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ATTY. AYO
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January 24 Wed, 2018


Deadline: January 23, 10:00 PM

Moral turpitude

Cases involving/not involving Moral Turpitude

1. Edgar y. Teves vs. Comelec and Hermenio Teves- Mark

Facts: Petitioner was a candidate for the position of Representative of the 3rd legislative district of
Negros Oriental during the May 14, 2007 elections.

Respondent Herminio G. Teves filed a petition to disqualify petitioner on the ground that in Teves v.
Sandiganbayan,3 he was convicted of violating Section 3(h), Republic Act (R.A.) No. 3019, or the Anti-
Graft and Corrupt Practices Act, for possessing pecuniary or financial interest in a cockpit (sabungan),
which is prohibited under Section 89(2) of the Local Government Code (LGC) of 1991.

Respondent alleged that petitioner is disqualified from running for public office because he was
convicted of a crime involving moral turpitude which carries the accessory penalty of perpetual
disqualification from public office.

The COMELEC First Division disqualified petitioner from running for the position of member of House
of Representatives and ordered the cancellation of his Certificate of Candidacy.

Upon MR, COMELEC en banc denied the motion saying that since petitioner lost in the last 14 May 2007
congressional elections, it thereby rendered the instant MR moot and academic.

Issue: Whether petitioner’s violation of Section 3(h), R.A. No. 3019 involves moral turpitude.

Held: Moral turpitude has been defined as everything which is done contrary to justice, modesty, or
good morals; an act of baseness, vileness or depravity in the private and social duties which a man owes
his fellowmen, or to society in general.

The essential elements of the violation of said provision are as follows: 1) The accused is a public officer;
2) he has a direct or indirect financial or pecuniary interest in any business, contract or transaction; 3)
he either: a) intervenes or takes part in his official capacity in connection with such interest, or b) is
prohibited from having such interest by the Constitution or by law.

Thus, there are two modes by which a public officer who has a direct or indirect financial or pecuniary
interest in any business, contract, or transaction may violate Section 3(h) of R.A. 3019. The first mode
is when the public officer intervenes or takes part in his official capacity in connection with his financial
or pecuniary interest in any business, contract, or transaction. The second mode is when he is
prohibited from having such an interest by the Constitution or by law.

In Teves v. Sandiganbayan, petitioner was convicted under the second mode for having pecuniary or
financial interest in a cockpit which is prohibited under Sec. 89(2) of the Local Government Code of
1991.
o The evidence for the prosecution has established that petitioner Edgar Teves, then mayor of Valencia,
Negros Oriental, owned the cockpit in question.
o Even if the ownership of petitioner Edgar Teves over the cockpit were transferred to his wife, still he
would have a direct interest thereon because, as correctly held by respondent Sandiganbayan, they
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remained married to each other from 1983 up to 1992, and as such their property relation can be
presumed to be that of conjugal partnership of gains in the absence of evidence to the contrary.
o Hence, his interest in the Valencia Cockpit is direct and is, therefore, prohibited under Section 89(2)
of the LGC of 1991.

However, conviction under the second mode does not automatically mean that the same involved
moral turpitude. A determination of all surrounding circumstances of the violation of the statute must
be considered. Besides, moral turpitude does not include such acts as are not of themselves
immoral but whose illegality lies in their being positively prohibited, as in the instant case.

The Court clarified that not every criminal act, however, involves moral turpitude. It is for this reason
that "as to what crime involves moral turpitude, is for the Supreme Court to determine." In resolving
the foregoing question, the Court is guided by one of the general rules that crimes mala in se involve
moral turpitude, while crimes mala prohibita do not.
Moral turpitude implies something immoral in itself, regardless of the fact that it is punishable by law
or not. It must not be merely mala prohibita, but the act itself must be inherently immoral. The doing of
the act itself, and not its prohibition by statute fixes the moral turpitude.

Consequently, considering all circumstances, the Court held that petitioner’s conviction does not
involve moral turpitude.

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally
considered inimical to the interests of the people, there is nothing in the Constitution categorically
proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress to
deal with the activity as it sees fit.

