RE: SC DECISION DATED A.C. No. 7940 MAY 20, 2008 IN G.R. NO.
161455 confirmed that although his culpability for falsification has been indubitably
UNDER RULE 139-B OF THE RULES OF COURT v. PACTOLIN
FACTS: In May 1996, Elmer Abastillas, the playing coach of the Ozamis City
volleyball team, wrote Mayor Benjamin A. Fuentes of Ozamis City, requesting
financial assistance for his team. Mayor Fuentes approved the request and sent
Abastillas letter to the City Treasurer for processing. Mayor Fuentes also designated
Mario R. Ferraren, a city council member, as Officer-in-Charge (OIC) of the city while
Mayor Fuentes was away. Abastillas eventually got the P10,000.00 assistance for his
volleyball team. Meanwhile, respondent lawyer, Atty. Rodolfo D. Pactolin, then a
Sangguniang Panlalawigan member of Misamis Occidental, got a photocopy of
Abastillas letter and, using it, filed on June 24, 1996 a complaint with the Office of the
Deputy Ombudsman-Mindanao against Ferraren for alleged illegal disbursement of
P10,000.00 in public funds. Atty. Pactolin attached to the complaint a copy of what he
claimed was a falsified letter of Abastillas, which showed that it was Ferraren, not
Mayor Fuentes, who approved the disbursement. Aggrieved, Ferraren filed with the
Sandiganbayan a complaint against Atty. Pactolin for falsification of public document.
On November 12, 2003 the Sandiganbayan found Atty. Pactolin guilty of falsification
under Article 172 and sentenced him to the indeterminate penalty of imprisonment of
2 years and 4 months of prision correccional as minimum to 4 years, 9 months and 10
days of prision correccional as maximum, to suffer all the accessory penalties of
prision correccional, and to pay a fine of P5,000.00, with subsidiary imprisonment in
case of insolvency. Atty. Pactolin appealed to this Court but on May 20, 2008 it
affirmed his conviction. Since the Court treated the matter as an administrative
complaint against him as well under Rule 139-B of the Rules of Court, it referred the
case to the IBP for appropriate action.
ISSUE: whether or not Atty. Pactolin should be disbarred after conviction by final
judgment of the crime of falsification.
HELD: YES, Atty. Pactolin is disbarred. To recapitulate, this Court upheld the finding
of the Sandiganbayan that the copy of Abastillas letter which Atty. Pactolin attached
to his complaint was spurious. Given the clear absence of a satisfactory explanation
regarding his possession and use of the falsified Abastillas letter, this Court held that
the Sandiganbayan did not err in concluding that it was Atty. Pactolin who falsified the
letter. This Court relied on the settled rule that in the absence of satisfactory
explanation, one found in possession of and who used a forged document is the
forger and therefore guilty of falsification. This Court has ruled that the crime of
falsification of public document is contrary to justice, honesty, and good morals and,
therefore, involves moral turpitude. As a rule, this Court exercises the power to disbar
with great caution. Being the most severe form of disciplinary sanction, it is imposed
only for the most imperative reasons and in clear cases of misconduct affecting the
standing and moral character of the lawyer as an officer of the court and a member of
the bar. Yet this Court has also consistently pronounced that disbarment is the
appropriate penalty for conviction by final judgment for a crime involving moral
turpitude. Here, Atty. Pactolins disbarment is warranted. The Sandiganbayan has
established, he has not yet served his sentence. His conduct only exacerbates his
offense and shows that he falls short of the exacting standards expected of him as a
vanguard of the legal profession.
ELPIDIO TIONG V. ATTY. GEORGE M. FLORENDO,
A.C. NO. 44-28, December 12, 2011
NATURE: Administrative complaint for disbarment filed by Tiong against Atty.
Florendo for gross immorality and grave misconduct.
FACTS: Complainant Elpidio P. Tiong, an American Citizen, and his wife, Ma. Elena
T. Tiong, are real estate lessors in Baguio City. They are likewise engaged in the
assembly and repair of motor vehicles in Paldit, Sison, Pangasinan. In 1991, they
engaged the services of respondent Atty. George M. Florendo not only as legal
counsel but also as administrator of their businesses whenever complainant would
leave for the United States of America (USA).
In 1993 Tiong began to suspect that respondent and his wife were having an illicit
affair. His suspicion was confirmed in the afternoon of May 13, 1995 when, in their
residence, he chanced upon a telephone conversation between the two. Listening
through the extension phone, he heard respondent utter the words "I love you, I'll call
you later”. When confronter, both Elena Tiong and Atty. Florendo admitted the
amorous relationship. Subsequently, at a meeting initiated by respondent and held at
the Salibao Restaurant in Burnham Park, Baguio City, respondent and complainant's
wife, Ma. Elena, confessed anew to their illicit affair before their respective spouses.
On May 1995, the parties met again at the Mandarin Restaurant in Baguio City and, in
the presence of a Notary Public, Atty. Liberato Tadeo, respondent and Ma. Elena
executed and signed an affidavit2 attesting to their illicit relationship and seeking their
respective spouses' forgiveness, as follows:
“WE, GEORGE M. FLORENDO, a resident of Baguio City and of legal age and MA.
