Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

A.C. No. 7269 November 23, 2011

ATTY. EDITA NOE-LACSAMANA, Complainant,

vs.
ATTY. YOLANDO F. BUSMENTE, Respondent.

DECISION

CARPIO, J.:

The Case

Before the Court is a complaint for disbarment filed by Atty. Edita Noe-Lacsamana (Noe-Lacsamana)
against Atty. Yolando F. Busmente (Busmente) before the Integrated Bar of the Philippines (IBP).

The Antecedent Facts

Noe-Lacsamana alleged in her complaint that she was the counsel for Irene Bides, the plaintiff in Civil
Case No. SCA-2481 before the Regional Trial Court of Pasig City, Branch 167, while Busmente was the
counsel for the defendant Imelda B. Ulaso (Ulaso). Noe-Lacsamana alleged that Ulaso’s deed of sale
over the property subject of Civil Case No. SCA-2481 was annulled, which resulted in the filing of an
ejectment case before the Metropolitan Trial Court (MTC), San Juan, docketed as Civil Case No. 9284,
where Busmente appeared as counsel. Another case for falsification was filed against Ulaso where
Busmente also appeared as counsel. Noe-Lacsamana alleged that one Atty. Elizabeth Dela Rosa or Atty.
Liza Dela Rosa (Dela Rosa) would accompany Ulaso in court, projecting herself as Busmente’s
collaborating counsel. Dela Rosa signed the minutes of the court proceedings in Civil Case No. 9284 nine
times from 25 November 2003 to 8 February 2005. Noe-Lacsamana further alleged that the court orders
and notices specified Dela Rosa as Busmente’s collaborating counsel. Noe-Lacsamana alleged that upon
verification with this Court and the Integrated Bar of the Philippines, she discovered that Dela Rosa was
not a lawyer.

Busmente alleged that Dela Rosa was a law graduate and was his paralegal assistant for a few years.
Busmente alleged that Dela Rosa’s employment with him ended in 2000 but Dela Rosa was able to
continue misrepresenting herself as a lawyer with the help of Regine Macasieb (Macasieb), Busmente’s
former secretary. Busmente alleged that he did not represent Ulaso in Civil Case No. 9284 and that his
signature in the Answer1 presented as proof by Noe-Lacsamana was forged.

The Decision of the Commission on Bar Discipline

In its Report and Recommendation,2 the IBP Commission on Bar Discipline (IBP-CBD) found that Dela
Rosa was not a lawyer and that she represented Ulaso as Busmente’s collaborating counsel in Civil Case
No. 9284. The IBP-CBD noted that while Busmente claimed that Dela Rosa no longer worked for him
since 2000, there was no proof of her separation from employment. The IBP-CBD found that notices from
the MTC San Juan, as well as the pleadings of the case, were all sent to Busmente’s designated office
address. The IBP-CBD stated that Busmente’s only excuse was that Dela Rosa connived with his former
secretary Macasieb so that the notices and pleadings would not reach him.

The IBP-CBD rejected the affidavit submitted by Judy M. Ortalez (Ortalez), Busmente’s staff, alleging
Macasieb’s failure to endorse pleadings and notices of Civil Case No. 9284 to Busmente. The IBP-CBD
noted that Ortalez did not exactly refer to Ulaso’s case in her affidavit and that there was no mention that
she actually witnessed Macasieb withholding pleadings and notices from Busmente. The IBP-CBD also
noted that Macasieb was still working at Busmente’s office in November 2003 as shown by the affidavit
attached to a Motion to Lift Order of Default that she signed. However, even if Macasieb resigned in
November 2003, Dela Rosa continued to represent Ulaso until 2005, which belied Busmente’s allegation
that Dela Rosa was able to illegally practice law using his office address without his knowledge and only
due to Dela Rosa’s connivance with Macasieb. As regards Busmente’s allegation that his signature on
the Answer was forged, the IBP-CBD gave Busmente the opportunity to coordinate with the National
Bureau of Investigation (NBI) to prove that his signature was forged but he failed to submit any report
from the NBI despite the lapse of four months from the time he reserved his right to submit the report.

The IBP-CBD recommended Busmente’s suspension from the practice of law for not less than five years.
On 26 May 2006, in its Resolution No. XVII-2006-271,3 the IBP Board of Governors adopted and
approved the recommendation of the IBP-CBD, with modification by reducing the period of Busmente’s
suspension to six months.

Busmente filed a motion for reconsideration and submitted a report4 from the NBI stating that the
signature in the Answer, when compared with standard/sample signatures submitted to its office, showed
that they were not written by one and the same person. In its 14 May 2011 Resolution No. XIX-2011-168,
the IBP Board of Governors denied Busmente’s motion for reconsideration.

The Issue

The issue in this case is whether Busmente is guilty of directly or indirectly assisting Dela Rosa in her
illegal practice of law that warrants his suspension from the practice of law.

The Ruling of this Court

We agree with the IBP.

Canon 9 of the Code of Professional Responsibility states:

Canon 9. A lawyer shall not, directly or indirectly, assist in the unauthorized practice of law.

The Court ruled that the term "practice of law" implies customarily or habitually holding oneself out to the
public as a lawyer for compensation as a source of livelihood or in consideration of his services.5 The
Court further ruled that holding one’s self out as a lawyer may be shown by acts indicative of that
purpose, such as identifying oneself as attorney, appearing in court in representation of a client, or
associating oneself as a partner of a law office for the general practice of law.6

The Court explained:

The lawyer’s duty to prevent, or at the very least not to assist in, the unauthorized practice of law is
founded on public interest and policy. Public policy requires that the practice of law be limited to those
individuals found duly qualified in education and character. The permissive right conferred on the lawyer
is an individual and limited privilege subject to withdrawal if he fails to maintain proper standards of moral
and professional conduct. The purpose is to protect the public, the court, the client, and the bar from the
incompetence or dishonesty of those unlicensed to practice law and not subject to the disciplinary control
of the Court. It devolves upon a lawyer to see that this purpose is attained. Thus, the canons and ethics of
the profession enjoin him not to permit his professional services or his name to be used in aid of, or to
make possible the unauthorized practice of law by, any agency, personal or corporate. And, the law
makes it a misbehavior on his part, subject to disciplinary action, to aid a layman in the unauthorized
practice of law.7

In this case, it has been established that Dela Rosa, who is not a member of the Bar, misrepresented
herself as Busmente’s collaborating counsel in Civil Case No. 9284. The only question is whether
Busmente indirectly or directly assisted Dela Rosa in her illegal practice of law.
Busmente alleged that Dela Rosa’s employment in his office ended in 2000 and that Dela Rosa was able
to continue with her illegal practice of law through connivance with Macasieb, another member of
Busmente’s staff. As pointed out by the IBP-CBD, Busmente claimed that Macasieb resigned from his
office in 2003. Yet, Dela Rosa continued to represent Ulaso until 2005. Pleadings and court notices were
still sent to Busmente’s office until 2005. The IBP-CBD noted that Dela Rosa’s practice should have
ended in 2003 when Macasieb left.

We agree. Busmente’s office continued to receive all the notices of Civil Case No. 9284. The 7 December
2004 Order8 of Judge Elvira DC. Panganiban (Judge Panganiban) in Civil Case No. 9284 showed that
Atty. Elizabeth Dela Rosa was still representing Ulaso in the case. In that Order, Judge Panganiban set
the preliminary conference of Civil Case No. 9284 on 8 February 2005. It would have been impossible for
Dela Rosa to continue representing Ulaso in the case, considering Busmente’s claim that Macasieb
already resigned, if Dela Rosa had no access to the files in Busmente’s office.

Busmente, in his motion for reconsideration of Resolution No. XVII-2006-271, submitted a copy of the NBI
report stating that the signature on the Answer submitted in Civil Case No. 9284 and the specimen
signatures submitted by Busmente were not written by one and the same person. The report shows that
Busmente only submitted to the NBI the questioned signature in the Answer. The IBP-CBD report,
however, showed that there were other documents signed by Busmente, including the Pre-Trial Brief
dated 14 November 2003 and Motion to Lift Order of Default dated 22 November 2003. Noe-Lacsamana
also submitted a letter dated 14 August 2003 addressed to her as well as three letters dated 29 August
2003 addressed to the occupants of the disputed property, all signed by Busmente. Busmente failed to
impugn his signatures in these other documents.

Finally, Busmente claimed that he was totally unaware of Civil Case No. 9284 and he only came to know
about the case when Ulaso went to his office to inquire about its status. Busmente’s allegation
contradicted the Joint Counter-Affidavit9 submitted by Ulaso and Eddie B. Bides stating that:

a. That our legal counsel is Atty. YOLANDO F. BUSMENTE of the YOLANDO F. BUSMENTE AND
ASSOCIATES LAW OFFICES with address at suite 718 BPI Office Cond. Plaza Cervantes, Binondo
Manila.

b. That ELIZABETH DELA ROSA is not our legal counsel in the case which have been filed by IRENE
BIDES and LILIA VALERA in representation of her sister AMELIA BIDES for Ejectment docketed as Civil
Case No. 9284 before Branch 58 of the Metropolitan Trial Court of San Juan, Metro Manila.

c. That we never stated in any of the pleadings filed in the cases mentioned in the Complaint-Affidavit that
ELIZABETH DELA ROSA was our lawyer;

d. That if ever ELIZABETH DELA ROSA had affixed her signature in the notices or other court records as
our legal counsel the same could not be taken against us for, we believed in good faith that she was a
lawyer; and we are made to believe that it was so since had referred her to us (sic), she was handling
some cases of Hortaleza and client of Atty. Yolando F. Busmente;

e. That we know for the fact that ELIZABETH DELA ROSA did not sign any pleading which she filed in
court in connection with our cases at all of those were signed by Atty. YOLANDO BUSMENTE as our
legal counsel; she just accompanied us to the court rooms and/or hearings;

f. That we cannot be made liable for violation of Article 171 (for and in relation to Article 172 of the
Revised Penal Code) for the reason that the following elements of the offense are not present, to wit:

1. That offender has a legal obligation to disclose the truth of the facts narrated;

2. There must be wrongful intent to injure a 3rd party;

3. Knowledge that the facts narrated by him are absolutely false;

4. That the offender makes in a document untruthful statements in the narration of facts.

And furthermore the untruthful narrations of facts must affect the integrity which is not so in the instant
case.

g. That from the start of our acquaintance with ELIZABETH DELA ROSA we never ask her whether she
was a real lawyer and allowed to practice law in the Philippines; it would have been unethical and
shameful on our part to ask her qualification; we just presumed that she has legal qualifications to
represent us in our cases because Atty. YOLANDO F. BUSMENTE allowed her to accompany us and
attend our hearings in short, she gave us paralegal assistance[.] (Emphasis supplied)

The counter-affidavit clearly showed that Busmente was the legal counsel in Civil Case No. 9284 and that
he allowed Dela Rosa to give legal assistance to Ulaso.

Hence, we agree with the findings of the IBP-CBD that there was sufficient evidence to prove that
Busmente was guilty of violation of Canon 9 of the Code of Professional Responsibility. We agree with
the recommendation of the IBP, modifying the recommendation of the IBP-CBD, that Busmente should be
suspended from the practice of law for six months.

WHEREFORE, we SUSPEND Atty. Yolando F. Busmente from the practice of law for SIX MONTHS.

Let a copy of this Decision be attached to Atty. Busmente’s personal record in the Office of the Bar
Confidant.1âwphi1 Let a copy of this Decision be also furnished to all chapters of the Integrated Bar of
the Philippines and to all courts in the land.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

______________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

A.M. No. 08-6-352-RTC August 19, 2009

QUERY OF ATTY. KAREN M. SILVERIO-BUFFE, FORMER Clerk of Court - BRANCH 81, ROMBLON,
ROMBLON - ON THE PROHIBITION FROM ENGAGING IN THE PRIVATE PRACTICE OF LAW.

DECISION

BRION, J.:

This administrative matter started as a letter-query dated March 4, 2008 of Atty. Karen M. Silverio-Buffe
(Atty. Buffe) addressed to the Office of the Court Administrator, which query the latter referred to the
Court for consideration. In the course of its action on the matter, the Court discovered that the query was
beyond pure policy interpretation and referred to the actual situation of Atty. Buffe, and, hence, was a
matter that required concrete action on the factual situation presented.
The query, as originally framed, related to Section 7(b)(2) of Republic Act (R.A.) No. 6713, as amended
(or the Code of Conduct and Ethical Standards for Public Officials and Employees). This provision places
a limitation on public officials and employees during their incumbency, and those already separated from
government employment for a period of one (1) year after separation, in engaging in the private practice
of their profession. Section 7(b)(2) of R.A. No. 6713 provides:

SECTION 7. Prohibited Acts and Transactions. – In addition to acts and omissions of public officials and
employees now prescribed in the Constitution and existing laws, the following shall constitute prohibited
acts and transactions of any public official and employee and are hereby declared to be unlawful:

xxx

(b) Outside employment and other activities related thereto. – Public officials and employees during their
incumbency shall not:

xxx

(2) Engage in the private practice of their profession unless authorized by the Constitution or law,
provided, that such practice will not conflict or tend to conflict with their official functions; or

xxx

These prohibitions shall continue to apply for a period of one (1) year after resignation, retirement, or
separation from public office, except in the case of subparagraph (b) (2) above, but the professional
concerned cannot practice his profession in connection with any matter before the office he used to be
with, in which case the one-year prohibition shall likewise apply.

In her letter-query, Atty. Buffe posed these questions: "Why may an incumbent engage in private practice
under (b)(2), assuming the same does not conflict or tend to conflict with his official duties, but a non-
incumbent like myself cannot, as is apparently prohibited by the last paragraph of Sec. 7? Why is the
former allowed, who is still occupying the very public position that he is liable to exploit, but a non-
incumbent like myself – who is no longer in a position of possible abuse/exploitation – cannot?"1

The query arose because Atty. Buffe previously worked as Clerk of Court VI of the Regional Trial Court
(RTC), Branch 81 of Romblon; she resigned from her position effective February 1, 2008. Thereafter (and
within the one-year period of prohibition mentioned in the above-quoted provision), she engaged in the
private practice of law by appearing as private counsel in several cases before RTC-Branch 81 of
Romblon.

Atty. Buffe alleged that Section 7(b)(2) of R.A. No. 6713 gives preferential treatment to an incumbent
public employee, who may engage in the private practice of his profession so long as this practice does
not conflict or tend to conflict with his official functions. In contrast, a public official or employee who has
retired, resigned, or has been separated from government service like her, is prohibited from engaging in
private practice on any matter before the office where she used to work, for a period of one (1) year from
the date of her separation from government employment.

Atty. Buffe further alleged that the intention of the above prohibition is to remove the exercise of clout,
influence or privity to insider information, which the incumbent public employee may use in the private
practice of his profession. However, this situation did not obtain in her case, since she had already
resigned as Clerk of Court of RTC-Branch 18 of Romblon. She advanced the view that she could engage
in the private practice of law before RTC-Branch 81 of Romblon, so long as her appearance as legal
counsel shall not conflict or tend to conflict with her former duties as former Clerk of Court of that Branch.

Then Deputy Court Administrator (now Court Administrator) Jose P. Perez made the following
observations when the matter was referred to him:
The general intent of the law, as defined in its title is "to uphold the time-honored principle of public office
being a public trust." Section 4 thereof provides for the norms of conduct of public officials and
employees, among others: (a) commitment to public interest; (b) professionalism; and (c) justness and
sincerity. Of particular significance is the statement under professionalism that "[t]hey [public officials and
employees] shall endeavor to discourage wrong perceptions of their roles as dispensers or peddlers of
undue patronage.

Thus, it may be well to say that the prohibition was intended to avoid any impropriety or the appearance
of impropriety which may occur in any transaction between the retired government employee and his
former colleagues, subordinates or superiors brought about by familiarity, moral ascendancy or undue
influence, as the case may be.21avvphi1

Subsequently, in a Minute Resolution dated July 15, 2008, we resolved to refer this case to the Office of
the Chief Attorney (OCAT) for evaluation, report and recommendation.3 The OCAT took the view that:

The premise of the query is erroneous. She interprets Section 7 (b) (2) as a blanket authority for an
incumbent clerk of court to practice law. Clearly, there is a misreading of that provision of law.4 and
further observed:

The confusion apparently lies in the use of the term "such practice" after the phrase "provided that." It
may indeed be misinterpreted as modifying the phrase "engage in the private practice of their profession"
should be prefatory sentence that public officials "during their incumbency shall not" be disregarded.
However, read in its entirety, "such practice" may only refer to practice "authorized by the Constitution or
law" or the exception to the prohibition against the practice of profession. The term "law" was intended by
the legislature to include "a memorandum or a circular or an administrative order issued pursuant to the
authority of law."

xxx

The interpretation that Section 7 (b) (2) generally prohibits incumbent public officials and employees from
engaging in the practice of law, which is declared therein a prohibited and unlawful act, accords with the
constitutional policy on accountability of public officers stated in Article XI of the Constitution …

xxx

The policy thus requires public officials and employees to devote full time public service so that in case of
conflict between personal and public interest, the latter should take precedence over the
former.5[Footnotes omitted]

With respect to lawyers in the judiciary, the OCAT pointed to Section 5, Canon 3 of the Code of Conduct
for Court Personnel – the rule that deals with outside employment by an incumbent judicial employee and
which limits such outside employment to one that "does not require the practice of law."6 The prohibition
to practice law with respect to any matter where they have intervened while in the government service is
reiterated in Rule 6.03, Canon 6 of the Code of Professional Responsibility, which governs the conduct of
lawyers in the government service.7

In view of the OCAT findings and recommendations, we issued an En Banc Resolution dated November
11, 2008 directing the Court Administrator to draft and submit to the Court a circular on the practice of
profession during employment and within one year from resignation, retirement from or cessation of
employment in the Judiciary. We likewise required the Executive Judge of the RTC of Romblon to (i)
verify if Atty. Buffe had appeared as counsel during her incumbency as clerk of court and after her
resignation in February 2008, and (ii) submit to the Court a report on his verification.8

In compliance with this our Resolution, Executive Judge Ramiro R. Geronimo of RTC-Branch 81 of
Romblon reported the following appearances made by Atty. Buffe:
(1) Civil Case No. V-1564, entitled Oscar Madrigal Moreno, Jr. et al. versus Leonardo M. Macalam, et al.
on February 19, 2008, March 4, 2008, April 10, 2008 and July 9, 2008 as counsel for the plaintiffs;

(2) Civil Case No. V-1620, entitled Melchor M. Manal versus Zosimo Malasa, et al., on (sic) February,
2008, as counsel for the plaintiff;

(3) Civil Case No. V-1396, entitled Solomon Y. Mayor versus Jose J. Mayor, on February 21, 2008, as
counsel for the plaintiff; and

(4) Civil Case No. V-1639, entitled Philippine National Bank versus Sps. Mariano and Olivia Silverio, on
April 11, 2008 and July 9, 2008, as counsel for the defendants.

Atty. Buffe herself was furnished a copy of our November 11, 2008 En Banc Resolution and she filed a
Manifestation (received by the Court on February 2, 2009) acknowledging receipt of our November 11,
2008 Resolution. She likewise stated that her appearances are part of Branch 81 records. As well, she
informed the Court that she had previously taken the following judicial remedies in regard to the above
query:

1. SCA No. 089119028 (Annex C), filed with Branch 54 of the RTC Manila, which had been dismissed
without prejudice on July 23, 2008 (Annex D) – a recourse taken when undersigned was still a private
practitioner;

2. SCA No. 08120423 (Annex A), filed with Branch 17 of the RTC of Manila, which had been also
dismissed (with or without prejudice) on December 4, 2008 (Annex B) – a recourse taken when
undersigned was already a public prosecutor appearing before the same Branch 81, after she took her
oath of office as such on August 15, 2008.[Emphasis supplied]

She also made known her intent to elevate the dismissal of the above cases "so that eventually, the
Honorable Supreme Court may put to rest the legal issue/s presented in the above petitions which is, why
is it that R.A. No. 6713, Sec. 7 (b)(2) and last par. thereof, apparently contains an express prohibition
(valid or invalid) on the private practice of undersigned’s law profession, before Branch 81, while on the
other hand not containing a similar, express prohibition in regard to undersigned’s practice of profession,
before the same court, as a public prosecutor – within the supposedly restricted 1-year period?"

OUR ACTION AND RULING

Preliminary Considerations

As we stated at the outset, this administrative matter confronts us, not merely with the task of determining
how the Court will respond to the query, both with respect to the substance and form (as the Court does
not give interpretative opinions9 but can issue circulars and regulations relating to pleading, practice and
procedure in all courts10 and in the exercise of its administrative supervision over all courts and
personnel thereof11), but also with the task of responding to admitted violations of Section 7 (b)(2) of R.A.
No. 6713 and to multiple recourses on the same subject.

After our directive to the Office of the Court Administrator to issue a circular on the subject of the query for
the guidance of all personnel in the Judiciary, we consider this aspect of the present administrative matter
a finished task, subject only to confirmatory closure when the OCA reports the completion of the
undertaking to us.

Atty. Buffe’s admitted appearance, before the very same branch she served and immediately after her
resignation, is a violation that we cannot close our eyes to and that she cannot run away from under the
cover of the letter-query she filed and her petition for declaratory relief, whose dismissal she manifested
she would pursue up to our level. We note that at the time she filed her letter-query (on March 4, 2008),
Atty. Buffe had already appeared before Branch 81 in at least three (3) cases. The terms of Section 7
(b)(2) of R.A. No. 6713 did not deter her in any way and her misgivings about the fairness of the law
cannot excuse any resulting violation she committed. In other words, she took the risk of appearing
before her own Branch and should suffer the consequences of the risk she took.

Nor can she hide behind the two declaratory relief petitions she filed, both of which were dismissed, and
her intent to elevate the dismissal to this Court for resolution. The first, filed before the RTC, Branch 54,
Manila, was dismissed on July 23, 2008 because the "court declined to exercise the power to declare
rights as prayed for in the petition, as any decision that may be rendered will be inutile and will not
generally terminate the uncertainty or controversy."12 The second, filed with the RTC, Branch 17, Manila,
was dismissed for being an inappropriate remedy after the dismissal ordered by the RTC, Branch 54,
Manila, on December 4, 2008.13 Under these circumstances, we see nothing to deter us from ruling on
Atty. Buffe’s actions, as no actual court case other than the present administrative case, is now actually
pending on the issue she raised. On the contrary, we see from Atty. Buffe’s recourse to this Court and the
filing of the two declaratory petitions the intent to shop for a favorable answer to her query. We shall duly
consider this circumstance in our action on the case.

A last matter to consider before we proceed to the merits of Atty. Buffe’s actions relates to possible
objections on procedural due process grounds, as we have not made any formal directive to Atty. Buffe to
explain why she should not be penalized for her appearance before Branch 81 soon after her resignation
from that Branch. The essence of due process is the grant of the opportunity to be heard; what it abhors
is the lack of the opportunity to be heard.14 The records of this case show that Atty. Buffe has been
amply heard with respect to her actions. She was notified, and she even responded to our November 11,
2008 directive for the Executive Judge of the RTC of Romblon to report on Atty. Buffe’s appearances
before Branch 81; she expressly manifested that these appearances were part of the Branch records. Her
legal positions on these appearances have also been expressed before this Court; first, in her original
letter-query, and subsequently, in her Manifestation. Thus, no due process consideration needs to deter
us from considering the legal consequences of her appearances in her previous Branch within a year
from her resignation.

The Governing Law: Section 7 of R.A. No. 6713

Section 7 of R.A. No. 6713 generally provides for the prohibited acts and transactions of public officials
and employees. Subsection (b)(2) prohibits them from engaging in the private practice of their profession
during their incumbency. As an exception, a public official or employee can engage in the practice of his
or her profession under the following conditions: first, the private practice is authorized by the Constitution
or by the law; and second, the practice will not conflict, or tend to conflict, with his or her official functions.

The Section 7 prohibitions continue to apply for a period of one year after the public official or employee’s
resignation, retirement, or separation from public office, except for the private practice of profession under
subsection (b)(2), which can already be undertaken even within the one-year prohibition period. As an
exception to this exception, the one-year prohibited period applies with respect to any matter before the
office the public officer or employee used to work with.

The Section 7 prohibitions are predicated on the principle that public office is a public trust; and serve to
remove any impropriety, real or imagined, which may occur in government transactions between a former
government official or employee and his or her former colleagues, subordinates or superiors. The
prohibitions also promote the observance and the efficient use of every moment of the prescribed office
hours to serve the public.15

Parenthetically, in the case of court employees, Section 7(b)(2) of R.A. No. 6713 is not the only
prohibition to contend with; Section 5, Canon 3 of the Code of Conduct for Court Personnel also applies.
The latter provision provides the definitive rule on the "outside employment" that an incumbent court
official or court employee may undertake in addition to his official duties:

Outside employment may be allowed by the head of office provided it complies with all of the following
requirements:
(a) The outside employment is not with a person or entity that practices law before the courts or conducts
business with the Judiciary;

(b) The outside employment can be performed outside of normal working hours and is not incompatible
with the performance of the court personnel’s duties and responsibilities;

(c) That outside employment does not require the practice of law; Provided, however, that court personnel
may render services as professor, lecturer, or resource person in law schools, review or continuing
education centers or similar institutions;

(d) The outside employment does not require or induce the court personnel to disclose confidential
information acquired while performing officials duties;

(e) The outside employment shall not be with the legislative or executive branch of government, unless
specifically authorized by the Supreme Court.

Where a conflict of interest exists, may reasonably appear to exist, or where the outside employment
reflects adversely on the integrity of the Judiciary, the court personnel shall not accept outside
employment. [Emphasis supplied]

In both the above discussed aspect of R.A. No. 6713 and the quoted Canon 3, the practice of law is
covered; the practice of law is a practice of profession, while Canon 3 specifically mentions any outside
employment requiring the practice of law. In Cayetano v. Monsod,16 we defined the practice of law as
any activity, in and out of court, that requires the application of law, legal procedure, knowledge, training
and experience. Moreover, we ruled that to engage in the practice of law is to perform those acts which
are characteristics of the profession; 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.17 Under both provisions, a
common objective is to avoid any conflict of interest on the part of the employee who may wittingly or
unwittingly use confidential information acquired from his employment, or use his or her familiarity with
court personnel still with the previous office.

After separation from the service, Section 5, Canon 3 of the Code of Conduct for Court Personnel ceases
to apply as it applies specifically to incumbents, but Section 7 and its subsection (b)(2) of R.A. No. 6713
continue to apply to the extent discussed above. Atty. Buffe’s situation falls under Section 7.

Atty. Buffe’s Situation

A distinctive feature of this administrative matter is Atty. Buffe’s admission that she immediately engaged
in private practice of law within the one-year period of prohibition stated in Section 7(b)(2) of R.A. No.
6713. We find it noteworthy, too, that she is aware of this provision and only objects to its application to
her situation; she perceives it to be unfair that she cannot practice before her old office – Branch 81 – for
a year immediately after resignation, as she believes that her only limitation is in matters where a conflict
of interest exists between her appearance as counsel and her former duties as Clerk of Court. She
believes that Section 7 (b)(2) gives preferential treatment to incumbent public officials and employees as
against those already separated from government employment.

Atty. Buffe apparently misreads the law. As the OCAT aptly stated, she interprets Section 7 (b)(2) as a
blanket authority for an incumbent clerk of court to practice law. We reiterate what we have explained
above, that the general rule under Section 7 (b)(2) is to bar public officials and employees from the
practice of their professions; it is unlawful under this general rule for clerks of court to practice their
profession. By way of exception, they can practice their profession if the Constitution or the law allows
them, but no conflict of interest must exist between their current duties and the practice of their
profession. As we also mentioned above, no chance exists for lawyers in the Judiciary to practice their
profession, as they are in fact expressly prohibited by Section 5, Canon 3 of the Code of Conduct for
Court Personnel from doing so. Under both the general rule and the exceptions, therefore, Atty. Buffe’s
basic premise is misplaced.
As we discussed above, a clerk of court can already engage in the practice of law immediately after her
separation from the service and without any period limitation that applies to other prohibitions under
Section 7 of R.A. No. 6713. The clerk of court’s limitation is that she cannot practice her profession within
one year before the office where he or she used to work with. In a comparison between a resigned,
retired or separated official or employee, on the one hand, and an incumbent official or employee, on the
other, the former has the advantage because the limitation is only with respect to the office he or she
used to work with and only for a period of one year. The incumbent cannot practice at all, save only
where specifically allowed by the Constitution and the law and only in areas where no conflict of interests
exists. This analysis again disproves Atty. Buffe’s basic premises.

A worrisome aspect of Atty. Buffe’s approach to Section 7 (b)(2) is her awareness of the law and her
readiness to risk its violation because of the unfairness she perceives in the law. We find it disturbing that
she first violated the law before making any inquiry. She also justifies her position by referring to the
practice of other government lawyers known to her who, after separation from their judicial employment,
immediately engaged in the private practice of law and appeared as private counsels before the RTC
branches where they were previously employed. Again we find this a cavalier attitude on Atty. Buffe’s part
and, to our mind, only emphasizes her own willful or intentional disregard of Section 7 (b)(2) of R.A. No.
6713.

By acting in a manner that R.A. No. 6713 brands as "unlawful," Atty. Buffe contravened Rule 1.01 of
Canon 1 of the Code of Professional Responsibility, which provides:

CANON 1 – A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND
PROMOTE RESPECT FOR LAW AND FOR LEGAL PROCESSES

xxx

Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

As indicated by the use of the mandatory word "shall," this provision must be strictly complied with. Atty.
Buffe failed to do this, perhaps not with an evil intent, considering the misgivings she had about Section 7
(b)(2)’s unfairness. Unlawful conduct under Rule 1.01 of Canon 1, however, does not necessarily require
the element of criminality, although the Rule is broad enough to include it.18 Likewise, the presence of
evil intent on the part of the lawyer is not essential to bring his or her act or omission within the terms of
Rule 1.01, when it specifically prohibits lawyers from engaging in unlawful conduct.19 Thus, we find Atty.
Buffe liable under this quoted Rule.

We also find that Atty. Buffe also failed to live up to her lawyer’s oath and thereby violated Canon 7 of the
Code of Professional Responsibility when she blatantly and unlawfully practised law within the prohibited
period by appearing before the RTC Branch she had just left. Canon 7 states:

CANON 7. A LAWYER SHALL AT ALL TIMES UPHOLD THE INTEGRITY AND THE DIGNITY OF THE
LEGAL PROFESSION AND SUPPORT THE ACTIVITIES OF THE INTEGRATED BAR. [Emphasis
supplied]

By her open disregard of R.A. No. 6713, she thereby followed the footsteps of the models she cited and
wanted to replicate – the former court officials who immediately waded into practice in the very same
court they came from. She, like they, disgraced the dignity of the legal profession by openly disobeying
and disrespecting the law.20 By her irresponsible conduct, she also eroded public confidence in the law
and in lawyers.21 Her offense is not in any way mitigated by her transparent attempt to cover up her
transgressions by writing the Court a letter-query, which she followed up with unmeritorious petitions for
declaratory relief, all of them dealing with the same Section 7 (b)(2) issue, in the hope perhaps that at
some point she would find a ruling favorable to her cause. These are acts whose implications do not
promote public confidence in the integrity of the legal profession.22
Considering Atty. Buffe’s ready admission of violating Section 7(b)(2), the principle of res ipsa loquitur
finds application, making her administratively liable for violation of Rule 1.01 of Canon 1 and Canon 7 of
the Code of Professional Responsibility.23 In several cases, the Court has disciplined lawyers without
further inquiry or resort to any formal investigation where the facts on record sufficiently provided the
basis for the determination of their administrative liability.

In Prudential Bank v. Castro,24 the Court disbarred a lawyer without need of any further investigation
after considering his actions based on records showing his unethical misconduct; the misconduct not only
cast dishonor on the image of both the Bench and the Bar, but was also inimical to public interest and
welfare. In this regard, the Court took judicial notice of several cases handled by the errant lawyer and his
cohorts that revealed their modus operandi in circumventing the payment of the proper judicial fees for
the astronomical sums they claimed in their cases.25 The Court held that those cases sufficiently
provided the basis for the determination of respondents' administrative liability, without need for further
inquiry into the matter under the principle of res ipsa loquitur.26

Also on the basis of this principle, we ruled in Richards v. Asoy,27 that no evidentiary hearing is required
before the respondent may be disciplined for professional misconduct already established by the facts on
record.

We applied the principle of res ipsa loquitur once more in In re: Wenceslao Laureta28 where we punished
a lawyer for grave professional misconduct solely based on his answer to a show-cause order for
contempt and without going into a trial-type hearing. We ruled then that due process is satisfied as long
as the opportunity to be heard is given to the person to be disciplined.29

Likewise in Zaldivar v. Gonzales,30 the respondent was disciplined and punished for contempt for his
slurs regarding the Court’s alleged partiality, incompetence and lack of integrity on the basis of his answer
in a show-cause order for contempt. The Court took note that the respondent did not deny making the
negative imputations against the Court through the media and even acknowledged the correctness of his
degrading statements. Through a per curiam decision, we justified imposing upon him the penalty of
suspension in the following tenor:

The power to punish for contempt of court does not exhaust the scope of disciplinary authority of the
Court over lawyers. The disciplinary authority of the Court over members of the Bar is but corollary to the
Court's exclusive power of admission to the Bar. A lawyer is not merely a professional but also an officer
of the court and as such, he is called upon to share in the task and responsibility of dispensing justice and
resolving disputes in society. Any act on his part which visibly tends to obstruct, pervert, or impede and
degrade the administration of justice constitutes both professional misconduct calling for the exercise of
disciplinary action against him, and contumacious conduct warranting application of the contempt
power.31

These cases clearly show that the absence of any formal charge against and/or formal investigation of an
errant lawyer do not preclude the Court from immediately exercising its disciplining authority, as long as
the errant lawyer or judge has been given the opportunity to be heard. As we stated earlier, Atty. Buffe
has been afforded the opportunity to be heard on the present matter through her letter-query and
Manifestation filed before this Court.

A member of the bar may be penalized, even disbarred or suspended from his office as an attorney, for
violation of the lawyer’s oath and/or for breach of the ethics of the legal profession as embodied in the
Code of Professional Responsibility.32 The appropriate penalty on an errant lawyer depends on the
exercise of sound judicial discretion based on the surrounding facts.33

In this case, we cannot discern any mitigating factors we can apply, save OCAT’s observation that Atty
Buffe’s letter-query may really reflect a misapprehension of the parameters of the prohibition on the
practice of the law profession under Section 7 (b) (2) of R.A. No. 6713. Ignorance of the law, however, is
no excuse, particularly on a matter as sensitive as practice of the legal profession soon after one’s
separation from the service. If Atty. Buffe is correct in the examples she cited, it is time to ring the bell and
to blow the whistle signaling that we cannot allow this practice to continue.1avvphi1

As we observed earlier,34 Atty. Buffe had no qualms about the simultaneous use of various fora in
expressing her misgivings about the perceived unfairness of Section 7 of R.A. 6713. She formally lodged
a query with the Office of the Court Administrator, and soon after filed her successive petitions for
declaratory relief. Effectively, she exposed these fora to the possibility of embarrassment and confusion
through their possibly differing views on the issue she posed. Although this is not strictly the forum-
shopping that the Rules of Court prohibit, what she has done is something that we cannot help but
consider with disfavor because of the potential damage and embarrassment to the Judiciary that it could
have spawned. This is a point against Atty. Buffe that cancels out the leniency we might have exercised
because of the OCAT’s observation about her ignorance of and misgivings on the extent of the prohibition
after separation from the service.

Under the circumstances, we find that her actions merit a penalty of fine of ₱10,000.00, together with a
stern warning to deter her from repeating her transgression and committing other acts of professional
misconduct.35 This penalty reflects as well the Court’s sentiments on how seriously the retired, resigned
or separated officers and employees of the Judiciary should regard and observe the prohibition against
the practice of law with the office that they used to work with.

WHEREFORE, premises considered, we find Atty. Karen M. Silverio-Buffe GUILTY of professional

misconduct for violating Rule 1.01 of Canon 1 and Canon 7 of the Code of Professional Responsibility.
She is hereby FINED in the amount of Ten Thousand Pesos (₱10,000.00), and STERNLY WARNED that
a repetition of this violation and the commission of other acts of professional misconduct shall be dealt
with more severely.

Let this Decision be noted in Atty. Buffe’s record as a member of the Bar.

SO ORDERED.

ARTURO D. BRION
Associate Justice

________________

EN BANC

B. M. No. 1036 June 10, 2003

DONNA MARIE S. AGUIRRE, Complainant,

vs.
EDWIN L. RANA, Respondent.

DECISION

CARPIO, J.:

The Case

Before one is admitted to the Philippine Bar, he must possess the requisite moral integrity for
membership in the legal profession. Possession of moral integrity is of greater importance than
possession of legal learning. The practice of law is a privilege bestowed only on the morally fit. A bar
candidate who is morally unfit cannot practice law even if he passes the bar examinations.

The Facts
Respondent Edwin L. Rana ("respondent") was among those who passed the 2000 Bar Examinations.

On 21 May 2001, one day before the scheduled mass oath-taking of successful bar examinees as
members of the Philippine Bar, complainant Donna Marie Aguirre ("complainant") filed against respondent
a Petition for Denial of Admission to the Bar. Complainant charged respondent with unauthorized practice
of law, grave misconduct, violation of law, and grave misrepresentation.

The Court allowed respondent to take his oath as a member of the Bar during the scheduled oath-taking
on 22 May 2001 at the Philippine International Convention Center. However, the Court ruled that
respondent could not sign the Roll of Attorneys pending the resolution of the charge against him. Thus,
respondent took the lawyer’s oath on the scheduled date but has not signed the Roll of Attorneys up to
now.

Complainant charges respondent for unauthorized practice of law and grave misconduct. Complainant
alleges that respondent, while not yet a lawyer, appeared as counsel for a candidate in the May 2001
elections before the Municipal Board of Election Canvassers ("MBEC") of Mandaon, Masbate.
Complainant further alleges that respondent filed with the MBEC a pleading dated 19 May 2001 entitled
Formal Objection to the Inclusion in the Canvassing of Votes in Some Precincts for the Office of Vice-
Mayor. In this pleading, respondent represented himself as "counsel for and in behalf of Vice Mayoralty
Candidate, George Bunan," and signed the pleading as counsel for George Bunan ("Bunan").

On the charge of violation of law, complainant claims that respondent is a municipal government
employee, being a secretary of the Sangguniang Bayan of Mandaon, Masbate. As such, respondent is
not allowed by law to act as counsel for a client in any court or administrative body.

On the charge of grave misconduct and misrepresentation, complainant accuses respondent of acting as
counsel for vice mayoralty candidate George Bunan ("Bunan") without the latter engaging respondent’s
services. Complainant claims that respondent filed the pleading as a ploy to prevent the proclamation of
the winning vice mayoralty candidate.

On 22 May 2001, the Court issued a resolution allowing respondent to take the lawyer’s oath but
disallowed him from signing the Roll of Attorneys until he is cleared of the charges against him. In the
same resolution, the Court required respondent to comment on the complaint against him.

In his Comment, respondent admits that Bunan sought his "specific assistance" to represent him before
the MBEC. Respondent claims that "he decided to assist and advice Bunan, not as a lawyer but as a
person who knows the law." Respondent admits signing the 19 May 2001 pleading that objected to the
inclusion of certain votes in the canvassing. He explains, however, that he did not sign the pleading as a
lawyer or represented himself as an "attorney" in the pleading.

On his employment as secretary of the Sangguniang Bayan, respondent claims that he submitted his
resignation on 11 May 2001 which was allegedly accepted on the same date. He submitted a copy of the
Certification of Receipt of Revocable Resignation dated 28 May 2001 signed by Vice-Mayor Napoleon
Relox. Respondent further claims that the complaint is politically motivated considering that complainant
is the daughter of Silvestre Aguirre, the losing candidate for mayor of Mandaon, Masbate. Respondent
prays that the complaint be dismissed for lack of merit and that he be allowed to sign the Roll of
Attorneys.

On 22 June 2001, complainant filed her Reply to respondent’s Comment and refuted the claim of
respondent that his appearance before the MBEC was only to extend specific assistance to Bunan.
Complainant alleges that on 19 May 2001 Emily Estipona-Hao ("Estipona-Hao") filed a petition for
proclamation as the winning candidate for mayor. Respondent signed as counsel for Estipona-Hao in this
petition. When respondent appeared as counsel before the MBEC, complainant questioned his
appearance on two grounds: (1) respondent had not taken his oath as a lawyer; and (2) he was an
employee of the government.
Respondent filed a Reply (Re: Reply to Respondent’s Comment) reiterating his claim that the instant
administrative case is "motivated mainly by political vendetta."

On 17 July 2001, the Court referred the case to the Office of the Bar Confidant ("OBC") for evaluation,
report and recommendation.

OBC’s Report and Recommendation

The OBC found that respondent indeed appeared before the MBEC as counsel for Bunan in the May
2001 elections. The minutes of the MBEC proceedings show that respondent actively participated in the
proceedings. The OBC likewise found that respondent appeared in the MBEC proceedings even before
he took the lawyer’s oath on 22 May 2001. The OBC believes that respondent’s misconduct casts a
serious doubt on his moral fitness to be a member of the Bar. The OBC also believes that respondent’s
unauthorized practice of law is a ground to deny his admission to the practice of law. The OBC therefore
recommends that respondent be denied admission to the Philippine Bar.

On the other charges, OBC stated that complainant failed to cite a law which respondent allegedly
violated when he appeared as counsel for Bunan while he was a government employee. Respondent
resigned as secretary and his resignation was accepted. Likewise, respondent was authorized by Bunan
to represent him before the MBEC.

The Court’s Ruling

We agree with the findings and conclusions of the OBC that respondent engaged in the unauthorized
practice of law and thus does not deserve admission to the Philippine Bar.

Respondent took his oath as lawyer on 22 May 2001. However, the records show that respondent
appeared as counsel for Bunan prior to 22 May 2001, before respondent took the lawyer’s oath. In the
pleading entitled Formal Objection to the Inclusion in the Canvassing of Votes in Some Precincts for the
Office of Vice-Mayor dated 19 May 2001, respondent signed as "counsel for George Bunan." In the first
paragraph of the same pleading respondent stated that he was the "(U)ndersigned Counsel for, and in
behalf of Vice Mayoralty Candidate, GEORGE T. BUNAN." Bunan himself wrote the MBEC on 14 May
2001 that he had "authorized Atty. Edwin L. Rana as his counsel to represent him" before the MBEC and
similar bodies.

On 14 May 2001, mayoralty candidate Emily Estipona-Hao also "retained" respondent as her counsel. On
the same date, 14 May 2001, Erly D. Hao informed the MBEC that "Atty. Edwin L. Rana has been
authorized by REFORMA LM-PPC as the legal counsel of the party and the candidate of the said party."
Respondent himself wrote the MBEC on 14 May 2001 that he was entering his "appearance as counsel
for Mayoralty Candidate Emily Estipona-Hao and for the REFORMA LM-PPC." On 19 May 2001,
respondent signed as counsel for Estipona-Hao in the petition filed before the MBEC praying for the
proclamation of Estipona-Hao as the winning candidate for mayor of Mandaon, Masbate.

All these happened even before respondent took the lawyer’s oath. Clearly, respondent engaged in the
practice of law without being a member of the Philippine Bar.

In Philippine Lawyers Association v. Agrava,1 the Court elucidated that:

The practice of law is not limited to the conduct of cases or litigation in court; it embraces the preparation
of pleadings and other papers incident to actions and special proceedings, the management of such
actions and proceedings on behalf of clients before judges and courts, and in addition, conveyancing. 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 a
judicial body, the foreclosure of a 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, as do the preparation and drafting of legal
instruments, where the work done involves the determination by the trained legal mind of the legal effect
of facts and conditions. (5 Am. Jur. p. 262, 263). (Italics supplied) x x x

In Cayetano v. Monsod,2 the Court held that "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 acts which are usually performed by members of the legal profession.
Generally, to practice law is to render any kind of service which requires the use of legal knowledge or
skill.

Verily, respondent was engaged in the practice of law when he appeared in the proceedings before the
MBEC and filed various pleadings, without license to do so. Evidence clearly supports the charge of
unauthorized practice of law. Respondent called himself "counsel" knowing fully well that he was not a
member of the Bar. Having held himself out as "counsel" knowing that he had no authority to practice law,
respondent has shown moral unfitness to be a member of the Philippine Bar.3

The right to practice law is not a natural or constitutional right but is a privilege. It is limited to persons of
good moral character with special qualifications duly ascertained and certified. The exercise of this
privilege presupposes possession of integrity, legal knowledge, educational attainment, and even public
trust4 since a lawyer is an officer of the court. A bar candidate does not acquire the right to practice law
simply by passing the bar examinations. The practice of law is a privilege that can be withheld even from
one who has passed the bar examinations, if the person seeking admission had practiced law without a
license.5

The regulation of the practice of law is unquestionably strict. In Beltran, Jr. v. Abad,6 a candidate passed
the bar examinations but had not taken his oath and signed the Roll of Attorneys. He was held in
contempt of court for practicing law even before his admission to the Bar. Under Section 3 (e) of Rule 71
of the Rules of Court, a person who engages in the unauthorized practice of law is liable for indirect
contempt of court.7

True, respondent here passed the 2000 Bar Examinations and took the lawyer’s oath.1âwphi1 However,
it is the signing in the Roll of Attorneys that finally makes one a full-fledged lawyer. The fact that
respondent passed the bar examinations is immaterial. Passing the bar is not the only qualification to
become an attorney-at-law.8 Respondent should know that two essential requisites for becoming a
lawyer still had to be performed, namely: his lawyer’s oath to be administered by this Court and his
signature in the Roll of Attorneys.9

On the charge of violation of law, complainant contends that the law does not allow respondent to act as
counsel for a private client in any court or administrative body since respondent is the secretary of the
Sangguniang Bayan.

Respondent tendered his resignation as secretary of the Sangguniang Bayan prior to the acts complained
of as constituting unauthorized practice of law. In his letter dated 11 May 2001 addressed to Napoleon
Relox, vice- mayor and presiding officer of the Sangguniang Bayan, respondent stated that he was
resigning "effective upon your acceptance."10 Vice-Mayor Relox accepted respondent’s resignation
effective 11 May 2001.11 Thus, the evidence does not support the charge that respondent acted as
counsel for a client while serving as secretary of the Sangguniang Bayan.

On the charge of grave misconduct and misrepresentation, evidence shows that Bunan indeed authorized
respondent to represent him as his counsel before the MBEC and similar bodies. While there was no
misrepresentation, respondent nonetheless had no authority to practice law.

WHEREFORE, respondent Edwin L. Rana is DENIED admission to the Philippine Bar.

SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur.

_______________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

A. M. No. 139 March 28, 1983

RE: ELMO S. ABAD, 1978 Successful Bar Examinee. ATTY. PROCOPIO S. BELTRAN, JR., President of
the Philippine Trial Lawyers Association, Inc., complainant,
vs.
ELMO S. ABAD, respondent.

ABAD SANTOS, J.:

Charged by Atty. Procopio S. Beltran, Jr., president of the Philippine Trial Lawyers Association, Inc., of
practicing law without having been previously admitted to the Philippine Bar, Mr. Elmo S. Abad could not
deny and had to admit the practice. In exculpation he gives the following lame explanation:

1. On July 23, 1979, respondent conformably with the Resolution of the Honorable Supreme Court
En Banc dated July 10, 1979, ... prior to his taking the Oath of Office as a member of the bar, paid his Bar
Admission Fee in the amount of P175.00 as shown by Official Receipt No. 8128792, ... paid his
Certification Fee in the amount of P5.00 as shown by Official Receipt No. 8128793, ... and also paid his
Membership Dues for the year 1979-80 to the Integrated Bar of the Philippines as shown by Official
Receipt No. 83740,... .

2. On July 26, 1979, Atty. Romeo Mendoza, the then Clerk of Court of the Honorable Supreme
Court, included the respondent as among those taking the Oath of Office as Member of the Bar as shown
by a Letter of Request dated July 23, 1979, ...

3. At around Eleven o' clock in the morning of July 26, 1979, while waiting for my turn to take my Oath as
a member of the Bar, I was made to sign my Lawyer's Oath by one of the Clerk in the Office of the Bar
Confidant and while waiting there, Atty. Romeo Mendoza told me that Chief Justice, the Honorable
Enrique M. Fernando wants to talk to me about the Reply of Mr. Jorge Uy (Deceased) to my Answer to
his Complaint. The Honorable Chief Justice told me that I have to answer the Reply and for which reason
the taking of my Lawyer's Oath was further suspended. *

4. On July 31, 1979, I filed my Reply to Mr. Jorge Uy's Answer with a Prayer that the Honorable
Supreme Court determines my fitness to be a member of the Bar;

5. While waiting for the appropriate action which the Honorable Supreme Court may take upon my
Prayer to determine my fitness to be a member of the Bar, I received a letter from the Integrated Bar of
the Philippines, Quezon City Chapter dated May 10, 1980 informing the respondent of an Annual General
Meeting together with my Statement of Account for the year 1980-1981, ... .

6. Believing that with my signing of the Lawyer's Oath on July 26, 1979 and my Reply to Mr. Jorge
Uy's (Deceased) Answer, the Honorable Supreme Court did not ordered for the striking of my name in the
Roll of Attorneys with the Integrated Bar of the Philippines and therefore a Member in Good Standing, I
paid my membership due and other assessments to the Integrated Bar of the Philippines, Quezon City
Chapter, as shown by Official Receipt No. 110326 and Official Receipt No. 0948, ... . Likewise respondent
paid his Professional Tax Receipt as shown by Official Receipt No. 058033 and Official Receipt No.
4601685, ... .

7. On February 28, 1981, the Integrated Bar of the Philippines, Quezon City Chapter also included
the name of the respondent as a Qualified Voter for the election of officers and directors for the year
1981-1982, ... .

8. Respondent's belief and good faith was further enhanced by the fact that on January 8, 1981,
Complainant Jorge Uy in SBC607 died and herein respondent submitted a verified Notice and Motion with
the Honorable Supreme Court on April 27, 1981; notifying the Court of this fact with a prayer that herein
respondent be allowed to take his Oath as Member of the Bar;

9. Thereafter, respondent was again assessed by the Integrated Bar for his 1981-1982 membership
due and other assessment for which the undersigned paid as shown by Official Receipt No. 132734 and
Official Receipt No. 3363, ... .

10. Respondent likewise paid his Professional Tax Receipt for 1981 as shown by Official Receipt No.
3195776, ... .

11. Respondent likewise has a Certificate of Membership in the Integrated Bar of the Philippines as
well as a Certificate of Membership in Good Standing with the Quezon City Chapter of the Integrated Bar
of the Philippines, ....

Respondent Abad should know that the circumstances which he has narrated do not constitute his
admission to the Philippine Bar and the right to practise law thereafter. He should know that two essential
requisites for becoming a lawyer still had to be performed, namely: his lawyer's oath to be administered
by this Court and his signature in the Roll of Attorneys. (Rule 138, Secs. 17 and 19, Rules of Court.)

The proven charge against respondent Abad constitutes contempt of court (Rule 71, Sec. 3(e), Rules of
Court.)

WHEREFORE, Mr. Elmo S. Abad is hereby fined Five Hundred (P500.00) pesos payable to this Court
within ten (10) days from notice failing which he shall serve twenty-five (25) days imprisonment.

SO ORDERED.

Fernando, C.J., Teehankee, Makasiar, Concepcion Jr., Guerrero, De Castro, Melencio-Herrera, Plana,
Escolin Vasquez, Relova and Gutierrez, Jr., JJ., concur.

Aquino, J., is on leave.

_______________

EN BANC

B.M. No. 1370 May 9, 2005

LETTER OF ATTY. CECILIO Y. AREVALO, JR., REQUESTING EXEMPTION FROM PAYMENT OF IBP
DUES.

DECISION

CHICO-NAZARIO, J.:
This is a request for exemption from payment of the Integrated Bar of the Philippines (IBP) dues filed by
petitioner Atty. Cecilio Y. Arevalo, Jr.

In his letter,1 dated 22 September 2004, petitioner sought exemption from payment of IBP dues in the
amount of P12,035.00 as alleged unpaid accountability for the years 1977-2005. He alleged that after
being admitted to the Philippine Bar in 1961, he became part of the Philippine Civil Service from July
1962 until 1986, then migrated to, and worked in, the USA in December 1986 until his retirement in the
year 2003. He maintained that he cannot be assessed IBP dues for the years that he was working in the
Philippine Civil Service since the Civil Service law prohibits the practice of one's profession while in
government service, and neither can he be assessed for the years when he was working in the USA.

On 05 October 2004, the letter was referred to the IBP for comment.2

On 16 November 2004, the IBP submitted its comment3 stating inter alia: that membership in the IBP is
not based on the actual practice of law; that a lawyer continues to be included in the Roll of Attorneys as
long as he continues to be a member of the IBP; that one of the obligations of a member is the payment
of annual dues as determined by the IBP Board of Governors and duly approved by the Supreme Court
as provided for in Sections 9 and 10, Rule 139-A of the Rules of Court; that the validity of imposing dues
on the IBP members has been upheld as necessary to defray the cost of an Integrated Bar Program; and
that the policy of the IBP Board of Governors of no exemption from payment of dues is but an
implementation of the Court's directives for all members of the IBP to help in defraying the cost of
integration of the bar. It maintained that there is no rule allowing the exemption of payment of annual
dues as requested by respondent, that what is allowed is voluntary termination and reinstatement of
membership. It asserted that what petitioner could have done was to inform the secretary of the IBP of his
intention to stay abroad, so that his membership in the IBP could have been terminated, thus, his
obligation to pay dues could have been stopped. It also alleged that the IBP Board of Governors is in the
process of discussing proposals for the creation of an inactive status for its members, which if approved
by the Board of Governors and by this Court, will exempt inactive IBP members from payment of the
annual dues.

In his reply4 dated 22 February 2005, petitioner contends that what he is questioning is the IBP Board of
Governor's Policy of Non-Exemption in the payment of annual membership dues of lawyers regardless of
whether or not they are engaged in active or inactive practice. He asseverates that the Policy of Non-
Exemption in the payment of annual membership dues suffers from constitutional infirmities, such as
equal protection clause and the due process clause. He also posits that compulsory payment of the IBP
annual membership dues would indubitably be oppressive to him considering that he has been in an
inactive status and is without income derived from his law practice. He adds that his removal from
nonpayment of annual membership dues would constitute deprivation of property right without due
process of law. Lastly, he claims that non-practice of law by a lawyer-member in inactive status is neither
injurious to active law practitioners, to fellow lawyers in inactive status, nor to the community where the
inactive lawyers-members reside.

Plainly, the issue here is: whether or nor petitioner is entitled to exemption from payment of his dues
during the time that he was inactive in the practice of law that is, when he was in the Civil Service from
1962-1986 and he was working abroad from 1986-2003?

We rule in the negative.

An "Integrated Bar" is a State-organized Bar, to which every lawyer must belong, as distinguished from
bar association organized by individual lawyers themselves, membership in which is voluntary. Integration
of the Bar is essentially a process by which every member of the Bar is afforded an opportunity to do his
shares in carrying out the objectives of the Bar as well as obliged to bear his portion of its responsibilities.
Organized by or under the direction of the State, an Integrated Bar is an official national body of which all
lawyers are required to be members. They are, therefore, subject to all the rules prescribed for the
governance of the Bar, including the requirement of payment of a reasonable annual fee for the effective
discharge of the purposes of the Bar, and adherence to a code of professional ethics or professional
responsibility, breach of which constitutes sufficient reason for investigation by the Bar and, upon proper
cause appearing, a recommendation for discipline or disbarment of the offending member.5

The integration of the Philippine Bar means the official unification of the entire lawyer population. This
requires membership and financial support of every attorney as condition sine qua non to the practice of
law and the retention of his name in the Roll of Attorneys of the Supreme Court.6

Bar integration does not compel the lawyer to associate with anyone. He is free to attend or not to attend
the meetings of his Integrated Bar Chapter or vote or refuse to vote in its elections as he chooses. The
only compulsion to which he is subjected is the payment of his annual dues. The Supreme Court, in order
to foster the State's legitimate interest in elevating the quality of professional legal services, may require
that the cost of improving the profession in this fashion be shared by the subjects and beneficiaries of the
regulatory program – the lawyers.7

Moreover, there is nothing in the Constitution that prohibits the Court, under its constitutional power and
duty to promulgate rules concerning the admission to the practice of law and in the integration of the
Philippine Bar8 - which power required members of a privileged class, such as lawyers are, to pay a
reasonable fee toward defraying the expenses of regulation of the profession to which they belong. It is
quite apparent that the fee is, indeed, imposed as a regulatory measure, designed to raise funds for
carrying out the noble objectives and purposes of integration.

The rationale for prescribing dues has been explained in the Integration of the Philippine Bar,9 thus:

For the court to prescribe dues to be paid by the members does not mean that the Court is attempting to
levy a tax.

A membership fee in the Bar association is an exaction for regulation, while tax purpose of a tax is a
revenue. If the judiciary has inherent power to regulate the Bar, it follows that as an incident to regulation,
it may impose a membership fee for that purpose. It would not be possible to put on an integrated Bar
program without means to defray the expenses. The doctrine of implied powers necessarily carries with it
the power to impose such exaction.

The only limitation upon the State's power to regulate the privilege of law is that the regulation does not
impose an unconstitutional burden. The public interest promoted by the integration of the Bar far
outweighs the slight inconvenience to a member resulting from his required payment of the annual dues.

Thus, payment of dues is a necessary consequence of membership in the IBP, of which no one is
exempt. This means that the compulsory nature of payment of dues subsists for as long as one's
membership in the IBP remains regardless of the lack of practice of, or the type of practice, the member is
engaged in.

There is nothing in the law or rules which allows exemption from payment of membership dues. At most,
as correctly observed by the IBP, he could have informed the Secretary of the Integrated Bar of his
intention to stay abroad before he left. In such case, his membership in the IBP could have been
terminated and his obligation to pay dues could have been discontinued.

As abovementioned, the IBP in its comment stated that the IBP Board of Governors is in the process of
discussing the situation of members under inactive status and the nonpayment of their dues during such
inactivity. In the meantime, petitioner is duty bound to comply with his obligation to pay membership dues
to the IBP.

Petitioner also contends that the enforcement of the penalty of removal would amount to a deprivation of
property without due process and hence infringes on one of his constitutional rights.

This question has been settled in the case of In re Atty. Marcial Edillon,10 in this wise:
. . . Whether the practice of law is a property right, in the sense of its being one that entitles the holder of
a license to practice a profession, we do not here pause to consider at length, as it [is] clear that under
the police power of the State, and under the necessary powers granted to the Court to perpetuate its
existence, the respondent's right to practice law before the courts of this country should be and is a
matter subject to regulation and inquiry. And, if the power to impose the fee as a regulatory measure is
recognize[d], then a penalty designed to enforce its payment, which penalty may be avoided altogether by
payment, is not void as unreasonable or arbitrary.

But we must here emphasize that the practice of law is not a property right but a mere privilege, and as
such must bow to the inherent regulatory power of the Court to exact compliance with the lawyer's public
responsibilities.

As a final note, it must be borne in mind that membership in the bar is a privilege burdened with
conditions,11 one of which is the payment of membership dues. Failure to abide by any of them entails
the loss of such privilege if the gravity thereof warrants such drastic move.

WHEREFORE, petitioner's request for exemption from payment of IBP dues is DENIED. He is ordered to
pay P12,035.00, the amount assessed by the IBP as membership fees for the years 1977-2005, within a
non-extendible period of ten (10) days from receipt of this decision, with a warning that failure to do so will
merit his suspension from the practice of law.

SO ORDERED.

Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-
Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, and Garcia, JJ., concur.

_________

EN BANC

B.M. No. 2540 September 24, 2013

IN RE: PETITION TO SIGN IN THE ROLL OF ATTORNEYS

MICHAEL A. MEDADO, Petitioner.

RESOLUTION

SERENO, CJ.:

We resolve the instant Petition to Sign in the Roll of Attorneys filed by petitioner Michael A. Medado
(Medado).

Medado graduated from the University of the Philippines with the degree of Bachelor of Laws in 19791
and passed the same year's bar examinations with a general weighted average of 82.7.2

On 7 May 1980, he took the Attorney’s Oath at the Philippine International Convention Center (PICC)
together with the successful bar examinees.3 He was scheduled to sign in the Roll of Attorneys on 13
May 1980,4 but he failed to do so on his scheduled date, allegedly because he had misplaced the Notice
to Sign the Roll of Attorneys5 given by the Bar Office when he went home to his province for a vacation.6

Several years later, while rummaging through his old college files, Medado found the Notice to Sign the
Roll of Attorneys. It was then that he realized that he had not signed in the roll, and that what he had
signed at the entrance of the PICC was probably just an attendance record.7
By the time Medado found the notice, he was already working. He stated that he was mainly doing
corporate and taxation work, and that he was not actively involved in litigation practice. Thus, he operated
"under the mistaken belief that since he had already taken the oath, the signing of the Roll of Attorneys
was not as urgent, nor as crucial to his status as a lawyer";8 and "the matter of signing in the Roll of
Attorneys lost its urgency and compulsion, and was subsequently forgotten."9

In 2005, when Medado attended Mandatory Continuing Legal Education (MCLE) seminars, he was
required to provide his roll number in order for his MCLE compliances to be credited.10

Not having signed in the Roll of Attorneys, he was unable to provide his roll number.

About seven years later, or on 6 February 2012, Medado filed the instant Petition, praying that he be
allowed to sign in the Roll of Attorneys.11

The Office of the Bar Confidant (OBC) conducted a clarificatory conference on the matter on 21
September 201212 and submitted a Report and Recommendation to this Court on 4 February 2013.13
The OBC recommended that the instant petition be denied for petitioner’s gross negligence, gross
misconduct and utter lack of merit.14 It explained that, based on his answers during the clarificatory
conference, petitioner could offer no valid justification for his negligence in signing in the Roll of
Attorneys.15

After a judicious review of the records, we grant Medado’s prayer in the instant petition, subject to the
payment of a fine and the imposition of a penalty equivalent to suspension from the practice of law.

At the outset, we note that not allowing Medado to sign in the Roll of Attorneys would be akin to imposing
upon him the ultimate penalty of disbarment, a penalty that we have reserved for the most serious ethical
transgressions of members of the Bar.

In this case, the records do not show that this action is warranted.

For one, petitioner demonstrated good faith and good moral character when he finally filed the instant
Petition to Sign in the Roll of Attorneys. We note that it was not a third party who called this Court’s
attention to petitioner’s omission; rather, it was Medado himself who acknowledged his own lapse, albeit
after the passage of more than 30 years. When asked by the Bar Confidant why it took him this long to
file the instant petition, Medado very candidly replied:

Mahirap hong i-explain yan pero, yun bang at the time, what can you say? Takot ka kung anong
mangyayari sa ‘yo, you don’t know what’s gonna happen. At the same time, it’s a combination of
apprehension and anxiety of what’s gonna happen. And, finally it’s the right thing to do. I have to come
here … sign the roll and take the oath as necessary.16

For another, petitioner has not been subject to any action for disqualification from the practice of law,17
which is more than what we can say of other individuals who were successfully admitted as members of
the Philippine Bar. For this Court, this fact demonstrates that petitioner strove to adhere to the strict
requirements of the ethics of the profession, and that he has prima facie shown that he possesses the
character required to be a member of the Philippine Bar.

Finally, Medado appears to have been a competent and able legal practitioner, having held various
positions at the Laurel Law Office,18 Petron, Petrophil Corporation, the Philippine National Oil Company,
and the Energy Development Corporation.19

All these demonstrate Medado’s worth to become a full-fledged member of the Philippine Bar.1âwphi1
While the practice of law is not a right but a privilege,20 this Court will not unwarrantedly withhold this
privilege from individuals who have shown mental fitness and moral fiber to withstand the rigors of the
profession.
That said, however, we cannot fully exculpate petitioner Medado from all liability for his years of inaction.

Petitioner has been engaged in the practice of law since 1980, a period spanning more than 30 years,
without having signed in the Roll of Attorneys.21 He justifies this behavior by characterizing his acts as
"neither willful nor intentional but based on a mistaken belief and an honest error of judgment."22

We disagree.

While an honest mistake of fact could be used to excuse a person from the legal consequences of his
acts23 as it negates malice or evil motive,24 a mistake of law cannot be utilized as a lawful justification,
because everyone is presumed to know the law and its consequences.25 Ignorantia factiexcusat;
ignorantia legis neminem excusat.

Applying these principles to the case at bar, Medado may have at first operated under an honest mistake
of fact when he thought that what he had signed at the PICC entrance before the oath-taking was already
the Roll of Attorneys. However, the moment he realized that what he had signed was merely an
attendance record, he could no longer claim an honest mistake of fact as a valid justification. At that point,
Medado should have known that he was not a full-fledged member of the Philippine Bar because of his
failure to sign in the Roll of Attorneys, as it was the act of signing therein that would have made him so.26
When, in spite of this knowledge, he chose to continue practicing law without taking the necessary steps
to complete all the requirements for admission to the Bar, he willfully engaged in the unauthorized
practice of law.

Under the Rules of Court, the unauthorized practice of law by one’s assuming to be an attorney or officer
of the court, and acting as such without authority, may constitute indirect contempt of court,27 which is
punishable by fine or imprisonment or both.28 Such a finding, however, is in the nature of criminal
contempt29 and must be reached after the filing of charges and the conduct of hearings.30 In this case,
while it appears quite clearly that petitioner committed indirect contempt of court by knowingly engaging in
unauthorized practice of law, we refrain from making any finding of liability for indirect contempt, as no
formal charge pertaining thereto has been filed against him.

Knowingly engaging in unauthorized practice of law likewise transgresses Canon 9 of 'the Code of
Professional Responsibility, which provides:

CANON 9 -A lawyer shall not, directly or indirectly, assist in the unauthorized practice of law.

While a reading of Canon 9 appears to merely prohibit lawyers from assisting in the unauthorized practice
of law, the unauthorized practice of law by the lawyer himself is subsumed under this provision, because
at the heart of Canon 9 is the lawyer's duty to prevent the unauthorized practice of law. This duty likewise
applies to law students and Bar candidates. As aspiring members of the Bar, they are bound to comport
themselves in accordance with the ethical standards of the legal profession.

Turning now to the applicable penalty, previous violations of Canon 9have warranted the penalty of
suspension from the practice of law.31 As Medado is not yet a full-fledged lawyer, we cannot suspend
him from the practice of law. However, we see it fit to impose upon him a penalty akin to suspension by
allowing him to sign in the Roll of Attorneys one (1) year after receipt of this Resolution. For his
transgression of the prohibition against the unauthorized practice of law, we likewise see it fit to fine him
in the amount of ₱32,000. During the one year period, petitioner is warned that he is not allowed to
engage in the practice of law, and is sternly warned that doing any act that constitutes practice of law
before he has signed in the Roll of Attorneys will be dealt with severely by this Court.

WHEREFORE, the instant Petition to Sign in the Roll of Attorneys is hereby GRANTED. Petitioner
Michael A. Medado is ALLOWED to sign in the Roll of Attorneys ONE (1) YEAR after receipt of this
Resolution. Petitioner is likewise ORDERED to pay a FINE of ₱32,000 for his unauthorized practice of
law. During the one year period, petitioner is NOT ALLOWED to practice law, and is STERNLY WARNED
that doing any act that constitutes practice of law before he has signed in the Roll of Attorneys will be
dealt will be severely by this Court.

