by Dinglasan. Although respondent denied that there was
 ever such a demand made by Dinglasan, the point is that his word on the matter,
i.e., whether there was in fact such a demand, would carry much weight against
complainant considering that he was the latter's counsel in 1957 or 1958 when th
e alleged demand was made. In addition, respondent initiated the prosecution of
complainant in I.S. No. 74-193 for violation of P.D. No. 296[7] for the disappea
rance of the two (2) creeks, namely, Sapang Malalim and Sapang Caluang, previous
ly traversing complainant's fishpond in Bulacan covered by TCT No. T-15674 by us
ing information obtained while he was in possession of the certificate of title
and the blueprint plan of the property.
As the Code of Professional Responsibility provides:
Rule 21.01. - A lawyer shall not reveal the confidences or secrets of his client
except:
a) When authorized by the client after acquainting him of the consequences of th
e disclosure;
b) When required by law;
c) When necessary to collect his fees or to defend himself, his employees or ass
ociates or by judicial action.
Rule 21.01. - A lawyer shall not, to the disadvantage of his client, use informa
tion acquired in the course of employment, nor shall he use the same to his own
advantage or that of a third person, unless the client with full knowledge of th
e circumstances consents thereto.
A lawyer shall preserve the confidences and secrets of his clients even after te
rmination of the attorney-client relation.[8] As his defense to the charges, res
pondent averred that complainant failed to specify the alleged confidential info
rmation used against him. Such a defense is unavailing to help respondent's caus
e for as succinctly explained in Hilado v. David - [9]
Communications between attorney and client are, in a great number of litigations
, a complicated affair, consisting of entangled relevant and irrelevant, secret
and well known facts. In the complexity of what is said in the course of the dea
lings between an attorney and a client, inquiry of the nature suggested would le
ad to the revelation, in advance of the trial, of other matters that might only
further prejudice the complainants cause. And the theory would be productive of
other unsalutary results. To make the passing of confidential communication a co
ndition precedent, i.e., to make the employment conditioned on the scope and cha
racter of the knowledge acquired by an attorney in determining his right to chan
ge sides, would not enhance the freedom of litigants, which is to be sedulously
fostered, to consult with lawyers upon what they believe are their rights in lit
igation. The condition would of necessity call for an investigation of what info
rmation the attorney has received and in what way it is or it is not in conflict
with his new position. Litigants would in consequence be wary in going to an at
torney, lest by an unfortunate turn of the proceeding, if an investigation be he
ld, the court should accept the attorneys inaccurate version of the facts that c
ame to him x x x x
Hence, the necessity of setting down the existence of the bare relationship of a
ttorney and client as the yardstick for testing incompatibility of interests. Th
is stern rule is designed not alone to prevent the dishonest practitioner from f
raudulent conduct, but as well to protect the honest lawyer from unfounded suspi
cion of unprofessional practice x x x x It is founded on principles of public po
licy, on good taste x x x x [T]he question is not necessarily one of the rights
of the parties, but as to whether the attorney has adhered to proper professiona
l standard. With these thoughts in mind, it behooves attorneys, like Caesars wif
e, not only to keep inviolate the clients confidence, but also to avoid the appe
arance of treachery and double-dealing. Only thus can litigants be encouraged to
entrust their secrets to their attorneys which is of paramount importance in th
e administration of justice.
WHEREFORE, in view of the foregoing, IBP Resolution No. XIV-2001-169 dated 29 Ap
ril 2001 is adopted and approved. For violating the confidentiality of lawyer-cl
ient relationship and for unethical conduct, respondent Atty. Rafael G. Suntay i
s SUSPENDED from the practice of law for two (2) years effective upon the finali
ty hereof.
Let copies of this Decision be furnished the Office of the Bar Confidant, the In
tegrated Bar of the Philippines and all courts throughout the country.
SO ORDERED.

[A.C. No. 4215. May 21, 2001]

FELICISIMO M. MONTANO, complainant, vs. INTEGRATED BAR of the PHILIPPINES AND At
ty. JUAN S. DEALCA, respondents.