In the exercise of its own discretion, the legislature may prohibit gambling altogether or allow it without
limitation or it may prohibit some forms of gambling and allow others for whatever reasons it may
consider sufficient. Thus, it has prohibited jueteng and monte but permits lotteries, cockfighting and
horse-racing. In making such choices, Congress has consulted its own wisdom, which this Court has no
authority to review, much less reverse.

2. Supreme Court Decision date May 20, 20008 GR No. 1611455 Under Rule 139 B of the Rules
of court vs Atty Rodolfo D. Pactolin AC No. 7940 April 24, 2012 (Jued) Case too short, didn’t digest
:)

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 in Criminal Case 25665 a complaint against Atty.
Pactolin for falsification of public document.[1] On November 12, 2003 the Sandiganbayan found Atty.
Pactolin guilty of falsification under Article 172 and sentenced him to the indeterminate penalty of
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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 prisioncorreccional,
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.[2] 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 Integrated Bar of the Philippines (IBP) for appropriate action.

Because complainant Ferraren neither appeared nor submitted any pleading during the administrative
proceedings before the IBP Commission on Bar Discipline, on October 9, 2010 the IBP Board of
Governors passed Resolution XIX-2010-632, adopting and approving the Investigating Commissioners
Report and Recommendation that the case against Atty. Pactolin be dismissed for insufficiency of
evidence.

Issue: The only issue presented in this case is whether or not Atty. Pactolin should be disbarred after
conviction by final judgment of the crime of falsification.

Ruling: In his pleadings before the Commission on Bar Discipline, Atty. Pactolin reiterated the defenses
he raised before the Sandiganbayan and this Court in the falsification case. He claims that the Court
glossed over the facts, that its decision and referral to the IBP was factually infirmed[3] and contained
factual exaggerations and patently erroneous observation,[4] and was too adventurous.[5]

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.[6]

This Courts decision in said falsification case had long become final and executory. In In Re: Disbarment
of Rodolfo Pajo,[7] the Court held that in disbarment cases, it is no longer called upon to review the
judgment of conviction which has become final. The review of the conviction no longer rests upon this
Court.

Under Section 27, Rule 138 of the Rules of Court, a lawyer may be removed or suspended on the
following grounds: (1) deceit; (2) malpractice; (3) gross misconduct in office; (4) grossly immoral
conduct; (5) conviction of a crime involving moral turpitude; (6) violation of the lawyers oath; (7) willful
disobedience of any lawful order of a superior court; and (8) corruptly or willfully appearing as a lawyer
for a party to a case without authority so to do.

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.[8] Moral turpitude includes everything
which is done contrary to justice, honesty, modesty, or good morals. It involves an act of baseness,
vileness, or depravity in the private duties which a man owes his fellowmen, or to society in general,
contrary to the accepted and customary rule of right and duty between man and woman, or conduct
contrary to justice, honesty, modesty, or good morals.[9]

Having said that, what penalty should be imposed then on Atty. Pactolin?

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
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misconduct affecting the standing and moral character of the lawyer as an officer of the court and a
member of the bar.[10] Yet this Court has also consistently pronounced that disbarment is the
appropriate penalty for conviction by final judgment for a crime involving moral turpitude.[11]

Here, Atty. Pactolins disbarment is warranted. The Sandiganbayan has confirmed that although his
culpability for falsification has been indubitably 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.[12]

This Court once again reminds all lawyers that they, of all classes and professions, are most sacredly
bound to uphold the law.[13] The privilege to practice law is bestowed only upon individuals who are
competent intellectually, academically and, equally important, morally. As such, lawyers must at all
times conduct themselves, especially in their dealings with their clients and the public at large, with
honesty and integrity in a manner beyond reproach.[14]

WHEREFORE, Atty. Rodolfo D. Pactolin is hereby DISBARRED and his name REMOVED from the Rolls
of Attorney. Let a copy of this decision be attached to his personal records and furnished the Office of
the Bar Confidant, Integrated Bar of the Philippines and the Office of the Court Administrator for
circulation to all courts in the country.