ELENA T. TIONG…committed adultery against our spouses from May 1993 to May
13, 1995 and we hereby ask forgiveness and assure our spouses that this thing will
never happen again with us or any other person…
xxx
We, the offended spouses Elizabeth F. Florendo and Elpidio Tiong forgive our
spouses and assure them that we will not institute any criminal or legal action
against them because we have forgiven them. If they violate this agreement we
will institute legal action….”
Notwithstanding, Tiong instituted the present suit for disbarment on May 23, 1995
charging respondent of gross immorality and grave misconduct. In his Answer3,
respondent admitted the material allegations of the complaint but interposed the
defense of pardon.
In the Resolution4 dated September 20, 1995, the Court resolved to refer the case to
the Integrated Bar of the Philippines (IBP) for investigation and decision.
Commission on Bar Discipline (CBD): recommended Atty. Florendo’s suspension
from the practice of law for one (1) year; adopted and approved by IBP Board of
Governors
MR was denied, hence this petition.
ISSUE/S: WON the pardon extended by the complainant in the Affidavit is sufficient to
warrant the dismissal of the present disbarment case against respondent for gross
immoral conduct? — NO
RULING: After due consideration, the Court resolves to adopt the findings and
recommendation of the IBP-CBD except as to the penalty imposed.
The pertinent provisions in the Code of Professional Responsibility provide, thus:
“CANON 1 - A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS
OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES.
Rule 1.01. - A lawyer shall not engage in unlawful, dishonest, immoral or deceitful
conduct.
xxxx
CANON 7 - A LAWYER SHALL AT ALL TIMES UPHOLD THE INTEGRITY AND
DIGNITY OF THE LEGAL PROFESSION AND SUPPORT THE ACTIVITIES OF THE
INTEGRATED BAR.
xxxx
Rule 7.03. - A lawyer shall not engage in conduct that adversely reflects on his fitness
to practice law, nor shall he, whether in public or private life, behave in a scandalous
manner to the discredit of the legal profession.”
It as been consistently held by the Court that possession of good moral character is
not only a condition for admission to the Bar but is a continuing requirement to
maintain one's good standing in the legal profession. It is the bounden duty of law
practitioners to observe the highest degree of morality in order to safeguard the
integrity of the Bar.9 Consequently, any errant behaviour on the part of a lawyer, be it
in his public or private activities, which tends to show him deficient in moral character,
honesty, probity or good demeanor, is sufficient to warrant his suspension or
disbarment.
In his case, respondent admitted his illicit relationship with a married woman not his
wife, and worse, that of his client. Contrary to respondent's claim, their consortium
cannot be classified as a mere "moment of indiscretion"10 considering that it lasted
for two (2) years and was only aborted when complainant overheard their amorous
phone conversation on March 13, 1995.
Respondent’s act of having an affair with his client's wife manifested his disrespect for
the laws on the sanctity of marriage and his own marital vow of fidelity. It showed his
utmost moral depravity and low regard for the ethics of his profession.11 Likewise, he
violated the trust and confidence reposed on him by complainant which in itself is
prohibited under Canon 17 of the Code of Professional Responsibility. Undeniably,
therefore, his illicit relationship with Ma. Elena amounts to a disgraceful and grossly
immoral conduct warranting disciplinary action from the Court.13 Section 27, Rule
138 of the Rules of Court provides that an attorney may be disbarred or suspended
from his office by the Court for any deceit, malpractice, or other gross misconduct in
office, grossly immoral conduct, among others.
The Court also disagrees with respondent’s argument that he cannot be sanctioned
for his questioned conduct because he and Ma. Elena had already been pardoned by
their respective spouses in the May 15, 1995 Affidavit. It bears to stress that a case of
suspension or disbarment is sui generis and not meant to grant relief to a complainant
as in a civil case but is intended to cleanse the ranks of the legal profession of its
undesirable members in order to protect the public and the courts. It is not an
investigation into the acts of respondent as a husband but on his conduct as an officer
of the Court and his fitness to continue as a member of the Bar.15 Hence, the
Affidavit dated March 15, 1995, which is akin to an affidavit of desistance, cannot
have the effect of abating the instant proceedings.
TERESITA D. SANTECO VS. ATTY. LUNA B. AVANCE, A.C. NO. 5834
(FORMERLY CBD-01-861). FEBRUARY 22, 2011
Facts: On December 11, 2003, the Court found Luna Avance (respondent) guilty of
gross misconduct for abandoning her client’s cause in bad faith and persistent refusal
to comply with lawful orders directed at her without any explanation for doing so. She
was suspended from the practice of law for a period of 5 years.
Subsequently, while respondent’s 5-year suspension from the practice of law was still
in effect, Judge Consuelo Amog-Bocar of Zambales sent a letter-report to the Court
Administrator informing the latter that respondent had appeared and actively
participated in 3 cases wherein she misrepresented herself as “Atty. Liezl Tanglao”.
When opposing counsels confronted her and showed to the court a certification
regarding her suspension, respondent admitted and conceded that she is Atty. Luna
B. Avance, but qualified that she was only suspended for 3 years and that her
suspension has already been lifted.