R E S O L U T I O N
KAPUNAN, J.:
In a verified complaint filed before this Court on March 9, 1994, complainant Fe
licisimo M. Montano charged Atty. Juan Dealca with misconduct and prays that he
be sternly dealt wit administratively. The complaint[1] is summarized as follows
:
1. On November 14, 1992, the complainant hired the services of Atty. Juan S. Dea
lca as his counsel in collaboration with Atty. Ronando L. Gerona in a case pendi
ng before the Court of Appeals docketed as CA-G.R. CV No. 37467 wherein the comp
lainant was the plaintiff-appellant.
2. The parties agreed upon attorneys fees in the amount of P15,000.00, fifty per
cent (50%) of which was payable upon acceptance of the case and the remaining ba
lance upon the termination of the case. Accordingly, complainant paid respondent
the amount of P7,500.00 representing 50% of the attorneys fee.
3. Thereafter, even before the respondent counsel had prepared the appellants br
ief and contrary to their agreement that the remaining balance be payable after
the termination of the case, Atty. Dealca demanded an additional payment from co
mplainant. Complainant obliged by paying the amount of P4,000.00.
4. Prior to the filing of the appellants brief, respondent counsel again demand
payment of the remaining balance of 3,500.00. When complainant was unable to do
so, respondent lawyer withdrew his appearance as complainants counsel without hi
s prior knowledge and/or conformity. Returning the case folder to the complainan
t, respondent counsel attached a Note dated February 28, 1993,[2] stating:
28 February 1994
Pepe and Del Montano,
For breaking your promise, since you do not want to fulfill your end of the barg
ain, heres your reward:
Henceforth, you lawyer for yourselves. Here are your papers.
Johnny
Complainant claimed that such conduct by respondent counsel exceeded the ethical
standards of the law profession and prays that the latter be sternly dealt with
administratively. Complainant later on filed motions praying for the imposition
of the maximum penalty of disbarment.
After respondent counsel filed his comment on the complaint, the Court in the Re
solution of August 1, 1994, referred the case to the Integrated Bar of the Phili
ppines (IBP) for investigation, report and recommendation.
The Investigating Commissioner found respondent counsel guilty of unprofessional
conduct and recommended that he be severely reprimanded. However, in a Resoluti
on[3] by the IBP Board of Governors on July 26, 1997, it was resolved that the p
enalty recommended by the Investigating Commissioner meted to respondent by amen
ded to three (3) months suspension from the practice of law for having been foun
d guilty of misconduct, which eroded the public confidence regarding his duty as
a lawyer.
Respondent counsel sought reconsideration of the aforementioned resolution of th
e IBP, alleging that the latter misapprehended the facts and that, in any case,
he did not deserve the penalty imposed. The true facts, according to him, are th
e following:
1. Complainant is being represented by Atty. Ronando L. Gerona in his case on ap
peal;
2. Due to the ailment of Atty. Geronas daughter, he could not prepare and submit
complainants appellants brief on time;
3. Complainant went to the respondent to do just that, i.e., prepare and submit
his appellants brief on time at the agreed fee of P15,000.00, 50% down and 50% u
pon its completion;
4. Working overtime, respondent was able to finish the appellants brief ahead of
its deadline, so he advised the complainant about its completion with the reque
st that the remaining balance of P7,500.00 be paid. Complainant paid P4,000.00 o
nly, promising to pay the P3,500.00 tomorrow or on later particular date. Please
take note that, at this juncture, there was already a breach of the agreement o
n complainants part.