Let a copy of this Resolution be furnished the Office of the Bar Confidant, the Integrated Bar

of the Philippines, and the Office of the Court Administrator for circulation to all courts in the country.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Chief Justice

___________

FIRST DIVISION

G.R. No. 169517 March 14, 2006

ROGELIO A. TAN, NORMA TAN and MALIYAWAO PAGAYOKAN, Petitioners,

vs.
BENEDICTO M. BALAJADIA, Respondent.

DECISION

YNARES-SANTIAGO, J.:

Before us is an original petition1 for contempt filed by petitioners Rogelio Tan, Norma Tan and Maliyawao
Pagayokan against respondent Benedicto Balajadia.

Petitioners allege that on May 8, 2005, respondent filed a criminal case against them with the Office of
the City of Prosecutor of Baguio City for usurpation of authority, grave coercion and violation of city tax
ordinance due to the alleged illegal collection of parking fees by petitioners from respondent. In paragraph
5 of the complaint-affidavit, respondent asserted that he is a "practicing lawyer based in Baguio City with
office address at Room B-207, 2/F Lopez Building, Session Road, Baguio City."2 However, certifications
issued by the Office of the Bar Confidant3 and the Integrated Bar of the Philippines4 showed that
respondent has never been admitted to the Philippine Bar. Hence, petitioners claim that respondent is
liable for indirect contempt for misrepresenting himself as a lawyer.

In his Comment,5 respondent avers that the allegation in paragraph 5 of the complaint-affidavit that he is
a practicing lawyer was an honest mistake. He claims that the secretary of Atty. Paterno Aquino prepared
the subject complaint-affidavit which was patterned after Atty. Aquino’s complaint-affidavit.6 It appears
that Atty. Aquino had previously filed a complaint-affidavit against petitioners involving the same subject
matter.

Respondent claims that two complaint-affidavits were drafted by the same secretary; one for the May 5,
2005 parking incident at 10:00 o’clock in the morning and another for the parking incident on the same
date but which occurred at 1:00 o’clock in the afternoon. Respondent insists that the complaint-affidavit
regarding the 1:00 o’clock parking incident correctly alleged that he is "a businessman with office address
at Room B-204, 2/F Lopez Building, Session Road, Baguio City."7 However, the complaint-affidavit
regarding the 10:00 o’clock parking incident, which is the subject of the instant petition, erroneously
referred to him as a practicing lawyer because Atty. Aquino’s secretary copied verbatim paragraph 5 of
Atty. Aquino’s complaint-affidavit. Hence, it was inadvertently alleged that respondent is a "practicing
lawyer based in Baguio City with office address at Room B-207, 2/F Lopez Building, Session Road,
Baguio City," which statement referred to the person of Atty. Aquino and his law office address.
Liza Laconsay, Atty. Aquino’s secretary, executed an affidavit8 admitting the mistake in the preparation of
the complaint-affidavit. Respondent alleged that he did not read the complaint-affidavit because he
assumed that the two complaint-affidavits contained the same allegations with respect to his occupation
and office address. Respondent claims that he had no intention of misrepresenting himself as a practicing
lawyer.

In their Reply,9 petitioners reiterate that respondent should be made liable for indirect contempt for
having made untruthful statements in the complaint-affidavit and that he cannot shift the blame to Atty.
Aquino’s secretary.

The sole issue for resolution is whether respondent is liable for indirect contempt.

Section 3(e), Rule 71 of the Rules of Court provides:

Section 3. Indirect contempt to be punished after charge and hearing. – After a charge in writing has been
filed, and an opportunity given to the respondent to comment thereon within such period as may be fixed
by the court and to be heard by himself or counsel, a person guilty of any of the following acts may be
punished for indirect contempt:

xxxx

(e) Assuming to be an attorney or an officer of a court, and acting as such without authority;

x x x x.

In several cases,10 we have ruled that the unauthorized practice of law by assuming to be an attorney
and acting as such without authority constitutes indirect contempt which is punishable by fine or
imprisonment or both. The liability for the unauthorized practice of law under Section 3(e), Rule 71 of the
Rules of Court is in the nature of criminal contempt and the acts are punished because they are an affront
to the dignity and authority of the court, and obstruct the orderly administration of justice. In determining
liability for criminal contempt, well-settled is the rule that intent is a necessary element, and no one can be
punished unless the evidence makes it clear that he intended to commit it.11

In the case at bar, a review of the records supports respondent’s claim that he never intended to project
himself as a lawyer to the public. It was a clear inadvertence on the part of the secretary of Atty Aquino.
The affidavit of Liza Laconsay attesting to the circumstances that gave rise to the mistake in the drafting
of the complaint-affidavit conforms to the documentary evidence on record. Taken together, these
circumstances show that the allegation in paragraph 5 of respondent’s complaint-affidavit was, indeed,
the result of inadvertence.

Respondent has satisfactorily shown that the allegation that he is a practicing lawyer was the result of
inadvertence and cannot, by itself, establish intent as to make him liable for indirect contempt. In the
cases where we found a party liable for the unauthorized practice of law, the party was guilty of some
overt act like signing court pleadings on behalf of his client;12 appearing before court hearings as an
attorney;13 manifesting before the court that he will practice law despite being previously denied
admission to the bar;14 or deliberately attempting to practice law and holding out himself as an attorney
through circulars with full knowledge that he is not licensed to do so.15

In the case at bar, no evidence was presented to show that respondent acted as an attorney or that he
intended to practice law. Consequently, he cannot be made liable for indirect contempt considering his
lack of intent to illegally practice law.

However, while the evidence on record failed to prove respondent’s deliberate intent to misrepresent
himself as an attorney and act as such without authority, he is hereby warned to be more careful and
circumspect in his future actions.
WHEREFORE, the petition is DISMISSED. Respondent is WARNED to be more careful and circumspect
in his future actions.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

____________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

February 20, 1981

IN RE: PETITION FOR REINSTATEMENT IN THE ROLL OF ATTORNEYS, JUAN T. PUBLICO,

petitioner.

MELENCIO-HERRERA, J.:

Three Petitions for the reinstatement of Juan T. Publico in the Roll of Attorneys, have been filed: (1) by
Juan T. Publico himself dated May 28, 1979; 2) by the President and twelve members of the faculty of the
Polytechnic University of the Philippines, Sta. Mesa, Manila, where Juan T. Publico is also a faculty
member, filed on June 1, 1979; and 3) by the San Page 723 Miguel (Catanduanes) Civic Association in
Metro Manila through its President, Vice-President and Directors on April 23, 1979.

The records disclose that Juan Tapel Publico filed a petition to take the Bar Examination in 1960 after
failing in the 1959 Bar Examination. His uncle, Dulcisimo B. Tapel opposed the petition alleging that his
nephew is not a person of good moral character for having misrepresented, sometime in 1950, when he
was sixteen (16) years of age, that he was eligible for Third Year High School, University of Manila, by
utilizing the school records of his cousin and name-sake, Juan M. Publico when, in actual fact, petitioner
had not completed Grade VI of his elementary schooling, much less, First and Second Year High School.
When required to file a formal Complaint, Dulcisimo Tapel instituted an administrative case against his
nephew for falsification of school records or credentials.

In the meantime, Juan T. Publico took the 1960 Bar Examination, passed it, took the lawyer's oath, and
signed the Roll of Attorneys.

The administrative case was referred to the Court's Legal Officer-Investigator, Ricardo Paras, Jr., for
investigation and report. On September 10, 1961, Dulcisimo Tapel moved to drop the complaint on the
ground that his witnesses had turned hostile. The Motion was denied, however, as the complainant's
witnesses had already testified. Upon the termination of the hearing, the Legal Officer-Investigator
submitted a Report with the following findings and recommendation:

To recapitulate, respondent Juan Tapel Publico (son of Francisco Publico) studied at Buhi Elementary
School, Bato, Catanduanes, until Grade VI, but finished only Grade V in said school, because on
February 1, 1950, or before the end of the school year 1949-1950, he left said school and came to
Manila. Once in Manila, he enrolled in Third Year high school at the University of Manila. Required by the
school authorities to submit his school records for Grade VI elementary and First and Second Year high
school, he sent for the records of his cousin Juan Marino Publico (son of Gabriel Publico).
For all the foregoing, we find and so hold that respondent falsified his school records, by making it appear
that he had finished or completed Grade VI elementary and First and Second Year high school, when in
truth and in fact he had not, thereby violating the provisions of Sections 5 and 6, Rule 127 of the Rules of
Court, which require completion by a bar examinee or candidate of the prescribed courses in elementary,
high, pre-law and law school, prior to his admission to the practice of law.

Wherefore, the undersigned Investigators hereby recommend that respondent's name be stricken from
the Rollo of Attorneys.

In this Court's Resolution of February 23, 1962, the name of Juan T. Publico was stricken off the Roll of
Attorneys.

Approximately eleven years later, or on June 28, 1973, Juan T. Publico filed a Petition for Reinstatement
alleging that he had never received, for had he been informed, nor did he have any knowledge of the
Resolution of the Court ordering the Bar Division to strike his name from the Roll of Attorneys until March
1969, when after taking his oath of office as Municipal Judge of Gigmoto, Catanduanes, he was advised
to inquire into the outcome of the disbarment case against him; that he was shocked and humiliated upon
learning of the said Resolution; that he resigned from all his positions in public and private offices, and
transferred to Manila. He then prayed that the Court allow his reinstatement taking into consideration his
exemplary conduct from the time he became a lawyer, his services to the community the numerous
awards, resolutions and/'or commendations he received, which were incorporated in the Petition, and
particularly, for the sake of his children. The Court denied the Petition. Petitioner moved for
reconsideration claiming that he had been sufficiently punished already, but again this was denied by the
Court for lack of merit.

On April 17, 1974, Juan T. Publico filed his second Petition for Reinstatement stating that the Complaint
for disbarment against him had been withdrawn by the complainant, but that the Legal Officer-Investigator
proceeded with the hearing ex parte; that he was unable to cross-examine the witnesses against him as
he was unaware of the ex-parte proceedings until he was informed by the Legal Officer-Investigator about
the same; that he had suffered so much already and to let him suffer perpetual disqualification would not
be in consonance with the program of the New Society. He prayed that his name be reinstated in the Roll
of Attorneys, or that the case be reopened so that he could cross-examine the witnesses against him and
clear himself of the charges. This Court denied his Petition in its Resolution of April 23, 1974.

On November 17, 1975, Juan T. Publico wrote to the Chief Justice imploring his assistance that he may
be given another opportunity to enjoy the privileges of a lawyer, and requesting that a hearing be held
where he could personally plead for his reinstatement in the Roll of Attorneys. Again, this Court denied
the aforesaid letter-petition.

Petitioner filed a fourth petition for reinstatement on July 8, 1976 stating that he had remained a person of
good moral character and had an exemplary social standing in the community where he resides, as
shown by his election to various positions in different associations: as peace officer of Barangay 593,
Zone 58 of the City of Manila (Annex A of the petition), President of the Stallholders and Vendors
Association of Pamilihang Sentral ng Sta. Mesa, Inc. (Annex B), re-elected President of the Altura
Elementary School General Parents-Teachers Association (Annex C), and re-elected President of the
San Miguel (Catanduanes) Civic Association in Metro Manila (Annex D). He also alleged that his moral
character and integrity had remained irreproachable, that he had been more than sufficiently punished
and had been undergoing economic difficulties because of his disbarment. In its Resolution of August 3,
1976, this Court denied the Petition with finality.

For consideration now is petitioner's fifth plea for reinstatement filed on June 1, 1979 in addition to a
letter-petition addressed to Chief Justice Enrique M. Fernando dated November 3, 1979. In his Petition,
Juan T. Publico avers that his enrollment in Third Year High School in Manila was through the initiative of
his uncle, Dulcisimo B. Tapel who accompanied him to school and enrolled him in a grade level above his
qualifications in spite of his demonstrations; that the misrepresentation committed about his academic
records was not his own fault alone, but was precipitated by his uncle, who as member of the faculty of
the Catanduanes Institute had access to the records of the school; that being merely sixteen years of
age, he could not be expected to act with discernment as he was still under the influence of his uncle,
who later on caused his disbarment; that he had conducted himself in a manner befitting a member of the
bar; that he had striven to serve the people and the government as shown by the positions he held as
Municipal Attorney of San Miguel, Catanduanes, Deputy Register of Deed of Catanduanes, Election
Registrar of the Commission on Elections, and Editorial Assistant in the Editorial Staff of the defunct
House of Representatives, and presently as faculty member of the Polytechnic university of the
Philippines, a State University.

Additionally, petitioner submitted evidence purporting to show his honesty and integrity and other
manifestations of his good moral character, particularly, the Resolution dated March 30, 1979 of the
Integrated Bar of the Philippines, Catanduanes Chapter (Annex A); the Resolution dated April 16, 1979 of
the Sangguniang Bayan of San Miguel, Catanduanes (Annex B); the letter of the Municipal Mayor of San
Miguel, Alejandro T. Tatel addressed to the late Chief Justice Castro dated April 17, 1979 (Annex B-1), all
attesting to his good character and standing in the community and his capability as a lawyer. Further
submitted are certifications issued by the different government offices Court of First Instance of
Catanduanes (Annex C); Catanduanes Integrated National Police Command (Annex F should be D);
Office of the Provincial Fiscal at Virac, Catanduanes (Annex F), and First Municipal Circuit Court, Bato-
San Miguel, Bato, Catanduanes (Annex E), certifying that petitioner has not been accused nor convicted
of any crime.

The petition filed by the President and Faculty of the Polytechnic University of the Philippines reiterated
the same circumstances as those stated by Juan T. Publico in his own Petition and further professed that
Atty. Publico is a competent and proficient teacher; that his moral integrity and honesty are beyond
reproach; that to require him to comply with what he missed in the steps of the educational ladder would
be meaningless and without any value as it is not intended to benefit him nor the system of education;
and that non-formal education has already been recognized and given its equivalence in the scheme of
formal education. The petition also mentioned the names of some great men who had been school
dropouts, but who did not let this fact deter them from attaining success in their respective fields.

The petition filed by the San Miguel (Catanduanes) Civic Association in Metro Manila is substantially of
the same tenor and added that petitioner was re-elected President of that Association for four years from
1972 to 1975 inclusive.

No opposition has been filed to any of the petitions.

The criterion for reinstatement has been stated as follows:

Whether or not the applicant shall be reinstated rests to a great extent in the sound discretion of the court,
The court action will depend, generally speaking, on whether or not it decides that the public interest in
the orderly and impartial administration of justice will be conserved by the applicant's participation therein
in the capacity of an attorney and counselor at law. The applicant must, like a candidate for admission to
the bar, satisfy the court that he is a person of good moral character — a fit and proper person to practice
law. The court will take into consideration the applicant's character and standing prior to the disbarment,
the nature and character of the charge for which he was disbarred, his conduct subsequent to the
disbarment, and the time that has elapsed between the disbarment and the application for reinstatement.
(5 Am. Jur., Sec. 301, p. 443). 1

Almost nineteen (19) years, by February 23, 1981, shall have elapsed since petitioner was barred from
exercising his profession. Cognizant that the power to discipline, especially if amounting to disbarment,
should be exercised on the preservative and not on the indicative principle, 2 we find that the evidence
submitted by petitioner, particularly, the testimonials presented on his behalf, as listed heretofore, his
good conduct and honorable dealings subsequent to his disbarment, his active involvement in civic,
educational, and religious organizations, render him fit to be restored to membership in the Bar, and that
petitioner has been sufficiently punished and disciplined. 3
WHEREFORE, petitioner Juan T. Publico is hereby ordered reinstated in the Roll of Attorneys.

SO ORDERED.

Teehankee, Makasiar, Concepcion, Jr., Fernandez, Guerrero, Abad Santos and De Castro, JJ., concur.

Aquino J., took no part.

Separate Opinions

BARREDO, J., concurring:

I concur because there have been cases in the past where persons who had not attended any law school
were admitted to practice the law profession.

FERNANDO, C.J., concurring:

There is no question to my mind that, as so ably put in the opinion of Justice Melencio-Herrera,
reinstatement is warranted. This is not to overlook the offense which caused his disbarment. It certainly
was not in conformity with the high standard membership in the legal profession entails. Nonetheless, it
could be said that he had expiated long enough for this particular lapse from rectitude, one, moreover,
committed at a time when he was barely sixteen years of age. His youthful years while certainly not
constituting a justification may be considered as impressed with a mitigating character. Moreover, from
the recitals appearing in resolutions of the Integrated Bar of the Philippines, Catanduanes Chapter, and
the Sangguniang Bayan of San Miguel Catanduanes, as well as certifications of different government
offices, it would appear that his conduct subsequent to his disbarment can stand a rigorous appraisal. At
least, no other misdeed has been attributed to him. There is pertinence therefore to this excerpt from
Barba v. Pedro: "There is no affront to reason then in ruling that the punishment, while deserved, has
lasted long enough. He has sufficiently rehabilitated himself." 1

The same approach to my mind is reflected in the opinion of the Court. Why this brief concurrence then?
While there is no clear necessity for it, it may not be amiss to say a few words on the implications of the
preservative and not vindictive principle as the test, the satisfaction of which warrants an affirmative
response to a plea for reinstatement. As in the case contempt proceedings where such a doctrine has
held sway, and justifiably so, what is sought to be guarded zealously is that justice be properly
administered. Membership in the bar, as aptly pointed out by Justice Cardozo, is a privilege burdened
with conditions. One of them, and by far the most important, is fidelity to the concept that a lawyer is an
officer of the court. That he should never forget. He is expected to aid not to hinder or obstruct the cause
of truth so that justice may be dispened with according to law. In that sense, the mere lapse of time, to my
mind, while justifying the view that there has been retribution, is not decisive. It is my belief, that, of itself
alone, it does not suffice to call indubitably for reinstatement. Far more important is a showing that his
conduct after disbarment is such that there can be a reasonable expectation of his being able to comply
with a lawyer's oath. As with my brethren, I am convinced that respondent in this case has given sufficient
proof that he would not be lacking in that respect. Hence my vote to readmit him to membership in the
bar.

_____________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

SBC Case No. 519 July 31, 1997

PATRICIA FIGUEROA, complainant,

vs.
SIMEON BARRANCO, JR., respondent.

RESOLUTION

ROMERO, J.:

In a complaint made way back in 1971, Patricia Figueroa petitioned that respondent Simeon Barranco, Jr.
be denied admission to the legal profession. Respondent had passed the 1970 bar examinations on the
fourth attempt, after unsuccessful attempts in 1966, 1967 and 1968. Before be could take his oath,
however, complainant filed the instant petition averring that respondent and she had been sweethearts,
that a child out of wedlock was born to them and that respondent did not fulfill his repeated promises to
many her.

The facts were manifested in hearings held before Investigator Victor F. Sevilla in June and July 1971.
Respondent and complainant were townmates in Janiuay, Iloilo. Since 1953, when they were both in their
teens, they were steadies. Respondent even acted as escort to complainant when she reigned as Queen
at the 1953 town fiesta. Complainant first acceded to sexual congress with respondent sometime in 1960.
Their intimacy yielded a son, Rafael Barranco, born on December 11, 1964.1 It was after the child was
born, complainant alleged, that respondent first promised he would marry her after he passes the bar
examinations. Their relationship continued and respondent allegedly made more than twenty or thirty
promises of marriage. He gave only P10.00 for the child on the latter's birthdays. Her trust in him and their
relationship ended in 1971, when she learned that respondent married another woman. Hence, this
petition.

Upon complainant's motion, the Court authorized the taking of testimonies of witnesses by deposition in
1972. On February 18, 1974, respondent filed a Manifestation and Motion to Dismiss the case citing
complainant's failure to comment on the motion of Judge Cuello seeking to be relieved from the duty to
take aforesaid testimonies by deposition. Complainant filed her comment required and that she remains
interested in the resolution of the present case. On June 18, 1974, the Court denied respondent's motion
to dismiss.

On October 2, 1980, the Court once again denied a motion to dismiss on the ground of abandonment
filed by respondent on September 17, 1979.2 Respondent's third motion to dismiss was noted in the
Court's Resolution dated September 15, 1982.3 In 1988, respondent repeated his request, citing his
election as a member of the Sangguniang Bayan of Janiuay, Iloilo from 1980-1986, his active
participation in civic organizations and good standing in the community as well as the length of time this
case has been pending as reasons to allow him to take his oath as a lawyer.4

On September 29, 1988, the Court resolved to dismiss the complaint for failure of complainant to
prosecute the case for an unreasonable period of time and to allow Simeon Barranco, Jr. to take the
lawyer's oath upon payment of the required fees.5

Respondent's hopes were again dashed on November 17, 1988 when the Court, in response to
complainant's opposition, resolved to cancel his scheduled oath-taking. On June 1, 1993, the Court
referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation.

The IBP's report dated May 17, 1997 recommended the dismissal of the case and that respondent be
allowed to take the lawyer's oath.

We agree.

Respondent was prevented from taking the lawyer's oath in 1971 because of the charge of gross
immorality made by complainant. To recapitulate, respondent bore an illegitimate child with his
sweetheart, Patricia Figueroa, who also claims that he did not fulfill his promise to marry her after he
passes the bar examinations.

We find that these facts do not constitute gross immorality warranting the permanent exclusion of
respondent from the legal profession. His engaging in premarital sexual relations with complainant and
promises to marry suggests a doubtful moral character on his part but the same does not constitute
grossly immoral conduct. The Court has held that to justify suspension or disbarment the act complained
of must not only be immoral, but grossly immoral. "A grossly immoral act is one that is so corrupt and
false as to constitute a criminal act or so unprincipled or disgraceful as to be reprehensible to a high
degree."6 It is a willful, flagrant, or shameless act which shows a moral indifference to the opinion of
respectable members of the community.7

We find the ruling in Arciga v. Maniwang8 quite relevant because mere intimacy between a man and a
woman, both of whom possess no impediment to marry, voluntarily carried on and devoid of any deceit
on the part of respondent, is neither so corrupt nor so unprincipled as to warrant the imposition of
disciplinary sanction against him, even if as a result of such relationship a child was born out of wedlock.9

Respondent and complainant were sweethearts whose sexual relations were evidently consensual. We
do not find complainant's assertions that she had been forced into sexual intercourse, credible. She
continued to see and be respondent's girlfriend even after she had given birth to a son in 1964 and until
1971. All those years of amicable and intimate relations refute her allegations that she was forced to have
sexual congress with him. Complainant was then an adult who voluntarily and actively pursued their
relationship and was not an innocent young girl who could be easily led astray. Unfortunately, respondent
chose to marry and settle permanently with another woman. We cannot castigate a man for seeking out
the partner of his dreams, for marriage is a sacred and perpetual bond which should be entered into
because of love, not for any other reason.

We cannot help viewing the instant complaint as an act of revenge of a woman scorned, bitter and
unforgiving to the end. It is also intended to make respondent suffer severely and it seems, perpetually,
sacrificing the profession he worked very hard to be admitted into. Even assuming that his past
indiscretions are ignoble, the twenty-six years that respondent has been prevented from being a lawyer
constitute sufficient punishment therefor. During this time there appears to be no other indiscretion
attributed to him.10 Respondent, who is now sixty-two years of age, should thus be allowed, albeit
belatedly, to take the lawyer's oath.

WHEREFORE, the instant petition is hereby DISMISSED. Respondent Simeon Barranco, Jr. is
ALLOWED to take his oath as a lawyer upon payment of the proper fees.

SO ORDERED.

Padilla, Regalado, Davide, Jr., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco and
Panganiban, JJ., concur.

Narvasa, C.J., Hermosisima, Jr. and Torres Jr., JJ., are on leave.

_____________
Supreme Court of Arizona,En Banc.
IN RE: James Joseph HAMM, Applicant.

No. SB-04-0079-M.
Decided: December 07, 2005
James Joseph Hamm, Tempe, In Propria Persona. Monroe & McDonough, P.C., by Lawrence
McDonough, Tucson, and Juan Perez-Medrano, Phoenix, Chair Attorneys for the Committee on
Character & Fitness. Charles W. Wirken, President, Helen Perry Grimwood, President-elect, Jim D.
Smith, First Vice President, Daniel J. McAuliffe, Second Vice President, Edward F. Novak, Secretary-
Treasurer, Robert B. Van Wyck, Chief Bar Counsel, Phoenix, Attorneys for Amicus Curiae State Bar of
Arizona. Michael D. Kimerer, Marty Lieberman, Amy L. Nguyen, Phoenix, Carla Ryan, Andrew Silverman,
Tucson, Attorneys for Amicus Curiae, Arizona Attorneys for Criminal Justice. Andrew P. Thomas,
Maricopa County Attorney, by Andrew P. Thomas, Phoenix, Attorney for Amicus Curiae Maricopa County
Attorney's Office.
OPINION

¶ 1 James Hamm petitioned this Court, pursuant to Arizona Supreme Court Rule 36(g), 17A A.R.S.,1 to
review the recommendation of the Committee on Character and Fitness (the Committee) that his
application for admission to the State Bar of Arizona (the Bar) be denied. Having reviewed the record
and the Committee's report, we conclude that James Hamm has failed to establish the good moral
character necessary to be admitted to the practice of law in Arizona and deny his application.

I.

¶ 2 In September 1974, James Hamm was twenty-six years old and living on the streets of Tucson.
Although he previously had attended divinity school and worked as a part-time pastor, Hamm describes
his life in 1974 as reflecting a series of personal and social failures. In 1973, he had separated from his
wife, with whom he had a son. Although he had no criminal record, he supported himself by selling
small quantities of marijuana and, again according to Hamm, he used marijuana and other drugs and
abused alcohol.

¶ 3 On September 6, 1974, Hamm met two young men who identified themselves as college students
from Missouri. The two, Willard Morley and Zane Staples, came to Tucson to buy twenty pounds of
marijuana. Hamm agreed to sell it to them, but apparently was unable to acquire that quantity of
marijuana. Rather than call off the transaction, Hamm and two accomplices, Garland Wells and Bill
Reeser, agreed to rob Staples and Morley of the money intended for the purchase. On September 7,
Wells gave Hamm a gun to use during the robbery. Later that day, Wells and Hamm directed Morley
and Staples to drive to the outskirts of Tucson, purportedly to complete the drug transaction;  Reeser
followed in another vehicle. Both Wells and Hamm carried guns;  Morley and Staples were unarmed.
Hamm sat behind Morley, the driver, and Wells sat behind Staples. At some point, Hamm detected that
Staples was becoming suspicious. As Morley stopped the car, and without making any demand on the
victims for money, Hamm shot Morley in the back of the head, killing him. At the same time, Wells shot
Staples. Hamm then shot Staples in the back as he tried to escape and shot Morley once again. Wells
also shot Morley, then pursued Staples, whom he ultimately killed outside of the car. Hamm and Wells
took $1400.00 from the glove compartment, fled the scene in the van driven by Reeser, and left the
bodies of Morley and Staples lying in the desert.

¶ 4 Hamm took his share of the money and visited his sister in California. At the hearing held to
consider his application to the Bar, he told the Committee that he “was compelled to come back to
Tucson,” despite knowing he probably would be caught. Police officers arrested Hamm shortly after his
return. While in custody, he told the police that Morley and Staples were killed in a gun battle during the
drug deal. Initially charged with two counts of first-degree murder and two counts of armed robbery,
Hamm pled guilty to one count of first-degree murder and was sentenced to life in prison, with no
possibility of parole for twenty-five years.
¶ 5 Once in prison, Hamm began taking steps toward rehabilitation and became a model prisoner. After
spending one year in maximum security, he applied for and received a job in a computer training program
that allowed him to be transferred to medium security. Once in medium security, Hamm apparently took
advantage of any and every educational opportunity the prison system had to offer. He completed
certificates in yoga and meditation and, on his own, studied Jungian psychology. He helped fellow
inmates learn to read and write and to take responsibility for their actions. He obtained a bachelor's
degree in applied sociology, summa cum laude, from Northern Arizona University through a prison study
program.

¶ 6 After Hamm completed six years in medium security, prison officials transferred him to minimum
security, where he worked on paint and construction crews. He received a significant degree of
freedom, which allowed him to live in a dormitory rather than in a cell and occasionally to drive
unaccompanied to nearby towns. He testified that he was the only inmate permitted to head a work
crew. Hamm reported to the Committee that he played an instrumental role on various prison
committees, particularly the committee that developed a new grievance procedure within the Department
of Corrections. In addition, he wrote grant proposals for libraries, for handicapped prisoners, and for
obtaining greater legal assistance for prisoners.

¶ 7 While in prison, he met and married Donna Leone. She and Hamm founded Middle Ground Prison
Reform (Middle Ground), a prisoner and prisoner family advocacy organization involved in lobbying for
laws related to the criminal justice system and prisons. Middle Ground also provides public education
about those topics.

¶ 8 In 1989, the Governor, acting on the recommendation of the Arizona Board of Pardons and Parole
(the Board), commuted Hamm's sentence. When he had served nearly seventeen years, in July 1992,
the Board released Hamm on parole, conditioned upon no use of alcohol or drugs, drug and alcohol
testing, and fifteen hours of community service each month. In December 2001, the Arizona Board of
Executive Clemency 2 granted Hamm's third application for absolute discharge.

¶ 9 Between his release in August 1992 and his absolute discharge in December 2001, Hamm performed
thousands of hours of community service. He advocated for prisoners' rights in various forums by
writing position papers, appearing on radio programs, testifying in legislative hearings, and speaking at
churches, schools, and civic organizations. He also appeared in a public service video encouraging
children not to do drugs or join gangs. Hamm now works as the Director of Advocacy Services at Middle
Ground Prison Reform.

¶ 10 While on parole, Hamm graduated from the Arizona State University College of Law. In July 1999,
Hamm passed the Arizona bar examination and, in 2004, filed his Character and Fitness Report with the
Committee.

II.

¶ 11 The Rules of the Supreme Court of Arizona establish the process through which the Committee and
this Court evaluate applications for admission to the Bar, and prior case law clarifies the burden an
applicant must satisfy to establish good moral character. We begin with a review of the rules.

A.

¶ 12 Rules 34 through 37 define the requirements for admission to the Bar.3 The Committee may
recommend an applicant for admission only if that applicant, in addition to meeting other requirements,
satisfies the Committee that he or she is of good moral character. Rule 34(a). The applicant bears the
burden of establishing his or her good moral character. In re Greenberg, 126 Ariz. 290, 292, 614 P.2d
832, 834 (1980) (citing In re Levine, 97 Ariz. 88, 397 P.2d 205 (1964)). In determining whether an
applicant's prior conduct indicates a lack of good moral character, the Committee must consider the
following non-exhaustive list of factors:
A. The applicant's age, experience and general level of sophistication at the time of the conduct

B. The recency of the conduct

C. The reliability of the information concerning the conduct

D. The seriousness of the conduct

E. Consideration given by the applicant to relevant laws, rules and responsibilities at the time of the
conduct

F. The factors underlying the conduct

G. The cumulative effect of the conduct

H. The evidence of rehabilitation

I. The applicant's positive social contributions since the conduct

J. The applicant's candor in the admissions process

K. The materiality of any omissions or misrepresentations by the applicant.

Rule 36(a)3.

¶ 13 When prior conduct involves the commission of a violent crime, the Committee must, at a minimum,
hold an informal hearing. Rule 36(a)4.E. If three or more Committee members who attended the hearing
or who have read the entire record do not recommend admission of an applicant, the Committee must
hold a formal hearing to consider whether to recommend the applicant for admission to the Bar. Id.

¶ 14 If the applicant fails to convince the Committee of his or her good moral character, the Committee
has a duty not to recommend that person to this Court. In re Klahr, 102 Ariz. 529, 531, 433 P.2d 977,
979 (1967);  Levine, 97 Ariz. at 91, 397 P.2d at 207 (“If the proof of good moral character falls short of
convincing the Committee on Examinations and Admissions, it is its duty not to recommend admission.”);
 In re Courtney, 83 Ariz. 231, 233, 319 P.2d 991, 993 (1957) (“In this it has no discretion;  if the members
entertain any reservations whatsoever as to the applicant's good moral character, it should not make a
favorable recommendation to this court.”). After the Committee submits its report, an aggrieved
applicant may petition this Court for review. Rule 36(g).

B.

¶ 15 This Court then independently determines whether the applicant possesses good moral character
and, based upon that determination, grants or denies the candidate's application. Although we give
serious consideration to the facts as found by and the recommendation of the Committee, “[t]he ultimate
decision in this difficult matter rests with the Supreme Court.” In re Kiser, 107 Ariz. 326, 327, 487 P.2d
393, 394 (1971) (holding applicant possessed good moral character);  see also Levine, 97 Ariz. at 92, 397
P.2d at 207 (holding the Court must, “using our independent judgment, de novo determine whether the
necessary qualifications have been shown”). We do not limit our independent review to matters of law;
 we have “the ultimate responsibility for determination of fact and law.” In re Ronwin, 139 Ariz. 576, 579,
680 P.2d 107, 110 (1983);  see also In re Walker, 112 Ariz. 134, 137, 539 P.2d 891, 894 (1975) (making a
finding regarding the credibility of testimony, although in agreement with the Committee).

¶ 16 The ultimate question in cases such as this is whether the applicant has established good moral
character, a concept with which we have wrestled as we have attempted to define its boundaries.
Greenberg, 126 Ariz. at 292, 614 P.2d at 834. As Hamm asserts, the rules and standards governing
admission to the practice of law in Arizona include no per se disqualifications. Instead, we consider
each case on its own merits. Id. In Walker, we described the principles on which we rely as follows:

‘Upright character’ * * * is something more than an absence of bad character. * * * It means that he
[an applicant for admission] must have conducted himself as a man of upright character ordinarily would,
should, or does. Such character expresses itself not in negatives nor in following the line of least
resistance, but quite often in the will to do the unpleasant thing if it is right, and the resolve not to do the
pleasant thing if it is wrong.

112 Ariz. at 138, 539 P.2d at 895 (alteration in original) (quoting In re Farmer, 191 N.C. 235, 131 S.E.
661, 663 (1926)).

¶ 17 We also agree with Hamm that, under the Rule applicable to Hamm's application, our concern
must be with the applicant's present moral character. In Greenberg, we explained that “it is [the
applicant's] moral character as of now with which we are concerned.” 126 Ariz. at 292, 614 P.2d at 834;
 see also Rule 36(a)3. Past misconduct, however, is not irrelevant. Rather, this Court must determine
what past bad acts reveal about an applicant's current character.

III.

¶ 18 In compliance with Rule 36(a)4.E, the Committee conducted a formal hearing to consider Hamm's
application. The Committee heard testimony on May 20 and June 2, 2004. Hamm, representing
himself, and his wife presented extensive testimony. In addition, the Committee heard from three
licensed attorneys who had worked with Hamm and who recommended his admission and also
considered letters from those opposed to and in support of Hamm's application. In detailed findings, the
Committee specifically considered the various factors set out in Rule 36(a) to determine Hamm's
character and fitness to be admitted to the Bar. In its report, the Committee stated that, in reaching its
conclusions, it considered the following:

1) Hamm's unlawful conduct, which included the commission of two violent “execution style” murders and
his testimony as to the facts surrounding the murders.

2) Hamm's omissions on his Application and his testimony in explaining his failure to disclose all required
information.

3) Hamm's neglect of his financial responsibilities and/or violation of a longstanding child support court
order and his testimony as to his failure to comply with the court order.

4) Hamm's mental or emotional instability impairing his ability to perform the functions of an attorney
including his testimony as to any diagnosis and treatment.4

¶ 19 After reviewing all these factors, the Committee concluded that Hamm had not met his burden of
establishing that he possesses the requisite character and fitness for admission to the Bar and
accordingly recommended that his application be denied. We now consider the Committee's findings,
together with pertinent facts.

A.

¶ 20 The serious nature of Hamm's past criminal conduct is beyond dispute. Hamm acknowledges that
no more serious criminal conduct exists than committing first-degree murder. Our society reserves its
harshest punishment for those convicted of such conduct. See Tucson Rapid Transit Co. v. Rubiaz, 21
Ariz. 221, 231, 187 P. 568, 572 (1920) (describing murder as “the most serious crime known to the law”).

¶ 21 Hamm's past criminal conduct and the serious nature of that conduct affect the burden he must
meet to establish good moral character. He must first establish rehabilitation from prior criminal conduct,
a requirement that adds to his burden of showing current good moral character. See In re Adams, 273
Ga. 333, 540 S.E.2d 609, 610 (2001) (“Where an applicant for admission to the bar has a criminal record,
his or her burden of establishing present good moral character takes on the added weight of proving full
and complete rehabilitation subsequent to conviction․”);  In re Allan S., 282 Md. 683, 387 A.2d 271, 275
(1978) (“Although a prior conviction is not conclusive of a lack of present good moral character, ․ it adds
to his burden of establishing present good character by requiring convincing proof of his full and complete
rehabilitation.”).

¶ 22 The added burden becomes greater as past unlawful conduct becomes more serious. In In re
Arrotta, we considered an application for reinstatement from an attorney who, eight years earlier, pled
guilty to mail fraud and bribery. 208 Ariz. 509, 96 P.3d 213 (2004). We noted there that “the more
serious the misconduct that led to disbarment, the more difficult is the applicant's task in showing
rehabilitation.” Id. at 512 ¶ 12, 96 P.3d at 216. An applicant for initial admission to the Bar who is
attempting to overcome the negative implications of a serious felony on his current moral character
likewise must overcome a greater burden for more serious crimes. We agree with the New Jersey
Supreme Court, which recognized that “in the case of extremely damning past misconduct, a showing of
rehabilitation may be virtually impossible to make.” In re Matthews, 94 N.J. 59, 462 A.2d 165, 176
(1983). Indeed, we are aware of no instance in which a person convicted of first-degree murder has
been admitted to the practice of law.

¶ 23 To show rehabilitation, Hamm must show that he has accepted responsibility for his criminal
conduct. Hamm fully recognizes his need to make this showing. Indeed, he states that his
rehabilitation could not have proceeded absent such acceptance. We recognize the Committee's
concern that Hamm has not yet fully accepted responsibility for the two murders. Hamm says he has
done so, repeatedly and strongly, but some of his other statements indicate to the contrary. The
inconsistencies among his various statements related to accepting responsibility are most evident when
he discusses Staples' murder. Although he told the Committee that he accepts responsibility for Staples'
murder, in fact he consistently assigns that responsibility to his accomplice. His testimony revealed
almost no attention to the commission or aftermath of Staples' murder. Hamm concedes that he has
focused on his role in Morley's murder rather than on his role in Staples' murder. The difference in
approach, he explains, resulted from one postcard written to him by Morley's grandmother and his
decision to use his connection to Morley to provide motivation to overcome difficulties. We have no
reason to doubt that Hamm's focus on Morley's murder aided him, using his words, in “accomplishing
things that people have been telling me I can't do and we're [Hamm and Morley] still doing it today.”
That fact, however, does nothing to assure us that Hamm has taken responsibility for Staples' murder, as
he must if he is to establish rehabilitation.

¶ 24 We also give serious consideration to the Committee's finding that Hamm was not completely
forthright in his testimony about the murders.5 Hamm has insisted in his filings with this Court that he did
not intend to kill, but only to rob, his victims. The agreed facts, however, lead directly to the inference
that Hamm intended to kill. He conspired with his accomplices to rob the victims;  he accepted the gun
provided by Wells and took it with him in the car with the victims;  he testified that, although he did not
intend to kill the victims, he was “afraid” they would be killed when he got in the car;  he shot Morley
without ever attempting a robbery and shot him a second time to make certain he was dead;  and he also
shot Staples to prevent his escape. The Committee observed Hamm testify and was able to judge the
credibility of his testimony in light of uncontested facts. We agree that the record shows that Hamm,
despite his current protestations to the contrary, intended to kill the victims. His failure to confront the
fact that these murders were intentional undermines his statements that he fully accepts responsibility for
his actions.

¶ 25 As did the Committee, we give substantial weight to Hamm's attempts at rehabilitation. In Section I,
supra, we described in some detail the activities Hamm has undertaken, both while in and since his
release from prison. We are impressed with the sincerity and fervor of those who testified or submitted
letters on Hamm's behalf. Were rehabilitation the only showing Hamm must make to establish good
moral character, we would weigh those factors tending to show rehabilitation against those tending to
show a lack thereof. Under the facts of this case, however, we need not decide whether the facts of
record establish rehabilitation.
 ¶ 26 When an applicant has committed first-degree murder, a crime that demonstrates an extreme lack
of good moral character, that applicant must make an extraordinary showing of present good moral
character to establish that he or she is qualified to be admitted to the practice of law. Even assuming
that Hamm has established rehabilitation, showing rehabilitation from criminal conduct does not, in itself,
establish good moral character. Rehabilitation is a necessary, but not sufficient, ingredient of good
moral character. An applicant must establish his current good moral character, independent of and in
addition to, evidence of rehabilitation. We conclude that Hamm failed to make that showing.

B.

¶ 27 We share the Committee's deep concern about Hamm's longstanding failure to fulfill, or even
address, his child support obligation to his son, born in 1969, four years before Hamm and his first wife
separated. Not until he prepared his application for admission to the Bar in 2004 did Hamm make any
effort to meet his responsibility to provide support for his son. During the Committee hearing, Hamm
advanced several explanations for his failure to do so. Like the Committee, we find none of his
explanations credible.

¶ 28 Although Hamm attempts to excuse his failure to pay child support by pointing out that he never
received a copy of a final divorce decree, Hamm scarcely can claim that he lacked awareness of his
obligation. A few months after he and his wife separated in 1973, Hamm was arrested on a
misdemeanor charge of failing to pay child support. On May 6, 1974, James and Karen Hamm's divorce
decree set Hamm's child support payments at $75.00 a month. Hamm made no effort to learn the
extent of his financial obligation to his son from 1974, when Hamm was twenty-six years old, until 2004,
when he was fifty-five. During those nearly thirty years, he gained sophistication and attended law
school. He must have known, and certainly should have known, that he had long avoided a basic
parental obligation.6

¶ 29 Hamm also attempted to excuse his inattention to his obligation by explaining that he learned, first
from a private investigator hired by his wife in 1988, and later from his son, that his former wife's new
husband had adopted his son. His reliance on the private investigator's 1988 report to excuse his failure
is surprising, given the fact that his son was only months from the age of majority when Hamm learned of
the report;  he provides no explanation for his lack of concern prior to that date.

¶ 30 Hamm further explained that only when he applied for admission to the Bar in 2004 did he discover
that his son had not been adopted and then “calculated the child support payment [due] over the years.”
Hamm determined that he owed $10,000.00 and, even though the statute of limitations barred an action
to recover past amounts due,7 contacted his son and set up a repayment schedule.

¶ 31 “ Behavior of such long duration cannot be considered as a temporary aberration․” Walker, 112
Ariz. at 138, 539 P.2d at 895;  see also Office of Disciplinary Counsel v. Lewis, 493 Pa. 519, 426 A.2d
1138 (1981) (holding that even when an attorney made belated restitution for funds taken from clients,
because “[s]uch actions cannot be said to be consistent with high ethical standards of the profession, with
a lawyer's fiduciary responsibility to his client, with a character that is beyond reproach, or with truth,
candor and honesty,” the attorney could not continue to practice law). Hamm's failure to meet his
parental obligation for nearly thirty years makes it more difficult for him to make the required extraordinary
showing that he “has conducted himself as a man ordinarily would, should, or does.” Walker, 112 Ariz. at
138, 539 P.2d at 895.

¶ 32 We also agree with the Committee that Hamm did not display honesty and candor in discussing his
failure to pay child support with the Committee. Hamm testified both that his son told him personally that
he had been adopted and that his son “adamantly refused” to accept interest payments on the unpaid
child support.

¶ 33 Hamm's son testified, however, that he had never been adopted, that prior to his contact with Hamm
he had changed his name himself, and that he had not told Hamm he had been adopted. Hamm's son
also did not report adamantly refusing interest payments. In response to a question from the Committee
about interest payments, he said:

Discussions about interest? Seems like whenever we were talking about it, you know, he said it was a
large amount, and it seems like the subject of interest did come up. I can't remember exactly, you know,
what we said about it. But, you know, I didn't push the issue or anything, say, well, you know, you're
going to pay me interest for this or what, or is there any interest. It wasn't really an issue or important to
me.

¶ 34 We discern no reason that Hamm's son would have been other than forthright about these matters,
while Hamm had every reason to present himself in the best possible light.8 Like the Committee, we find
the testimony of his son to be more credible.

C.

¶ 35 We further conclude that Hamm did not adequately explain his failure to disclose an incident
involving him and his current wife, Donna, when he submitted his application to the Committee.

¶ 36 In 1996, Hamm and Donna engaged in a physical altercation outside a convenience store. Donna
“yelled the word ‘kidnap’ out of the window” of the vehicle Hamm was driving, causing him to pull over
and leave the vehicle. During their tussle, Donna tore Hamm's shirt. Both called the police, who
arrested neither Hamm nor Donna. The incident and what Donna describes as her “embellishments”
caused such great concern to the Hamms, particularly because Hamm was on parole, that Donna
submitted to a polygraph administered by a private company to demonstrate that Hamm had not
kidnapped her. The two also underwent marital counseling.

¶ 37 Nonetheless, when filling out his Character and Fitness Report, Hamm failed to disclose the incident
to the Committee. Question 25 on the report asks specifically whether the applicant, among other
things, has been “questioned” concerning any felony or misdemeanor.9 Hamm told the Committee that,
in reading the application, he missed the word “questioned” in the list of encounters with law enforcement
that Question 25 directs an applicant to report.

¶ 38 Hamm's explanation strains credulity. In Walker, this Court inferred that the son of an Army
officer would understand the requirement to register for the draft. 112 Ariz. at 138, 539 P.2d at 895.
Likewise, we infer from Hamm's knowledge of the law and his efforts in 1996 to document a defense for
the domestic incident that he fully understood its importance and must have known that the incident
would be of interest to the Committee. His failure to include it in his initial application further affects his
ability to make the needed extraordinary showing of good moral character.

D.

¶ 39 Hamm's actions during these proceedings also raise questions about his fitness to practice law.
The introduction to Hamm's petition before this Court begins:

The consequences of this case for Petitioner take it out of the ordinary realm of civil cases. If the
Committee's recommendation is followed, it will prevent him from earning a living through practicing law.
This deprivation has consequences of the greatest import for Petitioner, who has invested years of study
and a great deal of financial resources in preparing to be a lawyer․

This language repeats nearly verbatim the language of the United States Supreme Court in Konigsberg v.
State Bar, 353 U.S. 252, 77 S.Ct. 722, 1 L.Ed.2d 810 (1957), in which the Court wrote:

While this is not a criminal case, its consequences for Konigsberg take it out of the ordinary run of civil
cases. The Committee's action prevents him from earning a living by practicing law. This deprivation
has grave consequences for a man who has spent years of study and a great deal of money in preparing
to be a lawyer.
Id. at 257-58, 77 S.Ct. 722. If an attorney submits work to a court that is not his own, his actions may
violate the rules of professional conduct. Iowa Supreme Court Bd. of Prof'l Ethics & Conduct v. Lane,
642 N.W.2d 296, 299 (Iowa 2002) (“[P]lagiarism constitute[s], among other things, a misrepresentation to
the court. An attorney may not engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation.”);   see also Rule 42, ER 8.4(c) (defining professional misconduct as including
“engag[ing] in conduct involving dishonesty, fraud, deceit or misrepresentation”). We are concerned
about Hamm's decision to quote from the Supreme Court's opinion without attribution and are equally
troubled by his failure to acknowledge his error. When the Committee's response pointed to Hamm's
failure to attribute this language to Konigsberg, he avoided the serious questions raised and refused to
confront or apologize for his improper actions, asserting instead:  “From Petitioner's perspective, any
eloquence that might be found in the Petition does not derive from any prior case decided in any
jurisdiction, but rather from the gradual development of his own potential through study, reflection, and
devotion to the duty created by his commission of murder.” Hamm apparently either does not regard his
actions as improper or simply refuses to take responsibility. In either case, his actions here do not assist
him in making the requisite showing of good moral character.10

E.

¶ 40 When Hamm committed first-degree murder in 1974, he demonstrated his extreme lack of good
moral character. Although this Court has not adopted a per se rule excluding an applicant whose past
includes such serious criminal misconduct, we agree with those jurisdictions that have held that an
applicant with such a background must make an extraordinary showing of rehabilitation and present good
moral character to be admitted to the practice of law. Perhaps such a showing is, in practical terms, a
near impossibility. We need not decide that question today, however, because Hamm's lack of candor
before the Committee and this Court, his failure to accept full responsibility for his serious criminal
misconduct, and his failure to accept or fulfill, on a timely basis, his parental obligation of support for his
son, all show that Hamm has not met the stringent standard that applies to an applicant in his position
who seeks to show his present good moral character.

IV.

¶ 41 Hamm asserts that he was denied due process of law because two members of the Committee
may have prejudged the merits of his application. Both members, however, left the Committee
proceedings when their potential bias came to light, and neither played any role in the Committee's
findings and recommendation.

¶ 42 Hamm, like all applicants for membership in the Bar, is entitled to receive due process of law.
“The fundamental requirement of due process is the opportunity to be heard ‘at a meaningful time and in
a meaningful manner.’ ” Mathews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976)
(quoting Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 14 L.Ed.2d 62 (1965)). Also, “due
process requires that a party be given a ‘fair trial in a fair tribunal.’ ” United States v. Superior Court, 144
Ariz. 265, 280, 697 P.2d 658, 673 (1985) (quoting In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, 99
L.Ed. 942 (1955)). Both the Committee and this Court have provided Hamm ample opportunity to be
heard through hearings and written arguments. Moreover, this Court, and not the Committee, made the
ultimate decision on Hamm's application. Hamm received a full opportunity to be heard before a fair
tribunal.

V.

¶ 43 Because James Hamm has failed to meet his burden of proving that he is of good moral character,
we deny his application for admission to the State Bar of Arizona.

FOOTNOTES

1. References in this opinion to “Rule _” are to the Rules of the Arizona Supreme Court.
2. The Board of Pardons and Paroles is now the Arizona Board of Executive Clemency. 1993 Ariz.
Sess. Laws, ch. 255, § 64.

3. Amendments to Rules 32 through 40 became effective December 1, 2005. Order Amending Rules
32-40, 46, 62, 64 & 65, Rules of Supreme Ct., Ariz. Sup.Ct. No. R-04-0032 (June 9, 2005). In this
opinion, we refer to the Rules effective when Hamm filed his application for admission to the practice of
law.

4. The Committee was divided as to the significance of complaints made concerning Hamm's alleged
unauthorized practice of law. This Court's decision does not rely upon those allegations.

5. Hamm's lack of candor on this question also impacts our analysis of whether he met his burden of
showing present good moral character. See Section III, subsections B through E, infra.

6. Hamm also cannot attribute his failure to pay child support to the absence of funds. Even while in
prison, Hamm earned “somewhere around a hundred dollars a month probably,” but used no portion of
those earnings to discharge his obligation.

7. When asked if he had taken steps to formalize his agreement with his son to pay back child support,
Hamm replied, “No. No. I simply acknowledged the debt regardless whether it is a legal debt or not and
whether it's an enforceable debt or not.” In its findings, the Committee noted that Hamm “has since
taken it upon himself to attempt to comply with his child support obligations,” but expressed concern that
he made no admission of a legal obligation to pay. Whether an action to enforce Hamm's obligation to
his son is in fact time-barred is unclear. In Huff v. Huff, the Texas Supreme Court held that a ten-year
statute of limitations under Tex.Rev.Civ. Stat. Ann. art. 5532, since repealed by Acts 1985, 69th Leg., ch.
959, § 9(1), eff. Sept. 1, 1985, applied to violations of child support orders. 648 S.W.2d 286, 287-88
(Tex.1983) (allowing a claim based on a 1973 divorce decree). Because Hamm's son turned eighteen in
1987, the ten-year statute of limitations expired in 1997. In 2002, however, the Texas Supreme Court
held that an administrative writ, created by constitutional amendment in 1997, could be used to enforce a
divorce decree issued in 1974, for which no order was obtained, because the administrative writ is a “new
and improved enforcement mechanism.” In re A.D., 73 S.W.3d 244, 248 (Tex.2002). We need not
resolve this question of Texas law, but share the Committee's concern over Hamm's failure to formally
investigate his legal obligations to his son.

8. Rather than acknowledge any inconsistencies between his testimony and that of his son, Hamm
lashed out at the Committee's refusal to agree with Hamm's argument, which the Committee could accept
only if it accepted Hamm's testimony on this issue as credible. Hamm accused the Committee of “totally
ignor[ing] the content of [Hamm's Petition] to which it supposedly was responding.”

9. Question 25 asks:Have you either as an adult or a juvenile, ever been served with a criminal
summons, questioned, arrested, taken into custody, indicted, charged with, tried for, pleaded guilty to or
been convicted of, or ever been the subject of an investigation concerning the violation of, any felony or
misdemeanor? (In answering this question, include all incidents, no matter how trivial or minor the
infraction or whether guilty or not, whether expunged or not, whether you believe or were advised that you
need not disclose any such instance.)

10. In addition to the matters discussed above, only four years have passed since James Hamm was
absolutely discharged. The fact that Hamm has been free of supervision for this relatively short time
weighs against his admission to the practice of law. Greenberg, 126 Ariz. at 293, 614 P.2d at 835
(noting that “[r]ehabilitation is seldom accomplished in an instantaneous fashion” and holding that
Greenberg had “not convinced [the Court] that he as yet evidences the requisite good moral character”)
(emphasis added);  see also In re Dortch, 860 A.2d 346, 348 (D.C.2004) (finding it “would be erosive of
public confidence in the legal profession and the administration of justice were we to admit an applicant
who is still on parole for crimes as serious as those committed by Dortch”). Because Hamm otherwise
failed to establish good moral character, however, we reached our decision without considering this
factor.

McGREGOR, Chief Justice.

CONCURRING:  MICHAEL D. RYAN, ANDREW D. HURWITZ, W. SCOTT BALES, Justices, and

JEFFERSON L. LANKFORD, Judge.*

_______________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

A.M. No. P-220 December 20, 1978

JULIO ZETA, complainant,

vs.
FELICISIMO MALINAO, respondent.

BARREDO, J.:

Administrative complaint against Felicisimo Malinao court interpreter of the Court of First Instance of
Catbalogan, Samar charging as follows:

l — ILLEGALLY APPEARING IN COURT. — MR. Malinao has been appearing in the municipal court of
this town for parties like attorney when he is not an attorney. Reliable information also says he has been
appearing in the municipal courts of Daram, Zumarraga, Talalora and even Sta. Rita. He is not authorized
to do so we believe. He makes it his means of livelihood as he collects fees from his clients. He competes
with attorneys but does not pay anything. We believe that his doing so should be stopped for a good
government. These facts can be checked with records of those municipal courts.

2 — GRAVE MISCONDUCT IN OFFICE. — Being employed in the Court of First Instance he would
instigate persons, especially in his barrio to grab land rob or coerce. In fact he has cases in the municipal
court in this town involving himself and his men. He incite them telling them not to be afraid as he is a
court employee and has influence over the judges. Those persons being ignorant would believe him and
so would commit crimes. This act of Mr. Malinao is contrary to good order and peace as he is using his
supposed influences to urge persons to commit crimes.

3 — CRIME OF FALSIFICATION. — Information has it that he is unfaithfully filing his time record in the
CFI. Even he has been out practicing in the municipal courts sometimes he would fill his time record as
present. He receives salary for those absent days. This can be checked with time record he has
submitted and if he has any application for leave. He may try to cure it by submitting application for leave
but this should not be allowed as he has already committed crime.

4 — VIOLATION OF EXECUTIVE ORDER AND CIVIL SERVICE LAW.-WE have reliable information it is
prohibited for a civil service employee to engage in private practice any profession or business without
permission from the Department Head. Mr. Malinao we are sure has not secured that permission because
he should not be allowed to practice as he is not an attorney. If that were so, he violated that Executive
Order and Civil Service Law and we are urgently and earnestly requesting the Commissioner of Civil
Service to investigate him on this. If warranted he should be given the corresponding penalty as dismissal
because we believe he deserve it. (Page 2, Record.)
After respondent filed the following 3rd indorsement relative to the above complaint:

Respectfully returned to the Honorable, the Secretary of Justice, Manila, thru the Honorable District
Judge, Court of First Instance, Branch I, Catbalogan, Samar, and thru the Honorable Judicial
Superintendent, Department of Justice, Manila, the undersigned's reply to the preceding endorsements,
to wit: That the alleged letter-complaint of one Julio Zeta is not inclosed in the first indorsement, which
absence has also been noticed and noted on the right hand corner of the said first indorsement by the
Clerk of Court, of this Court; that despite this absence, and without waiving, however, his right to any
pertinent provision of law, but for respect and courtesy to a Superior, he hereby states that he has not
violated any rule or law, much less Sec. 12, Rule XVIII of the Civil Service Rules; that his participation for
defendants' cause was gratuitous as they could not engage the services of counsel by reason of poverty
and the absence of one in the locality, said assistance has also checked the miscarriage of justice by the
Presiding Municipal Judge, now resigned; that he is attaching herewith a carbon-original of a pleading
submitted by Atty. Simeon Quiachon the attorney of record for the defendants in Civil Case No. 24,
entitled 'Jose Kiskisan versus Fidel Pacate, et al. for Forcible Entry, in the Municipal Court of Talalora,
Samar, which is a 'Motion To Withdraw Exhibits', as Annex 'A', as part of this reply. (Page 5, Rec.)

the Department of Justice that had jurisdiction over the matter then, referred the said complaint and
answer to District Judge Segundo Zosa, Court of First Instance, Catbalogan, Western Samar, for
investigation, report and recommendation, and after due hearing, Judge Zosa submitted his report
pertinent parts of which read thus:

Inspite of diligent efforts exerted by the Court to subpoena the complainant, Julio Zeta, who is said to be a
resident of Zumarraga, Samar the same had failed because the said Julio Zeta appears to be a fictitious
person

Inspite of the failure of the complainant to appear in the investigation in connection with his complaint
against Felicisimo Malinao, the Court nevertheless proceeded to investigate the case against him by
calling Judge Restituto Duran of Sta. Rita, Samar, Judge Juanito Reyes of Zumarraga, Samar and Judge
Miguel Avestruz of Daram, Samar.

Judge Restituto Duran of Sta. Rita, Samar, declared that according to his docket books the respondent
appeared as counsel for Vicente Baculanlan in criminal case No. 1247 in the Municipal Court of Sta. Rita,
Samar, for grave threats and in criminal case No. 1249 for the same accused and Romulo Villagracia for
illegal possession of firearm on August 5, 1960 and on September 17, 1970.

Judge Miguel Avestruz of Daram, Samar, declared that the respondent appeared as counsel in civil case
No. 39 in the Municipal Court of Daram, Samar, entitled Felix Versoza versus Victor Payao, et al., for
forcible entry on December 15, 1962, January 26, 1963, February 18, 1963 and on March 1, 1963.

Judge Juanito Reyes declared that on March 27, 1969, the respondent appeared as counsel for the
defendant in civil case No. 318 of the Municipal Court of Zumarraga entitled Restituto Centino versus
Jesus Tizon for forcible entry and again on June 17, 1970 in the same case.

From the certification of the Clerk of this Court, it appears that the respondent had the following entries in
his daily time record:

1. Was on leave from office on August 5, 1960 and September 17, 1960;

2. Was present in office on December l5, 1962;

3. Was present in office on January 26, 1963, and present also on February 18, 1963 but undertime by 1
hour;

4. Was on leave from office on March 1, 1963;

5. Was on leave from office on March 27, 1969; and

6. Was present in office on June 17, 1970 but undertime by 5 hours.

Comparing the dates when the respondent appeared before the aforementioned Municipal Courts with his
daily time records, he made it appear that on December 15, 1962 and February 18, 1963 he was present
in his office although according to the testimony of Judge Miguel Avestruz he was before his Court on
December 15, 1962 as well as on February 18, 1963. Again according to Judge Juanito Reyes the
respondent appeared in his Court on June 17, 1970. The respondent again made it appear in his daily
time record that he was present with an undertime of five hours. The respondent did not offer any
plausible explanation for this irregularity.

xxx xxx xxx

With respect to the crime of falsification of his daily time record as shown by the evidence, he had made it
appear that he was present in his office on December 15, 1962, February 18, 1963 and June 17, 1970
when as a matter of fact he was in the Municipal Court of Daram attending to a case entitled Felix
Versoza versus Victor Payao, et al., for forcible entry as well as in the Municipal Court of Zumarraga
attending to Civil Case No. 318 entitled Restituto Centino versus Jesus Tizon for forcible entry. The
Inquest Judge respectfully recommends that he be given stern warning and severe reprimand for this
irregularity.

With respect to the fourth charge, for violation of Section 12, Rule XVIII, Republic Act 2260, as amended,
again the evidence shows that respondent had been appearing as counsel in the municipal courts of Sta.
Rita, Daram and Zumarraga in violation of the rules of the Civil Service Law. (Pp. 28-31, Record.)

We have carefully reviewed the record, and We find the conclusions of fact of the Investigator to be amply
supported by the evidence, particularly the documents consisting of public records and the declarations of
the judges before whom respondent had appeared. It is clear to Us that respondent, apart from appearing
as counsel in various municipal courts without prior permission of his superiors in violation of civil service
rules and regulations, falsified his time record of service by making it appear therein that he was present
in his office on occasions when in fact he was in the municipal courts appearing as counsel, without being
a member of the bar, which, furthermore, constitutes illegal practice of law. We, therefore, adopt the
above findings of fact of the Investigator.

The defense of respondent that "his participation (sic) for defendants' cause was gratuitous as they could
not engage the services of counsel by reason of poverty and the absence of one in the locality" cannot,
even if true, carry the day for him, considering that in appearing as counsel in court, he did so without
permission from his superiors and, worse, he falsified his time record of service to conceal his absence
from his office on the dates in question. Indeed, the number of times that respondent acted as counsel
under the above circumstances would indicate that he was doing it as a regular practice obviously for
considerations other than pure love of justice.

In the premises, it is quite obvious that the offense committed by respondent is grave, hence it warrants a
more drastic sanction than that of reprimand recommended by Judge Zosa. We find no alternative than to
separate him from the service, with the admonition that he desist from appearing in any court or
investigative body wherein Only members of the bar are allowed to practice.

WHEREFORE, respondent Felicisimo Malinao is hereby ordered dismissed from his position as
interpreter in the Court of First Instance, CFI, Zumarraga, Western Samar with prejudice to reemployment
in the judicial branch of the government.

Castro, C.J., Fernando, Teehankee, Makasiar, Antonio, Aquino, Concepcion, Jr., Santos, Fernandez and
Guerrero, JJ., concur.
_________________

FIRST DIVISION

G.R. No. 89591-96 January 24, 2000

PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. BONIFACIO SANZ MACEDA, Presiding Judge of Branch 12, Regional Trial Court of Antique, and
AVELINO T. JAVELLANA, respondents.

RESOLUTION

PARDO, J.:

On September 8, 1999, we denied the People's motion seeking reconsideration of our August 13, 1990
decision in these cases. In said resolution, we held that respondent Judge Bonifacio Sanz Maceda
committed no grave abuse of discretion in issuing the order of August 8, 1989 giving custody over private
respondent Avelino T. Javellana to the Clerk of Court of the Regional Trial Court, Branch 12, San Jose,
Antique, Atty. Deogracias del Rosario, during the pendency of Criminal Cases Nos. 3350-3355. At that
time, sufficient reason was shown why private respondent Javellana should not be detained at the
Antique Provincial Jail. The trial court's order specifically provided for private respondent's detention at
the residence of Atty. del Rosario. However, private respondent was not to be allowed liberty to roam
around but was to be held as detention prisoner in said residence.

This order of the trial court was not strictly complied with because private respondent was not detained in
the residence of Atty. Del Rosario. He went about his normal activities as if he were a free man, including
engaging in the practice of law. Despite our resolution of July 30, 1990 prohibiting private respondent to
appear as counsel in Criminal Case No. 4262,1 the latter accepted cases and continued practicing law.

On April 7, 1997, Senior State Prosecutor Henrick F. Guingoyon filed with the Supreme Court a motion
seeking clarification on the following questions: "(1) Does the resolution of this Honorable Court dated
July 30, 1990, prohibiting Atty. Javellana from appearing as counsel refer only to Criminal Case No.
4262? (2) Is Atty. now (Judge) Deogracias del Rosario still the custodian of Atty. Javellana? and (3) Since
it appears that Atty. (now Judge) del Rosario never really held and detained Atty. Javellana as prisoner in
his residence, is not Atty. Javellana considered an escapee or a fugitive of justice for which warrant for
his arrest should forthwith be issued?"2

In a resolution dated June 18, 1997, we "noted" the above motion.

After we denied the motion for reconsideration on September 8, 1999, the trial court resumed hearing
Criminal Cases Nos. 3350-3355. Earlier, on August 2, 1999, Rolando Mijares filed with the Regional Trial
Court, Branch 12, San Jose, Antique, a motion seeking the revocation of the trial court's custody order
and the imprisonment of private respondent Javellana in the provincial jail.1âwphi1.nêt

On November 15, 1999, private respondent Javellana filed with the Supreme Court an urgent motion
seeking to clarify whether the June 18, 1997 resolution finally terminated or resolved the motion for
clarification filed by the State Prosecutor on April 7, 1997.

Private respondent Javellana has been arrested based on the filing of criminal cases against him. By
such arrest, he is deemed to be under the custody of the law. The trial court gave Atty. Deogracias del
Rosario the custody of private respondent Javellana with the obligation "to hold and detain" him in Atty.
del Rosario's residence in his official capacity as the clerk of court of the regional trial court. Hence, when
Atty. del Rosario was appointed judge, he ceased to be the personal custodian of accused Javellana and
the succeeding clerk of court must be deemed the custodian under the same undertaking.
In our mind, the perceived threats to private respondent Javelana's life no longer exist. Thus, the trial
court's order dated August 8, 1989 giving custody over him to the clerk of court must be recalled, and he
shall be detained at the Provincial Jail of Antique at San Jose, Antique.

Regarding his continued practice of law, as a detention prisoner private respondent Javellana is not
allowed to practice his profession as a necessary consequence of his status as a detention prisoner. The
trial court's order was clear that private respondent "is not to be allowed liberty to roam around but is to be
held as a detention prisoner." The prohibition to practice law referred not only to Criminal Case No. 4262,
but to all other cases as well, except in cases where private respondent would appear in court to defend
himself.

As a matter of law, when a person indicted for an offense is arrested, he is deemed placed under the
custody of the law.1âwphi1 He is placed in actual restraint of liberty in jail so that he may be bound to
answer for the commission of the offense.3 He must be detained in jail during the pendency of the case
against him, unless he is authorized by the court to be released on bail or on recognizance.4 Let it be
stressed that all prisoners whether under preventive detention or serving final sentence can not practice
their profession nor engage in any business or occupation, or hold office, elective or appointive, while in
detention. This is a necessary consequence of arrest and detention. Consequently, all the accused in
Criminal Cases Nos. 3350-3355 must be confined in the Provincial Jail of Antique.

Considering that the pendency of Criminal Cases Nos. 3350-3355 has dragged on for more than ten (10)
years, the presiding judge of the Regional Trial Court, Branch 12, San Jose, Antique, is ordered to
continue with the trial of said criminal cases with all deliberate dispatch and to avoid further delay.

WHEREFORE, the August 8, 1989 order of the trial court is hereby SET ASIDE. All accused in Criminal
Cases Nos. 3350-3355, including Avelino T. Javellana and Arturo F. Pacificador are ordered detained at
the Provincial Jail of Antique, San Jose, Antique, effective immediately, and shall not be allowed to go out
of the jail for any reason or guise, except, upon prior written permission of the trial court for a lawful
purpose.

