C.
ATTORNEY AND CLIENT RELATIONSHIP relates to the
communication between lawyer and client.
III. FIXING AND DETERMINATION OF FEES (FEE IS BASED ON
WRITTEN CONTRACT)
1. Martinez v Banogon
The above-entitled case was instituted by the former
administrator (deceased Emiliano S. Arnaiz) for and in behalf of
the heirs of the deceased Alejandro Somoza, on February 1,
1946. Since then, up to the termination of the case, Atty.
Leonardo P. Martinez appeared as counsel, first for the probate of
the will of the decedent, and later for the administration of the
estate left by him. Sometime on November 19, 1956, Messrs.
Alejandro Somoza, Jr. and Francisco Banogon, in representation
of all the heirs, entered into a contract with Atty. Martinez, for
professional services, whereby it was agreed
(a) The Party of the Second Part shall handle all legal matters
in connection with this administration case No. 476 and to
prepare the necessary papers or documents legitimately
belonging to said special case up to its termination.
(b) All other cases, which may come up during the
continuance of this Special Case No. 476 involving the
property, rights or interests of the testator or his heirs and
requiring appearance of attorney in any courts of justice, are
EXCLUDED from this contract. Should the Party of the First
Part or their co-heirs desire to utilize the services of the Party
of the Second Part in such cases, another contract concerning
fees shall be entered into between them.
(c) That, for and in consideration of the services which the
Party of the Second Part may have rendered or may render in
connection with this Special Case No. 476, the Party of the
First Part agrees to pay him the sum of EIGHT HUNDRED
PESOS (P800.00), Philippine Currency.
4. That it is the intention of the Party of the First Part and
their co-heirs to terminate this Special Case as soon as
possible by paying in full, within the shortest period possible,
the account of the estate to the Agricultural and Industrial
Bank or by subrogating themselves in place of the deceased
father.
For one reason or another, the case was not closed and terminated as
expected. Up to the filing of his claim for Attorney's fees, Atty.
Martinez had already received P1,320.00 as compensation for
the services rendered by him as counsel in this case.
On March 5, 1957, in the same proceedings, a petition was filed
stating that the reasonable value of all the services rendered by him
up to the termination of the case is P6K; that this amount be taken
and considered as part of the expenses of administration minus the
amount of P1,320.00 already paid out of the proceeds of the product
of the estate and duly approved by the court; and that the said
amount of P1,320.00 is not a reasonable compensation. In support of
his claim, Atty. Martinez made an itemization of the services rendered
by him, together with an information as to the real worth and income
of the estate, and the length of time it took this case to be closed
and terminated. While admitting the existence of the contract for
professional service above-mentioned, Atty. Martinez now contends
that the same is not binding for the reason that the heirs were not
duly authorized by the former administrator to enter into such
contract. On the other hand, the heirs allege that Atty. Martinez had
been fully paid for his services in accordance with the contract in
question and that he had also been paid an additional sum of
P520.00, for other incidental services.
The lower court is denying the petition of Atty. Martinez for additional
payment of attorney's fees, in an order of Sept. 30, 1957, held
... The general rule is that a written contract for
professional services controls the amount to be paid
therefor unless found by the Court to be unconscionable
or unreasonable (Sec. 22, Rule 127). There is no doubt the
relationship of attorney and client in this particular case and
what is important to determine now is whether the fee as
stipulated in the contract and paid is reasonable, considering
the importance of the subject matter of controversy, the
extent of the services rendered and the professional standing
 of the attorney. It would be idle to impugn the contract
movant entered into with the heirs of the estate and by which
he benefited. As a lawyer, he knows its validity and the
obligation thereunder was enforced. The act of the heirs were
impliedly ratified by the administrator when periodical
payments were made to him. To determine the
reasonableness of the claim, we should not necessarily lay
importance to the delayed period of the proceedings where
there was no continuous service rendered or shown. Rather,
we should take into account the nature of the work done.
(Arce v. National Bank, 62 Phil. 569). The specification of
services submitted by movant shows the ordinary preparation
of initial papers connected with testate proceedings, the
appointment of administrator, non-controversial motions,
opposition, reports of accounts, appearance in court for their
approval, negotiations for loans and other matters. For these
services, he received, according to the contract, P800.00 and
for other incidental services, P520.00 or it total of P1,320.00
which, considering all factors in this case, we believe is fair
and reasonable compensation for services rendered by
movant attorney".
Petitioner Martinez appealed to the Court of Appeals, which certified
the case to Us, it appearing that only questions of law are involved.
"... A written contract for services shall control the amount to be paid
therefor unless found by the court to be unconscionable or
unreasonable" (Sec. 22, Rule 127) Whether the fees as provided in
the contract was unconscionable or unreasonable will have to be
determined, in accordance with some guiding principles announced
by this Court, in already familiar cases, one of which is the Delgado
v. De la Rama, 43 Phil. 419, where We held
... The circumstances to be considered in determining the
compensation of an attorney are: (1) the amount and
character of the services rendered; (2) labor, time, and
trouble involved; (3) the nature and importance of the
litigation or business in which the services were rendered; (4)
the responsibility imposed; (5) the amount of money or the
value of the property affected by the controversy or involved
in the employment: (6) the skill and experience called for in
the performance of the services; (7) the professional
character and social standing of the attorney; (8) the results
secured, it being a recognized rule that an attorney may
properly charge a much larger fee when it is contingent than
when it is not.
We have gone over the records of the case and We find no plausible
reason to alter or modify the factual findings and legal conclusions
reached by the trial court in the above quoted decision. His Honor
had considered all the factors and circumstances of the claim, and
gave the opinion, in which We concur, that the guiding principles
heretofore recited, are not, obtaining in this particular case. It may
be added, in this connection, that the petitioner being a lawyer,
apparently of long experience and good standing, is presumed to
have sized up the entire situation before entering into the contract,
portions of which are above quoted. Emphasis is laid on the fact that
petitioner-attorney had been rendering services for almost 11 years,
before he entered into the said contract. It must be stated, however,
that even the time employed is not an appropriate basis for fixing the
amount of compensation De Guzman v. Visayan Transit Co., 68 Phil.
643).
2. Paterno Canlas v CA & Francisco Herrera (WORK AND
FEE SHOULD BE CORRELATIONAL)
Facts:
Francisco Herrera executed a mortgage over his 8 parcels of land in
favor of L&R Corporation as a security for the several loans which he
obtained from the financing institution. Upon his failure to pay, L&R
Corporation extrajudicially foreclosed the said lots. The lands were
disposed of in a public auction and L&R was the highest bidder.
Pending redemption, with Atty. Canlas as his counsel, Herrera was
able to obtain a preliminary injunction against L&R to prevent it from
consolidating the title in the corporations name.
Two years later, the parties entered into a compromise agreement
where L&R gave Herrera another year to redeem the foreclosed
properties subject to payment of P600,000. They also stipulated that
Canlas shall be entitled to attorneys fees of 100k. The court
approved the compromise.
However, Herrera, due to his financial difficulties, was still unable to
pay neither the several loans nor the attorneys fees which he owed
to Canlas. Canlas moved for execution insofar as his fees were
concerned which the court granted although he was not really able to
collect the fees.
Subsequently, Canlas and Herrera met to discuss the relief for
Herrera with respect to his liability to L&R on the one hand, and his
obligation to Canlas on the other. Canlas contends that Herrera
earnestly begged him to redeem the properties. However, Herrera
maintains that it was Canlas who offered to advance the money
provided that they executed a transfer of mortgage over the
properties in Canlas favor. (SC believes Herreras contention more)
They executed a Deed of Sale, and Transfer of Rights of Redemption
and/or to Redeem, a document that enabled Canlas to redeem the
parcels of land and to register the same in his name. Herrera only
discovered that the said lawyer registered the lots under his name
when he was about to secure a loan from a bank to finance a wet
market project. Herrera contends that the said document was
falsified. The original document only transferred the rights of Herrera
to redeem the property whereas the falsified document stated that he
was transferring all of his rights of the real properties.
Herrera filed for an action for reconveyance of the said lots and a
petition to reform the said document to reflect the true agreement
between him and Canlas. TC ruled in favor of Canlas. CA reversed.
Issue:
1. W/N Herrera should have filed a petition for certiorari rather
than a pleading for annulment of judgment
2. W/n the attorneys fees that Canlas charged Herrera was
reasonable
Held:
1. Yes. Judgments can only be annulled if there was a showing
that there is extrinsic fraud. In the case at bar, extrinsic fraud
was not proved. (Herrera contends that the judge in the trial
court colluded with Canlas in order for him to sell his land to
Canlas.)
However, the Court was still unable to find merit in his
petition. The court cannot overlook the unseemlier side of the
proceeding in which a member of the bar would exploit his
mastery of procedural law to score a technical knockout over
his client, of all people.
2. No. Even Canlas himself admitted that his client lacks
paying capacity and no financing entity wanted to
extend him a loan. This circumstance should have tempered
his demand for his fees.
Lawyering is not a money-making venture and lawyers are not
merchants. Canlas claim of attorneys fees in the sum of
P100,000 was unreasonable. The extent of the services
he rendered in the case is not impressive to justify
payment of such amount. The case itself did not involve
complex question fact or law that would have required
substantial effort as to research or leg work for the Canalas to
support his demand. The fact that the properties subject
thereof commanded quite handsome prices in the market
should not be a measure of the importance or non-importance
of the case. The petitioners stature does not support such
claim. The Court reduced the petitioners fees on a quantum
merit basis, to P20,000.00
***the contract is not void for it is not covered by the ban
(remember sales?) but it is voidable because Canlas exerted undue
influence over Herrera (moral ascendancy of the attorney.)
***however, the property was already in the possession of an IPFV
so Canlas was only held liable for actual damages. BUTHerrera
should still pay for the redemption price that Canlas paid plus
attorneys fees so this will be set-off against the damages that Canlas
has to pay.
3. Taganas v NLRC (CONTINGENT FEE)
Petitioner Atty. Wilfredo E. Taganas represented herein private
respondents in a labor suit for illegal dismissal, underpayment and
non-payment of wages, thirteenth-month pay, attorney's fees and
damages conditioned upon a contingent fee arrangement granting
the equivalent of fifty percent of the judgment award plus three
hundred pesos appearance fee per hearing. 1 The Labor Arbiter ruled
in favor of private respondents and ordered Ultra Clean Services
(Ultra) and the Philippine Tuberculosis Society, Inc., (PTSI)
respondents therein, jointly and severally, to reinstate herein private
respondents with full backwages, to pay wage differentials,
emergency cost of living allowance, thirteenth-month pay and
attorney's fee, but disallowed the claim for damages for lack of
basis. 2 This decision was appealed by Ultra and PTSI to the National
Labor Relations Commission (NLRC), and subsequently by PTSI to the
Court but to no avail. During the execution stage of the decision,
petitioner moved to enforce his attorney's charging lien. 3 Private
respondents, aggrieved for receiving a reduced award due to the
attorney's charging lien, contested the validity of the contingent fee
arrangement they have with petitioner, albeit four of the fourteen
private respondents have expressed their conformity thereto. 4
Finding the arrangement excessive, the Labor Arbiter ordered the
reduction of petitioner's contingent fee from fifty percent of the
judgment award to ten percent, except for the four private
respondents who earlier expressed their conformity. 5 Petitioner
appealed to NLRC which affirmed with modification the Labor
Arbiter's order by ruling that the ten percent contingent fee should
apply also to the four respondents even if they earlier agreed to pay
a higher percentage. 6Petitioner's motion for reconsideration was
denied, hence this petition for certiorari.
The sole issue in this petition is whether or not the reduction of
petitioner's contingent fee is warranted. Petitioner argues that
respondent NLRC failed to apply the pertinent laws and jurisprudence
on the factors to be considered in determining whether or not the
stipulated amount of petitioner's contingent fee is fair and
reasonable. Moreover, he contends that the invalidation of the
contingent fee agreement between petitioner and his clients was
without any legal justification especially with respect to the four
clients who manifested their conformity thereto. We are not
persuaded.