5. When that tomorrow or on a later particular date came, respondent, thru a mes
senger, requested the complainant to pay the P3,500.00 as promised but word was
sent that he will again pay tomorrow or on later date. This promise-non-payment
cycle went on repeatedly until the last day of the filing of the brief. Please t
ake note again that it was not the respondent but the complainant who sets the d
ate when he will pay, yet fails to pay as promised;
6. Even without being paid completely, respondent, of his own free will and acco
rd, filed complainants brief on time;
7. After the brief was filed, respondent tried to collect from the complainant t
he remaining balance of P3,500.00, but the latter made himself scarce. As the re
cords would show, such P3,500.00 remains unpaid until now;
8. Sensing that something was amiss, respondent sent the February 28, 1993 note
and case folder to the complainant, hoping that the latter would see personally
the former about it to settle the matter between them;
9. However, instead of seeing the respondent, complainant filed this case;
10. Respondent was constrained to file his withdrawal with the Court of Appeals
because of this case to avoid further misunderstanding since he was the one who
signed the appellants brief although Atty. Gerona was his counsel of record. Suc
h withdrawal was accordingly granted by the appellate court;
xxx xxx xxx.[4]
Respondent counsel further averred that complainants refusal to pay the agreed l
awyers fees, measly as it was, was deliberate and in bad faith; hence, his withd
rawal as counsel was just, ethical and proper. Respondent counsel concluded that
not only was the penalty of suspension harsh for his act of merely trying to co
llect payment for his services rendered, but it indirectly would punish his fami
ly since he was the sole breadwinner with children in school and his wife termin
ally ill with cancer.
In its Resolution No. XIII-97-129 dated October 25, 1997, the IBP denied Atty. D
ealcas motion for reconsideration, to wit:
xxx
RESOLVED TO DENY Atty. Dealcas Motion For Reconsideration of the Boards Decision
in the above-entitled case there being no substantive reason to reverse the fin
ding therein. Moreover, the motion is improperly laid the remedy of the responde
nt is to file the appropriate pleading with the Supreme Court within fifteen (15
) days from receipt of notice of said Decision pursuant to Sec. 12 [c] of Rule 1
39-B.[5]
On December 10, 1997, this Court noted the following pleadings filed in the pres
ent complaint,
(a) notice and a copy of Resolution No. XII-97-154 dated July 26, 1997 of the In
tegrated Bar of the Philippines amending the recommendation of the Investigating
Commissioner of reprimand to three (3) months suspension of respondent from the
practice of law for having been found guilty of misconduct which eroded the pub
lic confidence regarding his duty as a lawyer;
(b) complainants motion for praying for the imposition of the maximum penalty of
disbarment;
(c) motion dated September 15, 1997 of respondent for reconsideration of the afo
resaid resolution of July 26, 1997;
(d) comment/opposition of respondent praying that the motion for the imposition
of the maximum penalty be denied;
(e) comment of complainant praying that the penalty of three (3) months suspensi
on for the practice of law as recommended by the Integrated Bar of the Philippin
es pursuant to Resolution No. XII-97-154 be raised to a heavier penalty;
(f) comment/manifestation/opposition of complainant praying that the respondent
be disbarred; and
(g) rejoinder of respondent praying that this case be dismissed for being basele
ss.[6]
and referred the same to the IBP for evaluation and report.
In compliance therewith, on March 28, 1998, the IBP issued Resolution No. XIII-9
8-42 referring the above-entitled case to Commissioner Vibar for evaluation, rep
ort and recommendation in view of the Motion for Reconsideration granted by the
Supreme Court.
The Investigating Commissioner, after referring the case, recommended that his o
riginal recommendation of the imposition of the penalty of reprimand be maintain
ed, noting that respondent counsel had served the IBP well as President of the S
orsogon Chapter.[7] Accordingly, on February 23, 1999, the IBP Board of Governor
s, issued the following resolution:
RESOLUTION NO. XIII-99-48
xxx
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report
and Recommendation of the Investigating Commissioner in the above-entitled case,
herein made part of this Resolution/Decision as Annex A; and, finding the recom
mendation fully supported by the evidence on record and the applicable laws and
rules, the Motion for Reconsideration be granted and that the penalty of REPRIMA
ND earlier recommended by the Investigating Commissioner be imposed on Atty. Jua
n S. Dealca.[8]
Complainant asked the IBP to reconsider the foregoing resolution but the motion
was denied.[9]
On April 10, 2000, complainant filed with this Court a petition for review on ce
rtiorari in connection with Administrative Case No. 4215 against the IBP and res
pondent counsel averring that the IBP Board of Governors committed grave abuse o
f discretion when it overturned its earlier resolution and granted respondent co
unsels motion for reconsideration on February 23, 1999. He claimed that the earl
ier resolution denying the motion for reconsideration issued on October 25, 1997
had already become final and executory; hence, any further action or motion sub
sequent to such final and executory judgment shall be null and void.