Let copies of this resolution be given to the Provincial Director, PNP Antique Provincial Police Office, San
Jose, Antique and to the Provincial Jail Warden, Provincial Jail of Antique, San Jose, Antique.1âwphi1.nêt

SO ORDERED.

Davide, Jr., C.J., Puno and Ynares-Santiago, JJ., concur.

Kapunan, J., took no part.

___________

SECOND DIVISION

Adm. Case No. 4749 January 20, 2000

SOLIMAN M. SANTOS, JR., complainant,

vs.
ATTY. FRANCISCO R. LLAMAS, respondent.

MENDOZA, J.:

This is a complaint for misrepresentation and non-payment of bar membership dues filed against
respondent Atty. Francisco R. Llamas.

In a letter-complaint to this Court dated February 8, 1997, complainant Soliman M. Santos, Jr., himself a
member of the bar, alleged that:
On my oath as an attorney, I wish to bring to your attention and appropriate sanction the matter of Atty.
Francisco R. Llamas who, for a number of years now, has not indicated the proper PTR and IBP O.R.
Nos. and data (date & place of issuance) in his pleadings. If at all, he only indicates "IBP Rizal 259060"
but he has been using this for at least three years already, as shown by the following attached sample
pleadings in various courts in 1995, 1996 and 1997: (originals available).

Annex A — "Ex-Parte Manifestation and Submission" dated December 1, 1995 in Civil Case No. Q-95-
25253, RTC, Br. 224, QC.

Annex B — "Urgent Ex-Parte Manifestation Motion" dated November 13, 1996 in Sp. Proc. No. 95-030,
RTC Br. 259 (not 257), Parañaque, MM.

Annex C — "An Urgent and Respectful Plea for extension of Time to File Required Comment and
Opposition" dated January 17, 1997 in CA-G.R. SP (not Civil Case) No. 42286, CA 6th Div.

This matter is being brought in the context of Rule 138, Section 1 which qualifies that only a duly admitted
member of the bar "who is in good and regular standing, is entitled to practice law". There is also Rule
139-A, Section 10 which provides that "default in the payment of annual dues for six months shall warrant
suspension of membership in the Integrated Bar, and default in such payment for one year shall be a
ground for the removal of the name of the delinquent member from the Roll of Attorneys."

Among others, I seek clarification (e.g. a certification) and appropriate action on the bar standing of Atty.
Francisco R. Llamas both with the Bar Confidant and with the IBP, especially its Rizal Chapter of which
Atty. Llamas purports to be a member.

Please note that while Atty. Llamas indicates "IBP Rizal 259060" sometimes, he does not indicate any
PTR for payment of professional tax.

Under the Rules, particularly Rule 138, Sections 27 and 28, suspension of an attorney may be done not
only by the Supreme Court but also by the Court of Appeals or a Regional Trial Court (thus, we are also
copy furnishing some of these courts).

Finally, it is relevant to note the track record of Atty. Francisco R. Llamas, as shown by:

1. his dismissal as Pasay City Judge per Supreme Court Admin. Matter No. 1037-CJ En Banc Decision
on October 28, 1981 (in SCRA).

2. his conviction for estafa per Decision dated June 30, 1994 in Crim. Case No. 11787, RTC Br. 66,
Makati, MM (see attached copy of the Order dated February 14, 1995 denying the motion for
reconsideration of the conviction which is purportedly on appeal in the Court of Appeals).

Attached to the letter-complaint were the pleadings dated December 1, 1995, November 13, 1996, and
January 17, 1997 referred to by complainant, bearing, at the end thereof, what appears to be
respondent's signature above his name, address and the receipt number "IBP Rizal 259060."1 Also
attached was a copy of the order,2 dated February 14, 1995, issued by Judge Eriberto U. Rosario, Jr. of
the Regional Trial Court, Branch 66, Makati, denying respondent's motion for reconsideration of his
conviction, in Criminal Case No. 11787, for violation of Art. 316, par. 2 of the Revised Penal Code.

On April 18, 1997, complainant filed a certification3 dated March 18, 1997, by the then president of the
Integrated Bar of the Philippines, Atty. Ida R. Macalinao-Javier, that respondent's "last payment of his IBP
dues was in 1991. Since then he has not paid or remitted any amount to cover his membership fees up to
the present."

On July 7, 1997, respondent was required to comment on the complaint within ten days from receipt of
notice, after which the case was referred to the IBP for investigation, report and recommendation. In his
comment-memorandum4 dated June 3, 1998, respondent alleged:5
3. That with respect to the complainant's absurd claim that for using in 1995, 1996 and 1997 the same
O.R. No. 259060 of the Rizal IBP, respondent is automatically no longer a member in good standing.

Precisely, as cited under the context of Rule 138, only an admitted member of the bar who is in good
standing is entitled to practice law.

The complainant's basis in claiming that the undersigned was no longer in good standing, were as above
cited, the October 28, 1981 Supreme Court decision of dismissal and the February 14, 1995 conviction
for Violation of Article 316 RPC, concealment of encumbrances.

As above pointed out also, the Supreme Court dismissal decision was set aside and reversed and
respondent was even promoted from City Judge of Pasay City to Regional Trial Court Judge of Makati,
Br. 150.

Also as pointed out, the February 14, 1995 decision in Crim. Case No. 11787 was appealed to the Court
of Appeals and is still pending.

Complainant need not even file this complaint if indeed the decision of dismissal as a Judge was never
set aside and reversed, and also had the decision of conviction for a light felony, been affirmed by the
Court of Appeals. Undersigned himself would surrender his right or privilege to practice law.

4. That complainant capitalizes on the fact that respondent had been delinquent in his dues.

Undersigned since 1992 have publicly made it clear per his Income Tax Return, up to the present, that he
had only a limited practice of law. In fact, in his Income Tax Return, his principal occupation is a farmer of
which he is. His 30 hectares orchard and pineapple farm is located at Calauan, Laguna.

Moreover, and more than anything else, respondent being a Senior Citizen since 1992, is legally exempt
under Section 4 of Rep. Act 7432 which took effect in 1992, in the payment of taxes, income taxes as an
example. Being thus exempt, he honestly believe in view of his detachment from a total practice of law,
but only in a limited practice, the subsequent payment by him of dues with the Integrated Bar is covered
by such exemption. In fact, he never exercised his rights as an IBP member to vote and be voted upon.

Nonetheless, if despite such honest belief of being covered by the exemption and if only to show that he
never in any manner wilfully and deliberately failed and refused compliance with such dues, he is willing
at any time to fulfill and pay all past dues even with interests, charges and surcharges and penalties. He
is ready to tender such fulfillment or payment, not for allegedly saving his skin as again irrelevantly and
frustratingly insinuated for vindictive purposes by the complainant, but as an honest act of accepting
reality if indeed it is reality for him to pay such dues despite his candor and honest belief in all food faith,
to the contrary.

On December 4, 1998, the IBP Board of Governors passed a resolution6 adopting and approving the
report and recommendation of the Investigating Commissioner which found respondent guilty, and
recommended his suspension from the practice of law for three months and until he pays his IBP dues.
Respondent moved for a reconsideration of the decision, but this was denied by the IBP in a resolution,7
dated April 22, 1999. Hence, pursuant to Rule 139-B, §12(b) of the Rules of Court, this case is here for
final action on the decision of the IBP ordering respondent's suspension for three months.

The findings of IBP Commissioner Alfredo Sanz are as follows:

On the first issue, Complainant has shown "respondent's non-indication of the proper IBP O.R. and PTR
numbers in his pleadings (Annexes "A", "B" and "C" of the letter complaint, more particularly his use of
"IBP Rizal 259060 for at least three years."
The records also show a "Certification dated March 24, 1997 from IBP Rizal Chapter President Ida R.
Makahinud Javier that respondent's last payment of his IBP dues was in 1991."

While these allegations are neither denied nor categorically admitted by respondent, he has invoked and
cited that "being a Senior Citizen since 1992, he is legally exempt under Section 4 of Republic Act No.
7432 which took effect in 1992 in the payment of taxes, income taxes as an example.

xxx xxx xxx

The above cited provision of law is not applicable in the present case. In fact, respondent admitted that he
is still in the practice of law when he alleged that the "undersigned since 1992 have publicly made it clear
per his Income tax Return up to the present time that he had only a limited practice of law." (par. 4 of
Respondent's Memorandum).

Therefore respondent is not exempt from paying his yearly dues to the Integrated Bar of the Philippines.

On the second issue, complainant claims that respondent has misled the court about his standing in the
IBP by using the same IBP O.R. number in his pleadings of at least six years and therefore liable for his
actions. Respondent in his memorandum did not discuss this issue.

First. Indeed, respondent admits that since 1992, he has engaged in law practice without having paid his
IBP dues. He likewise admits that, as appearing in the pleadings submitted by complainant to this Court,
he indicated "IBP-Rizal 259060" in the pleadings he filed in court, at least for the years 1995, 1996, and
1997, thus misrepresenting that such was his IBP chapter membership and receipt number for the years
in which those pleadings were filed. He claims, however, that he is only engaged in a "limited" practice
and that he believes in good faith that he is exempt from the payment of taxes, such as income tax, under
R.A. No. 7432, §4 as a senior citizen since 1992.

Rule 139-A provides:

Sec. 9. Membership dues. — Every member of the Integrated Bar shall pay such annual dues as the
Board of Governors shall determine with the approval of the Supreme Court. A fixed sum equivalent to
ten percent (10%) of the collections from each Chapter shall be set aside as a Welfare Fund for disabled
members of the Chapter and the compulsory heirs of deceased members thereof.

Sec. 10. Effect of non-payment of dues. — Subject to the provisions of Section 12 of this Rule, default in
the payment of annual dues for six months shall warrant suspension of membership in the Integrated Bar,
and default in such payment for one year shall be a ground for the removal of the name of the delinquent
member from the Roll of Attorneys.

In accordance with these provisions, respondent can engage in the practice of law only by paying his
dues, and it does not matter that his practice is "limited." While it is true that R.A. No. 7432, §4 grants
senior citizens "exemption from the payment of individual income taxes: provided, that their annual
taxable income does not exceed the poverty level as determined by the National Economic and
Development Authority (NEDA) for that year," the exemption does not include payment of membership or
association dues.

Second. By indicating "IBP-Rizal 259060" in his pleadings and thereby misrepresenting to the public and
the courts that he had paid his IBP dues to the Rizal Chapter, respondent is guilty of violating the Code of
Professional Responsibility which provides:

Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

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.
CANON 10 — A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE COURT.

Rule 10.01 — A lawyer shall not do any falsehood, nor consent to the doing of any court; nor shall he
mislead or allow the court to be misled by any artifice.

Respondent's failure to pay his IBP dues and his misrepresentation in the pleadings he filed in court
indeed merit the most severe penalty. However, in view of respondent's advanced age, his express
willingness to pay his dues and plea for a more temperate application of the law,8 we believe the penalty
of one year suspension from the practice of law or until he has paid his IBP dues, whichever is later, is
appropriate.

WHEREFORE, respondent Atty. Francisco R. Llamas is SUSPENDED from the practice of law for ONE
(1) YEAR, or until he has paid his IBP dues, whichever is later. Let a copy of this decision be attached to
Atty. Llamas' personal record in the Office of the Bar Confidant and copies be furnished to all chapters of
the Integrated Bar of the Philippines and to all courts in the land.1âwphi1.nêt

SO ORDERED.

Bellosillo, Quisumbing, Buena and De Leon, Jr., JJ., concur.

_____________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

B.M. No. 1678 December 17, 2007

PETITION FOR LEAVE TO RESUME PRACTICE OF LAW,

BENJAMIN M. DACANAY, petitioner.

RESOLUTION

CORONA, J.:

This bar matter concerns the petition of petitioner Benjamin M. Dacanay for leave to resume the practice
of law.

Petitioner was admitted to the Philippine bar in March 1960. He practiced law until he migrated to Canada
in December 1998 to seek medical attention for his ailments. He subsequently applied for Canadian
citizenship to avail of Canada’s free medical aid program. His application was approved and he became a
Canadian citizen in May 2004.

On July 14, 2006, pursuant to Republic Act (RA) 9225 (Citizenship Retention and Re-Acquisition Act of
2003), petitioner reacquired his Philippine citizenship.1 On that day, he took his oath of allegiance as a
Filipino citizen before the Philippine Consulate General in Toronto, Canada. Thereafter, he returned to the
Philippines and now intends to resume his law practice. There is a question, however, whether petitioner
Benjamin M. Dacanay lost his membership in the Philippine bar when he gave up his Philippine
citizenship in May 2004. Thus, this petition.

In a report dated October 16, 2007, the Office of the Bar Confidant cites Section 2, Rule 138 (Attorneys
and Admission to Bar) of the Rules of Court:
SECTION 2. Requirements for all applicants for admission to the bar. – Every applicant for admission as
a member of the bar must be a citizen of the Philippines, at least twenty-one years of age, of good moral
character, and a resident of the Philippines; and must produce before the Supreme Court satisfactory
evidence of good moral character, and that no charges against him, involving moral turpitude, have been
filed or are pending in any court in the Philippines.

Applying the provision, the Office of the Bar Confidant opines that, by virtue of his reacquisition of
Philippine citizenship, in 2006, petitioner has again met all the qualifications and has none of the
disqualifications for membership in the bar. It recommends that he be allowed to resume the practice of
law in the Philippines, conditioned on his retaking the lawyer’s oath to remind him of his duties and
responsibilities as a member of the Philippine bar.

We approve the recommendation of the Office of the Bar Confidant with certain modifications.

The practice of law is a privilege burdened with conditions.2 It is so delicately affected with public interest
that it is both a power and a duty of the State (through this Court) to control and regulate it in order to
protect and promote the public welfare.3

Adherence to rigid standards of mental fitness, maintenance of the highest degree of morality, faithful
observance of the rules of the legal profession, compliance with the mandatory continuing legal education
requirement and payment of membership fees to the Integrated Bar of the Philippines (IBP) are the
conditions required for membership in good standing in the bar and for enjoying the privilege to practice
law. Any breach by a lawyer of any of these conditions makes him unworthy of the trust and confidence
which the courts and clients repose in him for the continued exercise of his professional privilege.4

Section 1, Rule 138 of the Rules of Court provides:

SECTION 1. Who may practice law. – Any person heretofore duly admitted as a member of the bar, or
thereafter admitted as such in accordance with the provisions of this Rule, and who is in good and regular
standing, is entitled to practice law.

Pursuant thereto, any person admitted as a member of the Philippine bar in accordance with the statutory
requirements and who is in good and regular standing is entitled to practice law.

Admission to the bar requires certain qualifications. The Rules of Court mandates that an applicant for
admission to the bar be a citizen of the Philippines, at least twenty-one years of age, of good moral
character and a resident of the Philippines.5 He must also produce before this Court satisfactory
evidence of good moral character and that no charges against him, involving moral turpitude, have been
filed or are pending in any court in the Philippines.6

Moreover, admission to the bar involves various phases such as furnishing satisfactory proof of
educational, moral and other qualifications;7 passing the bar examinations;8 taking the lawyer’s oath9
and signing the roll of attorneys and receiving from the clerk of court of this Court a certificate of the
license to practice.10

The second requisite for the practice of law ― membership in good standing ― is a continuing
requirement. This means continued membership and, concomitantly, payment of annual membership
dues in the IBP;11 payment of the annual professional tax;12 compliance with the mandatory continuing
legal education requirement;13 faithful observance of the rules and ethics of the legal profession and
being continually subject to judicial disciplinary control.14

Given the foregoing, may a lawyer who has lost his Filipino citizenship still practice law in the Philippines?
No.

The Constitution provides that the practice of all professions in the Philippines shall be limited to Filipino
citizens save in cases prescribed by law.15 Since Filipino citizenship is a requirement for admission to the
bar, loss thereof terminates membership in the Philippine bar and, consequently, the privilege to engage
in the practice of law. In other words, the loss of Filipino citizenship ipso jure terminates the privilege to
practice law in the Philippines. The practice of law is a privilege denied to foreigners.16

The exception is when Filipino citizenship is lost by reason of naturalization as a citizen of another
country but subsequently reacquired pursuant to RA 9225. This is because "all Philippine citizens who
become citizens of another country shall be deemed not to have lost their Philippine citizenship under the
conditions of [RA 9225]."17 Therefore, a Filipino lawyer who becomes a citizen of another country is
deemed never to have lost his Philippine citizenship if he reacquires it in accordance with RA 9225.
Although he is also deemed never to have terminated his membership in the Philippine bar, no automatic
right to resume law practice accrues.

Under RA 9225, if a person intends to practice the legal profession in the Philippines and he reacquires
his Filipino citizenship pursuant to its provisions "(he) shall apply with the proper authority for a license or
permit to engage in such practice."18 Stated otherwise, before a lawyer who reacquires Filipino
citizenship pursuant to RA 9225 can resume his law practice, he must first secure from this Court the
authority to do so, conditioned on:

(a) the updating and payment in full of the annual membership dues in the IBP;

(b) the payment of professional tax;

(c) the completion of at least 36 credit hours of mandatory continuing legal education; this is specially
significant to refresh the applicant/petitioner’s knowledge of Philippine laws and update him of legal
developments and

(d) the retaking of the lawyer’s oath which will not only remind him of his duties and responsibilities as a
lawyer and as an officer of the Court, but also renew his pledge to maintain allegiance to the Republic of
the Philippines.

Compliance with these conditions will restore his good standing as a member of the Philippine bar.

WHEREFORE, the petition of Attorney Benjamin M. Dacanay is hereby GRANTED, subject to compliance
with the conditions stated above and submission of proof of such compliance to the Bar Confidant, after
which he may retake his oath as a member of the Philippine bar.

SO ORDERED.

Puno, C.J., Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Azcuna,

Tinga, Chico-Nazario, Velasco, Jr., Nachura, Reyes, Leonardo-de Castro, JJ., concur.
Quisumbing, J., on leave.

_____________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

B.M. No. 2112 July 24, 2012

IN RE: PETITION RE-ACQUIRE THE PRIVILEGE TO PRACTICE LAW IN THE PHILIPPINES,

EPIFANIO B. MUNESES, Petitioner,

RESOLUTION
REYES, J.:

On June 8, 2009, a petition was filed by Epifanio B. Muneses (petitioner) with the Office of the Bar
Confidant (OBC) praying that he be granted the privilege to practice law in the Philippines.

The petitioner alleged that he became a member of the Integrated Bar of the Philippines (IBP) on March
21, 1966; that he lost his privilege to practice law when he became a citizen of the United States of
America (USA) on August 28, 1981; that on September 15, 2006, he re-acquired his Philippine citizenship
pursuant to Republic Act (R.A.) No. 9225 or the "Citizenship Retention and Re-Acquisition Act of 2003" by
taking his oath of allegiance as a Filipino citizen before the Philippine Consulate General in Washington,
D.C., USA; that he intends to retire in the Philippines and if granted, to resume the practice of law.
Attached to the petition were several documents in support of his petition, albeit mere photocopies
thereof, to wit:

1. Oath of Allegiance dated September 15, 2006 before Consul General Domingo P. Nolasco;

2. Petition for Re-Acquisition of Philippine Citizenship of same date;

3. Order for Re-Acquisition of Philippine Citizenship also of same date;

4. Letter dated March 13, 2008 evidencing payment of membership dues with the IBP;

5. Attendance Forms from the Mandatory Continuing Legal Education (MCLE).

In Bar Matter No. 1678, dated December 17, 2007, the Court was confronted with a similar petition filed
by Benjamin M. Dacanay (Dacanay) who requested leave to resume his practice of law after availing the
benefits of R.A. No. 9225. Dacanay was admitted to the Philippine Bar in March 1960. In December 1998,
he migrated to Canada to seek medical attention for his ailments and eventually became a Canadian
citizen in May 2004. On July 14, 2006, Dacanay re-acquired his Philippine citizenship pursuant to R.A.
No. 9225 after taking his oath of allegiance before the Philippine Consulate General in Toronto, Canada.
He returned to the Philippines and intended to resume his practice of law.

The Court reiterates that Filipino citizenship is a requirement for admission to the bar and is, in fact, a
continuing requirement for the practice of law. The loss thereof means termination of the petitioner’s
membership in the bar; ipso jure the privilege to engage in the practice of law. Under R.A. No. 9225,
natural-born citizens who have lost their Philippine citizenship by reason of their naturalization as citizens
of a foreign country are deemed to have re-acquired their Philippine citizenship upon taking the oath of
allegiance to the Republic.1 Thus, a Filipino lawyer who becomes a citizen of another country and later
re-acquires his Philippine citizenship under R.A. No. 9225, remains to be a member of the Philippine Bar.
However, as stated in Dacanay, the right to resume the practice of law is not automatic.2 R.A. No. 9225
provides that a person who intends to practice his profession in the Philippines must apply with the proper
authority for a license or permit to engage in such practice.3

It can not be overstressed that:

The practice of law is a privilege burdened with conditions.1âwphi1 It is so delicately affected with public
interest that it is both the power and duty of the State (through this Court) to control and regulate it in
order to protect and promote the public welfare.

Adherence to rigid standards of mental fitness, maintenance of the highest degree of morality, faithful
observance of the legal profession, compliance with the mandatory continuing legal education
requirement and payment of membership fees to the Integrated Bar of the Philippines (IBP) are the
conditions required for membership in good standing in the bar and for enjoying the privilege to practice
law. Any breach by a lawyer of any of these conditions makes him unworthy of the trust and confidence
which the courts and clients repose in him for the continued exercise of his professional privilege.4
Thus, in pursuance to the qualifications laid down by the Court for the practice of law, the OBC required
the herein petitioner to submit the original or certified true copies of the following documents in relation to
his petition:

1. Petition for Re-Acquisition of Philippine Citizenship;

2. Order (for Re-Acquisition of Philippine citizenship);

3. Oath of Allegiance to the Republic of the Philippines;

4. Identification Certificate (IC) issued by the Bureau of Immigration;

5. Certificate of Good Standing issued by the IBP;

6. Certification from the IBP indicating updated payments of annual membership dues;

7. Proof of payment of professional tax; and

8. Certificate of compliance issued by the MCLE Office.

In compliance thereof, the petitioner submitted the following:

1. Petition for Re-Acquisition of Philippine Citizenship;

2. Order (for Re-Acquisition of Philippine citizenship);

3. Oath of Allegiance to the Republic of the Philippines;

4. Certificate of Re-Acquisition/Retention of Philippine Citizenship issued by the Bureau of Immigration, in

lieu of the IC;

5. Certification dated May 19, 2010 of the IBP-Surigao City Chapter attesting to his good moral character
as well as his updated payment of annual membership dues;

6. Professional Tax Receipt (PTR) for the year 2010;

7. Certificate of Compliance with the MCLE for the 2nd compliance period; and

8. Certification dated December 5, 2008 of Atty. Gloria Estenzo-Ramos, Coordinator, UC-MCLE Program,
University of Cebu, College of Law attesting to his compliance with the MCLE.

The OBC further required the petitioner to update his compliance, particularly with the MCLE. After all the
requirements were satisfactorily complied with and finding that the petitioner has met all the qualifications
and none of the disqualifications for membership in the bar, the OBC recommended that the petitioner be
allowed to resume his practice of law.

Upon this favorable recommendation of the OBC, the Court adopts the same and sees no bar to the
petitioner's resumption to the practice of law in the Philippines.

WHEREFORE, the petition of Attorney Epifanio B. Muneses is hereby GRANTED, subject to the condition
that he shall re-take the Lawyer's Oath on a date to be set by the Court and subject to the payment of
appropriate fees.

Furthermore, the Office of the Bar Confidant is directed to draft the necessary guidelines for the re-
acquisition of the privilege to resume the practice of law for the guidance of the Bench and Bar.
SO ORDERED.

BIENVENIDO L. REYES
Associate Justice

_______________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. Nos. L-10236-48 January 31, 1958

THE PFOPLE OF THE PHILIPPINES plaintiff-appellant,

vs.
EUSTACIO DE LUNA, ET AL., defendants-appellees.

Office of the Solicitor General Ambrosio Padilla and Solicitor Felicisimo R. Rosete for appellant.
Luis F. Gabinete for appellee Eustacio de Luna.
Pedro B. Ayuda for appellee Estella R. Gordo.
Alejandro P. Capitulo for appellees Angelo T. Lopez and Alawadin I. Bandon.
Fransisco de la Fuente for appellee Oreste Arellano y Rodriguez.
Bienvenido Peralta for appellee Abraham C. Calaguas.
Santos L. Parina, Generosa H. Hubilla, Maria Velez y Estrellas, Jaime P. Marco, Roque J. Briones,
Balbino P. Fajardo and Emilio P. Jardinico, Jr. in their own behalf.

CONCEPCION, J.:

This is an appeal, taken by the prosecution, from an order, of the Court of First Instance of Manila,
granting a motion to dismiss filed by the defendant in each one of the above entitled cases, for lack of
jurisdiction and, also, upon the ground that the facts alleged in the amended informations, filed in said
cases, do not constitute the crime of contempt of court with which said defendants (Eustacio de Luna,
Jaime P. Marco, Santos L. Parina, Estela R. Gordo, Angelo T. Lopez, Generosa H. Hubilla Oreste
Arellano y Rodriguez, Abraham C. Calaguas, Roque J. Briones, Alawadin T. Bandon, Balbino P. Fajardo,
Maria Velez y Estrellas and Emilio P. Jardinico, Jr., are charged. It is alleged in said amended
informations that, on or about the 22nd day of December, 1954, in the City of Manila, Philippines, the
person accused in each one Of these cases.

. . . well knowing that he has not passed the bar examination and was not in any way authorized to take
his oath as a lawyer and after haing been duly informed and notified that certain portions of Republic Act
No. 972, known as the Bar Flunkers Act of 1953, are unconstitutional and therefore void and without force
and effect, and that all the petitions of the candidates including the accused who failed in the
examinations of 1946 to 1952, inclusive, for admission to the bar were refused and denied by the
Resolution of the Honorable, the Supreme Court, promulgated on March 18, 1954, did then and there
wilfully, unlawfully and contemptously disobey and resist in an insolent and defiant manner the said
Resolution of the Supreme Court directed to him and each and everyone of the petitioners, and perform
acts constituting improper conduct and manifestations that tend directly or indirectly to impede, obstruct
or degrade the administration of justice in all courts of the Philippines and impair the respect to and attack
the authority and dignity of the Honorable, the Supreme Court and all other inferior courts by then and
there, without being lawfully authorized to do so, taking an oath as a lawyer before a notary public and
making manifestations to that effect before the Honorable, the Supreme Court.
After quoting from Rule 64, section 4, of the Rules of Court, the pertinent part of which reads:

Where the contempt . . . has been committed against a superior court or judge, or against an officer
appointed by it, the charge may be filed with such superior court . . . (Emphasis our.).

and from the Corpus Juris Secundum, the rule to the effect that .

It is a well-established rule that the power to judge the contempt rest exclusively with the court contemned
and that no court is authorized to punish a contempt against another. Accordingly, disobedience of the
order of a state court is not punishable as for contempt by a court of another state or by a federal court.

the lower court concluded that the contemptuous act allegedly committed by appellees herein "was
committed not against" said court "but against the Supreme Court of the Philippines" and that,
accordingly, the Court of First Instance of Manila "has no jurisdiction to try and punish" the appellees
herein.

This conclusion is untenable. The above-quoted provisions of the Rules of court is permissive in nature. It
is merely declaratory of the inherent power of courts to punish those guilty of contempt against the same.
It does not declare that jurisdiction of the court concerned to so punish the guilty party is exclusive.
Indeed, in promulgating said Rules of Court, this Court could not have validly denied to other Courts, to
which the jurisdiction may have been vested by statute, the right to exercise said authority, for the rule-
making power of the Supreme Court, under Article VIII, section 13, of the Constitution, is limited to the
promulgation of "rules concerning pleadings, practice and procedure in all courts, and the admission to
the practice of law," and does not extend to the determination of the jurisdiction of the courts of justice in
the Philippines. In fact, section 2 of said Article VIII of the Constitution explicitly ordains that "Congress
shall have the power to define, prescribe and apportion the jurisdiction of the various courts," thereby
implying, necessarily, that such power is withheld from the Supreme Court. Needless to say, the aforesaid
view, quoted from Corpus Juris Secundum, is good law only "unless otherwise provided by stattute" (17
C.J.S., 81), and such statute, providing "otherwise", exists in the Philippines.

Moreover, the amended informantions specifically allege that the defendants herein did "perform acts
constituting improper conduct and manifestations that the tend directly or indirectly to impede, obstruct or
degrade the administration of justice in all courts of the Philippines and impair the respect to and attack
the authority and dignity of the Honorable, the Supreme Court and all other inferior courts." To put it
differently the acts charged werecommitted, according to said amended informations, in contempt of the
Supreme Court, as well as of "all other courts of the Philippines," including the Court of First Instance of
Manila. Thus, the very authorities cited in the order appealed from do not justify the same.

Again , section 236 of Act No. 190 and section 6 of Rule 64 of the Rules of Court provide that a person
guilty of any of the acts of contempt defined, respectively, in section 232 of said Act and section 3 of said
Rule 64, "may be fined not exceeding one thousand pesos, or imprisoned not more than six months."
Pursuant to section 44 of the Revised Judiciary Act of 1948 (Republic Act No. 296), courts of first
instance have original jurisdiction over criminal cases "in which the penalty provided by law is
imprisonment for more than six months, or a fine of more than two thousand pesos." Inasmuch as a fine
not exceeding P1,000 may be imposed in the cases of contempt under consideration, it follows that the
same are within the original jurisdiction of the Court of First Instance of Manila, although such jurisdiction
is concurrent with that of the Supreme Court, in view of the inherent power of the latter to punish those
guilty of contempt against the same.

It may not be amiss to add that, in the event of such concurrent jurisdiction over cases of contempt of
court, it would be a good practice to acknowledge the preferencial right of the court against which the act
of contempt was committed to try and punish the guilty party. However, insofar as appellees herein are
concerned, on February 3, 1955, this Court passed and promulgated a resolution of the following tenor:

The Court received from Pedro B. Ayuda a communication of the following tenor:
REPUBLIC OF THE PHILIPPINES
SUPREME COURT
MANILA

IN-RE ATTORNEYS WHO TOOK THE OATH BEFORE A NOTARY PUBLIC UNDER THE PROVISIONS
OF REPUBLIC ACT NO. 972.

Oreste Arellano y Rodriguez.

Pedro B. Ayuda.
Alawadin I. Bandon.
Roque J. Briones.
Abraham C. Calaguas.
Balbino P. Fajardo.
Claro C. Gofredo.
Estela R. Gordo.
Generoso H. Hubilla.
Emilio P. Jardinico, Jr.
Angelo T. Lopez.
Eustacio de Luna.
Jaime P. Marco.
Santos L. Parina.
Florencio P. Sugarol, and
Maria Velez y Estrellas.
Attorneys.

xxx xxx xxx.

MANIFESTATION

COMES NOW the undersigned for and in representation of the above-named attorneys and to this
Honorable Court, hereby respectfully makes manifestation that they have taken the oath of office as
Attorneys-at-Law on December 22, 1954 before Mr. Anatolio A. Alcova, a Notary Public in and for the City
of Manila, with office at R-201 Regina Building, Escolta, Manila, in pursuance of the provisions of
Republic Act No. 972;

There are attached to this manifestation seventeen (17) copies of the oath of office as Annexes 'A', 'B',
'C', 'D', 'E', 'F', 'G', 'H', 'I', 'K', 'L', 'M', 'N', 'O', 'P', and 'Q'.

Messrs, Alejandro P. Capitulo, Claro C. Godofredo, and Florencio P. Sugarol of the group took the bar
examination in August, 1954. They also had taken their oath before this Honorable Tribunal, January 20,
1955.

This manifestation is made for all legal effects as they will practice law in all the Courts of the Philippines.

Manila, Philippines, January 28, 1955.

(Sgd.) PEDRO B. AYUDA

In his own behalf and on behalf of the others in his capacity as president of the 1946-1952 BAR
EXAMINEES ASSOCIATION, 2034 Azcarraga, Manila.

It appearing that the persons mentioned, except Capitulo, Gefredo, and Sugarol, have not passed the
examinations, it was resolved:

A. To refer the matter to the Fiscal, City of Manila for investigation and appropriate action in connection
with Section 3 (e), Rule 64;
B. As Pedro Ayuda has assumed to be an attorney without authority, he is given 10 days from notice
thereof, within which to explain why he should not be dealt with for contempt of the Court;

C. The notary public Anatolio A. Alcoba, member of the Bar, who has illegally administered the oath to the
said persons in disregard of this Court's resolution denying them admission to the Bar (except Capitulo,
Gofredo and Sugarol), is hereby given ten days to show cause why he should not be disbarred or
suspended from the pratice of law;

D. The clerk of Court is directed to furnish copy of this resolution to the Court of Appeals and to all courts
of first instance, the Court of Industrial Relations, the Public Service Commission, and the Department of
Justice;

E. As to Capitulo, Gofredo and Sugarol, proper action will be taken later in their respective cases. (pp. 36-
37, rec., G.R. No. L-10245.)

It is clear, from the foregoing resolution, that this Court did not intend to exercise its concurrent jurisdiction
over the acts of alleged contempt committed by appellees herein and that we preferred that the
corresponding action be taken by the City Fiscal of Manila in the Court of First Instance of Manila. In fine,
the latter had no jurisdiction over the cases at the bar.

The next question for determination is whetehr the acts charged in the amended informations constitute
contempt of court. After quoting the allegation of said amended informations to the effect that the
defendant in each one of the instant cases.

. . . did then and there wilfully, unlawfully and contemptuously disobey and resist in an insolent snd
defiant manner the said Resolution of the Supreme Court directed to him, and each and everyone of the
petitioners and perform acts constituting improper conduct and manifestations that tend directly and
indirectly to impede, obstruct or degrade the administration of justice. . .

the lower court had the following to say:

From this allegation, there is no hint whatsoever that any command, order or notification from the judicial
court or any non-judicial person, committee or body clothed by law with power to punish for contempt has
been disobeyed or violated by the herein accused. Moreover, there is nothing shown in the resolution of
the Honorable Supreme Court of March 18, 1954 dircting the accused not to take their oath as lawyers.
The mere fact of taking an oath by any person as a lawyer does not make him automatically a lawyer
without having completed the requirements prescribed by the Supreme Court for the admission to the
practice by law. It is necessary before his admission to the Bar that he passes the required bar
examinations and is admitted by the Supreme Court to practice as attorney. Our statutes punishas
criminal contempt one 'assuming to be an attorney or an officer of a court and acting as such without
authority.' (par. F. Rule 64, Rules of Court.) The mere taking of oath of lawyers by herein accused, in the
humble opinion of this Court, is not tantamount to practice law. However, if this had taken one step
further, as for example, after taking their oaths, they have held out themselves as lawyers to the public,
received cases for litigants, appeared before any court of justice personally or by filing pleadings
therewith, would be considered that they are really engaged in the practice of law. These accused have
not committed any of these acts as enunciated by our Supreme Tribunal in the case of Bosque and Ney,
8 Phil., 146, nor have they disobeyed or defied any command, order or notification of this Court or of the
Honorable Supreme Court. What they have done only was the taking of their oath as lawyers before a
notary public who was not authorized by law to take their oath as lawyers, as the latter can only swear as
such before the Supreme Court or any member thereof.

Pursuant to the above stated reasons, this Court is of the opinion and so holds that no criminal contempt
has been committed by the herein accused before this Court and neither before the highest Tribunal of
this land.
The aforementioned quotation from the amended informations is, however, incomplete. It did not include
the allegation to the effect that the defendant in each one of the cases ar bar took his "oath as a lawyer
before a notary public" and filed the manifestation transcribed in the resolutionabove quoted,

well knowing that he has not passed the bar examination and was not in any way authorized to take his
oath as a lawyer and after having been duly informed and notified that certain portions of Republic Act
No. 972, known as the Bar Flunkers Act of 1953, are unconstitutional and therefore void and without force
and effect, and that all the petition of the candidates including the accused who failed in the examinations
of 1946 to 1952, inclusive for admission to the bar were refused and denied by the resolution of the
Honorable Supreme Court, on March 18, 1954, . . .

In other words, appellees knew that they did not pass the bar examination. Although they, likewise,
sought admission to the Bar under the provisions of Republic Act No. 972, known as the Bar Flunkers Act
of 1953, they were subsequently notified of the resolution of this Court denying said petition. Inasmuch as
the oath as lawyer is a prerequisite to the practice of law and may be taken only, before the Supreme
Court, by those authorized by the latter to engage in such practice, the resolution denying the
aforementioned petition of appellees herein, implied, necessarily, a denial of the right to said oath, as well
as a prohibition of or injunction against the taking thereof. When, this notwithstanding, appellees took the
oath before a notary public, and formally advised this Court, not only of such fact, but also, that "they will
practice in all the courtr of the Philippines," they, accordingly, disobeyed the order implied, in said
resolution, thus violating section 232 of Act No. 190, which declares in part:

A person guilty of any of the following acts may be punished as for contempt:

1. Disobedience of or resistance to a lawful writ, process, order, judgment, or command of a court, or

injunction granted by a court or judge.

and section 3, subdivision (b), Rule 64, of the Rules of Court, which is identical.

This case is, in principle, analogous to that of U.S. vs. Ney and Bosque (8 Phil., 146), which involved two
lawyers, an American, C.W. Ney, and a Spaniard, Juan Garcia Bosque, who sent out a circular, signed
"Ney and Bosque", stating that they had established an office for the general practice of law in all courts
of the Islands and that Bosque would devote himself especially to consultation and office work relating to
Spanish Law. Accused of contempt of court, both were convicted as charged, although upon different
grounds. As regards the Spaniard, it was held that a former order of this Court denying his admission to
the practice of in the Philippines, on account of alienage, "was directly binding upon him;" that the
aforementioned circular "amounted to an assertation of his right and purpose" to engage in such practice
of law; and that "consequently the conduct of the defendant Bosque amounts to disobedience of an order
made in a proceeding to which he was a party." As regards Ney, he was found guilty of "misbehaviour"
committed by "an officer of the court."

Likewise, by their aforementioned acts, as set forth in the amended informations, appellees herein
expressed clearly their intent to, and did, in fact, challenged and defy the authority of this Court to pass
upon and settle, in a final and conclusive manner, the issue whether or not they should be admitted to the
bar, as well as, embarrass, hinder and obstruct the administration of justice and impair the respect due to
the courts of justice in general, and the Supreme Court, in particular. Thus, they performed acts
constituting an "improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the
administration of justice," in violation of section 3, subdivision (b) of said Rule 64.

. . . Acts which bring the court into disrepute or disrespect or which offend its dignity, affront its majesty, or
challenge its authority constitute contempt of court. . . . (12 Am. Jur. 395.).

The lower court is, seemingly, under the impression that appellees could not be guilty of contempt of
court unless they actually engaged in the practice of law or "held out to the public" as lawyers "by means
of circulars." Such view is inaccurate, for assuming to be an attorney . . . and acting as such without
authority," is, only one of the means by which contempt of court may be committed, under said Rule 64,
section 3, of the Rules of Court. At any rate, by taking "'the oath of office as attorney-at-law" and notifying
the Supreme Court that they had done so and would "practice law in all courts of the Philippines", the
appellees had for all intents and purposes, "held out to the public" as such attorneys-at-law (U.S. vs. Ney
and Mosque, supra).

Wherefore, the order appealed from is hereby reversed, and let the records of these cases be remanded
to the court of origin for further proceedings not inconsistent with this decision. It is so ordered.

Bengzon, Paras, C.J., Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador, Reyes, J.B.L.,
Endencia, and Felix, JJ., concur.

______________

Republic of the Philippines

SUPREME COURT

FIRST DIVISION

G.R. No. 167886 October 25, 2005

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
PAMINTUAN DEVELOPMENT CO., represented by MARIANO PAMINTUAN, JR., Respondent.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the April 15, 2005 Decision1 of the Court of Appeals in CA-
G.R. SP No. 85843, which dismissed Land Bank of the Philippines’ (LANDBANK’s) petition and sustained
the August 2, 2004 Order2 of the Department of Agrarian Reform Adjudication Board (DARAB) which
denied due course to the notice of appeal and notice of entry of appearance filed by LANDBANK’s
counsels.

The antecedent facts show that in DARAB Case No. 1204-0545-2003 for "Preliminary Determination of
Just Compensation," DARAB rendered a Decision3 dated April 27, 2004, fixing the just compensation of
respondent Pamintuan Development Company’s 274.9037 hectare lot covered by Transfer Certificate of
Title No. T-4972 and located at San Vicente, Makilala, Cotabato, at P58,237,301.68. The dispositive
portion thereof, reads:

WHEREFORE, foregoing considered, the just compensation of TCT No. T-4972 registered in the name of
Pamintuan Development Company (PAMDEVCO) containing an area of 274.9037 hectares located at
San Vicente, Makilala, Cotabato is preliminary determined at FIFTY EIGHT MILLION TWO HUNDRED
THIRTY SEVEN THOUSAND THREE HUNDRED ONE AND 68/100 (P58,237,301.68) PESOS.

SO ORDERED.4

Petitioner moved for reconsideration but was denied. The order denying the motion for reconsideration
was received by petitioner on June 11, 2004. At the proceedings before the trial court, petitioner was
represented by Piczon, Beramo & Associates.

On June 4, 2004, Attys. Engilberto F. Montarde and Felix F. Mesa, filed a Notice of Entry of Appearance5
in behalf of petitioner. Within the period to appeal, or on June 15, 2004, said counsels also filed a Notice
of Appeal6 via registered mail. The Certification7 attached to the Notice of Appeal was signed by Loreto
B. Corotan, Head of petitioner’s Agrarian Operations Center.
Respondent filed an Opposition contending that the notice of appeal and notice of entry of appearance
should be denied due course because Attys. Montarde and Mesa failed to show that their appearance
was authorized by petitioner. Said new counsels, on the other hand, asserted that they were duly
authorized, attaching to their Comment the Special Power of Attorney (SPA) executed by Gilda E. Pico,
Executive Vice President of petitioner, authorizing Loreto B. Corotan to represent,8 and designating9
Attys. Montarde and Mesa as counsels for LANDBANK.

On August 2, 2004, DARAB issued an order holding that Attys. Montarde and Mesa are without authority
to represent petitioner because the latter failed to effect a valid substitution of their former counsel of
record. It added that the April 27, 2004 decision had become final and executory because the notice of
appeal filed by its purported new counsels is a mere scrap of paper which did not toll the running of the
reglementary period to appeal. Thus –

WHEREFORE, foregoing considered, the instant Notice of Entry of Appearance and the Notice of Appeal
are hereby not given DUE COURSE for LACK OF LEGAL BASIS. The decision dated April 27, 2004 has
become FINAL and EXECUTORY.

SO ORDERED.10

Petitioner filed a motion for reconsideration appending two memoranda11 signed by Atty. Danilo B.
Beramo, petitioner’s Department Manager and Head, Comprehensive Agrarian Reform Program (CARP)
Legal Services Department, confirming the authority of Atty. Montarde to file a notice of appeal.

The DARAB, however, denied petitioner’s motion for reconsideration. Hence, a petition for certiorari was
filed by petitioner with the Court of Appeals, but the latter dismissed the petition. It sustained the
DARAB’s finding that Attys. Montarde and Mesa were not clothed with authority to file the notice of
appeal.12

Petitioner filed the instant petition with prayer for the issuance of a temporary restraining order.

In a resolution dated June 6, 2005, the Court issued a temporary restraining order enjoining the execution
of the April 27, 2004 decision of the DARAB.

We find that the DARAB gravely abused its discretion in holding that Attys. Montarde and Mesa lacked
the authority to file a notice of appeal in behalf of petitioner. Section 21, Rule 138 of the Rules of Court
provides:

SEC. 21. Authority of attorney to appear. – An attorney is presumed to be properly authorized to

represent any cause in which he appears, and no written power of attorney is required to authorize him to
appear in court for his client, but the presiding judge may, on motion of either party and on reasonable
grounds therefor being shown, require any attorney who assumes the right to appear in a case to produce
or prove the authority under which he appears, and to disclose, whenever pertinent to any issue, the
name of the person who employed him, and may thereupon make such order as justice requires. An
attorney wilfully appearing in court for a person without being employed, unless by leave of the court, may
be punished for contempt as an officer of the court who has misbehaved in his official transactions.

The presumption in favor of the counsel’s authority to appear in behalf of a client is a strong one.13 A
lawyer is not even required to present a written authorization from the client. In fact, the absence of a
formal notice of entry of appearance will not invalidate the acts performed by the counsel in his client’s
name.14 However, the court, on its own initiative or on motion of the other party require a lawyer to
adduce authorization from the client.

In the case at bar, the filing of a notice of entry of appearance by Attys. Montarde and Mesa, gave rise to
the presumption that they have the authority to file the notice of appeal in behalf of petitioner. When their
authority was challenged, they presented the SPA executed by Gilda E. Pico, Executive Vice President of
LANDBANK authorizing them to represent petitioner; and the two memoranda of Atty. Danilo B. Beramo,
Department Manager and Head, CARP Legal Services Department, requesting Atty. Montarde to file a
notice of appeal. These documents are sufficient proof of their authority to represent petitioner’s cause.
The doubt entertained by the DARAB as to when the SPA and memoranda were executed is of no
consequence in view of petitioner’s vigorous assertion that it authorized said lawyers to file a notice of
appeal. Indeed, even an unauthorized appearance of an attorney may be ratified by the client either
expressly15 or impliedly.16 Ratification retroacts to the date of the lawyer’s first appearance and validates
the action taken by him.17

The DARAB’s assertion that Attys. Montarde and Mesa cannot validly represent petitioner because there
was no proper substitution of counsels, lacks merit. Petitioner never intended to replace its counsel of
record, the law firm Piczon, Beramo & Associates. Though not specified in the notice, Attys. Montarde
and Mesa entered their appearance as collaborating counsels.

Likewise, the Court of Appeals erroneously applied the doctrine laid down in Sublay v. National Labor
Relations Commission,18 in dismissing the petition. In Sublay, it was held that a substitution cannot be
presumed from the mere filing of a notice of appearance of a new lawyer and that the representation of
the first counsel of record continuous until a formal notice to change counsel is filed with the court.19
Thus, absent a formal notice of substitution, all lawyers who appeared before the court or filed pleadings
in behalf of the client are considered counsels of the latter. All acts performed by them are deemed to be
with the client’s consent.

The case of Ong Ching v. Ramolete,20 is on all fours with the instant controversy. The trial court therein
held that the period to appeal had already lapsed rendering the assailed decision final and executory
because petitioner’s motion for reconsideration, though presented within the reglementary period, is
without legal effect having been filed by a lawyer other than petitioner’s counsel of record. It disregarded
petitioner’s written authorization belatedly filed by said new lawyer as the same was not appended to the
motion for reconsideration previously filed. In debunking the ruling of the trial court, we stressed that the
new counsel who filed the motion for reconsideration in behalf of the client is presumed to be authorized
even if he filed no formal notice of entry of appearance. Hence, said motion effectively tolled the running
of the period to appeal. As explained by the Court:

The present case, however, does not involve a substitution of attorneys, but merely the employment by
petitioner of an additional counsel. True it is, as claimed by respondents, that the motion for
reconsideration filed by Atty. Hermosisima gives no indication that he was presenting his motion in
collaboration with Atty. Vasquez; but neither would it indicate that by his filing of the pleading in the case,
Atty. Hermosisima was replacing Atty. Vasquez as counsel for petitioner. In law it is assumed prima facie
that every attorney who appears in court does so with sufficient authority. The fact that a second attorney
enters an appearance on behalf of a litigant does not authorize a presumption that the authority of the first
attorney has been withdrawn. There is no question that a party may have two or more lawyers working in
collaboration as his counsel in a given litigation. Thus in the case at bar the certificate dated May 16,
1972, executed by Atty. Vasquez, is to the effect that he, with the consent and authority of petitioner (who
signified his conformity in writing) was authorizing Atty. Hermosisima to collaborate with him in the case
due to his ill health. While the said certificate was not attached to the motion for reconsideration on May
17, 1972, but was presented in court rather belatedly on June 16, 1972 as an annex to petitioner’s
"Rejoinder to Opposition to Motion for Reconsideration," respondents have not shown that the recitals of
fact contained therein did not reflect the truth. At any rate, this case is different from U.S. v. Borromeo,
Fojas, et al. v. Navarro, Ramos v. Potenciano, Baquiran v. Court of Appeals. Here petitioner's counsel,
Atty. Vasquez, not only affirmed his continued connection with the case, but also explained Atty.
Hermosisima’s appearance as collaborating counsel. While it may be desirable in the interest of an
orderly conduct of judicial proceedings, that a counsel for a party should file with the court his formal
written appearance in the case, before filing a pleading therein, or mention in said pleading that he is
submitting the same in collaboration with the counsel of record, the mere circumstance that such acts
were not done does not warrant the conclusion that the pleading filed by such counsel has no legal effect
whatsoever.
It is evident therefore that the DARAB gravely abused its discretion in denying due course to the notice of
appeal seasonably filed by Attys. Montarde and Mesa, the duly authorized counsel of petitioner. In the
same vein, the affirmance by the Court of Appeals of the assailed order of the DARAB is a clear disregard
of the oft repeated principle that courts should not resort to a rigid application of the rules where the end
result would frustrate the just, speedy and inexpensive determination of the controversy.21

WHEREFORE, the petition is GRANTED and the April 15, 2005 Decision of the Court of Appeals
dismissing the petition in CA-G.R. SP No. 85843, is REVERSED and SET ASIDE. The Department of
Agrarian Reform Adjudication Board is DIRECTED to give due course to petitioner’s Notice of Entry of
Appearance and the Notice of Appeal.

SO ORDERED.

CONSUELO YNARES-SANTIAGO

Associate Justice

_____________________

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

A.M. No. SDC-97-2-P February 24, 1997

SOPHIA ALAWI, complainant,

vs.
ASHARY M. ALAUYA, Clerk of Court VI, Shari'a District Court, Marawi City, respondent.

NARVASA, C.J.:

Sophia Alawi was (and presumably still is) a sales representative (or coordinator) of E.B. Villarosa &
Partners Co., Ltd. of Davao City, a real estate and housing company. Ashari M. Alauya is the incumbent
executive clerk of court of the 4th Judicial Shari'a District in Marawi City, They were classmates, and used
to be friends.

It appears that through Alawi's agency, a contract was executed for the purchase on installments by
Alauya of one of the housing units belonging to the above mentioned firm (hereafter, simply Villarosa &
Co.); and in connection therewith, a housing loan was also granted to Alauya by the National Home
Mortgage Finance Corporation (NHMFC).

Not long afterwards, or more precisely on December 15, 1995, Alauya addressed a letter to the President
of Villarosa & Co. advising of the termination of his contract with the company. He wrote:

. . I am formally and officially withdrawing from and notifying you of my intent to terminate the
Contract/Agreement entered into between me and your company, as represented by your Sales
Agent/Coordinator, SOPHIA ALAWI, of your company's branch office here in Cagayan de Oro City, on the
grounds that my consent was vitiated by gross misrepresentation, deceit, fraud, dishonesty and abuse of
confidence by the aforesaid sales agent which made said contract void ab initio. Said sales agent acting
in bad faith perpetrated such illegal and unauthorized acts which made said contract an Onerous Contract
prejudicial to my rights and interests. He then proceeded to expound in considerable detail and quite
acerbic language on the "grounds which could evidence the bad faith. deceit, fraud, misrepresentation,
dishonesty and abuse of confidence by the unscrupulous sales agent . . .;" and closed with the plea that
Villarosa & Co. "agree for the mutual rescission of our contract, even as I inform you that I categorically
state on record that I am terminating the contract . . . I hope I do not have to resort to any legal action
before said onerous and manipulated contract against my interest be annulled. I was actually fooled by
your sales agent, hence the need to annul the controversial contract."

Alauya sent a copy of the letter to the Vice-President of Villarosa & Co. at San Pedro, Gusa, Cagayan de
Oro City. The envelope containing it, and which actually went through the post, bore no stamps. Instead
at the right hand corner above the description of the addressee, the words, "Free Postage - PD 26," had
been typed.

On the same date, December 15, 1995, Alauya also wrote to Mr. Fermin T. Arzaga, Vice-President,
Credit & Collection Group of the National Home Mortgage Finance Corporation (NHMFC) at Salcedo
Village, Makati City, repudiating as fraudulent and void his contract with Villarosa & Co.; and asking for
cancellation of his housing loan in connection therewith, which was payable from salary deductions at the
rate of P4,338.00 a month. Among other things, he said:

. . . (T)hrough this written notice, I am terminating, as I hereby annul, cancel, rescind and voided, the
"manipulated contract" entered into between me and the E.B. Villarosa & Partner Co., Ltd., as
represented by its sales agent/coordinator, SOPHIA ALAWI, who maliciously and fraudulently
manipulated said contract and unlawfully secured and pursued the housing loan without my authority and
against my will. Thus, the contract itself is deemed to be void ab initio in view of the attending
circumstances, that my consent was vitiated by misrepresentation, fraud, deceit, dishonesty, and abuse
of confidence; and that there was no meeting of the minds between me and the swindling sales agent
who concealed the real facts from me.

And, as in his letter to Villarosa & Co., he narrated in some detail what he took to be the anomalous
actuations of Sophia Alawi.

Alauya wrote three other letters to Mr. Arzaga of the NHMFC, dated February 21, 1996, April 15, 1996,
and May 3, 1996, in all of which, for the same reasons already cited, he insisted on the cancellation of his
housing loan and discontinuance of deductions from his salary on account thereof. a He also wrote on
January 18, 1996 to Ms. Corazon M. Ordoñez, Head of the Fiscal Management & Budget Office, and to
the Chief, Finance Division, both of this Court, to stop deductions from his salary in relation to the loan in
question, again asserting the anomalous manner by which he was allegedly duped into entering into the
contracts by "the scheming sales agent." b

The upshot was that in May, 1996, the NHMFC wrote to the Supreme Court requesting it to stop
deductions on Alauya's UHLP loan "effective May 1996." and began negotiating with Villarosa & Co. " for
the buy-back of . . . (Alauya's) mortgage. and . . the refund of . . (his) payments." c

On learning of Alauya's letter to Villarosa & Co. of December 15, 1995, Sophia Alawi filed with this Court
a verified complaint dated January 25, 1996 — to which she appended a copy of the letter, and of the
above mentioned envelope bearing the typewritten words, "Free Postage - PD 26."1 In that complaint,
she accused Alauya of:

1. "Imputation of malicious and libelous charges with no solid grounds through manifest ignorance
and evident bad faith;"

2. "Causing undue injury to, and blemishing her honor and established reputation;"

3. "Unauthorized enjoyment of the privilege of free postage . . .;" and

4. Usurpation of the title of "attorney," which only regular members of the Philippine Bar may
properly use.

She deplored Alauya's references to her as "unscrupulous swindler, forger, manipulator, etc." without
"even a bit of evidence to cloth (sic) his allegations with the essence of truth," denouncing his imputations
as irresponsible, "all concoctions, lies, baseless and coupled with manifest ignorance and evident bad
faith," and asserting that all her dealings with Alauya had been regular and completely transparent. She
closed with the plea that Alauya "be dismissed from the senice, or be appropriately desciplined (sic) . . ."

The Court resolved to order Alauya to comment on the complaint, Conformably with established usage
that notices of resolutions emanate from the corresponding Office of the Clerk of Court, the notice of
resolution in this case was signed by Atty. Alfredo P. Marasigan, Assistant Division Clerk of Court.2

Alauya first submitted a "Preliminary Comment"3 in which he questioned the authority of Atty. Marasigan
to require an explanation of him, this power pertaining, according to him, not to "a mere Asst. Div. Clerk of
Court investigating an Executive Clerk of Court." but only to the District Judge, the Court Administrator or
the Chief Justice, and voiced the suspicion that the Resolution was the result of a "strong link" between
Ms. Alawi and Atty. Marasigan's office. He also averred that the complaint had no factual basis; Alawi was
envious of him for being not only "the Executive Clerk of Court and ex-officio Provincial Sheriff and District
Registrar." but also "a scion of a Royal Family . . ."4

In a subsequent letter to Atty. Marasigan, but this time in much less aggressive, even obsequious tones,5
Alauya requested the former to give him a copy of the complaint in order that he might comment
thereon.6 He stated that his acts as clerk of court were done in good faith and within the confines of the
law; and that Sophia Alawi, as sales agent of Villarosa & Co. had, by falsifying his signature, fraudulently
bound him to a housing loan contract entailing monthly deductions of P4,333.10 from his salary.

And in his comment thereafter submitted under date of June 5, 1996, Alauya contended that it was he
who had suffered "undue injury, mental anguish, sleepless nights, wounded feelings and untold financial
suffering," considering that in six months, a total of P26,028.60 had been deducted from his salary.7 He
declared that there was no basis for the complaint; in communicating with Villarosa & Co. he had merely
acted in defense of his rights. He denied any abuse of the franking privilege, saying that he gave P20.00
plus transportation fare to a subordinate whom he entrusted with the mailing of certain letters; that the
words: "Free Postage - PD 26," were typewritten on the envelope by some other person, an averment
corroborated by the affidavit of Absamen C. Domocao, Clerk IV (subscribed and sworn to before
respondent himself, and attached to the comment as Annex J);8 and as far as he knew, his subordinate
mailed the letters with the use of the money he had given for postage, and if those letters were indeed
mixed with the official mail of the court, this had occurred inadvertently and because of an honest
mistake.9

Alauya justified his use of the title, "attorney," by the assertion that it is "lexically synonymous" with
"Counsellors-at-law." a title to which Shari'a lawyers have a rightful claim, adding that he prefers the title
of "attorney" because "counsellor" is often mistaken for "councilor," "konsehal" or the Maranao term
"consial," connoting a local legislator beholden to the mayor. Withal, he does not consider himself a
lawyer.

He pleads for the Court's compassion, alleging that what he did "is expected of any man unduly
prejudiced and injured." 10 He claims he was manipulated into reposing his trust in Alawi, a classmate
and friend. 11 He was induced to sign a blank contract on Alawi's assurance that she would show the
completed document to him later for correction, but she had since avoided him; despite "numerous letters
and follow-ups" he still does not know where the property — subject of his supposed agreement with
Alawi's principal, Villarosa & Co. — is situated; 12 He says Alawi somehow got his GSIS policy from his
wife, and although she promised to return it the next day, she did not do so until after several months. He
also claims that in connection with his contract with Villarosa & Co., Alawi forged his signature on such
pertinent documents as those regarding the down payment, clearance, lay-out, receipt of the key of the
house, salary deduction, none of which he ever saw. 13
Averring in fine that his acts in question were done without malice, Alauya prays for the dismissal of the
complaint for lack of merit, it consisting of "fallacious, malicious and baseless allegations." and
complainant Alawi having come to the Court with unclean hands, her complicity in the fraudulent housing
loan being apparent and demonstrable.

It may be mentioned that in contrast to his two (2) letters to Assistant Clerk of Court Marasigan (dated
April 19, 1996 and April 22, 1996), and his two (2) earlier letters both dated December 15, 1996 — all of
which he signed as "Atty. Ashary M. Alauya" — in his Comment of June 5, 1996, he does not use the title
but refers to himself as "DATU ASHARY M. ALAUYA."

The Court referred the case to the Office of the Court Administrator for evaluation, report and
recommendation. 14

The first accusation against Alauya is that in his aforesaid letters, he made "malicious and libelous
charges (against Alawi) with no solid grounds through manifest ignorance and evident bad faith, resulting
in "undue injury to (her) and blemishing her honor and established reputation." In those letters, Alauya
had written inter alia that:

1) Alawi obtained his consent to the contracts in question "by gross misrepresentation, deceit, fraud,
dishonesty and abuse of confidence;"

2) Alawi acted in bad faith and perpetrated . . . illegal and unauthorized acts . . . prejudicial to . . (his)
rights and interests;"

3) Alawi was an "unscrupulous (and "swindling") sales agent" who had fooled him by "deceit, fraud,
misrepresentation, dishonesty and abuse of confidence;" and

4) Alawi had maliciously and fraudulently manipulated the contract with Villarosa & Co., and
unlawfully secured and pursued the housing loan without . . (his) authority and against . . (his) will," and
"concealed the real facts . . ."

Alauya's defense essentially is that in making these statements, he was merely acting in defense of his
rights, and doing only what "is expected of any man unduly prejudiced and injured," who had suffered
"mental anguish, sleepless nights, wounded feelings and untold financial suffering, considering that in six
months, a total of P26,028.60 had been deducted from his salary. 15

The Code of Conduct and Ethical Standards for Public Officials and Employees (RA 6713) inter alia
enunciates the State policy of promoting a high standard of ethics and utmost responsibility in the public
service. 16 Section 4 of the Code commands that "(p)ublic officials and employees . . at all times respect
the rights of others, and . . refrain from doing acts contrary to law, good morals, good customs, public
policy, public order, public safety and public interest." 17 More than once has this Court emphasized that
"the conduct and behavior of every official and employee of an agency involved in the administration of
justice, from the presiding judge to the most junior clerk, should be circumscribed with the heavy burden
of responsibility. Their conduct must at all times be characterized by, among others, strict propriety and
decorum so as to earn and keep the respect of the public for the judiciary." 18

Now, it does not appear to the Court consistent with good morals, good customs or public policy, or
respect for the rights of others, to couch denunciations of acts believed — however sincerely — to be
deceitful, fraudulent or malicious, in excessively intemperate, insulting or virulent language. Alauya is
evidently convinced that he has a right of action against Sophia Alawi. The law requires that he exercise
that right with propriety, without malice or vindictiveness, or undue harm to anyone; in a manner
consistent with good morals, good customs, public policy, public order, supra; or otherwise stated, that he
"act with justice, give everyone his due, and observe honesty and good
faith." 19 Righteous indignation, or vindication of right cannot justify resort to vituperative language, or
downright name-calling. As a member of the Shari'a Bar and an officer of a Court, Alawi is subject to a
standard of conduct more stringent than for most other government workers. As a man of the law, he may
not use language which is abusive, offensive, scandalous, menacing, or otherwise improper. 20 As a
judicial employee, it is expected that he accord respect for the person and the rights of others at all times,
and that his every act and word should be characterized by prudence, restraint, courtesy, dignity. His
radical deviation from these salutary norms might perhaps be mitigated, but cannot be excused, by his
strongly held conviction that he had been grievously wronged.

As regards Alauya's use of the title of "Attorney," this Court has already had occasion to declare that
persons who pass the Shari'a Bar are not full-fledged members of the Philippine Bar, hence may only
practice law before Shari'a courts. 21 While one who has been admitted to the Shari'a Bar, and one who
has been admitted to the Philippine Bar, may both be considered "counsellors," in the sense that they
give counsel or advice in a professional capacity, only the latter is an "attorney." The title of "attorney" is
reserved to those who, having obtained the necessary degree in the study of law and successfully taken
the Bar Examinations, have been admitted to the Integrated Bar of the Philippines and remain members
thereof in good standing; and it is they only who are authorized to practice law in this jurisdiction.

Alauya says he does not wish to use the title, "counsellor" or "counsellor-at-law, " because in his region,
there are pejorative connotations to the term, or it is confusingly similar to that given to local legislators.
The ratiocination, valid or not, is of no moment. His disinclination to use the title of "counsellor" does not
warrant his use of the title of attorney.

Finally, respecting Alauya's alleged unauthorized use of the franking privilege, 22 the record contains no
evidence adequately establishing the accusation.

WHEREFORE, respondent Ashari M. Alauya is hereby REPRIMANDED for the use of excessively
intemperate, insulting or virulent language, i.e., language unbecoming a judicial officer, and for usurping
the title of attorney; and he is warned that any similar or other impropriety or misconduct in the future will
be dealt with more severely.

SO ORDERED.

Davide, Jr., Melo, Francisco and Panganiban, Jr., JJ., concur.

__________________

EN BANC

B.M. Nos. 979 and 986 December 10, 2002

RE: 1999 BAR EXAMINATIONS,

MARK ANTHONY A. PURISIMA, petitioner.

RESOLUTION

BELLOSILLO, J.:

Petitioner was conditionally admitted to take the 1999 Bar Examinations. Like many others he was
directed "to submit the required certification of completion of the pre-bar review course within sixty (60)
days from the last day of the examinations."

Petitioner passed the 1999 Examinations. But in a Resolution dated 13 April 2000 the Court disqualified
him from becoming a member of the Philippine Bar and declared his examinations null and void on two
(2) grounds: (a) Petitioner failed to submit the required certificate of completion of the pre-bar review
course under oath for his conditional admission to the 1999 Bar Examinations; and (b) He committed a
serious act of dishonesty which rendered him unfit to become a member of the Philippine Bar when he
made it appear in his Petition to Take the 1999 Bar Examinations that he took his pre-bar review course
at the Philippine Law School (PLS) when, as certified by Acting Registrar Rasalie G. Kapauan, PLS had
not offered such course since 1967.

Petitioner moved for a reconsideration of the 13 April 2000 Resolution but his motion was denied.

On 29 October 2001, retired Regional Trial Court Judge Amante P. Purisima, father of petitioner, filed a
Petition to Reopen Bar Matter 986. However, the Court in its Resolution of 27 November 2001 "noted
without action" the said petition and further resolved "that no further pleadings will be entertained."

On 2 July 2002 petitioner filed a Motion for Due Process stating, among others, his reasons why in his
Petition to Take the 1999 Bar Examinations it was stated that he was enrolled in and regularly attending
the pre-bar review course at the PLS and not at the University of Santo Tomas (UST) where he in fact
took the said course as evidenced by the Certification dated 22 July 1999 of Dean Amado L. Damayuga
of the UST Faculty of Civil Law.

Petitioner claimed that the statement in paragraph 8 of his Petition that "he x x x enrolled in and passed
the regular fourth year (law) review classes at the Phil. Law School x x x x" was a "self-evident clerical
error and a mere result of an oversight which is not tantamount to a deliberate and willful declaration of a
falsehood."

Petitioner explained that upon obtaining a "ready-made form" of the Petition and affixing his signature on
the space provided therefor, he requested his schoolmate/friend Ms. Lilian A. Felipe to fill up the form,
have it notarized and then to file it for him with the Office of the Bar Confidant (OBC). Being "consumed
with his preparations for the upcoming bar examinations," petitioner admitted that he did not have the
opportunity to check the veracity of the information supplied by Ms. Felipe. Had he done this he could
have readily seen that Ms. Felipe had erroneously typed "Philippine Law School," instead of UST, on the
space provided for the school where petitioner attended his pre-bar review course.

Petitioner further averred that on 26 July 1999, a week after the filing of the Petition to take the bar, he
(thru Ms. Felipe) submitted the Certification of Completion of the Pre-Bar Review as Annex "D" of his
Petition to prove that he actually enrolled and attended the pre-bar review course in UST.

To corroborate his enrollment in UST, petitioner submitted (a) the Official Receipt of his payment of tuition
fee for the course; (b) his identification card for the course; (c) car pass to the UST campus; (d) individual
affidavits of classmates in the pre-bar review course in UST that petitioner was their classmate and that
he attended the review course; (e) separate affidavits of five (5) UST students/acquaintances of petitioner
that they saw him regularly attending the review lectures; (f) affidavit of Professor Abelardo T. Domondon
attesting to the attendance of petitioner in his review classes and lectures in Taxation and Bar Review
Methods at the UST Faculty of Civil Law; (g) affidavit of Ms. Gloria L. Fernandez, maintenance staff at the
UST Law Department that she knew petitioner very well as he was among those who would arrive early
and request her to open the reading area and turn on the airconditioning before classes started; and, (h)
affidavit of Ms. Melicia Jane Parena, office clerk at the UST Faculty Civil Law, that Dean Dimayuga issued
the Certification dated 22 July 1999 to the effect that petitioner was officially enrolled in and had
completed the pre-bar review course in UST which started on 14 April 1999 and ended 24 September
1999.