The Court then required respondent to comment within 10 days from notice.
Respondent, however, failed to file the required comment. On June 10, 2009, the
Court reiterated the directive to comment. Still, respondent failed to comply despite
notice. Accordingly, this Court issued a Resolution finding respondent guilty of indirect
contempt. Respondent was ordered to pay a fine in the amount of Php 30,000.00
which respondent also failed to pay.
ISSUE: Whether or not Atty. Avance should be disbarred
HELD: YES. Atty. Luna B. Avance is disbarred for gross misconduct and willful
disobedience of lawful orders of a superior court.
RATIO: As an officer of the court, it is a lawyer’s duty to uphold the dignity and
authority of the court. The highest form of respect for judicial authority is shown by a
lawyer’s obedience to court orders and processes. SC held that failure to comply with
Court directives constitutes gross misconduct, insubordination or disrespect which
merits a lawyer’s suspension or even disbarment.
Respondent’s cavalier attitude in repeatedly ignoring orders of the Supreme Court
constitutes utter disrespect to the judicial institution. Respondent’s conduct indicates a
high degree or irresponsibility. A Court’s Resolution is “not to be construed as a mere
request, nor should it be complied with partially, inadequately, or selectively.
Respondent’s obstinate refusal to comply with the Court’s orders not “only betrays
recalcitrant flaw in her character; it also underscores her disrespect of the Court’s
lawful orders which is only too deserving of reproof. (Sebastian v. Bajar)
Under Section 27, Rule 138 of the Rules of Court, a member of the bar may be
disbarred or suspended from office as an attorney for gross misconduct and/or for a
willful disobedience of any lawful order of a superior court, to wit:
SEC. 27. Disbarment or suspension of attorneys by Supreme Court; grounds therefor.
– A 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 of any violation of the oath which he is required to take before
admission to practice, or for a willful disobedience of any lawful order of a superior
court, or for corruptly or willfully appearing as an attorney for a party to a case without
authority so to do. The practice of soliciting cases at law for the purpose of gain,
either personally or through paid agents or brokers, constitutes malpractice.
(Emphasis supplied.)
In repeatedly disobeying this Court’s orders, respondent proved herself unworthy of
membership in the Philippine Bar. Worse, she remains indifferent to the need to
reform herself. Clearly, she is unfit to discharge the duties of an officer of the court
and deserves the ultimate penalty of disbarment.
CAYETANO VS. MONSOD
FACTS: Christian Monsod was nominated by then President Corazon C. Aquino as
chairman of the COMELEC. Cayetano questioned the appointment for Monsod
allegedly lacked the necessary qualification of having been engaged in the practice of
law for at least 10 years.
The 1987 constitution provides in Section 1, Article IX-C: There shall be a
Commission on Elections composed of a Chairman and six Commissioners who shall
be natural-born citizens of the Philippines and, at the time of their appointment, at
least thirty-five years of age, holders of a college degree, and must not have been
candidates for any elective position in the immediately preceding elections.However,
a majority thereof, including the Chairman, shall be members of the Philippine Bar
who have been engaged in the practice of law for at least ten years.
It was established that after graduating from the College of Law and hurdling the Bar,
respondent worked in his father’s law office for a short while, then worked as an
Operations Officer in the World Bank Group for about 2 years, which involved getting
acquainted with the laws of member-countries, negotiating loans, and coordinating
legal, economic and project work of the Bank. Upon returning to the Philippines, he
worked with the Meralco Group, served as Chief Executive Officer of an investment
bank and has subsequently worked either as Chief Executive Officer or Consultant of
various companies.
ISSUE: 1. Whether or not Monsod satisfies the requirement of the position of
Chairman of the COMELEC.
2. Whether or not the Commission on Appointments committed grave abuse of
discretion in confirming Monsod’s appointment.
HELD: 1. YES. In the case of Philippine Lawyers Association vs. Agrava: The
practice of law is not limited to the conduct of cases or litigation in court…In general,
all advice to clients, and all action taken for them in matters connected with the law
incorporation services, assessment and condemnation services, contemplating an
appearance before judicial body, the foreclosure of mortgage, enforcement of a
creditor’s claim in bankruptcy and insolvency proceedings, and conducting
proceedings in attachment, and in matters of estate and guardianship have been held
to constitute law practice.
Practice of law means any activity, in or out court, which requires the application of
law, legal procedure, knowledge, training and experience. “To engage in the practice
of law is to perform those acts which are characteristics of the profession. Generally,
to practice law is to give notice or render any kind of service, which device or service
requires the use in any degree of legal knowledge or skill. In general, a practice of law
requires a lawyer and client relationship, it is whether in or out of court.
A person is also considered to be in the practice of law when he: “. . . for valuable
consideration engages in the business of advising person, firms, associations or
corporations as to their rights under the law, or appears in a representative capacity
as an advocate in proceedings pending or prospective, before any court,
commissioner, referee, board, body, committee, or commission constituted by law or
authorized to settle controversies. Otherwise stated, one who, in a representative
capacity, engages in the business of advising clients as to their rights under the law,
or while so engaged performs any act or acts either in court or outside of court for that
purpose, is engaged in the practice of law.”