A contingent fee arrangement is an agreement laid down in an
express contract between a lawyer and a client in which the
lawyer's professional fee, usually a fixed percentage of what
may be recovered in the action, is made to depend upon the
success of the litigation. This arrangement is valid in this
jurisdiction. 8 It is, however, under the supervision and scrutiny of
the court to protect clients from unjust charges. 9 Section 13 of the
Canons of Professional Ethics states that "[a] contract for a
contingent fee, where sanctioned by law, should be reasonable under
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". Likewise, Rule 138, Section 24 of
the Rules of Court provides:
Sec. 24. Compensation of attorneys; agreement as to
fees. An attorney shall be entitled to have and
recover from his client no more than a reasonable
compensation for his services, with a view to the
importance of the subject-matter of the controversy,
the extent of the services rendered, and the
professional standing of the attorney. No court shall be
bound by the opinion of attorneys as expert witnesses
as to the proper compensation but may disregard such
testimony and base its conclusion on its own
professional knowledge. A written contract for services
shall control the amount to be paid therefor unless
found by the court to be unconscionable or
unreasonable.
When it comes, therefore, to the validity of contingent
fees, in large measure it depends on the
reasonableness of the stipulated fees under the
circumstances of each case. The reduction of unreasonable
attorney's fees is within the regulatory powers of the courts.
We agree with the NLRC's assessment that fifty percent of the
judgment award as attorney's fees is excessive and
unreasonable. The financial capacity and economic status of
the client have to be taken into account in fixing the
reasonableness of the fee. 11 Noting that petitioner's clients were
lowly janitors who receive miniscule salaries and that they were
precisely represented by petitioner in the labor dispute for
reinstatement and claim for backwages, wage differentials,
emergency cost of living allowance, thirteenth-month pay and
attorney's fees to acquire what they have not been receiving under
the law and to alleviate their living condition, the reduction of
petitioner's contingent fee is proper. Labor cases, it should be
stressed, call for compassionate justice.
Furthermore, petitioner's contingent fee falls within the purview of
Article 111 of the Labor Code. This article fixes the limit on the
amount of attorney's fees which a lawyer, like petitioner, may recover
in any judicial or administrative proceedings since the labor suit
where he represented private respondents asked for the claim and
recovery of wages. In fact, we are not even precluded from
fixing a lower amount than the ten percent ceiling prescribed
by the article when circumstances warrant it. 12 Nonetheless,
considering the circumstances and the able handling of the case,
petitioner's fee need not be further reduced.
The manifestation of petitioner's four clients indicating their
conformity with the contingent fee contract did not make the
agreement valid. The contingent fee contract being unreasonable
and unconscionable the same was correctly disallowed by public
respondent NLRC even with respect to the four private respondents
who agreed to pay higher percentage. Petitioner is reminded that as
a lawyer he is primarily an officer of the court charged with the duty
of assisting the court in administering impartial justice between the
parties. When he takes his oath, he submits himself to the authority
of the court and subjects his professional fees to judicial control.
4. Traders Royal Bank Employees Union v NLRC
Facts:
Traders Royal Bank Employees Union-Independent (UNION) and Atty.
Emmanuel Noel A. Cruz (ATTY. CRUZ) entered into a retainer
agreement whereby the Union obligated itself to pay Atty. Cruz a
retainer fee of P3K in consideration of his firms undertaking to
render the services. During the existence of the agreement, the
Union referred to Atty. Cruz the claim of its members for holiday,
mid-year and year-end bonuses against Traders Royal Bank
(TRADERS) which was filed with the NLRC. The Union obtained a
favorable judgment from the NLRC and was challenged before the SC
by Traders. The SC modified the decision, deleting the award for mid-
year and year-end bonuses but affirmed the award for holiday pay
differential amounting to P175,794.32. When he received the order of
the SC, Atty. Cruz notified the Union, Traders and the NLRC of his
right to exercise and enforce his attorneys lien over the award for
the holiday pay differential. He filed a motion with the labor arbiter
for determining attorneys fees in and prayed the amount of 10% of
the total award (P17,579.43) be given. The labor arbiter granted his
petition which led the Union to appeal to the NLRC. The NLRC
affirmed the decision of the labor arbiter and denied the subsequent
motion for reconsideration.
The Union argues that the NLRC acted without jurisdiction in making
the award for attorneys fees and argues that the said fees should
have been incorporated in the main case and not after the SC has
already reviewed and passed upon the decision of the NLRC. Also,
there shouldnt be payment of attorneys fees anymore because of
anything due to Atty. Cruz is already covered by the P3,000.00
retainer.
On the other hand, Atty. Cruz argues that attorneys fees are mere
incidents of the main case where the Union was awarded its money
claims and to include such fees in the case would presuppose that
the fees will be paid by Traders to the Union. Also, according to him,
the P3000.00 retainer fee is not the attorneys fees contemplated for.
Issue: W/N Atty. Cruz is entitled to attorneys fees from the award
despite the P3,000.00 retainer fee?
Held: YES, but only to the extent of P10,000.00. The P3,000.00
retainer fee doesnt cover the services that Atty. Cruz
rendered before the labor arbiter and the NLRC in behalf of
the Union. It was intended merely as a consideration for the law
firms commitment to render services in Part A and Part B of the
retainer agreement (see NB).
The SC had a lengthy discussion to make the judgment clear
regarding the types of attorneys fees, retainer fees and the basis of
whats supposed to be reasonable compensation and will be dealt
with here in seriatim.
There are two commonly accepted concepts of attorneys fees,
the so-called ordinary and extraordinary.
In its ordinary concept, an attorneys fee is the reasonable
compensation paid to a lawyer by his client for the legal services he
has rendered to the latter. The basis of this compensation is the fact
of his employment by and his agreement with the client. In its
extraordinary concept, an attorneys fee is an indemnity for
damages ordered by the court to be paid by the losing party in
litigation. The basis of this is any of the cases provided by law where
such award can be made, and is payable not to the lawyer but to the
client unless they have agreed otherwise. It is the first type of
attorneys fees which Atty. Cruz demanded before the labor arbiter.
The Court said that it was within Atty. Cruz right to make his
claim for attorneys fees only after the judgment has been
deemed final by the SC. In such a case, lawyers have two options,
either to file it before judgment is rendered with the award being
held in abeyance until the main case from which the attorneys fees
has become final, or wait for the final judgment just as Atty. Cruz
did.
As regards the concept of retainer, there are also two types of
retainer, a general retainer/retaining fee and a special retainer.
A general retainer is the fee paid to a lawyer to secure his future
services as general counsel for any ordinary legal problem that may
arise in the routinary business of the client and referred to him for
legal action. The reason for this is that the lawyer is deprived of the
opportunity of rendering services for a fee to the opposing party or
other parties. In fine, it is a compensation for lost opportunity.
A special retainer is a fee for a specific case handled or special
service rendered by the lawyer for a client.
In Hilado, in reference to general retainer, the Court said that the
payment of retainer has no relation to the obligation of the client to
pay his attorney for the services for which he has retained him to
perform. In the case at bar, the SC said that the P3,000.00 fee is not
a payment for Atty. Cruzs execution or performance of the services
listed in the contract, that the fee was independent and different
from the compensation which Atty. Cruz should receive.
Finally, with respect to what the Court deems as reasonable
compensation, the Court surrenders that such is a question of fact.
However, it said that in numerous decisions, it has applied the
doctrine of quantum meruit to prevent unjust enrichment.
Based on such guideline, which was already codified in Rule 20.01 of
the Code of Professional Responsibility, the factors to be
considered in determining the amount of attorneys fees are:
1) time spent and the extent of services rendered and required;
2) novelty and difficulty of the questions involved;
3) importance of the subject matter;
4) skill demanded;
5) probability of losing other employment as a result of acceptance of
the proferred case;
6) customary charges for similar services and the schedule of fees of
the IBP chapter to which the lawyer belongs;
7) amount involved in the controversy and the benefits resulting to
the client from the services;
8) contingency or certainty of compensation;
9) character of the employment, whether occasional or established;
10) professional standing of the lawyer.
In the case at bar, Atty. Cruz based his demand for attorneys fee on
the maximum amount that he can ask in accordance with Art. 111 of
the Labor Code but such fact doesnt preclude the Court in lessening
the amount given that what was stated in the law was the maximum
amount.
Attys fees in a judgment is part of the award that goes to the client.
It doesnt reimburse the client for the amount spent to litigate.
5. Padillo v CA
Facts:
Veronica Padillo, in a petition filed against Averi and Casilang, alleged
that she is the owner of the 251 square meter land area located in
Quezon Avenue, Lucena City, Quezon Province, which was purchased
from Marina M. de Vera-Quincho and Margarite de Vera, and that
Averia and Casilang unlawfully refused to turn over the property in
her favor.
Padilla petitioned for a court order to place her in the possession of
the property, and prohibit the respondents from disturbing the same,
and order the respondents Averia and Casilang to pay jointly and
severally to petitioner Padillo: a) P150,000 for the use of her
property from January 4, 1982, b) moral and exemplary charges
determined by the Court, and c) attorneys fees of P80,000 plus P600
per appearance in court.
Casilang denied the material allegations, and claimed that he vacated
the property as early as June 1982, thus the case against him should
be dismissed. On the other hand, Averia invoked the decision
rendered in Civil Case No. 1620-G, a suit against Quincho. Prior to
the institution of Civil Case No. 9114, 3 actions were concerned on
the property.
a) Civil Case No. 1620-G was a case filed by Averia against
Quincho and the Register Deeds of Lucena City. The RTC
ordered Quincho to execute necessary documents over the
property. The decision became final and executory as no
appeal was filed.
b) M.C. No. 374-82 was filed by Padillo to compel the Register of
Deeds of Lucena City to register the deed of sale wherein de
Vera sold of the property to Padillo. The petition was
opposed by Averia.
c) Civil Case No. 1690-G was filed by Averia against Padillo and
her spouse. The case was dismissed by Branch 61 of RTC of
Gumaca, Quezon, for improper venue.
Averia appealed to the Court of Appeals. In the meantime, M.C. No.
374-82 was ruled in favor of Padillo. RTC ordered for the
registration of the deed of sale. Respondent Averia filed a petition to
the Supreme Court (SC) claiming that the trial court has no
jurisdiction. The SC declared that the trial court has a jurisdiction,
and set aside the decision of the trial court and ordered a new trial.
The trial court declared Padillo as sole and exclusive owner of the
property and ordered the Register of Deeds of Lucena City to register
the deed of sale.
The decision of RTC in M.C. No. 374-82 was appealed to the
Court of Appeals (CA), which sustained the decision of the trial
court. Averia appealed to the SC, which was then denied. The CA
affirmed the dismissal of Civil Case No. 1690-G for improper
venue, the hearing Civil Case No. 9114 was resumed, but the
resolution of Averias Motion to Dismiss was deferred in view
of pendency of M.C. No. 374-82. The M.C. No. 374-82 was
resolved in the decision denying Averias Motion to Dismiss and
Motion to Suspend Further Proceeding in Civil Case No. 9114. Averia
assailed his denial of motion to dismiss in a petition, docketed as CA
G.R. SP No. 15356, before the CA, which suspended the proceedings
of Civil Case No. 9114 to await the final termination of M.C. No. 374-
82. No appeal was filed, so the decision of the CA in CA G.R. SP No.
15356 became final. The SC denied the petition to challenge the CAs
affirmance of the decision in M.C. No. 374-82, and rendered the
decision in Civil Case No. 9114 which favored petitioner
Padillo.
But, on appeal to the CA, CA-G.R. No. 40142 reversed the trial
courts decision on the ground of res judicata. The petitioner
sought for reconsideration but was denied.
Hence this petition.
Issue:
Did the Court of Appeals overlook the significance of the principle of
the law of the case?
Held:
Yes. The appellate court apparently overlooked the significance of
the principle of law of the case which is different from the concept of
res judicata. In the petition, the law of the case on the matter of the
pendency of M.C. No. 374-82 to bar Civil Case No. 9114 has been
settled in CA G.R. SP No. 15356. When the dismissal of Civil Case No.
9114 on the ground of pendency of M.C. No. 372-83 was raised
before the trial court the trial court chose to defer the resolution.
When the issue of pendency was raised in CA-G.R. SP No. 15356, the
Court of Appeals incorrectly ordered the mere suspension of Civil
Case No. 9114 to await the final termination of M.C. No. 374-82,
instead of dismissing the case and/or filling the claim for damages in
M.C. No. 374-82.
Law of the case does not have the finality of the doctrine of res
judicata, and applies only to one case. It is defined as the opinion
delivered on a former appeal. As a general rule, a decision prior
appeal of the same case is held to be the law of the case whether
that question is right or wrong, as long as the facts of the predicated
case continue to be the facts of the case before the court.