3. Elipidio Tiong vs. Atty. George M. Florendo AC. No 42-28, December 12, 2011 (Mark)

FACTS: Atty. George Florendo has been serving as the lawyer of spouses Elpidio and Ma. Elena Tiong.
Elpidio, a US citizen is often times away. For two years, he suspected that his wife and Atty. Florendo
were having an affair. Finally in 1995, he was able to listen to a telephone conversation where he heard
Atty. Florendo mention amorous words to Ma. Elena. Atty. Florendo confronted the two and both
eventually admitted to their illicit relationship. Atty. Florendo and Ma. Elena then executed and signed
an affidavit, which was later notarized, stating that they admit of their illicit relationship; that they are
seeking the forgiveness of their respective spouse. Elpidio forgave Florendo and Ma. Elena. But
nevertheless, Elpidio filed a disbarment case against Florendo.
Florendo said he can no longer be sanctioned because he was already pardoned.
ISSUE 1: Whether or not Atty. Florendo`s illicit relationship with Ma. Elena involves Moral Turpitude
(YES)
Moral turpitude has been defined as everything which is done contrary to justice, modesty, or good
morals; an act of baseness, vileness or depravity, or of sexual immorality whether in the private or
social duties which a man owes his fellowmen, or to society in general. Crimes mala in se involve
moral turpitude. Moral turpitude implies something immoral in itself, regardless of the fact that it is
punishable by law or not. It must not be merely mala prohibita, but the act itself must be inherently
immoral. The doing of the act itself, and not its prohibition by statute fixes the moral turpitude.

ISSUE 2: Whether or not Atty. Florendo should no longer be sanctioned because he was already
pardoned.
HELD:
NO. Florendo’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. He violated the trust reposed upon him
by his client (Canon 17, Code of Professional Responsibility). His illicit relationship with Ma. Elena
amounts to a disgraceful and grossly immoral conduct warranting disciplinary action. Section
27, Rule 138 of the Rules of Court provides that an attorney may be disbarred or suspended from his
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office for any deceit, malpractice, or other gross misconduct in office, grossly immoral conduct, among
others. It cannot be also said, as he claims, that their relationship is merely a moment of indiscretion
considering that their affair went on for more than two years. Florendo was suspended for 6 months. A
petition for suspension or disbarment of a lawyer is a sui generis case. This class of cases is meant to
protect the public and the courts of undesirable members of the legal profession. As such, pardon by
the offended party of the act complained of does not operate to offset the ground for disbarment or
suspension.

4. Teresita D. Santeco vs. Atty. Luna B. Avance Ac. No, 5834 Feb 22, 2011 (Mustang)

FACTS:

In an En Banc Decision dated December 11, 2003, the Court found respondent guilty of gross
misconduct for, among others, 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 ordered
suspended from the practice of law for a period of five years.

Subsequently, while respondent’s five-year suspension from the practice of law was still in effect, Judge
Consuelo Amog-Bocar, Presiding Judge of the RTC of Iba, Zambales, Branch 71, sent a letter-report dated
November 12, 2007 to the Court Administrator informing the latter that respondent had appeared and
actively participated in three 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 three years and that her suspension has already been lifted.

Acting on Judge Amog-Bocar’s letter-report, the Court, in a Resolution dated April 9, 2008, required
respondent to comment within ten 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 on September 29, 2009 finding respondent
guilty of indirect contempt.
Respondent was ordered to pay a fine in the amount of Php 30,000.00 which respondent failed to pay.

ISSUE: Whether or not Atty. Avance should be disbarred.

HELD: Respondent Atty. Luna B. Avance is disbarred for gross misconduct and willful disobedience of
lawful orders of a superior court. Her name is ordered stricken off from the Roll of Attorneys.

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. We have held that failure to comply with Court directives constitutes gross misconduct,
insubordination or disrespect which merits a lawyer’s suspension or even disbarment.

Sebastian v. Bajar teachers 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
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which is only too deserving of reproof.” 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.