Atty. Christian Monsod is a member of the Philippine Bar, having passed the bar
examinations of 1960 with a grade of 86.55%. He has been a dues paying member of
the Integrated Bar of the Philippines since its inception in 1972-73. He has also been
paying his professional license fees as lawyer for more than 10 years. Atty. Monsod’s
past work experiences as a lawyer-economist, a lawyer-manager, a lawyer-
entrepreneur of industry, a lawyer-negotiator of contracts, and a lawyer-legislator of
both the rich and the poor — verily more than satisfy the constitutional requirement —
that he has been engaged in the practice of law for at least 10 years.
2. NO. The power of the COA to give consent to the nomination of the Comelec
Chairman by the president is mandated by the constitution. The power of appointment
is essentially within the discretion of whom it is so vested subject to the only condition
that the appointee should possess the qualification required by law. From the
evidence, there is no occasion for the SC to exercise its corrective power since there
is no such grave abuse of discretion on the part of the CA
PINEDA V. DE JESUS
FACTS: On April 6, 1993, Aurora Pineda filed an action for declaration of nullity of
marriage against petitioner Vinson Pineda in the RTC of Pasig City, docketed as
JDRC Case No. 2568. Petitioner was represented by respondents Attys. Clodualdo
de Jesus, Carlos Ambrosio and Emmanuel Mariano.
During the pendency of the case, Aurora proposed a settlement to petitioner
regarding her visitation rights over their minor child and the separation of their
properties. The proposal was accepted by the petitioner and both parties
subsequently filed a motion for approval of their agreement. This was approved by the
trial court. On November 25, 1998, the marriage between the petitioner and Aurora
Pineda was declared null and void.
Throughout the proceedings, respondent counsels were well-compensated. They
including their relatives and friends, even availed of free products and treatments from
petitioner’s dermatology clinic. This notwithstanding, they billed petitioner additional
legal fees amounting to P16.5 million which the latter, however, refused to pay.
Instead, petitioner issued them several checks totaling P1.12 million as “full payment
for settlement.”
Still not satisfied, respondents filed in the same trial court a motion for payment of
lawyers’ fees for P50 million.
On April 14, 2000, trial court ordered petitioner to pay P5 million to Atty. De Jesus, P2
million to Atty. Ambrosio and P2 million to Atty. Mariano.
On appeal, the Court of Appeals reduced the amount as follows: P1 million to Atty. de
Jesus, P500,000 to Atty. Ambrosio and P500,000 to Atty. Mariano. The motion for
reconsideration was denied. Hence, this recourse.
ISSUE: Whether the lawyers are entitled to additional legal fees?
RULING: NO. The professional engagement between petitioner and respondents was
governed by the principle of quantum meruit which means “as much as the lawyer
deserves.” The recovery of attorney’s fees on this basis is permitted, as in this case,
where there is no express agreement for the payment of attorney’s fees. Basically, it
is a legal mechanism which prevents an unscrupulous client from running away with
the fruits of the legal services of counsel without paying for it. In the same vein, it
avoids unjust enrichment on the part of the lawyer himself.
Further, Rule 20.4 of the Code of Professional Responsibility advises lawyers to avoid
controversies with clients concerning their compensation and to resort to judicial
action only to prevent imposition, injustice or fraud. Suits to collect fees should be
avoided and should be filed only when circumstances force lawyers to resort to it. In
the case at bar, respondents’ motion for payment of their lawyers’ fees was not meant
to collect what was justly due them; the fact was, they had already been adequately
paid. Demanding P50 million on top of the generous sums and perks already given to
them was an act of unconscionable greed which is shocking to this Court.
As lawyers, respondents should be reminded that they are members of an honorable
profession, the primary vision of which is justice. It is respondents’ despicable
behavior which gives lawyering a bad name in the minds of some people. The
vernacular has a word for it: nagsasamantala. The practice of law is a decent
profession and not a money- making trade. Compensation should be but a mere
incident. Respondents’ claim for additional legal fees was not justified. They could not
charge petitioner a fee based on percentage, absent an express agreement to that
effect. The payments to them in cash, checks, free products and services from
petitioner’s business¬–all of which were not denied by respondents¬–more than
sufficed for the work they did. The “full payment for settlement” should have
discharged petitioner’s obligation to them.
The power of this Court to reduce or even delete the award of attorney’s fees cannot
be denied. Lawyers are officers of the Court and they participate14in the fundamental
function of administering justice.
MAMBULAO LUMBER VS PNB
FACTS: On May 5, 1956 the plaintiff applied for an industrial loan of P155,000 with
the Naga Branch of defendant PNB and the former offered real estate, machinery,
logging and transportation equipments as collaterals. The application, however, was
approved for a loan of P100,000 only. To secure the payment of the loan, the plaintiff
mortgaged to defendant PNB a parcel of land, together with the buildings and
improvements existing thereon, situated in the poblacion of Jose Panganiban
(formerly Mambulao), province of Camarines Norte, as well as various sawmill
equipment, rolling unit and other fixed assets of the plaintiff, all situated in its
compound in the aforementioned municipality. The plaintiff failed to pay the
amortization on the amounts released to and received by it. Repeated demands were
made upon the plaintiff to pay its obligation but it failed or otherwise refused to do so.