With respect to attorney's fees, the award thereof is the
exception rather than the general rule; counsel's fees are not
awarded every time a party prevails in a suit because of the policy
that no premium should be placed on the right to litigate. Attorney's
fees as part of damages are not the same as attorney's fees in
the concept of the amount paid to a lawyer. In the ordinary
sense, attorney's fees represent the reasonable compensation paid to
a lawyer by his client for the legal services he has rendered to the
latter, while in its extraordinary concept, they may be awarded by the
court as indemnity for damages to be paid by the losing party to the
prevailing party.
Attorney's fees as part of damages is awarded only in the
instances specified in Article 2208 of the Civil Code. As such, it
is necessary for the court to make findings of facts and law that
would bring the case within the exception and justify the grant of
such award, and in all cases it must be reasonable. Thereunder, the
trial court may award attorney's fees where it deems just and
equitable that it be so granted. While we respect the trial court's
exercise of its discretion in this case, we find the award of the trial
court of attorney's fees in the sum of One Hundred Seven Thousand
Pesos (P107,000.00) plus One Thousand Pesos (P1,000.00) per
appearance in the hearing of the case and litigation expenses of Ten
Thousand Pesos (P10,000.00), to be unreasonable and excessive.
Attorney's fees as part of damages is not meant to enrich the
winning party at the expense of the losing litigant. Thus, it
should be reasonably reduced to Twenty-Five Thousand Pesos
(P25,000.00).
Thus, even if erroneous, the ruling of CA in CA-G.R. SP No.
15356 became the law of the case, and may no longer be
disturbed or modified. The CAs decision in CA-G.R. SP No.
15356 on the matter of the issue of existence of M.C. No. 374-82 as
a bar to Civil Case No. 9114 should dictate all further
proceedings.
IV. CONFLICT OF INTEREST
1. PCGG v Sandiganbayan
FACTS
In 1976 the General Bank and Trust Company (GENBANK)
encountered financial difficulties. GENBANK had extended
considerable financial support to Filcapital Development Corporation
causing it to incur daily overdrawings on its current account with
Central Bank. Despite the mega loans GENBANK failed to recover
from its financial woes. The Central Bank issued a resolution
declaring GENBANK insolvent and unable to resume business with
safety to its depositors, creditors and the general public, and ordering
its liquidation. A public bidding of GENBANKs assets was held where
Lucio Tan group submitted the winning bid.
Solicitor General Estelito Mendoza filed a petition with the CFI praying
for the assistance and supervision of the court in GENBANKs
liquidation as mandated by RA 265. After EDSA Revolution I Pres
Aquino established the PCGG to recover the alleged ill-gotten wealth
of former Pres Marcos, his family and cronies. Pursuant to this
mandate, the PCGG filed with the Sandiganbayan a complaint for
reversion, reconveyance, restitution against respondents Lucio Tan,
at.al. PCGG issued several writs of sequestration on properties
allegedly acquired by them by taking advantage of their close
relationship and influence with former Pres. Marcos.
The abovementioned respondents Tan, et. al are represented as their
counsel, former Solicitor General Mendoza. PCGG filed motions to
disqualify respondent Mendoza as counsel for respondents Tan et. al.
with Sandiganbayan. It was alleged that Mendoza as then Sol Gen
and counsel to Central Bank actively intervened in the liquidation of
GENBANK which was subsequently acquired by respondents Tan et.
al., which subsequently became Allied Banking Corporation. The
motions to disqualify invoked Rule 6.03 of the Code of Professional
Responsibility which prohibits former government lawyers from
accepting engagement or employment in connection with any
matter in which he had intervened while in the said service.
The Sandiganbayan issued a resolution denying PCGGs motion to
disqualify respondent Mendoza. It failed to prove the existence of an
inconsistency between respondent Mendozas former function as
SolGen and his present employment as counsel of the Lucio Tan
group. PCGGs recourse to this court assailing the Resolutions of the
Sandiganbayan.
ISSUE
Whether Rule 6.03 of the Code of Professional Responsibility applies
to respondent Mendoza. The prohibition states: A lawyer shall not,
after leaving government service, accept engagement or employment
in connection with any matter in which he had intervened while in the
said service.
HELD
The case at bar does not involve the adverse interest aspect of Rule
6.03. Respondent Mendoza, it is conceded, has no adverse interest
problem when he acted as SOlGen and later as counsel of
respondents et.al. before the Sandiganbayan. However there is still
the issue of whether there exists a congruent-interest conflict
sufficient to disqualify respondent Mendoza from representing
respondents et. al. The key is unlocking the meaning of matter and
the metes and bounds of intervention that he made on the matter.
Beyond doubt that the matter or the act of respondent
Mendoza as SolGen involved in the case at bar is advising the
Central Bank, on how to proceed with the said banks
liquidation and even filing the petition for its liquidation in CFI
of Manila.
The Court held that the advice given by respondent Mendoza on the
procedure to liquidate GENBANK is not the matter contemplated by
Rule 6.03 of the Code of Professional Responsibility. ABA Formal
Opinion No. 342 is clear in stressing that drafting, enforcing or
interpreting government or agency procedures, regulations and laws,
or briefing abstract principles of law are acts which do not fall within
the scope of the term matter and cannot disqualify. Respondent
Mendoza had nothing to do with the decision of the Central Bank to
liquidate GENBANK. He also did not participate in the sale of
GENBANK to Allied Bank.
The legality of the liquidation of GENBANK is not an issue in
the sequestration cases. Indeed, the jurisdiction of the PCGG does
not include the dissolution and liquidation of banks. Thus, the Code
6.03 of the Code of Professional Responsibility cannot apply to
respondent Mendoza because his alleged intervention while SolGen is
an intervention on a matter different from the matter involved in the
Civil case of sequestration. In the metes and bounds of the
intervention.
The applicable meaning as the term is used in the Code of
Professional Ethics is that it is an act of a person who has the power
to influence the subject proceedings. The evil sought to be remedied
by the Code do not exist where the government lawyer does not act
which can be considered as innocuous such as drafting, enforcing,
or interpreting government or agency procedures, regulations or laws
or briefing abstract principles of law. The court rules that the
intervention of Mendoza is not significant and substantial. He merely
petitions that the court gives assistance in the liquidation of
GENBANK. The role of court is not strictly as a court of justice but as
an agent to assist the Central Bank in determining the claims
of creditors. In such a proceeding the role of the SolGen is not that of
the usual court litigator protecting the interest of government.
Petition assailing the Resolution of the Sandiganbayan is denied.
Relevant Dissenting Opinion of Justice Callejo:
Rule 6.03 is a restatement of Canon 36 of the Canons of Professional
Ethics: A lawyer, having once held public office or having been in
the public employ, should not after his retirement accept employment
in connection with any matter which he has investigated or passed
upon while in such office or employ.
Indeed, the restriction against a public official from using his public
position as a vehicle to promote or advance his private
interests extends beyond his tenure on certain matters in which he
intervened as a public official. Rule 6.03 makes this restriction
specifically applicable to lawyers who once held public office.
A plain reading shows that the interdiction applies to a lawyer who
once served in the government and relates to his accepting
engagement or employment in connection with any matter in which
he had intervened while in the service.
2. Gamaliel Abaqueta v Bernardito Floredo (CANT
REPRESENT ANOTHER WHOSE INTERST CONFLICTS
WITH CLIENT)
This is an administrative complaint against Atty. Bernardito A.
Florido filed with the Integrated Bar of the Philippines (IBP)
Commission on Bar Discipline, praying that appropriate sanctions be
imposed on respondent for representing conflicting interests.
 Complainant is a Filipino by birth who had acquired American
citizenship. He resides at 15856 N. 15th Way, Phoenix, Arizona 85022,
U.S.A. Respondent is a practicing lawyer based in Cebu City.
On November 28, 1983, complainant engaged the professional
services of respondent through his attorney-in-fact, Mrs. Charito Y.
Baclig, to represent him in Special Proceedings No. 3971-R,
entitled, In the Matter of the Intestate Estate of Deceased Bonifacia
Abaqueta,[2] Susana Uy Trazo, petitioner before the Regional Trial
court of Cebu.[3]
Accordingly, respondent entered his appearance in Special
Proceedings No. 3971-R as counsel for herein complainant, he filed
complainants Objections and Comments to Inventory and Accounting,
registering complainants objection
. . . to the inclusion of the properties under Items 1 to 5 contained in
the inventory of the administratrix dated November 9, 1983. These
properties are the sole and exclusive properties of the oppositor per
the latest tax declarations already marked as Exhibits 2, 3, 4, 5 and
6 in the Formal Offer of Exhibits by oppositor in writing dated August
17, 1983 xxx.[5]
Several years later, Milagros Yap Abaqueta filed an action for sum
of money against complainant, docketed as Civil Case No. CEB-11453
and entitled, Milagros Yap Abaqueta vs. Gamaliel Abaqueta and
Casiano Gerona.[6] Respondent signed the Complaint as counsel for
plaintiff Milagros Yap Abaqueta, averring, inter alia, that:
Plaintiff and defendant Gamaliel Abaqueta are the conjugal owners of
those certain parcels of land, more particularly as follows
The parcels of land referred to as conjugal property of
complainant and Milagros Yap-Abaqueta are the very same parcels of
land in Special Proceedings No. 3971-R which respondent, as lawyer
of complainant, alleged as the sole and exclusive properties of
complainant. In short, respondent lawyer made allegations in
Civil Case No. CEB-11453 which were contrary to and in direct
conflict with his averments as counsel for complainant in
Special Proceedings No. 3971-R.
Complainant further averred that respondent admitted he was
never authorized by the former to appear as counsel for
complainants ex-wife in Civil Case No. CEB-11453; that respondent
failed to indicate in the Complaint the true and correct address of
herein complainant, which respondent knew as far back as August 2,
1990, when he wrote a letter to the complainant at the said address.
[7]
Consequently, complainant failed to receive summons and was
declared in default in Civil Case No. CEB-11453. While the order of
default was eventually set aside, complainant incurred expenses to
travel to the Philippines, which were conservatively estimated at
$10,000.00. He argues that respondents conduct constitute
professional misconduct and malpractice as well as trifling with court
processes.
In his defense, respondent claims in his Answer[8] that he always
acted in good faith in his professional relationship with complainant in
spite of the fact that they have not personally met. He based the
matters he wrote in the Complaint on information and documents
supplied by Mrs. Charito Y. Baclig, complainants sister-in-law and
attorney-in-fact, indicating that he was sole and exclusive owner of
the properties. This was sometime in November 1983. No affidavit of
adjudication was ever furnished respondent by complainant and this
was apparently suppressed because it would show that the properties
formed part of the estate.
Eight years later, in November 1991, long after Special
Proceedings No. 3971-R was settled and the attorney-client
relationship between complainant and respondent was terminated,
Mrs. Milagros Abaqueta through Mrs. Baclig, engaged his services to
file Civil Case No. CEB-11453. Mrs. Baclig presented to him a deed of
absolute sale dated July 7, 1975,[9] showing that the properties
subject hereof were not complainants exclusive property but his
conjugal property with his wife, the same having been acquired
during the subsistence of their marriage. Thus, in all good faith,
respondent alleged in the complaint that said properties were
conjugal assets of the spouses.
Respondent further pointed out that his law firm handles on the
average eighty new court cases annually and personally interviews
four or five clients, prospective clients and/or witnesses daily except
Saturdays and Sundays. It regularly closes to the public at 7:00 p.m.,
but work continues sometimes until 8:30 p.m. This has been going
on for the last twenty-five years out of respondents thirty-three years
of private practice. The absence of personal contact with complainant
and the lapse of eight years resulted in the oversight and/or lapse of
respondents memory that complainant was a former
client. Furthermore, the caption of the Special Proceeding was not in
the name of complainant but was entitled, In the Matter of the
Intestate Estate of Bonifacia Payahay Abaqueta.
Respondent expressed regret over the oversight and averred that
immediately after discovering that he formerly represented
complainant in Special Proceeding No. 3971-R, he filed a motion to
withdraw as counsel for plaintiff, which was granted by the trial court.
[10]
He denied any malice in his acts and alleged that it is not in his
character to do malice or falsehood particularly in the exercise of his
profession.
In his Comments/Observations on Respondents Answer,
complainant averred that respondents conduct was geared
[11]
towards insuring a court victory for Milagros Yap in Civil Case No.
CEB-11453, wherein he deliberately stated that complainants address
was 9203 Riverside Lodge Drive, Houston, Texas, 77083, U.S.A.,
when he knew fully well that complainants true and correct address
was c/o V.A. Hospital, 7th Street & Italian School Road, Phoenix,
Arizona, 85013, U.S.A. By falsely stating and concealing his true and
correct address, respondent eventually succeeded in obtaining a
default judgment in favor of his client.