Petitioner also explained that he did not submit the required certification of completion of the pre-bar
review course within sixty (60) days from the last day of the examinations because he thought that it was
already unnecessary in view of the Certification of Completion (Annex "D" of his Petition) issued by Dean
Dimayuga which not only attested to his enrollment in UST but also his completion of the pre-bar review
course.

In a letter dated 17 September 2002, addressed to Chief Justice Hilario G. Davide, Jr., thru Senior
Associate Justice Josue N. Bellosillo, who took over as Chairman of the 1995 Committee on Bar
Examinations, retired Judge Purisima expressed his concern for his son and stated that his son took the
pre-bar review course in UST and that he entry in his son’s Petition that he took it in PLS is a "self-evident
clerical error." He then poised the question that if there was really a falsehood and forgery in paragraph 8
and Annex "D" of the Petition, which would have been a fatal defect, why then was his son issued permit
to take the 1999 Bar examinations?

Pursuant to the Court Resolution of 1 October 2002, the OBC conducted a summary hearing on 30
October 2002 during which the Bar Confidant asked clarificatory questions from petitioner who appeared
together with his father, retired Judge Purisima, and Ms. Lilian Felipe.

On 7 November 2002 the OBC submitted its Report and Recommendation the pertinent portions of which
are quoted hereunder:

"Considering petitioner’s explanation fortified by unquestionably genuine documents in support thereof,

we respectfully submit that petitioner should be given the benefit of the doubt.

The Resolution of the Court dated April 2, 2002, in Bar Matter 890, may be cited. In the said case, Victor
Rey T. Gingoyon was given the benefit of the doubt and allowed to take the Lawyer’s Oath.

In said case, Mr. Gingoyon stated in his Petition to take the 1998 Bar that the charge of Grave Threats
(Criminal Case No. 9693) against him was still pending before the Municipal Trial Courts in Cities,
Mandaue City, Branch 3, when in fact, in the decision of MTC dated April 8, 1998, he was already
convicted. But the Court believed his explanation that he had no actual knowledge of his conviction.

In allowing Mr. Gingoyon to take the Lawyer’s Oath, the Court stated, thus:

‘It had been two (2) years past since he first filed the petition to take the lawyer’s oath. Hopefully, this
period of time of being deprived the privilege had been long enough for him to do some introspection.’

In his letter, petitioner’s father also pleaded that the three (3) years denial of his son’s request for oath-
taking should be enough penalty, if there may be any wrong that his son may have unwittingly committed.

It is submitted that the same kindness and compassion extended to Mr. Gingoyon in Bar Matter 890 be
given to petitioner. Three years deprivation of the privilege to practice law may be considered an ample
penalty, not to mention that petitioner has not been convicted of any crime.

As regards petitioner’s failure to submit within sixty days the required certification of completion of the pre-
bar review course, his explanation that there was no need for him to submit another certification because
the July 22, 1999 Certification of Dean Dimayuga certified not only his enrollment but also his completion
of the course, is impressed with truth.

Let it be also noted that, in the Resolution dated April 13, 2000, in this Bar Matter 986, the Court declared
DISQUALIFIED from the 1999 Bar examinations not only Purisima but also Josenio Marquez Reoma, Ma.
Salvacion Sucgang Revilla and Victor Estell Tesorero for their failure to submit within sixty days from the
last day of the examinations the certification of completion of the pre-bar review course. However, the
Court, in its Resolution dated June 20, 2000, acting on the separate motions for reconsideration of the
Court Resolution dated April 13, 2000 filed by Reoma and Revilla, both were allowed to take the Lawyer’s
Oath.

In the case of Reoma, his explanation that his failure to submit the required certification was due to his
honest belief and assumption that the UP College of Law, where he took his review course, had filed the
required certification together with other required documents, was accepted.

In the case of Revilla, her claim that her failure to submit the required certification within the 60-day period
was due to her erroneous impression that only the certification of enrollment and attendance was
arequired, was likewise accepted.
The Court also allowed Mr. Tesorero to take his oath, as he stated that his f ailure to submit within the 60-
day period was due to his honest and mistaken belief that he had substantially complied with the
requirements for admission to the Bar Examinations because he thought that the required certificate of
compleltition of the pre-bar review course is the same as the certificate of enrollment and attendance in
the said course.

The OBS respectfully submits that pertitioner’s explanation should also be given credit just like his three
co-examinees.

Let it be finally cited that in Bar Matter No. 832, in the Matter of Admission to the Bar of Blas Antonio M.
Tuliao, the Court also favorably considered the report of the Committee on Legal Education which
recommended the admission to the Bar of Mr. Tuliao on grounds of fairness, equal treatment and
protection, considering that his co-accused in a criminal case have been allowed to take the lawyer’s
oath. This Court stated, in its Resolution dated November 27, 2001, that there was no reason to accord a
different treatment to Mr. Tuliao, and that the dispensation of justice should be even-handed and
consistent."

The recommendation is well taken.

The foremost question to be resolved is whether petitioner did enrol in and complete his pre-bar review
course in UST as he herein avows.

The testimony of petitioner and Ms. Felipe during the 30 October 2002 hearing that the subject
Certification of Dean Dimayuga was duly submitted to the OBC a week after the filing of the Petition to
take the bar appears to be credible. It is supported by documentary evidence showing that petitioner
actually enrolled and completed the required course in UST.

Granting that the Certification of Dean Dimayuga was defective as it certified completion of the pre-bar
review course which was still on-going, this defect should not be attributed to petitioner considering that
he had no participation in the preparation thereof. Whatever it is, the fact remains that there is such a
certification issued by the UST which appears to be genuine. This finding is backed by the affidavit of Ms.
Parena, office clerk at the UST Faculty of Civil Law, that she was the one who released the Certification
to petitioner on 26 July 1999.

Indeed, it must be stressed that there is nothing on record which impugns the authenticity of the subject
Certification as well as that of the other documentary evidence proferred by petitioner to establish that he
was duly enrolled and took the pre-bar review course in UST, not in PLS. As to the argument that the
Certification of Dean Dimayuga did not include the "taking and completion" of the pre-bar review course,
the realities of our bar reviews render it difficult to record the attendance religiously of the reviewees
every single day for several months.

Considering petitioner’s explanation, fortified by undisputedly genuine documents, at the very least,
petitioner should be given the benefit of the doubt and be allowed to take his oath.

The Court is well aware of instances in the past when ,as a measure of compassion and kindness, it has
acted favorably on similar petitions. In his letter petitioner’s father pleaded that "the denial of permission
for Mark to take his oath for about three (3) years now should be enough penalty." It is time to move on.

At this juncture it may be well to note the Court’s growing concern over the apparent laxity of law schools
in the conduct of their pre-bar review classes. Specifically, it has been observed that the attendance of
reviewees is not closely monitored, such that some reviewees are able to comply with the requisite with
minimal attendance. Enrollment and completion of pre-bar review course is an additional requirement
under Rule 138 of the Rules of Court for those who failed the bar examinations for three (3) or more
times.
For the Court to insist on strict compliance may be literally asking for the moon but it can be done. We just
have to bear in mind that this requirement is not an empty or idle ceremony; it is intended to ensure the
quality and preparedness of those applying for admission to the bar.

WHEREFORE, premises considered, as recommended by the Office of the Bar Confidant in its Report
and Recommendation dated 7 November 2002, the prayer in Bar Matters Nos. 979 and 986 is granted
and examinee MARK ANTHONY A. PURISIMA who passed the 1999 Bar Examinations is now allowed to
take the Lawyer’s Oath and be admitted to the Philippine Bar. He is further allowed to sign the Roll of
Attorneys upon payment of the required fees.

SO ORDERED.

Davide, Jr., C.J., Puno, Vitug, Mendoza, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio,
Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur.
Panganiban, J., in the result.

____________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 176278 June 25, 2010

ALAN F. PAGUIA, Petitioner,

vs.
OFFICE OF THE PRESIDENT, SECRETARY OF FOREIGN AFFAIRS, and HON. HILARIO DAVIDE, JR.
in his capacity as Permanent Representative of the Philippines to the United Nations, Respondents.

RESOLUTION

CARPIO, J.:

At issue is the power of Congress to limit the President’s prerogative to nominate ambassadors by
legislating age qualifications despite the constitutional rule limiting Congress’ role in the appointment of
ambassadors to the Commission on Appointments’ confirmation of nominees.1 However, for lack of a
case or controversy grounded on petitioner’s lack of capacity to sue and mootness,2 we dismiss the
petition without reaching the merits, deferring for another day the resolution of the question raised, novel
and fundamental it may be.

Petitioner Alan F. Paguia (petitioner), as citizen and taxpayer, filed this original action for the writ of
certiorari to invalidate President Gloria Macapagal-Arroyo’s nomination of respondent former Chief
Justice Hilario G. Davide, Jr. (respondent Davide) as Permanent Representative to the United Nations
(UN) for violation of Section 23 of Republic Act No. 7157 (RA 7157), the Philippine Foreign Service Act of
1991. Petitioner argues that respondent Davide’s age at that time of his nomination in March 2006, 70,
disqualifies him from holding his post. Petitioner grounds his argument on Section 23 of RA 7157 pegging
the mandatory retirement age of all officers and employees of the Department of Foreign Affairs (DFA) at
65.3 Petitioner theorizes that Section 23 imposes an absolute rule for all DFA employees, career or non-
career; thus, respondent Davide’s entry into the DFA ranks discriminates against the rest of the DFA
officials and employees.

In their separate Comments, respondent Davide, the Office of the President, and the Secretary of Foreign
Affairs (respondents) raise threshold issues against the petition. First, they question petitioner’s standing
to bring this suit because of his indefinite suspension from the practice of law.4 Second, the Office of the
President and the Secretary of Foreign Affairs (public respondents) argue that neither petitioner’s
citizenship nor his taxpayer status vests him with standing to question respondent Davide’s appointment
because petitioner remains without personal and substantial interest in the outcome of a suit which does
not involve the taxing power of the state or the illegal disbursement of public funds. Third, public
respondents question the propriety of this petition, contending that this suit is in truth a petition for quo
warranto which can only be filed by a contender for the office in question.

On the eligibility of respondent Davide, respondents counter that Section 23’s mandated retirement age
applies only to career diplomats, excluding from its ambit non-career appointees such as respondent
Davide.

The petition presents no case or controversy for petitioner’s lack of capacity to sue and mootness.

First. Petitioner’s citizenship and taxpayer status do not clothe him with standing to bring this suit. We
have granted access to citizen’s suits on the narrowest of ground: when they raise issues of
"transcendental" importance calling for urgent resolution.5 Three factors are relevant in our determination
to allow third party suits so we can reach and resolve the merits of the crucial issues raised – the
character of funds or assets involved in the controversy, a clear disregard of constitutional or statutory
prohibition, and the lack of any other party with a more direct and specific interest to bring the suit.6 None
of petitioner’s allegations comes close to any of these parameters. Indeed, implicit in a petition seeking a
judicial interpretation of a statutory provision on the retirement of government personnel occasioned by its
seemingly ambiguous crafting is the admission that a "clear disregard of constitutional or statutory
prohibition" is absent. Further, the DFA is not devoid of personnel with "more direct and specific interest
to bring the suit." Career ambassadors forced to leave the service at the mandated retirement age
unquestionably hold interest far more substantial and personal than petitioner’s generalized interest as a
citizen in ensuring enforcement of the law.1avvphi1

The same conclusion holds true for petitioner’s invocation of his taxpayer status. Taxpayers’ contributions
to the state’s coffers entitle them to question appropriations for expenditures which are claimed to be
unconstitutional or illegal.7 However, the salaries and benefits respondent Davide received
commensurate to his diplomatic rank are fixed by law and other executive issuances, the funding for
which was included in the appropriations for the DFA’s total expenditures contained in the annual budgets
Congress passed since respondent Davide’s nomination. Having assumed office under color of authority
(appointment), respondent Davide is at least a de facto officer entitled to draw salary,8 negating
petitioner’s claim of "illegal expenditure of scarce public funds."9

Second. An incapacity to bring legal actions peculiar to petitioner also obtains. Petitioner’s suspension
from the practice of law bars him from performing "any activity, in or out of court, which requires the
application of law, legal procedure, knowledge, training and experience."10 Certainly, preparing a petition
raising carefully crafted arguments on equal protection grounds and employing highly legalistic rules of
statutory construction to parse Section 23 of RA 7157 falls within the proscribed conduct.

Third. A supervening event has rendered this case academic and the relief prayed for moot. Respondent
Davide resigned his post at the UN on 1 April 2010.

WHEREFORE, we DISMISS the petition.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

________________

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-44388 January 30, 1985

VICTORIANO BULACAN, plaintiff-appellee,

vs.
FAUSTINO TORCINO and FELIPA TORCINO, defendants-appellants.

GUTIERREZ, JR., J.:

The issue before us is whether or not a complaint for forcible entry and detainer should be dismissed by a
municipal court on the ground that the plaintiff knowingly asked a non-member of the bar to sign and file it
for him.

A complaint for forcible entry and damages with preliminary mandatory injunction was filed with the
Municipal Court of Baybay, Leyte by Victoriano Bulacan against Faustino Torcino and Felipa Torcino. The
complaint was signed by Nicolas Nuñes, Jr., "Friend counsel for the Plaintiff" but was verified by the
plaintiff-appellee himself. The verification reads:

I, VICTORIANO BULACAN, of legal age, Filipino, married and a resident of Baybay, Leyte after having
been duly sworn to in accordance with law thereby depose and say:

That I am the plaintiff in the above-entitled case; that I have caused the above complaint to be prepared
by Nicolas P. Nuñes, Jr. and that I have voluntarily asked, sought and requested his aid to file, claim,
prosecute, and defend in court my civil case against the defendants Faustino Torcino et al or others in
connection with this case at the Municipal Court of Baybay, Leyte; that I have read and known the
contents thereon and the allegations therein are true and correct to my own knowledge.

IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of August, 1972 at Baybay, Leyte.

s/VICTORIANO BULACAN

t/VICTORIANO BULACAN

Plaintiff

SUBSCRIBED AND SWORN to before me this 4th day of August, 1972 at Baybay, Leyte by Victoriano
Bulacan with his Res. Cert. No. A-930280 dated Aug. 4, 1972 issued at Baybay, Leyte.

s/NICOLAS P. NUÑES, JR

t/NICOLAS P. NUÑES, JR.

Notary Public

Until December 31st, 1972

Doc. No. 344

Page No. 56

Book No. VII

Series of 1972

When the defendants-appellants filed their answer, they did not question the fact that the complaint was
signed by Nicolas Nuñes, Jr.

On February 10, 1973, the municipal court issued the following order:

The contending parties are given one week time to submit the proposed compromise agreement in
connection with his case.

Failure to do so will constrain this court to render judgment on the basis of the ocular inspection
conducted sometime on December, 1972.

Due to the failure of the parties to settle their case amicably, the court rendered a decision ordering the
Torcinos to demolish and remove the portion of their house which was illegally constructed on the land of
the plaintiff The municipal court stated that there is no doubt that Victoriano Bulacan is the owner and has
been in possession of Lot No. 5998 and that the lot of the defendants-appellants is on the eastern portion
of said lot. The court found that the Torcinos constructed a residential house which unfortunately
encroached on the lot of the plaintiff.

The Torcinos appealed the decision to the Court of First Instance of Leyte.

On September 18, 1973, the appellants Torcinos filed a motion to dismiss the complaint on the ground
that the complaint was not signed by the plaintiff or by an admitted attorney, and therefore must be
considered as sham and false.

Four days later, another motion to dismiss the complaint was filed with the additional discussion that the
fact that the complaint is verified, does not in itself cure the defect obtaining in the complaint.

On September 24, 1973, appellee Bulacan opposed the motion and alleged that the motion to dismiss
was not filed on time and the defenses therein were not pleaded in the answer in the municipal court and
therefore, are deemed waived and may not be raised for the first time on appeal in the Court of First
Instance. The opposition also stated that the complaint substantially conforms to the Rule.

On September 24, 1973, the Court of First Instance of Leyte denied the motion to dismiss. A motion for
reconsideration was denied for lack of merit.

On December 7, 1973, when the case was called for continuance, the parties presented to the court a
stipulation of facts which states and which we quote verbatim:

COME NOW, the plaintiff and the defendants duly assisted by their respective counsel and unto this
Honorable Court most respectfully submits the following stipulation of facts, to wit:

1. That the plaintiff and the defendants hereby agree to relocate the defendants' land covered by
Transfer Certificate of Title Number T-8133 which is hereto attached.

2. That should the findings of the Geodetic Engineer be that the present construction particularly the
wallings is beyond the lot of the said defendants as defined and described in Transfer Certificate of Title
No. T-8133 then the defendants win remove any portion of the wallings that maybe inside the land of the
plaintiff and vacate from the premises encroached. However, should the findings of the Geodetic
Engineer be that the walling constructed by the defendants does not encroach even an inch on the land
of the plaintiff then the plaintiff hereby agrees to the dismissal of the present case.

3. That should the Geodetic Engineer finds out that the defendants has encroach the land of the
plaintiff the defendants will be the one who will pay for the services of the Goedetic Engineer and should
the findings be that no encroachment were made by the defendants, then the plaintiff should shoulder the
expenses of the relocation survey.

4. That parties hereby agree that Geodetic Engineer Jaime Kudera be appointed by the Honorable
Court to conduct and execute the relocation survey.

5. That plaintiff and defendants hereby agree to waive the claims and counterclaims for damages.

WHEREFORE, it is most respectfully prayed that the Honorable Court renders judgment on the basis of
the above stipulation of facts.

The stipulation of facts was signed by plaintiff Victoriano Bulacan, his new counsel Atty. Diego A. Cala
defendants Faustino and Felipa Torcino, and their counsel Gerardo A. Pabello

The court issued an order directing surveyor Jaime Kudera to conduct the relocation work on the basis of
the stipulation.

On December 17, 1983, Kudera submitted his report and on the basis of his findings, the Court of First
Instance of Leyte affirmed the decision of the municipal court.

The defendants appealed the case to the Court of Appeals and assigned two errors:

THAT THE TRIAL COURT ERRED IN DENYING THE MOTION TO DISMISS FILED BY THE
DEFENDANTS APPELLANTS AND IN NOT DISMISSING THE COMPLAINT.

II

THAT THE TRIAL COURT ERRED IN DECIDING THE CASE AGAINST THE DEFENDANTS-
APPELLANTS AND IN AFFIRMING THE DECISION OF THE MUNICIPAL COURT ON THE DECISION
APPEALED FROM.

The Court of Appeals in a resolution dated August 7, 1976 certified the appeal to us on the ground that no
testimonial or oral evidence was presented by the parties and, therefore, no factual matters are in issue in
the appeal.

We affirm the decision of the lower court.

The Torcinos allege that the complaint is irregular as it was signed not by the plaintiff but by one who was
not a member of the bar and who designated himself merely as "Friend counsel for the Plaintiff." The
appellants argue that the municipal court did not acquire jurisdiction over the case. They invoke Section
5, Rule 7 which states:

SEC. 5. Signature and address.—Every pleading of a party represented by an attorney shall be signed by
at least one attorney of record in his individual name, whose address shall be stated A party who is not
represented by an attorney shall sign his pleading and state his address. Except when otherwise
specifically provided by rule or statute, pleadings need not be verified or accompanied by affidavit. The
signature of an attorney constitutes a certificate by him that he has read the pleading; that to the best of
his knowledge, information, and belief there is good ground to support it; and that it is not interposed for
delay. If a pleading is not signed or is signed with intent to defeat the purpose of this rule, it may be
stricken out as sham and false and the action may proceed as though the pleading had not been served.
For a willful violation of this rule an attorney may be subjected to appropriate disciplinary action. Similar
action may be taken if scandalous or indecent matter is inserted. (Emphasis supplied)
Under the facts of this case, however, the applicable provision is Section 34, Rule 138 of the Rules of
Court which states:

SEC. 34. By whom litigation is conducted. — In the Court of a municipality a party may conduct his
litigation in person with the aid of an agent or friend appointed by him for that purpose, or with the aid of
an attorney. In any other court, a party may conduct his litigation personally or by aid of an attorney and
his appearance must be either personal or by a duly authorized member of the bar. (Emphasis supplied)

The Rules are clear. In municipal courts, the litigant may be assisted by a friend, agent, or an attorney.
However, in cases before the regional trial court, the litigant must be aided by a duly authorized member
of the bar. The rule invoked by the Torcinos applies only to cases filed with the regional trial court and not
to cases before a municipal court.

In the case of Cantimbuhan v. Cruz, Jr. (126 SCRA 190) we decided a similar issue and allowed the
appearance of two senior law students as friends of the complainant-petitioner Cantimbuhan to prosecute
the case before the sala of Judge Nicanor J. Cruz, Jr., of the Municipal Court of Parañaque.

Similarly, in the case of Laput v. Bernabe (55 Phil. 621) a law student was allowed to represent the
accused in a case pending before the City Court of Manila.

Court procedures are often technical and may prove like shares to the ignorant or the unwary. In the past,
our law has allowed non-lawyers to appear for party litigants in places where duly authorized members of
the bar are not available. (U.S. v. Bacansas, 6 Phil. 539). For relatively simple litigation before municipal
courts, the Rules still allow a more educated or capable person to appear in behalf of a litigant who
cannot get a lawyer. But for the protection of the parties and in the interest of justice, the requirement for
appearances in regional trial courts and higher courts is more stringent.

In the case before us, the complaint was verified by the party litigant himself. In the verification, the
plaintiff specifically stated that he had caused Mr. Nuñes to conduct the litigation and to sign the
complaint in Ms behalf, indicating his awareness that Nuñes in not a registered lawyer. There is,
therefore, added justification for the pleading to be admitted rather than dismissed. As the lower court has
cited:

So it has been held that, where a pleading is not signed by the attorney as required, but is verified by the
party, substantial rights have not been affected and the defect may be disregarded as against a motion to
strike. (71 C.J.S. 954- 955)

Rules of pleading, practise, and procedure must be liberally construed so as to protect the rights and
interests of the ties. As we stated in Paulino v. Court of Appeals (80 SCRA 257):

xxx xxx xxx

... pleadings, as well as remedial laws, should be construed liberally, in order that litigants may have
ample opportunity to prove their respective claims, and that a possible denial of substantial justice, due to
legal technicalities, may be avoided. ...

The Torcinos try to impugn the results of the relocation survey. We agree with the appellee that the
appellants are now estopped on this issue because they themselves prayed in the stipulation of facts that
the findings of the geodetic engineer would be bases for the decision of the court of first instance. We see
no error, much less any grave abuse of discretion, in the lower courts' findings that the house of the
Torcinos encroached on the lot of Victoriano Bulacan.

WHEREFORE, the decision of the court a quo is hereby AFFIRMED.

SO ORDERED.
Teehankee (Actg. C.J.), Melencio-Herrera, Plana, Relova and De la Fuente, JJ., concur.

____________

Republic of the Philippines

SUPREME COURT
Baguio City

THIRD DIVISION

G.R. No. 154207 April 27, 2007

FERDINAND A. CRUZ, Petitioner,

vs.
ALBERTO MINA, HON. ELEUTERIO F. GUERRERO and HON. ZENAIDA LAGUILLES, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Certiorari under Rule 65 of the Rules of Court, grounded on pure
questions of law, with Prayer for Preliminary Injunction assailing the Resolution dated May 3, 2002
promulgated by the Regional Trial Court (RTC), Branch 116, Pasay City, in Civil Case No. 02-0137, which
denied the issuance of a writ of preliminary injunction against the Metropolitan Trial Court (MeTC), Branch
45, Pasay City, in Criminal Case No. 00-1705;1 and the RTC’s Order dated June 5, 2002 denying the
Motion for Reconsideration. No writ of preliminary injunction was issued by this Court.

The antecedents:

On September 25, 2000, Ferdinand A. Cruz (petitioner) filed before the MeTC a formal Entry of
Appearance, as private prosecutor, in Criminal Case No. 00-1705 for Grave Threats, where his father,
Mariano Cruz, is the complaining witness.

The petitioner, describing himself as a third year law student, justifies his appearance as private
prosecutor on the bases of Section 34 of Rule 138 of the Rules of Court and the ruling of the Court En
Banc in Cantimbuhan v. Judge Cruz, Jr.2 that a non-lawyer may appear before the inferior courts as an
agent or friend of a party litigant. The petitioner furthermore avers that his appearance was with the prior
conformity of the public prosecutor and a written authority of Mariano Cruz appointing him to be his agent
in the prosecution of the said criminal case.

However, in an Order dated February 1, 2002, the MeTC denied permission for petitioner to appear as
private prosecutor on the ground that Circular No. 19 governing limited law student practice in conjunction
with Rule 138-A of the Rules of Court (Law Student Practice Rule) should take precedence over the ruling
of the Court laid down in Cantimbuhan; and set the case for continuation of trial.3

On February 13, 2002, petitioner filed before the MeTC a Motion for Reconsideration seeking to reverse
the February 1, 2002 Order alleging that Rule 138-A, or the Law Student Practice Rule, does not have the
effect of superseding Section 34 of Rule 138, for the authority to interpret the rule is the source itself of
the rule, which is the Supreme Court alone.

In an Order dated March 4, 2002, the MeTC denied the Motion for Reconsideration.

On April 2, 2002, the petitioner filed before the RTC a Petition for Certiorari and Mandamus with Prayer
for Preliminary Injunction and Temporary Restraining Order against the private respondent and the public
respondent MeTC.
After hearing the prayer for preliminary injunction to restrain public respondent MeTC Judge from
proceeding with Criminal Case No. 00-1705 pending the Certiorari proceedings, the RTC, in a Resolution
dated May 3, 2002, resolved to deny the issuance of an injunctive writ on the ground that the crime of
Grave Threats, the subject of Criminal Case No. 00-1705, is one that can be prosecuted de oficio, there
being no claim for civil indemnity, and that therefore, the intervention of a private prosecutor is not legally
tenable.

On May 9, 2002, the petitioner filed before the RTC a Motion for Reconsideration. The petitioner argues
that nowhere does the law provide that the crime of Grave Threats has no civil aspect. And last, petitioner
cites Bar Matter No. 730 dated June 10, 1997 which expressly provides for the appearance of a non-
lawyer before the inferior courts, as an agent or friend of a party litigant, even without the supervision of a
member of the bar.

Pending the resolution of the foregoing Motion for Reconsideration before the RTC, the petitioner filed a
Second Motion for Reconsideration dated June 7, 2002 with the MeTC seeking the reversal of the March
4, 2002 Denial Order of the said court, on the strength of Bar Matter No. 730, and a Motion to Hold In
Abeyance the Trial dated June 10, 2002 of Criminal Case No. 00-1705 pending the outcome of the
certiorari proceedings before the RTC.

On June 5, 2002, the RTC issued its Order denying the petitioner’s Motion for Reconsideration.

Likewise, in an Order dated June 13, 2002, the MeTC denied the petitioner’s Second Motion for
Reconsideration and his Motion to Hold in Abeyance the Trial on the ground that the RTC had already
denied the Entry of Appearance of petitioner before the MeTC.

On July 30, 2002, the petitioner directly filed with this Court, the instant Petition and assigns the following
errors:

I.

the respondent regional trial court abused its discretion when it resolved to deny the prayer for the writ of
injunction of the herein petitioner despite petitioner having established the necessity of granting the writ;

II.

THE RESPONDENT TRIAL COURT ABUSED ITS DISCRETION, TANTAMOUNT TO IGNORANCE OF

THE LAW, WHEN IT RESOLVED TO DENY THE PRAYER FOR THE WRIT OF PRELIMINARY
INJUNCTION AND THE SUBSEQUENT MOTION FOR RECONSIDERATION OF THE HEREIN
PETITIONER ON THE BASIS THAT [GRAVE] THREATS HAS NO CIVIL ASPECT, FOR THE SAID
BASIS OF DENIAL IS NOT IN ACCORD WITH THE LAW;

III.

THE RESPONDENT METROPOLITAN TRIAL COURT ABUSED ITS DISCRETION WHEN IT DENIED
THE MOTION TO HOLD IN ABEYANCE TRIAL, WHEN WHAT WAS DENIED BY THE RESPONDENT
REGIONAL TRIAL COURT IS THE ISSUANCE OF THE WRIT OF PRELIMINARY INJUNCTION and
WHEN THE RESPONDENT REGIONAL TRIAL COURT IS YET TO DECIDE ON THE MERITS OF THE
PETITION FOR CERTIORARI;

IV.

THE RESPONDENT COURT[s] ARE CLEARLY IGNORING THE LAW WHEN THEY PATENTLY
REFUSED TO HEED TO [sic] THE CLEAR MANDATE OF THE LAPUT, CANTIMBUHAN AND
BULACAN CASES, AS WELL AS BAR MATTER NO. 730, PROVIDING FOR THE APPEARANCE OF
NON-LAWYERS BEFORE THE LOWER COURTS (MTC’S).4
This Court, in exceptional cases, and for compelling reasons, or if warranted by the nature of the issues
reviewed, may take cognizance of petitions filed directly before it.5

Considering that this case involves the interpretation, clarification, and implementation of Section 34, Rule
138 of the Rules of Court, Bar Matter No. 730, Circular No. 19 governing law student practice and Rule
138-A of the Rules of Court, and the ruling of the Court in Cantimbuhan, the Court takes cognizance of
herein petition.

The basic question is whether the petitioner, a law student, may appear before an inferior court as an
agent or friend of a party litigant.

The courts a quo held that the Law Student Practice Rule as encapsulated in Rule 138-A of the Rules of
Court, prohibits the petitioner, as a law student, from entering his appearance in behalf of his father, the
private complainant in the criminal case without the supervision of an attorney duly accredited by the law
school.

Rule 138-A or the Law Student Practice Rule, provides:

RULE 138-A
LAW STUDENT PRACTICE RULE

Section 1. Conditions for Student Practice. – A law student who has successfully completed his 3rd year
of the regular four-year prescribed law curriculum and is enrolled in a recognized law school's clinical
legal education program approved by the Supreme Court, may appear without compensation in any civil,
criminal or administrative case before any trial court, tribunal, board or officer, to represent indigent clients
accepted by the legal clinic of the law school.

Sec. 2. Appearance. – The appearance of the law student authorized by this rule, shall be under the
direct supervision and control of a member of the Integrated Bar of the Philippines duly accredited by the
law school. Any and all pleadings, motions, briefs, memoranda or other papers to be filed, must be signed
by the supervising attorney for and in behalf of the legal clinic.

However, in Resolution6 dated June 10, 1997 in Bar Matter No. 730, the Court En Banc clarified:

The rule, however, is different if the law student appears before an inferior court, where the issues and
procedure are relatively simple. In inferior courts, a law student may appear in his personal capacity
without the supervision of a lawyer. Section 34, Rule 138 provides:

Sec. 34. By whom litigation is conducted. - In the court of a justice of the peace, a party may conduct his
litigation in person, with the aid of an agent or friend appointed by him for that purpose, or with the aid of
an attorney. In any other court, a party may conduct his litigation personally or by aid of an attorney, and
his appearance must be either personal or by a duly authorized member of the bar.

Thus, a law student may appear before an inferior court as an agent or friend of a party without the
supervision of a member of the bar.7 (Emphasis supplied)

The phrase "In the court of a justice of the peace" in Bar Matter No. 730 is subsequently changed to "In
the court of a municipality" as it now appears in Section 34 of Rule 138, thus:8

SEC. 34. By whom litigation is conducted. — In the Court of a municipality a party may conduct his
litigation in person, with the aid of an agent or friend appointed by him for that purpose, or with the aid of
an attorney. In any other court, a party may conduct his litigation personally or by aid of an attorney and
his appearance must be either personal or by a duly authorized member of the bar. (Emphasis supplied)
which is the prevailing rule at the time the petitioner filed his Entry of Appearance with the MeTC on
September 25, 2000. No real distinction exists for under Section 6, Rule 5 of the Rules of Court, the term
"Municipal Trial Courts" as used in these Rules shall include Metropolitan Trial Courts, Municipal Trial
Courts in Cities, Municipal Trial Courts, and Municipal Circuit Trial Courts.

There is really no problem as to the application of Section 34 of Rule 138 and Rule 138-A. In the former,
the appearance of a non-lawyer, as an agent or friend of a party litigant, is expressly allowed, while the
latter rule provides for conditions when a law student, not as an agent or a friend of a party litigant, may
appear before the courts.

Petitioner expressly anchored his appearance on Section 34 of Rule 138. The court a quo must have
been confused by the fact that petitioner referred to himself as a law student in his entry of appearance.
Rule 138-A should not have been used by the courts a quo in denying permission to act as private
prosecutor against petitioner for the simple reason that Rule 138-A is not the basis for the petitioner’s
appearance.

Section 34, Rule 138 is clear that appearance before the inferior courts by a non-lawyer is allowed,
irrespective of whether or not he is a law student. As succinctly clarified in Bar Matter No. 730, by virtue of
Section 34, Rule 138, a law student may appear, as an agent or a friend of a party litigant, without the
supervision of a lawyer before inferior courts.

Petitioner further argues that the RTC erroneously held that, by its very nature, no civil liability may flow
from the crime of Grave Threats, and, for this reason, the intervention of a private prosecutor is not
possible.

It is clear from the RTC Decision that no such conclusion had been intended by the RTC. In denying the
issuance of the injunctive court, the RTC stated in its Decision that there was no claim for civil liability by
the private complainant for damages, and that the records of the case do not provide for a claim for
indemnity; and that therefore, petitioner’s appearance as private prosecutor appears to be legally
untenable.

Under Article 100 of the Revised Penal Code, every person criminally liable for a felony is also civilly
liable except in instances when no actual damage results from an offense, such as espionage, violation of
neutrality, flight to an enemy country, and crime against popular representation.9 The basic rule applies in
the instant case, such that when a criminal action is instituted, the civil action for the recovery of civil
liability arising from the offense charged shall be deemed instituted with criminal action, unless the
offended party waives the civil action, reserves the right to institute it separately or institutes the civil
action prior to the criminal action.10

The petitioner is correct in stating that there being no reservation, waiver, nor prior institution of the civil
aspect in Criminal Case No. 00-1705, it follows that the civil aspect arising from Grave Threats is deemed
instituted with the criminal action, and, hence, the private prosecutor may rightfully intervene to prosecute
the civil aspect.

WHEREFORE, the Petition is GRANTED. The assailed Resolution and Order of the Regional Trial Court,
Branch 116, Pasay City are REVERSED and SET ASIDE. The Metropolitan Trial Court, Branch 45,
Pasay City is DIRECTED to ADMIT the Entry of Appearance of petitioner in Criminal Case No. 00-1705
as a private prosecutor under the direct control and supervision of the public prosecutor.

No pronouncement as to costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice
__________________

THIRD DIVISION

A.M. No. MTJ-02-1459 October 14, 2003

IMELDA Y. MADERADA, complainant,

vs.
Judge ERNESTO H. MEDIODEA, 12th Municipal Circuit Trial Court, Cabatuan and Maasin, Iloilo,
respondent.

DECISION

PANGANIBAN, J.:

Under the Rules of Court, parties to a case in a first-level court may -- without having to resign from their
posts -- conduct their own litigation in person as well as appear for and on their own behalf as plaintiffs or
defendants. However, appearing as counsel on behalf of a co-plaintiff subjects the employee to
administrative liability.

The Case and the Facts

A Complaint1 dated January 3, 2002, was filed by Imelda Y. Maderada against Judge Ernesto H.
Mediodea of the 12th Municipal Circuit Trial Court (MCTC) of Cabatuan and Maasin, Iloilo. In the
Complaint, the judge was charged with "gross ignorance of the law amounting to grave misconduct" for
failing "to observe and apply the Revised Rule on Summary Procedure" in Civil Case No. 252.2

On September 7, 2001, complainant filed before the 12th MCTC of Cabatuan and Maasin, Iloilo --
presided over by Judge Erlinda Tersol -- an action for forcible entry with a prayer for preliminary
injunction, temporary restraining order (TRO) and damages3 covered by the Rule on Summary
Procedure. Because complainant was the clerk of court in the aforesaid sala, Judge Tersol inhibited
herself from the case. Thus, Executive Judge Tito Gustilo designated respondent judge to hear and
decide the case.

In an Order4 dated September 13, 2001, respondent required the defendants in the civil case to show
cause why the preliminary injunction should not be granted. Respondent judge scheduled the hearing on
September 21, 2001, but defendants therein filed a Manifestation5 on September 17, 2001, praying that
they be given an additional period of ten days to file an answer. After the September 21 hearing,
respondent reset the hearing to September 28, 2001.6 Meanwhile, the defendants filed their Opposition7
to complainant’s prayer for preliminary injunction and TRO. The September 28 hearing was held in
abeyance after the defendants’ lawyer questioned the authority of complainant to appear on behalf of and
as counsel for her co-plaintiff.8 Respondent gave the defendants ten days9 to file a motion to disqualify
complainant from appearing as counsel and thereafter to complainant to file her opposition thereto.

In his Order10 dated October 19, 2001, respondent denied the defendants’ Motion11 to disqualify
complainant from appearing on behalf of and as counsel for her co-plaintiff.

Complainant filed a total of three Motions12 praying for judgment to be rendered on the civil case. In an
Order13 dated October 19, 2001, respondent denied complainant’s Motions because of the pending
hearing for the issuance of a restraining order and an injunction. He likewise denied the defendants’
Motion for extension of time to file an answer.14 Complainant did not ask for a reconsideration of the
denial of her Motion for Rendition of Judgment.

In his Comment15 on the Complaint, respondent contends that complainant filed a Petition for his
inhibition after filing two administrative cases against him. He argues that the mere filing of administrative
charges against judges is not a ground for disqualifying them from hearing cases. In the exercise of their
discretion, however, they may voluntarily disqualify themselves. It is worth noting that respondent later
inhibited himself from Civil Case No. 252. The case was then reassigned to Judge Loida Maputol of the
14th MCTC, San Miguel-Alimodian-Leon, Iloilo.

Respondent avers that the delay in the resolution of the case cannot be attributed to him, considering that
he was mandated by law and the rules of procedure to pass upon every motion presented before him.16
Besides, complainant allegedly failed to present evidence necessary for the immediate resolution of her
prayer for preliminary injunction.17 Moreover, she supposedly failed to exhaust the remedies available to
her to question the validity of his Orders. Instead, she tried to compel him to render a decision on the
case.18

Respondent likewise refutes complainant’s assertion that she appeared as counsel on her own behalf
because she could not afford the services of a lawyer. Such claim was allegedly without basis, since her
compensation and other benefits as clerk of court were more than enough to pay for the services of
counsel.19 He further alleges that she did not secure authority from this Court to appear as counsel, and
that she failed to file her leave of absence every time she appeared in court.20

Evaluation and Recommendation of the Court Administrator

The OCA agreed with respondent that the issuance of the preliminary injunction prayed for in the
Complaint should first be resolved before judgment should be rendered in the principal action. However, it
opined that the prayer for preliminary injunction should have been decided within 30 days from the filing
thereof. It noted that both the motion for preliminary injunction and the principal action for forcible entry
remained unresolved even after four months had already lapsed since the filing of Civil Case No.
252.1a\^/phi1.net

Accordingly, the OCA recommended that respondent judge be fined in the amount of ₱1,000 with a stern
warning that a similar infraction in the future would be dealt with more severely.21

It did not, however, find complainant completely faultless. It therefore undertook another round of
investigation, the subject of which was complainant’s appearance in court as counsel for herself and on
behalf of her co-plaintiff without court authority.

According to the OCA, officials and employees of the judiciary must devote their full time to government
service to ensure the efficient and speedy administration of justice. Although they are not absolutely
prohibited from engaging in a vocation or a profession, they should do so only with prior approval of this
Court. The OCA added that "[e]ngaging in any private business, vocation or profession without prior
approval of the Court is tantamount to moonlighting, which amounts to malfeasance in office."22

Thus, it recommended that Complainant Maderada be fined in the amount of ₱1,000 for appearing as
counsel without authority from this Court, with a stern warning that any similar infraction in the future
would be dealt with more severely. The OCA also recommended that she be directed to file her
application for leaves of absence on the days she had appeared in court to litigate her case.

The Court’s Ruling

We agree with the findings and recommendations of the OCA, but modify the penalty to conform to the
rules.

Administrative Liability

The Rules of Court clearly provide that actions for forcible entry and unlawful detainer, regardless of the
amount of damages or unpaid rentals sought to be recovered, shall be governed by the Rule on
Summary Procedure.23 These actions are summary in nature, because they involve the disturbance of
the social order, which should be restored as promptly as possible.24 Designed as special civil actions,
they are governed by the Rules on Summary Procedure to disencumber the courts from the usual
formalities of ordinary actions.25 Accordingly, technicalities or details of procedure that may cause
unnecessary delays should be carefully avoided.26 The actions for forcible entry and unlawful detainer
are designed to provide expeditious means of protecting actual possession or the right to possession of
the property involved. Both are "time procedures" designed to bring immediate relief.27

Moreover, as correctly observed by the OCA, in an action for forcible entry, parties are entitled to the
provisional remedy of preliminary injunction.

A preliminary injunction is an order granted at any stage of court actions or proceedings prior to the
judgment or final order, requiring a party or a court, an agency or a person to refrain from doing a
particular act or acts.28 It may also require the performance of a particular act or acts, in which case it is
known as a preliminary mandatory injunction.29 Since this remedy is granted prior to the judgment or final
order, we agree with both the OCA and respondent that the prayer for preliminary injunction should first
be resolved before the main case of forcible entry is decided.

However, respondent should have resolved the Motion for Preliminary Injunction within 30 days from its
filing. There can be no mistaking the clear command of Section 15 of Rule 70 of the Rules of Court, which
reads:

"Sec. 15. Preliminary injunction -- The court may grant preliminary injunction, in accordance with the
provisions of Rule 58 hereof, to prevent the defendant from committing further acts of dispossession
against the plaintiff.

"A possessor deprived of his possession through forcible entry or unlawful detainer may, within five (5)
days from the filing of the complaint, present a motion in the action for forcible entry or unlawful detainer
for the issuance of a writ of preliminary mandatory injunction to restore him in his possession. The court
shall decide the motion within thirty (30) days from the filing thereof." (Italics ours)

Judges have no other option but to obey. In fact, the provision uses the word "shall" to evince its
mandatory character. We cannot subscribe to the belief of respondent that since there was a prayer for
the issuance of a preliminary injunction, the main case for forcible entry would have to wait until after he
shall have decided the injunction plea, no matter how long it took. If that were so, then the main case
would lose its summary nature.

Respondent should have known that since a prayer for preliminary injunction is merely a provisional
remedy in an action for forcible entry, it should lend itself to the summary nature of the main case. This is
the very reason why the Rules of Court mandate that a preliminary injunction in a forcible entry case be
decided within 30 days from its filing. Preliminary injunctions and TROs are extraordinary remedies
provided by law for the speedy adjudication of an ejectment case in order to save the dispossessed party
from further damage during the pendency of the original action.

Time and time again, this Court has impressed upon judges the need to decide, promptly and judiciously,
cases and other matters pending before their courts.30 To a large extent, the public’s faith and
confidence in the judicial system is boosted by the judicious and prompt disposition of cases and
undermined by any delay thereof.31 Judges are thus enjoined to decide cases with dispatch.

Their failure to do so constitutes gross inefficiency and warrants the imposition of administrative sanction
on them. Rule 3.05 of the Code of Judicial Conduct specifically obliges judges to dispose of the court’s
business promptly and decide cases within the required periods. Often have we ruled that their inability to
decide a case within the required period is not excusable and constitutes gross inefficiency.32 To avoid
sanction, they should ask this Court for an extension and give their reasons for the delay.

Although respondent is correct in asserting that he is mandated to rule on every motion, he cannot use
this excuse to evade the clear command of the rule that cases should be decided within the prescribed
period. This Court notes with concern the plethora of motions and pleadings filed in this case, which
should have been tried under the Rules of Summary Procedure. Yet, even after four months had lapsed
since the filing of the original Complaint for forcible entry, the prayer for preliminary injunction and the
main case remained unresolved.

Respondent is reminded that in order to meet the deadlines set for deciding cases, judges should at all
times remain in full control of the proceedings in their sala.33 They should not be at the mercy of the
whims of lawyers and parties, for it is not the latter’s convenience that should be the primordial
consideration, but the administration of justice.34 1awphi1.nét

To reiterate, judges are bound to dispose of the court’s business promptly and to decide cases within the
required period. They are called upon to observe utmost diligence and dedication in the performance of
their judicial functions and duties. As held by this Court in Gallego v. Acting Judge Doronila:35

"We cannot countenance such undue delay by a judge especially at a time when the clogging of court
dockets is still the bane of the judiciary whose present leadership has launched an all-out program to
minimize, if not totally eradicate, docket congestion and undue delay in the disposition of cases. Judges
are called upon to observe utmost diligence and dedication in the performance of their judicial functions
and duties."36

The prompt disposition of cases becomes even more pronounced when a municipal trial court is called
upon to decide a case governed by the Rules of Summary Procedure. As eloquently put by Justice Jose
C. Vitug, speaking for the Court in Cruz Jr. v. Judge Joven:37

"x x x. Being the paradigm of justice in the first instance, a municipal trial court judge, more than any other
colleague on the bench, is the immediate embodiment of how that trust is carried out. In the evolvement
of the public perception on the judiciary, there can likely be no greater empirical data that influences it
than the prompt and proper disposition of cases before the courts."38

We have often held that failure to decide cases and other matters within the reglementary period
constitutes gross inefficiency and warrants the imposition of administrative sanctions against erring
judges. Given the facts of this case, a fine of ₱10,000 is appropriate pursuant to current jurisprudence39
and Rule 140.40

As to Complainant Maderada, the OCA recommended that she be fined in the amount of ₱1,000 for
supposedly engaging in a private vocation or profession without prior approval of the Court. The Office of
the Court Administrator held that her appearance as counsel for herself and on behalf of her co-plaintiff
was tantamount to moonlighting, a species of malfeasance in office.

Since complainant was charged with engaging in a private vocation or profession when she appeared on
her own behalf in court, the necessary implication was that she was in the practice of law. We clarify. A
party’s right to conduct litigation personally is recognized by law. Section 34 of Rule 138 of the Rules of
Court provides:

"SEC. 34. By whom litigation conducted. -- In the court of a justice of the peace a party may conduct his
litigation in person, with the aid of an agent or friend appointed by him for that purpose, or with the aid of
an attorney. In any other court, a party may conduct his litigation personally or by aid of an attorney, and
his appearance must be either personal or by a duly authorized member of the bar."

This provision means that in a litigation, parties may personally do everything during its progress -- from
its commencement to its termination.41 When they, however, act as their own attorneys, they are
restricted to the same rules of evidence and procedure as those qualified to practice law; otherwise,
ignorance would be unjustifiably rewarded.42 Individuals have long been permitted to manage, prosecute
and defend their own actions; and when they do so, they are not considered to be in the practice of
law.43 "One does not practice law by acting for himself any more than he practices medicine by rendering
first aid to himself."44
The practice of law, though impossible to define exactly, involves the exercise of a profession or vocation
usually for gain, mainly as attorney by acting in a representative capacity and as counsel by rendering
legal advise to others.45 Private practice has been defined by this Court as follows:

"x x x. Practice is more than an isolated appearance, for it consists in frequent or customary action, a
succession of acts of the same kind. In other words, it is frequent habitual exercise. Practice of law to fall
within the prohibition of statute [referring to the prohibition for judges and other officials or employees of
the superior courts or of the Office of the Solicitor General from engaging in private practice] has been
interpreted as customarily or habitually holding one's self out to the public, as a lawyer and demanding
payment for such services. x x x."46 (Citations omitted)

Clearly, in appearing for herself, complainant was not customarily or habitually holding herself out to the
public as a lawyer. Neither was she demanding payment for such services. Hence, she cannot be said to
be in the practice of law.

Black’s Law Dictionary defines profession in the collective sense as referring to "the members of such a
vocation."47 In turn, vocation is defined as "a person’s regular calling or business; one’s occupation or
profession."48

The law allows persons who are not lawyers by profession to litigate their own case in court. The right of
complainant to litigate her case personally cannot be taken away from her. Her being an employee of the
judiciary does not remove from her the right to proceedings in propria persona or to self-representation.
To be sure, the lawful exercise of a right cannot make one administratively liable. Thus, we need not go
into a discussion of the Court’s ruling in Cayetano v. Monsod49 regarding the extent of the practice of
law.

However, it was also clearly established that complainant had appeared on behalf of her co-plaintiff in the
case below, for which act the former cannot be completely exonerated. Representing oneself is different
from appearing on behalf of someone else.

The raison d’etre for allowing litigants to represent themselves in court will not apply when a person is
already appearing for another party. Obviously, because she was already defending the rights of another
person when she appeared for her co-plaintiff, it cannot be argued that complainant was merely
protecting her rights. That their rights may be interrelated will not give complainant authority to appear in
court. The undeniable fact remains that she and her co-plaintiff are two distinct individuals. The former
may be impairing the efficiency of public service once she appears for the latter without permission from
this Court.

We cannot countenance any act that would undermine the people’s faith and confidence in the judiciary,
even if we consider that this was the first time complainant appeared in court, that she appeared for her
own sister, and that there was no showing she did so for a fee. Again we should be reminded that
everyone connected with an office that is charged with the dispensation of justice carries a heavy burden
of responsibility.50 Given these circumstances, the penalty of reprimand51 is sufficient.

This Court reiterates its policy not to tolerate or condone any conduct, act or omission that falls short of
the exacting norms of public office, especially on the part of those expected to preserve the image of the
judiciary. Thus, it will not shirk from its responsibility of imposing discipline upon its employees in order
not to diminish the people’s faith in our justice system. But when the charge has no basis, it will not
hesitate to shield the innocent court employee from any groundless accusation that trifles with judicial
processes,52 and that serves only to disrupt rather than promote the orderly administration of justice.53

WHEREFORE, Respondent Judge Ernesto H. Mediodea is hereby found GUILTY of gross inefficiency in
failing to observe the reglementary periods in deciding cases, and is FINED in the amount of ₱10,000
with a stern warning that a repetition of the same or of a similar act in the future shall be dealt with more
severely. On the other hand, Imelda Y. Maderada is hereby REPRIMANDED for appearing as counsel on
behalf of a co-plaintiff without court authority and is likewise warned that a future similar act shall be
sanctioned more severely.1awphi1.nét

SO ORDERED.

Puno, (Chairman), Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.

Corona, J., on leave.

_______________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-51813-14 November 29, 1983

ROMULO CANTIMBUHAN, NELSON B. MALANA, and ROBERT V. LUCILA, petitioners,

vs.
HON. NICANOR J. CRUZ, JR., Presiding Judge of the Municipal Court of Parañaque, Metro Manila, and
FISCAL LEODEGARIO C. QUILATAN, respondents.

Froilan M. Bacungan and Alfredo F. Tadiar for petitioners.

The Solicitor General for respondents.

RELOVA, J.:ñé+.£ªwph!1

Appeal from the Order, dated August 16, 1979, of respondent Judge Nicanor J. Cruz, Jr., of the then
Municipal Court of Parañaque, Metro Manila, disallowing the appearances of petitioners Nelson B.
Malana and Robert V. Lucila as private prosecutors in Criminal Cases Nos. 58549 and 58550, both for
less serious physical injuries, filed against Pat. Danilo San Antonio and Pat. Rodolfo Diaz, respectively,
as well as the Order, dated September 4, 1979, denying the motion for reconsideration holding, among
others, that "the fiscal's claim that appearances of friends of party-litigants should be allowed only in
places where there is a scarcity of legal practitioner, to be well founded. For, if we are to allow non-
members of the bar to appear in court and prosecute cases or defend litigants in the guise of being
friends of the litigants, then the requirement of membership in the Integrated Bar of the Philippines and
the additional requirement of paying professional taxes for a lawyer to appear in court, would be put to
naught. " (p. 25, Rollo)

Records show that on April 6, 1979, petitioner Romulo Cantimbuhan filed separate criminal complaints
against Patrolmen Danilo San Antonio and Rodolfo Diaz for less serious physical injuries, respectively,
and were docketed as Criminal Cases Nos. 58549 and 58550 in the then Municipal Court of Parañaque,
Metro Manila.

Petitioners Nelson B. Malana and Robert V. Lucila, in 1979, were senior law students of the
U.P.assistance to the needy clients in the Office of the Legal Aid. Thus, in August 1979, petitioners
Malana and Lucila filed their separate appearances, as friends of complainant-petitioner Cantimbuhan.
Herein respondent Fiscal Leodegario C. Quilatan opposed the appearances of said petitioners, and
respondent judge, in an Order dated August 16, 1979, sustained the respondent fiscal and disallowed the
appearances of petitioners Malana and Lucila, as private prosecutors in said criminal cases. Likewise, on
September 4, 1979, respondent Judge issued an order denying petitioners' motion for reconsideration.
Hence, this petition for certiorari, mandamus and prohibition with prayers, among others, that the Orders
of respondent judge, dated August 16, 1979 and September 4, 1979, be set aside as they are in plain
violation of Section 34, Rule 138 of the Rules of Court and/or were issued with grave abuse of discretion
amounting to lack of jurisdiction. Upon motion, the Court, on November 8, 1979, issued a temporary
restraining order "enjoining respondent judge and all persons acting for and in his behalf from conducting
any proceedings in Criminal Cases Nos. 58549 (People of the Philippines vs. Danilo San Antonio) and
58559 (People of the Philippines vs. Rodolfo Diaz) of the Municipal Court of Parañaque, Metro Manila on
November 15, 1979 as scheduled or on any such dates as may be fixed by said respondent judge.

Basis of this petition is Section 34, Rule 138 of the Rules of Court which states: têñ.£îhqwâ£

SEC. 34. By whom litigation conducted. — In the court of a justice of the peace a party may conduct his
litigation in person, with the aid of an agent or friend appointed by him for that purpose, or with the aid of
an attorney. In any other court, a party may conduct his litigation personally or by aid of an attorney, and
his appearance must be either personal or by a duly authorized member of the bar.

Thus, a non-member of the Philippine Bar — a party to an action is authorized to appear in court and
conduct his own case; and, in the inferior courts, the litigant may be aided by a friend or agent or by an
attorney. However, in the Courts of First Instance, now Regional Trial Courts, he can be aided only by an
attorney.

On the other hand, it is the submission of the respondents that pursuant to Sections 4 and 15, Rule 110
of the Rules of Court, it is the fiscal who is empowered to determine who shall be the private prosecutor
as was done by respondent fiscal when he objected to the appearances of petitioners Malana and Lucila.
Sections 4 and 15, Rule 110 of the Rules of Court provide: têñ.£îhqwâ£

SEC. 4. Who must prosecute criminal actions. — All criminal actions either commenced by complaint or
by information shall be prosecuted under the direction and control of the fiscal.

xxx xxx xxx

SEC. 15. Intervention of the offended party in criminal action. — Unless the offended party has waived
the civil action or expressly reserved the right to institute it separately from the criminal action, and subject
to the provisions of section 4 hereof, he may intervene, personally or by attorney, in the prosecution of the
offense.

And, they contend that the exercise by the offended party to intervene is subject to the direction and
control of the fiscal and that his appearance, no less than his active conduct of the case later on, requires
the prior approval of the fiscal.

We find merit in the petition. Section 34, Rule 138 of the Rules of Court, clearly provides that in the
municipal court a party may conduct his litigation in person with the aid of an agent appointed by him for
the purpose. Thus, in the case of Laput vs. Bernabe, 55 Phil. 621, a law student was allowed to represent
the accused in a case pending before the then Municipal Court, the City Court of Manila, who was
charged for damages to property through reckless imprudence. "It is accordingly our view that error was
committed in the municipal court in not allowing Crispiniano V. Laput to act as an agent or friend of
Catalino Salas to aid the latter in conducting his defense." The permission of the fiscal is not necessary
for one to enter his appearance as private prosecutor. In the first place, the law does not impose this
condition. What the fiscal can do, if he wants to handle the case personally is to disallow the private
prosecutor's participation, whether he be a lawyer or not, in the trial of the case. On the other hand, if the
fiscal desires the active participation of the private prosecutor, he can just manifest to the court that the
private prosecutor, with its approval, will conduct the prosecution of the case under his supervision and
control. Further, We may add that if a non-lawyer can appear as defense counsel or as friend of the
accused in a case before the municipal trial court, with more reason should he be allowed to appear as
private prosecutor under the supervision and control of the trial fiscal.
In the two criminal cases filed before the Municipal Court of Parañaque, petitioner Cantimbuhan, as the
offended party, did not expressly waive the civil action nor reserve his right to institute it separately and,
therefore, the civil action is deemed impliedly instituted in said criminal cases. Thus, said complainant
Romulo Cantimbuhan has personal interest in the success of the civil action and, in the prosecution of the
same, he cannot be deprived of his right to be assisted by a friend who is not a lawyer.

WHEREFORE, the Orders issued by respondent judge dated August 16, 1979 and September 4, 1979
which disallowed the appearances of petitioners Nelson B. Malana and Robert V. Lucila as friends of
party-litigant petitioner Romulo Cantimbuhan. are hereby SET ASIDE and respondent judge is hereby
ordered to ALLOW the appearance and intervention of petitioners Malana and Lucila as friends of
Romulo Cantimbuhan. Accordingly, the temporary restraining order issued on November 8, 1979 is
LIFTED.

SO ORDERED.1äwphï1.ñët

Fernando, C.J., Makasiar, Concepcion Jr., Guerrero, Abad Santos, Plana, Escolin and Gutierrez, Jr., JJ.,
concur.

Separate Opinions

AQUINO, J., dissenting:

Senior law students should study their lessons anti prepare for the bar. They have no business appearing
in court.

MELENCIO-HERRERA, J., dissenting:

Section 34, Rule 138 of the Rules of Court specifically provides that it is "a party" who may conduct his
litigation in person, with the aid of an agent or friend appointed by him for that purpose in the Court of a
Justice of the Peace. Romulo Cantimbuhan, as the complaining witness in Criminal Cases Nos. 58549
and 58550 of the then Municipal Court of Parañaque, Metro Manila, is not a "party" within the meaning of
the said Rule. The parties in a criminal case are the accused and the People. A complaining witness or
an offended party only intervene in a criminal action in respect of the civil liability. The case of Laput and
Salas vs. Bernabe, 55 Phil. 621, is authority only in respect of the accused, as a "party", in a criminal
case.

Sections 4 and 15, Rule 110 of the Rules of Court, being the more specific provisions in respect of
criminal cases, should take precedence over Section 34, Rule 138 and should be controlling (Bagatsing
vs. Hon. Ramirez, 74 SCRA 306 [1976]). Section 4 provides that all criminal actions shall be prosecuted
under the direction and control of the Fiscal, while Section 15 specifically provides that the offended party
may intervene, personally or by attorney, in the prosecution of the offense.

I vote, therefore, to uphold the Order of respondent Municipal Judge, dated August 16, 1979, disallowing
the appearances of petitioners as private prosecutors in the abovementioned criminal cases. Orders set
aside.

Fernando, C.J., Makasiar, Concepcion, Jr., Guerrero, Abad Santos, Plana, Escolin and Gutierrez, Jr., JJ.,
concur.
Separate Opinions

AQUINO, J., dissenting:

Senior law students should study their lessons anti prepare for the bar. They have no business appearing
in court.

MELENCIO-HERRERA, J., dissenting:

Section 34, Rule 138 of the Rules of Court specifically provides that it is "a party" who may conduct his
litigation in person, with the aid of an agent or friend appointed by him for that purpose in the Court of a
Justice of the Peace. Romulo Cantimbuhan, as the complaining witness in Criminal Cases Nos. 58549
and 58550 of the then Municipal Court of Parañaque, Metro Manila, is not a "party" within the meaning of
the said Rule. The parties in a criminal case are the accused and the People. A complaining witness or
an offended party only intervene in a criminal action in respect of the civil liability. The case of Laput and
Salas vs. Bernabe, 55 Phil. 621, is authority only in respect of the accused, as a "party", in a criminal
case.

Sections 4 and 15, Rule 110 of the Rules of Court, being the more specific provisions in respect of
criminal cases, should take precedence over Section 34, Rule 138 and should be controlling (Bagatsing
vs. Hon. Ramirez, 74 SCRA 306 [1976]). Section 4 provides that all criminal actions shall be prosecuted
under the direction and control of the Fiscal, while Section 15 specifically provides that the offended party
may intervene, personally or by attorney, in the prosecution of the offense.

I vote, therefore, to uphold the Order of respondent Municipal Judge, dated August 16, 1979, disallowing
the appearances of petitioners as private prosecutors in the abovementioned criminal cases. Orders set
aside.

De Castro, Teehankee, JJ., concur

_______________

FIRST DIVISION

A.C. No. 5299 August 19, 2003

ATTY. ISMAEL G. KHAN, JR., Assistant Court Administrator and Chief, Public Information Office,
Complainant,
vs.
ATTY. RIZALINO T. SIMBILLO, Respondent.

x-----------------------x

G.R. No. 157053 August 19, 2003

ATTY. RIZALINO T. SIMBILLO, Petitioner,

vs.
IBP COMMISSION ON BAR DISCIPLINE and ATTY. ISMAEL G. KHAN, JR., in his capacity as Assistant
Court Administrator and Chief, Public Information Office, Respondents.

RESOLUTION
YNARES-SANTIAGO, J.:

This administrative complaint arose from a paid advertisement that appeared in the July 5, 2000 issue of
the newspaper, Philippine Daily Inquirer, which reads: "ANNULMENT OF MARRIAGE Specialist 532-
4333/521-2667."1

Ms. Ma. Theresa B. Espeleta, a staff member of the Public Information Office of the Supreme Court,
called up the published telephone number and pretended to be an interested party. She spoke to Mrs.
Simbillo, who claimed that her husband, Atty. Rizalino Simbillo, was an expert in handling annulment
cases and can guarantee a court decree within four to six months, provided the case will not involve
separation of property or custody of children. Mrs. Simbillo also said that her husband charges a fee of
P48,000.00, half of which is payable at the time of filing of the case and the other half after a decision
thereon has been rendered.

Further research by the Office of the Court Administrator and the Public Information Office revealed that
similar advertisements were published in the August 2 and 6, 2000 issues of the Manila Bulletin and
August 5, 2000 issue of The Philippine Star.2

On September 1, 2000, Atty. Ismael G. Khan, Jr., in his capacity as Assistant Court Administrator and
Chief of the Public Information Office, filed an administrative complaint against Atty. Rizalino T. Simbillo
for improper advertising and solicitation of his legal services, in violation of Rule 2.03 and Rule 3.01 of the
Code of Professional Responsibility and Rule 138, Section 27 of the Rules of Court.3

In his answer, respondent admitted the acts imputed to him, but argued that advertising and solicitation
per se are not prohibited acts; that the time has come to change our views about the prohibition on
advertising and solicitation; that the interest of the public is not served by the absolute prohibition on
lawyer advertising; that the Court can lift the ban on lawyer advertising; and that the rationale behind the
decades-old prohibition should be abandoned. Thus, he prayed that he be exonerated from all the
charges against him and that the Court promulgate a ruling that advertisement of legal services offered by
a lawyer is not contrary to law, public policy and public order as long as it is dignified.4

The case was referred to the Integrated Bar of the Philippines for investigation, report and
recommendation.5 On June 29, 2002, the IBP Commission on Bar Discipline passed Resolution No. XV-
2002-306,6 finding respondent guilty of violation of Rules 2.03 and 3.01 of the Code of Professional
Responsibility and Rule 138, Section 27 of the Rules of Court, and suspended him from the practice of
law for one (1) year with the warning that a repetition of similar acts would be dealt with more severely.
The IBP Resolution was noted by this Court on November 11, 2002.7

In the meantime, respondent filed an Urgent Motion for Reconsideration,8 which was denied by the IBP in
Resolution No. XV-2002-606 dated October 19, 20029

Hence, the instant petition for certiorari, which was docketed as G.R. No. 157053 entitled, "Atty. Rizalino
T. Simbillo, Petitioner versus IBP Commission on Bar Discipline, Atty. Ismael G. Khan, Jr., Asst. Court
Administrator and Chief, Public Information Office, Respondents." This petition was consolidated with
A.C. No. 5299 per the Court’s Resolution dated March 4, 2003.

In a Resolution dated March 26, 2003, the parties were required to manifest whether or not they were
willing to submit the case for resolution on the basis of the pleadings.10 Complainant filed his
Manifestation on April 25, 2003, stating that he is not submitting any additional pleading or evidence and
is submitting the case for its early resolution on the basis of pleadings and records thereof. 11
Respondent, on the other hand, filed a Supplemental Memorandum on June 20, 2003.

We agree with the IBP’s Resolutions Nos. XV-2002-306 and XV-2002-606.

Rules 2.03 and 3.01 of the Code of Professional Responsibility read:

Rule 2.03. – A lawyer shall not do or permit to be done any act designed primarily to solicit legal
business.

Rule 3.01. – A lawyer shall not use or permit the use of any false, fraudulent, misleading, deceptive,
undignified, self-laudatory or unfair statement or claim regarding his qualifications or legal services.

Rule 138, Section 27 of the Rules of Court states:

SEC. 27. Disbarment and 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 for any violation of the oath which he is required to take
before the admission to practice, or for a willful disobedience appearing as attorney for a party without
authority to do so.

It has been repeatedly stressed that the practice of law is not a business.12 It is a profession in which
duty to public service, not money, is the primary consideration. Lawyering is not primarily meant to be a
money-making venture, and law advocacy is not a capital that necessarily yields profits.13 The gaining of
a livelihood should be a secondary consideration.14 The duty to public service and to the administration
of justice should be the primary consideration of lawyers, who must subordinate their personal interests or
what they owe to themselves.15 The following elements distinguish the legal profession from a business:

1. A duty of public service, of which the emolument is a by-product, and in which one may attain the
highest eminence without making much money;

2. A relation as an "officer of the court" to the administration of justice involving thorough sincerity,
integrity and reliability;

3. A relation to clients in the highest degree of fiduciary;

4. A relation to colleagues at the bar characterized by candor, fairness, and unwillingness to resort to
current business methods of advertising and encroachment on their practice, or dealing directly with their
clients.16

There is no question that respondent committed the acts complained of. He himself admits that he
caused the publication of the advertisements. While he professes repentance and begs for the Court’s
indulgence, his contrition rings hollow considering the fact that he advertised his legal services again after
he pleaded for compassion and after claiming that he had no intention to violate the rules. Eight months
after filing his answer, he again advertised his legal services in the August 14, 2001 issue of the Buy &
Sell Free Ads Newspaper.17 Ten months later, he caused the same advertisement to be published in the
October 5, 2001 issue of Buy & Sell.18 Such acts of respondent are a deliberate and contemptuous
affront on the Court’s authority.

What adds to the gravity of respondent’s acts is that in advertising himself as a self-styled "Annulment of
Marriage Specialist," he wittingly or unwittingly erodes and undermines not only the stability but also the
sanctity of an institution still considered sacrosanct despite the contemporary climate of permissiveness in
our society. Indeed, in assuring prospective clients that an annulment may be obtained in four to six
months from the time of the filing of the case,19 he in fact encourages people, who might have otherwise
been disinclined and would have refrained from dissolving their marriage bonds, to do so.