Upon inspection and verification made by employees of the PNB, it was found that the
plaintiff had already stopped operation about the end of 1957 or early part of 1958.
On November 6, 1961, the PNB sent a letter to the Provincial Sheriff of Camarines
Norte requesting him to take possession of the chattels mortgaged to it by the plaintiff
and sell them at public auction also on November 21, 1961, for the satisfaction of the
sum of P57,646.59, plus 6% annual interest therefore from September 23, 1961,
attorney's fees equivalent to 10% of the amount due and the costs and expenses of
the sale. Deputy Provincial Sheriff Anacleto Heraldo took possession of the chattels
mortgaged by the plaintiff and made an inventory. Appellant next assails the award of
attorney's fees and the expenses of the foreclosure sale in favor of the PNB. With
respect to the amount of P298.54 allowed as expenses of the extra-judicial sale of the
real property, appellant maintains that the same has no basis, factual or legal, and
should not have been awarded. It likewise decries the award of attorney's fees which,
according to the appellant, should not be deducted from the proceeds of the sale of
the real property, not only because there is no express agreement in the real estate
mortgage contract to pay attorney's fees in case the same is extra-judicially
foreclosed, but also for the reason that the PNB neither spent nor incurred any
obligation to pay attorney's fees in connection with the said extra-judicial foreclosure
under consideration.
ISSUE: WON attorneys fees should be paid and if so are they reasonable?
RATIO: YES, there was a stipulation in the Mortgage that attorneys fees should be
paid to wit:
xxxxx the Mortgagor hereby agrees further that in all cases, attorney's fees hereby
fixed at Ten Per cent (10%) of the total indebtedness then unpaid which in no case
shall be less than P100.00 exclusive of all fees allowed by law, and the expenses of
collection shall be the obligation of the Mortgagor and shall with priority, be paid to the
Mortgagee out of any sums realized as rents and profits derived from the mortgaged
property or from the proceeds realized from the sale of the said property and this
mortgage shall likewise stand as security therefor. . . .
We find the above stipulation to pay attorney's fees clear enough to cover both cases
of foreclosure sale mentioned thereunder, i.e., judicially or extra-judicially. At any rate,
we find merit in the contention of the appellant that the award of P5,821.35 in favor of
the PNB as attorney's fees is unconscionable and unreasonable, considering that all
that the branch attorney of the said bank did in connection with the foreclosure sale of
the real property was to file a petition with the provincial sheriff of Camarines Norte
requesting the latter to sell the same in accordance with the provisions of Act 3135.
The principle that courts should reduce stipulated attorney's fees whenever it is found
under the circumstances of the case that the same is unreasonable, is now deeply
rooted in this jurisdiction to entertain any serious objection to it. Thus, this Court has
explained:
But the principle that it may be lawfully stipulated that the legal expenses involved in
the collection of a debt shall be defrayed by the debtor does not imply that such
stipulations must be enforced in accordance with the terms, no matter how injurious
or oppressive they may be. The lawful purpose to be accomplished by such a
stipulation is to permit the creditor to receive the amount due him under his contract
without a deduction of the expenses caused by the delinquency of the debtor. It
should not be permitted for him to convert such a stipulation into a source of
speculative profit at the expense of the debtor.
Contracts for attorney's services in this jurisdiction stands upon an entirely different
footing from contracts for the payment of compensation for any other services. By
express provision of section 29 of the Code of Civil Procedure, an attorney is not
entitled in the absence of express contract to recover more than a reasonable
compensation for his services; and even when an express contract is made the court
can ignore it and limit the recovery to reasonable compensation if the amount of the
stipulated fee is found by the court to be unreasonable. This is a very different rule
from that announced in section 1091 of the Civil Code with reference to the obligation
of contracts in general, where it is said that such obligation has the force of law
between the contracting parties. Had the plaintiff herein made an express contract to
pay his attorney an uncontingent fee of P2,115.25 for the services to be rendered in
reducing the note here in suit to judgment, it would not have been enforced against
him had he seen fit to oppose it, as such a fee is obviously far greater than is
necessary to remunerate the attorney for the work involved and is therefore
unreasonable. In order to enable the court to ignore an express contract for an
attorney's fees, it is not necessary to show, as in other contracts, that it is contrary to
morality or public policy (Art. 1255, Civil Code). It is enough that it is unreasonable or
unconscionable.
Since then this Court has invariably fixed counsel fees on a quantum meruit basis
whenever the fees stipulated appear excessive, unconscionable, or unreasonable,
because a lawyer is primarily a court officer charged with the duty of assisting the
court in administering impartial justice between the parties, and hence, the fees
should be subject to judicial control. Nor should it be ignored that sound public policy
demands that courts disregard stipulations for counsel fees, whenever they appear to
be a source of speculative profit at the expense of the debtor or mortgagor. 5 And it is
not material that the present action is between the debtor and the creditor, and not
between attorney and client. As court have power to fix the fee as between attorney
and client, it must necessarily have the right to say whether a stipulation like this,
inserted in a mortgage contract, is valid.