During the pendency of these proceedings before the IBP, it
appeared that respondents son got married to the daughter of IBP
National President Arthur D. Lim. Thus, Atty. Lim inhibited himself
from participating in the resolution of the case. [12] Subsequently, a
Resolution was issued requiring the IBP to elevate the entire records
of the case within thirty (30) days from notice.[13]
The main issue to be resolved in the case at bar is whether or
not respondent violated Rule 15.03 of the Code of Professional
Responsibility. The investigating commissioner found that respondent
clearly violated the prohibition against representing conflicting
interests and recommended that he be suspended from the practice
of law for a period of three (3) months.
We find the recommendation well-taken.
Rule 15.03 of the Code of Professional Responsibility explicitly
provides that: A lawyer shall not represent conflicting interests
except by written consent of all concerned given after a full disclosure
of the facts.
There is a conflict of interest if there is an inconsistency in
the interests of two or more opposing parties. The test is
whether or not in behalf of one client, it is the lawyers duty to fight
for an issue or claim but it is his duty to oppose it for the other client.
[14]
In short, if he argues for one client, this argument will be opposed
by him when he argues for the other client.
There is a representation of conflicting interests if the acceptance
of the new retainer will require the attorney to do anything which will
injuriously affect his first client in any matter in which he represents
him and also whether he will be called upon in his new relation, to
use against his first client any knowledge acquired through their
connection.[16]
As pointed out by the investigating commissioner, respondent
does not deny that he represented complainant in Special
Proceedings No. 3971-R. He also does not deny that he is the lawyer
of Milagros Yap Abaqueta in Civil Case No. CEB-11453, filed against
complainant and involving the same properties which were litigated
in Special Proceedings No. 3971-R. Respondent also admitted that he
did not secure the consent of complainant before he agreed to act as
Milagros Yap Abaquetas lawyer in Civil Case No. CEB-11453.
The reasons proffered by respondent are hardly persuasive to
excuse his clear representation of conflicting interests in this
case. First, the investigating commissioner observed that the name
Gamaliel Abaqueta is not a common name. Once heard, it will surely
ring a bell in ones mind if he came across the name again. In this
case, respondent actively prosecuted the cause of complainant in
Special Proceedings No. 3971-R, such that it would be impossible for
respondent not to have recalled his name.
Second, assuming arguendo that respondents memory was
indeed faulty, still it is incredible that he could not recall that
complainant was his client, considering that Mrs. Charito Baclig, who
was complainants attorney-in-fact and the go-between of
complainant and respondent in Special Proceedings No. 3971-R, was
the same person who brought Milagros Yap Abaqueta to him. Even a
person of average intelligence would have made the connection
between Mrs. Baclig and complainant under such circumstances.
Lastly, the fact that the subject matter of Civil Case No. CEB-
11453 and Special Proceedings No. 3971-R are the same
properties could not have escaped the attention of respondent. With
such an abundance of circumstances to aid respondents memory, it
simply strains credulity for him to have conveniently forgotten his
past engagement as complainants lawyer. What rather appears, given
the prevailing facts of this case, is that he chose to ignore them on
the assumption that the long period of time spanning his past and
present engagement would effectively blur the memories of the
parties to such a discrepancy.
It is axiomatic that no lawyer is obliged to act either as
adviser or advocate for every person who may wish to become
his client. He has the right to decline such employment,
[17]
subject, however, to Canon 14 of the Code of Professional
Responsibility.[18] Once he agrees to take up the cause of the
client, the lawyer owes fidelity to such cause and must always
be mindful of the trust and confidence reposed in him.[19] He
must serve the client with competence and diligence [20] and champion
the latters cause with wholehearted fidelity, care and devotion.[21]
A lawyer may not, without being guilty of professional
misconduct, act as counsel for a person whose interest
conflicts with that of his former client.[22] The reason for the
prohibition is found in the relation of attorney and client which is one
of trust and confidence of the highest degree. [23] Indeed, as we stated
in Sibulo v. Cabrera,[24] The relation of attorney and client is
based on trust, so that double dealing, which could sometimes
lead to treachery, should be avoided.[25]
Credence cannot, however, be given to the charge that
respondent fraudulently and maliciously falsified the true and correct
address of the complainant notwithstanding respondents knowledge
thereof. Lawyers normally do not have knowledge of the personal
circumstances of a party in a case and usually rely on the information
supplied by their clients. The fact that respondent sent a letter to
complainant at the latters correct address[26] sixteen months before
the filing of Civil Case No. CEB-11453 does not by itself prove malice
on the part of respondent. A new address was furnished by Milagros
Yap Abaqueta days before the complaint was filed. Respondent had
no reason to doubt the correctness of the address of the complainant
given to him by Milagros Yap Abaqueta considering that she was
complainants wife.
3. Lolita Artuzuela v Ricarte Maderazo (DONT PRINT SHIT
IN YOUR OFFICE haha)
FACTS
Allan Echavia had a vehicular accident at Caduman St., corner H.
Abellana St., Mandaue City. At the time of the accident, Echavia was
driving a Ford Telstar car owned by a Japanese national named
Hirometsi Kiyami, but was registered in the name of his brother-in-
law, Jun Anthony Villapez. The car rammed into a
small carinderia owned by complainant Lolita Artezuela. Complainant
engaged the services of the respondent in filing a damage suit
against Echavia, Villapez and one Bernardo Sia.
On November 24, 1994, Artezuela filed before this Court a verified
complaint for disbarment against the respondent. She alleged that
respondent grossly neglected his duties as a lawyer and failed to
represent her interests with zeal and enthusiasm. According to her,
when Civil Case (car rammed into her carinderia) was scheduled for
pre-trial conference on August 20, 1993, respondent asked for its
postponement although all the parties were present. Notwithstanding
complainant's persistent and repeated follow-up, respondent did not
do anything to keep the case moving. He withdrew as counsel
without obtaining complainant's consent.
Complainant also claimed that respondent engaged in activities
inimical to her interests. While acting as her counsel, respondent
prepared Echavia's Answer to the Amended Complaint. The said
document was even printed in respondent's office. Complainant
further averred that it was respondent who sought the dismissal of
the case, misleading the trial court into thinking that the dismissal
was with her consent.

Respondent denied the complainant's allegations and averred that he
conscientiously did his part as the complainant's lawyer in Civil Case
No. 13666. He withdrew as counsel because the complainant was
uncooperative and refused to confer with him. He also gave several
notices to the complainant and made known his intention before he
filed his Manifestation to withdraw as counsel. Because of the severed
relationship, the lower court, after holding a conference, decided to
grant respondent's manifestation and advised the complainant to
secure the services of a new lawyer. Complainant, however, refused
and instead, sought the dismissal of the case.
Respondent alleged that he sought the postponement of the Pre-Trial
Conference scheduled on August 20, 1993 so that he could file the
Amended Complaint. He admitted that Echavia's Answer to the
Amended Complaint was printed in his office but denied having
prepared the document and having acted as counsel of Echavia. He
claimed that complainant requested him to prepare Echavia's Answer
but he declined. Echavia, however, went back to his office and asked
respondent's secretary to print the document. Respondent intimated
that the complainant and Echavia have fabricated the accusations
against him to compel him to pay the amount of P500,000.00.13
ISSUE:
Whether or not respondent had a direct hand in the preparation of
Echavia's Answer to the Amended Complaint and therefore guilty of
conflicting interests?
HELD:
To be guilty of representing conflicting interests, a counsel-of-
record of one party need not also be counsel-of-record of the
adverse party. He does not have to publicly hold himself as
the counsel of the adverse party, nor make his efforts to
advance the adverse party's conflicting interests of record---
although these circumstances are the most obvious and satisfactory
proof of the charge. It is enough that the counsel of one party had a
hand in the preparation of the pleading of the other party, claiming
adverse and conflicting interests with that of his original client. To
require that he also be counsel-of-record of the adverse party would
punish only the most obvious form of deceit and reward, with
impunity, the highest form of disloyalty
As pointed out by Echavia, he was approached by Atty. Maderazo,
introduced himself as his lawyer and after some sessions in the
latter's office, asked him to return and sign a document which he
latter identified as the Answer to the Amended Complaint.
The Investigating Committee found respondent's defense weak.
Respondent did not bother to present his secretary as witness, nor
obtain her affidavit to prove his allegations. Instead, he offered a
convenient excuse--- that he cannot anymore locate his secretary.
Respondent argued that it was the complainant who asked him to
prepare Echavia's Answer to the Amended Complaint, after reaching
an agreement whereby Echavia would testify in favor of the
complainant. After he declined the request, he claimed that it was the
complainant who prepared the document and asked his secretary to
print the same. But as shown, Echavia's Answer to the Amended
Complaint was in no way favorable to the complainant.
With the dismissal of Civil Case No. 13666, Echavia is practically off
the hook. We cannot find any reason why Echavia would commit
perjury and entangle himself, once again, with the law. He does not
stand to profit at all by accusing the respondent falsely.
Furthermore, considering complainant's stature and lack of legal
education, we cannot see how she could have prepared Echavia's
Answer to the Amended Complaint and device a legal maneuver as
complicated as the present case.
Respondent's attack on the credibility of Investigating Commissioner
Ingles to render an impartial decision, having been an adversary in
Civil Case No. R-33277, does not convince us to grant new trial. This
is the first time that respondent questions the membership of
Commissioner Ingles in the Investigating Committee. If respondent
really believed in good faith that Commissioner Ingles would be
biased and prejudiced, he should have asked for the latter's inhibition
at the first instance. Moreover, we could not find any hint of
irregularity, bias or prejudice in the conduct of the investigation that
would lead us to set it aside
4. Erlinda Abragan v Atty Maximo Rodriguez
FACTS
That sometime in 1986, the petitioners hired the services of the
respondent to represent them in the case entitled PABLO SALOMON
et al vs. RICARDO DACALUZ for Forcible Entry with Petition for a Writ
of Preliminary Injunction and Damages.
After the case was finally won, and a Writ of Execution was issued by
the Honorable Municipal Trial Court in Cities of Cagayan de Oro City,
Branch 3, the same respondent lawyer represented the petitioners
herein;
When respondent counsel disturbed the association (Cagayan de Oro
Landless Residents Association, Inc.), to which all the complainants
belong, by surreptitiously selling some rights to other persons
without the consent of the petitioners herein, they decided to
sever their client-lawyer relationship;
The NBI of CDO, is presently undertaking an investigation on the
illegal activities of Atty. Maximo Rodriguez pertaining to his express
involvement in the illegal and unauthorized apportionment,
assignment and sale of parcels of land subject to the Case No.
11204, where he represented the poor landless claimants of Cagayan
de Oro City, which include your petitioners in this case;
Petitioners later filed an indirect contempt charge under Civil Case
No. 11204 against Sheriff Fernando Loncion, and engaged the
services of Atty. LORETO O. SALVA, SR., an alleged former student of
law of Atty. Maximo Rodriguez.
Respondent lawyer, Atty. Maximo Rodriguez, (in the Indirect
Contempt Case under the same Civil Case No. 11204,)
REPRESENTED and actively took up the defense of FERNANDO
LONCION et al. much to the dismay, damage and prejudice of the
herein petitioners.
The records will bear the petitioners out that their counsel, Atty.
SALVA SR. later on withdrew the case of Indirect Contempt upon the
suggestion of Atty. Maximo Rodriguez; and instead, filed the Motion
for the Issuance of an Alias Writ of Execution;
That on January 12, 1993, the respondent, without consulting the
Petitioners who are all poor and ignorant of court procedures and the
law, filed in behalf of the plaintiffs (which include the herein
Petitioners) in Civil Case No. 11204, a Motion to Withdraw Plaintiffs
Exhibit. That the illegal and unethical actions of Atty. Maximo
Rodriguez are most obnoxious, condemnable, and highly immoral, to
say the least, more so if we consider his social standing and
ascendancy in the community of Cagayan de Oro City;
11. That the records of Civil Case No. 11204 which are voluminous
will bear the petitioners allegations against the herein respondent,
who, after representing them initially, then transferring allegiance
and services to the adverse parties (Lonchion, Palacio and NHA
Manager), came back to represent the herein petitioners without any
regard [for] the rules of law and the Canons of Professional Ethics,
which is highly contemptible and a clear violation of his oath as a
lawyer and an officer of the courts of law;
12. That these acts are only those that records will bear, because
outside of the court records, respondent, without regard [for]
delicadeza, fair play and the rule of law, has assigned, apportioned
and sold parcels of land that is the subject matter in Civil Case No.