Nonetheless, the solicitation of legal business is not altogether proscribed. However, for solicitation to be
proper, it must be compatible with the dignity of the legal profession. If it is made in a modest and
decorous manner, it would bring no injury to the lawyer and to the bar.20 Thus, the use of simple signs
stating the name or names of the lawyers, the office and residence address and fields of practice, as well
as advertisement in legal periodicals bearing the same brief data, are permissible. Even the use of calling
cards is now acceptable.21 Publication in reputable law lists, in a manner consistent with the standards of
conduct imposed by the canon, of brief biographical and informative data is likewise allowable. As
explicitly stated in Ulep v. Legal Clinic, Inc.:22

Such data must not be misleading and may include only a statement of the lawyer’s name and the names
of his professional associates; addresses, telephone numbers, cable addresses; branches of law
practiced; date and place of birth and admission to the bar; schools attended with dates of graduation,
degrees and other educational distinctions; public or quasi-public offices; posts of honor; legal
authorships; legal teaching positions; membership and offices in bar associations and committees
thereof, in legal and scientific societies and legal fraternities; the fact of listings in other reputable law lists;
the names and addresses of references; and, with their written consent, the names of clients regularly
represented.

The law list must be a reputable law list published primarily for that purpose; it cannot be a mere
supplemental feature of a paper, magazine, trade journal or periodical which is published principally for
other purposes. For that reason, a lawyer may not properly publish his brief biographical and informative
data in a daily paper, magazine, trade journal or society program. Nor may a lawyer permit his name to
be published in a law list the conduct, management, or contents of which are calculated or likely to
deceive or injure the public or the bar, or to lower dignity or standing of the profession.

The use of an ordinary simple professional card is also permitted. The card may contain only a statement
of his name, the name of the law firm which he is connected with, address, telephone number and special
branch of law practiced. The publication of a simple announcement of the opening of a law firm or of
changes in the partnership, associates, firm name or office address, being for the convenience of the
profession, is not objectionable. He may likewise have his name listed in a telephone directory but not
under a designation of special branch of law. (emphasis and italics supplied)

WHEREFORE, in view of the foregoing, respondent RIZALINO T. SIMBILLO is found GUILTY of violation
of Rules 2.03 and 3.01 of the Code of Professional Responsibility and Rule 138, Section 27 of the Rules
of Court. He is SUSPENDED from the practice of law for ONE (1) YEAR effective upon receipt of this
Resolution. He is likewise STERNLY WARNED that a repetition of the same or similar offense will be
dealt with more severely.

Let copies of this Resolution be entered in his record as attorney and be furnished the Integrated Bar of
the Philippines and all courts in the country for their information and guidance.

SO ORDERED.

Vitug, (Acting Chairman),Carpio, and Azcuna, JJ., concur.

Davide, Jr., C.J., (Chairman ), abroad, on official business.

____________

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

A.C. No. 6672 September 4, 2009

PEDRO L. LINSANGAN, Complainant,

vs.
ATTY. NICOMEDES TOLENTINO, Respondent.
RESOLUTION

CORONA, J.:

This is a complaint for disbarment1 filed by Pedro Linsangan of the Linsangan Linsangan & Linsangan
Law Office against Atty. Nicomedes Tolentino for solicitation of clients and encroachment of professional
services.

Complainant alleged that respondent, with the help of paralegal Fe Marie Labiano, convinced his clients2
to transfer legal representation. Respondent promised them financial assistance3 and expeditious
collection on their claims.4 To induce them to hire his services, he persistently called them and sent them
text messages.

To support his allegations, complainant presented the sworn affidavit5 of James Gregorio attesting that
Labiano tried to prevail upon him to sever his lawyer-client relations with complainant and utilize
respondent’s services instead, in exchange for a loan of ₱50,000. Complainant also attached
"respondent’s" calling card:6

Front

NICOMEDES TOLENTINO

LAW OFFFICE

CONSULTANCY & MARITIME SERVICES

W/ FINANCIAL ASSISTANCE

Fe Marie L. Labiano
Paralegal

1st MIJI Mansion, 2nd Flr. Rm. M-01

6th Ave., cor M.H. Del Pilar
Grace Park, Caloocan City Tel: 362-7820
Fax: (632) 362-7821
Cel.: (0926) 2701719
Back

SERVICES OFFERED:

CONSULTATION AND ASSISTANCE

TO OVERSEAS SEAMEN
REPATRIATED DUE TO ACCIDENT,
INJURY, ILLNESS, SICKNESS, DEATH
AND INSURANCE BENEFIT CLAIMS
ABROAD.

1avvphi1

(emphasis supplied)
Hence, this complaint.

Respondent, in his defense, denied knowing Labiano and authorizing the printing and circulation of the
said calling card.7

The complaint was referred to the Commission on Bar Discipline (CBD) of the Integrated Bar of the
Philippines (IBP) for investigation, report and recommendation.8

Based on testimonial and documentary evidence, the CBD, in its report and recommendation,9 found that
respondent had encroached on the professional practice of complainant, violating Rule 8.0210 and other
canons11 of the Code of Professional Responsibility (CPR). Moreover, he contravened the rule against
soliciting cases for gain, personally or through paid agents or brokers as stated in Section 27, Rule 13812
of the Rules of Court. Hence, the CBD recommended that respondent be reprimanded with a stern
warning that any repetition would merit a heavier penalty.

We adopt the findings of the IBP on the unethical conduct of respondent but we modify the recommended
penalty.

The complaint before us is rooted on the alleged intrusion by respondent into complainant’s professional
practice in violation of Rule 8.02 of the CPR. And the means employed by respondent in furtherance of
the said misconduct themselves constituted distinct violations of ethical rules.

Canons of the CPR are rules of conduct all lawyers must adhere to, including the manner by which a
lawyer’s services are to be made known. Thus, Canon 3 of the CPR provides:

CANON 3 - A lawyer in making known his legal services shall use only true, honest, fair, dignified and
objective information or statement of facts.

Time and time again, lawyers are reminded that the practice of law is a profession and not a business;
lawyers should not advertise their talents as merchants advertise their wares.13 To allow a lawyer to
advertise his talent or skill is to commercialize the practice of law, degrade the profession in the public’s
estimation and impair its ability to efficiently render that high character of service to which every member
of the bar is called.14

Rule 2.03 of the CPR provides:

RULE 2.03. A lawyer shall not do or permit to be done any act designed primarily to solicit legal business.

Hence, lawyers are prohibited from soliciting cases for the purpose of gain, either personally or through
paid agents or brokers.15 Such actuation constitutes malpractice, a ground for disbarment.16

Rule 2.03 should be read in connection with Rule 1.03 of the CPR which provides:

RULE 1.03. A lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or
delay any man’s cause.

This rule proscribes "ambulance chasing" (the solicitation of almost any kind of legal business by an
attorney, personally or through an agent in order to gain employment)17 as a measure to protect the
community from barratry and champerty.18

Complainant presented substantial evidence19 (consisting of the sworn statements of the very same
persons coaxed by Labiano and referred to respondent’s office) to prove that respondent indeed solicited
legal business as well as profited from referrals’ suits.
Although respondent initially denied knowing Labiano in his answer, he later admitted it during the
mandatory hearing.

Through Labiano’s actions, respondent’s law practice was benefited. Hapless seamen were enticed to
transfer representation on the strength of Labiano’s word that respondent could produce a more favorable
result.

Based on the foregoing, respondent clearly solicited employment violating Rule 2.03, and Rule 1.03 and
Canon 3 of the CPR and Section 27, Rule 138 of the Rules of Court.1avvphi1

With regard to respondent’s violation of Rule 8.02 of the CPR, settled is the rule that a lawyer should not
steal another lawyer’s client nor induce the latter to retain him by a promise of better service, good result
or reduced fees for his services.20 Again the Court notes that respondent never denied having these
seafarers in his client list nor receiving benefits from Labiano’s "referrals." Furthermore, he never denied
Labiano’s connection to his office.21 Respondent committed an unethical, predatory overstep into
another’s legal practice. He cannot escape liability under Rule 8.02 of the CPR.

Moreover, by engaging in a money-lending venture with his clients as borrowers, respondent violated
Rule 16.04:

Rule 16.04 – A lawyer shall not borrow money from his client unless the client’s interests are fully
protected by the nature of the case or by independent advice. Neither shall a lawyer lend money to a
client except, when in the interest of justice, he has to advance necessary expenses in a legal matter he
is handling for the client.

The rule is that a lawyer shall not lend money to his client. The only exception is, when in the interest of
justice, he has to advance necessary expenses (such as filing fees, stenographer’s fees for transcript of
stenographic notes, cash bond or premium for surety bond, etc.) for a matter that he is handling for the
client.

The rule is intended to safeguard the lawyer’s independence of mind so that the free exercise of his
judgment may not be adversely affected.22 It seeks to ensure his undivided attention to the case he is
handling as well as his entire devotion and fidelity to the client’s cause. If the lawyer lends money to the
client in connection with the client’s case, the lawyer in effect acquires an interest in the subject matter of
the case or an additional stake in its outcome.23 Either of these circumstances may lead the lawyer to
consider his own recovery rather than that of his client, or to accept a settlement which may take care of
his interest in the verdict to the prejudice of the client in violation of his duty of undivided fidelity to the
client’s cause.24

As previously mentioned, any act of solicitation constitutes malpractice25 which calls for the exercise of
the Court’s disciplinary powers. Violation of anti-solicitation statutes warrants serious sanctions for
initiating contact with a prospective client for the purpose of obtaining employment.26 Thus, in this
jurisdiction, we adhere to the rule to protect the public from the Machiavellian machinations of
unscrupulous lawyers and to uphold the nobility of the legal profession.

Considering the myriad infractions of respondent (including violation of the prohibition on lending money
to clients), the sanction recommended by the IBP, a mere reprimand, is a wimpy slap on the wrist. The
proposed penalty is grossly incommensurate to its findings.

A final word regarding the calling card presented in evidence by petitioner. A lawyer’s best advertisement
is a well-merited reputation for professional capacity and fidelity to trust based on his character and
conduct.27 For this reason, lawyers are only allowed to announce their services by publication in
reputable law lists or use of simple professional cards.

Professional calling cards may only contain the following details:

(a) lawyer’s name;

(b) name of the law firm with which he is connected;

(c) address;

(d) telephone number and

(e) special branch of law practiced.28

Labiano’s calling card contained the phrase "with financial assistance." The phrase was clearly used to
entice clients (who already had representation) to change counsels with a promise of loans to finance
their legal actions. Money was dangled to lure clients away from their original lawyers, thereby taking
advantage of their financial distress and emotional vulnerability. This crass commercialism degraded the
integrity of the bar and deserved no place in the legal profession. However, in the absence of substantial
evidence to prove his culpability, the Court is not prepared to rule that respondent was personally and
directly responsible for the printing and distribution of Labiano’s calling cards.

WHEREFORE, respondent Atty. Nicomedes Tolentino for violating Rules 1.03, 2.03, 8.02 and 16.04 and
Canon 3 of the Code of Professional Responsibility and Section 27, Rule 138 of the Rules of Court is
hereby SUSPENDED from the practice of law for a period of one year effective immediately from receipt
of this resolution. He is STERNLY WARNED that a repetition of the same or similar acts in the future shall
be dealt with more severely.

Let a copy of this Resolution be made part of his records in the Office of the Bar Confidant, Supreme
Court of the Philippines, and be furnished to the Integrated Bar of the Philippines and the Office of the
Court Administrator to be circulated to all courts.

SO ORDERED.

_______________

Geffen v. Moss
Annotate this Case
[Civ. No. 46079. Court of Appeals of California, Second Appellate District, Division Three. November 24,
1975.]
RALPH J. GEFFEN, Plaintiff, Cross-defendant and Appellant, v. RUSSELL J. MOSS, Defendant, Cross-
complainant and Respondent

(Opinion by Allport, Acting P. J., with Cobey and Potter, JJ., concurring.) [53 Cal. App. 3d 216]

COUNSEL

Louis R. Stein, for Plaintiff, Cross-defendant and Appellant.

Russell J. Moss, in pro. per., for Defendant, Cross-complainant and Respondent.

OPINION

ALLPORT, Acting P. J.

Ralph J. Geffen appeals from a judgment entered in favor of Russell J. Moss in an action for damages for
breach of contract. It appears without conflict that, because of an appointment as a United States
magistrate precluding him from continuing the private practice of law, attorney Geffen entered into a
written agreement with attorney Moss whereby Geffen agreed to sell and Moss to buy "the physical
assets, files and work in process" of Geffen's law practice. The [53 Cal. App. 3d 218] total purchase price
was $27,500. Fifteen thousand dollars was paid in accordance with the terms of the contract. The action
seeks to recover an unpaid balance of $12,500 plus attorney's fees and costs.

The Contract

The pertinent provisions of the contract are as follows:

"Ralph J. Geffen, hereinafter designated as 'Geffen,' and Russell J. Moss, hereinafter designated as
'Moss,' agree as follows:

"Geffen hereby sells to Moss the physical assets, files and work in process of the law practice of Geffen
located in the City of Norwalk, except as hereinafter specified, on the following terms and conditions:

"* * *

"The purchase shall include:

"A. Entire law library, excepting not to exceed ten (10) books to be agreed upon between the parties, and
Martindale-Hubbell (1969);

"B. Any and all furniture, fixtures, furnishings and equipment, excepting not to exceed six (6) items of
decor (not major items) selected by Geffen; and

"C. Subject to approval thereof by the respective clients, all cases and legal matters now pending in the
above law practice except personal injury or wrongful death cases and the following legal matters:

"* * *

"Geffen will sublet to Moss, at the same rental (Three Hundred Dollars [$300.00] per month) and upon the
same terms and conditions as are provided in the Master Lease held by him, Suite 7 (six [6] rooms) now
occupied by Geffen at 11850 East Firestone Boulevard, Norwalk, California, for a term of three (3) years.
Upon full payment of the purchase price, Geffen will assign to Moss said Master Lease and will assist in
procuring a further lease in Moss' name alone as lessee thereafter upon request of Moss. [53 Cal. App.
3d 219]

"* * *

"Geffen expresses an intention to exert his influence for the continued welfare of the practice and to
encourage present and former clients to utilize the legal services of the office in the future.

VIII

"Geffen agrees that he will not, so long as Moss is not in default of any obligation to Geffen hereunder,
maintain any office for the practice of law within ten (10) miles of the City of Norwalk nor hold himself out
as in practice in said area for a period of six (6) years following the execution of this Agreement without
the consent of Moss.

"* * *

"All fees collected for work done by Moss shall belong to Moss; and all fees collected for work in process,
as to which the fee is contingent or agreed to be collected only after the completion of the work, or only in
stages (and not collected or due on January 1, 1971), shall belong to Moss.

"* * *
"Appropriate and ethical announcements may be sent out by Moss of his succession to the practice, at
his expense; and Geffen will cooperate in the wording and mailing list for such announcements.

"* * *

"Of the total purchase price, Fifteen Thousand Dollars ($15,000.00) is attributable to the fair value of
physical assets sold."

Findings of Fact

The pertinent findings of fact are as follows:

"3. That it was the intention of plaintiff, an Attorney at Law, to sell to the defendant, also an Attorney at
Law, his, the plaintiff's practice of law, insofar as the same could be accomplished within the limits and
[53 Cal. App. 3d 220] confines of the canons of ethics and it was the intention of the defendant Attorney
at Law to purchase the same from plaintiff.

"4. That the agreement between plaintiff and defendant executed December 1, 1970, provided for the
sale of all physical assets of the Law Offices of Plaintiff Attorney, which consisted generally of a Library,
Index of former and present clients, office equipment, and a three-year lease which was subsequently
assigned to defendant and which provided a substantial benefit by way of rental less than prevailing rates
in the community, which benefit was $8,500.00. Custody of all files of completed and pending business
were transferred to defendant. The Court further finds the value of all of said assets other than the lease
to be in the approximate sum of $6,500.00, and the total value of all physical assets, including the lease
to be the sum of $15,000.00.

"* * *

"6. That the contract, Exhibit 3 in evidence, omits any reference to good will and precludes any payment
to the plaintiff based on pending or future business.

"7. That the plaintiff did not and would not break down the total sales price as to value assigned to any
particular item.

"* * *

"9. That the plaintiff per the terms of the contract expressed his intention to exert his influence for the
continued welfare of the practice and to encourage present and former clients to utilize the legal services
of the law office in the future; and that pursuant thereto he did thereafter with the aid of the defendant
prepare and circulate the letter of announcement, Exhibit 9.

"* * *

"13. That both plaintiff and defendant considered the expectation of future business from present and
former clients as a principal motivating factor in this sale transaction.

"14. That without the expectation and hope of future patronage by existing and former clients of the office,
the value of the law office would not exceed $15,000.00. [53 Cal. App. 3d 221]

"15. That the plaintiff advised the defendant that he could make no promise or guarantee of continued
patronage by existing and former clients.

"16. That the attempted sale of future patronage by existing and former clients of the office constituted a
sale of the good will of the law practice.
"17. That the expected business from former and current clients of the plaintiff did not materialize and the
defendant has utilized that opportunity; and the plaintiff has received the fair value for the physical assets
transferred pursuant to the agreement."

Conclusions of Law

The pertinent conclusions of law are as follows:

"1. That the plaintiff's attempt to sell the expectation of future patronage of his former and current clients
and to encourage them to patronize the defendant, and the defendant's attempt to purchase the future
patronage of the plaintiff's former and current clients and the recommendation of himself by the plaintiff to
those former and current clients constitutes an attempt to buy and sell the good will of a law practice.

"2. That the sale or attempted sale of the good will of the law practice is contrary to public policy and
against the spirit and intent of Rules 2 and 3 of Section 6076 of the Business and Professions Code, 'The
State Bar Act' and of the ABA Canons of Ethics No. 4, EC 4-6, prohibiting the sale of a law practice as a
going business.

"3. That both plaintiff and defendant are in pari delicto and the Court will leave the parties where it has
found them as to the attempted sale of good will of the law practice.

"4. That neither plaintiff nor defendant has been unjustly enriched at the expense of the other.

"5. That judgment should be for the defendant on the complaint together with defendant's costs and
attorney's fees in the sum of $500.00." [53 Cal. App. 3d 222]

Contentions

It is contended on appeal that the trial court erred in utilizing extrinsic parol and other evidence to alter the
express terms of the written contract and in then construing the contract, as altered, to be contrary to
public policy and unenforceable.

The argument advanced is that the agreement, in clear, plain and unambiguous language, provided for
the purchase and sale of the physical assets, assignment of the leasehold and for retention by the buyer
of any legal fees generated from the work in process and did not purport to dispose of good will of a law
practice. It is urged that the language employed by the contracting parties in drafting the agreement did
not warrant the resort to extrinsic evidence nor require the result reached by the trial court.

Discussion

At the outset we note that illegality of the agreement was raised by way of an affirmative defense in the
answer. The sufficiency of the allegation of illegality was not challenged in the lower court. [1a] The
threshold question presented for consideration by this court is whether the resort to extrinsic evidence as
to the intention of the parties on the issue of illegality was proper. The record clearly indicates that the trial
court did admit and utilize such evidence in resolving this issue against Geffen. In the memorandum of
intended decision we find the following: "Although the contract, Exhibit 3 in evidence, is so drawn as to
omit any reference to 'good will', precludes any payment to the plaintiff based on pending or future
business, and although the evidence establishes that the plaintiff at no time did or would break down the
total sales price as to the value assigned to any particular item, and although the contract provision,
Section 18, providing $15,000.00 instead of $13,750.00 as attributable to the fair value of physical assets
was prompted by way of modification at defendant's request, it is clearly apparent to this court, based on
the total evidence presented, that each party considered the expectation of future business from present
clients and former clients as a principal motivating factor in this transaction. This concern is evidenced to
some extent by paragraph 7 of the contract referring to plaintiff's intention to exert his influence for the
continued welfare of the practice and to encourage present and former clients to utilize the legal services
of the office in the future. This factor of the sale is further evidenced and supplemented by the letter of
announcement, Exhibit 9." fn. 1 [53 Cal. App. 3d 223]

[2] While it is true that a written instrument may not be changed, altered, modified, detracted from or
added to in any particular whatsoever except by another instrument in writing, where parol or other
extrinsic evidence is consistent with, explains and does not vary the written contract, it may be admitted.
(Shimmon v. Moore, 104 Cal. App. 2d 554, 559 [232 P.2d 22].) [3] Pacific Gas & E. Co. v. G. W. Thomas
Drayage etc. Co., 69 Cal. 2d 33 [69 Cal. Rptr. 561, 442 P.2d 641, 40 A.L.R.3d 1373], disposes of the
argument advanced in the instant case that the intent of the parties must be determined "from the four
corners of the agreement." In that case it was said at page 37:

"The test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not
whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence
is relevant to prove a meaning to which the language of the instrument is reasonably susceptible.
(Continental Baking Co. v. Katz (1968) 68 Cal. 2d 512, 520-521 [67 Cal. Rptr. 761, 439 P.2d 889];
Parsons v. Bristol Development Co. (1965) 62 Cal. 2d 861, 865 [44 Cal. Rptr. 767, 402 P.2d 839]; Hulse
v. Juillard Fancy Foods Co. (1964) 61 Cal. 2d 571, 573 [39 Cal. Rptr. 529, 394 P.2d 65]; Nofziger v.
Holman (1964) 61 Cal. 2d 526, 528 [39 Cal. Rptr. 384, 393 P.2d 696]; Coast Bank v. Minderhout (1964)
61 Cal. 2d 311, 315 [38 Cal. Rptr. 505, 392 P.2d 265]; Imbach v. Schultz (1962) 58 Cal. 2d 858, 860 [27
Cal. Rptr. 160, 377 P.2d 272]; Reid v. Overland Machined Products (1961) 55 Cal. 2d 203, 210 [10 Cal.
Rptr. 819, 359 P.2d 251].)

"A rule that would limit the determination of the meaning of a written instrument to its four-corners merely
because it seems to the court to be clear and unambiguous, would either deny the relevance of the
intention of the parties or presuppose a degree of verbal precision and stability our language has not
attained."

We agree, however, that this court is not bound by the trial court's interpretation of the contract. (Estate of
Dodge, 6 Cal. 3d 311, 318 [98 [53 Cal. App. 3d 224] Cal.Rptr. 801, 491 P.2d 385]; Parsons v. Bristol
Development Co., 62 Cal. 2d 861, 865-866 [44 Cal. Rptr. 767, 402 P.2d 839].) [1b] We now proceed to
make an independent examination of the agreement as to its meaning to determine whether the trial
court's interpretation is so erroneous that it must be reversed.

The preamble states that the subject matter of the sale is the physical assets, files and work in process
"of the law practice." In paragraph III the subject matter is more specifically defined as consisting of a law
library, furniture, fixtures, furnishings and "all cases and legal matters now pending in the above law
practice [with certain exceptions]. ..." Geffen then agrees to sublet the premises and upon payment of the
purchase price to assign the lease. Geffen expresses an intention to exert his influence for the
"continued" welfare of the practice and to encourage present and former clients to "utilize the legal
services of the office in the future." He agrees not to compete with Moss in the practice. Noting that the
fair value of the physical assets, defined as library, furniture, fixtures, furnishings and equipment is
established in the contract to be $15,000 and that all fees earned for work done by Moss or collected for
work in progress belong to Moss, we immediately wonder what the additional consideration, payable in
monthly installments totaling $12,500 covers. It does not appear to be for assignment of the lease since
that act is contingent upon and to be made after full payment of the total purchase price of $27,500.

In light of the applicable law we conclude that these provisions of the agreement, in view of the
transaction contemplated thereby, clearly support the trial court's action in utilizing parol and extrinsic
evidence to determine the intent of the parties, although we are of the opinion it would not have been
unreasonable for that court to conclude from the terms of the contract itself that a sale of future patronage
of existing and former clients was contemplated without resort to extrinsic evidence. What else was being
sold for the $12,500 now being sought by Geffen in this action?

No attack is made upon the sufficiency of the evidence to support the finding that the parties "considered
the expectation of future business from present and former clients as a principal motivating factor in this
sale transaction" and that without that expectation the value of the law office would not exceed $15,000.
Under the circumstances we must presume there was evidentiary support for these and the other
findings. (Brown v. World Church, 272 Cal. App. 2d 684, 690 [77 Cal. Rptr. 669, 45 A.L.R.3d 622].) [53
Cal. App. 3d 225]

[4] We turn now to the validity of the trial court's conclusion that the attempt to sell the expectation of
future patronage of former and current clients was an attempt to buy and sell the good will of a law
practice as a going business. In this respect we have read and considered the rationale of that court as
expressed in its memorandum of intended decision on the issue and, while not binding on this court
(Dairyman's Cooperative Creamery Assn. v. Leipold, 34 Cal. App. 3d 184, 188 [109 Cal.Rptr. 753]), we
adopt such as a part of this opinion by reference. fn. 2

Plaintiff argues that the conclusion of illegality is neither sanctioned by law nor compelled by the facts of
this case. True, we have been referred to no specific statute nor any California case law compelling us to
hold that a purported sale of good will of a law practice is contrary to public policy and therefore illegal.
We are, however, by this argument, expected to overlook the policy expressed in rules 2 and 3 of the
Rules of Professional Conduct of the State Bar of California and approved by the Supreme Court
pursuant to Business and Professions Code section 6076 prohibiting solicitation or obtaining of
professional employment by any means of communication. Noting, as found by the trial court, that two
able experienced attorneys drew the agreement to sell only insofar as this could be accomplished "within
the limits and confines of the canons of ethics," they themselves acknowledge some applicable limitation
on the scope of the sale. We agree that, insofar as the parties purport to sell the physical assets and to
assign the leasehold and dispose of pending office [53 Cal. App. 3d 226] matters, the agreement does
not violate public policy as expressed in the canons of legal ethics. However, it appears obvious to us that
both parties, recognizing a limitation against the sale of good will, nevertheless attempted to avoid a
proscription against such by deliberately failing to mention good will as such in the agreement. We cannot
say that the trial court's resolution of the matter was unreasonable. The attempted sale of the expectation
of future patronage by former and current clients of a law office coupled with an agreement to encourage
said clients to continue to patronize the purchaser of the physical assets of the office, under the facts of
this case, may well be said to constitute an attempt to buy and sell the good will of a law practice as a
going business, contrary to public policy, and that the portion of the agreement purporting to so do is
invalid and unenforceable. The following language found in Linnick v. State Bar, 62 Cal. 2d 17, 21 [41
Cal. Rptr. 1, 396 P.2d 33], although involving the activities of a lay person and an attorney, indicates the
existence of applicable ethical considerations: "Rule 3 of the Rules of Professional Conduct, however,
prohibits an attorney from remunerating another for either 'soliciting' or 'obtaining' employment for him.
Whether or not a lay intermediary solicits the business referred, he may not keep the best interests of the
clients paramount when he profits from his referrals. He is likely to refer claimants, not to the most
competent attorney, but to the one who is compensating him. (See Hildebrand v. State Bar, 36 Cal. 2d
504, 521, 523 [225 P.2d 508] [concurring opinion by Traynor, J.]; Guides to Professional Conduct for the
New California Practitioner, 36 State Bar J. 1013, 1020-1021; Ambulance Chasing and Related Evils, 7
State Bar J. 22, 23.) Hence, although there is no evidence that Williams solicited strangers, or that he
was paid for specific referrals, the relationship between Williams and petitioner created the risk that rule 3
is designed to prevent."

Even though such is not deemed contrary to public policy, the following language in Lyon v. Lyon, 246
Cal. App. 2d 519, 524, 526 [54 Cal. Rptr. 829], renders an attempted sale of good will of a law practice
suspect: "The nature of a professional partnership for the practice of law, the reputation of which depends
on the skill, training and experience of each individual member, and the personal and confidential
relationship existing between each such member and the client, places such a partnership in a class
apart from other business and professional partnerships. The legal profession stands in a peculiar relation
to the public and the relationship existing between the members of the profession and those who seek its
services cannot be likened to the relationship of a merchant to his customer. (Barton v. State Bar, 209
Cal. [53 Cal. App. 3d 227] 677, 682 [289 P. 818].) Thus, our research has brought to light no case in this
jurisdiction in which an allowance was made to a partner for goodwill upon the dissolution of a partnership
created for the practice of law."
[5] Geffen argues that, if the contract is held to be illegal, the award of attorney's fees in favor of Moss as
the prevailing party would be improper. We must agree. In paragraph IB the agreement provides for the
payment of the $12,500 in installments and, in the event of default and the filing of suit to enforce
payment, for attorney's fees to Geffen. Civil Code section 1717 renders the obligation to pay attorney's
fees mutual. However, since we have decided that the obligation to pay the $12,500 is contrary to public
policy and unenforceable the right to attorney's fees created by this provision never matured.

The judgment is modified by striking therefrom that portion awarding defendant attorney's fees. In all
other respects the judgment is affirmed.

Cobey, J., and Potter, J., concurred.

FN 1. After advising the clients of his leaving the practice Geffen's letter stated:"All of my files and records
remain intact at the above Norwalk address. In order to provide continuity in the handling of the legal
affairs of the clients of my office, I was fortunate in being able to arrange for an experienced and
competent attorney, Russell J. Moss, to take over at my location. mr. Moss, who practiced in the
Inglewood-Hawthorne area for the past sixteen years, has agreed to complete all legal matters in the
office, subject to the approval of the clients involved. He has custody of all files and records of the office,
including original wills which may have been drawn for you by this office. if you have any questions or
problems regarding your legal affairs, Mr. Moss will be pleased to assist you just as I would if I were
available."

FN 2. We refer specifically to the following portion of the memorandum: "'Good will' as defined by the
Business & Profession Code 14100 as being the expectation of future public patronage is a valid
definition applicable to this case. Each party entered into this sale contract with the expectation and hope
of future patronage by existing and former clients of the office. It is true that the plaintiff advised the
defendant that no promise or guarantee could be made as to continued patronage, but nevertheless,
each party considered that expectation as a principal element or factor of the sale. Without such a
principal factor the reasonable value of the law office would not exceed $15,000.00. To the extent that the
plaintiff indirectly attempted to sell that expectation of future patronage and to encourage his former and
current clients to patronize the defendant, and to the extent that the defendant sought to purchase that
expectation of future patronage and the recommendation of himself by the plaintiff to the plaintiff's former
and current clients, each party participated in an attempt to buy and sell good will of a law practice, which
in this court's opinion is contrary to the spirit and intent of Rule 2 and 3 of the State Bar Act, and therefore
is contrary to public policy. There is no question but that an existing law practice may have 'good will' as
an asset which under certain circumstances must be evaluated for a particular reason, as in a dissolution
action between husband and wife, but the attempted sale of 'good will' of a practice by one lawyer to
another involves an altogether different concept with altogether different implications and consequences.
Those implications and consequences are well stated in the defendant's citation of the May 1973 issue of
the Practical Lawyer, Vol. 19, Number 5, Page 63, in the article entitled 'The Sale of a Law Practice.'"

_______________________

In Re Krasner
Annotate this Case
32 Ill. 2d 121 (1965)

204 N.E.2d 10

In re DAVID P. KRASNER, Attorney, Respondent.

No. 38783.

Supreme Court of Illinois.

Opinion filed January 21, 1965.

*122 J.R. CHRISTIANSON, of Chicago, amicus curiae.

HARRY J. BUSCH and JACOB SHAMBERG, of Chicago, for respondent.

Respondent suspended.

*123 Mr. JUSTICE DAILY delivered the opinion of the court:

The Board of Managers and Committee on Grievances of the Chicago Bar Association, as commissioners
of this court under Rule 59, have filed a report recommending that respondent be suspended from the
practice of law for a period of five years on the basis of findings that he had unethically engaged in
conduct which constituted a division of fees with laymen and the employment of solicitors to procure law
business. Respondent, a 50-year-old practitioner who was admitted to the bar of this State in 1938, has
filed exceptions to the report contending there is no evidence to support such findings.

The disciplinary proceeding was an outgrowth of an indictment returned to a Federal district court wherein
a man named David E. Vogele was charged with evasion of income tax. He pleaded guilty, and at a
hearing on the matter of his punishment it came to light that he was a professional "ambulance chaser"
and that the source of his unreported income had been payments from some twenty lawyers, of whom
respondent was one. The trial judge, by a letter of February 20, 1963, brought the matter to the attention
of the Chicago Bar Association and as a consequence an inquiry was made and a complaint filed against
respondent. At the hearing which followed, the evidence on behalf of the complainant association
consisted only of the testimony of respondent and his partner, and certain ledger sheets and cancelled
checks of the partnership. For the respondent, two judges, numerous attorneys and a businessman
testified to his good character and reputation and to his professional integrity.

Since, as we have said, the complainant's proof rested almost entirely upon the testimony of respondent
and his partner, there is no dispute as to the facts and what follows is largely a summation of their
statements at the hearings. During the years 1957, 1958 and 1959, respondent, in partnership with his
brother-in-law, engaged in a general practice *124 and handled personal injury work. And while the
charges of his professional misconduct center principally around his dealings with Vogele, respondent
testified that he had known a man named Paul Skidmore prior to meeting Vogele, that Skidmore "might
have recommended a case or two," and that he, respondent, remembered a few "isolated instances" in
which he had paid Skidmore "gratuities" for the cases referred. At another point in his testimony,
respondent gave a less positive answer, and stated that he "may have" given Skidmore a check,
considered by the witness to be a "gratuity."

To avoid future repetition, it may be stated respondent repeatedly testified he considered that all
payments made to Skidmore, Vogele and others who had referred business to him, were voluntary
gratuities, or gifts, and expressly denied that they were investigational fees or commissions paid pursuant
to agreement.

Describing his first meeting and transaction with Vogele, respondent said they had been introduced at
lunch sometime in the Spring of 1957, and that during the course of the conversation he had told Vogele,
in response to the latter's inquiries, that he was an attorney and that he had done personal injury work.
When asked if he had ascertained Vogele's occupation, respondent replied: "* * * as I recall he was a
man with a lot of connections and the thing that I remember with some particularity is the fact he made
some reference he is (sic) connected with, in some sort, with the insurance field, insurance business or
something like that." Respondent couldn't recall if Skidmore was present, or who made the introduction,
and stated that it was a chance meeting and that he was unaware that Vogele was a person who sought
out personal injury cases for profit. However, at another point in his testimony, he said he "guessed" that
it was Skidmore who had introduced him to Vogele. Shortly after this meeting, by respondent's version,
he was retained by a client in a case, then subsequently received *125 a telephone call from Vogele who
represented that he had referred the client and said: "I took care of you, and perhaps you could do
something for me." Respondent's recollection was that he gave Vogele a check as a gratuity, but he could
not recall the amount. Vogele, as he did on subsequent occasions, came to respondent's office for the
check.

Respondent conceded that his relationship with Vogele continued until the middle of 1959, when
respondent purportedly terminated it because Vogele proposed to "chase a case." During this period, by
respondent's admission, Vogele referred some 70 to 75 cases, and it was likewise conceded that Vogele
had been paid "gratuities" of approximately $7,295 in 1959, approximately $10,000 during 1958, and
$6,000, "more or less," in 1957. In excess of 100 checks, totalling the above amounts, were drawn on the
partnership account and were made payable either to Vogele directly, or to cash, or, in two instances, to
Skidmore at Vogele's direction. Incredibly, respondent testified that the pattern for each transaction was
the same as the first, (i.e. that Vogele would telephone and claim to have referred a certain client,) and
that he took no steps to verify whether the client had in fact been referred by Vogele, but took the latter's
word for it and paid him a gratuity. This testimony, we are constrained to remark, makes it difficult to see
why in excess of 100 checks were necessary to pay for only 70 to 75 of the so-called referrals,
particularly since respondent also testified he could not recall giving more than one gratuity to Vogele in
any case.

The size of the gratuity in a given case depended upon what respondent "thought the case was worth."
Further, he stated that in no instance had a client been charged with any of the sums received by Vogele,
and ledger sheets in evidence disclosed that all checks made payable to cash were charged to
respondent and his partner, one-half to each, as part of their drawing accounts. Checks made payable to
Vogele by name were treated as a business expense and deducted *126 for income tax purposes; those
payable to cash were not so deducted.

When asked if he had paid "gratuities" to any other persons for the referral of personal injury cases during
the years of 1957, 1958 and 1959, respondent temporized that "if a person or client would refer a case I
would make a gratuity," and then stated he could recall no individual who had received more than two or
three gratuities in those years. Again, upon being queried about "gratuities" given since the termination of
his relationship with Vogele, respondent replied that he had paid some on occasion, but not as many, and
explained that he felt the payment of a cash gratuity was no different from the giving of a gift of clothing or
something similar. No records were kept of any of the gratuities given, and respondent stated that
individual case or client records likewise contained no reference to gratuities or to the person to whom
they were given. Respondent promised to look for and present case files involving clients sent to him by
Vogele, provided they had not been destroyed, but we find no indication that any such files were ever
placed at the disposal of the commissioners. It is axiomatic that an attorney whose conduct is questioned
must appear for examination under oath, and must submit for examination whatever records are in his
possession relevant to the inquiry. In re Royal, 29 Ill. 2d 458, 460.

At all times in question Canon 28 of the Canons of Ethics of the Chicago and State bar associations
provided in part: "* * * it is disreputable to * * * breed litigation by seeking out those with claims for
personal injuries or those having any other grounds of action in order to secure them as clients, or to
employ agents or runners for like purposes, or to pay or reward, directly or indirectly, those who bring or
influence the bringing of such cases to his office * * *." Also, Canon 34 provided: "No division of fees for
legal services is proper except with another lawyer, based upon a division of service or responsibility."
*127 Based upon the evidence substantially as related, it was the finding of the commissioners that
respondent had violated these canons.

Anchoring his argument to the frequently expressed principle that charges in a disciplinary proceeding
must be sustained by clear and convincing proof, (e.g. In re Donaghy, 402 Ill. 120, 124,) respondent
contends there is no proof that Vogele, Skidmore or any other person actually solicited any cases, or that
respondent had any knowledge they were doing so, and as a consequence no evidence that business
was ever solicited by respondent or by others in his behalf. His theory seems to be that without direct
testimonial evidence of solicitation, either by Vogele or Skidmore or the persons solicited, the proof
against him is neither clear nor convincing. We do not agree. Circumstantial evidence is legal evidence
and neither the commissioners nor this court are required to be naive or impractical in appraising an
attorney's conduct. In this particular case, we need not remain blind or insensitive to the reasonable and
clear cut intendments arising from respondent's own admissions and business records.

Reduced to its simplest terms, and without regard to the transactions with Skidmore and others, the proof
shows that during a period of about two and one-half years Vogele referred some 70 to 75 cases to
respondent, all being personal injury cases except for "a divorce or two," and was paid sums totalling in
excess of $20,000 for such referrals. And while respondent indulges in semantics and describes the
payments as gifts or gratuities, it is clear that such payments, regardless of the label appended to them,
were in fact remuneration for law business sent to respondent. (Cf. In re Greenwald, 241 N.Y.S. 703,
707.) In short, the reasonable intendment from the evidence is a systematic referral of cases by Vogele,
and the payment of a fee for each referral. And before turning to the matter of solicitation, we are
constrained to remark that even if respondent's *128 payments to Vogele and others were considered to
be "gratuities" in the true sense of the word, such conduct is highly unprofessional and fraught with
possibilities of evil, inasmuch as such payments could serve as an inducement to the recipients to seek
out or stir up litigation in the hope of obtaining further gratuities. See: In re Mitgang, 385 Ill. 311, 332-333;
In re Littick, 232 N.Y.S. 571.

Even if we accept as true respondent's statement that he did not know of Vogele's reputation and
profession, we think it unquestionable respondent knew cases were being solicited and that he was quite
willing to profit by Vogele's activities. As was observed in the case of In re Mahan, 239 N.Y.S. 392, under
comparable facts, the mere volume of business referred from a single individual should have made it
obvious to respondent that there was active solicitation of cases rather than innocent recommendation,
and we have here the added circumstance that the bulk of the cases were personal injury actions. Yet,
despite these unusual circumstances, respondent made no inquiry and, as was true of the attorney in
Mahan, accepted the continuous results of Vogele's services "in such proportions as must have
demonstrated to any one possessed of ordinary common sense" that Vogele was "actively and
successfully soliciting business for him." (239 N.Y.S. at 396.) At the time of these transactions respondent
was an attorney with twenty years experience. According to his witnesses he was a capable practitioner,
and most certainly was not oblivious to what was going on. It is our opinion that the proof supports the
charge of solicitation through others and shows respondent's acquiescence in their activities. Cf. State of
Oklahoma ex rel. Oklahoma Bar Assn. v. Woodard, 362 P.2d 960, 963; In re McKee, 229 Ore. 67, 365
P.2d 120; In re Kreisel, 250 N.Y.S.2d 1001; Columbus Bar Assn. v. Agee, 175 Ohio St. 443, 196 N.E.2d
98.

Equally without merit is respondent's rationalization that there is no proof to support the charge that he
had *129 divided fees with laymen, first, because there was no direct evidence that he had in fact
collected a fee in any case referred by the recipients of his "gratuities," and second because the proof
shows that all payments were made to Vogele and others before the particular case was ever tried or
settled. As to the first premise, it is enough to say it is beyond human experience and belief that
respondent would have been generous to the extent of an amount in excess of $20,000 had not fees
been realized from the cases sent to him by Vogele and Skidmore. As to the second, there is no validity
in the distinction respondent seeks to make. Whether payment was made before or after respondent
realized his fees is meaningless. (In re Thompson, 30 Ill. 2d 560.) Respondent testified the "gratuities"
were "based upon what, in my opinion, the case was worth." Necessarily he meant what it was "worth" to
him in the matter of fees, and his payments were clearly a division of fees anticipated or later realized. As
already pointed out, characterizing the payments as "gratuities" does not alter the fact.

We are satisfied the proof fully supports the charges and findings against respondent, and are likewise of
the opinion that the Canons of Ethics have been violated and that discipline is warranted. Although
canons of ethics adopted by bar associations are not binding obligations, nor enforcible by the courts as
such, they constitute a safe guide for professional conduct and an attorney may be disciplined for not
observing them. (In re Heirich, 10 Ill. 2d 357.) And while neither the solicitation of law business nor the
division of fees here involved imports venality, fraudulent practices or moral turpitude, they are
nevertheless practices which have long been condemned as a blight upon the legal profession.
After some vascillation between suspension and disbarment, the Grievance Committee of the Chicago
Bar Association recommended that respondent be disbarred from the practice of law. The Board of
Managers, however, did not *130 concur and in its report has recommended that he be suspended from
practice for a period of five years. Such recommendation is, of course, purely advisory, inasmuch as we
are regarded as a court of initial hearing in a case of this kind, (In re McCallum, 391 Ill. 400,) and the
question now becomes what disciplinary measure is warranted by the evidence presented, bearing in
mind that the purpose of such a proceeding is not punishment per se but the protection of the public from
further misdeeds and the preservation of the high standing and reputation of the bar, (In re Power, 407 Ill.
525,) and that each case of this character must be considered on its own particular facts. (In re Smith,
365 Ill. 11.) Indeed, dependent upon the circumstances involved, the discipline meted out by this court for
solicitation has ranged from disbarment. (In re McCallum, 391 Ill. 400,) to suspension, (In re Veach, 1 Ill.
2d 264,) to censure, (In re Cohn, 10 Ill. 2d 186,) while misconduct amounting to an improper division of
fees has provoked suspension, (In re Hamilton, 388 Ill. 589; In re Browning, 23 Ill. 2d 483,) and
disbarment. People ex rel. Illinois State Bar Assn. v. Jadrich, 320 Ill. 344.

We need not labor the point that solicitation or ambulance chasing, so-called, either directly or indirectly
through the services of runners or others, is conduct which is reprehensible and inimicable to the
traditions and best interests of the legal profession. Not only does it provoke derision and disrespect in
the eyes of the public, but it is an overreaching of the other members of the profession who adhere to the
standards fixed by canons of ethics and the dictates of good conscience. To permit such conduct to
continue undeterred could only result in unsavory competitions and consequences materially detrimental
to the dignity and honor of the legal profession as a whole. The division of fees which follows as a natural
outgrowth of solicitation or ambulance chasing is equally reprehensible and harmful in that it encourages
and promotes further solicitation. This is not *131 a case where respondent operated openly, either by
himself or through a known employee or investigator, but one in which the operation was clandestine to a
degree, and one which might have gone undetected had not Vogele's activities come to the attention of
the income tax authorities. That it was a profitable system to respondent is borne out by the extent to
which Vogele profited from their relationship. The entire evidence demonstrates an utter departure from
the standards of honesty and integrity required of a member of the bar.

In imposing discipline we are not unmindful of its effect on respondent's professional future, nor do we
overlook the testimony of his character witnesses or the circumstance that he co-operated with the
commissioners in this proceeding. While such factors do bear weight where, as here, the charges against
an attorney do not import criminality or moral turpitude, at the same time they do not relieve this court of
its obligation to take proper disciplinary action if the charges of improper and unprofessional conduct are
found to be true. (In re Harris, 383 Ill. 336.) We are aware, too, that respondent has had no dealings with
Vogele or Skidmore for a number of years, and that he apparently terminated the relationship with these
men of his own accord. Once again, however, the mere cessation of improper practices does not serve to
completely exonerate an attorney for his past misdeeds, nor to forestall all discipline. Under all of the
circumstances it is our opinion that the extreme penalty of disbarment is not warranted; however, upon a
careful consideration it is our opinion that respondent should be suspended from the practice of law for
one year.

Respondent suspended.

_______________

U.S. Supreme Court

In re Primus, 436 U.S. 412 (1978)
In re Primus

No. 77-56

Argued January 16, 1978

Decided May 30, 1978

436 U.S. 412

Syllabus

Appellant, a practicing lawyer in South Carolina who was also a cooperating lawyer with a branch of the
American Civil Liberties Union (ACLU), after advising a gathering of women of their legal rights resulting
from their having been sterilized as a condition of receiving public medical assistance, informed one of
the women in a subsequent letter that free legal assistance was available from the ACLU. Thereafter, the
disciplinary Board of the South Carolina Supreme Court charged and determined that appellant, by
sending such letter, had engaged in soliciting a client in violation of certain Disciplinary Rules of the State
Supreme Court, and issued a private reprimand. The court adopted the Board's findings and increased
the sanction to a public reprimand.

Held: South Carolina's application of its Disciplinary Rules to appellant's solicitation by letter on the
ACLU's behalf violates the First and Fourteenth Amendments. NAACP v. Button, 371 U. S. 415, followed;
Ohralik v. Ohio Bar Assn., post, p. 436 U. S. 447, distinguished. Pp. 436 U. S. 421-439.

(a) Solicitation of prospective litigants by nonprofit organizations that engage in litigation as "a form of
political expression" and "political association" constitutes expressive and associational conduct entitled
to First Amendment protection, as to which government may regulate only "with narrow specificity,"
Button, supra at 371 U. S. 429, 371 U. S. 431, 371 U. S. 433. Pp. 436 U. S. 422-425.

(b) Subsequent decisions have interpreted Button as establishing the principle that "collective activity
undertaken to obtain meaningful access to the courts is a fundamental right within the protection of the
First Amendment," United Transportation Union v. Michigan Bar, 401 U. S. 576, 401 U. S. 585, and have
required that "broad rules framed to protect the public and to preserve respect for the administration of
justice" must not work a significant impairment of "the value of associational freedoms," Mine Workers v.
Illinois Bar Assn., 389 U. S. 217, 389 U. S. 222. P. 436 U. S. 426.

(c) Appellant's activity in this case comes within the generous zone of protection reserved for
associational freedoms because she engaged in solicitation by mail on behalf of a bona fide, nonprofit
organization that pursues litigation as a vehicle for effective political expression and association, as well
as a means of communicating useful information to the public. There is nothing in the record to suggest
that the ACLU

Page 436 U. S. 413

or its South Carolina affiliate is an organization dedicated exclusively to providing legal services, or a
group of attorneys that exists for the purpose of financial gain through the recovery of counsel fees, or a
mere sham to evade a valid state rule against solicitation for pecuniary gain. Pp. 436 U. S. 426-432.

(d) The Disciplinary Rules in question, which sweep broadly, rather than regulating with the degree of
precision required in the context of political expression and association, have a distinct potential for
dampening the kind of "cooperative activity that would make advocacy of litigation meaningful," Button,
supra at 371 U. S. 438, as well as for permitting discretionary enforcement against unpopular causes. P.
436 U. S. 433.

(e) Although a showing of potential danger may suffice in the context of in-person solicitation for
pecuniary gain under the decision today in Ohralik, appellant may not be disciplined unless her activity in
fact involved the type of misconduct at which South Carolina's broad prohibition is said to be directed. P.
436 U. S. 434.

(f) The record does not support appellee's contention that undue influence, overreaching,
misrepresentation, invasion of privacy, conflict of interest, or lay interference actually occurred in this
case. And the State's interests in preventing the "stirring up" of frivolous or vexatious litigation and
minimizing commercialization of the legal profession offer no further justification for the discipline
administered to appellant. Pp. 436 U. S. 434-437.

(g) Nothing in this decision should be read to foreclose carefully tailored regulation that does not abridge
unnecessarily the associational freedom of nonprofit organizations, or their members, having
characteristics like those of the ACLU. Pp. 436 U. S. 438-439.

268 S.C. 259, 233 S.E.2d 301, reversed.

POWELL, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, WHITE,
BLACKMUN, and STEVENS, JJ., joined, and in all but the first paragraph of Part VI of which MARSHALL,
J., joined. BLACKMUN, J., filed a concurring opinion, post, p. 436 U. S. 439. MARSHALL, J., filed an
opinion concurring in part and concurring in the judgment, post, p. 436 U. S. 468. REHNQUIST, J., filed a
dissenting opinion, post, p. 436 U. S. 440. BRENNAN, J., took no part in the consideration or decision of
the case.

Page 436 U. S. 414

_____________

U.S. Supreme Court

Ohralik v. Ohio State Bar Assn., 436 U.S. 447 (1978)
Ohralik v. Ohio State Bar Assn.

No. 76-1650

Argued January 16, 1978

Decided May 30, 1978

436 U.S. 447

Syllabus

Appellant, an Ohio lawyer, contacted the parents of one of the drivers injured in an automobile accident
after hearing about the accident from another source, and learned that the 18-year-old daughter was
hospitalized. He then approached the daughter at the hospital and offered to represent her. After another
visit with her parents, he again visited the accident victim in her hospital room, where she signed a
contingent fee agreement. In the meantime, appellant approached the driver's 18-year-old female
passenger -- who also had been injured -- at her home on the day she was released from the hospital;
she agreed orally to a contingent fee arrangement. Eventually, both young women discharged appellant
as their lawyer, but he succeeded in obtaining a share of the driver's insurance recovery in settlement of
his lawsuit against her for breach of contract. As a result of complaints filed against appellant by the two
young women with a bar grievance committee, appellee filed a formal complaint with the disciplinary
Board of the Ohio Supreme Court. The Board found that appellant solicited clients in violation of certain
Disciplinary Rules, and rejected appellant's defense that his conduct was protected by the First and
Fourteenth Amendments. The Ohio Supreme Court adopted the Board's findings, and increased the
Board's recommended sanction of a public reprimand to indefinite suspension.

Held: The Bar, acting with state authorization, constitutionally may discipline a lawyer for soliciting clients
in person, for pecuniary gain, under circumstances likely to pose dangers that the State has a right to
prevent, and thus the application of the Disciplinary Rules in question to appellant does not offend the
Constitution. Bates v. State Bar of Arizona, 433 U. S. 350, distinguished. Pp. 436 U. S. 454-468.
(a) A lawyer's solicitation of business through direct, in-person communication with the prospective clients
has long been viewed as inconsistent with the profession's ideal of the attorney-client relationship and as
posing a significant potential for harm to the prospective client. P. 436 U. S. 454.

(b) The State does not lose its power to regulate commercial activity deemed harmful to the public simply
because speech is a component of that activity. Pp. 436 U. S. 455-456.

(c) A lawyer's procurement of remunerative employment is only marginally affected with First Amendment
concerns. While entitled to

Page 436 U. S. 448

some constitutional protection, appellant's conduct is subject to regulation in furtherance of important

state interests. Pp. 436 U. S. 457-459.

(d) In addition to its general interest in protecting consumers and regulating commercial transactions, the
State bears a special responsibility for maintaining standards among members of the licensed
professions, especially members of the Bar. Protection of the public from those aspects of solicitation that
involve fraud, undue influence, intimidation, overreaching, and other forms of "vexatious conduct" is a
legitimate and important state interest. Pp. 436 U. S. 460-462.

(e) Because the State's interest is in averting harm by prohibiting solicitation in circumstances where it is
likely to occur, the absence of explicit proof or findings of harm or injury to the person solicited is
immaterial. The application of the Disciplinary Rules to appellant, who solicited employment for pecuniary
gain under circumstances likely to result in the adverse consequences the State seeks to avert, does not
offend the Constitution. Pp. 436 U. S. 462-468.

48 Ohio St.2d 217, 357 N.E.2d 1097, affirmed.

POWELL, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, WHITE,
BLACKMUN, and STEVENS, JJ., joined. MARSHALL, J., filed an opinion concurring in part and
concurring in the judgment, post, p. 436 U. S. 468. REHNQUIST, J., filed a statement concurring in the
judgment, post, p. 436 U. S. 477. BRENNAN, J., took no part in the consideration or decision of the case.

_____________

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-68838 March 11, 1991

FLORENCIO FABILLO and JOSEFA TANA (substituted by their heirs Gregorio Fabillo, Roman Fabillo,
Cristeta F. Maglinte and Antonio Fabillo), petitioners,
vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT (Third Civil Case Division) and ALFREDO
MURILLO (substituted by his heirs Fiamita M. Murillo, Flor M. Agcaoili and Charito M. Babol),
respondents.

Francisco A. Tan for petitioners.

Von Kaiser P. Soro for private respondent.

FERNAN, C.J.:
In the instant petition for review on certiorari, petitioners seek the reversal of the appellate court's decision
interpreting in favor of lawyer Alfredo M. Murillo the contract of services entered into between him and his
clients, spouses Florencio Fabillo and Josefa Taña.

In her last will and testament dated August 16, 1957, Justina Fabillo bequeathed to her brother, Florencio,
a house and lot in San Salvador Street, Palo, Leyte which was covered by tax declaration No. 19335, and
to her husband, Gregorio D. Brioso, a piece of land in Pugahanay, Palo, Leyte.1 After Justina's death,
Florencio filed a petition for the probate of said will. On June 2, 1962, the probate court approved the
project of partition "with the reservation that the ownership of the land declared under Tax Declaration No.
19335 and the house erected thereon be litigated and determined in a separate proceedings."2

Two years later, Florencio sought the assistance of lawyer Alfredo M. Murillo in recovering the San
Salvador property. Acquiescing to render his services, Murillo wrote Florencio the following handwritten
letter:

Dear Mr. Fabillo:

I have instructed my stenographer to prepare the complaint and file the same on Wednesday if you are
ready with the filing fee and sheriffs fee of not less than P86.00 including transportation expenses.

Considering that Atty. Montilla lost this case and the present action is a revival of a lost case, I trust that
you will gladly give me 40% of the money value of the house and lot as a contigent (sic) fee in case of a
success. When I come back I shall prepare the contract of services for your signature.

Thank you.

Cordially yours,
(Sgd.) Alfredo M. Murillo
Aug. 9, 19643

Thirteen days later, Florencio and Murillo entered into the following contract:

CONTRACT OF SERVICES

KNOW ALL MEN BY THESE PRESENTS:

That I, FLORENCIO FABILLO, married to JOSEFA TANA, of legal age, Filipino citizen and with residence
and postal address at Palo, Leyte, was the Petitioner in Special Proceedings No. 843, entitled "In the
Matter of the Testate Estate of the late Justina Fabillo, Florencio Fabillo, Petitioner" of the Court of First
Instance of Leyte;

That by reason of the Order of the Court of First Instance of Leyte dated June 2, 1962, my claim for the
house and lot mentioned in paragraph one (1) of the last will and testament of the late Justina Fabillo,
was denied altho the will was probated and allowed by the Court;

That acting upon the counsel of Atty. Alfredo M. Murillo, I have cause(d) the preparation and filing of
another case, entitled "Florencio Fabillo vs. Gregorio D. Brioso," which was docketed as Civil Case No.
3532 of the Court of First Instance of Leyte;

That I have retained and engaged the services of Atty. ALFREDO M. MURILLO, married and of legal age,
with residence and postal address at Santa Fe, Leyte to be my lawyer not only in Social Proceedings No.
843 but also in Civil Case No. 3532 under the following terms and conditions;

That he will represent me and my heirs, in case of my demise in the two cases until their successful
conclusion or until the case is settled to my entire satisfaction;
That for and in consideration for his legal services, in the two cases, I hereby promise and bind myself to
pay Atty. ALFREDO M. MURILLO, in case of success in any or both cases the sum equivalent to FORTY
PER CENTUM (40%) of whatever benefit I may derive from such cases to be implemented as follows:

If the house and lot in question is finally awarded to me or a part of the same by virtue of an amicable
settlement, and the same is sold, Atty. Murillo, is hereby constituted as Atty. in-fact to sell and convey the
said house and lot and he shall be given as his compensation for his services as counsel and as attorney-
in-fact the sum equivalent to forty per centum of the purchase price of the house and lot;

If the same house and lot is just mortgage(d) to any person, Atty. Murillo shall be given the sum
equivalent to forty per centum (40%) of the proceeds of the mortgage;

If the house and lot is leased to any person, Atty. Murillo shall be entitled to receive an amount equivalent
to 40% (FORTY PER CENTUM) of the rentals of the house and lot, or a part thereof;

If the house and lot or a portion thereof is just occupied by the undersigned or his heirs, Atty. Murillo shall
have the option of either occupying or leasing to any interested party FORTY PER CENT of the house
and lot.

Atty. Alfredo M. Murillo shall also be given as part of his compensation for legal services in the two cases
FORTY PER CENTUM of whatever damages, which the undersigned can collect in either or both cases,
provided, that in case I am awarded attorney's fees, the full amount of attorney's fees shall be given to the
said Atty. ALFREDO M. MURILLO;

That in the event the house and lot is (sic) not sold and the same is maintained by the undersigned or his
heirs, the costs of repairs, maintenance, taxes and insurance premiums shall be for the account of myself
or my heirs and Attorney Murillo, in proportion to our rights and interest thereunder that is forty per cent
shall be for the account of Atty. Murillo and sixty per cent shall be for my account or my heirs.

IN WITNESS HEREOF, I hereby set unto my signature below this 22nd day of August 1964 at Tacloban
City.

(Sgd.) FLORENCIO FABILLO

(Sgd.) JOSEFA T. FABILLO

WITH MY CONFORMITY:

(Sgd.) ALFREDO M. MURILLO

(Sgd.) ROMAN T. FABILLO
(Witness) (Sgd.) CRISTETA F. MAGLINTE
(Witness)4
Pursuant to said contract, Murillo filed for Florencio Fabillo Civil Case No. 3532 against Gregorio D.
Brioso to recover the San Salvador property. The case was terminated on October 29, 1964 when the
court, upon the parties' joint motion in the nature of a compromise agreement, declared Florencio Fabillo
as the lawful owner not only of the San Salvador property but also the Pugahanay parcel of land.

Consequently, Murillo proceeded to implement the contract of services between him and Florencio Fabillo
by taking possession and exercising rights of ownership over 40% of said properties. He installed a
tenant in the Pugahanay property.

Sometime in 1966, Florencio Fabillo claimed exclusive right over the two properties and refused to give
Murillo his share of their produce.5 Inasmuch as his demands for his share of the produce of the
Pugahanay property were unheeded, Murillo filed on March 23, 1970 in the then Court of First Instance of
Leyte a complaint captioned "ownership of a parcel of land, damages and appointment of a receiver"
against Florencio Fabillo, his wife Josefa Taña, and their children Ramon (sic) Fabillo and Cristeta F.
Maglinte.6

Murillo prayed that he be declared the lawful owner of forty per cent of the two properties; that defendants
be directed to pay him jointly and severally P900.00 per annum from 1966 until he would be given his
share of the produce of the land plus P5,000 as consequential damages and P1,000 as attorney's fees,
and that defendants be ordered to pay moral and exemplary damages in such amounts as the court might
deem just and reasonable.

In their answer, the defendants stated that the consent to the contract of services of the Fabillo spouses
was vitiated by old age and ailment; that Murillo misled them into believing that Special Proceedings No.
843 on the probate of Justina's will was already terminated when actually it was still pending resolution;
and that the contingent fee of 40% of the value of the San Salvador property was excessive, unfair and
unconscionable considering the nature of the case, the length of time spent for it, the efforts exerted by
Murillo, and his professional standing.

They prayed that the contract of services be declared null and void; that Murillo's fee be fixed at 10% of
the assessed value of P7,780 of the San Salvador property; that Murillo be ordered to account for the
P1,000 rental of the San Salvador property which he withdrew from the court and for the produce of the
Pugahanay property from 1965 to 1966; that Murillo be ordered to vacate the portion of the San Salvador
property which he had occupied; that the Pugahanay property which was not the subject of either Special
Proceedings No. 843 or Civil Case No. 3532 be declared as the exclusive property of Florencio Fabillo,
and that Murillo be ordered to pay moral damages and the total amount of P1,000 representing expenses
of litigation and attorney's fees.

In its decision of December 2, 1975,7 the lower court ruled that there was insufficient evidence to prove
that the Fabillo spouses' consent to the contract was vitiated. It noted that the contract was witnessed by
two of their children who appeared to be highly educated. The spouses themselves were old but literate
and physically fit.

In claiming jurisdiction over the case, the lower court ruled that the complaint being one "to recover real
property from the defendant spouses and their heirs or to enforce a lien thereon," the case could be
decided independent of the probate proceedings. Ruling that the contract of services did not violate
Article 1491 of the Civil Code as said contract stipulated a contingent fee, the court upheld Murillo's claim
for "contingent attorney's fees of 40% of the value of recoverable properties." However, the court declared
Murillo to be the lawful owner of 40% of both the San Salvador and Pugahanay properties and the
improvements thereon. It directed the defendants to pay jointly and severally to Murillo the amount of
P1,200 representing 40% of the net produce of the Pugahanay property from 1967 to 1973; entitled
Murillo to 40% of the 1974 and 1975 income of the Pugahanay property which was on deposit with a
bank, and ordered defendants to pay the costs of the suit.

Both parties filed motions for the reconsideration of said decision: Fabillo, insofar as the lower court
awarded 40% of the properties to Murillo and the latter insofar as it granted only P1,200 for the produce
of the properties from 1967 to 1973. On January 29, 1976, the lower court resolved the motions and
modified its decision thus:

ACCORDINGLY, the judgment heretofore rendered is modified to read as follows:

(a) Declaring the plaintiff as entitled to and the true and lawful owner of forty percent (40%) of the
parcels of land and improvements thereon covered by Tax Declaration Nos. 19335 and 6229 described in
Paragraph 5 of the complaint;

(b) Directing all the defendants to pay jointly and severally to the plaintiff the sum of Two Thousand
Four Hundred Fifty Pesos (P2,450.00) representing 40% of the net produce of the Pugahanay property
from 1967 to 1973;
(c) Declaring the plaintiff entitled to 40% of the 1974 and 1975 income of said riceland now on
deposit with the Prudential Bank, Tacloban City, deposited by Mr. Pedro Elona, designated receiver of the
property;

(d) Ordering the defendants to pay the plaintiff the sum of Three Hundred Pesos (P 300.00) as
attorney's fees; and

(e) Ordering the defendants to pay the costs of this suit.

SO ORDERED.

In view of the death of both Florencio and Justina Fabillo during the pendency of the case in the lower
court, their children, who substituted them as parties to the case, appealed the decision of the lower court
to the then Intermediate Appellate Court. On March 27, 1984, said appellate court affirmed in toto the
decision of the lower court.8

The instant petition for review on certiorari which was interposed by the Fabillo children, was filed shortly
after Murillo himself died. His heirs likewise substituted him in this case. The Fabillos herein question the
appellate court's interpretation of the contract of services and contend that it is in violation of Article 1491
of the Civil Code.

The contract of services did not violate said provision of law. Article 1491 of the Civil Code, specifically
paragraph 5 thereof, prohibits lawyers from acquiring by purchase even at a public or judicial auction,
properties and rights which are the objects of litigation in which they may take part by virtue of their
profession. The said prohibition, however, applies only if the sale or assignment of the property takes
place during the pendency of the litigation involving the client's property.9

Hence, a contract between a lawyer and his client stipulating a contingent fee is not covered by said
prohibition under Article 1491 (5) of the Civil Code because the payment of said fee is not made during
the pendency of the litigation but only after judgment has been rendered in the case handled by the
lawyer. In fact, under the 1988 Code of Professional Responsibility, a lawyer may have a lien over funds
and property of his client and may apply so much thereof as may be necessary to satisfy his lawful fees
and disbursements.10

As long as the lawyer does not exert undue influence on his client, that no fraud is committed or
imposition applied, or that the compensation is clearly not excessive as to amount to extortion, a contract
for contingent fee is valid and enforceable.11 Moreover, contingent fees were impliedly sanctioned by No.
13 of the Canons of Professional Ethics which governed lawyer-client relationships when the contract of
services was entered into between the Fabillo spouses and Murillo.12

However, we disagree with the courts below that the contingent fee stipulated between the Fabillo
spouses and Murillo is forty percent of the properties subject of the litigation for which Murillo appeared
for the Fabillos. A careful scrutiny of the contract shows that the parties intended forty percent of the
value of the properties as Murillo's contingent fee. This is borne out by the stipulation that "in case of
success of any or both cases," Murillo shall be paid "the sum equivalent to forty per centum of whatever
benefit" Fabillo would derive from favorable judgments. The same stipulation was earlier embodied by
Murillo in his letter of August 9, 1964 aforequoted.

Worth noting are the provisions of the contract which clearly states that in case the properties are sold,
mortgaged, or leased, Murillo shall be entitled respectively to 40% of the "purchase price," "proceeds of
the mortgage," or "rentals." The contract is vague, however, with respect to a situation wherein the
properties are neither sold, mortgaged or leased because Murillo is allowed "to have the option of
occupying or leasing to any interested party forty per cent of the house and lot." Had the parties intended
that Murillo should become the lawful owner of 40% of the properties, it would have been clearly and
unequivocally stipulated in the contract considering that the Fabillos would part with actual portions of
their properties and cede the same to Murillo.
The ambiguity of said provision, however, should be resolved against Murillo as it was he himself who
drafted the contract.13 This is in consonance with the rule of interpretation that, in construing a contract of
professional services between a lawyer and his client, such construction as would be more favorable to
the client should be adopted even if it would work prejudice to the lawyer.14 Rightly so because of the
inequality in situation between an attorney who knows the technicalities of the law on the one hand and a
client who usually is ignorant of the vagaries of the law on the other hand.15

Considering the nature of the case, the value of the properties subject matter thereof, the length of time
and effort exerted on it by Murillo, we hold that Murillo is entitled to the amount of Three Thousand Pesos
(P3,000.00) as reasonable attorney's fees for services rendered in the case which ended on a
compromise agreement. In so ruling, we uphold "the time-honored legal maxim that a lawyer shall at all
times uphold the integrity and dignity of the legal profession so that his basic ideal becomes one of
rendering service and securing justice, not money-making. For the worst scenario that can ever happen
to a client is to lose the litigated property to his lawyer in whom all trust and confidence were bestowed at
the very inception of the legal controversy."16

WHEREFORE, the decision of the then Intermediate Appellate Court is hereby reversed and set aside
and a new one entered (a) ordering the petitioners to pay Atty. Alfredo M. Murillo or his heirs the amount
of P3,000.00 as his contingent fee with legal interest from October 29, 1964 when Civil Case No. 3532
was terminated until the amount is fully paid less any and all amounts which Murillo might have received
out of the produce or rentals of the Pugahanay and San Salvador properties, and (b) ordering the receiver
of said properties to render a complete report and accounting of his receivership to the court below within
fifteen (15) days from the finality of this decision. Costs against the private respondent.

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur.

__________________

THIRD DIVISION

A.C. No. 5534 January 17, 2005

JAYNE Y. YU, complainant,

vs.
RENATO LAZARO BONDAL, respondent.