In determining the compensation of an attorney, the following circumstances should
be considered: the amount and character of the services rendered; the responsibility
imposed; the amount of money or the value of the property affected by the
controversy, or involved in the employment; the skill and experience called for in the
performance of the service; the professional standing of the attorney; the results
secured; and whether or not the fee is contingent or absolute, it being a recognized
rule that an attorney may properly charge a much larger fee when it is to be
contingent than when it is not. 7 From the stipulation in the mortgage contract earlier
quoted, it appears that the agreed fee is 10% of the total indebtedness, irrespective of
the manner the foreclosure of the mortgage is to be effected. The agreement is
perhaps fair enough in case the foreclosure proceedings is prosecuted judicially but,
surely, it is unreasonable when, as in this case, the mortgage was foreclosed extra-
judicially, and all that the attorney did was to file a petition for foreclosure with the
sheriff concerned. It is to be assumed though, that the said branch attorney of the
PNB made a study of the case before deciding to file the petition for foreclosure; but
even with this in mind, we believe the amount of P5,821.35 is far too excessive a fee
for such services. Considering the above circumstances mentioned, it is our
considered opinion that the amount of P1,000.00 would be more than sufficient to
compensate the work aforementioned.
BAUTISTA VS GONZALES
FACTS: In a verified complaint filed by Angel L. Bautista, respondent Ramon A.
Gonzales was charged with malpractice, deceit, gross misconduct and violation of
lawyer’s oath. Required by this Court to answer the charges against him, respondent
filed a motion for a bill of particulars asking this Court to order complainant to amend
his complaint by making his charges more definite. In a resolution the Court granted
respondent’s motion and required complainant to file an amended complaint.
Complainant submitted an amended complaint for disbarment, alleging that
respondent committed the following acts: 1. Accepting a case wherein he agreed with
his clients, namely, Alfaro Fortunado, Nestor Fortunado and Editha Fortunado
[hereinafter referred to as the Fortunados] to pay all expenses, including court fees,
for a contingent fee of fifty percent (50%) of the value of the property in litigation. x x x
4. Inducing complainant, who was his former client, to enter into a contract with him
on August 30, 1971 for the development into a residential subdivision of the land
involved in Civil Case No. Q-15143, covered by TCT No. T-1929, claiming that he
acquired fifty percent (50%) interest thereof as attorney’s fees from the Fortunados,
while knowing fully well that the said property was already sold at a public auction on
June 30, 1971, by the Provincial Sheriff of Lanao del Norte and registered with the
Register of Deeds of Iligan City; x x x Pertinent to No. 4 above, the contract, in No. 1
above, reads: We the [Fortunados] agree on the 50% contingent fee, provided, you
[respondent Ramon Gonzales] defray all expenses, for the suit, including court fees.
ISSUE: Whether or not respondent committed serious misconduct involving a
champertous contract.
HELD: YES. Respondent was suspended from practice of law for six (6) months.
RATIO: The Court finds that the agreement between the respondent and the
Fortunados contrary to Canon 42 of the Canons of Professional Ethics which provides
that a lawyer may not properly agree with a client to pay or bear the expenses of
litigation. [See also Rule 16.04, Code of Professional Responsibility].
Although a lawyer may in good faith, advance the expenses of litigation, the same
should be subject to reimbursement. The agreement between respondent and the
Fortunados, however, does not provide for reimbursement to respondent of litigation
expenses paid by him. An agreement whereby an attorney agrees to pay expenses of
proceedings to enforce the client’s rights is champertous. Such agreements are
against public policy especially where, as in this case, the attorney has agreed to
carry on the action at his own expense in consideration of some bargain to have part
of the thing in dispute [citation omitted]. The execution of these contracts violates the
fiduciary relationship between the lawyer and his client, for which the former must
incur administrative sanctions.
Rayos vs. Hernandez
FACTS: Respondent was the counsel of petitioner in a Civil Case entitled, "Francisco
Rayos v. NAPOCOR," filed before the RTC, Malolos, Bulacan. The complaint alleged,
that NAPOCOR recklessly, imprudently and negligently opened the three floodgates
of the spillway of Angat Dam at midnight during the occurrence of typhoon "Kading"
causing the release of a great volume of stored water, the resultant swelling and
flooding of Angat River, and the consequent loss of lives of some of petitioner’s
relatives and destruction of his family’s properties, for which he sought damages. The
complaint was dismissed on the ground that the State cannot be sued without its
consent. Said dismissal was questioned directly to the SC which set aside the RTC
decision and ordered the reinstatement of the complaint. However, the complaint was
dismissed again by the RTC for lack of sufficient and credible evidence. CA reversed
RTC's decision and awarded damages in favor of petitioner. In addition, in all the four
(4) instant cases, ordering defendants-appellees to pay, jointly and severally,
plaintiffs-appellants, attorney’s fees in an amount equivalent to 15% of the total
amount awarded. Thus, a Writ of Execution was issued by the RTC, upon motion filed
by respondent. As a consequence, NAPOCOR issued a check amounting to
₱1,060,800.00 payable to petitioner. Thereafter, the check was turned over to
respondent as counsel of petitioner. Petitioner demanded the turn over of the check
from respondent, but the latter refused.