When the Court issued the resolution of December 10, 1997 treating the several p
leadings filed in the present complaint, it should be noted that the IBP resolut
ion denying respondents motion for reconsideration (Resolution No. XIII-97-129)
dated October 25, 1997, for some reason, had not yet reached this Court. As of t
hat date, the only IBP resolution attached to the records of the case was Resolu
tion No. XII-97-54 amending the administrative sanction from reprimand to three
months suspension. Hence, at the time the pleadings were referred back to the IB
P in the same resolution, the Court was not aware that the IBP had already dispo
sed of the motion for reconsideration filed by respondent counsel.
Thus, when the IBP was informed of the said Court resolution, it construed the s
ame as granting Atty. Dealcas motion for reconsideration and as an order for IBP
to conduct a re-evaluation of the case. The IBP assumed that its resolution of
October 25, 1997 was already considered by this Court when it referred the case
back to the IBP. It failed to notice that its resolution denying the motion for
reconsideration was not among those pleadings and resolution referred back to it
.
Hence, on the strength of this Courts resolution which it had inadvertently misc
onstrued, the IBP conducted a re-evaluation of the case and came up with the ass
ailed resolution now sought to be reversed. The Court holds that the error is no
t attributable to the IBP. It is regrettable that the procedural infirmity alleg
ed by complainant actually arose from a mere oversight which was attributable to
neither party.
Going into the merits, we affirm the findings made by the IBP that complainant e
ngaged the services of respondent lawyer only for the preparation and submission
of the appellants brief and the attorneys fees was payable upon the completion
and submission of the appellants brief and not upon the termination of the case.
There is sufficient evidence which indicates complainants willingness to pay the
attorneys fees. As agreed upon, complainant paid half of the fees in the amount
of P7,500.00 upon acceptance of the case. And while the remaining balance was n
ot yet due as it was agreed to be paid only upon the completion and submission o
f the brief, complainant nonetheless delivered to respondent lawyer P4,000.00 as
the latter demanded. This, notwithstanding, Atty. Dealca withdrew his appearanc
e simply because of complainants failure to pay the remaining balance of P3,500.
00, which does not appear to be deliberate. The situation was aggravated by resp
ondent counsels note to complainant withdrawing as counsel which was couched in
impolite and insulting language.[10]
Given the above circumstances, was Atty. Dealcas conduct just and proper?
We find Atty. Dealcas conduct unbecoming of a member of the legal profession. Un
der Canon 22 of the Code of Professional Responsibility, lawyer shall withdraw h
is services only for good cause and upon notice appropriate in the circumstances
. Although he may withdraw his services when the client deliberately fails to pa
y the fees for the services,[11] under the circumstances of the present case, At
ty. Dealcas withdrawal was unjustified as complainant did not deliberately fail
to pay him the attorneys fees. In fact, complainant exerted honest efforts to fu
lfill 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. R
ule 20.4 of Canon 20, mandates that a lawyer shall avoid controversies with clie
nts concerning his compensation and shall resort to judicial action only to prev
ent 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. The power to disb
ar must be exercised with great caution. Only in a clear case of misconduct that
seriously affects the standing and character of the lawyer as an officer of the
Court and member of the bar will disbarment be imposed as a penalty. It should
never be decreed where a lesser penalty, such as temporary suspension, would acc
omplish the end desired.[12] In the present case, reprimand is deemed sufficient
.
WHEREFORE, in view of the foregoing, respondent Atty. Juan S. Dealca is REPRIMAN
DED with a warning that repetition of the same act will be dealt with more sever
ely.
SO ORDERED.
[A. C. No. 5485. March 16, 2005]
ELMER CANOY, complainant, vs. ATTY. JOSE MAX ORTIZ, respondent.
D E C I S I O N
TINGA, J.:
There are no good reasons that would justify a lawyer virtually abandoning the c
ause of the client in the midst of litigation without even informing the client
of the fact or cause of desertion. That the lawyer forsook his legal practice on
account of what might be perceived as a higher calling, election to public offi
ce, does not mitigate the dereliction of professional duty. Suspension from the
practice is the usual penalty, and there is no reason to deviate from the norm i
n this case.