DECISION

CARPIO MORALES, J.:

Atty. Renato Lazaro Bondal (respondent) stands charged in a complaint1 filed by Jayne Y. Yu
(complainant) for gross negligence and violation of Canon 162 and Rule 16.033 of the Code of
Professional Responsibility arising from his alleged failure to attend to the five cases she referred to him
and to return, despite demand, the amount of ₱51,716.54 she has paid him.

By complainant’s allegation, the following spawned the filing of the present administrative complaint:

On March 30, 2000, she engaged the services of respondent as counsel in the following cases: (1)
"Jayne Yu. v. Swire Realty and Development Corp," for Rescission with Damages filed before the
Housing and Land Use Regulatory Board, (2) I.S. No. 00-22089-90, "Jayne Yu v. Lourdes Fresnoza
Boon," for Estafa, (3) I.S. No. 2000-G-22087-88, "Jayne Yu v. Julie Teh," for violation of Batas Pambansa
Blg. 22, (4) I.S. No. 2000-D-11826, "Jayne Yu v. Mona Lisa San Juan" for violation of Batas Pambansa
Blg. 22, and (5) I.S. No. 2000-D-11827, "Jayne Yu v. Elizabeth Chan Ong," also for violation of Batas
Pambansa Blg. 22.4

In the Retainer Agreement5 dated March 30, 2000, complainant agreed to pay respondent the amount of
₱200,000.00 as Acceptance Fee for the five cases, with an Appearance Fee of ₱1,500.00 pesos per
hearing; and in the event that damages are recovered, she would pay respondent 10% thereof as
success fee.

Complainant later issued two checks, BPI Family Bank No. 94944 and BPI Family Bank No. 94968, dated
February 20, 2001 and April 5, 2001 in the amount of ₱30,000.00 and ₱21,716.54, respectively.6

Despite receipt of above-said amounts, respondent failed to file a case against Swire Realty and
Development Corp;7 due to respondent’s negligence, the case for estafa against Lourdes Fresnoza Boon
was dismissed by the Office of the City Prosecutor of Makati City and was not timely appealed to the
Department of Justice;8 respondent negligently failed to inform complainant, before she left for abroad, to
leave the necessary documents for purposes of the preliminary investigation of the case filed against
Julie Teh before the Office of the City Prosecutor of Makati City, which case was eventually dismissed by
Resolution dated August 14, 2000;9 and respondent compelled her to settle the two cases for violation of
B.P. Blg. 22 against Mona Lisa San Juan and Elizabeth Chan Ong under unfair and unreasonable
terms.101a\^/phi1.net

Respondent thus demanded from respondent, by letter11 of June 14, 2001, for the return of all the
records she had entrusted him bearing on the subject cases.

Through complainant’s counsel (Chavez Laureta and Associates Law Office) which sent a letter12 to
respondent, she reiterated her demand for the return of the records of the cases.

Respondent did return but only the records bearing on the estafa case against Lourdes Fresnoza Boon
and the B.P. Blg. 22 case against Mona Lisa San Juan.

Complainant through counsel thus demanded, by letter13 of August 8, 2001, the return of the rest of the
files, particularly that dealing with Swire Realty and Development Corporation and Julie Teh. In the same
letter, complainant also demanded the refund of the amounts covered by the above-said two BPI Family
Bank Checks amounting to ₱51,716.54, they being intended to represent payment of filing fees for the
case against Swire Realty and Development Corporation which respondent failed to file.

As respondent failed and continues to refuse to comply with complainant’s valid demands in evident bad
faith and to her prejudice, she filed the present complaint charging him with flagrant violation of Canon 16
and Canon 16.03 of the Code of Professional Responsibility.

By Resolution14 of February 4, 2002, this Court directed respondent to file his Comment. Respondent,
through his counsel, the Escobido and Pulgar Law Offices, filed a motion for extension for thirty days or
up to April 9, 2002, which was granted by Resolution of May 27, 2002. No copy was, however, furnished
respondent’s counsel.15

As respondent failed to file his Comment on the present complaint, this Court, by Resolution of July 21,
2003, considered the filing of respondent’s comment deemed waived and allowed complainant to present
her evidence before the Office of the Bar Confidant.16

At the hearing before the Officer of the Bar Confidant, complainant echoed her allegations in the
complaint.

As to the other cases referred by complainant to respondent, complainant testified that the case against
Julie Enriquez-Teh was dismissed because respondent failed to present the original checks subject of the
case;17 that the estafa case against Ms. Lourdes Boon was dismissed and was never appealed;18 and
that she was prodded by respondent to settle the two cases for B.P. Blg. 22 even if she was not satisfied
with the terms thereof, respondent having assured her that he would waive his 10% "success fee" in the
case against Swire Development.19

And complainant submitted the following documentary evidence: (1) Retainer Agreement between her
and Atty. Renato Lazaro Bondal;20 (2) BPI Family Bank Check No. 94944 dated February 20, 2001 for
₱30,000.00 payable to cash;21 (3) BPI Family Bank Check No. 94968 dated April 5, 2001 for ₱21,716.54
payable to cash;22 (4) Resolution of the City Prosecutor of Makati dated August 18, 2000 on a case
between Jayne Yu and Lourdes Fresnoza Boon;23 (5) Resolution of the City Prosecutor of Makati on a
case between her and Julie Enriquez-Teh;24 (5) her letter to respondent dated June 14, 2001 requesting
the return of pertinent records of the cases referred to him;25 (6) letter of Francisco I. Chavez to
respondent dated July 18, 2001 reiterating the request for the return of the records and an accounting of
the amount of ₱51,716.54;26 (7) letter of Francisco I. Chavez to respondent dated August 8, 2001
confirming the receipt of two folders relative to the cases she filed against Lourdes Fresnoza Boon and
Mona Lisa San Juan, requesting Atty. Bondal to return the files bearing on Swire Realty and Development
Corporation and Julie Teh, and demanding the refund of the amount of ₱51,716.54.27

The Office of the Bar Confidant, by Report and Recommendation,28 recommends the dismissal of the
complaint for failure of complainant to substantiate it.

From the records of the case, it is culled that except for the case against Swire Development Corporation,
the other 4 cases referred by complainant to respondent were filed in court but were dismissed or
terminated for causes not attributable to respondent.

The case for estafa against Lourdes Fresnoza Boon in I.S. No. 00-22089-90 was dismissed by the Makati
Prosecutor’s Office by Resolution dated August 18, 2000 due to lack of probable cause and, in any event,
the issues raised therein were in the nature of intra-corporate disputes which are properly cognizable by
another forum, viz:

After careful examination and evaluation of the evidence adduced both by complainant and respondent,
undersigned Investigating Prosecutor finds no probable cause to hold respondent for the offense charged
of Estafa. Apparently, there was no deceit and/or unfaithfulness or abuse of confidence employed by
respondent when complainant agreed to invest her money in the restaurant business under the name and
style of La Gondola, Inc. which is owned by respondent. xxx In the present case, though, complainant
alleged that respondent immediately upon receipt of the P4,800,000.00 representing her investment in
the restaurant business, executed earlier in favor of Philippine Commercial and International Bank
whereby La Gondola assumed the loans and credit accommodations obtained by Lucre Export/Import
Inc., using the funds of La Gondola, Inc.; respondent being the President and majority owner of the latter
corporation. However, outside of the mere allegation of complainant that respondent allegedly assumed
the loans and credit accommodations extended to the other company using the funds of La Gondola, Inc.,
no concrete and real evidence were presented and/or proven to this effect by complainant. xxx

Moreover, it is apparent that the issues being raised by complainant appears to be intra-corporate
disputes which could be very well settled in another forum.29 (Underscoring supplied)

Notably, a similar complaint for the same offense, docketed as I.S. No. 99-H-2780, had been previously
filed by complainant against Ms. Boon which case was dismissed for insufficiency of evidence.30 As thus
observed by the Office of the Bar Confidant, the filing of an appeal from the prosecutor’s resolution would
have been inutile since the facts and issues raised in the estafa case had already been twice passed
upon by the Office of the City Prosecutor, hence, it would likely be dismissed.31

No fault or negligence can also be attributed to respondent in the dismissal of I.S. No. 2000-G-22087-88
against Julie Teh. By Resolution of August 14, 2000 of the Makati Prosecutor’s Office, it is clear that it
was dismissed, in the main, on the ground that the offense charged did not actually exist and complainant
failed to appear and present the original checks, viz:
After a careful evaluation of the evidence on record, the undersigned recommends for the dismissal of the
present complaints on the following grounds:

1. Despite reasonable opportunity given to her, complainant failed to appear and present the original
copies of the subject checks and other documents attached to the complaint.

2. The subject checks were presented after the 90-day period hence there is no more presumption of
knowledge of the insufficiency of funds. Accordingly, the burden is shifted upon the complainant to prove
that at the time the checks were issued, the drawer knew that he had insufficient funds. There is no
allegation much less proof to that effect. The result is that the element of knowledge of insufficiency of
funds or credit is not present, therefore the crime does not exist.32

On the alleged failure of respondent to appear during the hearing of I.S. No. 2000-G-22087-88 and his
failure to present the original of the checks subject thereof, they being then in the possession of
complainant who was abroad at that time:33 Such failure to present the original of the checks cannot
solely be attributed to respondent, for she herself was guilty of neglect.34

As for the alleged compulsion in the settlement of her two complaints for violation of B.P. Blg. 22 in
accordance with the terms dictated by the therein respondents Mona Lisa San Juan and Elizabeth Chan
Ong, upon the promise of respondent that he would waive the 10% success fee in the complaint to be
filed against Swire Development: Assuming the truthfulness of her allegation that respondent compelled
her to settle, what the terms were as alleged to have been dictated by Ms. San Juan and Ms. Chan Ong,
and the manner and/or extent of prejudice she suffered, complainant did not establish. Moreover, she
failed to show that the promise by respondent that he would waive the 10% success fee was for the
purpose of defrauding her or of such nature as to constitute undue influence, thereby depriving her of
reasonable freedom of choice.

Subsequent to the amicable settlement, it appears that complainant never raised any objection to the
terms of the compromise. As an accepted rule, when a client, upon becoming aware of the compromise
and the judgment thereon, fails to promptly repudiate the action of his attorney, he will not afterwards be
heard to complain about it.35

As for complainant’s claim that the amount of ₱51,716.54, which was the only amount on record that
complainant paid for respondent’s legal services, was intended for the filing fees in the complaint against
Swire Development Corporation, the same was not substantiated as in fact the retainer agreement does
not so confirm.

We would like to thank you for retaining our law firm in the handling and representation of your case. In
regard to the five cases you referred to us, our aggregate Acceptance fee is P200,000 Pesos with an
Appearance fee of P1,500.00 Pesos per hearing. As regards the damages to be recovered, we will get
10% thereof by way of Success Fee.36 (Underscoring supplied)

If, admittedly, the only payment given to complainant by respondent is the amount of ₱51,716.54, then
complainant still owes respondent more, as respondent rendered his legal services in 4 out of the 5
cases. An acceptance fee is not a contingent fee, but is an absolute fee arrangement which entitles a
lawyer to get paid for his efforts regardless of the outcome of the litigation. That complainant was
dissatisfied with the outcome of the four cases does not render void the above retainer agreement for
respondent appears to have represented the interest of complainant. Litigants need to be reminded that
lawyers are not demi-gods or "magicians" who can always win their cases for their clients no matter the
utter lack of merit of the same or how passionate the litigants may feel about their cause.371awphi1.nét

In sum, this Court finds well taken the finding of the Office of the Bar Confidant that complainant failed to
establish the guilt of respondent by clear, convincing and satisfactory proof. The charges against him
must thus be dismissed.38
However, since respondent had been advised by complainant through counsel Chavez Laureta and
Associates, by letter of July 18, 2001, that she intended to terminate his services, as of said date, he was
obliged, under Rule 22.02 of the Code of Professional Responsibility, viz:

Rule 22.02 – A lawyer who withdraws or is discharged shall, subject to a retainer lien, immediately turn
over all papers and property to which the client is entitled, and shall cooperate with his successor in the
orderly transfer of the matter, including all information necessary for the proper handling of the matter,

to immediately turn over all papers and property which complainant entrusted to his successor.

WHEREFORE, the complaint is hereby DISMISSED. Respondent is, however, hereby directed to
RETURN all the records in his possession relative to the cases he handled for complainant.

Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Garcia, JJ., concur.

__________________

SECOND DIVISION

G.R. No. 138542 August 25, 2000

ALFREDO P. PASCUAL and LORETA S. PASCUAL, petitioners,

vs.
COURT OF APPEALS (former Seventh Division), ERNESTO P. PASCUAL and HON. ADORACION
ANGELES, in her capacity as Presiding Judge, RTC, Kaloocan City, Branch 121, respondents.

DECISION

MENDOZA, J.:

The question for decision in this case is whether an action for reconveyance of a piece of land and for
accounting and damages which private respondent Ernesto P. Pascual brought against his brother,
petitioner Alfredo P. Pascual, and the latter’s wife involves an intra-corporate dispute beyond the
jurisdiction of the Regional Trial Court, Branch 121, Kalookan City in which it was filed. The trial court held
that the action did not constitute an intra-corporate dispute and, therefore, denied petitioners’ motion to
dismiss. The Court of Appeals sustained the order of the trial court. Hence, this petition for review of the
decision1 of the appellate court. We affirm.

The facts are as follows:

On February 7, 1996, private respondent Ernesto P. Pascual filed a complaint in the Regional Trial Court
for "accounting, reconveyance of real property based on implied trust resulting from fraud, declaration of
nullity of TCT, recovery of sums of money, and damages" against his brother, petitioner Alfredo, and the
latter’s wife Loreta Pascual. The pertinent parts of his complaint read:

3. Plaintiff Ernesto and defendant Alfredo Pascual are full blood brothers. They, along with Araceli P.
Castro, Ester P. Abad, Edgardo P. Pascual, Sr. (now deceased), Corazon P. Montenegro, Leonor P.
Rivera, Luciano Pascual, Jr., and Teresita P. Manuel, are legitimate children of Luciano Pascual, Sr. and
Consolacion Pascual. Defendant Loreta Pascual is the wife of defendant Alfredo.

4. Between 1963 to 1975, Luciano R. Pascual, Sr. acquired substantial shares in Phillens Manufacturing
Corp. Luciano, Sr. parceled out and assigned a good number of these shares in the names of his
children.
5. With Luciano’s substantial shareholdings, his eldest son, defendant Alfredo became President, General
Manager, and Vice-Chairman of the Board of Phillens. Plaintiff was only 20 years old then.

6. Defendant Alfredo was also president of L.R. Pascual & Sons, Inc. which held substantial shares in
Phillens. (Plaintiff is a stockholder of L. R. Pascual & Sons, Inc.)

7. Although during and after the lifetime of the parties’ parents, defendant Alfredo held family property in
trust for Luciano Sr. and Consolacion, and for his brothers and sisters, defendant Alfredo gave the latter
no accounting at any point in time contrary to what their father intended.

8. Because from 1969 to 1990, defendant Alfredo turned over zero profit to plaintiff Ernesto as far as his
share was concerned, plaintiff tried to arrange a meeting between them about the matter of accounting --
without any success during a 5-year period (1990-1995). Defendant Alfredo would each time be sensitive,
evasive, and drunk, so nothing became of those efforts.

....

10. Since defendant Alfredo was President of L.R. Pascual & Sons, Inc. which held family properties in
Quezon City, Manila, and Baguio, plaintiff wanted this matter taken up in a meeting he requested with
defendant Alfredo. In addition, plaintiff asked defendant Alfredo for an accounting in L.R. Pascual & Co., a
registered partnership distinct from L.R. Pascual & Sons, Inc. which would be discussed in that requested
meeting.

....

12. Because of defendant Alfredo’s icy silence and unmistakable attempts to claim the lid on plaintiff
Ernesto Pascual, plaintiff conducted an inquiry. As a result, he discovered that when defendant Alfredo
caused the dissolution of Phillens Manufacturing Corporation by asking for a shortening of its term,
defendant Alfredo represented in an affidavit of undertaking that

(a) he is the owner of the majority of the outstanding capital stock of the corporation;

(b) that the corporation has no obligation, whether existing or contingent, direct or indirect, due or payable
to any person whomsoever, natural or juridical;

(c) he is assuming and will pay any and all valid claims or demands by creditors, stockholders, or any
third person or persons, presented after the dissolution of the corporation.

13. By taking a position adverse to the trust and to his family’s, defendant Alfredo, greatly profiting from
Phillens, now held he owned majority and will undertake to pay any claimant or creditor. Yet, defendant
Alfredo had not paid plaintiff what was properly owing to him.

14. Plaintiff also discovered, to his dismay, that defendant Alfredo had written an October 8, 1990 letter to
the Securities & Exchange Commission falsely representing as follows:

October 8, 1990

Examiner & Appraiser Dept. [sic]

Securities & Exchange Commission
E. de los Santos Avenue
Mandaluyong, Metro Manila

Gentlemen:

This will certify that the ₱3.3-million notes payable as shown in the balance sheet of Phillens
Manufacturing Corporation as of June 30, 1990, is [sic] my personal advances.
Since I am assuming the assets and liabilities of the company, to which all the stockholders have
consented, I am likewise giving my consent to the dissolution of the corporation.

Very truly yours,

ALFREDO P. PASCUAL

16. Further, on inquiry, plaintiff discovered that last April 3, 1989, defendant Alfredo caused an appraisal
of the fair market value of the land and buildings of Phillens in Kalookan, excluding equipment, remaining
stock and inventory. Aware that Cuervo had appraised such properties at ₱10,977,000 as of March 10,
1989, defendant Alfredo hatched a ploy to buy for himself such properties at only ₱4.5 million. (A copy of
the April 3, 1989 Cuervo report addressed to defendant Alfredo is here attached as Annex A.)

18. To consummate his fraudulent design, defendant Alfredo caused in bad faith the cancellation of TCT
C-28572 and the issuance of TCT 215804 in his and defendant Loreta’s name (copy of which is here
attached as Annex D). That TCT is of course void, proceeding as it does from a void transfer, which
constitutes fraud and a breach of trust.

On March 21, 1996, petitioners filed a motion to dismiss on the ground that the complaint raises an intra-
corporate controversy between the parties over which original and exclusive jurisdiction is vested in the
Securities and Exchange Commission (SEC). At first, the trial court granted petitioners’ motion and
dismissed the complaint on the ground that the complaint stemmed from alleged fraudulent acts and
misrepresentations of petitioner Alfredo P. Pascual as a corporate officer of Phillens Manufacturing Corp.
(Phillens) and thus the SEC had jurisdiction over the case. However, on respondent’s motion, the trial
court reconsidered its order and reinstated respondent’s action. In an order, dated September 29, 1997,
the trial court held that, since the corporation had been dissolved in 1990 and its corporate affairs
terminated in 1993, there were no more corporate affairs to speak of at the time of the filing of the
complaint. The court also allowed the amendment of the complaint. It appears that, pending resolution of
the motion for reconsideration, respondent amended his complaint by alleging the following matters which
are underlined:

4. Luciano R. Pascual, Sr. together with L.R. Pascual & Sons. Inc. acquired approximately 38% of shares
in Phillens Manufacturing Corp., a close corporation. Luciano Sr. died in 1984 while Consolacion died in
1986. Thus, plaintiff became owner by operation of law of 1/9 of his parents’ stockholdings since they
died intestate without obligations.

5. With Luciano’s substantial shareholdings, defendant Alfredo became President, General Manager, and
Vice-Chairman of Phillens in 1968 or 1969, positions which he held until 1990 when Phillens was
dissolved.

6. Defendant Alfredo held in trust for the benefit of Luciano Sr. and Consolacion, and for his brothers and
sisters, plaintiff included, said stockholdings and the properties of Phillens.

7. As trustee defendant Alfredo did not turn over the properties and sums due to plaintiff and the former
even failed to account for the trust estate and its earnings, to the grave prejudice of the latter.

8. One of the properties composing the trust estate, TCT No. C-28572 with an area of 7,528 square
meters located in Caloocan City, was registered in the name of defendants under devious and fraudulent
circumstances engineered by Alfredo.

8.1. Said property was appraised conservatively to have a market value of no less than P10.9 Million in
1989.

8.2 Although Alfredo was fully aware of its market value, Alfredo schemed, manipulated and succeeded in
transferring title to and possession in his favor of TCT No. C-28572 in 1989 for an alleged consideration
of P4.5 Million, in violation of his duties as trustee.
8.3 In order to cover-up such serious breach of trust, Alfredo maliciously caused the dissolution of
Phillens in 1990, shortly after ownership was transferred to him, and further caused the destruction of
Phillens records thereby rendering its stocks valueless after its corporate affairs were wound up in 1993.

8.4 Defendants presently appear as legal and beneficial owners by virtue of TCT No. C-215804.

Petitioners reiterate their contention that the complaint against them involves an intra-corporate dispute
cognizable by the SEC and, therefore, the Regional Trial Court should have dismissed the complaint.
They complain that the trial court should not have allowed the amendment of the complaint because it
was done in order to confer jurisdiction on the trial court.

First. Petitioners contend that the existence of a corporation at the time of filing of a complaint involving
an intra-corporate dispute is not required in order that such dispute be cognizable by the SEC because
such requirement is not found in P.D. No. 902-A.

This contention has no merit. P.D. 902-A, §5 provides:

In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over
corporations, partnerships and other forms of association registered with it as expressly granted under
existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases
involving:

....

b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders,
members, or associates; between any or all of them and the corporation, partnership or association of
which they are stockholders, members or associates, respectively; and between such corporation,
partnership or association and the state insofar as it concerns their individual franchise or right to exist as
such entity;

....

Sec. 5(b) does not define what an intra-corporate controversy is, but case law has fashioned out two tests
for determining what suit is cognizable by the SEC or the regular courts, and sometimes by the National
Labor Relations Commission. The first test uses the enumeration in §5(b) of the relationships to
determine jurisdiction,2 to wit:

(1) Those between and among stockholders and members;

(2) Those between and among stockholders and members, on one hand, and the corporation, on the
other hand; and

(3) Those between the corporation and the State but only insofar as its franchise or right to exist as an
entity is concerned.

The second test, on the other hand, focuses on the nature of the controversy itself.3 Recent decisions of
this Court consider not only the subject of their controversy but also the status of the parties.4

We hold that the Court of Appeals correctly ruled that the regular courts, not the SEC, have jurisdiction
over this case.1âwphi1 Petitioners and private respondent never had any corporate relations in Phillens.
It appears that private respondent was never a stockholder in Phillens, of which the parties’ predecessor-
in-interest, Luciano Pascual, Sr., was a stockholder and whose properties are being litigated. Private
respondent’s allegation is that, upon the death of their father, he became co-owner in the estate left by
him, and part of this estate includes the corporate interests in Phillens. He also alleges that petitioners
repudiated the trust relationship created between them and appropriated to themselves even the property
that should have belonged to respondent. It is thus clear that there is no corporate relationship involved
here. That petitioner Alfredo Pascual was a corporate officer holding in trust for his brother their father’s
corporate interests did not create an intra-corporate relationship between them.

Nor is the controversy corporate in nature. As we have stated before, the grant of jurisdiction must be
viewed in the light of the nature and function of the SEC under the law.5 P.D. No. 902-A, §3 gives the
SEC jurisdiction, supervision, and control over all corporations, partnerships or associations, who are the
grantees of primary franchise and/or a license or permit issued by the government to operate in the
Philippines. From this, it can be deduced that the regulatory and adjudicatory functions of the SEC,
insofar as intra-corporate controversies are concerned, comes into play only if a corporation still exists.

In the case at bar, the corporation whose properties are being contested no longer exists, it having been
completely dissolved in 1993; consequently, the supervisory authority of the SEC over the corporation
has likewise come to an end.

It is true that a complaint for accounting, reconveyance, etc. of corporate properties has previously been
held to be within the jurisdiction of the SEC.6 Nonetheless, a distinction can be drawn between those
cases and the case at bar, for, in those cases, the corporations involved were still existing, whereas in the
present case, there is no more corporation involved. There is no question that assessing the financial
status of an existing corporation, for purposes of an action for accounting, requires the expertise of the
SEC. But in the case of a dissolved corporation, no such expertise is required, for all its business has
been properly accounted for already, and what is left to be determined is properly within the competence
of regular courts.

It may be noted in this connection that pursuant to R.A. No. 8799, §5.2,7 which took effect on August 8,
2000, the jurisdiction of the SEC to decide cases involving intra-corporate dispute was transferred to
courts of general jurisdiction and, in accordance therewith, all cases of this nature, with the exception only
of those submitted for decision, were transferred to the regular courts. Hence, the question whether this
case should be filed in the SEC is now only of academic interest. For even if it involves an intra-corporate
dispute, it would be remanded to the Regional Trial Court just the same.

Second. Petitioners contend that the lower courts erred in allowing the amendment of the complaint,
which were actually made to confer jurisdiction on the trial court after the original complaint was
dismissed.

This contention has no basis. The original complaint alleged that Phillens has already been completely
dissolved. In addition, it alleged a breach by petitioner Alfredo P. Pascual of the implied trust created
between him and his brother, respondent Ernesto P. Pascual, after the death of their father. Thus, even
without the amendments, the allegations in the original complaint were sufficient to confer jurisdiction on
the trial court. The amendments made by respondent were merely for the purpose of making more
specific his original allegations.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED.

SO ORDERED.

_____________

EN BANC

G.R. No. 139542 June 21, 2001

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
INOCENCIO GONZALEZ, JR., accused-appellant.
DISSENTING OPINION

GONZAGA-REYES, J.:

Many unfortunate tragedies would not have happened if the improvident use of a firearm did not
exacerbate a simple altercation over traffic. This is one of them.

On a day intended to pay homage to the dead, a pregnant woman was shot to death in the course of her
husband’s altercation with the accused-appellant and his son along the Garden of Remembrance within
the Loyola Memorial Park in Marikina. The trial court found the accused guilty of the complex crime of
murder and two counts of frustrated murder and accordingly sentenced him to death. This case is before
us on automatic review.

The details of what actually transpired in the few seconds immediately preceding the shooting are
controverted by both parties but the events leading to this tragedy are not disputed.

In the afternoon of October 31, 1998 at about 2:30 p.m. both the families of the private complainant Noel
Andres and that of the accused-appellant Inocencio Gonzalez were on their way to the exit of the Loyola
Memorial Park. The appellant was driving a white Isuzu Esteem with his grandson and three housemaids,
while the private complainant was driving a maroon Toyota FX with his pregnant wife Feliber Andres, his
two year old son, Kenneth, his nephew Kevin and his sister-in-law, Francar Valdez. At the intersection
near the Garden of Remembrance, while the accused-appellant Gonzalez was turning left towards the
exit and the complainant Noel Andres was headed straight along the road to the exit their two vehicles
almost collided. Noel Andres was able to timely step on the brakes. The appellant continued driving along
his way while Noel Andres drove behind the appellant’s vehicle for some time and cut him off when he
found the opportunity to do so.1 Noel Andres then got out of his vehicle and knocked on the appellant’s
car window.2 This is as far as their versions of the incident coincide.

The prosecution’s version of the incident is that Noel Andres calmly told the appellant to be careful with
his driving and informed the latter that he, Andres, is with his family and to this Gonzalez allegedly
replied, "Accidents are accidents, what’s your problem." Andres stated that he saw the appellant turning
red in anger so he decided to go back to his vehicle when he was blocked by the appellant’s son who
said, "Anong problema mo sa erpat ko." Andres testified that he felt threatened and so he immediately
boarded his vehicle, sat at the driver’s seat, closed the door, and partially opened the car window just
wide enough to talk back to appellant’s son, Dino. Suddenly, one of his passengers said "Binaril kami".
He turned to his wife Feliber Andres and saw her bloodied and unconscious. He turned around and saw
his son Kenneth and nephew Kevin were also wounded. Andres admitted in court that he and Dino were
shouting at each other so that he did not hear the shot. Andres then got out of his vehicle to warn the
appellant not to flee. He then took the wounded members of his family to the exit where there was an
ambulance standing by. The three were then taken to the Sta. Monica Hospital and were later transferred
to the Quezon City Medical Center.

The defense’s version of the incident is that Andres cut the appellant’s path by positioning his FX
obliquely along the appellant’s lane from the latter’s left side. Andres then got out of his vehicle, stood
beside the appellant’s car window, and repeatedly cursed the appellant, "Putang ina mo, ang tanda-tanda
mo na hindi ka pa marunong magmaneho. Ang bobo-bobo mo."3 The appellant stayed inside his car and
allegedly replied, "Pasensiya ka na hindi kita nakita, nasilaw ako. Aksidente lang." The appellant
Gonzalez and another witness for the defense, Quidic, testified that Noel Andres went back to his vehicle
to move it in such a way that it is straight in front of the appellant’s car. Andres allegedly got out of his
vehicle again and continued shouting and cursing at the appellant.4 Dino, the appellant’s son, who rode
in another vehicle decided to go back when he did not see his father’s car behind him. When Dino arrived
at the scene he confronted Andres and the two had an altercation. Both Dino and the appellant stated
that Andres remained outside his vehicle during the altercation with Dino. When Andres suddenly
reached for something inside his vehicle, Dino froze on the spot where he stood. This prompted the
appellant to get his gun from the glove compartment and feeling that his son was threatened he got out of
his car ready to shoot. When he saw that Andres did not have a weapon he put down his hand holding
the gun. This is when the appellant’s daughter Trisha who was riding in Dino’s car arrived at the scene,
walked past Dino and Andres, and pushed the appellant away. She hugged her father and in the process
held his hand holding the gun. The appellant tried to free his hand and with Trisha’s substantial body
weight pushing against him the appellant lost his balance and the gun accidentally fired. The accused
stated that he did not know he shot somebody until the private complainant’s sister-in-law, Francar
Valdez, got out of the vehicle carrying a bloodied small boy. The defense claims that the appellant did not
try to flee and even told the complainant’s sister-in-law to take the wounded to the hospital.

On November 4, 1998 an Information for the complex crime of Murder, Double Frustrated Murder and
Attempted Murder was filed against herein accused-appellant:

"That on or about the 31st day of October 1998, in the city of Marikina, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused, did then and there willfully, unlawfully and
feloniously with intent to kill, attack, assault and employ personal violence by means of treachery and
abuse of superior strength upon the person of Noel Andres y Tomas, by then and there shooting him with
a Glock cal. 9mm pistol but instead hitting one Feliber Andres y Ordoño, on the left back portion of her
head, thereby inflicting upon her serious and mortal wound which directly caused her death, as well as
hitting John Kenneth Andres y Ordoño and Kevin Valdez y Ordoño physical injuries which ordinarily
would have caused their death, thus performing all the acts of execution which would have produced the
crime of murder as a consequence, but nevertheless did not produce it by reason of some cause or
causes, independent of their will, that is, the timely and able medical assistance rendered to John
Kenneth Andres y Ordoño and Kevin Valdez y Ordoño to their damage and prejudice as well as to the
damage and prejudice of the heirs of Feliber Andres y Ordoño."

On arraignment the accused-appellant pleaded "not guilty" to the crimes charged.

The case records show that Feliber Andres, the wife of Noel Andres did not die instantaneously. She lived
to give birth to a baby girl5 by caesarian section and died the following morning on November 1, 1998.
The Autopsy Report6 states:

"FINDINGS: Fairly nourished, fairly developed female cadaver, with post mortem lividity. Conjunctivae are
pale. Lips and nail beds are cyanotic. Surgical incisions were noted at left tempero-parietal region.
Surgical incisions is also noted at the abdominal region secondary to a caesarian section.

HEAD: (1) gunshot wound, point of entry, left fronto-temporal region, measuring 1 by 0.9 cm, 9 cm from
the anterior midline, with a uniform abraided collar measuring 0.2 cm., directed posteriorwards, slightly
downwards, and medialwards, fracturing the frontal, and left temporal bones, lacerating the left cerebral
hemisphere, with a deformed slug fragment embedded and recovered at the posterior lobe of the left
cerebral hemisphere. (2) hematoma, left orbital region, measuring 4.5 by 2 cm, 4 cm from the anterior
midline. There are subdural and subarachnoidal hemorrages. Stomach contains 1 ½ glassful of partially
digested food particles mostly rice and meaty material.

CONCLUSION: Cause of death is gunshot wound on the head."

Kenneth and Kevin were treated for extraction of metallic fragments on their faces. They were discharged
from the hospital six days later or on November 6, 1998.

On June 25, 1999 the trial court rendered judgement finding that the shooting was attended by the
qualifying circumstance of treachery and held the appellant guilty of the complex crime of murder for the
death of Feliber Andres and for two counts of frustrated murder for the injuries sustained by Kenneth
Andres and Kevin Valdez and sentenced the appellant to the maximum of the imposable penalty which is
death. The trial court held:

"Beforehand, the Court takes note of the judicial admissions on the verbal declarations of the accused
that the court ‘a quo’ has jurisdiction over the case; that he owns the black Gluck 9 mm. automatic pistol;
that the said gun will never fire even if he drops it; that only one bullet was fired from his gun; and that the
victim Feliber Andres is already dead. With this exegesis and the declarations in open court of the
eyewitness of both the prosecution and some of the defense, there is no real dispute on the antecedent
facts showing that the accused fired on Noel Andres but instead hit and caused the fatal injuries to the
victims John Kenneth Andres, Kevin Valdez and Feliber Andres resulting to the ultimate death of the
latter. The court takes further judicial admissions of the accused made in their memorandum
demonstrating the existence of five (5) sequences of events leading to the death of Feliber Andres and
the wounding of John Kenneth Andres and Kevin Valdez which are as follows: First is when Noel Andres
overtook the car driven of the accused and cut cross his path; Second is when Noel Andres alighted from
his vehicle and confronted Inocencio; Third is when Noel had an argument with Dino Gonzalez, the son of
the accused; Forth is when, Inocencio seeing his son having confrontation with Noel, got his gun to
protect Dino; and Fifth is when Inocencio had a struggle with his daughter. Trisha Gonzalez, who tried to
reach for the gun and as a result of which Inocencio lost his balance and as he was falling backward to
his side, his right arm holding the gun hit the rear window of the Tamaraw FX van and the gun
accidentally went off hitting the victim, who were all then inside the van.

The court likewise take judicial notice on the feature of the automatic pistol used in this case which is
capable of unquestionable demonstration or ought to be known to judges because of their judicial
functions. Practically, the stages before an automatic firearm would be capable of firing are as follows: 1)
the loading of a bullet into the chamber of the gun; 2) the cocking of the hammer, if uncocked; 3) the
releasing of the safety pin; 4) the pressing of the trigger to unleash the hammer so that the firing pin will
hit the cartridge to propel the bullet out to hit the target. Realistically, it demonstrates that a gun will not
fire even if the bullet is loaded in its chamber if the hammer is uncocked; or even if cocked if the safety
pin is engaged; or even if the safety pin is disengaged if the trigger will not be pressed. However, even if
the gun is fired if it is not aimed and leveled to the target, the purpose of firing it shall not be achieved.
Contrarily, once a gun is drawn against a person, the means methods and forms employed for its
execution is already conceived. And once it is tended directly and specifically to insure its execution, it
consequently produces the conscious and deliberate intention. Finally if all the acts of execution had been
effectively done without risk on the part of the offender arising from any defense coming from the
offended party, treachery results. In brief, there is treachery when the offender commits any crime against
persons, employing means, methods and forms in the execution thereof which tend directly and specially
to insure its execution, without risk to himself arising from any defense which the offended party might
make (People vs. Mesa 276 SCRA 407; People vs. Carlos Patrolla, Jr. G. R. No. 112445, March 7, 1996).
To appreciate treachery two (2) conditions must be present, to wit: 1) the employment of means of
execution that give the person attacked no opportunity to defend himself or retaliate; and 2) the means of
execution were deliberately or consciously adopted. (People vs. Azugue, 268 SCRA 711; People vs.
Peña, G. R. No. 116022, July 1, 1998, p. 1)

In the case at bar and guided with the above-quoted doctrinal cases, logically, the accused is positive of
the crime charged against him. When he alighted with a drawn gun to protect his son and released all the
safety measures of his gun as he fired and missed at Noel who was then unarmed, but instead hit Kevin
Valdez, John Kenneth Andres and Feliber Andres which resulted to the death of the latter, demonstrate
that the accused has executed the two (2) conditions to generate treachery enough to qualify the crime
committed to murder."

XXXX XXXXX XXXX

"WHEREFORE, foregoing premises considered, the accused Inocencio Gonzalez, Jr., y Esquivel is
hereby found guilty beyond reasonable doubt of the complex crime of Murder with Double Frustrated
Murder and Attempted Murder penalized under Art. 248, as amended by Republic Act No. 7659 in
relation to Article 48 of the Revised Penal Code and is sentenced to suffer the maximum penalty of Death
by lethal injection.

The accused is further ordered to pay the following civil liabilities:

1. To the private complainant Noel Andres:

a) the amount of P50,000.00 as indemnity for the death of Feliber Andres;

b) the amount of P3,363,663.60 as indemnity for the loss of earning capacity of the deceased Feliber
Andres;

c) the amount of P98,384.19 as funeral expenses;

d) the amount of P271,800.56 for the hospitalization expenses incurred for the injuries sustained by the
deceased Feliber Andres and the amount of P23,622.58 representing the expenses for the untimely
delivery of the child Ma. Clarisse Andres;

e) the amount of P51,566.00 representing the hospitalization expenses for the injuries sustained by the
victim John Kenneth Andres;

f) the amount of P150,000.00 as moral damages suffered for the untimely death of his wife Feliber Andres
and for the injuries caused to his son John Kenneth Andres;

g) the amount of P50,000.00 as and by way of attorney’s fees and a fee of P2,000.00 per appearance;
and

h) the costs of the suit.

2. To the private complainant Nicasio Valdez:

a) the amount of P73,824.75 as actual damages for the injuries sustained by the victim Kevin Valdez; and

b) the amount of P75,000.00 as and by way of moral damages.

SO ORDERED."

In his appeal, Gonzalez submits the following assignments of error:

"1. The trial court committed reversible error when it found that treachery was present.

2. The trial court committed reversible error when it presumed that there was treachery by taking judicial
notice of the feature of the automatic pistol involved in this case.

3. The trial court committed reversible error when it violated the constitutional right of the accused-
appellant to due process when it took judicial notice of the feature of the automatic pistol involved in this
case without notice.

4. The trial court committed reversible error when it found Accused-Appellant guilty beyond reasonable
doubt of the complex crime of Murder with Double Frustrated Murder.

5. The trial court committed reversible error when it failed to appreciate the mitigating circumstances of
passion or obfuscation, lack of intention to commit so grave a wrong, provocation or threat on the part of
the offended party immediately preceded the act, incomplete defense of relative, and voluntary surrender.

6. The trial court committed reversible error when it failed to find that the shooting incident was accidental.

7. The trial court committed reversible error when it gave credence to the testimonies of prosecution
witnesses Elmer Ramos and Moises Castro.

8. The trial court committed reversible error when it disregarded the basic principle that the accused is
presumed innocent and his guilt must be proven beyond reasonable doubt.
9. The trial court committed reversible error when it ordered Accused-Appellant to pay for the civil
liabilities."

The appellant seeks a reversal and prays that judgment be rendered exempting him from criminal and
civil liabilities. Appellant declared that he had no intention to shoot Noel Andres much less his wife nor the
children. He lost his balance when his daughter Trisha approached and pushed him backwards to stop
him from joining Dino and Noel Andres but the appellant tried to free his right hand holding the gun and it
accidentally fired. The single bullet fired hit the last window on the left side of the Tamaraw FX. The
appellant claims that he did not see the passengers inside the vehicle at the time of the shooting. This is
corroborated by the testimony of two witnesses for the prosecution who testified that the windows of
Andres’ vehicle are heavily tinted so that a person outside the vehicle would not be able to see if there
are people inside. It is also argued that had the appellant intended to shoot Noel Andres he could have
simply done so by shooting at him directly. The defense asserts that the evidence for the prosecution
failed to establish the attendance of treachery and without the attendance of the said qualifying
circumstance the crime committed is homicide, not murder.

The appellant also points out that the trial court made the factual finding that the shooting happened in a
matter of seconds and that it was preceded by a heated argument between the parties. Such being the
case, it is argued that the shooting could not have been attended by treachery. There was no time for the
appellant to consciously and deliberately employ the mode of attack against Noel Andres, nor against any
one of the actual victims, to insure its execution and at the same time to eliminate any form of retaliation
from the alleged intended victim. And yet, the trial court, contrary to the evidence on record, held that the
loading of the bullet into the chamber of the gun, the cocking of the hammer, the release of the safety pin
and the pulling of the trigger by the appellant of his automatic pistol constitute conscious and deliberate
effort to employ the gun as a means of committing the crime and resultantly, qualified its commission by
treachery. Such a finding presupposes that the appellant loaded the gun to shoot Noel Andres only that
very moment when his son Dino and Noel Andres were arguing. This conclusion has no basis on record.
The appellant testified that his gun was loaded before he left the house and two witnesses for prosecution
stated in court that a few seconds after Noel Andres and Dino started shouting at each other, the
appellant got out of his car and shot at the last window on the left side of the complainant’s vehicle.
Further, the appellant assigns as error the procedure adopted by the trial court in taking judicial notice
that the gun used by the appellant is an automatic pistol and as such, it will not fire unless aimed at the
intended target. The procedure taken by the trial court is contrary to Section 3, Rule 129 of the Rules of
Court.7 The trial court should have given both parties the opportunity to present evidence, expert
evidence, if necessary, to inform the court on the subject matter. The appellant argues that the factual
finding borne by such erroneous procedure is equally erroneous. The gun used by the appellant is a
semi-automatic and not an automatic pistol which means that the pistol used has no external safety pin to
be released and that the hammer need not be cocked. The pulling of the trigger, intentional or not, will fire
the gun. The use of a semi-automatic pistol does not necessarily imply treachery.

Appellant also argues that the testimonies of prosecution witnesses Castro and Ramos were improperly
given credence by the trial court. The appellant contends that a reading of their testimonies would show
that their narration of the incident is rather absurd and would show that they did not witness the actual
shooting. Defense witnesses, Gonzalez and his daughter, Trisha, on the other hand, testified that Castro
and Ramos arrived at the scene only after the shooting.

As regards the injuries sustained by Kevin and Kenneth, it is argued that considering that there was no
intent to kill and that they stayed in the hospital only for six days, the crime committed is physical injuries.
It is argued that the trial court erred in awarding damages. The bunch of receipts allegedly representing
the medical expenses incurred for the injuries sustained by the victims was erroneously admitted in
evidence, without first requiring the prosecution to establish the authenticity of the receipts. The appellant
also points out that the award for loss of earning capacity has no basis as the deceased was unemployed
at the time of the incident.

Finally, the appellant assigns as error the trial court’s rejection of the mitigating circumstances pleaded by
the defense which allegedly attended the commission of the crime, i.e., lack of intent to commit so grave
a wrong, passion and obfuscation, incomplete defense of a relative and voluntary surrender. The
appellant asserts that these mitigating circumstances were duly proven during the trial and are supported
by the evidence on record. The private complainant Noel Andres testified that he saw the appellant
getting red in anger after they, Andres and the appellant, had a heated argument immediately prior to the
shooting. These admitted circumstances show that the appellant was not in his proper state of mind at the
time of the shooting. First, he was angered by Andres’ abusive language and later he got out of his car
with a loaded gun to protect his son from a perceived danger. The appellant clams that his willingness to
help the injured and his voluntary surrender to the police should likewise be considered as mitigating
circumstances in the imposition of penalties.

The Solicitor-General agrees with the appellant that the crime was not attended by the qualifying
circumstance of treachery and hence the crime committed by the appellant for the death of Feliber
Andres is homicide, not murder. The appellee takes into consideration that the shooting was preceded by
a heated argument and that the supposed victim was placed on guard that attack was imminent. It also
appears that the shooting was done impulsively. There is no evidence that the appellant deliberately
employed the means of attack to insure execution of the crime and at the same time eliminate the risk of
retaliation from the private complainant. The appellee also agrees with the appellant that the trial court
erred in equating the use of an automatic pistol with treachery. The trial court made the factual finding
that the appellant’s automatic pistol would not fire unless aimed and the trigger is deliberately pulled and
hence treachery attended the shooting. The appellee submits that if we follow the reasoning of the trial
court it would appear that the appellant intended to shoot at the complainant’s vehicle only as the shot
was fired at the last window on the left side of the FX away from where Andres was allegedly seated. The
fact that the gun was drawn and fired does not mean that the mode of attack was consciously and
deliberately employed.

However, with respect to the injuries sustained by Kevin and Kenneth, the appellee disagrees with the
contention that the appellant is liable only for slight physical injuries. The injuries sustained by both
children are head injuries and could have caused their death if not for the immediate medical attention
given them. The number of days spent in the hospital is not determinative of the severity of the wounds.
Their nature and location should instead be considered. The appellant cannot escape liability for
frustrated homicide for the injuries of the two children on the ground that he fired a single shot at the
vehicle of Noel Andres. He is liable for all the consequences of his unlawful act even if the crime
committed is different from that intended.

As regards the pleaded mitigating circumstances, appellee asserts that none can be considered in favor
of the appellant. There is evidence on record that the appellant did not voluntarily surrender to the police
and it appears from the testimonies of witnesses that he entertained the possibility of flight but his car was
stuck in traffic along the exit of the memorial park. His pretense of incomplete defense of a relative is
belied by his own admission that when he saw that Noel Andres did not have a gun he lowered his hand
holding the gun. There was allegedly no threat on the life of his son at the time of the shooting, no
uncontrollable fear nor irresistible force that would mitigate the commission of the offense.

The Solicitor-General also seeks to uphold the pecuniary awards granted by the trial court. The appellee
alleges that it is not denied by the appellant that Feliber Andres was a 38 year old registered nurse at the
time of the shooting. Although she was then unemployed on account of her pregnancy, she still had
earning capacity and the trial court properly applied the salary of a government nurse under the salary
standardization scheme in the computation of damages for the loss of earning capacity. The receipts
presented in evidence by the prosecution to establish hospitalization and other medical expenses
incurred by the private complainants by reason of the injuries suffered by the victims were duly
authenticated by the prosecution witnesses and there is no dispute that they are exact copies of the
original receipts presented in court. The objections raised by the appellant in this regard were duly met by
the evidence presented by the private complainants.

In sum, the appellee asserts that considering that the appellant fired a single shot and in the process
committed four offenses the appellant should be held liable for the complex crime of homicide for the
death of Feliber Andres, double frustrated homicide against Kevin and Kenneth and attempted homicide
against Noel Andres. Under the rules on complex crimes the penalty for the gravest offense, i.e.,
reclusion temporal for homicide, should be imposed in its maximum period.

The appeal has merit.

Treachery under par.16 of Article 14 of the Revised Penal Code is defined as the deliberate employment
of means, methods or forms in the execution of a crime against persons which tend directly and specially
to insure its execution, without risk to the offender arising from the defense which the intended victim
might raise. For treachery to be appreciated two elements must concur: 1) the employment of means of
execution that would insure the safety of the accused from retaliatory acts of the intended victim and
leaving the latter without an opportunity to defend himself and 2) the means employed were deliberately
or consciously adopted by the offender.8 The suddenness of the attack, the infliction of the wound from
behind the victim, the vulnerable position of the victim at the time the attack was made or the fact that the
victim was unarmed do not by themselves render the attack as treacherous.9 This is of particular
significance in a case of an instantaneous attack made by the accused whereby he gained an
advantageous position over the victim when the latter accidentally fell and was rendered defenseless.10
The means employed for the commission of the crime or the mode of attack must be shown to have been
consciously or deliberately adopted by the accused to insure the consummation of the crime and at the
same time eliminate or reduce the risk of retaliation from the intended victim.11 Accordingly, it has been
consistently held by this court that chance encounters, impulse killing or crimes committed at the spur of
the moment or that were preceded by heated altercations are generally not attended by treachery for lack
of opportunity of the accused to deliberately employ a treacherous mode of attack.12 Thus, the sudden
attack made by the accused due to his infuriation by reason of the victim’s provocation was held to be
without treachery. Sudden attacks made by the accused preceded by curses and insults by the victim or
acts taunting the accused to retaliate or the rebellious or aggressive behavior of the victim were held to
be without treachery as the victim was sufficiently forewarned of reprisal.13 For the rules on treachery to
apply the sudden attack must have been preconceived by the accused, unexpected by the victim and
without provocation on the part of the latter.14

This Court has also had occasion to state that whether or not the attack succeeds against its intended
victim or injures another or whether the crime committed is graver than that intended is immaterial, as
long as it is shown that the attack is attended by treachery, the said qualifying circumstance may still be
considered by the court.15 Thus, the determining factor on whether or not the commission of a crime is
attended by treachery is not the resulting crime committed but the mode of attack employed in its
execution.16

Treachery is never presumed. It is required that the manner of attack must be shown to have been
attended by treachery as conclusively as the crime itself.17

We affirm the recommendation of the Solicitor-General that the shooting was not attended by treachery
and accordingly the crime committed for the death of Feliber Andres is homicide and not murder.

The encounter between Noel Andres and the appellant was a chance encounter. They were total
strangers before their vehicles almost collided at an intersection inside the memorial park. Unfortunately,
heated exchange of remarks that followed the near collision was fanned by a short temper, which in the
case of the appellant, was augmented by the improvident use of a firearm.

From a reading of the transcript of the testimonies of the witnesses, it would appear that Noel Andres,
who had his pregnant wife and child with him, among others, on board the Tamaraw FX provoked the
altercation. After the near collision of his vehicle with that of the appellant, he tailed behind the latter’s car
towards the exit until he had the chance to cut him off to scold him for his failure to observe traffic rules.18
Andres stated in court that he calmly told the appellant to be careful with his driving and denied that he
was angry when he alighted from his vehicle to confront the appellant.19 His statement is belied by the
witnesses, two prosecution witnesses included, who uniformly testified that Andres quarreled with or
shouted and cursed at the appellant for the latter’s recklessness at the intersection.20 The appellant
narrated in court that Andres repeatedly shouted at him, "Putang ina mo, ang tanda-tanda mo na gago ka
pa".21 Andres’ hostile behavior towards the appellant is evident from his statement in court that he
noticed the appellant turning red in anger.22 It is highly improbable for Gonzalez to have turned red in
anger had Andres been polite, as he claims he was, in scolding Gonzalez. Andres could have simply
communicated to the appellant his disgust for the latter’s bad driving when he overtook the appellant’s car
near the scene of the shooting but instead he chose to block the appellant’s path, insult and virtually
provoke the appellant to retaliate.

Andres stated in court that when he noticed Gonzalez’ infuriation he immediately walked towards his
vehicle, because according to him the altercation was over. On his way to his FX he met another man,
whom he later found out to be the appellant’s son, Dino. It appears that the altercation was far from over
because again Andres had a shouting match this time with Dino.23 In a matter of seconds, the appellant
alighted from his car and fired a single shot at the last window on the left side of Andres’ vehicle at an
angle away from Noel Andres. The single bullet fired hit Feliber Andres on the forehead near the temporal
region above the left eye and the two children with metallic fragments of the bullet on their faces, one at
the cheek and the other below his left eye.

The prosecution did not present evidence as to the exact seating arrangement of the victims inside the
vehicle; suffice it to say, that an examination of the pictures of the vehicle24 one of which shows a mass
of blood stains on the left side (towards the driver’s seat) of the white seat cover below the head rest25,
would show that the deceased Feliber must have been seated at the front passenger’s seat and the
children at the middle row behind the driver’s seat.26 Another picture shows a bullet hole on the last
window on the left side of the vehicle27 and another shows that the front windshield appears
undamaged.28 A ballistics expert appeared in court for the prosecution and testified that the bullet fired at
the FX came from the appellant’s gun, which fact was admitted by the defense. The prosecution did not
inquire from the ballistics expert regarding the trajectory of the bullet or the approximate distance of the
appellant from the FX when he fired his gun to establish whether or not the appellant aimed for Noel or
Feliber or simply fired indiscriminately at the latter’s vehicle.29

At first blush it would seem that the shooting of Feliber Andres was attended by treachery as she was
inside the FX witnessing her husband’s altercation, first, with the appellant then with the appellant’s son,
totally defenseless from the shot that came suddenly from her left side. Public outrage over the death of
Feliber was heightened by the fact that she was then pregnant with her second child and her death left a
new born baby girl and a two year old boy motherless.

However, a meticulous review of the evidence prevents a conclusive finding of treachery and any doubt
must be resolved, like the fact of the commission of an offense, in favor of the accused. The pictures
indicate that Gonzalez fired at the FX at an angle away from Noel Andres and that Gonzalez was not
aiming at anybody in particular. It is not disputed that the appellant’s car was directly behind the
complainant’s FX and that Gonzalez who was then seated at the driver’s seat alighted from his car, took a
few steps then fired at the left side of the FX. Whether Noel Andres was seated at the driver’s seat inside
his vehicle when Gonzalez fired at the FX, as the prosecution asserts, or was standing by the door of the
driver’s seat outside his vehicle, as the defense submits, it is clear that the shot was fired away from Noel
Andres. The bullet hit Feliber near her temple above the left eye indicating that she was facing left
towards her husband when the shot was fired.30 The direct hit on Feliber’s head shows that the angle of
the shot was indeed away from Noel Andres. Even the eyewitness for the prosecution testified that had
the appellant intended to kill Noel Andres he could have shot directly at him, considering that Noel Andres
was just a few steps away from him31 and that Noel Andres was visible from the outside because his
window was partially open.32 The pictures show that the bullet hole was on the third window on the left
side of the Tamaraw FX33 belying any attempt to shoot Noel Andres. Two prosecution witnesses Ramos
and Castro unequivocally declared that "nothing or no one" prevented Gonzalez from shooting directly at
Noel Andres and that Gonzalez could have simply done so if he wanted to. But after alighting from his
car, Gonzalez took a few steps and shot at the left side window of the FX.34

The fact that the appellant fired his gun from behind the victim does not by itself amount to treachery.
There is no evidence on record that the appellant deliberately positioned himself behind the victim to gain
advantage over him when he fired the shot. On the contrary, the evidence before us reveals that the
position of the appellant’s car was not of his own doing but it became so when Noel Andres overtook his
car and cut off his path.

We note further, that the appellant did not act belligerently towards Noel Andres even after the latter cut
off the appellant’s path. Andres stated in court that the appellant did not alight from his car nor opened his
window until he, Andres, tapped on it.35 For his part Gonzalez categorically stated in court that he did not
point his gun nor threatened Andres during their short spat.36 Gonzalez, although he had his gun in his
car, did not react to Andres’ cursing until the latter was having an altercation with the appellant’s son,
Dino. Gonzalez claimed that he perceived that his son was in imminent danger.37 Whether he
overreacted or he shot at Andres’ vehicle out of rage over Andres’ aggressive behavior, one thing
appears clear to us, that the shooting was not done in cold blood. It is undisputed that the windows of the
FX are heavily or darkly tinted so that a person outside would not see if anybody was inside.38 The
pictures of the FX39 on record confirm the testimonies of both prosecution and defense witnesses that
the other passengers of the FX were not visible from the outside. Gonzalez admitted in court that Noel
Andres mentioned that he has passengers with him while he was shouting and cursing at Gonzalez but
there is no indication that Gonzalez had any opportunity to see the passengers when he fired the shot.
The totality of the evidence on record fails to support a conclusion that Gonzalez deliberately employed
the mode of attack to gain undue advantage over the intended nor the actual victim. Without any decisive
evidence to the contrary, treachery cannot be considered; thus the crime committed is homicide.40

The trial court’s finding that the loading of the gun, the cocking of the hammer and finally the pulling of the
trigger constitute a deliberate effort on the part of appellant to use the gun as a means of a treacherous
attack is patently erroneous. A single and continuous attack cannot be divided into stages to make it
appear that treachery was involved.41 The entire incident happened in a matter of minutes, as testified to
by witnesses, and as noted by the trial court.42 It was error to our mind for the trial court to divide the
assault in stages to arrive at the conclusion that the mode of attack was consciously employed by the
appellant. Contrary to the finding of the trial court that the appellant prepared the gun before getting out of
his car, the appellant testified that he loaded his gun before he left the house and that it was ready to fire
when he alighted his car. There was no time for him to reflect on the mode of attack since he just picked
up his gun and alighted from his car and shot at the FX a few seconds after Dino and Noel Andres started
shouting at each other.43 We note further that the trial court pointed out that from the fact that the
appellant prepared his gun to shoot, this was an indication of the deliberate employment of the gun as a
means to kill; i.e. that the use of an automatic pistol shows that the shooting was attended by treachery.

We do not agree that the weapon used, by itself, is determinative of treachery, unless it is shown, and it is
not herein shown, that the appellant deliberately used the gun to insure the commission of the crime and
to render the unarmed victim defenseless. As discussed above, the encounter between the appellant and
the Andresses was a chance encounter and the appellant’s gun was in the glove compartment of his car
even before he left his house. The shooting was clearly a spur of the moment or impulsive decision made
by the appellant preceded by a heated altercation at the instance of the private complainant.
Jurisprudence teaches us that under the circumstances, treachery is not obtaining. In the case of People
vs. Valles,44 the accused, a security guard, fired his Armalite and mortally wounded the victim when the
latter approached the accused four times insisting on entering the workplace wearing improper uniform,
then cursed and insulted and challenged the accused to a fight. We held that the shooting was not
attended by treachery as the shooting was preceded by a heated altercation at the instance of the victim.
It is to be noted that the kind of weapon used against an unarmed victim was not taken into consideration
in determining the attendance of treachery; it is the mode of attack employed by the accused under the
particular circumstances of a case that determines its attendance in the commission of a crime. We find
that the prosecution has not discharged its burden to show that the shooting was attended by treachery
and we are convinced that the crime committed for the death of Feliber Andres is homicide.

As regards the injuries sustained by the two children we find that the crime committed are two counts of
slight physical injuries. The intent to kill determines whether the crime committed is physical injuries or
homicide and such intent is made manifest by the acts of the accused which are undoubtedly intended to
kill the victim.45 In a case wherein the accused did not know that a person was hiding behind a table who
was hit by a stray bullet causing superficial injuries requiring treatment for three days, the crime
committed is slight physical injuries.46 In case of doubt as to the homicidal intent of the accused, he
should be convicted of the lesser offense of physical injuries.47 We have earlier pointed out that the
intent to kill is absent in this case. It was also found that one small metallic fragment was extracted from
Kenneth below his left eye while another fragment was extracted from Kevin "immediately below the level
of his skin before the cheek bone".48 An examination of the testimonies of the attending physicians,
showed that the wounds sustained by the two children from the metallic fragments are not in themselves
fatal but may cause death if left untreated. One of the attending physician testified in court that the
fragments themselves "will not cause complication, it is the entry of the fragment" or the open wound that
is susceptible to infection.49 Two small fragments were no longer extracted from the face of Kevin
Valdez, as the doctor deemed it to be without danger of complication.50 We note that the various sizes of
the metallic fragments were not established, at least to give an indication of the severity of the wounds
sustained. Both children were discharged after six days of treatment and there is no showing that they
required subsequent treatment or that they were immobilized for a greater number of days by reason of
the injuries sustained. Considering the nature and location of their injuries and the number of days
required for their treatment, we find that the crime committed for the injuries sustained by the children are
two counts of slight physical injuries under Art. 266 of the Revised Penal Code which imposes a penalty
of arresto menor or imprisonment for 1 to 30 days for injuries sustained that has incapacitated the victim
for one to nine days or required medical attendance for the same period. For evident lack of criminal
intent to kill the complainant, Noel Andres, as above stated, the information for attempted homicide must
fail.

The mitigating circumstances of voluntary surrender, passion and obfuscation, incomplete defense of a
relative and lack of intent to commit so grave a wrong, pleaded by the defense, were not convincingly
proved and none can be considered in the imposition of penalties. The testimony of prosecution witness
contradicts the appellant’s pretense of voluntary surrender. Witness Ramos testified that the appellant
drove away towards the gate of the memorial park while he was questioning him after the shooting and
had not Noel Andres and onlookers blocked his path the appellant could have fled the scene of the
crime.51

The mitigating circumstance of passion and obfuscation is also not obtaining. For this mitigating
circumstance to be considered, it must be shown that (1) an unlawful act sufficient to produce passion
and obfuscation was committed by the intended victim; (2) that the crime was committed within a
reasonable length of time from the commission of the unlawful act that produced the obfuscation in the
accused’s mind; and that (3) "the passion and obfuscation arose from lawful sentiments and not from a
spirit of lawlessness or revenge".52 Noel Andres’ act of shouting at the appellant’s son, who was then a
nurse and of legal age, is not sufficient to produce passion and obfuscation as it is claimed by the
accused. Besides, the appellant’s son, Dino was shouting back at Noel Andres. It was not a case wherein
the appellant’s son appeared helpless and oppressed that the appellant lost his reason and shot at the
FX of Noel Andres. The same holds true for the appellant’s claim of provocation on the part of Noel
Andres. Provocation must be sufficient to excite a person to commit the wrong committed and that the
provocation must be commensurate to the crime committed. The sufficiency of provocation varies
according to the circumstances of the case.53 The aggressive behavior of Noel Andres towards the
appellant and his son may be demeaning or humiliating but it is not sufficient provocation to shoot at the
complainant’s vehicle.

The plea for the appreciation of the mitigating circumstance of incomplete defense of a relative is also
unmeritorious since the act of Andres in cursing and shouting at the appellant and his son do not amount
to an unlawful aggression against them, Dino Gonzalez. Finally, the plea for the appreciation of the
mitigating circumstance of lack of intent to commit so grave a wrong is likewise devoid of merit. This
mitigating circumstance is obtaining when there is a notable disparity between the means employed by
the accused to commit a wrong and the resulting crime committed. The intention of the accused at the
time of the commission of the crime is manifested from the weapon used, the mode of attack employed
and the injury sustained by the victim.54 The appellant’s use of a gun, although not deliberately sought
nor employed in the shooting, should have reasonably placed the appellant on guard of the possible
consequences of his act. The use of a gun is sufficient to produce the resulting crimes committed.
For the death of Feliber Andres, and in the absence of any mitigating circumstance, the appellant is
hereby sentenced to an indeterminate sentence of 8 years and 1 day of prision mayor, in its medium
period, as minimum to 14 years 8 months and 1 day of reclusion temporal in its medium period, as
maximum. For each count of the slight physical injuries committed against Kenneth Andres and Kevin
Valdez, the appellant is hereby sentenced to 20 days of arresto menor in its medium period.

The rules on the imposition of penalties for complex crimes under Art. 48 of the Revised Penal Code are
not applicable in this case. Art. 48 applies if a single act constitutes two or more grave and less grave
felonies or when an offense is a necessary means of committing another; in such a case, the penalty for
the most serious offense shall be imposed in its maximum period. Art. 9 of the Revised Penal Code in
relation to Art. 25 defines grave felonies as those to which the law attaches the capital punishment or
afflictive penalties from reclusion perpetua to prision mayor; less grave felonies are those to which the law
attaches a penalty which in its maximum period falls under correctional penalties; and light felonies are
those punishable by arresto menor or fine not exceeding two hundred pesos. Considering that the
offenses committed by the act of the appellant of firing a single shot are one count of homicide, a grave
felony, and two counts of slight physical injuries, a light felony, the rules on the imposition of penalties for
complex crimes, which requires two or more grave and/or less grave felonies, will not apply.

The pecuniary award granted by the trial court for actual damages was duly established by the
testimonies of the prosecution witnesses as supported by the original receipts for hospitalization and
other medical expenses presented in evidence by the prosecution. The award for loss of earning capacity
is likewise sustained for the reason that while Feliber Andres was pregnant and was unemployed at the
time of death, it is not disputed that she was a registered nurse and had earning capacity. Noel Andres
also testified that he and his wife had plans to go back to Saudi Arabia to work after Feliber had given
birth to their second baby. While there is no evidence as to Feliber’s actual income at the time of her
death, in view of her temporary separation from work because of her pregnancy, we do not consider it
reversible error for the trial court to peg her earning capacity to that of the salary of a government nurse
under the salary standardization law, as a fair estimate or reasonable assessment of her earning capacity
at the time of her death. It would be grossly inequitous to deny her spouse and her minor children
damages for the support that they would have received, considering clear evidence on record that she did
have earning capacity at the time of her death.

The awards for moral damages for the death of Feliber Andres and for the injuries sustained by the two
children, which under the circumstances are reasonable, are likewise sustained.

WHEREFORE, the decision of the trial court is hereby MODIFIED. The appellant is hereby found guilty of
homicide for the death of Feliber Andres and is sentenced to an indeterminate sentence of 8 years and 1
day of prision mayor in its medium period, as minimum, to 14 years 8 months and 1 day of reclusion
temporal in its medium period, as maximum. For each count of the slight physical injuries committed
against Kenneth Andres and Kevin Valdez, the appellant is hereby sentenced to 20 days of arresto
menor.

The pecuniary awards granted by the trial court are hereby sustained.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Melo, Vitug, Mendoza, Quisumbing, Buena, Ynares-Santiago, De Leon, Jr.,
Sandoval-Gutierrez, JJ., concur.

Pardo, J., dissenting opinion.

Puno, Kapunan, Panganiban, JJ., joins the dissenting opinion of J. Pardo.

______________

U.S. Supreme Court

In re R.M.J., 455 U.S. 191 (1982)
In re R.M.J.

No 80-1431

Argued November 9, 1981

Decided January 25, 1982

455 U.S. 191

Syllabus

Rule 4 of the Missouri Supreme Court, regulating advertising by lawyers, states that a lawyer may include
10 categories of information in a published advertisement: name, address and telephone number; areas
of practice; date and place of birth; schools attended; foreign language ability; office hours; fee for an
initial consultation; availability of a schedule of fees; credit arrangements; and the fixed fee to be charged
for certain "routine" legal services. Although the Rule does not state explicitly that these 10 categories of
information are the only information that will be permitted, that is the interpretation given the Rule by the
State Supreme Court and appellee Advisory Committee, which is charged with its enforcement. An
addendum to the Rule specifies two ways in which areas of practice may be listed in an advertisement,
under one of which the lawyer may use one or more of a list of 23 areas of practice, but may not deviate
from the precise wording stated in the Rule to describe these areas. In addition, the Rule permits a lawyer
to send professional announcement cards announcing a change of address or firm name, or similar
matters, but only to "lawyers, clients, former clients, personal friends, and relatives." An information was
filed in the Missouri Supreme Court by appellee Advisory Committee, charging appellant, a practicing
lawyer in St. Louis, Mo., with violations of Rule 4. The information charged that appellant published
advertisements which listed areas of practice in language other than that specified in the Rule and which
listed the courts in which appellant was admitted to practice although this information was not included
among the 10 categories of information authorized by the Rule. In addition, the information charged that
appellant had mailed announcement cards to persons other than those permitted by the Rule. Appellant
claimed that each of the restrictions upon advertising was unconstitutional under the First and Fourteenth
Amendments, but the Missouri Supreme Court upheld the constitutionality of Rule 4 and issued a private
reprimand.

Held: None of the restrictions in question upon appellant's First Amendment rights can be sustained in the
circumstances of this case. Pp. 455 U. S. 199-207.

(a) Although the States retain the ability to regulate commercial speech, such as lawyer advertising that is
inherently misleading or that has proved to be misleading in practice, the First and Fourteenth

Page 455 U. S. 192

Amendments require that they do so with care and in a manner no more extensive than reasonably
necessary to further substantial interests. Pp. 455 U. S. 199-204.

(b) Because the listing published by appellant -- e.g., "real estate" instead of "property law" as specified
by Rule 4, and "contracts" and "securities," which were not included in the Rule's listing -- has not been
shown to be misleading, and appellee suggests no substantial interest promoted by the restriction, the
portion of Rule 4 specifying the areas of practice that may be listed is an invalid restriction upon speech
as applied to appellant's advertisements. P. 455 U. S. 205.