11204 which legally have been pronounced and decided to be in the
possession of the plaintiffs in Civil Case No. 11204, who are partly
the petitioners herein. Thus, they cannot yet enjoy the fruits of the
tedious and protracted legal battle because of respondents illegal
acts, which have instilled fear among the plaintiffs and the petitioners
herein;
13. That respondent lawyer even represented ERLINDA ABRAGAN,
one of the herein petitioners, in a later proceedings in Civil Case No.
11204 wherein the apportionment of parcels of land was erroneously,
unproceduraly and illegally submitted to a commissioner, and that
ERLINDA ABRAGAN, after winning in the said Civil Case was later on
dispossessed of her rights by respondent counsels maneuver, after
the decision (in Civil Case No. 11208) became final executory;
14. That to make matters worse, respondent Atty. Rodriguez
eventually fenced an area consisting of about 10, 200 square meters
within Lot No. 1982[,] the subject matter in Civil Case No. 11204
without the consent of the herein petitioners. He even openly and
publicly proclaimed his possession and ownership thereof, which fact
is again and also under NBI investigation;
15. That all the foregoing acts of respondent lawyer plus his
continuing and ongoing illegal and unethical maneuvers have
deprived the herein petitioners of their vested rights to possess and
eventually own the land they have for decades possessed, and
declared as such by final judgment in Civil Case No. 11204.
In his Comment,[2] respondent flatly denied the accusations of
petitioners. He explained that the withdrawal of the exhibits, having
been approved by the trial court, was not illegal, obnoxious,
undesirable and highly immoral. He added that he took over the
8,000 square meters of land only after it had been given to him as
attorneys fees.
Thereafter, petitioners filed a Reply[4] in which they reiterated
their allegations against respondent and added that the latter
likewise violated Rule 15.03 of the Code of Professional
Responsibility. The Court referred the case to the Integrated Bar of
the Philippines (IBP) for investigation, report and/or decision.[5]
Report of the Investigating Commissioner
In her Report and Recommendation dated January 23, 2001,
Investigating IBP Commissioner Lydia A. Navarro recommended that
respondent be suspended from the practice of law for six (6) months
for violation of Rule 15.03 of Canon 15 of the Code of Professional
Responsibility. Her report reads in part as follows:
From the facts obtaining, it is apparent that respondent
represented conflicting interest considering that the
complainants were the same plaintiffs in both cases and were
duly specified in the pleadings particularly in the caption of
the cases. Under the said predicament even if complainants were
excluded as members of the Association represented by the
respondent; the latter should have first secured complainants
written consent before representing defendants in the
Indirect Contempt case particularly Macario Palacio, president
of the Association, or inhibited himself.
It is very unfortunate that in his desire to render service to his client,
respondent overlooked the fact that he already violated Rule 15.03 of
[C]anon 15 of the Code of Professional Responsibility, to wit:
Rule 15.03 - A lawyer shall not represent conflicting interests
except by written consent of all concerned given
after a full disclosure of the facts.
We have no alternative but to abide by the rules.[6]
IBP Board of Governors Resolution
Upholding the above-quoted Report, the Board of Governors of
the Integrated Bar of the Philippines recommended via its May 26,
2001 Resolution that respondent be suspended from the practice of
law for two (2) months for violation of Rule 15.03 of Canon 15 of the
Code of Professional Responsibility.
This Courts Ruling
We agree with the findings and the recommendation of the IBP
Board of Governors, but hold that the penalty should be six-month
suspension as recommended by the investigating commissioner.
Administrative Liability of Respondent
At the outset, we agree with Commissioner Navarros conclusion
that apart from their allegations in their various pleadings, petitioners
did not proffer any proof tending to show that respondent had sold to
other persons several rights over the land in question; and that he
had induced the former counsel for petitioners, Atty. Salva Jr., to
withdraw the indirect contempt case that they had filed. Neither did
the IBP find anything wrong as regards the 8,000 square meters
awarded to respondent as payment for his legal services. Petitioners
bare assertions, without any proof to back them up, would not justify
the imposition of a penalty on respondent.
Having said that, we find, however, that respondent falls
short of the integrity and good moral character required from
all lawyers. They are expected to uphold the dignity of the
legal profession at all times. The trust and confidence clients
repose in them require a high standard and appreciation of the
latters duty to the former, the legal profession, the courts and the
public. Indeed, the bar must maintain a high standard of legal
proficiency as well as of honesty and fair dealings. To this end,
lawyers should refrain from doing anything that might tend to lessen
the confidence of the public in the fidelity, honesty and integrity of
their profession.[7]
In the present case, respondent clearly violated Rule 15.03 of
Canon 15 of the Code of Professional Responsibility, which provides
that a lawyer shall not represent conflicting interests except by
written consent of all concerned given after full disclosure of the
facts.
The Court explained in Buted v. Hernando:[8]
[A] lawyer represents conflicting interests when, in behalf of one
client, it is his duty to contend for that which duty to another client
requires him to oppose.
The obligation to represent the client with undivided fidelity
and not to divulge his secrets or confidence forbids also the
subsequent acceptance of retainers or employment from
others in matters adversely affecting any interest of the client
with respect to which confidence has been reposed.[9] (Italics
in the original)
In the case at bar, petitioners were the same complainants
in the indirect contempt case and in the Complaint for forcible
entry in Civil Case No. 11204.[10] Respondent should have evaluated
the situation first before agreeing to be counsel for the defendants in
the indirect contempt proceedings. Attorneys owe undivided
allegiance to their clients, and should at all times weigh their actions,
especially in their dealings with the latter and the public at large.
They must conduct themselves beyond reproach at all times.
This stern rule is designed not alone to prevent the dishonest
practitioner from fraudulent conduct, but as well as to protect the
honest lawyer from unfounded suspicion of unprofessional practice. It
is founded on principles of public policy, on good taste. As has been
said in another case, the question is not necessarily one of the rights
of the parties, but as to whether the attorney has adhered to proper
professional standard. With these thoughts in mind, it behooves
attorneys, like Caesars wife, not only to keep inviolate the clients
confidence, but also to avoid the appearance of treachery and
double-dealing. Only thus can litigants be encouraged to entrust their
secrets to their attorneys which is of paramount importance in the
administration of justice.
Because of his divided allegiance, respondent has eroded, rather
than enhanced, the public perception of the legal profession. His
divided loyalty constitutes malpractice for which he may be
suspended, following Section 27, Rule 138 of the Rules of Court,
which provides:
SEC. 27. Disbarment or suspension of Attorneys by Supreme Court,
grounds therefor. Any member of the bar may be disbarred or
suspended from his office as attorney by the Supreme Court for any
deceit, malpractice, or other gross misconduct in such office, grossly
immoral conduct, or by reason of his conviction of a crime involving
moral turpitude, or for any violation of the oath which he is required
to take before admission to practice, or for a wilful disobedience
appearing as an attorney for a party to a case without authority so to
do. x x x.
Complainants ask that respondent be disbarred. We find however
that suspension of six (6) months from the practice of law, as
recommended by Commissioner Navarro, is sufficient to discipline
respondent.
A survey of cases involving conflicting interests on the part of
counsel reveals that the Court has imposed on erring
attorneys[12] either a reprimand, or a suspension from the practice of
law from five (5) months[13] to as high as two (2) year
5. Pasay Law and Conscience Union Inc v Paz
On June 5, 1971, the Pasay Law and Conscience Union, Inc. (PLACU)
filed this disbarment case against David D.C. Paz, a member of the
Philippine Bar. The complainant charged the respondent with
malpractice, gross misconduct in office, gross immoral conduct
and/or disloyalty to the Republic of the Philippines. 1
In a resolution dated June 22, 1971, this Court required the
respondent to file an answer to the complaint against him. 2
After the respondent had filed his answer 3 and the complainant had
submitted a reply, 4 this administrative case was referred to the
Solicitor General for investigation, report and recommendation. 5
On January 23, 1973, the Solicitor General, having found sufficient
grounds to proceed against the respondent after due investigation of
the administrative case against him, submitted, among others
sixteen copies, in a sealed envelope, of his complaint against the
respondent, together with the transcript of stenographic notes taken
during the investigation of the case, the folder of exhibits, the record
of the investigation not the case and the original Supreme Court
record. 6
The Solicitor General charged Atty. D.C. Paz with representing clients
with conflicting interests and gross misconduct in office.
Regarding the charge of representing clients with conflicting
interests, the complainant alleged that in 1969, in the course of the
investigation then being conducted by the "Charlie Division" of the
Presidential Agency on Reforms and Government Operations,
otherwise known as the PARGO, on the complaint of Dr. Irineo P. Sia
for anti-graft against the then ex-Mayor Pablo Cuneta of Pasay City,
the respondent, David D.C. Paz, was then PARGO's Legal Officer and
Chief Prosecutor, as well as the head of the aforesaid "Charlie
Division"; that in the series of follow-ups made with PARGO by Dr.
Irineo P. Sia himself and at times in company of Atty. Galileo P. Brion,
President of the complainant, PLACU, of the aforesaid anti-graft
complaint against the then ex-Mayor Pablo Cuneta, the respondent
enlisted the help of Dr. Irineo P. Sia and Atty. Galilee P. Brion in the
gathering of evidence which included PLACU's copies of the records of
Civil Case No. 72967 of the Court of First Instance of Manila, entitled
"Vicente D. Isip vs. The Pasay City Government, et al."; that in the
course of the investigation by the PARGO of the aforesaid anti-graft
complaint, but prior to September 10, 1969, the respondent even
administered oaths to some persons who had given written
statements before the PARGO investigators; that on September 10,
1969, the respondent was detailed by the then PARGO Secretary
Ramon D. Bagatsing as Executive and Police Adviser to the Mayor of
Makati, Rizal;
On the same day, the respondent designated as division-in-charge
Atty. Rodolfo Navarro, who was then Team Leader of Charlie-two
under PARGO's "Charlie Division" to act for and in respondent's behalf
while not in office and while performing his duties and functions as
such adviser in Makati, Rizal;
Later on, after respondent had resigned from the PARGO sometime in
January 1970 and on the basis of the investigation conducted by the
PARGO on the aforementioned anti-graft complaint of Dr. Sia, the
PARGO's successor, the Complaints and Investigation Office (CIO)
filed an anti-graft charge and another charge for technical
malversation both against Pablo Cuneta and others with the Pasay
City Fiscal's Office, docketed therein as I.S. Nos. 71712 and 71712-A.
respectively; that on November 13 and 23, 1970, during the
preliminary investigation by the Pasay City Fiscal's Office of I.S. Nos.
71712 and 71712-A, the respondent entered his appearance,
participated and orally argued therein as one of the counsels of Pablo
Cuneta; that while in subsequent hearings thereof, the respondent no
longer appeared as counsel for Cuneta, it was only after his
appearance had been questioned by Atty. Brion;
Up to September 10, 1969, the respondent was then PARGO's Legal
Officer and Chief Prosecutor, as well as head of PARGO's "Charlie
Division", he had access to, and necessarily acquired, directly or
indirectly, knowledge of the facts of the said anti-graft case, its weak
as well as its strong points, and such knowledge is confidential and
should be guarded with great care, lest it jeopardizes PARGO, an
agency and instrumentality of the Republic of the Philippines whose
interest respondent swore to serve and protect without any mental
reservation, in the ultimate prosecution of the said case; that there
was a relationship of attorney and client between respondent and the
government; that for having appeared twice, participated and orally
argued as counsel for Pablo Cuneta during the preliminary
investigation of the charges for anti-graft and technical malversation
filed by the CIO, successor of PARGO, against said Pablo Cuneta and
others before the Pasay City Fiscal's Office, the respondent violated
Section 6 of the Canons of Legal Ethics and Section 20 (e) of Rule
138 of the Revised Rules of Court; and that the alleged withdrawal of
the respondent as counsel for Pablo Cuneta, although in this
connection there is nothing reflected in the records of the preliminary
investigation, is of no moment for he had already violated the
aforesaid Canons of Legal Ethics and that respondent's having
appeared twice as Counsel for Cuneta in the preliminary investigation
of the aforesaid charge constitutes clear attempts on respondent's
part to damage CIO's cause against Cuneta.