Petitioner filed with the RTC a motion to direct respondent to deliver to him the check
issued by NAPOCOR, corresponding to the damages awarded by the Court of
Appeals. Petitioner sought to recover the check in the amount of ₱1,060,800.00 from
respondent, claiming that respondent had no authority to receive the same as he was
already dismissed by petitioner as his counsel on 21 November 1993. 9 Respondent,
on the other hand, justifies his retention as a means to ensure payment of his
attorney’s fees.
RTC issued an Order directing respondent to deliver the check to the Sheriff of the
court who will subsequently deliver it to petitioner. A Writ of Execution was
subsequently issued. Despite the Court Order, respondent refused to surrender the
check. Subsequently, respondent deposited the amount of ₱502,838.79 only. Thus,
petitioner initiated this complaint for disbarment for the failure of respondent to return
the rest of the award in the amount of ₱557,961.21. Respondent alleged that he
handled petitioner’s case, in Civil Case No. SM-951, for 15 years, from the trial court
up to the Supreme Court.
Respondent also averred that petitioner had a verbal contract for attorney’s fees on a
contingent basis and that the said contract was only reduced in writing on 6 October
1991, duly signed by both of them. By virtue of the contract, petitioner and respondent
supposedly agreed on a 40%-60% sharing, respectively, of the court award.
Respondent was entitled to receive 60% of the award because petitioner agreed to
pay him 40% of the award as attorney’s fees and 20% of the award as litigation
expenses. The Court referred the case to the Commission on Bar Discipline of the
IBP for investigation, report and recommendation. The Investigating Commissioner
recommended the dismissal of the case which was approved by the IBP.
ISSUES:
1.) Whether respondent is justified in retaining the amount awarded to petitioner in
Civil Case No. SM-951 to assure payment of his attorney’s fees. - NO
2.) Whether the contingent fee was reasonable? - NO
HELD: NO. Moneys collected by an attorney on a judgment rendered in favor of his
client constitute trust funds and must be immediately paid over to the client. 16 Canon
16 of the Code of Professional Responsibility provides as follows:
CANON 16 - A lawyer shall hold in trust all moneys and properties of his client that
may come into his possession.
Rule 16.01 – A lawyer shall account for all money or property collected or received for
or from the client.
In the case at bar, when respondent withheld and refused to deliver the NAPOCOR
check representing the amount awarded by the court in Civil Case No. SM-951, which
he received on behalf of his client (petitioner herein), he breached the trust reposed
on him. It is only after an Order was issued by the RTC ordering the delivery of the
check to petitioner that the respondent partially delivered the amount of ₱502,838.79
to the former, but still retaining for himself the amount of ₱557,961.21 as payment for
his attorney’s fees. The claim of the respondent that petitioner failed to pay his
attorney’s fees is not an excuse for respondent’s failure to deliver the amount to the
petitioner. A lawyer is not entitled to unilaterally appropriate his client’s money for
himself by the mere fact alone that the client owes him attorney’s fees. The failure of
an attorney to return the client’s money upon demand gives rise to the presumption
that he has misappropriated it for his own use to the prejudice and violation of the
general morality, as well as of professional ethics; it also impairs public confidence in
the legal profession and deserves punishment. In short, a lawyer’s unjustified
withholding of money belonging to his client, as in this case, warrants the imposition
of disciplinary action.
There is another aspect to this case which the Court cannot just gloss over.
Respondent claimed that he charged petitioner, his client, a contingent fee comprising
of forty percent (40%) as attorney’s fees and twenty percent (20%) as litigation
expenses.
A contingent fee arrangement is valid in this jurisdiction and is generally recognized
as valid and binding but must be laid down in an express contract. The amount of
contingent fee agreed upon by the parties is subject to the stipulation that counsel will
be paid for his legal services only if the suit or litigation prospers. A much higher
compensation is allowed as contingent fee in consideration of the risk that the lawyer
may get nothing if the suit fails. 27 Contracts of this nature are permitted because
they redound to the benefit of the poor client and the lawyer "especially in cases
where the client has meritorious cause of action, but no means with which to pay for
legal services unless he can, with the sanction of law, make a contract for a
contingent fee to be paid out of the proceeds of the litigation. Oftentimes, the
contingent fee arrangement is the only means by which the poor and helpless can
seek redress for injuries sustained and have their rights vindicated." 28
Contingent fee contracts are subject to the supervision and close scrutiny of the court
in order that clients may be protected from unjust charges. 29 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."
In the case at bar, respondent retained the amount of ₱557,961.21 out of the
₱1,060,800.00 award for damages paid by NAPOCOR to petitioner. Under the said
scheme, respondent actually collected fifty-three percent (53%) or more than half of
the total amount due the petitioner; indeed, he appropriated for himself more than the
amount which he had already turned over to and actually received by his client.
We note that petitioner was unschooled and frustrated and hopeless with the tragic
loss of his loved ones caused by the inundation of the town of Norzagaray, Bulacan,
on 26-27 October 1978 because of the negligent release by NAPOCOR of the water
through the spillways of the Angat Dam. Petitioner also had to face the loss and
destruction of his family’s properties. Under such circumstances and given his
understandable desire to recover the damages for the loss of his loved ones and
properties, petitioner would easily succumb and readily agree to the demands of
respondent lawyer regarding his attorney’s fees.