A Complaint[1] dated 10 April 2001 was filed with the Office of the Bar Confidan
t by Elmer Canoy (Canoy) accusing Atty. Jose Max Ortiz (Atty. Ortiz) of miscondu
ct and malpractice. It was alleged that Canoy filed a complaint for illegal dism
issal against his former employer, Coca Cola Bottlers Philippines. The complaint
was filed with the National Labor Relations Commission (NLRC) Regional Arbitrat
ion Board VI in Bacolod City.[2] Atty. Ortiz appeared as counsel for Canoy in th
is proceeding. In 1998, the labor arbiter hearing the complaint ordered the part
ies to submit their respective position papers. Canoy submitted all the necessar
y documents and records to Atty. Ortiz for the preparation of the position paper
. Thereafter, he made several unfruitful visits to the office of Atty. Ortiz to
follow-up the progress of the case. After a final visit at the office of Atty. O
rtiz in April of 2000, during which Canoy was told to come back as his lawyer wa
s not present, Canoy decided to follow-up the case himself with the NLRC. He was
shocked to learn that his complaint was actually dismissed way back in 1998, fo
r failure to prosecute, the parties not having submitted their position papers.[
3] The dismissal was without prejudice. Canoy alleged that Atty. Ortiz had never
communicated to him about the status of the case, much less the fact that he fa
iled to submit the position paper.
The Comment[4] filed by Atty. Ortiz is the epitome of self-hagiography. He infor
ms the Court that since commencing his law practice in 1987, he has mostly cater
ed to indigent and low-income clients, at considerable financial sacrifice to hi
mself. Atty. Ortiz claims that for more than ten years, his law office was a vir
tual adjunct of the Public Attorneys Office with its steady stream of non-paying
clients in the hundreds or thousands.[5] At the same time, he hosted a legal as
sistance show on the radio, catering to far-flung municipalities and reaching th
e people who need legal advice and assistance.[6] Atty. Ortiz pursued on with th
is lifestyle until his election as Councilor of Bacolod City, a victory which he
generously attributes to the help of the same people whom he had helped by way
of legal assistance before.[7]
Canoy was among those low-income clients whom Atty. Ortiz deigned to represent.
The lawyer was apparently confident that the illegal dismissal case would eventu
ally be resolved by way of compromise. He claims having prepared the position pa
per of Canoy, but before he could submit the same, the Labor Arbiter had already
issued the order dismissing the case.[8] Atty. Ortiz admits though that the per
iod within which to file the position paper had already lapsed. He attributes th
is failure to timely file the position paper to the fact that after his election
as Councilor of Bacolod City, he was frankly preoccupied with both his function
s as a local government official and as a practicing lawyer. Eventually, his des
ire to help was beyond physical limitations, and he withdrew from his other case
s and his free legal services.[9]
According to Atty. Ortiz, Mr. Canoy should have at least understood that during
all that time, he was free to visit or call the office and be entertained by the
 secretary as [he] would normally report to the office in the afternoon as he ha
d to attend to court trials and report to the Sanggunian office.[10] He states t
hat it was his policy to inform clients that they should be the ones to follow-u
p their cases with his office, as it would be too difficult and a financial burd
en to attend making follow-ups with hundreds of clients, mostly indigents with o
nly two office personnel.[11]
Nonetheless, Atty. Ortiz notes that the dismissal of Canoys complaint was withou
t prejudice, thus the prescriptive period had been tolled. He claims not being a
ble to remember whether he immediately informed Canoy of the dismissal of the ca
se, though as far as he could recall, Canoy had conveyed a message to him that h
e had a lawyer to handle the case, thus his office did not insist on refiling th
e same.[12]
The matter was referred to the Integrated Bar of the Philippines (IBP) for inves
tigation, report and recommendation.[13] Canoy eventually submitted a motion wit
hdrawing the complaint, but this was not favorably acted upon by the IBP in view
of the rule that the investigation of a case shall not be interrupted or termin
ated by reason of withdrawal of the charges.[14] Eventually, the investigating c
ommissioner concluded that clearly, the records show that [Atty. Ortiz] failed t
o exercise that degree of competence and diligence required of him in prosecutin
g his clients (sic) claim, and recommended that Atty. Ortiz be reprimanded.[15]
The IBP Commission on Discipline adopted the recommendation, with the slight mod
ification that Atty. Ortiz be likewise warned that a repetition of the same negl
igence shall be dealt with more severely in the future.