On the charge of gross misconduct in office, the complaint stated
that in the course of the investigation by the PARGO of Dr. Sia's anti-
graft complaint against the then ex-Mayor Pablo Cuneta of Pasay City,
but prior to September 10, 1969, the respondent borrowed and
received from Atty. Brion the PLACU's copies of the record or
expedients of Civil Case No. 72967 of the Court of First Instance of
Manila entitled Vicente D. Isip vs. The Pasay City Government, et
al.," in the presence of Dr. Sia and Atty. Alidio for the purpose of
making xerox copies of such relevant documents therein to be
utilized as evidence in the said anti-graft case; that notwithstanding
repeated requests by Atty. Brion, the respondent never returned to
the former the aforesaid PLACU's copies of the record or expedients,
and when Atty. Brion manifested before Pasay City Fiscal Pineda
during the preliminary investigation on November 13, 1970 of the
anti-graft and technical malversation charges against Pablo Cuneta
and others about the non-return to him of said expediente,
respondent denied having borrowed and received the same, to the
prejudice of PARGO's prosecution of the said charges, so that PARGO,
through Atty. Brion, had to reconstitute the answer and its seventeen
annexes which formed part of the said record or expedients, and it
was only then that these documents were presented in the
aforementioned preliminary investigation; and that the respondent's
conduct in this regard tended to prevent and obstruct the
administration of justice by concealing evidence, thus constituting
gross misconduct in office. 7
In his answer filed on February 24, 1973, respondent, David D.C.
Paz, specifically denied the allegation contained in paragraphs 1 to 9
of the complaint on representing clients with conflicting interests, the
same being contrary to the evidence of record submitted to the
investigation conducted by Solicitor Eulogio Racquel Santos and
averred that the respondent, Paz did not participation the
investigation of the Cuneta anti-graft case except to swear the
witnesses; that the Secretary of PARGO issued Mission Order No. 362
directing Atty. Rodolfo Navarro and Engineers Platon Chaves, Ventura
Villarosa, Gabriel Abellada, Jr. and agents Lysias G. Manalo and
Edilberto Arguelles, Jr. and Henry C. Consina to undertake a special
mission and carry out instructions given by the Secretary in
connection with the confidential investigation being undertaken by
PARGO; that a g to the affidavit Of Lysias Manalo of the Philippine
Constabulary, the Secretary of PARGO, by virtue of Mission Order No.
362, the continuance of the re-investigation of the complaint of Dr.
Irineo P. Sia, against the ex-Mayor Pablo Cuneta and they for
violation of the Anti-Graft and Corrupt Practices Act; that in fact, in
1969, the respondent Paz was on detail as police ad. viser of the
Mayor of Makati, Rizal and in 1970, he from PARGO and transferred
to Congress; that except for the self-serving declarations of Atty.
Brion and Dr. Irineo Sia, no other evidence was presented to prove
that the respondent Paz investigated the said anti-graft case in the
PARGO; that it is true that respondent Paz appeared among a battery
of lawyers for Mayor Cuneta but when his appearance was questioned
by Atty. Brion, it was withdrawn; and that the anti-graft case against
Mayor Cuneta was finally dismissed.
Anent the charge of gross misconduct in office, the respondent
denied the allegation in paragraphs 1 to 6 of the second count, the
same being contrary to the evidence of record and alleged that the
charge is a fabrication; that Atty, Brion was also a special assistant in
the PARGO; that when the respondent Paz resigned from the PARGO,
he was granted a clearance dated January 2, 1970 clearing him from
any record or money accountability; that Hector Lumba, Docket
Officer of PARGO who was presented by Atty. Brion as a witness,
admitted on cross-examination that the respondent Paz had been
cleared of accountabilities by the Docket Section; and that at the
time the clearance was granted, the respondent had no pending
cases in his possession that Atty. Brion admit" that the alleged
expediente supposedly borrowed by the respondent Paz was merely
his lawyer's file as intervenor in Civil Case No. 72967; that his motion
for intervention was, however, denied; that the lawyer's file was
allegedly finally reconstituted and presented in the preliminary
investigation of the anti-graft case against Pablo Cuneta; and Atty.
Brion declared that the respondent Paz "receipted" for the same
expediente but during the investigation conducted by Solicitor
Racquel Santos, Atty. Brion could not produce any receipt; that
neither could Atty. Brion present any proof that he addressed a
written complaint or demand to PARGO for the return of the alleged
expediente and Dr. Sia admitted that the evidence gathered were
turned over to Atty. Cuaresma and Mangase, not to respondent Paz.
On the charge representing clients with conflicting interests, the
evidence has duly established that the respondent, David D.C. Paz,
as PARGO's Legal Officer and Legal Prosecutor and head of the
"Charlie Division", took part in the investigation of the anti-graft case
against ex-Mayor Cuneta by administering oaths to witnesses and
gathering evidence. He acquired knowledge of the facts and
circumstances surrounding the anti-graft case. The respondent
obtained confidential information and learned of the evidence of the
PARGO against ex-Mayor Cuneta. There was undoubtedly a
relationship of attorney and client between the respondent David
D.C. Paz and the PARGO.
It is also a fact that at the early stages of the preliminary
investigation conducted by the City Fiscal of Pasay of the anti-graft
case against ex-Mayor Pablo Cuneta, the respondent appeared as
counsel for said Cuneta. This is the same anti-graft case investigated
by the PARGO when the respondent was head of the "Charlie
Division" thereof. That the respondent later withdrew his appearances
as counsel of Cuneta is of no moment. He had already violated the
Canons of Legal Ethics and Sec. 20(e) of Rule 138, Revised Rules of
Court which provides:
Sec. 20. Duties of attorneys. It is the duty of an
attorney:
xxx xxx xxx
(e) To maintain inviolate the confidence, and at a every
peril to himself, to preserve the secrets of his client,
and to accept no compensation in connection with his
client's business except from him or with his
knowledge and approval;
xxx xxx xxx
The respondent has displayed a lack concern for his duties as a
lawyer and an office of the court. In Nombrando vs. Hernandez, 8 this
court said:
The Solicitor General is of the opinion, and we find no
reason to disagree with him, that even if respondent
did not use against his client any information or
evidence acquired by ham as counsel it cannot be
denied that he did become privy to information
regarding the ownership of the parcel of land which
was later litigated in the forcible entry case, for it was
the dispute over the land that triggered the mauling
incident which gave rise to the criminal action for
physical injuries. This Court's remarks in Hilado vs.
David, 84 Phil. 571, are apropos:
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 dealings between an attorney and
client, inquiry of the nature suggested would lead to
the revelation, in advance of the trial of other matters
that might only further prejudice the complainant's
cause
Whatever may be said as to whether or not respondent
utilized against his former client information given to
him in a professional capacity, the mere fact of their
previous relationship should have precluded him from
appearing as counsel for the other side in the forcible
entry case. In the same cast of Hilado vs. David,
supra, this Tribunal further said:
Hence the necessity of setting down the existence of
the bare relationship of attorney and client as the
yardstick for testing incompatibility of interest. This
stern rule is designed not alone to prevent the
dishonest practitioner from fraudulent conduct, but as
wok to protect the honest lawyer from unfounded
suspicion of unprofessional practice. ... It is founded on
principles of public policy of good taste. As has been
said in another case, the n 43 not necessarily one of
the rights of the parties, but as to whether attorney
has adhered to proper professional standard. With
 these thoughts in mind, it behooves attorneys, like 's
Ceasar's wife, not only to keep inviolate the client's
confidence, but also to avoid the appearance of
treachery and double dealing. Only thus can litigants
be encouraged to entrust their secrets to their
attorneys which is of paramount importance in the
administration of justice. 9
Under the circumstances, the respondent should be punished by
suspension from the practice of law for two (2) months, 10 with a
warning that a repetition of the same offense wig be dealt with more
drastically.
There is no sufficient evidence that the respondent had borrowed the
record of Civil Case No. 72967 of the Court of First Instance of Manila
entitled "Vicente D. Isip vs. The Pasay City Government, et al.
According to Atty. Galilee Brion, the respondent issued a receipt for
the record. However, no such receipt could be presented at the
investigation. Moreover, Dr. Irineo Sia admitted that the evidence in
connection with the Cuneta anti-graft case was turned over to Attys.
Mangase and Cuaresma, both of the PARGO. In view thereof, the
respondent cannot be held guilty of the charge of serious misconduct.
6. Gesuden v Ferrer
YDIA JAMERO GESUDEN, in her verified complaint, accuses Atty.
EDWIN Z. FERRER of dishonesty and conduct unbecoming of a
member of the bar. She states that her mother, Lucia Jamero
Gesuden and her mothers co-heirs engaged the services of Atty.
Ferrer who prepared an Extra-Judicial Partition of Property left by
their deceased parents; that her mother was to receive 7,154 sq. m.
of the land which was partitioned but she actually received only
4,359 sq. m. because Atty. Ferrer acquired the difference by means
of deceit.
Required to answer the complaint, Atty. Ferrer denied the imputation.
The case was then referred to the Solicitor General for investigation,
report and recommendation.
The Solicitor General has reported that:
"An examination of the evidence presented by the complainant does
not support her allegation that respondent Atty. Edwin Z. Ferrer had
acquired, by deceit, a portion of the real estate subject of the extra-
judicial partition. That particular portion of real estate referred to by
the complainant was, in fact, sold to Edwin Z. Ferrer by complainants
mother as evidenced by a Deed of Absolute Sale (Exhibit "G" for
complainant; Exhibit "1" for respondent). This was confirmed by
complainant herself when she testified . . ." (Rollo, p. 72.)
However, the Solicitor General asserts that Atty. Ferrer violated
Section 20 (e) of Rule 138 of the Rules of Court which requires
attorneys "To maintain inviolate the confidence, and at every peril to
himself, to preserve the secrets of his client . . ." in that "after
initially having been retained by the heirs of Doroteo Jamero to
prepare the documents for the extra-judicial partition of the property
left by the decedent, later became the counsel of one of the heirs
(complainants mother, Lucia Gesuden) in a case designated as
Recovery of Hereditary Shares with Damages (Exhibit "C")." (Rollo,
p. 74.) Exhibit C is the complaint in Civil Case No. 2676 of the Court
of First Instance of Camarines Norte for "Recovery of Hereditary
Shares with Damages" filed by Lucia Jamero Gesuden against Agapito
Jamero, Et. Al.
According to the Solicitor General:
"When respondent was hired to prepare the documents for the
partition of the property, he became, for all intents and purposes, the
lawyer of all the heirs. In this situation, he was in a position to know
the relevant and irrelevant, secret and well-known facts. In the
complexity of what is said in the course of the preparation of the
documents, an attorney acquires data and/or information that might
prejudice one or all of the heirs.
"In later becoming a counsel for one of the heirs in a case filed
against the other heirs, and in disputing the division or partition
which he himself devised in the extra-judicial partition, respondent
Edwin Z. Ferrer failed to adhere to proper professional standard and
to comply with the duties imposed upon him as a lawyer. Thus, even
without impugning respondents good faith, his taking up the cause
of one of the heirs in a case filed against the other heirs, should not
be sanctioned. It had the tendency to bring the profession, of which
he is a distinguished member, into public disrepute and suspicion and
undermine the integrity of justice." (Rollo, p. 75.)
In the light of the foregoing, the Solicitor General filed a complaint
against Atty. Ferrer for violation of Rule 138, Section 20(e) of the
Rules of Court. In his answer, the respondent could only say that he
had advised against the filing of the complaint and that he "withdrew
from said case even before it had been tried on the merits."
Assuming for the sake of argument that the respondent did advise
against the filing of the complaint, the proper thing for him to do was
not to involve himself in it. As to his withdrawal therefrom, the order
of the court allowing him to do so shows that he withdrew after he
had presented the principal evidence for the plaintiff.
We hold that the respondent violated his duty as a lawyer when he
appeared as counsel for one of the heirs in her suit against the other
heirs over a matter which the respondent had handled for all of them
7. Tiana v Ocampo
FACTS
First case:
Maria Tiania claims in her verified complaint that respondent Amado
Ocampo who has been her "retaining counsel" in all her legal
problems and court cases as early as 1966, has always had her
unqualified faith and confidence. One Mrs. Concepcion Blaylock sued
Tiania for ejectment 2 from a parcel of land. Ocampo appeared for
Tiania and also for Blaylock.
Tiania confronted Ocampo about this but the latter reassured Tiania
that he will take care of everything and that there was no need for
Tiania to hire a new lawyer since he is still Tiania's lawyer. Ocampo
prepared the answer in the said ejectment case, which Tiania signed.