The lawyers Oath – encompasses all the ethical obligations of a lawyers

Obligation or duty to: the Court; to Client ; to Colleagues in the profession; and to the PUBLIC

Lawyer’s Oath

I, do solemnly swear that I will maintain allegiance to the Republic of the Philippines, I will support the
Constitution and obey the laws as well as the legal orders of the duly constituted authorities therein; I
will do no falsehood, nor consent to the doing of any in court; I will not wittingly or willingly promote
or sue any groundless, false or unlawful suit, or give aid nor consent to the same; I will delay no man for
money or malice, and will conduct myself as a lawyer according to the best of my knowledge and
discretion, with all good fidelity as well to the courts as to my clients; and I impose upon myself these
voluntary obligations without any mental reservation or purpose of evasion. So help me God.

3. Common Terms

a. Trial Lawyer – a lawyer who personally handles cases in court, administrative agencies or boards;
one who engages in actual trial work

b. Practicing Lawyer – one engaged in the practice of law


Practice of law means any activity, in or out of 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.

5. Cayetano Vs. Monsod - Yana

FACTS:
Respondent Atty. Christian Monsod was nominated by President Aquino to the position of Chairman of
the COMELEC on April 25, 1991. Atty. Renato Cayetano opposed the nomination because allegedly
Monsod does not possess the required qualification of having been engaged in the practice of law for at
least ten 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.
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Challenging the validity of the confirmation by the Commission on Appointments of Monsod’s


nomination, petitioner filed a petition for Certiorari and Prohibition praying that said confirmation and
the consequent appointment of Monsod as Chairman of the Commission on Elections be declared null
and void because Monsod did not meet the requirement of having practiced law for the last ten years.

ISSUE: Whether or not respondent possess the required qualifications of having engaged in the practice
of law for at least ten years.

HELD: YES

RATIO: In the case of Philippine Lawyers Association vs. Agrava, stated: The practice of law is not
limited to the conduct of cases in 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 ten 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 ten years.

c. Quatum Meruit – “as much as he has deserved”; authorized when (i) there is no express contract
(Pineda vs. de Jesus, 499 SCRA 608; (ii) although there is a contract the fees stipulated are found
unreasonable or unconscionable (Mambulao Lumber vs PNB, 22 SCRA 355); (iii) when the contract for
attorney’s fee is void due to purely formal matters or defect in the execution; (iv) when the lawyer is
unable to finish the case; and (v) when both lawyer and client disregard the contract

6. Pineda vs. de Jes, 499 SCRA 608 (Edward)


APPLICABLE RULE: Canon 20.04- A lawyer shall avoid controversies with clients concerning his
compensation and shall resort to judicial action only to prevent imposition, injustice or fraud.

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
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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.

DISPOSITIVE PORTION: WHEREFORE, the petition is hereby PARTIALLY GRANTED. The decision of
the Court of Appeals dated April 30, 2002 in CA-G.R. CV No. 68080 is hereby MODIFIED. The award of
additional attorney’s fees in favor of respondents is hereby DELETED.

7. Mambulao Lumber vs PNB, 22 SCRA 355 (Erica)


FACTS: On May 5, 1956 the plaintiff applied for an industrial loan of P155,000 (approved for a loan of
P100,000 only) with the Naga Branch of defendant PNB. To secure payment, the plaintiff mortgaged 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. The PNB released from the
approved loan the sum of P27,500, and another release of P15,500.

The plaintiff failed to pay the amortization on the amounts released to and received by it. It was found
that the plaintiff had already stopped operation about the end of 1957 or early part of 1958.
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The unpaid obligation of the plaintiff as of September 22, 1961, amounted to P57,646.59, excluding
attorney's fees. A foreclosure sale of the parcel of land, together with the buildings and improvements
thereon was, held on November 21, 1961, and the said property was sold to the PNB for the sum of
P56,908.00, subject to the right of the plaintiff to redeem the same within a period of one year.

The plaintiff sent a letter reiterating its request that the foreclosure sale of the mortgaged chattels be
discontinued on the grounds that the mortgaged indebtedness had been fully paid and that it could not
be legally effected at a place other than the City of Manila.