The Court is sensitive to the difficulties in obtaining legal representation for
indigent or low-income litigants. Apart from the heroic efforts of government e
ntities such as the Public Attorneys Office, groups such as the IBP National Com
mittee on Legal Aid and the Office of Legal Aid of the UP College of Law have li
kewise been at the forefront in the quest to provide legal representation for th
ose who could not otherwise afford the services of lawyers. The efforts of priva
te practitioners who assist in this goal are especially commendable, owing to th
eir sacrifice in time and resources beyond the call of duty and without expectat
ion of pecuniary reward.
Yet, the problem of under-representation of indigent or low-income clients is ju
st as grievous as that of non-representation. Admirable as the apparent focus of
Atty. Ortizs legal practice may have been, his particular representation of Can
oy in the latters illegal dismissal case leaves much to be desired.
Several of the canons and rules in the Code of Professional Responsibility guard
against the sort of conduct displayed by Atty. Ortiz with respect to the handli
ng of Canoys case.
CANON 17A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE MINDFU
L OF THE TRUST AND CONFIDENCE REPOSED IN HIM.
CANON 18A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.
. . .
Rule 18.03A lawyer shall not neglect a legal matter entrusted to him, and his ne
gligence in connection therewith shall render him liable.
Rule 18.04A lawyer shall keep the client informed of the status of his case and
shall respond within a reasonable time to the clients request for information.
. . .
CANON 22A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR GOOD CAUSE AND UPON NOTICE
APPROPRIATE IN THE CIRCUMSTANCES.
. . .
Rule 22.02 A lawyer who withdraws or is discharged shall, subject to a retainer
lien, immediately turn over all papers and property to which the client is entit
led, and shall cooperate with his successor in the orderly transfer of the matte
r, including all information necessary for the proper handling of the matter.
Atty. Ortiz should have filed the position paper on time, owing to his duty as c
ounsel of Canoy to attend to this legal matter entrusted to him. His failure to
do so constitutes a violation of Rule 18.03 of the Code of Professional Responsi
bility.
Once he agrees to take up the cause of a client, a lawyer owes fidelity to such
cause and must always be mindful of the trust and confidence reposed in him. He
must serve the client with competence and diligence and champion the latter's ca
use with wholehearted fidelity, care and devotion. Elsewise stated, he owes enti
re devotion to the interest of the client, warm zeal in the maintenance and defe
nse of his client's rights, and the exertion of his utmost learning and ability
to the end that nothing be taken or withheld from his client, save by the rules
of law, legally applied. This simply means that his client is entitled to the be
nefit of any and every remedy and defense that is authorized by the law of the l
and and he may expect his lawyer to assert every such remedy or defense. If much
is demanded from an attorney, it is because the entrusted privilege to practice
law carries with it the correlative duties not only to the client but also to t
he court, to the bar and to the public. A lawyer who performs his duty with dili
gence and candor not only protects the interest of his client; he also serves th
e ends of justice, does honor to the bar and helps maintain the respect of the c
ommunity to the legal profession.[16]
If indeed Atty. Ortizs schedule, workload, or physical condition was such that h
e would not be able to make a timely filing, he should have informed Canoy of su
ch fact. The relationship of lawyer-client being one of confidence, there is eve
r present the need for the client to be adequately and fully informed of the dev
elopments of the case and should not be left in the dark as to the mode and mann
er in which his/her interests are being defended.[17]
There could have been remedies undertaken to this inability of Atty. Ortiz to fi
le on time the position paper had Canoy been told of such fact, such as a reques
t for more time to file the position paper, or maybe even the hiring of collabor
ating counsel or substitution of Atty. Ortiz as counsel. Since Atty. Ortiz did n
ot exercise the necessary degree of care by either filing the position paper on
time or informing Canoy that the paper could not be submitted seasonably, the ig
nominy of having the complaint dismissed for failure to prosecute could not be a
voided.