Then Ocampo made Tiania sign a Compromise Agreement which the
latter signed without reading.
Tiania was shocked when she received an order to vacate the
property in question. To hold off her ejectment for another two years,
Ocampo advised Tiania to pay him a certain amount for the sheriff.
Ocampo denied the charges in detail. Although he handled some
legal problems and executed some notarial deeds for Tiania from
1966-1971, Tiania had also engaged the services of various counsel
to represent her in several criminal and civil cases, involving
violations of municipal ordinances and estafa. Thus, he could not be
the complainant's "retaining counsel" in all her legal problems and
court cases.
Ocampo then insisted that he appeared on behalf of Mrs. Blaylock,
and not as counsel of Tiania. He never saw or talked to Tiania from
the time the said civil case was filed up to the pre-trial and as such
could not have discussed with her the complaint, the hiring of
another lawyer, and more so the preparation of the answer in the
said case.
He admitted that during the pre-trial of the said case, Tiania showed
to him a document which supported her claim, over the property in
question. Ocampo, after going over the document, expressed his
doubts about its authenticity.
This convinced Tiania to sign a Compromise Agreement and to pay
the acquisition cost to Blaylock over a period of six (6) months. But
Tiania never fulfilled any of her obligations. She moreover made the
situation worse by selling the contested property to a third party
even after an alias writ of execution had ordered the transfer of the
possession of the disputed property to Blaylock.
Citing Arboleda v. Gatchalian, Ocampo said that the overdue filing of
a complaint against a lawyer should already create a suspicion about
the motives of the complainant or the merit of the complaint.
Second Case:
The Angel spouses, complainants in this case, allege that sometime
in 1972, they sold their house in favor of Blaylock for the amount of
seventy thousand pesos, (P70,000.00). Ocampo (the same
respondent Atty. Amado Ocampo), acted as their counsel and
prepared the Deed of Sale of a Residential House and Waiver of
Rights Over a Lot.
With the money paid by Blaylock, the Angel spouses bought another
parcel of land. Again, Ocampo prepared the Deed of Sale which was
signed by the vendor, a certain Laura Dalanan, and the Angel
spouses, as the vendees. In addition, Ocampo allegedly made the
Angel spouses sign two (2) more documents which, accordingly, were
made parts of the sale transaction.
Those two (2) documents later turned out to be a Real Estate
Mortgage of the same property purchased from Laura Dalanan and a
Promissory Note, both in favor of Blaylock. The Angel spouses never
realized the nature of the said documents until they received a
complaint naming them as defendants in a collection suit. The Angel
spouses added that Ocampo reassured them that there was no need
for them to engage the services of a new lawyer since he will take
care of everything.
These acts, the complainants charge, violate the ethics of the legal
profession. They lost their property as a result of the respondent's
fraudulent manipulation, taking advantage of his expertise in law
against his own unsuspecting and trusting clients.
As in the first case, Ocampo presented an elaborate explanation.
Ocampo alleged that it was his client, Mrs. Concepcion Blaylock, who
introduced to him the Angel spouses in 1972. Blaylock wanted
Ocampo to check the background of the Angel spouses in connection
with the loan they were seeking from Blaylock.
The Solicitor General charged the respondent Atty. Amado Ocampo
with malpractice and gross misconduct punishable under Section 27
of Rule 138 of the Rules of Court of the Philippines and violation of
his oath of office as an attorney
Issue: WON respondent Atty. Ocampo is guilty of representing
conflicting interests?
Held: Yes. The specific law applicable in both administrative cases is
Rule 15.03 of the Code of Professional Responsibility which provides:
A lawyer shall not represent conflicting interest except by
written consent of all concerned given after a full disclosure
of the facts. The Court prohibits the representation of conflicting
interests not only because the relation of attorney and client is one of
trust and confidence of the highest degree, but also because of the
principles of public policy and good taste. An attorney has the duty to
deserve the fullest confidence of his client and represent him with
undivided loyalty. Once this confidence is abused, the entire
profession suffers.
The aforementioned acts of the respondent in representing Blaylock,
and at the same time advising Tiania, the opposing party, as in the
first administrative case, and once again representing Blaylock and
her interest while handling the legal documents of another opposing
party as in the second case, whether the said actions were related or
totally unrelated, constitute serious misconduct.
However, taking into consideration the advanced age of the
respondent, who would have reached seventy three (73) years, as of
this date, the Court, while uncompromisingly firm in its stand against
erring lawyers, nonetheless appreciates the advance years of the
respondent in his favor.
Wherefore, respondent is suspended for a period of one year.
8. Dee v Mutuc
FACTS
In January of 1981 petitioner Donald Dee and his father went to seek
the advice of Respondent Atty. Mutuc regarding the problem of the
alleged indebtedness of petitioners brother Dewey to Caesars Palace
and the possibility that Dewey might be harmed by the local mafias
at the order or request of the casino.
Thereafter Atty. Mutuc assured the petitioners that he would look into
the matter, for which his services were allegedly contracted for the
amount of P100,000. Mutuc then proceeded to make calls and visit to
elicit additional information into the matter. The initial finding was
that the outstanding balance of Deweys account amounts to one
billion dollars. However after further investigation by Mutuc, it was
found out that the debt was actually incurred by a certain Ramon Sy,
and that Dewey merely signed the chits. Petitioners were then
informed of the findings and were also assured that Dewey would not
be harmed by the alleged mafias.
By June of the same year, respondent went to the casino to negotiate
with its president to let Dewey off the hook, and go after the real
debtor Ramon Sy. The president of the casino then told Mutuc that if
he can make Ramon Sy acknowledge the debt, then Dewey would be
exculpated. Thereafter Mutuc was able to convince Ramon Sy tro
acknowledge the debt and brought a letter to the casino asking for a
discount, which resulted to the clearing of Deweys name in the
casino.
Having resolved the problem, Mutuc proceeded to collect from
petitioner the remaining balance of their agreed professional fee.
However despite several letter of demand respondent Mutuc never
received his fees. This prompted respondent to file an action for
collection of the fees and other relevant expenses incurred.
The lower court in resolving the case, ruled in favor of Mutuc ordering
petitioner Dee to pay the amount of P50,000. On appeal the CA
initially affirmed the decision of the lower court, but was
subsequently abandoned when petitioners filed a motion for
reconsideration, alleging that Mutuc at the time when he was
rendering the alleged services for the petitioner was actually working
for the interest and to the advantage of the casino, and that Mutuc is
not justified to claim professional fees considering that there was
conflict of interest involved. Therefore the CA found that the amount
of P50,000 already received by MUTUC is commensurate of the work
he provided for petitioner. However this decision was later on
reversed and the intial decision was reinstated by CA upon the
motion of Mutuc. Hence the instant petition.
ISSUES:
1. Whether or not Mutuc is entitled to the balance of the agreed
professional fee in light of the fact that he was allegedly working for
the interest and advantage of the Casino. YES
2. Whether or not there was Attorney-Client relationship between the
parties.
HELD:
The Court ruled that Mutuc is entitled to the balance of the agreed
fees, and that at the time he rendered services for petitioner he was
not employed by the casino. The Court held that the conclusion of CA
in finding that Mutuc was employed by the casino during the period
when Mutuc provided services to petitioner was erroneous.
Additionally, the court found that the contention that the Casino only
agreed to the suggestion or advice of Mutuc is due to the fact that
there was an existing Atty.-Client relationship between the two.
According to the Court even without any Atty-Client relationship a
good lawyer who knows his craft even without any atty-client
relationship can convince the opposing party by mere negotiations.
Furthermore even assuming that Mutuc was indeed employed by the
casino, the only reason that the CA denied additional compensation
was that it alleged that since Mutuc was already employed by the
casino, he was already receiving compensation from the casino.
However there were no evidence to prove such allegation, and in fact
the Court already stated that CA was erroneous in finding that Mutuc
was under the employment of the casino when he provided service
for the Dees.
Lastly, the Court held that the petitioners are estopped from alleging
dual representation, since at the time they seek the services of
Mutuc, petitioners were not aware of the fact that Mutuc was
employed by the casino, and gave their consent to be represented by
Mutuc. Mutuc having resolved the issue, the petitioners may not
question the validity of Mutucs act anymore.
As to whether there exists an atty-client relationship, the court held
that the lack of a written contract or agreement does not prevent the
creation of the relationship. The court state that documentary
formalism is not an essential element to create the relationship, that
to establish such relationship it is sufficient that advice and
assistance of an atty is sought and received in any matter pertinent
to his profession. That an acceptance may be express or implied.
9. Nakpil v Valdes
FACTS:
Jose Nakpil was interested in a piece of property situated in Moran,
Baguio. He went into an agreement with Atty. Carlos Valdes for the
latter to buy the property in trust for Nakpil. Valdes did buy the
property by contracting 2 loans. The lands titles were transferred to
his name. When Jose Nakpil died, Imelda Nakpil (his wife) acquired
the services of Valdes and his accounting and law firms for the
settlement of the estate of Jose Nakpil.
What Valdes did was to exclude the property in Baguio from the list
of assets of Jose Nakpil (he actually transferred the property to his
company, the Caval Realty Corporation) while including the loans he
contracted.
What Imelda did was to file a suit for reconveyance in the CFI. While
the case was pending, Imelda also filed an administrative complaint
for disbarment against Valdes.
The CFI dismissed the action for reconveyance. The CA reversed the
CFI. The complaint for reconveyance went up to the SC and was
decided in favor of Nakpil. The SC held that Valdes only held the lots
in trust for Nakpil.
Issue:
W/N Atty. Valdes should be administratively sanctioned for his acts,
namely:
o Excluding the property in Baguio from the estate of Jose
Nakpil;
o Including his loans as claims on the estate; and
o Apparently, representing conflicting interests when his
accounting firm prepared the list of claims of creditors Angel
Nakpil and ENORN against the estate of Jose Nakpil, which
was represented by his law firm.
Held:
The SC found Valdes guilty of misconduct and suspends him for 1
year. The Court held that the first two acts clearly show that Valdes
broke the trust reposed on him by Imelda Nakpil when the latter
agreed to use his professional services as a lawyer and an
accountant. It was clear that Jose Nakpil and Atty. Came to an
agreement that the latter would be buying the property in trust for
Jose. By his act of excluding the property from the estate and
including the loans he contracted (and used for his own benefit) as
claims, Valdes took for granted the trust formed between Jose and
him (they had a close relationship since the 50s), which was the
basis for Imeldas decision to use his services.
As to the third charge, we hold respondent guilty of representing
conflicting interests which is proscribed by Canon 15 Rule 15.03. In
the case at bar, there is no question that the interests of the estate
and that of its creditors are adverse to each other. Respondent's
accounting firm prepared the list of assets and liabilities of the estate
and, at the same time, computed the claims of two creditors of the
estate. There is clearly a conflict between the interest of the estate
which stands as the debtor, and that of the two claimants who are
creditors of the estate.
V. CONFIDENTIALITY broader coverage. Includes attorney-
client privilege.
1. Regala (ACCRA) v Sandiganbayan (check out digest)
(INVOKING PRIVILEGE IS ALLOWED TO PROTECT
IDENTITY OF CLIENT FROM PROSECUTION)
FACTS
Corporation clients of petitioner consulted them regarding corporate
structure and financial matters upon which legal advice were given by
petitioners. Said corporation is subject to investigation by the PCGG
involving ill-gotten wealth. Petitioner refuses to provide information
on fear that it may implicate them in the very activity from which
legal advice was sought from them and it may breach the fiduciary
relationship of the petitioner with their client.
ISSUE: W/N fiduciary duty may be asserted by petitioner on refusal
to disclose names of their clients (privilege information)
HELD: SC upheld the right of petitioners to refuse disclosure of
names of their clients under the pain of breach of fiduciary
relationship with their client.
As a general rule, a lawyer MAY NOT INVOKE THE PRIVILEGE
BECAUSE:
1. The court has the right to know that the client whose privilege
is sought to be protected is flesh and blood.
2. Privilege begins to exist only after the atty-client relationship
has been established.
3. Privilege generally pertains to be the subject matter of the
relationship.
4. With due process consideration, the opposing party should
know his adversary.
EXCEPTION: LAWYERS MAY INVOKE THE PRIVILEGE WHEN:
1. Strong probability exists that revealing the clients name
would implicate the client in the very activity for which he
sought the lawyers advice.