The trial court sentenced the Mambulao Lumber Company to pay to the defendant PNB the sum of
P3,582.52 with interest thereon at the rate of 6% per annum. The plaintiff on appeal advanced that its
total indebtedness to the PNB as of November 21, 1961, was only P56,485.87 and not P58,213.51 as
concluded by the court a quo; hence, the proceeds of the foreclosure sale of its real property alone in
the amount of P56,908.00 on that date, added to the sum of P738.59 it remitted to the PNB thereafter
was more than sufficient to liquidate its obligation, thereby rendering the subsequent foreclosure sale
of its chattels unlawful;

That for the acts of the PNB in proceeding with the sale of the chattels, in utter disregard of plaintiff's
vigorous opposition thereto, and in taking possession thereof after the sale thru force, intimidation,
coercion, and by detaining its "man-in-charge" of said properties, the PNB is liable to plaintiff for
damages and attorney's fees.

ISSUE: Whether or not PNB may be held liable to plaintiff Corporation for damages and attorney’s fees.

HELD: Herein appellant's claim for moral damages, seems to have no legal or factual basis. Obviously,
an artificial person like herein appellant corporation cannot experience physical sufferings,
mental anguish, fright, serious anxiety, wounded feelings, moral shock or social humiliation
which are basis of moral damages. A corporation may have a good reputation which, if besmirched,
may also be a ground for the award of moral damages. The same cannot be considered under the facts
of this case, however, not only because it is admitted that herein appellant had already ceased in its
business operation at the time of the foreclosure sale of the chattels, but also for the reason that
whatever adverse effects of the foreclosure sale of the chattels could have upon its reputation or
business standing would undoubtedly be the same whether the sale was conducted at Jose Panganiban,
Camarines Norte, or in Manila which is the place agreed upon by the parties in the mortgage contract.

But for the wrongful acts of herein appellee bank and the deputy sheriff of Camarines Norte in
proceeding with the sale in utter disregard of the agreement to have the chattels sold in Manila as
provided for in the mortgage contract, to which their attentions were timely called by herein appellant,
and in disposing of the chattels in gross for the miserable amount of P4,200.00, herein appellant should
be awarded exemplary damages in the sum of P10,000.00. The circumstances of the case also warrant
the award of P3,000.00 as attorney's fees for herein appellant.

d. Barratry – fomenting suits among individuals and offering his services to one of them

e. Ambulance chasing – furtively chasing an ambulance carrying the victim and offering his services
on contingent basis

f. Amicus curiae – Friend of the court


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g. Assumpsit – an agreement or promise made orally in writing, under seal, a legal action to recover
damages for a breach of such an agreement

h. Champertous contract - Lawyer stipulates with his client that in the prosecution of the case, he will
bear all the expenses for the recovery of things or property being claimed by the client and the latter
agrees to pay the former a portion of the thing/property recovered as compensation. (Bautista vs.
Gonzales, 182 SCRA 151)

Void Contract. Exception: Lawyer may advance some expenses in good faith as a matter of convenience
but subject to reimbursement

8.(Bautista vs. Gonzales, 182 SCRA 151) (Jued)

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.

xxx

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;

xxx

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.
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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 [citation
omitted]. 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

i. Contingent fee Arrangement - counsel does not undertake to bear all the expenses of litigation;
fees dependent on the success of the cases (Rayos vs. Herndandez, 515 Scra 517)

9.(Rayos vs. Herndandez, 515 Scra 517) (Jerald)

FACTS:
1. Rayos was a client of Atty Hernandez in Rayos vs NAPOCOR.

The story of the case:


On Oct 26-27, 1978, typhoon Kading hit Bulacan and concurrently, NAPOCOR imprudently opened
three floodgates of the spillway of Angat Dam which caused flooding of Angat River. Consequently, 10
relatives of Rayos died and his family’s properties were destroyed. Rayos sued NAPOCOR. RTC
dismissed the case for lacking credible evidence. CA reversed the decision and awarded damages in
favor of Rayos, which was also affirmed by the SC.

Final and executory on Aug 4, 1993. The awards were as follows:


a. Actual damages - P520, 000
b. Moral damages – P500, 000
c. Litigation Expenses – P10,000.

2. The check issued by NAPOCOR was turned over to Atty Hernandez as he was the counsel of Rayos.
Rayos demanded the check from Atty H but Atty H refused

3. Rayos filed a motion with the RTC to direct Atty Hernandez to deliver to him the check. Despite the
Court Order, Atty H refused claiming that it was his means to ensure payment of his attorney’s fees.

