Beruflich Dokumente
Kultur Dokumente
Acquisition of Properties
Subject of Litigation
Krizzia D. Calvelo
Jevilyn Mary C. Ruiz
O Article 1491 of the Civil Code
The following persons cannot acquire by purchase, even at a
public or judicial auction, either in person or through the mediation of
another:
xxx
5. Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the
administration of justice, the property and rights in litigation or levied
upon an execution before the court within whose jurisdiction or territory
they exercise their respective functions; this prohibition includes the act
of acquiring by assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in which they
may take part by virtue of their profession.
O Article 1492 of the Civil Code
The prohibitions in the two preceding articles are
applicable to sales in legal redemption, compromises and
renunciations.
O There is violation even if the lawyer did not pay money for it
When Purchase of Client’s Property is Not Violation of
the Law
Held: Yes.
The property being thus in suit, which the respondent was waging on behalf of his clients, his
acquisition thereof by the deed of sale, Exhibit B, constitutes malpractice. Whether the deed of
sale in question was executed at the instance of the spouses driven by financial necessity, as
contended by the respondent, or at the latter's behest, as contended by the complainant, is of no
moment. In either case as attorney occupies a vantage position to press upon or dictate his terms
to a harassed client, in breach of the "rule so amply protective of the confidential relations, which
must necessarily exist between attorney and client, and of the rights of both."
Spouses Cadavedo v. Victorino Lacaya
G.R. No. 173188 January 15, 2014
FACTS:
O The Spouses Cadavedo acquired a homestead grant over a 230,765-square meter parcel of land in
Zamboanga del Norte, which they subsequently sold to the spouses Ames. After the spouses Ames
failed to pay the balance of the purchase price, spouses Cadavedo filed an action for sum of money
and/or voiding of contract of sale of homestead. The spouses Cadavedo engaged the services of Atty.
Lacaya on a contingency fee basis. The contingency fee stipulation specifically reads:
10. That due to the above circumstances, the plaintiffs were forced to hire a lawyer on contingent
basis and if they become the prevailing parties in the case at bar, they will pay the sum of
P2,000.00 for attorney’s fees.
O Eventually, Atty. Lacaya represented the Cadavedo spouses in two other cases in connection with the
subject lot.
O After a favorable decision on the first case, Atty. Lacaya asked for one-half of the subject lot as
attorney’s fees. Unsatisfied with the division, Vicente Cadavedo and his sons-in-law entered the
portion assigned to the respondents and ejected them. The latter responded by filing a counter-suit for
forcible entry. Cadavedo and Atty. Lacaya entered into an amicable settlement, re-adjusting the area
and portion obtained by each. Atty. Lacaya acquired 10.5383 hectares pursuant to the agreement.
ISSUE:
Whether or not agreement on attorney’s fee consisting of one-half of the subject lot is valid.
HELD:
No, the agreement on attorney’s fee consisting of one-half of the subject lot is void. The
written agreement providing for a contingent fee of P2,000.00 should prevail over the oral
agreement providing for one- half of the subject lot. Atty. Lacaya’s acquisition of the one-half portion
contravenes Article 1491 (5) of the Civil Code. Article 1491 (5) of the Civil Code forbids lawyers from
acquiring, by purchase or assignment, the property that has been the subject of litigation in which
they have taken part by virtue of their profession. The same proscription is provided under Rule 10
of the Canons of Professional Ethics. While contingent fee is a valid exception to the prohibitions
under Article 1491(5) of the Civil Code, this recognition does not apply to the present case. The
payment of the contingent fee is not made during the pendency of the litigation involving the client’s
property but only after the judgment has been rendered in the case handled by the lawyer. However,
in this case, the transfer or assignment of the disputed one-half portion to Atty. Lacaya took place
while the subject lot was still under litigation and the lawyer-client relationship still existed between
him and the spouses Cadavedo. Thus, the general prohibition provided under Article 1491 of the
Civil Code, rather than the exception provided in jurisprudence, applies.