We believe and so hold that the contingent fee here claimed was, under the facts
obtaining in this case, grossly excessive and unconscionable. Such a fee structure,
when considered in conjunction with the circumstances of this case, also shows that
an unfair advantage was taken of the client and legal fraud and imposition perpetrated
upon him. Lawyers should not be permitted to get a lion’s share of the benefits due
the poor and the helpless. Contracts for legal services between the helpless and
attorney should be zealously scrutinized to the end that a fair share of the benefits be
not denied to the former. This Court has the power to guard a client, especially an
aged and necessitous client, against such a contract. Suspension of respondent for
six months is justified in the case at bar.
ST. LOUIS LABORATORY HS FACULTY STAFF VS. DELA CRUZ
This is a disbarment case filed by the Faculty members and Staff of the Saint Louis
University-Laboratory High School (SLU-LHS) against Atty. Rolando C. Dela Cruz,
principal of SLU-LHS, predicated on the following grounds:
1) Gross Misconduct:
From the records of the case, it appears that there is a pending criminal case for child
abuse allegedly committed by him against a high school student filed before the
Prosecutors Office of Baguio City; a pending administrative case filed by the
Teachers, Staff, Students and Parents before an Investigating Board created by SLU
for his alleged unprofessional and unethical acts of misappropriating money
supposedly for the teachers; and the pending labor case filed by SLU-LHS Faculty
before the NLRC, Cordillera Administrative Region, on alleged illegal deduction of
salary by respondent.
2) Grossly Immoral Conduct:
In contracting a second marriage despite the existence of his first marriage; and
3) Malpractice: In notarizing documents despite the expiration of his commission.
Respondent denied the charges of child abuse, illegal deduction of salary and others
which are still pending before the St. Louis University (SLU), National Labor Relations
Commission (NLRC) and the Prosecutors Office. He however admitted his second
marriage despite the existence of his first marriage, and the subsequent nullification
of the former. He also admitted having notarized certain documents during the period
when his notarial commission had already expired. However, he offered some
extenuating defenses such as good faith, lack of malice and noble intentions in doing
the complained acts. The IBP decided that Atty. Rolando C. dela Cruz be
SUSPENDED from the practice of law for 1 year and for notarizing legal documents
despite full knowledge of the expiration of his notarial commission Atty. Rolando C.
dela Cruz is SUSPENDED from the practice of law for another 1 year, for a total of
two (2) years Suspension from the practice of law.
profession. Respondent is now SUSPENDED from the practice of law for a period of
two (2) years, and another two (2) years for notarizing documents despite the
expiration of his commission or a total of four (4) years of suspension.
NOTE: Other charges constituting respondents misconduct such as the pending criminal case for child abuse
allegedly committed by him against a high school student the pending administrative case filed by the
Teachers, Staff, Students and Parents before an Investigating Board created by SLU; and the pending labor
case filed by SLU-LHS Faculty before the NLRC, need not be discussed, as they are still pending before
the proper forums. At such stages, the presumption of innocence still prevails in favor of the
respondent.

ISSUE: Whether the Penalty was proper?

HELD: NO. As to the charge of misconduct for having notarized several

documents during the years 1988-1997 after his commission as notary public had
expired, respondent humbly admitted having notarized certain documents despite his
knowledge that he no longer had authority to do so. He, however, alleged that he
received no payment in notarizing said documents.

It has been emphatically stressed that notarization is not an empty, meaningless,

routinary act. On the contrary, it is invested with substantive public interest, such that
only those who are qualified or authorized may act as notaries public. Notarization of
a private document converts the document into a public one making it admissible in
court without further proof of its authenticity. A notarial document is by law entitled to
full faith and credit upon its face and, for this reason, notaries public must observe
with the utmost care the basic requirements in the performance of their duties.
Otherwise, the confidence of the public in the integrity of this form of conveyance
would be undermined.

The requirements for the issuance of a commission as notary public must not be
treated as a mere casual formality. The Court has characterized a lawyers act of
notarizing documents without the requisite commission to do so as reprehensible,
constituting as it does not only malpractice but also x x x the crime of falsification of
public documents.

The Court had occasion to state that where the notarization of a document is done by
a member of the Philippine Bar at a time when he has no authorization or commission
to do so, the offender may be subjected to disciplinary action or one, performing a
notarial act without such commission is a violation of the lawyers oath to obey the
laws, more specifically, the Notarial Law. Then, too, by making it appear that he is
duly commissioned when he is not, he is, for all legal intents and purposes, indulging
in deliberate falsehood, which the lawyers oath similarly proscribes. These violations
fall squarely within the prohibition of Rule 1.01 of Canon 1 of the Code of Professional
Responsibility, which provides: A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct. By acting as a notary public without the proper
commission to do so, the lawyer likewise violates Canon 7 of the same Code, which
directs every lawyer to uphold at all times the integrity and dignity of the legal