2. Disclosure would open to civil liability of client. (present in this
case)
3. Government lawyers have no case against the lawyers client
unless by revealing the clients name it would provide them
the only link that would form the chain of testimony necessary
to convict an individual of a crime. (present in this case)
4. Relevant to the subject matter of the legal problem on which
client seeks legal assistance. (present in this case)
5. Nature of atty-client relationship has been previously disclosed
and it is the identity which is intended to be confidential.
Old Code of Civil Procedure enacted by the Philippine Commission on
August 7, 1901: Section 383 of the Code specifically "forbids counsel,
without authority of his client to reveal any communication made by
the client to him or his advice given thereon in the course of
professional employment."
Passed on into various provisions of the Rules of Court, the attorney-
client privilege, as currently worded provides: Sec. 24.
Disqualification by reason of privileged communication.
The following persons cannot testify as to matters learned in
confidence in the following cases: An attorney cannot, without the
consent of his client, be examined as to any communication made
by the client to him, or his advice given thereon in the course of, or
with a view to, professional employment, can an attorney's secretary,
stenographer, or clerk be examined, without the consent of the client
and his employer, concerning any fact the knowledge of which has
been acquired in such capacity.
Further, Rule 138 of the Rules of Court states: Sec. 20. It is the duty
of an attorney: (e) to maintain inviolate the confidence, and at every
peril to himself, to preserve the secrets of his client, and to accept no
compensation in connection with his client's business except from
him or with his knowledge and approval.
This duty is explicitly mandated in Canon 17 of the Code of
Professional Responsibility which provides that:
Canon 17. A lawyer owes fidelity to the cause of his client and he
shall be mindful of the trust and confidence reposed in him.
Canon 15 of the Canons of Professional Ethics also demands a
lawyer's fidelity to client: The lawyers owes "entire devotion to the
interest of the client, warm zeal in the maintenance and defense of
his rights and the exertion of his utmost learning and ability," to the
end that nothing be taken or be withheld from him, save by the rules
of law, legally applied. No fear of judicial disfavor or public popularity
should restrain him from the full discharge of his duty.
In the judicial forum the client is entitled to the benefit of any and
every remedy and defense that is authorized by the law of the land,
and he may expect his lawyer to assert every such remedy or
defense. But it is steadfastly to be borne in mind that the great
trust of the lawyer is to be performed within and not without
the bounds of the law. The office of attorney does not permit,
much less does it demand of him for any client, violation of law or
any manner of fraud or chicanery. He must obey his own
conscience and not that of his client.
2. Lorenzana Food Corp v Atty. Francisco Daria (AN
ATTORNEY OWES LOYALTY TO HIS CLIENT EVEN AFTER
TERMINATION OF SERVICES)
FACTS
Atty. Francisco Daria was hired by Lorenzana Food Corporation (LFC)
as its legal counsel and was eventually designated as its personal
manager. In the course of his employment with the corporation, he
was involved in two labor cases:
Hanopol case - A certain Veronica Hanopol who was allegedly illegally
dismissed, filed a case against him. During the initial
hearing, Daria and Hanopol agreed to an amicable settlement and set
a date for the next meeting.
This was reset after Hanopol did not show up and the Labor Arbiter
reset the date further to June 20, 1983. On that date, Daria was in
another hearing and he moved to postpone the Hanopol hearing
through a phone message but the Labor Arbiter did not receive it,
hence he considers the case as submitted for decision based on
Hanopols complaint and affidavit.
Daria appealed to the NLRC and the case was remanded to the
Labor Arbiter for further proceedings. Attempts to have an amicable
settlement proved futile. By the time the final hearing was set, Daria
had already resigned from the company and no one appeared for the
corporation during the Hanopol hearing. Labor arbiter revived his
earlier decision awarding Hanopol with sum of P6,469.80 in labor
benefits. New counsel for the corporation appealed to the judgment
and this was remanded for further proceedings.
San Juan case - Roberto San Juan is an employee of the corporation
who was accused of double liquidation and unliquidated cash
advances. He was asked to submit a written explanation and was
placed on preventive suspension. He was required to restitute said
amount to the company but upon failure to do so, a complaint
of estafa was filed against him. San Juan resigned and sought the
assistance of Daria in preparing his counter affidavit.
Because of these incidents, LFC files an administrative charge
against Daria for negligence and betrayal of former clients
confidences.
Issue: Do the acts of Atty. Daria constitute negligence and betrayal
of his former clients confidence?
Held: Yes, Daria violated Code of Professional Responsibility and
betrayed the confidences of his former client. He is suspended from
the practice of law for 6 months.
Canon 18 provides that a lawyer shall serve his client with
competence and diligence; Rule 18.03 provides that a lawyer shall
not neglect a legal matter entrusted to him and his negligence in
connection therewith shall render him liable.
Because Daria had a responsibility to attend the two scheduled
hearings he missed and had he filed the required position paper for
the corporation then at least there would have been no delay in the
resolution of the case which the court states could have been in favor
of the corporation. The delay was prejudicial to LFC because it
deprived successor counsel of the time which he should be
devoting to other cases of LFC instead of the work left
by Daria. The respondents claim that he was able to persuade NLRC
on appeal to set aside the first decision is no matter. Negligence is
apparent in the conduct of Daria.
As for preparing the counter-affidavit of San Juan, the court is not
convinced with his denial of his participation in the preparation. His
signature was placed on the document and it is clear that the
contention of Daria is a mere afterthought.
An attorney owes loyalty to his client not only in the case in
which he has represented him but also for the relation of
attorney and client has terminated. It is not 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
and independent of the former case.
3. William Genato v Atty. Essex Silapan (PRIVILEGE
CANNOT BE CLAIMED IF IN CONTEMPLATION OF A
CRIME OR IN PERPETUATION OF FRAUD & DISCLOSURE
IS NOT RELEVANT TO THIS CASE, ERGO NOT ALLOWED)
FACTS
(Complainants side)
July 1992, respondent allegedly asked the complainant if he could
rent a small office space in complainants building in Quezon City for
his law practice. Complainant acceded and introduced respondent to
Atty. Benjamin Dacanay, complainants retained lawyer, who
accommodated respondent in the building and made him handle
some of complainants cases.
Respondent borrowed 200k from complainant which he intended to
use as down payment for the purchase of a new car. In return,
respondent issued to complainant a postdated check in the amount of
P176,528.00 to answer for the six (6) months interest on the loan.
He likewise mortgaged to complainant his house and lot in Quezon
City but did not surrender its title claiming that it was the subject of
reconstitution proceedings before the Quezon City Register of Deeds.
The respondent bought the car but the document of sale was issued
in the complainants name and financed through City Trust Company.
January 1993: respondent introduced to complainant a certain
Emmanuel Romero who wanted to borrow money from complainant.
Complainant lent Romero the money and, from this transaction,
respondent earned commission in the amount of P52K. Complainant
used the commission to pay respondents arrears with the car
financing firm.
Subsequently, respondent failed to pay the amortization on the car
and the financing firm sent demand letters to complainant.
Complainant tried to encash respondents postdated check with the
drawee bank but it was dishonored as respondents account therein
was already closed.
Respondent failed to heed complainants repeated demands for
payment. Complainant then filed a criminal case against respondent
for violation of Batas Pambansa Blg. 22 and a civil case for judicial
foreclosure of real estate mortgage.
In the foreclosure case, the respondent alleged that the complainant
is engaged in buy and sell of deficiency taxed imported cars, shark
loans and shady deals, and has many cases pending in court, which
the complainant denied, adding that the allegations were libelous and
were irrelevant to the foreclosure case. A particular allegation states
that in one case, the complainant would only give the respondent the
document of sale of the car if the latter would bribe the review
committee of the DOJ for a case of the complainant. According to the
complainant, the allegation was, aside from being false, immaterial to
the foreclosure case and maliciously designed to defame him, the
respondent was also guilty of breaking their confidential lawyer-client
relationship and should be held administratively liable.
The complainant then filed this complaint for disbarment, praying
also that an administrative sanction be meted against respondent for
his issuance of a bouncing check
(Respondents side)
It was complainant who offered him an office space in his building
and retained him as counsel as the latter was impressed with the way
he handled a B.P. 22 case filed against complainant.
There was nothing libelous in his imputations of dishonest business
practices to complainant and his revelation of complainants desire to
bribe government officials in relation to his pending criminal case. He
claimed to have made these statements in the course of judicial
proceedings to defend his case and discredit complainants credibility
by establishing his criminal propensity to commit fraud, tell lies and
violate laws. He argued that he is not guilty of breaking his
confidential lawyer-client relationship with complainant as he made
the disclosure in defense of his honor and reputation.
Respondent asserted that he executed the real estate mortgage in
favor of complainant without consideration and only as a formal
requirement so he could obtain the P200K loan and for this reason,
he did not surrender his title over the mortgaged property to
complainant.
Respondent claimed that he issued the postdated check, not for
account or for value, but only: (a) to serve as some kind of
acknowledgment that he already received in advance a portion of his
attorneys fees from the complainant for the legal services he
rendered, and (b) as a form of assurance that he will not abandon
the cases he was handling for complainant.
Respondent denied that he received a P52,289.90 commission from
Romeros loan which he allegedly helped facilitate, alleging that the
amount paid to him was for attorneys fees. He used this amount to
pay his arrears with the car financing firm. On January 29, 1993,
before paying the next amortization on the car, he asked complainant
to execute a deed of sale transferring ownership of the car to
him. Complainant refused and insisted that he would transfer
ownership of the car only after the termination of his criminal case
which respondent was handling as his defense lawyer. Consequently,
respondent stopped paying the amortization on the car. Respondent
also alleged that he filed a perjury case against complainant who, in
turn, filed a complaint for libel against him.
October 27, 1993: the Court referred the administrative case to the
Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation.
August 3, 2002, the Board of Governors of the IBP approved the
report of the investigating commissioner finding the respondent guilty
as charged and recommending his suspension from the practice of
law for one (1) year.
ISSUES
1. WON the court has the jurisdiction to sanction respondent for his
issuance of the bouncing check.
2. WON the respondent committed a breach of trust and confidence
by imputing to complainant illegal practices and disclosing
complainants alleged intention to bribe government officials in
connection with a pending case, and thus would be sanctioned.
HELD
1. NO, it is not for the Court to sanction respondent for his
issuance of a bouncing check, which would be determined by
the trial court.
Ratio We shall not delve into the merits of the various criminal and
civil cases pending between the parties. It is for the trial courts
handling these cases to ascertain the truth or falsity of the
allegations made therein.
2. YES, respondents allegations and disclosures in the
foreclosure case amount to a breach of fidelity sufficient to
warrant the imposition of disciplinary sanction against him.
Ratio A lawyer must conduct himself, especially in his dealings with
his clients, with integrity in a manner that is beyond reproach. His
relationship with his clients should be characterized by the highest
degree of good faith and fairness.
Reasoning Canon 17 of the Code of Professional Responsibility
provides that a lawyer owes fidelity to the cause of his client and
shall be mindful of the trust and confidence reposed on him. The
long-established rule is that an attorney is not permitted to disclose
communications made to him in his professional character by a client,
unless the latter consents.
The obligation to preserve the confidences and secrets of a client
arises at the inception of their relationship. The protection given to
the client is perpetual and does not cease with the
termination of the litigation, nor is it affected by the partys
ceasing to employ the attorney and retaining another, or by
any other change of relation between them. It even survives
the death of the client.
However, the privilege against disclosure of confidential
communications or information is limited only to communications
which are legitimately and properly within the scope of a lawful
employment of a lawyer. It does not extend to those made in
contemplation of a crime or perpetration of a fraud. If the unlawful
purpose is avowed, as in this case, the complainants alleged
intention to bribe government officials in relation to his case, the
communication is not covered by the privilege as the client does not
consult the lawyer professionally. It is not within the profession
of a lawyer to advise a client as to how he may commit a
crime as a lawyer is not a gun for hire. Thus, the attorney-
client privilege does not attach, there being no professional
employment in the strict sense.
The disclosures were not indispensable to protect his rights as they
were not pertinent to the foreclosure case. It was improper for
the respondent to use it against the complainant in the
foreclosure case as it was not the subject matter of litigation
therein and respondents professional competence and legal advice
were not being attacked in said case.
Disposition IN VIEW WHEREOF, respondent Atty. Essex L. Silapan is
ordered suspended from the practice of law for a period of six (6)
months effective upon receipt of this Decision. Let a copy of this
Decision be furnished the Office of the Bar Confidant and the
Integrated Bar of the Philippines. The Court Administrator is directed
to circulate this order of suspension to all courts in the country.
SO ORDERED.