(c) Nor has appellee identified any substantial interest in prohibiting a lawyer from identifying the
jurisdictions in which he is licensed to practice. Such information is not misleading on its face. That
appellant was licensed to practice in both Illinois and Missouri is factual and highly relevant information,
particularly in light of the geography of the region in which he practices. While listing the relatively
uninformative fact that he is a member of the United States Supreme Court Bar could be misleading,
there was no finding to this effect by the Missouri Supreme Court, there is nothing in the record to indicate
it was misleading, and the Rule does not specifically identify it as potentially misleading. Pp. 455 U. S.
205-206.

(d) With respect to the restriction on announcement cards, while mailings may be more difficult to
supervise, there is no indication in the record that an inability to supervise is the reason the State restricts
the potential audience of the cards. Nor is it clear that an absolute prohibition is the only solution, and
there is no indication of a failed effort to proceed along a less restrictive path. P. 455 U. S. 206.

609 S.W.2d 411, reversed.

POWELL, J., delivered the opinion for a unanimous Court.

Page 455 U. S. 193

______________

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

A.M. No. P-99-1292 February 26, 1999

JULIETA BORROMEO SAMONTE, complainant,

vs.
ATTY. ROLANDO R. GATDULA, Branch Clerk of Court, respondent.

RESOLUTION

GONZAGA-REYES, J.:

The complaint filed by Julieta Borremeo Samonte charges Rolando R. Gatdula, RTC, Branch 220,
Quezon City with grave misconduct consisting in the alleged engaging in the private practice of law which
is in conflict with his official functions as Branch Clerk of Court.

Complainant alleges that she is the authorized representative of her sister Flor Borromeo de Leon, the
plaintiff, in Civil Case No. 37-14552 for ejectment, filed with the Metropolitan Trial Court of Quezon City,
Branch 37. A typographical error was committed in the complaint which stated that the address of
defendant is No. 63-C instead of 63-B, P. Tuazon Blvd., Cubao, Quezon City. The mistake was rectified
by the filing of an amended complaint which was admitted by the Court. A decision was rendered in favor
of the plaintiff who subsequently filed a motion for execution. Complainant, however, was surprised to
receive a temporary restraining order signed by Judge Prudencio Castillo of Branch 220, RTC, Quezon
City, where Atty. Rolando Gatdula is the Branch Clerk Court, enjoining the execution of the decision of
the Metropolitan Trial Court. Complainant alleges that the issuance of the temporary restraining order was
hasty and irregular as she was never notified of the application for preliminary injunction.
Complainant further alleges that when she went to Branch 220, RTC, Quezon City, to inquire about the
reason for the issuance of the temporary restraining order, respondent Atty. Rolando Gatdula, blamed her
lawyer for writing the wrong address in the complaint for ejectment, and told her that if she wanted the
execution to proceed, she should change her lawyer and retain the law office of respondent, at the same
time giving his calling card with the name "Baligod, Gatdula, Tacardon, Dimailig and Celera" with office at
Rm. 220 Mariwasa Bldg., 717 Aurora Blvd., Cubao, Quezon City; otherwise she will not be able to eject
the defendant Dave Knope. Complainant told respondent that she could not decide because she was only
representing her sister. To her consternation, the RTC Branch 220 issued an order granting the
preliminary injunction as threatened by the respondent despite the fact that the MTC, Brach 37 had
issued an Order directing the execution of the Decision in Civil Case No. 37-14552.

Asked to comment, respondent Atty. Gatdula recited the antecedents in the ejectment case and the
issuance of the restraining order by the Regional Trial Court, and claimed that contrary to complainant
Samonte's allegation that she was not notified of the raffle and the hearing, the Notice of Hearing on the
motion for the issuance of a Temporary Retraining Order was duly served upon the parties, and that the
application for injunctive relief was heard before the temporary restraining order was issued. The
preliminary injunction was also set for hearing on August 7, 1996.

The respondent's version of the incident is that sometime before the hearing of the motion for the
issuance of the temporary restraining order, complainant Samonte went to court "very mad" because of
the issuance of the order stopping the execution of the decision in the ejectment case. Respondent tried
to calm her down, and assured her that the restraining order was only temporary and that the application
for preliminary injunction would still be heard. Later the Regional Trial Court granted the application for a
writ of preliminary injunction. The complainant went back to court "fuming mad" because of the alleged
unreasonableness of the court in issuing the injunction.

Respondent Gatdula claims that thereafter complainant returned to his office, and informed him that she
wanted to change counsel and that a friend of hers recommended the Law Firm of "Baligod, Gatdula,
Tacardon, Dimailig and Celera," at the same time showing a calling card, and asking if he could handle
her case. Respondent refused as he was not connected with the law firm, although he was invited to join
but he choose to remain in the judiciary. Complainant returned to court a few days later and told him that
if he cannot convince the judge to recall the writ of preliminary injunction, she will file an administrative
case against respondent and the judge. The threat was repeated but the respondent refused to be
pressured. Meanwhile, the Complainant's Motion to Dissolve the Writ of Preliminary Injunction was
denied. Respondent Gatdula claims that the complainant must have filed this administrative charge
because of her frustration in procuring the ejectment of the defendant lessee from the premises.
Respondent prays for the dismissal of the complainant against him.

The case was referred to Executive Judge Estrella Estrada, RTC, Quezon City, for investigation, report
and recommendation.

In her report, Judge Estrada states that the case was set for hearing three times, on September 7, 1997,
on September 17, and on September 24, 1997, but neither complainant nor her counsel appeared,
despite due notice. The return of service of the Order setting the last hearing stated that complainant is
still abroad. There being no definite time conveyed to the court for the return of the complainant, the
investigating Judge proceeded with the investigation by "conducting searching question" upon respondent
based on the allegations in the complaint, and asked for the record of Civil Case No. Q-96-28187 for
evaluation. The case was set for hearing for the last time on October 22, 1997, to give complainant a last
chance to appear, but there was again no appearance despite notice.

The respondent testified in his own behalf to affirm the statements in his Comment, and submitted
documentary evidence consisting mainly of the pleadings in MTC Civil Case No. 37-14552, and in RTC
Civil Case No. Q-9628187 to show that the questioned orders of the court were not improperly issued.

The investigating judge made the following findings:

For failure of the complainant to appear at the several hearings despite notice, she failed to substantiate
her allegations in the complaint, particularly that herein respondent gave her his calling card and tried to
convince her to change her lawyer. This being the case, it cannot be established with certainty that
respondent indeed gave her his calling card even convinced her to change her lawyer. Moreover, as
borne by the records of the Civil Case No. Q-96-28187, complainant was duly notified of all the
proceedings leading to the issuance of the TRO and the subsequent orders of Judge Prudencio Altre
Castillo, Jr. of RTC, Branch 220. Complainant's lack of interest in prosecuting this administrative case
could be an indication that her filing of the charge against the respondent is only intended to harass the
respondent for her failure to obtain a favorable decision from the Court.

However, based on the record of this administrative case, the calling card attached as Annex "B" of the
complainant's affidavit dated September 25, 1996 allegedly given by respondent to complainant would
show that the name of herein respondent was indeed include in the BALIGOD, GATDULA, TACARDON,
DIMAILIG & CELERA LAW OFFICES. While respondent denied having assumed any position in said
office, the fact remains that his name is included therein which may therefore tend to show that he has
dealings with said office. Thus, while he may not be actually and directly employed with the firm, the fact
that his name appears on the calling card as partner in the Baligod, Gatdula, Tacardon, Dimailig & Celera
Law Offices give the impression that he is connected therein and may constitute an act of solicitation and
private practice which is declared unlawful under Republic Act. No. 6713. It is to be noted, however, that
complainant failed to establish by convincing evidence that respondent actually offered to her the services
of their law office. Thus, the violation committed by respondent in having his name included/retained in
the calling card may only be considered as a minor infraction for which he must also be administratively
sanctioned.

and recommended that Atty. Gatdula be admonished and censured for the minor infraction he has
committed.

Finding: We agree with the investigating judge that the respondent is guilty of an infraction. The
complainant by her failure to appear at the hearings, failed to substantiate her allegation that it was the
respondent who gave her calling card "Baligod, Gatdula, Tacardon, Dimailig and Celera Law Offices" and
that he tried to convince her to change counsels. We find however, that while the respondent vehemently
denies the complainant's allegations, he does not deny that his name appears on the calling card
attached to the complaint, which admittedly came into the hands of the complainant. The respondent
testified before the Investigating Judge as follows:

Q: How about your statement that you even gave her a calling card of the "Baligod, Gatdula, Pardo,
Dimailig and Celera law Offices at Room 220 Mariwasa building?

A: I vehemently deny the allegation of the complainant that I gave her a calling card. I was surprised
when she presented (it) to me during one of her follow-ups of the case before the court. She told me that
a friend of hers recommended such firm and she found out that my name is included in that firm. I told her
that I have not assumed any position in the law firm. And I am with the Judiciary since I passed the bar. It
is impossible for me to enter an appearance as her counsel in the very same court where I am the Branch
Clerk of Court.

The above explanation tendered by the Respondent is an admission that it is his name appears on the
calling card, a permissible form of advertising or solicitation of legal services. 1 Respondent does not
claim that the calling card was printed without his knowledge or consent, and the calling card 2 carries his
name primarily and the name "Baligod, Gatdula, Tacardon, Dimailig and Celera with address at 220
Mariwasa Bldg., 717 Aurora Blvd., Cubao, Quezon City" in the left corner. The card clearly gives the
impression that he is connected with the said law firm. The inclusion/retention of his name in the
professional card constitutes an act of solicitation which violates Section 7 sub-par. (b)(2) of Republic Act
No. 6713, otherwise known as "Code of Conduct and Ethical Standards for the Public Officials and
Employees" which declares it unlawful for a public official or employee to, among others:
(2) Engage in the private practice of their profession unless authorized by the Constitution or law,
provided that such practice will not conflict or tend to conflict with official functions.

Time and again this Court has said that the conduct and behavior of every one connected with an office
charged with the dispensation of justice, from the presiding judge to the lowliest clerk, should be
circumscribed with the heavy burden of responsibility. His conduct, at all times must only be characterized
by propriety and decorum but above all else must be above suspicion. 3

WHEREFORE, respondent Rolando R. Gatdula. Branch Clerk of Court, RTC, Branch 220, Quezon City is
hereby reprimanded for engaging in the private practice of law with the warning that a repetition of the
same offense will be dealt with more severely. He is further ordered to cause the exclusion of his name in
the firm name of any office engaged in the private practice of law.

SO ORDERED.

Romero, Vitug, Panganiban and Purisima, JJ., concur.

__________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

Adm. Case No. 2131 May 10, 1985

ADRIANO E. DACANAY, complainant

vs.
BAKER & MCKENZIE and JUAN G. COLLAS JR., LUIS MA. GUERRERO, VICENTE A. TORRES,
RAFAEL E. EVANGELISTA, JR., ROMEO L. SALONGA, JOSE R. SANDEJAS, LUCAS M. NUNAG, J.
CLARO TESORO, NATIVIDAD B. KWAN and JOSE A. CURAMMENG, JR., respondents.

Adriano E. Dacanay for and his own behalf.

Madrid, Cacho, Angeles, Dominguez & Pecson Law Office for respondents.

AQUINO, J.:

Lawyer Adriano E. Dacanay, admitted to the bar in 1954, in his 1980 verified complaint, sought to enjoin
Juan G. Collas, Jr. and nine other lawyers from practising law under the name of Baker & McKenzie, a
law firm organized in Illinois.

In a letter dated November 16, 1979 respondent Vicente A. Torres, using the letterhead of Baker &
McKenzie, which contains the names of the ten lawyers, asked Rosie Clurman for the release of 87
shares of Cathay Products International, Inc. to H.E. Gabriel, a client.

Attorney Dacanay, in his reply dated December 7, 1979, denied any liability of Clurman to Gabriel. He
requested that he be informed whether the lawyer of Gabriel is Baker & McKenzie "and if not, what is your
purpose in using the letterhead of another law office." Not having received any reply, he filed the instant
complaint.

We hold that Baker & McKenzie, being an alien law firm, cannot practice law in the Philippines (Sec. 1,
Rule 138, Rules of Court). As admitted by the respondents in their memorandum, Baker & McKenzie is a
professional partnership organized in 1949 in Chicago, Illinois with members and associates in 30 cities
around the world. Respondents, aside from being members of the Philippine bar, practising under the firm
name of Guerrero & Torres, are members or associates of Baker & Mckenzie.

As pointed out by the Solicitor General, respondents' use of the firm name Baker & McKenzie constitutes
a representation that being associated with the firm they could "render legal services of the highest quality
to multinational business enterprises and others engaged in foreign trade and investment" (p. 3,
respondents' memo). This is unethical because Baker & McKenzie is not authorized to practise law here.
(See Ruben E. Agpalo, Legal Ethics, 1983 Ed., p. 115.)

WHEREFORE, the respondents are enjoined from practising law under the firm name Baker & McKenzie.

SO ORDERED.

Teehankee, Acting CJ., Makasiar, Abad Santos, Melencio-Herrera, Escolin, Relova, Gutierrez, Jr., De la
Fuente, Cuevas and Alampay, JJ., concur.

Plana, J., took no part.

Fernando, C.J., and Concepcion, Jr., J., are on leave.

_____________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

A.C. No. L-1117 March 20, 1944

THE DIRECTOR OF RELIGIOUS AFFAIRS, complainant,

vs.
ESTANISLAO R. BAYOT, respondent.

Office of the Solicitor General De la Costa and Solicitor Feria for complainant.
Francisco Claravall for respondent.

OZAETA, J.:

The respondent, who is an attorney-at-law, is charged with malpractice for having published an
advertisement in the Sunday Tribune of June 13, 1943, which reads as follows:

Marriage

license promptly secured thru our assistance & the annoyance of delay or publicity avoided if desired, and
marriage arranged to wishes of parties. Consultation on any matter free for the poor. Everything
confidential.

Legal assistance service

12 Escolta, Manila, Room, 105
Tel. 2-41-60.

Appearing in his own behalf, respondent at first denied having published the said advertisement; but
subsequently, thru his attorney, he admitted having caused its publication and prayed for "the indulgence
and mercy" of the Court, promising "not to repeat such professional misconduct in the future and to abide
himself to the strict ethical rules of the law profession." In further mitigation he alleged that the said
advertisement was published only once in the Tribune and that he never had any case at law by reason
thereof.

Upon that plea the case was submitted to the Court for decision.

It is undeniable that the advertisement in question was a flagrant violation by the respondent of the ethics
of his profession, it being a brazen solicitation of business from the public. Section 25 of Rule 127
expressly provides among other things that "the practice of soliciting cases at law for the purpose of gain,
either personally or thru paid agents or brokers, constitutes malpractice." It is highly unethical for an
attorney to advertise his talents or skill as a merchant advertises his wares. Law is a profession and not a
trade. The lawyer degrades himself and his profession who stoops to and adopts the practices of
mercantilism by advertising his services or offering them to the public. As a member of the bar, he defiles
the temple of justice with mercenary activities as the money-changers of old defiled the temple of
Jehovah. "The most worth and effective advertisement possible, even for a young lawyer, . . . is the
establishment of a well-merited reputation for professional capacity and fidelity to trust. This cannot be
forced but must be the outcome of character and conduct." (Canon 27, Code of Ethics.)

In In re Tagorda, 53 Phil., the respondent attorney was suspended from the practice of law for the period
of one month for advertising his services and soliciting work from the public by writing circular letters. That
case, however, was more serious than this because there the solicitations were repeatedly made and
were more elaborate and insistent.

Considering his plea for leniency and his promise not to repeat the misconduct, the Court is of the opinion
and so decided that the respondent should be, as he hereby is, reprimanded.

Yulo, C.J., Moran, Horrilleno, Paras and Bocobo, JJ., concur.

__________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

March 23, 1929

In re LUIS B. TAGORDA,

Duran & Lim for respondent.

Attorney-General Jaranilla and Provincial Fiscal Jose for the Government.

MALCOLM, J.:

The respondent, Luis B. Tagorda, a practising attorney and a member of the provincial board of Isabela,
admits that previous to the last general elections he made use of a card written in Spanish and Ilocano,
which, in translation, reads as follows:

LUIS B. TAGORDA
Attorney
Notary Public
CANDIDATE FOR THIRD MEMBER
Province of Isabela
(NOTE. — As notary public, he can execute for you a deed of sale for the purchase of land as required by
the cadastral office; can renew lost documents of your animals; can make your application and final
requisites for your homestead; and can execute any kind of affidavit. As a lawyer, he can help you collect
your loans although long overdue, as well as any complaint for or against you. Come or write to him in his
town, Echague, Isabela. He offers free consultation, and is willing to help and serve the poor.)

The respondent further admits that he is the author of a letter addressed to a lieutenant of barrio in his
home municipality written in Ilocano, which letter, in translation, reads as follows:

ECHAGUE, ISABELA, September 18, 1928

MY DEAR LIEUTENANT: I would like to inform you of the approaching date for our induction into office as
member of the Provincial Board, that is on the 16th of next month. Before my induction into office I should
be very glad to hear your suggestions or recommendations for the good of the province in general and for
your barrio in particular. You can come to my house at any time here in Echague, to submit to me any
kind of suggestion or recommendation as you may desire.

I also inform you that despite my membership in the Board I will have my residence here in Echague. I will
attend the session of the Board of Ilagan, but will come back home on the following day here in Echague
to live and serve with you as a lawyer and notary public. Despite my election as member of the Provincial
Board, I will exercise my legal profession as a lawyer and notary public. In case you cannot see me at
home on any week day, I assure you that you can always find me there on every Sunday. I also inform
you that I will receive any work regarding preparations of documents of contract of sales and affidavits to
be sworn to before me as notary public even on Sundays.

I would like you all to be informed of this matter for the reason that some people are in the belief that my
residence as member of the Board will be in Ilagan and that I would then be disqualified to exercise my
profession as lawyer and as notary public. Such is not the case and I would make it clear that I am free to
exercise my profession as formerly and that I will have my residence here in Echague.

I would request you kind favor to transmit this information to your barrio people in any of your meetings or
social gatherings so that they may be informed of my desire to live and to serve with you in my capacity
as lawyer and notary public. If the people in your locality have not as yet contracted the services of other
lawyers in connection with the registration of their land titles, I would be willing to handle the work in court
and would charge only three pesos for every registration.

Yours respectfully,

(Sgd.) LUIS TAGORDA

Attorney
Notary Public.

The facts being conceded, it is next in order to write down the applicable legal provisions. Section 21 of
the Code of Civil Procedure as originally conceived related to disbarments of members of the bar. In 1919
at the instigation of the Philippine Bar Association, said codal section was amended by Act No. 2828 by
adding at the end thereof the following: "The practice of soliciting cases at law for the purpose of gain,
either personally or through paid agents or brokers, constitutes malpractice."

The statute as amended conforms in principle to the Canons of Professionals Ethics adopted by the
American Bar Association in 1908 and by the Philippine Bar Association in 1917. Canons 27 and 28 of
the Code of Ethics provide:

27. ADVERTISING, DIRECT OR INDIRECT. — The most worthy and effective advertisement possible,
even for a young lawyer, and especially with his brother lawyers, is the establishment of a well-merited
reputation for professional capacity and fidelity to trust. This cannot be forced, but must be the outcome of
character and conduct. The publication or circulation of ordinary simple business cards, being a matter of
personal taste or local custom, and sometimes of convenience, is not per se improper. But solicitation of
business by circulars or advertisements, or by personal communications or interview not warranted by
personal relations, is unprofessional. It is equally unprofessional to procure business by indirection
through touters of any kind, whether allied real estate firms or trust companies advertising to secure the
drawing of deeds or wills or offering retainers in exchange for executorships or trusteeships to be
influenced by the lawyer. Indirect advertisement for business by furnishing or inspiring newspaper
comments concerning the manner of their conduct, the magnitude of the interest involved, the importance
of the lawyer's position, and all other like self-laudation, defy the traditions and lower the tone of our high
calling, and are intolerable.

28. STIRRING UP LITIGATION, DIRECTLY OR THROUGH AGENTS. — It is unprofessional for a lawyer

to volunteer advice to bring a lawsuit, except in rare cases where ties of blood, relationship or trust make
it his duty to do so. Stirring up strife and litigation is not only unprofessional, but it is indictable at common
law. It is disreputable to hunt up defects in titles or other causes of action and inform thereof in order to
the employed to bring suit, or to breed litigation by seeking out those with claims for personal injuries or
those having any other grounds of action in order to secure them as clients, or to employ agents or
runners for like purposes, or to pay or reward directly or indirectly, those who bring or influence the
bringing of such cases to his office, or to remunerate policemen, court or prison officials, physicians,
hospital attaches or others who may succeed, under the guise of giving disinterested friendly advice, in
influencing the criminal, the sick and the injured, the ignorant or others, to seek his professional services.
A duty to the public and to the profession devolves upon every member of the bar having knowledge of
such practices upon the part of any practitioner immediately to inform thereof to the end that the offender
may be disbarred.

Common barratry consisting of frequently stirring up suits and quarrels between individuals was a crime
at the common law, and one of the penalties for this offense when committed by an attorney was
disbarment. Statutes intended to reach the same evil have been provided in a number of jurisdictions
usually at the instance of the bar itself, and have been upheld as constitutional. The reason behind
statutes of this type is not difficult to discover. The law is a profession and not a business. The lawyer
may not seek or obtain employment by himself or through others for to do so would be unprofessional.
(State vs. Rossman [1909], 53 Wash., 1; 17 Ann. Cas., 625; People vs. Mac Cabe [1893], 19 L. R. A.,
231; 2 R. C. L., 1097.)

It becomes our duty to condemn in no uncertain terms the ugly practice of solicitation of cases by
lawyers. It is destructive of the honor of a great profession. It lowers the standards of that profession. It
works against the confidence of the community in the integrity of the members of the bar. It results in
needless litigation and in incenting to strife otherwise peacefully inclined citizens.

The solicitation of employment by an attorney is a ground for disbarment or suspension. That should be
distinctly understood.

Giving application of the law and the Canons of Ethics to the admitted facts, the respondent stands
convicted of having solicited cases in defiance of the law and those canons. Accordingly, the only
remaining duty of the court is to fix upon the action which should here be taken. The provincial fiscal of
Isabela, with whom joined the representative of the Attorney-General in the oral presentation of the case,
suggests that the respondent be only reprimanded. We think that our action should go further than this if
only to reflect our attitude toward cases of this character of which unfortunately the respondent's is only
one. The commission of offenses of this nature would amply justify permanent elimination from the bar.
But as mitigating, circumstances working in favor of the respondent there are, first, his intimation that he
was unaware of the impropriety of his acts, second, his youth and inexperience at the bar, and, third, his
promise not to commit a similar mistake in the future. A modest period of suspension would seem to fit
the case of the erring attorney. But it should be distinctly understood that this result is reached in view of
the considerations which have influenced the court to the relatively lenient in this particular instance and
should, therefore, not be taken as indicating that future convictions of practice of this kind will not be dealt
with by disbarment.
In view of all the circumstances of this case, the judgment of the court is that the respondent Luis B.
Tagorda be and is hereby suspended from the practice as an attorney-at-law for the period of one month
from April 1, 1929,

Street, Johns, Romualdez, and Villa-Real, JJ., concur.

Johnson, J., reserves his vote.

Separate Opinions

OSTRAND, J., dissenting:

I dissent. Under the circumstances of the case a reprimand would have been sufficient punishment.

__________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

Bar Matter No. 553 June 17, 1993

MAURICIO C. ULEP, petitioner,

vs.
THE LEGAL CLINIC, INC., respondent.

R E SO L U T I O N

REGALADO, J.:

Petitioner prays this Court "to order the respondent to cease and desist from issuing advertisements
similar to or of the same tenor as that of annexes "A" and "B" (of said petition) and to perpetually prohibit
persons or entities from making advertisements pertaining to the exercise of the law profession other than
those allowed by law."

The advertisements complained of by herein petitioner are as follows:

Annex A

SECRET MARRIAGE?
P560.00 for a valid marriage.
Info on DIVORCE. ABSENCE.
ANNULMENT. VISA.

THE Please call: 521-0767 LEGAL 5217232, 5222041 CLINIC, INC. 8:30 am— 6:00 pm 7-
Flr. Victoria Bldg., UN Ave., Mla.

Annex B
GUAM DIVORCE.

DON PARKINSON

an Attorney in Guam, is giving FREE BOOKS on Guam Divorce through The Legal Clinic beginning
Monday to Friday during office hours.

Guam divorce. Annulment of Marriage. Immigration Problems, Visa Ext. Quota/Non-quota Res. & Special
Retiree's Visa. Declaration of Absence. Remarriage to Filipina Fiancees. Adoption. Investment in the Phil.
US/Foreign Visa for Filipina Spouse/Children. Call Marivic.

THE 7F Victoria Bldg. 429 UN Ave., LEGAL Ermita, Manila nr. US Embassy CLINIC, INC.1 Tel.
521-7232; 521-7251; 522-2041; 521-0767

It is the submission of petitioner that the advertisements above reproduced are champterous, unethical,
demeaning of the law profession, and destructive of the confidence of the community in the integrity of
the members of the bar and that, as a member of the legal profession, he is ashamed and offended by
the said advertisements, hence the reliefs sought in his petition as hereinbefore quoted.

In its answer to the petition, respondent admits the fact of publication of said advertisement at its
instance, but claims that it is not engaged in the practice of law but in the rendering of "legal support
services" through paralegals with the use of modern computers and electronic machines. Respondent
further argues that assuming that the services advertised are legal services, the act of advertising these
services should be allowed supposedly
in the light of the case of John R. Bates and Van O'Steen vs. State Bar of Arizona,2 reportedly decided by
the United States Supreme Court on June 7, 1977.

Considering the critical implications on the legal profession of the issues raised herein, we required the
(1) Integrated Bar of the Philippines (IBP), (2) Philippine Bar Association (PBA), (3) Philippine Lawyers'
Association (PLA), (4) U.P. Womens Lawyers' Circle (WILOCI), (5) Women Lawyers Association of the
Philippines (WLAP), and (6) Federacion International de Abogadas (FIDA) to submit their respective
position papers on the controversy and, thereafter, their memoranda. 3 The said bar associations readily
responded and extended their valuable services and cooperation of which this Court takes note with
appreciation and gratitude.

The main issues posed for resolution before the Court are whether or not the services offered by
respondent, The Legal Clinic, Inc., as advertised by it constitutes practice of law and, in either case,
whether the same can properly be the subject of the advertisements herein complained of.

Before proceeding with an in-depth analysis of the merits of this case, we deem it proper and enlightening
to present hereunder excerpts from the respective position papers adopted by the aforementioned bar
associations and the memoranda submitted by them on the issues involved in this bar matter.

1. Integrated Bar of the Philippines:

xxx xxx xxx

Notwithstanding the subtle manner by which respondent endeavored to distinguish the two terms, i.e.,
"legal support services" vis-a-vis "legal services", common sense would readily dictate that the same are
essentially without substantial distinction. For who could deny that document search, evidence gathering,
assistance to layman in need of basic institutional services from government or non-government agencies
like birth, marriage, property, or business registration, obtaining documents like clearance, passports,
local or foreign visas, constitutes practice of law?

xxx xxx xxx

The Integrated Bar of the Philippines (IBP) does not wish to make issue with respondent's foreign
citations. Suffice it to state that the IBP has made its position manifest, to wit, that it strongly opposes the
view espoused by respondent (to the effect that today it is alright to advertise one's legal services).

The IBP accordingly declares in no uncertain terms its opposition to respondent's act of establishing a
"legal clinic" and of concomitantly advertising the same through newspaper publications.

The IBP would therefore invoke the administrative supervision of this Honorable Court to perpetually
restrain respondent from undertaking highly unethical activities in the field of law practice as
aforedescribed.4

xxx xxx xxx

A. The use of the name "The Legal Clinic, Inc." gives the impression that respondent corporation is
being operated by lawyers and that it renders legal services.

While the respondent repeatedly denies that it offers legal services to the public, the advertisements in
question give the impression that respondent is offering legal services. The Petition in fact simply
assumes this to be so, as earlier mentioned, apparently because this (is) the effect that the
advertisements have on the reading public.

The impression created by the advertisements in question can be traced, first of all, to the very name
being used by respondent — "The Legal Clinic, Inc." Such a name, it is respectfully submitted connotes
the rendering of legal services for legal problems, just like a medical clinic connotes medical services for
medical problems. More importantly, the term "Legal Clinic" connotes lawyers, as the term medical clinic
connotes doctors.

Furthermore, the respondent's name, as published in the advertisements subject of the present case,
appears with (the) scale(s) of justice, which all the more reinforces the impression that it is being operated
by members of the bar and that it offers legal services. In addition, the advertisements in question appear
with a picture and name of a person being represented as a lawyer from Guam, and this practically
removes whatever doubt may still remain as to the nature of the service or services being offered.

It thus becomes irrelevant whether respondent is merely offering "legal support services" as claimed by it,
or whether it offers legal services as any lawyer actively engaged in law practice does. And it becomes
unnecessary to make a distinction between "legal services" and "legal support services," as the
respondent would have it. The advertisements in question leave no room for doubt in the minds of the
reading public that legal services are being offered by lawyers, whether true or not.

B. The advertisements in question are meant to induce the performance of acts contrary to law,
morals, public order and public policy.

It may be conceded that, as the respondent claims, the advertisements in question are only meant to
inform the general public of the services being offered by it. Said advertisements, however, emphasize to
Guam divorce, and any law student ought to know that under the Family Code, there is only one instance
when a foreign divorce is recognized, and that is:

Article 26. ...

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall have capacity to remarry under Philippine Law.

It must not be forgotten, too, that the Family Code (defines) a marriage as follows:
Article 1. Marriage is special contract of permanent union between a man and woman entered into
accordance with law for the establishment of conjugal and family life. It is the foundation of the family and
an inviolable social institution whose nature, consequences, and incidents are governed by law and not
subject to stipulation, except that marriage settlements may fix the property relation during the marriage
within the limits provided by this Code.

By simply reading the questioned advertisements, it is obvious that the message being conveyed is that
Filipinos can avoid the legal consequences of a marriage celebrated in accordance with our law, by
simply going to Guam for a divorce. This is not only misleading, but encourages, or serves to induce,
violation of Philippine law. At the very least, this can be considered "the dark side" of legal practice, where
certain defects in Philippine laws are exploited for the sake of profit. At worst, this is outright malpractice.

Rule 1.02. — A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening
confidence in the legal system.

In addition, it may also be relevant to point out that advertisements such as that shown in Annex "A" of
the Petition, which contains a cartoon of a motor vehicle with the words "Just Married" on its bumper and
seems to address those planning a "secret marriage," if not suggesting a "secret marriage," makes light of
the "special contract of permanent union," the inviolable social institution," which is how the Family Code
describes marriage, obviously to emphasize its sanctity and inviolability. Worse, this particular
advertisement appears to encourage marriages celebrated in secrecy, which is suggestive of immoral
publication of applications for a marriage license.

If the article "Rx for Legal Problems" is to be reviewed, it can readily be concluded that the above
impressions one may gather from the advertisements in question are accurate. The Sharon Cuneta-
Gabby Concepcion example alone confirms what the advertisements suggest. Here it can be seen that
criminal acts are being encouraged or committed
(a bigamous marriage in Hong Kong or Las Vegas) with impunity simply because the jurisdiction of
Philippine courts does not extend to the place where the crime is committed.

Even if it be assumed, arguendo, (that) the "legal support services" respondent offers do not constitute
legal services as commonly understood, the advertisements in question give the impression that
respondent corporation is being operated by lawyers and that it offers legal services, as earlier discussed.
Thus, the only logical consequence is that, in the eyes of an ordinary newspaper reader, members of the
bar themselves are encouraging or inducing the performance of acts which are contrary to law, morals,
good customs and the public good, thereby destroying and demeaning the integrity of the Bar.

xxx xxx xxx

It is respectfully submitted that respondent should be enjoined from causing the publication of the
advertisements in question, or any other advertisements similar thereto. It is also submitted that
respondent should be prohibited from further performing or offering some of the services it presently
offers, or, at the very least, from offering such services to the public in general.

The IBP is aware of the fact that providing computerized legal research, electronic data gathering,
storage and retrieval, standardized legal forms, investigators for gathering of evidence, and like services
will greatly benefit the legal profession and should not be stifled but instead encouraged. However, when
the conduct of such business by non-members of the Bar encroaches upon the practice of law, there can
be no choice but to prohibit such business.

Admittedly, many of the services involved in the case at bar can be better performed by specialists in
other fields, such as computer experts, who by reason of their having devoted time and effort exclusively
to such field cannot fulfill the exacting requirements for admission to the Bar. To prohibit them from
"encroaching" upon the legal profession will deny the profession of the great benefits and advantages of
modern technology. Indeed, a lawyer using a computer will be doing better than a lawyer using a
typewriter, even if both are (equal) in skill.
Both the Bench and the Bar, however, should be careful not to allow or tolerate the illegal practice of law
in any form, not only for the protection of members of the Bar but also, and more importantly, for the
protection of the public. Technological development in the profession may be encouraged without
tolerating, but instead ensuring prevention of illegal practice.

There might be nothing objectionable if respondent is allowed to perform all of its services, but only if
such services are made available exclusively to members of the Bench and Bar. Respondent would then
be offering technical assistance, not legal services. Alternatively, the more difficult task of carefully
distinguishing between which service may be offered to the public in general and which should be made
available exclusively to members of the Bar may be undertaken. This, however, may require further
proceedings because of the factual considerations involved.

It must be emphasized, however, that some of respondent's services ought to be prohibited outright, such
as acts which tend to suggest or induce celebration abroad of marriages which are bigamous or
otherwise illegal and void under Philippine law. While respondent may not be prohibited from simply
disseminating information regarding such matters, it must be required to include, in the information given,
a disclaimer that it is not authorized to practice law, that certain course of action may be illegal under
Philippine law, that it is not authorized or capable of rendering a legal opinion, that a lawyer should be
consulted before deciding on which course of action to take, and that it cannot recommend any particular
lawyer without subjecting itself to possible sanctions for illegal practice of law.

If respondent is allowed to advertise, advertising should be directed exclusively at members of the Bar,
with a clear and unmistakable disclaimer that it is not authorized to practice law or perform legal services.

The benefits of being assisted by paralegals cannot be ignored. But nobody should be allowed to
represent himself as a "paralegal" for profit, without such term being clearly defined by rule or regulation,
and without any adequate and effective means of regulating his activities. Also, law practice in a
corporate form may prove to be advantageous to the legal profession, but before allowance of such
practice may be considered, the corporation's Article of Incorporation and By-laws must conform to each
and every provision of the Code of Professional Responsibility and the Rules of Court.5

2. Philippine Bar Association:

xxx xxx xxx.

Respondent asserts that it "is not engaged in the practice of law but engaged in giving legal support
services to lawyers and laymen, through experienced paralegals, with the use of modern computers and
electronic machines" (pars. 2 and 3, Comment). This is absurd. Unquestionably, respondent's acts of
holding out itself to the public under the trade name "The Legal Clinic, Inc.," and soliciting employment for
its enumerated services fall within the realm of a practice which thus yields itself to the regulatory powers
of the Supreme Court. For respondent to say that it is merely engaged in paralegal work is to stretch
credulity. Respondent's own commercial advertisement which announces a certain Atty. Don Parkinson to
be handling the fields of law belies its pretense. From all indications, respondent "The Legal Clinic, Inc." is
offering and rendering legal services through its reserve of lawyers. It has been held that the practice of
law is not limited to the conduct of cases in court, but includes drawing of deeds, incorporation, rendering
opinions, and advising clients as to their legal right and then take them to an attorney and ask the latter to
look after their case in court See Martin, Legal and Judicial Ethics, 1984 ed., p. 39).

It is apt to recall that only natural persons can engage in the practice of law, and such limitation cannot be
evaded by a corporation employing competent lawyers to practice for it. Obviously, this is the scheme or
device by which respondent "The Legal Clinic, Inc." holds out itself to the public and solicits employment
of its legal services. It is an odious vehicle for deception, especially so when the public cannot ventilate
any grievance for malpractice against the business conduit. Precisely, the limitation of practice of law to
persons who have been duly admitted as members of the Bar (Sec. 1, Rule 138, Revised Rules of Court)
is to subject the members to the discipline of the Supreme Court. Although respondent uses its business
name, the persons and the lawyers who act for it are subject to court discipline. The practice of law is not
a profession open to all who wish to engage in it nor can it be assigned to another (See 5 Am. Jur. 270). It
is a personal right limited to persons who have qualified themselves under the law. It follows that not only
respondent but also all the persons who are acting for respondent are the persons engaged in unethical
law practice.6

3. Philippine Lawyers' Association:

The Philippine Lawyers' Association's position, in answer to the issues stated herein, are wit:

1. The Legal Clinic is engaged in the practice of law;

2. Such practice is unauthorized;

3. The advertisements complained of are not only unethical, but also misleading and patently
immoral; and

4. The Honorable Supreme Court has the power to supress and punish the Legal Clinic and its
corporate officers for its unauthorized practice of law and for its unethical, misleading and immoral
advertising.

xxx xxx xxx

Respondent posits that is it not engaged in the practice of law. It claims that it merely renders "legal
support services" to answers, litigants and the general public as enunciated in the Primary Purpose
Clause of its Article(s) of Incorporation. (See pages 2 to 5 of Respondent's Comment). But its advertised
services, as enumerated above, clearly and convincingly show that it is indeed engaged in law practice,
albeit outside of court.

As advertised, it offers the general public its advisory services on Persons and Family Relations Law,
particularly regarding foreign divorces, annulment of marriages, secret marriages, absence and adoption;
Immigration Laws, particularly on visa related problems, immigration problems; the Investments Law of
the Philippines and such other related laws.

Its advertised services unmistakably require the application of the aforesaid law, the legal principles and
procedures related thereto, the legal advices based thereon and which activities call for legal training,
knowledge and experience.

Applying the test laid down by the Court in the aforecited Agrava Case, the activities of respondent fall
squarely and are embraced in what lawyers and laymen equally term as "the practice of law."7

4. U.P. Women Lawyers' Circle:

In resolving, the issues before this Honorable Court, paramount consideration should be given to the
protection of the general public from the danger of being exploited by unqualified persons or entities who
may be engaged in the practice of law.

At present, becoming a lawyer requires one to take a rigorous four-year course of study on top of a four-
year bachelor of arts or sciences course and then to take and pass the bar examinations. Only then, is a
lawyer qualified to practice law.

While the use of a paralegal is sanctioned in many jurisdiction as an aid to the administration of justice,
there are in those jurisdictions, courses of study and/or standards which would qualify these paralegals to
deal with the general public as such. While it may now be the opportune time to establish these courses
of study and/or standards, the fact remains that at present, these do not exist in the Philippines. In the
meantime, this Honorable Court may decide to make measures to protect the general public from being
exploited by those who may be dealing with the general public in the guise of being "paralegals" without
being qualified to do so.

In the same manner, the general public should also be protected from the dangers which may be brought
about by advertising of legal services. While it appears that lawyers are prohibited under the present
Code of Professional Responsibility from advertising, it appears in the instant case that legal services are
being advertised not by lawyers but by an entity staffed by "paralegals." Clearly, measures should be
taken to protect the general public from falling prey to those who advertise legal services without being
qualified to offer such services. 8

A perusal of the questioned advertisements of Respondent, however, seems to give the impression that
information regarding validity of marriages, divorce, annulment of marriage, immigration, visa extensions,
declaration of absence, adoption and foreign investment, which are in essence, legal matters , will be
given to them if they avail of its services. The Respondent's name — The Legal Clinic, Inc. — does not
help matters. It gives the impression again that Respondent will or can cure the legal problems brought to
them. Assuming that Respondent is, as claimed, staffed purely by paralegals, it also gives the misleading
impression that there are lawyers involved in The Legal Clinic, Inc., as there are doctors in any medical
clinic, when only "paralegals" are involved in The Legal Clinic, Inc.

Respondent's allegations are further belied by the very admissions of its President and majority
stockholder, Atty. Nogales, who gave an insight on the structure and main purpose of Respondent
corporation in the aforementioned "Starweek" article."9

5. Women Lawyer's Association of the Philippines:

Annexes "A" and "B" of the petition are clearly advertisements to solicit cases for the purpose of gain
which, as provided for under the above cited law, (are) illegal and against the Code of Professional
Responsibility of lawyers in this country.

Annex "A" of the petition is not only illegal in that it is an advertisement to solicit cases, but it is illegal in
that in bold letters it announces that the Legal Clinic, Inc., could work out/cause the celebration of a
secret marriage which is not only illegal but immoral in this country. While it is advertised that one has to
go to said agency and pay P560 for a valid marriage it is certainly fooling the public for valid marriages in
the Philippines are solemnized only by officers authorized to do so under the law. And to employ an
agency for said purpose of contracting marriage is not necessary.

No amount of reasoning that in the USA, Canada and other countries the trend is towards allowing
lawyers to advertise their special skills to enable people to obtain from qualified practitioners legal
services for their particular needs can justify the use of advertisements such as are the subject matter of
the petition, for one (cannot) justify an illegal act even by whatever merit the illegal act may serve. The
law has yet to be amended so that such act could become justifiable.

We submit further that these advertisements that seem to project that secret marriages and divorce are
possible in this country for a fee, when in fact it is not so, are highly reprehensible.

It would encourage people to consult this clinic about how they could go about having a secret marriage
here, when it cannot nor should ever be attempted, and seek advice on divorce, where in this country
there is none, except under the Code of Muslim Personal Laws in the Philippines. It is also against good
morals and is deceitful because it falsely represents to the public to be able to do that which by our laws
cannot be done (and) by our Code of Morals should not be done.

In the case (of) In re Taguda, 53 Phil. 37, the Supreme Court held that solicitation for clients by an
attorney by circulars of advertisements, is unprofessional, and offenses of this character justify permanent
elimination from the Bar. 10

6. Federacion Internacional de Abogados:

xxx xxx xxx

1.7 That entities admittedly not engaged in the practice of law, such as management consultancy firms or
travel agencies, whether run by lawyers or not, perform the services rendered by Respondent does not
necessarily lead to the conclusion that Respondent is not unlawfully practicing law. In the same vein,
however, the fact that the business of respondent (assuming it can be engaged in independently of the
practice of law) involves knowledge of the law does not necessarily make respondent guilty of unlawful
practice of law.

. . . . Of necessity, no one . . . . acting as a consultant can render effective service unless he is familiar
with such statutes and regulations. He must be careful not to suggest a course of conduct which the law
forbids. It seems . . . .clear that (the consultant's) knowledge of the law, and his use of that knowledge as
a factor in determining what measures he shall recommend, do not constitute the practice of law . . . . It is
not only presumed that all men know the law, but it is a fact that most men have considerable
acquaintance with broad features of the law . . . . Our knowledge of the law — accurate or inaccurate —
moulds our conduct not only when we are acting for ourselves, but when we are serving others. Bankers,
liquor dealers and laymen generally possess rather precise knowledge of the laws touching their
particular business or profession. A good example is the architect, who must be familiar with zoning,
building and fire prevention codes, factory and tenement house statutes, and who draws plans and
specification in harmony with the law. This is not practicing law.

But suppose the architect, asked by his client to omit a fire tower, replies that it is required by the statute.
Or the industrial relations expert cites, in support of some measure that he recommends, a decision of the
National Labor Relations Board. Are they practicing law? In my opinion, they are not, provided no
separate fee is charged for the legal advice or information, and the legal question is subordinate and
incidental to a major non-legal problem.

It is largely a matter of degree and of custom.

If it were usual for one intending to erect a building on his land to engage a lawyer to advise him and the
architect in respect to the building code and the like, then an architect who performed this function would
probably be considered to be trespassing on territory reserved for licensed attorneys. Likewise, if the
industrial relations field had been pre-empted by lawyers, or custom placed a lawyer always at the elbow
of the lay personnel man. But this is not the case. The most important body of the industrial relations
experts are the officers and business agents of the labor unions and few of them are lawyers. Among the
larger corporate employers, it has been the practice for some years to delegate special responsibility in
employee matters to a management group chosen for their practical knowledge and skill in such matter,
and without regard to legal thinking or lack of it. More recently, consultants like the defendants have the
same service that the larger employers get from their own specialized staff.

The handling of industrial relations is growing into a recognized profession for which appropriate courses
are offered by our leading universities. The court should be very cautious about declaring [that] a
widespread, well-established method of conducting business is unlawful, or that the considerable class of
men who customarily perform a certain function have no right to do so, or that the technical education
given by our schools cannot be used by the graduates in their business.

In determining whether a man is practicing law, we should consider his work for any particular client or
customer, as a whole. I can imagine defendant being engaged primarily to advise as to the law defining
his client's obligations to his employees, to guide his client's obligations to his employees, to guide his
client along the path charted by law. This, of course, would be the practice of the law. But such is not the
fact in the case before me. Defendant's primarily efforts are along economic and psychological lines. The
law only provides the frame within which he must work, just as the zoning code limits the kind of building
the limits the kind of building the architect may plan. The incidental legal advice or information defendant
may give, does not transform his activities into the practice of law. Let me add that if, even as a minor
feature of his work, he performed services which are customarily reserved to members of the bar, he
would be practicing law. For instance, if as part of a welfare program, he drew employees' wills.

Another branch of defendant's work is the representations of the employer in the adjustment of
grievances and in collective bargaining, with or without a mediator. This is not per se the practice of law.
Anyone may use an agent for negotiations and may select an agent particularly skilled in the subject
under discussion, and the person appointed is free to accept the employment whether or not he is a
member of the bar. Here, however, there may be an exception where the business turns on a question of
law. Most real estate sales are negotiated by brokers who are not lawyers. But if the value of the land
depends on a disputed right-of-way and the principal role of the negotiator is to assess the probable
outcome of the dispute and persuade the opposite party to the same opinion, then it may be that only a
lawyer can accept the assignment. Or if a controversy between an employer and his men grows from
differing interpretations of a contract, or of a statute, it is quite likely that defendant should not handle it.
But I need not reach a definite conclusion here, since the situation is not presented by the proofs.

Defendant also appears to represent the employer before administrative agencies of the federal
government, especially before trial examiners of the National Labor Relations Board. An agency of the
federal government, acting by virtue of an authority granted by the Congress, may regulate the
representation of parties before such agency. The State of New Jersey is without power to interfere with
such determination or to forbid representation before the agency by one whom the agency admits. The
rules of the National Labor Relations Board give to a party the right to appear in person, or by counsel, or
by other representative. Rules and Regulations, September 11th, 1946, S. 203.31. 'Counsel' here means
a licensed attorney, and ther representative' one not a lawyer. In this phase of his work, defendant may
lawfully do whatever the Labor Board allows, even arguing questions purely legal. (Auerbacher v. Wood,
53 A. 2d 800, cited in Statsky, Introduction to Paralegalism [1974], at pp. 154-156.).

1.8 From the foregoing, it can be said that a person engaged in a lawful calling (which may involve
knowledge of the law) is not engaged in the practice of law provided that:

(a) The legal question is subordinate and incidental to a major non-legal problem;.

(b) The services performed are not customarily reserved to members of the bar; .

(c) No separate fee is charged for the legal advice or information.

All these must be considered in relation to the work for any particular client as a whole.

1.9. If the person involved is both lawyer and non-lawyer, the Code of Professional Responsibility
succintly states the rule of conduct:

Rule 15.08 — A lawyer who is engaged in another profession or occupation concurrently with the practice
of law shall make clear to his client whether he is acting as a lawyer or in another capacity.

1.10. In the present case. the Legal Clinic appears to render wedding services (See Annex "A"
Petition). Services on routine, straightforward marriages, like securing a marriage license, and making
arrangements with a priest or a judge, may not constitute practice of law. However, if the problem is as
complicated as that described in "Rx for Legal Problems" on the Sharon Cuneta-Gabby Concepcion-
Richard Gomez case, then what may be involved is actually the practice of law. If a non-lawyer, such as
the Legal Clinic, renders such services then it is engaged in the unauthorized practice of law.

1.11. The Legal Clinic also appears to give information on divorce, absence, annulment of marriage
and visas (See Annexes "A" and "B" Petition). Purely giving informational materials may not constitute of
law. The business is similar to that of a bookstore where the customer buys materials on the subject and
determines on the subject and determines by himself what courses of action to take.
It is not entirely improbable, however, that aside from purely giving information, the Legal Clinic's
paralegals may apply the law to the particular problem of the client, and give legal advice. Such would
constitute unauthorized practice of law.

It cannot be claimed that the publication of a legal text which publication of a legal text which purports to
say what the law is amount to legal practice. And the mere fact that the principles or rules stated in the
text may be accepted by a particular reader as a solution to his problem does not affect this. . . . .
Apparently it is urged that the conjoining of these two, that is, the text and the forms, with advice as to
how the forms should be filled out, constitutes the unlawful practice of law. But that is the situation with
many approved and accepted texts. Dacey's book is sold to the public at large. There is no personal
contact or relationship with a particular individual. Nor does there exist that relation of confidence and
trust so necessary to the status of attorney and client. THIS IS THE ESSENTIAL OF LEGAL PRACTICE
— THE REPRESENTATION AND ADVISING OF A PARTICULAR PERSON IN A PARTICULAR
SITUATION. At most the book assumes to offer general advice on common problems, and does not
purport to give personal advice on a specific problem peculiar to a designated or readily identified person.
Similarly the defendant's publication does not purport to give personal advice on a specific problem
peculiar to a designated or readily identified person in a particular situation — in their publication and sale
of the kits, such publication and sale did not constitutes the unlawful practice of law . . . . There being no
legal impediment under the statute to the sale of the kit, there was no proper basis for the injunction
against defendant maintaining an office for the purpose of selling to persons seeking a divorce,
separation, annulment or separation agreement any printed material or writings relating to matrimonial
law or the prohibition in the memorandum of modification of the judgment against defendant having an
interest in any publishing house publishing his manuscript on divorce and against his having any personal
contact with any prospective purchaser. The record does fully support, however, the finding that for the
change of $75 or $100 for the kit, the defendant gave legal advice in the course of personal contacts
concerning particular problems which might arise in the preparation and presentation of the purchaser's
asserted matrimonial cause of action or pursuit of other legal remedies and assistance in the preparation
of necessary documents (The injunction therefore sought to) enjoin conduct constituting the practice of
law, particularly with reference to the giving of advice and counsel by the defendant relating to specific
problems of particular individuals in connection with a divorce, separation, annulment of separation
agreement sought and should be affirmed. (State v. Winder, 348, NYS 2D 270 [1973], cited in Statsky,
supra at p. 101.).

1.12. Respondent, of course, states that its services are "strictly non-diagnostic, non-advisory. "It is not
controverted, however, that if the services "involve giving legal advice or counselling," such would
constitute practice of law (Comment, par. 6.2). It is in this light that FIDA submits that a factual inquiry
may be necessary for the judicious disposition of this case.

xxx xxx xxx

2.10. Annex "A" may be ethically objectionable in that it can give the impression (or perpetuate the
wrong notion) that there is a secret marriage. With all the solemnities, formalities and other requisites of
marriages (See Articles 2, et seq., Family Code), no Philippine marriage can be secret.

2.11. Annex "B" may likewise be ethically objectionable. The second paragraph thereof (which is not
necessarily related to the first paragraph) fails to state the limitation that only "paralegal services?" or
"legal support services", and not legal services, are available." 11

A prefatory discussion on the meaning of the phrase "practice of law" becomes exigent for the proper
determination of the issues raised by the petition at bar. On this score, we note that the clause "practice
of law" has long been the subject of judicial construction and interpretation. The courts have laid down
general principles and doctrines explaining the meaning and scope of the term, some of which we now
take into account.

Practice of law means any activity, in or out of court, which requires the application of law, legal
procedures, knowledge, training and experience. To engage in the practice of law is to perform those acts
which are characteristic of the profession. Generally, to practice law is to give advice or render any kind of
service that involves legal knowledge or skill. 12

The practice of law is not limited to the conduct of cases in court. It includes legal advice and counsel,
and the preparation of legal instruments and contract by which legal rights are secured, although such
matter may or may not be pending in a court. 13

In the practice of his profession, a licensed attorney at law generally engages in three principal types of
professional activity: legal advice and instructions to clients to inform them of their rights and obligations,
preparation for clients of documents requiring knowledge of legal principles not possessed by ordinary
layman, and appearance for clients before public tribunals which possess power and authority to
determine rights of life, liberty, and property according to law, in order to assist in proper interpretation
and enforcement of law. 14

When a person participates in the a trial and advertises himself as a lawyer, he is in the practice of law.
15 One who confers with clients, advises them as to their legal rights and then takes the business to an
attorney and asks the latter to look after the case in court, is also practicing law. 16 Giving advice for
compensation regarding the legal status and rights of another and the conduct with respect thereto
constitutes a practice of law. 17 One who renders an opinion as to the proper interpretation of a statute,
and receives pay for it, is, to that extent, practicing law. 18

In the recent case of Cayetano vs. Monsod, 19 after citing the doctrines in several cases, we laid down
the test to determine whether certain acts constitute "practice of law," thus:

Black defines "practice of law" as:

The rendition of services requiring the knowledge and the application of legal principles and technique to
serve the interest of another with his consent. It is not limited to appearing in court, or advising and
assisting in the conduct of litigation, but embraces the preparation of pleadings, and other papers incident
to actions and special proceedings, conveyancing, the preparation of legal instruments of all kinds, and
the giving of all legal advice to clients. It embraces all advice to clients and all actions taken for them in
matters connected with the law.

The practice of law is not limited to the conduct of cases on court.(Land Title Abstract and Trust Co. v.
Dworken , 129 Ohio St. 23, 193N. E. 650). 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 right 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 and there, in such representative
capacity, performs any act or acts for the purpose of obtaining or defending the rights of their clients
under the law. 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. (State ex. rel. Mckittrick v.
C.S. Dudley and Co., 102 S. W. 2d 895, 340 Mo. 852).

This Court, in the case of Philippines Lawyers Association v. Agrava (105 Phil. 173, 176-177),stated:

The practice of law is not limited to the conduct of cases or litigation in court; it embraces the preparation
of pleadings and other papers incident to actions and special proceedings, the management of such
actions and proceedings on behalf of clients before judges and courts, and in addition, conveying. 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 a judicial body,
the foreclosure of a mortgage, enforcement of a creditor's claim in bankruptcy and insolvency
proceedings, and conducting proceedings in attachment, and in matters or estate and guardianship have
been held to constitute law practice, as do the preparation and drafting of legal instruments, where the
work done involves the determination by the trained legal mind of the legal effect of facts and conditions.
(5 Am. Jr. p. 262, 263).

Practice of law under modern conditions consists in no small part of work performed outside of any court
and having no immediate relation to proceedings in court. It embraces conveyancing, the giving of legal
advice on a large variety of subjects and the preparation and execution of legal instruments covering an
extensive field of business and trust relations and other affairs. Although these transactions may have no
direct connection with court proceedings, they are always subject to become involved in litigation. They
require in many aspects a high degree of legal skill, a wide experience with men and affairs, and great
capacity for adaptation to difficult and complex situations. These customary functions of an attorney or
counselor at law bear an intimate relation to the administration of justice by the courts. No valid
distinction, so far as concerns the question set forth in the order, can be drawn between that part of the
work of the lawyer which involves appearance in court and that part which involves advice and drafting of
instruments in his office. It is of importance to the welfare of the public that these manifold customary
functions be performed by persons possessed of adequate learning and skill, of sound moral character,
and acting at all times under the heavy trust obligations to clients which rests upon all attorneys. (Moran,
Comments on the Rules o Court, Vol. 3 [1973 ed.], pp. 665-666, citing In Re Opinion of the Justices
[Mass], 194 N. E. 313, quoted in Rhode Is. Bar Assoc. v. Automobile Service Assoc. [R.I.] 197 A. 139,
144).

The practice of law, therefore, covers a wide range of activities in and out of court. Applying the
aforementioned criteria to the case at bar, we agree with the perceptive findings and observations of the
aforestated bar associations that the activities of respondent, as advertised, constitute "practice of law."

The contention of respondent that it merely offers legal support services can neither be seriously
considered nor sustained. Said proposition is belied by respondent's own description of the services it has
been offering, to wit:

Legal support services basically consists of giving ready information by trained paralegals to laymen and
lawyers, which are strictly non-diagnostic, non-advisory, through the extensive use of computers and
modern information technology in the gathering, processing, storage, transmission and reproduction of
information and communication, such as computerized legal research; encoding and reproduction of
documents and pleadings prepared by laymen or lawyers; document search; evidence gathering; locating
parties or witnesses to a case; fact finding investigations; and assistance to laymen in need of basic
institutional services from government or non-government agencies, like birth, marriage, property, or
business registrations; educational or employment records or certifications, obtaining documentation like
clearances, passports, local or foreign visas; giving information about laws of other countries that they
may find useful, like foreign divorce, marriage or adoption laws that they can avail of preparatory to
emigration to the foreign country, and other matters that do not involve representation of clients in court;
designing and installing computer systems, programs, or software for the efficient management of law
offices, corporate legal departments, courts and other entities engaged in dispensing or administering
legal services. 20

While some of the services being offered by respondent corporation merely involve mechanical and
technical knowhow, such as the installation of computer systems and programs for the efficient
management of law offices, or the computerization of research aids and materials, these will not suffice to
justify an exception to the general rule.

What is palpably clear is that respondent corporation gives out legal information to laymen and lawyers.
Its contention that such function is non-advisory and non-diagnostic is more apparent than real. In
providing information, for example, about foreign laws on marriage, divorce and adoption, it strains the
credulity of this Court that all the respondent corporation will simply do is look for the law, furnish a copy
thereof to the client, and stop there as if it were merely a bookstore. With its attorneys and so called
paralegals, it will necessarily have to explain to the client the intricacies of the law and advise him or her
on the proper course of action to be taken as may be provided for by said law. That is what its
advertisements represent and for the which services it will consequently charge and be paid. That activity
falls squarely within the jurisprudential definition of "practice of law." Such a conclusion will not be altered
by the fact that respondent corporation does not represent clients in court since law practice, as the
weight of authority holds, is not limited merely giving legal advice, contract drafting and so forth.

The aforesaid conclusion is further strengthened by an article published in the January 13, 1991 issue of
the Starweek/The Sunday Magazine of the Philippines Star, entitled "Rx for Legal Problems," where an
insight into the structure, main purpose and operations of respondent corporation was given by its own
"proprietor," Atty. Rogelio P. Nogales:

This is the kind of business that is transacted everyday at The Legal Clinic, with offices on the seventh
floor of the Victoria Building along U. N. Avenue in Manila. No matter what the client's problem, and even
if it is as complicated as the Cuneta-Concepcion domestic situation, Atty. Nogales and his staff of
lawyers, who, like doctors are "specialists" in various fields can take care of it. The Legal Clinic, Inc. has
specialists in taxation and criminal law, medico-legal problems, labor, litigation, and family law. These
specialist are backed up by a battery of paralegals, counsellors and attorneys.

Atty. Nogales set up The Legal Clinic in 1984. Inspired by the trend in the medical field toward
specialization, it caters to clients who cannot afford the services of the big law firms.

The Legal Clinic has regular and walk-in clients. "when they come, we start by analyzing the problem.
That's what doctors do also. They ask you how you contracted what's bothering you, they take your
temperature, they observe you for the symptoms and so on. That's how we operate, too. And once the
problem has been categorized, then it's referred to one of our specialists.

There are cases which do not, in medical terms, require surgery or follow-up treatment. These The Legal
Clinic disposes of in a matter of minutes. "Things like preparing a simple deed of sale or an affidavit of
loss can be taken care of by our staff or, if this were a hospital the residents or the interns. We can take
care of these matters on a while you wait basis. Again, kung baga sa hospital, out-patient, hindi
kailangang ma-confine. It's just like a common cold or diarrhea," explains Atty. Nogales.

Those cases which requires more extensive "treatment" are dealt with accordingly. "If you had a rich
relative who died and named you her sole heir, and you stand to inherit millions of pesos of property, we
would refer you to a specialist in taxation. There would be real estate taxes and arrears which would need
to be put in order, and your relative is even taxed by the state for the right to transfer her property, and
only a specialist in taxation would be properly trained to deal with the problem. Now, if there were other
heirs contesting your rich relatives will, then you would need a litigator, who knows how to arrange the
problem for presentation in court, and gather evidence to support the case. 21

That fact that the corporation employs paralegals to carry out its services is not controlling. What is
important is that it is engaged in the practice of law by virtue of the nature of the services it renders which
thereby brings it within the ambit of the statutory prohibitions against the advertisements which it has
caused to be published and are now assailed in this proceeding.

Further, as correctly and appropriately pointed out by the U.P. WILOCI, said reported facts sufficiently
establish that the main purpose of respondent is to serve as a one-stop-shop of sorts for various legal
problems wherein a client may avail of legal services from simple documentation to complex litigation and
corporate undertakings. Most of these services are undoubtedly beyond the domain of paralegals, but
rather, are exclusive functions of lawyers engaged in the practice of law. 22

It should be noted that in our jurisdiction the services being offered by private respondent which constitute
practice of law cannot be performed by paralegals. Only a person duly admitted as a member of the bar,
or hereafter admitted as such in accordance with the provisions of the Rules of Court, and who is in good
and regular standing, is entitled to practice law. 23
Public policy requires that the practice of law be limited to those individuals found duly qualified in
education and character. The permissive right conferred on the lawyers is an individual and limited
privilege subject to withdrawal if he fails to maintain proper standards of moral and professional conduct.
The purpose is to protect the public, the court, the client and the bar from the incompetence or dishonesty
of those unlicensed to practice law and not subject to the disciplinary control of the court. 24

The same rule is observed in the american jurisdiction wherefrom respondent would wish to draw support
for his thesis. The doctrines there also stress that the practice of law is limited to those who meet the
requirements for, and have been admitted to, the bar, and various statutes or rules specifically so provide.
25 The practice of law is not a lawful business except for members of the bar who have complied with all
the conditions required by statute and the rules of court. Only those persons are allowed to practice law
who, by reason of attainments previously acquired through education and study, have been recognized
by the courts as possessing profound knowledge of legal science entitling them to advise, counsel with,
protect, or defend the rights claims, or liabilities of their clients, with respect to the construction,
interpretation, operation and effect of law. 26 The justification for excluding from the practice of law those
not admitted to the bar is found, not in the protection of the bar from competition, but in the protection of
the public from being advised and represented in legal matters by incompetent and unreliable persons
over whom the judicial department can exercise little control.27

We have to necessarily and definitely reject respondent's position that the concept in the United States of
paralegals as an occupation separate from the law profession be adopted in this jurisdiction. Whatever
may be its merits, respondent cannot but be aware that this should first be a matter for judicial rules or
legislative action, and not of unilateral adoption as it has done.

Paralegals in the United States are trained professionals. As admitted by respondent, there are schools
and universities there which offer studies and degrees in paralegal education, while there are none in the
Philippines. 28 As the concept of the "paralegals" or "legal assistant" evolved in the United States,
standards and guidelines also evolved to protect the general public. One of the major standards or
guidelines was developed by the American Bar Association which set up Guidelines for the Approval of
Legal Assistant Education Programs (1973). Legislation has even been proposed to certify legal
assistants. There are also associations of paralegals in the United States with their own code of
professional ethics, such as the National Association of Legal Assistants, Inc. and the American Paralegal
Association. 29

In the Philippines, we still have a restricted concept and limited acceptance of what may be considered as
paralegal service. As pointed out by FIDA, some persons not duly licensed to practice law are or have
been allowed limited representation in behalf of another or to render legal services, but such allowable
services are limited in scope and extent by the law, rules or regulations granting permission therefor. 30

Accordingly, we have adopted the American judicial policy that, in the absence of constitutional or
statutory authority, a person who has not been admitted as an attorney cannot practice law for the proper
administration of justice cannot be hindered by the unwarranted intrusion of an unauthorized and
unskilled person into the practice of law. 31 That policy should continue to be one of encouraging persons
who are unsure of their legal rights and remedies to seek legal assistance only from persons licensed to
practice law in the state. 32

Anent the issue on the validity of the questioned advertisements, the Code of Professional Responsibility
provides that a lawyer in making known his legal services shall use only true, honest, fair, dignified and
objective information or statement of facts. 33 He is not supposed to use or permit the use of any false,
fraudulent, misleading, deceptive, undignified, self-laudatory or unfair statement or claim regarding his
qualifications or legal services. 34 Nor shall he pay or give something of value to representatives of the
mass media in anticipation of, or in return for, publicity to attract legal business. 35 Prior to the adoption of
the code of Professional Responsibility, the Canons of Professional Ethics had also warned that lawyers
should not resort to indirect advertisements for professional employment, such as furnishing or inspiring
newspaper comments, or procuring his photograph to be published in connection with causes in which
the lawyer has been or is engaged or concerning the manner of their conduct, the magnitude of the
interest involved, the importance of the lawyer's position, and all other like self-laudation. 36

The standards of the legal profession condemn the lawyer's advertisement of his talents. A lawyer cannot,
without violating the ethics of his profession. advertise his talents or skill as in a manner similar to a
merchant advertising his goods. 37 The prescription against advertising of legal services or solicitation of
legal business rests on the fundamental postulate that the that the practice of law is a profession. Thus, in
the case of The Director of Religious Affairs. vs. Estanislao R. Bayot 38 an advertisement, similar to those
of respondent which are involved in the present proceeding, 39 was held to constitute improper
advertising or solicitation.

The pertinent part of the decision therein reads:

It is undeniable that the advertisement in question was a flagrant violation by the respondent of the ethics
of his profession, it being a brazen solicitation of business from the public. Section 25 of Rule 127
expressly provides among other things that "the practice of soliciting cases at law for the purpose of gain,
either personally or thru paid agents or brokers, constitutes malpractice." It is highly unethical for an
attorney to advertise his talents or skill as a merchant advertises his wares. Law is a profession and not a
trade. The lawyer degrades himself and his profession who stoops to and adopts the practices of
mercantilism by advertising his services or offering them to the public. As a member of the bar, he defiles
the temple of justice with mercenary activities as the money-changers of old defiled the temple of
Jehovah. "The most worthy and effective advertisement possible, even for a young lawyer, . . . . is the
establishment of a well-merited reputation for professional capacity and fidelity to trust. This cannot be
forced but must be the outcome of character and conduct." (Canon 27, Code of Ethics.).