4. Atty Hernandez deposited the amount of P502, 838. 79 to the bank account of Rayos.

5. Rayos filed a disbarment case against Atty H for his failure to return the remaining P557, 961. 21.

6. Atty H replied: Rayos allegedly agreed to a contingent basis fee on a 40%-60% (client-lawyer)
sharing:
40% - attorney’s fees
20% - litigation expenses

7. The Court referred the case to Commission on Bar Discipline of IBP for investigation.
 Investigating Commissioner recommended the DISMISSAL of the case.
 IBP adopted and approved the same.
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MAIN ISSUE:
Whether or not the contingent fee agreement is binding upon Rayos and Atty Hernandez.

DECISION:
YES, but with RESERVATIONS.

CONTINGENT FEE – the contingent fee is the amount agreed upon by the parties subject to the
stipulation that counsel will be paid for his legal services only if the suit or litigation prospers.

YES: 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 to pay for
legal services, unless he agrees to a contract of contingent fee. A much higher compensation is allowed
as contingent fee in consideration of the risk that the lawyer may get nothing if the suit fails.

RESERVATIONS: Contingent fee contracts should always be subject to the supervision of a court as to its
reasonableness. When the courts find that the stipulated amount is excessive or found to have been
marred by fraud, mistake, undue influence on the part of the attorney, public policy demands that said
contract be disregarded to protect the client from unreasonable exaction.

In the case at bar, Atty H collected 53% of the total amount due to Rayos.
 Rayos was unschooled and frustrated with the loss of his loved ones and the destruction of his
family’s properties. Given these facts, Rayos would easily succumb to the demands of Atty H
regarding his attorney’s fees.
 Taking note also of Atty H’s efforts in litigating Rayos’ case for 15 years and the risk he took in
representing Rayos on a contingent fee basis, a fee of 35% of the amount awarded to Rayos
would be a fair compensation for Atty H’s legal services.

Disbarment should never be decreed where any lesser penalty, such as temporary suspension, would
accomplish the end desired. Thus, guided by previous rulings of the Court, Atty Hernandez’s
SUSPENSION FOR 6 MONTHS is justified in the case at bar.

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NB:
Factors which should guide a lawyer in determining his fees:
Rule 20.1 of CPR:

a) The time spent and the extent of the services rendered or required;

b) The novelty and difficulty of the questions involved; 

c) The importance of the subject matter; 

d) The skill demanded; 

e) The probability of losing other employment as a result of acceptance of the proffered case;
f) The customary charges for similar services and the schedule of fees of the IBP Chapter to which
he belongs;
g) The amount involved in the controversy and the benefits resulting to the client from the
service;
h) The contingency or certainty of compensation;
i) The character of the employment, whether occasional or established; and
j) The professional standing of the lawyer.
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4. Lawyering – a profession not a business in which duty to public service , not money is the primary
consideration (St. Louis Laboratory High School Faculty and Staff v. del la Cruz, 499 Scra 614)

10. (St. Louis Laboratory High School Faculty and Staff v. del la Cruz, 499 Scra 614) (Mark)

Facts:
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- he has pending case of child abuse, administrative case and labor case.

2. Grossly immoral conduct – contracting a second marriage despite the existence of his first marriage.

3. Malpractice- notarizing documents despite the expiration of his commission.

Issue: May a pending case constitutes facts that determines the existence of gross misconduct by the
respondent?

Held: Practice of law is not a right but a privilege bestowed by the State on those who show that they
possess the qualifications required by law. The purpose of suspending or disbarring an attorney is to
remove from the profession those unfit to be entrusted with the duties and responsibilities thereby
protecting the public and those charged with the administration of justice, rather than to punish an
attorney.

Contracting a second marriage despite existence of first marriage is a violation of the continous
possession of good moral character as a requirement to the enjoyment of the privilege of law practice.

The Court has characterized a lawyer’s act of notarizing documents without the requisite commission
to do so as “reprehensible, constituting as it does not only malpractice but also the crime of falsification
of public documents.” 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.

Pending case does not constitute facts that determines the existence of gross misconduct by the
respondent as these are still pending before the proper forums. At such stages, the presumption of
innocence still prevails in favor of the respondent