That the case was dismissed without prejudice, thus allowing Canoy to refile the
case, hardly serves to mitigate the liability of Atty. Ortiz, as the failure to
file the position paper is per se a violation of Rule 18.03.[18]
Neither is the Court mollified by the circumstance of Atty. Ortizs election as a
City Councilor of Bacolod City, as his adoption of these additional duties does
not exonerate him of his negligent behavior. The Code of Professional Responsib
ility does allow a lawyer to withdraw his legal services if the lawyer is electe
d or appointed to a public office.[19] Statutes expressly prohibit the occupant
of particular public offices from engaging in the practice of law, such as gover
nors and mayors,[20] and in such instance, the attorney-client relationship is t
erminated.[21] However, city councilors are allowed to practice their profession
 or engage in any occupation except during session hours, and in the case of law
yers such as Atty. Ortiz, subject to certain prohibitions which are not relevant
to this case.[22] In such case, the lawyer nevertheless has the choice to withd
raw his/her services.[23] Still, the severance of the relation of attorney-clien
t is not effective until a notice of discharge by the client or a manifestation
clearly indicating that purpose is filed with the court or tribunal, and a copy
thereof served upon the adverse party, and until then, the lawyer continues to b
e counsel in the case.[24]
Assuming that Atty. Ortiz was justified in terminating his services, he, however
, cannot just do so and leave complainant in the cold unprotected.[25] Indeed, R
ule 22.02 requires that a lawyer who withdraws or is discharged shall, subject t
o a lien, immediately turn over all papers and property to which the client is e
ntitled, and shall cooperate with his successor in the orderly transfer of the m
atter. Atty. Ortiz claims that the reason why he took no further action on the c
ase was that he was informed that Canoy had acquired the services of another cou
nsel. Assuming that were true, there was no apparent coordination between Atty.
Ortiz and this new counsel.
In fact, it took nearly two years before Canoy had learned that the position pap
er had not been filed and that the case had been dismissed. This was highly irre
sponsible of Atty. Ortiz, much more so considering that Canoy was one of the ind
igent clients whom Atty. Ortiz proudly claims as his favored clientele. It does
not escape the Courts attention that Atty. Ortiz faults Canoy for not adequately
following up the case with his office.[26] He cannot now shift the blame to com
plainant for failing to inquire about the status of the case, since, as stated a
bove, it was his duty as lawyer to inform his clients of the status of cases ent
rusted to him.[27]
The appropriate sanction is within the sound discretion of this Court. In cases
of similar nature, the penalty imposed by the Court consisted of either a reprim
and, a fine of five hundred pesos with warning, suspension of three months, six
months, and even disbarment in aggravated cases.[28] Given the circumstances, th
e Court finds the penalty recommended by the IBP too lenient and instead suspend
s Atty. Ortiz from the practice of law for one (1) month. The graver penalty of
suspension is warranted in lieu of an admonition or a reprimand considering that
Atty. Ortizs undisputed negligence in failing to timely file the position paper
was compounded by his failure to inform Canoy of such fact, and the successive
dismissal of the complaint.
Lawyers who devote their professional practice in representing litigants who cou
ld ill afford legal services deserve commendation. However, this mantle of publi
c service will not deliver the lawyer, no matter how well-meaning, from the cons
equences of negligent acts. It is not enough to say that all pauper litigants sh
ould be assured of legal representation. They deserve quality representation as
well.
WHEREFORE, respondent Atty. Jose Max S. Ortiz is ordered SUSPENDED from the prac
tice of law for one (1) month from notice, with the warning that a repetition of
the same negligence will be dealt with more severely. Let a copy of this decisi
on be attached to respondent's personal record in the Office of the Bar Confidan
t and copies be furnished to all chapters of the Integrated Bar of the Philippin
es and to all the courts in the land.
SO ORDERED.