We repeat, the canon of the profession tell us that the best advertising possible for a lawyer is a well-
merited reputation for professional capacity and fidelity to trust, which must be earned as the outcome of
character and conduct. Good and efficient service to a client as well as to the community has a way of
publicizing itself and catching public attention. That publicity is a normal by-product of effective service
which is right and proper. A good and reputable lawyer needs no artificial stimulus to generate it and to
magnify his success. He easily sees the difference between a normal by-product of able service and the
unwholesome result of propaganda. 40

Of course, not all types of advertising or solicitation are prohibited. The canons of the profession
enumerate exceptions to the rule against advertising or solicitation and define the extent to which they
may be undertaken. The exceptions are of two broad categories, namely, those which are expressly
allowed and those which are necessarily implied from the restrictions. 41

The first of such exceptions is the publication in reputable law lists, in a manner consistent with the
standards of conduct imposed by the canons, of brief biographical and informative data. "Such data must
not be misleading and may include only a statement of the lawyer's name and the names of his
professional associates; addresses, telephone numbers, cable addresses; branches of law practiced;
date and place of birth and admission to the bar; schools attended with dates of graduation, degrees and
other educational distinction; public or quasi-public offices; posts of honor; legal authorships; legal
teaching positions; membership and offices in bar associations and committees thereof, in legal and
scientific societies and legal fraternities; the fact of listings in other reputable law lists; the names and
addresses of references; and, with their written consent, the names of clients regularly represented." 42

The law list must be a reputable law list published primarily for that purpose; it cannot be a mere
supplemental feature of a paper, magazine, trade journal or periodical which is published principally for
other purposes. For that reason, a lawyer may not properly publish his brief biographical and informative
data in a daily paper, magazine, trade journal or society program. Nor may a lawyer permit his name to
be published in a law list the conduct, management or contents of which are calculated or likely to
deceive or injure the public or the bar, or to lower the dignity or standing of the profession. 43
The use of an ordinary simple professional card is also permitted. The card may contain only a statement
of his name, the name of the law firm which he is connected with, address, telephone number and special
branch of law practiced. The publication of a simple announcement of the opening of a law firm or of
changes in the partnership, associates, firm name or office address, being for the convenience of the
profession, is not objectionable. He may likewise have his name listed in a telephone directory but not
under a designation of special branch of law. 44

Verily, taking into consideration the nature and contents of the advertisements for which respondent is
being taken to task, which even includes a quotation of the fees charged by said respondent corporation
for services rendered, we find and so hold that the same definitely do not and conclusively cannot fall
under any of the above-mentioned exceptions.

The ruling in the case of Bates, et al. vs. State Bar of Arizona, 45 which is repeatedly invoked and
constitutes the justification relied upon by respondent, is obviously not applicable to the case at bar.
Foremost is the fact that the disciplinary rule involved in said case explicitly allows a lawyer, as an
exception to the prohibition against advertisements by lawyers, to publish a statement of legal fees for an
initial consultation or the availability upon request of a written schedule of fees or an estimate of the fee to
be charged for the specific services. No such exception is provided for, expressly or impliedly, whether in
our former Canons of Professional Ethics or the present Code of Professional Responsibility. Besides,
even the disciplinary rule in the Bates case contains a proviso that the exceptions stated therein are "not
applicable in any state unless and until it is implemented by such authority in that state." 46 This goes to
show that an exception to the general rule, such as that being invoked by herein respondent, can be
made only if and when the canons expressly provide for such an exception. Otherwise, the prohibition
stands, as in the case at bar.

It bears mention that in a survey conducted by the American Bar Association after the decision in Bates,
on the attitude of the public about lawyers after viewing television commercials, it was found that public
opinion dropped significantly 47 with respect to these characteristics of lawyers:

Trustworthy from 71% to 14%

Professional from 71% to 14%
Honest from 65% to 14%
Dignified from 45% to 14%

Secondly, it is our firm belief that with the present situation of our legal and judicial systems, to allow the
publication of advertisements of the kind used by respondent would only serve to aggravate what is
already a deteriorating public opinion of the legal profession whose integrity has consistently been under
attack lately by media and the community in general. At this point in time, it is of utmost importance in the
face of such negative, even if unfair, criticisms at times, to adopt and maintain that level of professional
conduct which is beyond reproach, and to exert all efforts to regain the high esteem formerly accorded to
the legal profession.

In sum, it is undoubtedly a misbehavior on the part of the lawyer, subject to disciplinary action, to
advertise his services except in allowable instances 48 or to aid a layman in the unauthorized practice of
law. 49 Considering that Atty. Rogelio P. Nogales, who is the prime incorporator, major stockholder and
proprietor of The Legal Clinic, Inc. is a member of the Philippine Bar, he is hereby reprimanded, with a
warning that a repetition of the same or similar acts which are involved in this proceeding will be dealt
with more severely.

While we deem it necessary that the question as to the legality or illegality of the purpose/s for which the
Legal Clinic, Inc. was created should be passed upon and determined, we are constrained to refrain from
lapsing into an obiter on that aspect since it is clearly not within the adjudicative parameters of the
present proceeding which is merely administrative in nature. It is, of course, imperative that this matter be
promptly determined, albeit in a different proceeding and forum, since, under the present state of our law
and jurisprudence, a corporation cannot be organized for or engage in the practice of law in this country.
This interdiction, just like the rule against unethical advertising, cannot be subverted by employing some
so-called paralegals supposedly rendering the alleged support services.

The remedy for the apparent breach of this prohibition by respondent is the concern and province of the
Solicitor General who can institute the corresponding quo warranto action, 50 after due ascertainment of
the factual background and basis for the grant of respondent's corporate charter, in light of the putative
misuse thereof. That spin-off from the instant bar matter is referred to the Solicitor General for such action
as may be necessary under the circumstances.

ACCORDINGLY, the Court Resolved to RESTRAIN and ENJOIN herein respondent, The Legal Clinic,
Inc., from issuing or causing the publication or dissemination of any advertisement in any form which is of
the same or similar tenor and purpose as Annexes "A" and "B" of this petition, and from conducting,
directly or indirectly, any activity, operation or transaction proscribed by law or the Code of Professional
Ethics as indicated herein. Let copies of this resolution be furnished the Integrated Bar of the Philippines,
the Office of the Bar Confidant and the Office of the Solicitor General for appropriate action in accordance
herewith.

Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Davide, Jr., Romero, Nocon, Bellosillo, Melo
and Quiason, JJ., concur

____________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 3593 March 23, 1907

THE UNITED STATES, plaintiff,

vs.
C.W. NEY and JUAN GARCIA BOSQUE, defendants.

Attorney-General Araneta for plaintiff.

C.W. Ney for defendants.

TRACEY, J.:

This proceeding is to punish the defendants for contempt.

In the year 1902 this court decided that the defendant, J. Garcia Bosque, was not entitled to admission to
practice law in the Philippine Islands, upon the ground that after the change of sovereignty he had elected
to remain a Spanish subject and as such was not qualified for admission to the bar (In re Bosque, 1 Phil.
Rep., 88), and an order was entered accordingly.

In the year 1904 he made an arrangement with the defendant Ney, a practicing attorney, to carry on
business together, sending out a circular signed "Ney & Bosque," stating that they had established an
office for the general practice of law in all the courts of the Islands and that Bosque would devote himself
especially to consultation and office work relating to Spanish law. The paper was headed "Law Office —
Ney & Bosque. Juan G. Bosque, jurisconsulto español — C.W. Ney, abogado americano."

Since that time the defendant Bosque has not personally appeared in the courts, and with one exception,
occuring through an inadvertance, papers from the office were signed not with the firm name alone nor
with any designation of the firm as attorneys, but with the words "Ney & Bosque — C.W. Ney, abogado."
On two occasions, one on May 1, 1905, and the other on September 15, 1906, this court refused to
consider petitions so singed with the names of the defendants and the practice being repeated, on the
2nd day of October, 1906, ordered the papers sent to the Attorney-General to take appropriate action
thereon, and he thereupon instituted this proceeding.

The defendants disclaim any intentional contempt, and defend their acts as being within the law.

Section 102 of the Code of Civil procedure, providing that every pleading must be subscribed by the party
or his attorney, does not permit, and by implication prohibits, a subscription of the names of any other
persons, whether agents or otherwise; therefore a signature containing the name of one neither a party
nor an attorney was not a compliance with this section, nor was it aided by the too obvious subterfuge of
the addition of the individual name of a licensed attorney. The illegality in this instance was aggravated by
the fact that one of the agents so named was a person residing in these Islands to whom this court had
expressly denied admission to the bar. The papers in question were irregular and were properly rejected.
We refuse to recognize as a practice any signature of names appended to pleadings or other papers in
an action other than those specified in the statute. A signature by agents amounts to a signing by non-
qualified attorneys, the office of attorney being originally one of agency. (In re Cooper, 22 N.Y., 67.) We
do not, however, mean to discountenance the use of a suitable firm designation by partners, all of whom
have been duly admitted to practice.

It is to be noted that we are not now considering an application for the suspension or removal of the
defendant Ney from his office as attorney. The defendant Bosque, not being an officer of the court, could
not be proceeded against in that way, and probably for that reason the Attorney-General instituted this
form of proceeding.

Should either of these defendants be thus punished for contempt?

Section 232 of the Code of Civil Procedure describes contempt as follows:

1. Disobedience of or resistance to a lawful writ, process, order, judgment, or command of a court,

or injunction granted by a court or judge;

2. Misbehavior of an officer of the court in the performance of his official duties or in his official
transactions.

Where the law defines contempt, the power of the courts is restricted to punishment for acts so defined.
(Ex parte Robinson, 86 U.S., 505.)

As to the first subdivision of this section, no direct order or command of this court has been disobeyed or
resisted by the defendant Ney. The only order that the defendant Bosque can have disobeyed is the one
denying him the right to practice law. This order, however, was directly binding upon him, notwithstanding
proceedings taken for its review, and any hope on his part of ultimately reversing it furnished no excuse
for its violation. Even had he been entitled under the statute to practice law without any license from the
court and without an application to it, yet its order made on his own petition. A mandate of the court, while
in force, must be obeyed. The irregular signature to papers, though affixed by his associate, had his
authorization and constitutes a substantial attempt to engage in practice. Moreover the firm circular in
setting forth the establishment of an office for the general practice of law in all the courts of the Islands,
amounted to an assertion of his right and purpose, not effectively qualified by the addition that he would
devote himself to consultation and office work relating to Spanish law. Spanish law plays an important
part in the equipment of a lawyer in the Archipelago, standing on a different footing from the law of other
foreign countries, in regard to which a skilled person might as a calling, advise without practicing law. The
fact stated on the circular that he was a Spanish lawyer did not amount to a disclaimer of his professional
character in the Islands. Independent of statutory provisions, a foreigner is not by reason of his status
disqualified from practicing law. One of the most eminent American advocates was an alien barrister
admitted to the bar after a contest in the court of New York State. (In re Thomas Addis Emmett, 2 Cain's
Cases, 386.) Consequently the conduct of the defendant Bosque amounts to disobedience of an order
made in a proceeding to which he was a party.

Under the second subdivision of the section cited, Bosque is obviously not answerable, inasmuch as he
was not an officer of the court. On the other hand, under this subdivision, the defendant Ney, as an
admitted attorney, is liable if his conduct amounted to misbehavior. We are of the opinion that it did. In the
offense of Bosque in holding himself out as a general practitioner Ney participated, and for the improper
signature of the pleadings he was chiefly and personally responsible. It is impossible to say that the
signature itself was a violation of the law, and yet hold guiltless the man who repeatedly wrote it.
Moreover we regret to add that his persistent and rash disregard of the rulings of the court has not
commended him to our indulgence, while the offensive character of certain papers recently filed by him
forbids us from presuming on the hope of his voluntarily conforming to the customary standard of
members of the bar.

The judgment of the court is that each of the defendants is fined in the sum of 200 pesos, to be paid into
the office of the clerk of this court within ten days, with the costs de oficio. So ordered.

Arellano, C.J., Torres, Mapa, and Willard, JJ., concur.

Johnson, J., does not concur in the result.

______________________

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 183385 February 13, 2009

EVANGELINA MASMUD (as substitute complainant for ALEXANDER J. MASMUD), Petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (First Division) and ATTY. ROLANDO B. GO, JR.,
Respondents.

RESOLUTION

NACHURA, J.:

Before the Court is a petition for review on certiorari1 assailing the Decision2 dated October 31, 2007 and
the Resolution dated June 6, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 96279.

The facts of the case are as follows:

On July 9, 2003, Evangelina Masmud’s (Evangelina) husband, the late Alexander J. Masmud
(Alexander), filed a complaint3 against First Victory Shipping Services and Angelakos (Hellas) S.A. for
non-payment of permanent disability benefits, medical expenses, sickness allowance, moral and
exemplary damages, and attorney’s fees. Alexander engaged the services of Atty. Rolando B. Go, Jr.
(Atty. Go) as his counsel.

In consideration of Atty. Go’s legal services, Alexander agreed to pay attorney’s fees on a contingent
basis, as follows: twenty percent (20%) of total monetary claims as settled or paid and an additional ten
percent (10%) in case of appeal. It was likewise agreed that any award of attorney’s fees shall pertain to
respondent’s law firm as compensation.
On November 21, 2003, the Labor Arbiter (LA) rendered a Decision granting the monetary claims of
Alexander. The dispositive portion of the decision, as quoted in the CA Decision, reads:

WHEREFORE, foregoing considered, judgment is rendered finding the [First Victory Shipping Services
and Angelakos (Hellas) S.A.] jointly and severally liable to pay [Alexander’s] total permanent disability
benefits in the amount of US$60,000.00 and his sickness allowance of US$2,348.00, both in Philippine
currency at the prevailing rate of exchange at the time of payment; and to pay further the amount of
₱200,000.00 as moral damages, ₱100,000.00 as exemplary damages and attorney’s fees equivalent to
ten percent (10%) of the total monetary award.

[Alexander’s] claim for payment of medical expenses is dismissed for lack of basis.

SO ORDERED.4

Alexander’s employer filed an appeal before the National Labor Relations Commission (NLRC). During
the pendency of the proceedings before the NLRC, Alexander died. After explaining the terms of the
lawyer’s fees to Evangelina, Atty. Go caused her substitution as complainant. On April 30, 2004, the
NLRC rendered a Decision dismissing the appeal of Alexander’s employer. The employer subsequently
filed a motion for reconsideration. The NLRC denied the same in an Order dated October 26, 2004.

On appeal before the CA, the decision of the LA was affirmed with modification. The award of moral and
exemplary damages was deleted.5 Alexander’s employers filed a petition for certiorari6 before this Court.
On February 6, 2006, the Court issued a Resolution dismissing the case for lack of merit.

Eventually, the decision of the NLRC became final and executory. Atty. Go moved for the execution of the
NLRC decision, which was later granted by the LA. The surety bond of the employer was garnished.
Upon motion of Atty. Go, the surety company delivered to the NLRC Cashier, through the NLRC Sheriff,
the check amounting to ₱3,454,079.20. Thereafter, Atty. Go moved for the release of the said amount to
Evangelina.

On January 10, 2005, the LA directed the NLRC Cashier to release the amount of ₱3,454,079.20 to
Evangelina. Out of the said amount, Evangelina paid Atty. Go the sum of ₱680,000.00.

Dissatisfied, Atty. Go filed a motion to record and enforce the attorney’s lien alleging that Evangelina
reneged on their contingent fee agreement. Evangelina paid only the amount of ₱680,000.00, equivalent
to 20% of the award as attorney’s fees, thus, leaving a balance of 10%, plus the award pertaining to the
counsel as attorney’s fees.

In response to the motion filed by Atty. Go, Evangelina filed a comment with motion to release the amount
deposited with the NLRC Cashier. In her comment, Evangelina manifested that Atty. Go’s claim for
attorney’s fees of 40% of the total monetary award was null and void based on Article 111 of the Labor
Code.

On February 14, 2005, the LA issued an Order7 granting Atty. Go’s motion, the fallo of which reads:

WHEREFORE, premises considered, and further considering the substitute complainant’s initial payment
of 20% to movant-counsel of the monetary claims as paid, let the balance or unpaid twenty (20%) per
cent of attorney’s fees due movant-counsel (or the amount of ₱839,587.39) be recorded as lien upon all
the monies that may still be paid to substitute complainant Evangelina Masmud.

Accordingly, the NLRC Cashier is directed to pay movant-counsel the amount of ₱677,589.96 which is
currently deposited therein to partially satisfy the lien.

SO ORDERED.8
Evangelina questioned the February 14, 2005 Order of the LA before the NLRC. On January 31, 2006,
the NLRC issued a Resolution9 dismissing the appeal for lack of merit.

Evangelina then elevated the case to the CA via a petition for certiorari.10 On October 31, 2007, the CA
rendered a Decision11 partially granting the petition. The dispositive portion of the decision reads:

WHEREFORE, the petition is PARTIALLY GRANTED. The Resolutions dated January 31, 2006 and July
18, 2006 are hereby AFFIRMED with MODIFICATION in that the Attorney’s fees of respondent Atty.
Rolando B. Go, Jr. is declared fully compensated by the amount of ₱1,347,950.11 that he has already
received.

SO ORDERED.12

Evangelina filed a motion for reconsideration. However, on June 6, 2008, the CA issued a Resolution13
denying the motion for reconsideration for lack of merit.

Hence, the instant petition.

Evangelina presented this issue, viz.:

THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR OF LAW IN ITS
DECISION DATED 31 OCTOBER 2007 AND RESOLUTION DATED 6 JUNE 2008 INSOFAR AS IT
UPHOLDS RESPONDENT LAWYER’S CLAIM OF FORTY PERCENT (40%) OF THE MONETARY
AWARD IN A LABOR CASE AS ATTORNEY’S FEES.14

In effect, petitioner seeks affirmance of her conviction that the legal compensation of a lawyer in a labor
proceeding should be based on Article 111 of the Labor Code.

There are two concepts of attorney's fees. In the ordinary sense, attorney's fees represent the reasonable
compensation paid to a lawyer by his client for the legal services rendered to the latter. On the other
hand, in its extraordinary concept, attorney's fees may be awarded by the court as indemnity for damages
to be paid by the losing party to the prevailing party,15 such that, in any of the cases provided by law
where such award can be made, e.g., those authorized in Article 2208 of the Civil Code, the amount is
payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the
lawyer as additional compensation or as part thereof.16

Here, we apply the ordinary concept of attorney’s fees, or the compensation that Atty. Go is entitled to
receive for representing Evangelina, in substitution of her husband, before the labor tribunals and before
the court.

Evangelina maintains that Article 111 of the Labor Code is the law that should govern Atty. Go’s
compensation as her counsel and assiduously opposes their agreed retainer contract.

Article 111 of the said Code provides:

ART. 111. Attorney's fees. — (a) In cases of unlawful withholding of wages the culpable party may be
assessed attorney's fees equivalent to ten percent of the amount of the wages recovered.1avvphi1.zw+

Contrary to Evangelina’s proposition, Article 111 of the Labor Code deals with the extraordinary concept
of attorney’s fees. It regulates the amount recoverable as attorney's fees in the nature of damages
sustained by and awarded to the prevailing party. It may not be used as the standard in fixing the amount
payable to the lawyer by his client for the legal services he rendered.17

In this regard, Section 24, Rule 138 of the Rules of Court should be observed in determining Atty. Go’s
compensation. The said Rule provides:
SEC. 24. Compensation of attorney's; agreement as to fees. — An attorney shall be entitled to have and
recover from his client no more than a reasonable compensation for his services, with a view to the
importance of the subject matter of the controversy, the extent of the services rendered, and the
professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert
witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on
its own professional knowledge. A written contract for services shall control the amount to be paid
therefor unless found by the court to be unconscionable or unreasonable.18

The retainer contract between Atty. Go and Evangelina provides for a contingent fee. The contract shall
control in the determination of the amount to be paid, unless found by the court to be unconscionable or
unreasonable.19 Attorney's fees are unconscionable if they affront one's sense of justice, decency or
reasonableness.20 The decree of unconscionability or unreasonableness of a stipulated amount in a
contingent fee contract will not preclude recovery. It merely justifies the fixing by the court of a reasonable
compensation for the lawyer's services.21

The criteria found in the Code of Professional Responsibility are also to be considered in assessing the
proper amount of compensation that a lawyer should receive.1avvph¡1.zw+ Canon 20, Rule 20.01 of the
said Code provides:

CANON 20 — A LAWYER SHALL CHARGE ONLY FAIR AND REASONABLE FEES.

Rule 20.01. — A lawyer shall be guided by the following factors in determining his fees:

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

(b) The novelty and difficulty of the question 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.

Contingent fee contracts are subject to the supervision and close scrutiny of the court in order that clients
may be protected from unjust charges.22 The amount of contingent fees 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 fees because of the risk that the lawyer
may get nothing if the suit fails.23 The Court finds nothing illegal in the contingent fee contract between
Atty. Go and Evangelina’s husband. The CA committed no error of law when it awarded the attorney’s
fees of Atty. Go and allowed him to receive an equivalent of 39% of the monetary award.

The issue of the reasonableness of attorney's fees is a question of fact. Well-settled is the rule that
conclusions and findings of fact of the CA are entitled to great weight on appeal and will not be disturbed
except for strong and cogent reasons which are absent in the case at bench. The findings of the CA,
which are supported by substantial evidence, are almost beyond the power of review by the Supreme
Court.24

Considering that Atty. Go successfully represented his client, it is only proper that he should receive
adequate compensation for his efforts. Even as we agree with the reduction of the award of attorney's
fees by the CA, the fact that a lawyer plays a vital role in the administration of justice emphasizes the
need to secure to him his honorarium lawfully earned as a means to preserve the decorum and
respectability of the legal profession. A lawyer is as much entitled to judicial protection against injustice or
imposition of fraud on the part of his client as the client is against abuse on the part of his counsel. The
duty of the court is not alone to ensure that a lawyer acts in a proper and lawful manner, but also to see
that a lawyer is paid his just fees. With his capital consisting of his brains and with his skill acquired at
tremendous cost not only in money but in expenditure of time and energy, he is entitled to the protection
of any judicial tribunal against any attempt on the part of his client to escape payment of his just
compensation. It would be ironic if after putting forth the best in him to secure justice for his client, he
himself would not get his due.25

WHEREFORE, in view of the foregoing, the Decision dated October 31, 2007 and the Resolution dated
June 6, 2008 of the Court of Appeals in CA-G.R. SP No. 96279 are hereby AFFIRMED.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice

________________

54 F.3d 150

1995-1 Trade Cases P 70,970

The INDUSTRY NETWORK SYSTEM, INC.,

v.
ARMSTRONG WORLD INDUSTRIES, INC. Steven M. Kramer, Appellant.

Nos. 94-5132 and 94-5164.

United States Court of Appeals,

Third Circuit.

Argued Dec. 1, 1994.

Decided April 25, 1995.
As Corrected May 4, 1995.

James M. Lee (Argued), Crummy, Del Deo, Dolan, Griffinger & Vecchione, Newark, NJ, for appellee
Industry Network System.

Kevin P. Roddy, Milberg, Weiss, Bershad, Hynes & Lerach, Los Angeles, CA, for appellee Industry
Network System.

Edith K. Payne, Stryker, Tams & Dill, Newark, NJ, for appellee Armstrong World Industries.

Martin London, Cameron Clark, Jeh C. Johnson, Paul, Weiss, Rifkind, Wharton & Garrison, New York
City, for appellee Armstrong World Industries.
Carl A. Solano, Arlin M. Adams (Argued), Schnader, Harrison, Segal & Lewis, Philadelphia, PA, for
appellee Armstrong World Industries.

Steven M. Kramer (Argued), Steven M. Kramer & Associates, New York City, for appellant.

Before: HUTCHINSON and NYGAARD, Circuit Judges and SEITZ, Senior Circuit Judge.OPINION OF
THE COURT

NYGAARD, Circuit Judge.

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1
Appellant Steven M. Kramer is an attorney who represented The Industry Network System, Inc. and Elliot
Fineman in the underlying litigation, an antitrust case against Armstrong World Industries. After the first
trial, in which his clients prevailed, Mr. Kramer ceased to represent both plaintiffs.1 The issues that
culminate in this appeal arise from the severance of that relationship. Kramer believes he is entitled to a
lien to ensure that his fees will be paid and argues that the district court failed to recognize a lien. He
appeals from three orders of the district court: the order dated January 21, 1994, compelling Kramer to
turn over his files to the substituted counsel; the order dated February 8, 1994, denying reconsideration of
its January 21st order; and the order dated February 25, 1994, denying Kramer's February 16, 1994
motion for an attorney's lien pursuant to New Jersey statutory law. These matters are now before us for
review pursuant to the appellant's notice of appeal filed March 7, 1994.2 Kramer represented himself in
the district court and does so again before us. We will affirm.

2
Kramer sets forth three issues in his opening brief to this court: (1) whether the district court refused to
recognize an attorney's lien, to which Kramer contends he is entitled for defending his client from
counterclaims, and erred by holding him in contempt when he refused to surrender his files to substituted
counsel; (2) whether the district court should have insisted that Kramer be paid before new counsel
replaced him; and (3) whether the district judge should be disqualified from hearing any matter
concerning him.3

I.

3
The underlying case was filed by Network and Elliot Fineman, Network's majority shareholder, against
Armstrong, alleging antitrust, tortious interference and breach of contract claims. After a jury verdict in
favor of plaintiffs, the district court granted Armstrong's motions for JNOV and for a new trial. Fineman v.
Armstrong World Indus. Inc., 774 F.Supp. 225 (D.N.J.1991). Fineman v. Armstrong World Indus., Inc.,
980 F.2d 171 (3d Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1285, 122 L.Ed.2d 677 (1993). In the
second trial, the jury awarded no damages to Network. This verdict has been appealed and is now
pending before another panel of this court.

4
Kramer ceased to represent Fineman and Network between the first and second trials. Kramer refused,
however, to turn his files over to Network's new attorneys. After Network sought an order compelling
Kramer to relinquish the files, Kramer moved to recuse the trial judge and, in a separate motion,
requested, inter alia, that, before relinquishing his files, Network be required to post a bond to guarantee
payment for his services. The district court ordered Kramer to relinquish his files, allowed Network to
substitute new counsel, but did not require that Network post a bond or pay Kramer. Industry Network
System, Inc. v. Armstrong World Indus., Inc., No. 84-3837 (D.N.J. Jan. 21, 1994) (unpublished order).
Later, the district court denied Kramer's motion to recuse. Industry Network System, Inc. v. Armstrong
World Indus., Inc., No. 84-3837 (D.N.J. Feb. 14, 1994) (unpublished opinion).

5
Kramer then filed a motion contending that he was entitled to a statutory attorney's lien for work done
defending the plaintiffs from Armstrong's counterclaims. The district court also denied this motion.
Industry Network System, Inc. v. Armstrong World Indus., Inc., No. 84-3837 (D.N.J. Feb. 25, 1994)
(unpublished opinion). Following an order by the district court holding Kramer in contempt of its orders
requiring him to relinquish his files, Kramer obeyed.

II.

A. Attorney's Lien

6
Kramer claims that defending Network against Armstrong's counterclaims entitles him to a fee and a lien
to secure payment of it. He avers that all predicates to his claim are satisfied because his fee is not
contingent upon Network's success in its antitrust case against Armstrong, and hence the jury's verdict for
Network on the counterclaims, which was not contested on appeal, is for all purposes final. We conclude
that the issue is ripe for review but is without factual or legal support. We will affirm.

7
The matters before us on appeal have been unduly complicated by appellant. His theory on why he is
entitled to a fee and an attorney's lien, for example, has been evolving throughout the proceedings, from
a quantum meruit request for $3.2 million in fees to compensate him for an alleged 8,000 hours of work;
to a retaining lien for his defense to counterclaims;4 to a charging lien based upon the New Jersey
Statutes (upon which he based the motion that the district court denied on February 25, 1994, which is
one of the orders Kramer specified in his notice of appeal); to a fee based upon a bankruptcy order
authorizing him to represent Fineman in bankruptcy; and at oral argument he contended for the first time
that he is entitled to a lien under unspecified bankruptcy laws. Throughout his arguments, Kramer seems
to conflate the terms "fee" and "lien." They are two different matters. With respect to a lien, we have
before us on appeal only whether the district court adequately protected Kramer's retaining lien or erred
by denying him a statutory charging lien.

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8
It is axiomatic, of course, that Kramer must show that he is or will become entitled to a fee before he is
entitled to a lien. When pressed by the court at oral argument for the fee agreement or other basis
entitling him to a fee for defending the counterclaims, Kramer referred the court to Supplemental
Appendix page 29. This, as the court then pointed out, is only an order denying him a fee and deeming
the district court's referral of jurisdiction with respect to fees withdrawn. Nevertheless, Kramer then
argued that by authorizing the debtor-in-possession Fineman to employ him as his antitrust attorney, the
bankruptcy court created the obligation to pay him a fee.

9
There are several problems with Kramer's contentions. First, Fineman, who was the debtor-in-
possession, signed the application only in his individual capacity, and any fee Kramer has earned is from
the bankrupt estate for preserving its assets, not from the parties to the underlying litigation.5 Under the
Bankruptcy Code, an attorney for a debtor-in-possession is entitled to be paid only in accordance with an
agreement filed with the court. 11 U.S.C. Sec. 328. But the Code does not entitle the attorney to a lien--
and for good reason. Section 503(b) of the Code allows reasonable compensation for an attorney as an
administrative expense of the estate and Sec. 507(a)(1) gives the expense priority. A lien, however, is
neither authorized by the Code nor necessary.

10
Second, Kramer's argument is disingenuous at best and deceptive at worst. As debtor-in-possession,
Fineman applied to the bankruptcy court, with full knowledge of and assistance by Kramer, to have
Kramer appointed "under the terms and conditions set forth in the annexed affidavit of proposed antitrust
counsel." Kramer, in his "Affidavit of Proposed Special Counsel for Debtor-inPossession," which he
submitted with the Application to the Bankruptcy Court, averred:

11
I have rendered to debtor professional services in connection with the within action and in accordance
with a retainer agreement memorialized by letter attached hereto as Exhibit A.... In connection with this
retention I shall assist the Debtor-in-Possession in resolving all issues in the [underlying litigation] and
shall try the case to conclusion or settlement as is necessary.

12
(emphasis added). Moreover, Kramer concludes his affidavit:

13
I am unable to estimate the time for completion of these services. This case involves a prosecution of a
complex anti-trust case and inasmuch as my application will be based on a contingency agreement set
forth in Exhibit A the amount of time necessary is not applicable under these circumstances.

14
(emphasis added).6

15
Kramer contends that his right to a fee, hence his right to a statutory lien, is for the "hours he spent." Yet
from his own sworn words, his fee is "based upon the contingency agreement set forth in Exhibit A." This
contingency agreement, which is signed by both Kramer and Elliot Fineman individually, provides that
Kramer

16
shall receive 36% of any and all sums recovered, whether by settlement or judgment. Recovery shall be
defined as all monies recovered, including damages, treble damages, and counsel fees paid by
defendant pursuant to statute.

17
In sum, Kramer agreed to represent the debtor-in-possession on "all issues" for a fee that was contingent
upon Fineman's success in the antitrust case and not, as he has argued, based upon a hourly sum for
time spent or in quantum meruit. Because Fineman recovered nothing, and indeed did not participate in
the second trial, the condition precedent to Kramer's right to a fee--a verdict in the antitrust case in
Fineman's favor--has not occurred, and the entire basis of Kramer's counterclaim lien theory collapses.
On this record he simply is not entitled to either a fee or a lien.

18
But Kramer is wrong in his other arguments as well. He relies upon our decision in Novinger v. E.I.
duPont de Nemours & Co., Inc., 809 F.2d 212 (3d Cir.), cert. denied, 481 U.S. 1069, 107 S.Ct. 2462, 95
L.Ed.2d 871 (1987), in which we held that the district court was required to affirmatively protect an
attorney's retaining lien before requiring that he relinquish his files. His reliance, however, is misplaced.

19
Under New Jersey law, an attorney will lose a retaining lien by voluntarily relinquishing files to substituted
counsel. In New Jersey, however, an attorney will not lose the lien if the files are given to substituted
counsel under compulsion of a court order. In Frenkel v. Frenkel, 252 N.J.Super. 214, 599 A.2d 595
(1991), counsel for plaintiff likewise refused to give case files to substituted counsel until his fees were
paid by plaintiff. The court held that a "conflict between the withdrawing attorney and the former client
should not be allowed to delay the underlying action." Id. 599 A.2d at 598. It concluded that a withdrawing
attorney's common law retaining lien "[was] not relinquished" when it obeyed the court's order to turn
them over. Id.; accord Brauer v. Hotel Assoc., Inc., 40 N.J. 415, 192 A.2d 831, 835 (1963).

20
The situation is no different here. When Kramer was ordered by the court to relinquish his files, he had no
choice but to do so. His retaining lien was and is protected, as the district court explicitly recognized.
Industry Network, Inc., v. Armstrong, No. 84-3837, slip. op. at 10 (D.N.J. Jan. 21, 1994) (unpublished
opinion):

21
At issue today is not whether Mr. Kramer should voluntarily turn over the files, thereby destroying his
retaining lien. Rather, the issue is whether the court should order Mr. Kramer to turn over the files
involuntarily, a step which would preserve Mr. Kramer's lien rights.

22
Kramer unnecessarily exposed himself to contempt by his disobedience, and without any foundation in
the law he appealed the surrender order.

23
Kramer also incorrectly asserts that the district court erred by denying his February 16, 1994 motion in
which he requested a statutory charging lien for the work done defending the counterclaims. First, the
motion was entirely redundant because he was already protected by his common law retaining lien. But,
more fundamentally, he relied in his motion upon N.J.S.A. Sec. 2A:13-5, which provides:

24
After the filing of a complaint or third-party complaint or the service of a pleading containing a
counterclaim or cross-claim, the attorney or counsellor at law, who shall appear in the cause for the party
instituting the action or maintaining the third-party claim or counterclaim or cross-claim, shall have a lien
for compensation, upon his client's action, cause of action, claim or counterclaim or cross-claim, which
shall contain and attach to a verdict, report, decision, award, judgment or final order in his client's favor,
and the proceeds thereof in whosesoever hands they may come.

25
The district court held that this statute was limited on its face to attorneys who initiate claims and "confers
no rights whatsoever upon an attorney in his capacity as the representative of a party successfully
defending a claim of another party." Industry Network System, Inc. v. Armstrong World Indus., Inc., No.
84-3837, slip op. at 3 (D.N.J. Feb. 25, 1994) (unpublished opinion). We agree.

26
The plain language of N.J.S.A. Sec. 2A:13-5 grants a lien to an attorney for affirmatively pursuing his
client's "action, cause of action, claim or counterclaim or cross-claim." Rather than providing a lien for all
services performed by an attorney, the state legislature took pains to list those specific services to which
the lien applies, but it did not include the defense to a defendant's counterclaims. And Kramer has neither
cited to us nor have we found any New Jersey case that interprets this statute otherwise. At least one
case, however, recognizes the plain language of the statute as a barrier to the same argument that
Kramer now makes. See Wilde v. Wilde, 76 N.J.Super. 415, 184 A.2d 758 (1962) (questioning the
propriety of defense counsel's claim that he should be entitled to a lien under Sec. 2A:13-5 for
successfully defending his client's title to property). We decline to contravene the plain language of the
statute and read new rights into it.

27
For all of the foregoing reasons, the district court's order of January 21, 1994 and its order of February 8,
1994 denying reconsideration will be affirmed.
B. Substitution of Counsel

28
Kramer argues that New Jersey law required the district court to refuse substitution of new counsel for
him in the underlying case until it required Network to pay him or to post a bond. This argument, too, is
without support. Kramer relies only upon St. John the Baptist Greek Catholic Church v. Gengor, 2 A.2d
337 (N.J. Ch.1938). He contends that the district court "simply ignored that authority," and that, "[h]ad it
not done so, the orders in which appellant has been in contempt would never have been entered."

29
There are a number of problems with Kramer's contentions here as well. First, as we have shown by his
own sworn statement, he is not yet entitled to be paid a fee. Second, St. John does not support Kramer's
position. Indeed, the court in St. John said specifically that "the petition for substitution will not be granted
until the liens have been satisfied." Id. at 339 (emphasis added). When Kramer was before the district
court his right to a fee was not ripe, nor is it now because the primary contingency has not yet happened.
His retaining lien simply could not be satisfied when the district court ordered him to surrender his files
because it could not then be quantified. Inasmuch as we have held that the district court properly denied
Kramer's petition for the lien he requested under N.J.S.A. Sec. 2A:13-5, this argument fails as well.

30
Finally, New Jersey law contradicts Kramer's argument. Under Frenkel, Kramer is protected by his
retaining lien. Hence, should a court at some time determine that Kramer is entitled to a fee, "there has
not been a voluntary surrender of possession which would extinguish [his] common law retaining lien. On
the contrary, the lien is not relinquished." 599 A.2d at 598. Kramer simply had no right to withhold the files
as he did. We conclude that the district court properly allowed substitution of counsel without ordering
immediate payment of some arbitrary amount of fees or requiring that plaintiffs post bond.

C. Recusal of Trial Judge

31
At oral argument Kramer limited his recusal request to matters dealing specifically with his right to fees.7
There is, however, no indication that Judge Bissell has any matter pertaining to Kramer's fee before him.
Therefore, Kramer's request that Judge Bissell recuse himself from hearing matters relating to fees is
simply not ripe for review. Should the conditions precedent to Kramer's fee occur, the matter would then
still be in the first stage between him and his ex-client. If his ex-client refuses to pay and Kramer believes
he has a legitimate claim, he may opt to present the issue before a court. And to hypothesize further, if
that issue should come before Judge Bissell; if Kramer still believes that Judge Bissell will not fairly
adjudicate his claim and asks him to recuse; if Judge Bissell should refuse to recuse; and finally, if
Kramer is dissatisfied with any fee order and elects to appeal that order, then he has an appealable order.
But the record reflects nothing of the sort now. His appeal on this issue, as he has limited it, is premature.

III.

32
In sum, the issues before us, reduced to their essence, are whether the district court failed to protect
Kramer's retaining lien, erred by denying Kramer a charging lien under the N.J.S.A., and whether the trial
judge erred by not recusing himself from matters involving Kramer's entitlement to a fee. Inasmuch as we
have determined that Kramer's retaining lien is protected by New Jersey common law, and that on this
record he is entitled neither to a fee nor a statutory charging lien, we will affirm the district court's orders
of January 21, February 8 and 25, 1994, and its order holding him in contempt. We will dismiss the
appeal to the extent it challenges the district court's refusal to recuse.

1
There is a dispute between Kramer and his former clients whether he was discharged or withdrew. The
district court made no finding on this point, but the circumstances of how the relationship was severed are
not significant to our decision

2
Kramer also filed another handwritten, but legible, notice of appeal on March 30, 1994, in which he
appealed "the orders of March 30, 1994, holding him in contempt, denying emergency stay and the
January 21st and February 25th orders, and the orders denying recusal and all related orders." Since he
fails to pursue the stay order, it is abandoned. The balance of the issues in the handwritten "notice of
appeal" are subsumed in the earlier notice of appeal

3
We note that, to the extent Kramer argues issues in the text of his brief other than those first raised in the
"Statement of Issues," under the circumstances of this case, we will exercise our discretion to treat these
matters as waived. See Nagle v. Alspach, 8 F.3d 141, 143 (3d Cir.1993) and Fed.R.App.P. 28(a)(3),
(a)(6)

4
Kramer states in his brief that he spent "seven years of work in successfully defending the multi-million
dollar counterclaims." He modified this contention downward at oral argument to "defending the $400,000
counter-claims." Neither estimate, however, is material to our decision except to note the labile nature of
Kramer's contentions

5
Fineman withdrew from the litigation after the first trial, and is no longer a party

6
In the Appendix Kramer filed on appeal, he supplied the court with neither his Affidavit nor Elliot
Fineman's Application. Inasmuch as Kramer's entire argument on appeal, by his own account, depends
upon the bankruptcy court's order, it is difficult for the court to view Kramer's act of omitting these
documents, so damaging to his argument and so critical to our review and decision, as other than
deliberate

7
Kramer did not appeal from the district court's denial of his earlier motion for recusal, and we denied a
petition by Kramer for a writ of mandamus to disqualify the trial judge from hearing any matter related to
this case in which Kramer is involved. Industry Network System, Inc., v. Armstrong World Indus., Inc, No.
94-5183 (3d Cir. Apr. 22, 1994) (unpublished order)

_____________

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 169079 February 12, 2007

FRANCISCO RAYOS, Petitioner,

vs.
ATTY. PONCIANO G. HERNANDEZ, Respondent.

DECISION
CHICO-NAZARIO, J.:

This is a Petition for Review 1 of the Resolution dated 12 March 2005 of the Integrated Bar of the
Philippines (IBP), dismissing petitioner Francisco Rayos’s complaint for disbarment against respondent
Atty. Ponciano Hernandez.

Respondent was the counsel of petitioner in Civil Case No. SM-951 entitled, "Francisco Rayos v.
NAPOCOR," filed before the Regional Trial Court (RTC), Malolos, Bulacan. The complaint alleged,
among other things, that the National Power Corporation (NAPOCOR) recklessly, imprudently and
negligently opened the three floodgates of the spillway of Angat Dam at midnight of 26 October 1978 until
the early morning hours of 27 October 1978, 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. Of the 10 members of petitioner’s family who perished, only four bodies were
recovered and only petitioner and one of his sons, German Rayos, survived.

On 21 December 1979, the complaint was dismissed 2 on the ground that the State cannot be sued
without its consent as the operation and management of Angat Dam, Norzagaray, were governmental
functions. Said dismissal was questioned directly to this Court which set aside the RTC decision and
ordered the reinstatement of the complaint. 3

On 30 April 1990, however, the complaint was dismissed again by the RTC for lack of sufficient and
credible evidence. 4

The case was subsequently appealed to the Court of Appeals, which reversed the RTC decision and
awarded damages in favor of petitioner, the dispositive portion of which reads:

CONFORMABLY TO THE FOREGOING, the joint decision appealed from is hereby REVERSED and
SET ASIDE, and a new one is hereby rendered:

xxxx

2. In Civil Case No. SM-951, ordering defendants-appellees to pay jointly and severally, plaintiff-
appellant, with legal interest from the date when this decision shall have become final and executory, the
following:

A. Actual damages of Five Hundred Twenty Thousand Pesos (₱520,000.00);

B. Moral Damages of Five Hundred Thousand Pesos (₱500,000.00); and

C. Litigation Expenses of Ten Thousand Pesos (₱10,000.00).

xxxx

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. 5

The case was appealed to this Court, which affirmed the Court of Appeals Decision. 6 The Decision of the
Supreme Court became final and executory on 4 August 1993.

Thus, a Writ of Execution 7 was issued by the RTC on 10 December 1993, upon motion filed by
respondent. As a consequence, NAPOCOR issued Check No. 014710 dated 5 January 1994, in the
amount of ₱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.
On 24 January 1994 , petitioner filed with the RTC a motion 8 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.

On 7 April 1994, the 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.

However, on 4 July 1994, respondent deposited the amount of ₱502,838.79 with Farmers Savings and
Loan Bank, Inc., Norzagaray, Bulacan, in the name of petitioner which was eventually received by the
latter.

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.

In his comment, 10 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. On 21 November 1993, he received a letter from
petitioner dismissing him as counsel. Simultaneous thereto, respondent received a letter dated 15
November 1993 from Atty. Jose G. Bruno asking him to comment on the therein attached letter dated 19
November 1993 of petitioner addressed to NAPOCOR, requesting that the award of damages granted by
the Court of Appeals and affirmed by the Supreme Court be paid to him.

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.

Respondent further asseverated that because petitioner dismissed the respondent and refused to settle
his obligation, he deposited the amount of ₱424,320.00 in a bank in petitioner’s name under Account No.
381 (representing petitioner’s share of 40% of the total award) on 10 May 1994 11 ; and the amount of
₱63,648.00 in petitioner’s name under Account No. 389 (representing petitioner’s share of 40% of the
₱159,120.00 awarded as attorney’s fees by the Court of Appeals) on 19 May 1994. 12 Petitioner already
received the amount of ₱502,838.79 in accordance with the RTC Order dated 7 April 1994.

Respondent contended that the petitioner’s complaint was without basis and was meant only to harass
and put him to shame before the residents of Norzagaray, Bulacan.

In a Resolution dated 9 August 1995, 13 the Court referred the case to the Commission on Bar Discipline
of the IBP for investigation, report and recommendation.

A series of hearings were conducted by the Commission on Bar Discipline of the IBP at the IBP Building,
Ortigas Center, Pasig City, from March to September 2001.

On 1 February 2005, Investigating Commissioner Lydia A. Navarro B. Funa submitted her Report and
Recommendation, 14 recommending the dismissal of the case.

Thereafter, the IBP issued its Resolution dated 12 March 2005, approving and adopting the
recommendation of the Investigating Commissioner, thus:

RESOLVED to ADOPT and APPROVE, as it hereby ADOPTED and APPROVED, the Report and
Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this
Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and
the applicable laws and rules, and considering that the case lacks merit, the same is hereby DISMISSED.
15

We do not agree in the recommendation of the IBP.

The threshold issue in this petition is: 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.

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. 17 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. 18

It is true that under Canon 16.03 of the Code of Professional Responsibility, an attorney has the following
rights;

Rule 16.03- A lawyer shall deliver the funds and property of his client when due or upon demand.
However, he shall have a lien over the funds and may apply so much thereof as may be necessary to
satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also
have a lien to the same extent on all judgments and executions he has secured for his client as provided
for in the Rules of Court. (Emphases supplied.)

But the fact alone that a lawyer has a lien for fees on moneys in his hands collected for his client, as
above-stated, does not relieve him of his duty to promptly account for the moneys received; his failure to
do so constitutes professional misconduct. 19 Thus, what respondent should have properly done in the
case at bar was to provide the petitioner with an accounting before deducting his attorney’s fees and then
to turn over the remaining balance of the award collected to petitioner. The Court notes that respondent
represented petitioner from the time of filing of the complaint in Civil Case No. SM-951 before what is now
the RTC and of the appeal of the same case to the Court of Appeals and Supreme Court. But respondent
was not justified to hold on the entire amount of award collected by him until his fees had been paid and
received by him.

The relationship of attorney and client has always been rightly regarded as one of special trust and
confidence. An attorney must exercise the utmost good faith and fairness in all his relationship vis-à-vis
his client. Respondent fell far short of this standard when he failed to render an accounting for the amount
actually received by him on behalf of his client and when he refused to turn over any portion of said
amount to his client upon the pretext that his attorney’s fees had not at all been paid. Respondent had, in
fact, placed his private and personal interest above that of his client.
We have held that lawyering is not a moneymaking venture and lawyers are not merchants. 20 Law
advocacy, it has been stressed, is not capital that yields profits. The returns it births are simple rewards
for a job done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater
deal of freedom from governmental interference, is impressed with a public interest, for which it is subject
to State regulation. 21

A lawyer is not merely the defender of his client’s cause and a trustee of his client’s cause of action and
assets; he is also, and first and foremost, an officer of the court and participates in the fundamental
function of administering justice in society. 22 It follows that a lawyer’s compensation for professional
services rendered is subject to the supervision of the court, not just to guarantee that the fees he charges
and receives remain reasonable and commensurate with the services rendered, but also to maintain the
dignity and integrity of the legal profession to which he belongs. Upon taking his attorney’s oath as an
officer of the court, a lawyer submits himself to the authority of the courts to regulate his right to charge
professional fees. 23

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. The agreement provides:

UNAWAIN NG LAHAT SA PAMAMAGITAN NITO:

Ako, si Francisco Rayos, Sr., Pilipino, may sapat na gulang at ngayon ay naninirahan sa Pinagbarilan,
Baliwag, Bulacan, sa pamamagitan ng kasulatang ito, ay nagpapatunay sa mga sumusunod:

Na, kaugnay sa aking usapin laban sa NPC at Benjamin Chavez (Rayos vs. NPC, et al.) na ngayon ay
nakabinbin sa Court of Appeals, ako ay nakipagkasundo sa aking abogado, Atty. Ponciano G.
Hernandez, gaya ng sumusunod:

1 Sakaling ipanalo ang aking usapin, ang ano mang aking makukuha ay hahatiin gaya ng sumusunod:
40% ang para sa akin; 40% ang para kay Atty. Ponciano G. Hernandez; 20% ay ilalabas bilang gastos sa
kaso.

2. Kung matalo ako sa kaso ay wala akong sagutin sa aking abogado.

Sa katunayan ng lahat, ako ay lumagda sa kasunduang ito dito sa Norzagaray, Bulacan ngayong ika-6 ng
Oktubre 1991.

(SGD)PONCIANO G. HERNANDEZ (SGD)FRANCISCO RAYOS

Abogado May Usapin 24

A contingent fee arrangement is valid in this jurisdiction 25 and is generally recognized as valid and
binding but must be laid down in an express contract. 26 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." Likewise, Rule 138, Section 24, of the Rules of Court
provides:

SEC. 24. Compensation of attorney’s; agreement as to fees. - An attorney shall be entitled to have and
recover from his client no more than a reasonable compensation for his services, with a view to the
importance of the subject matter of the controversy, the extent of the services rendered, and the
professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert
witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on
its own professional knowledge. A written contract for services shall control the amount to be paid
therefor unless found by the court to be unconscionable or unreasonable. (Underscoring supplied.)

The reduction of unreasonable attorney’s fees is within the regulatory powers of the courts. 30 When the
courts find that the stipulated amount is excessive or the contract is unreasonable, or found to have been
marred by fraud, mistake, undue influence or suppression of facts on the part of the attorney, public policy
demands that said contract be disregarded to protect the client from unreasonable exaction. 31

There is, therefore, now a corollary issue of whether the stipulated attorney’s fees are unreasonable and
unconscionable under the circumstances of the case as to warrant a reduction thereof.

Stipulated attorney’s fees are unconscionable whenever the amount is by far so disproportionate
compared to the value of the services rendered as to amount to fraud perpetrated upon the client. This
means to say that the amount of the fee contracted for, standing alone and unexplained would be
sufficient to show that an unfair advantage had been taken of the client, or that a legal fraud had been
perpetrated on him. 32

The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract,

will not, however, preclude recovery. It merely justifies the fixing by the court of a reasonable
compensation for the lawyer’s services.

Generally, the amount of attorney’s fees due is that stipulated in the retainer agreement which is
conclusive as to the amount of the lawyer’s compensation. A stipulation on a lawyer’s compensation in a
written contract for professional services ordinarily controls the amount of fees that the contracting lawyer
may be allowed, unless the court finds such stipulated amount unreasonable or unconscionable. 33 In the
absence thereof, the amount of attorney’s fees is fixed on the basis of quantum meruit, i.e., the
reasonable worth of the attorney’s services. Courts may ascertain also if the attorney’s fees are found to
be excessive, what is reasonable under the circumstances. 34 In no case, however, must a lawyer be
allowed to recover more than what is reasonable, pursuant to Section 24, Rule 138 of the Rules of Court.

We have identified the circumstances to be considered in determining the reasonableness of a claim for
attorney’s fees as follows: (1) the amount and character of the service rendered; (2) labor, time, and
trouble involved; (3) the nature and importance of the litigation or business in which the services were
rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property affected by
the controversy or involved in the employment; (6) the skill and experience called for in the performance
of the services; (7) the professional character and social standing of the attorney; (8) the results secured;
(9) whether the fee is absolute or contingent, it being recognized that an attorney may properly charge a
much larger fee when it is contingent than when it is not; 35 and (10) the financial capacity and economic
status of the client have to be taken into account in fixing the reasonableness of the fee. 36

Rule 20.1, Canon 20 of the Code of Professional Responsibility enumerates the following factors which
should guide a lawyer in determining his fees:

(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.

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.

As adverted to above, 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, 37 especially an aged and necessitous client, 38 against such a contract.

A survey of existing jurisprudence regarding attorney’s fees would reveal the following: in the case of
Amalgamated Laborers’ Association v. Court of Industrial Relations, 39 the rate of attorney’s fees allowed
was 25%; in Law Firm of Raymundo A. Armovit v. Court of Appeals, 40 the rate allowed was 20%; in
Polytrade Corporation v. Blanco, 41 25%; in Santiago v. Dimayuga, 42 20%; in Cosmopolitan Insurance
Co., Inc. v. Reyes, 43 15%; in Reyes v. Court of Appeals, 44 15%; and in Social Security Commission v.
Almeda, 45 15%.

In the present case, respondent Atty. Hernandez, after all, succeeded in obtaining a favorable decision for
his client, the petitioner. At first, respondent failed to obtain a favorable judgment in the RTC as the case
was dismissed. But on appeal to the Court of Appeals, the RTC Decision was reversed and petitioner was
awarded the amount of ₱1,060,800.00 as damages and ₱159,120.00 as attorney’s fees. Said award was
sustained by the Supreme Court. We also take note respondent’s efforts in litigating petitioner’s case for a
long period of 15 years. Lastly, the respondent took risk in representing petitioner on a contingent fee
basis.

In consideration of the foregoing, a fee of 35% of the amount awarded to petitioner would be a fair
compensation for respondent’s legal services.
The misconduct of a lawyer, whether in his professional or private capacity, which shows him to be
wanting in moral character, honesty, probity and good demeanor, renders him unworthy to the privileges
which his license and the law confer upon him, may be sanctioned with disbarment or suspension. 46

The court should also exercise a sound discretion in determining whether a lawyer should be disbarred or
merely suspended. It should bear in mind that admission to the Bar is obtained only after years of labor
and study and the office acquired often becomes the source of great honor and emolument to its
possessor. To most members of the legal profession, it is a means of support for themselves and their
families. To deprive one of such an office is often to decree poverty to the lawyer and destitution to his
family. 47 Disbarment, therefore, should never be decreed where any lesser penalty, such as temporary
suspension, would accomplish the end desired. 48

In the case of Schulz v. Atty. Flores, 49 a lawyer was suspended for six months for not returning his
client’s money despite demands, for unjustifiably refusing to return his client’s papers, and for collecting
excessive and unreasonable fees. Also in the case of Tanhueco v. Atty. De Dumo, 50 a lawyer was
suspended for a period of six months for failure to return the money received by him on behalf of his client
and for collecting excessive and unconscionable fees.

Guided by our rulings in the abovestated cases, suspension of respondent for six months is justified in the
case at bar.1awphi1.net

WHEREFORE the Court Resolves that:

1. Respondent is guilty of violation of the attorney’s oath and of serious professional misconduct and shall
be SUSPENDED from the practice of law for six (6) months and WARNED that repetition of the same or
similar offense will be dealt with more severely;

2. Respondent is entitled to attorney’s fees in the amount equivalent to thirty-five percent (35%) of the
total amount awarded 51 to petitioner in Civil Case No. SM-951; and

3. Respondent is to return the amount of Two Hundred Ninety Thousand One Hundred Nine Pesos and
Twenty-One Centavos (₱290,109.21), 52 which he retained in excess of what we herein declared as fair
and reasonable attorney’s fees, plus legal interest from date of finality of this judgment until full payment
thereof.

Let copies of this Decision be entered in the personal record of respondent as member of the Bar and
furnished the Office of the Bar Confidant, the IBP, and the Court Administrator for circulation to all courts
of the country.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

__________________

SECOND DIVISION

G.R. No. 155224 August 23, 2006

VINSON B. PINEDA, Petitioner,

vs.
ATTY. CLODUALDO C. DE JESUS, ATTY. CARLOS AMBROSIO and ATTY. EMMANUEL MARIANO,
Respondents.

DECISION
CORONA, J.:

The subject of this petition for review is the April 30, 2002 decision1 of the Court of Appeals in CA-G.R.
CV No. 68080 which modified the order2 of the Regional Trial Court (RTC) of Pasig City, Branch 151, in
JDRC Case No. 2568 entitled Ma. Aurora D. Pineda v. Vinson B. Pineda.

The facts follow.

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, Branch 151, 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 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 petitioner and Aurora Pineda was declared null and
void.

Throughout the proceedings, respondent counsels were well-compensated.3 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 million4 which the
latter, however, refused to pay. Instead, petitioner issued them several checks totaling P1.12 million5 as
"full payment for settlement."6

Still not satisfied, respondents filed in the same trial court7 a motion

for payment of lawyers’ fees for P50 million.8

On April 14, 2000, the 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.

The issues raised in this petition are:

(1) whether the Pasig RTC, Branch 151 had jurisdiction over the claim for additional legal fees and

(2) whether respondents were entitled to additional legal fees.

First, a lawyer may enforce his right to his fees by filing the necessary petition as an incident of the main
action in which his services were rendered or in an independent suit against his client. The former is
preferable to avoid multiplicity of suits.9

The Pasig RTC, Branch 151, where the case for the declaration of nullity of marriage was filed, had
jurisdiction over the motion for the payment of legal fees. Respondents sought to collect P50 million which
was equivalent to 10% of the value of the properties awarded to petitioner in that case. Clearly, what
respondents were demanding was additional payment for legal services rendered in the same case.

Second, the professional engagement between petitioner and respondents was governed by the principle
of quantum meruit which means "as much as the lawyer deserves."10 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.11

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.12

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"13 should have
discharged petitioner’s obligation to them.

The power of this Court to reduce or even delete the award of attorneys’ fees cannot be denied. Lawyers
are officers of the Court and they participate in the fundamental function of administering justice.14 When
they took their oath, they submitted themselves to the authority of the Court and subjected their
professional fees to judicial control. 15

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.

SO ORDERED.

RENATO C. CORONA
Associate Justice

___________________

SECOND DIVISION

Adm. Case No. 5020 December 18, 2001

ROSARIO JUNIO, complainant,

vs.
ATTY. SALVADOR M. GRUPO, respondent.

MENDOZA, J.:

This is a complaint for disbarment filed against Atty. Salvador M. Grupo for malpractice and gross
misconduct.

Complainant Rosario N. Junio alleged that —

3. Sometime in 1995, [she] engaged the services of [respondent], then a private practitioner, for the
redemption of a parcel of land covered by Transfer Certificate of Title No. 20394 registered in the name of
her parents, spouses Rogelio and Rufina Nietes, and located at Concepcion, Loay, Bohol.

4. On 21 August 1995, [complainant] entrusted to [respondent] the amount of P25,000.00 in cash to

be used in the redemption of the aforesaid property. Respondent received the said amount as evidenced
by an acknowledgment receipt, a copy of which is being hereto attached as Annex "A".

5. Notwithstanding the foregoing and for no valid reason, respondent did not redeem the property;
as a result of which the right of redemption was lost and the property was eventually forfeited.

6. Because of respondent's failure to redeem the property, complainant had demanded [the] return
of the money which she entrusted to the former for the above-stated purpose.

7. Despite repeated demands made by the complainant and without justifiable cause, respondent
has continuously refused to refund the money entrusted to him.1

In his Answer, petitioner admitted receiving the amount in question for the purpose for which it was given.
However, he alleged that —

6. The subject land for which the money of complainant was initially intended to be applied could
really not be redeemed anymore . .;

7. Complainant knew the mortgage agreement between her parents and the mortgage-owner had
already expired, and what respondent was trying to do was a sort of [a] desperate, last-ditch attempt to
persuade the said mortgagee to relent and give back the land to the mortgagors with the tender of
redemption; but at this point, the mortgagee simply would not budge anymore. For one reason or another,
he would no longer accept the sum offered;

8. By the time that complainant was to return to Manila, it was already a foregone matter that
respondent's efforts did not succeed. And so, when transaction failed, respondent requested the
complainant that he be allowed, in the meantime, to avail of the money because he had an urgent need
for some money himself to help defray his children's educational expenses. It was really a personal
request, a private matter between respondent and complainant, thus, respondent executed a promissory
note for the amount, a copy of which is probably still in the possession of the complainant.

9. . . . [T]he family of the complainant and that of the respondent were very close and intimate with
each other. Complainant, as well as two of her sisters, had served respondent's family as household
helpers for many years when they were still in Manila, and during all those times they were treated with
respect, affection, and equality. They were considered practically part of respondent's own family.

That is why, when complainant requested . . . assistance regarding the problem of the mortgaged
property which complainant wanted to redeem, respondent had no second-thoughts in extending a
lending hand . . . .

Respondent did not ask for any fee. His services were purely gratuitous; his acts [were] on his own and
by his own. It was more than pro bono; it was not even for charity; it was simply an act of a friend for a
friend. It was just lamentably unfortunate that his efforts failed.

xxx xxx xxx

Of course, respondent accepts his fault, because, indeed, there were occasions when complainant's
sisters came to respondent to ask for the payment in behalf of complainant, and he could not produce the
money because the circumstances somehow, did not allow it. [I]t does not mean that respondent will not
pay, or that he is that morally depraved as to wilfully and deliberately re[nege] in his obligation towards
the complainant.2
Complainant filed a reply denying that respondent informed her of his failure to redeem the property and
that respondent requested her to instead lend the money to him.3

The case was thereafter referred to the Integrated Bar of the Philippines (IBP) for investigation, report,
and recommendation. However, while two hearings were set for this purpose, both were postponed at the
instance of respondent. For this reason, on August 28, 2000, complainant asked the Investigating
Commissioner4 to consider the case submitted for decision on the basis of the pleadings theretofore filed.
Respondent was required to comment on complainant's motion, but he failed to do so. Consequently, the
case was considered submitted for resolution.

In his report, dated January 5, 2001, the Investigating Commissioner found respondent liable for violation
of Rule 16.04 of the Code of Professional Responsibility which forbids lawyers from borrowing money
from their clients unless the latter's interests are "protected by the nature of the case or by independent
advice." The Investigating Commissioner found that respondent failed to pay his client's money. However,
in view of respondent's admission of liability and "plea for magnanimity," the Investigating Commissioner
recommended that respondent be simply reprimanded and ordered to pay the amount of P25,000.00 loan
plus interest at the legal rate.

In its Resolution No. XIV-2001-183, dated April 29, 2001, the IBP Board of Governors adopted and
approved the Investigating Commissioner's findings. However, it ordered —

[R]espondent . . . suspended indefinitely from the practice of law for the commission of an act which falls
short of the standard of the norm of conduct required of every attorney and . . . ordered [him] to return to
the complainant the amount of P25,000.00 plus interest at the legal rate from the time the said amount
was misappropriated, until full payment; provided that the total suspension shall be at least one (1) year
from the date of said full payment

On July 4, 2001, respondent filed a motion for reconsideration alleging that —

(a) there was no actual hearing of the case wherein respondent could have fully ventilated and
defended his position;

(b) the subject Resolution gravely modified the Report and Recommendation of the Trial
Commissioner, Hon. Pedro Magpayo, Jr., . . . such that the resultant sanctions that are ordered imposed
are too leonine, unjust and cruel;

(c) that the factual circumstances attending the matter which gave rise to the complaint were not
rightly or fairly appreciated.5

He argues that the Court should adopt the report and recommendation of the IBP Investigating
Commissioner.

In its resolution of August 15, 2001, the Court resolved to treat respondent's motion for reconsideration as
a petition for review of IBP Resolution No. XIV 2001-183 and required complainant to comment on the
petition.

In her comment, complainant states that her primary interest is to recover the amount of P25,000.00 with
interest and that she is leaving it to the Court to decide whether respondent deserves the penalty
recommended by the IBP.6

The Court resolves to partially grant the petition. In his report and recommendation, Investigating
Commissioner Magpayo, Jr. made the following findings:

In his Answer, the respondent ADMITS all the allegations in paragraph 4 of the complaint which avers:
4. On 21 August 1995, complainant entrusted to respondent the amount of P25,000.00 in cash to be
used in the redemption of the aforesaid property (parcel of land covered by TCT No. 20394 registered in
the name of complainant's parents located at Concepcion, Loay, Bohol). Respondent received the said
amount as evidenced by an acknowledgment receipt (Annex A).

By way of confession and avoidance, the respondent, . . . however, contended that when the mortgagee
refused to accept the sum tendered as the period of redemption had already expired, he requested the
complainant to allow him in the meantime to use the money for his children's educational expenses[,] to
which request the complainant allegedly acceded and respondent even executed a promissory note
(please see 4th par. of Annex "B" of complaint).

Respondent takes further refuge in the intimate and close relationship existing between himself and the
complainant's family on the basis of which his legal services were purely gratuitous or "simply an act of a
friend for a friend" with "no consideration involved." Unfortunately, his efforts to redeem the foreclosed
property, as already stated, did not produce the desired result because the mortgagee "would not budge
anymore" and "would not accept the sum offered."

Thus, the respondent concluded that there was, strictly speaking, no attorney-client [relationship] existing
between them. Rather, right from the start[,] everything was sort of personal, he added.

Granting to the respondent the benefit of the doubt, we shall assume that there was in reality a loan in the
amount of P25,000.00. This is likewise confirmed by the execution of a promissory note on 12 December
1996 by the respondent who "undertook to pay Mrs. Junio on or before January 1997" (Annex B of
complaint). Moreover, the demand letter of 12 March 1998 (Annex B) mentions of "reimbursement of the
sum received" and interest of "24% per annum until fully paid" giving the impression that the funds
previously intended to be used for the repurchase of a certain property (Annex A of complaint) was
converted into a loan with the consent of the complainant who gave way to the request of the respondent
"to help defray his children's educational expenses" (par. 8 of Answer).

Be that as it may, the duty and obligation to repay the loan remains unshaken. Having utilized the sum to
fulfill his "urgent need for some money," it is but just and proper that he return the amount borrowed
together with interest.

Five (5) years had already passed since respondent retained the cash for his own personal use. But
notwithstanding the same and his firm promise "to pay Mrs. Junio on or before January 1997" he has not
demonstrated any volition to settle his obligation to his creditor[,] although admittedly "there w[ere]
occasions when complainant's sister came to respondent to ask for the payment in behalf of
complainant," worse, "the passage of time made respondent somehow forgot about the obligation."

A lawyer shall not borrow money from his client unless the client's interests are fully protected by the
nature of the case or by independent advice (Rule 16.04, Code of Professional Responsibility). This rule
is intended to prevent the lawyer from taking advantage of his influence over the client.

This rule is especially significant in the instant case where the respondent enjoys an immense
ascendancy over the complainant who, "as well as two of his sisters, had served respondent's family as
household helpers for many years."

Having gained dominance over the complainant by virtue of such long relation of master and servant, the
respondent took advantage of his influence by not returning the money entrusted to him. Instead, he
imposed his will on the complainant and borrowed her funds without giving adequate security therefor and
mindless of the interest of the complainant

In the light of the foregoing, . . . respondent has committed an act which falls short of the standard of the
norm of conduct required of every attorney. If an ordinary borrower of money is required by the law to
repay the loan failing which he may be subjected to court action, it is more so in the case of a lawyer
whose conduct serves as an example.7
It would indeed appear from the records of the case that respondent was allowed to borrow the money
previously entrusted to him by complainant for the purpose of securing the redemption of the property
belonging to complainant's parents. Respondent, however, did not give adequate security for the loan and
subsequently failed to settle his obligation. Although complainant denied having loaned the money to
respondent, the fact is that complainant accepted the promissory note given her by respondent on
December 12,1996. In effect, complainant consented to and ratified respondent's use of the money. It is
noteworthy that complainant did not attach this promissory note to her complaint nor explain the
circumstances surrounding its execution. She only mentioned it in her demand letter of March 12, 1998
(Annex B), in which she referred to respondent's undertaking to pay her the P25,000.00 on or before
January 1997. Under the circumstances and in view of complainant's failure to deny the promissory note,
the Court is constrained to give credence to respondent's claims that the money previously entrusted to
him by complainant was later converted into a loan.

Respondent's liability is thus not for misappropriation or embezzlement but for violation of Rule 16.04 of
the Code of Professional Responsibility which forbids lawyers from borrowing money from their clients
unless the latter's interests are protected by the nature of the case or by independent advice. In this case,
respondent's liability is compounded by the fact that not only did he not give any security for the payment
of the amount loaned to him but that he has also refused to pay the said amount. His claim that he could
not pay the loan "because circumstances . . . did not allow it" and that, because of the passage of time,
"he somehow forgot about his obligation" only underscores his blatant disregard of his obligation which
reflects on his honesty and candor. A lawyer is bound to observe candor, fairness, and loyalty in all his
dealings and transactions with his client.8

Respondent claims that complainant is a close personal friend and that in helping redeem the property of
complainant's parents, he did not act as a lawyer but as a friend, hence there is no client-attorney
relationship between them. This contention has no merit. As explained in Hilado v. David,9

To constitute professional employment it is not essential that the client should have employed the
attorney professionally on any previous occasion . . . It is not necessary that any retainer should have
been paid. promised, or charged for; neither is it material that the attorney consulted did not afterward
undertake the case about which the consultation was had. If a person, in respect to his business affairs or
troubles of any kind, consults with his attorney in his professional capacity with the view to obtaining
professional advice or assistance, and the attorney voluntarily permits or acquiesces in such consultation,
then the professional employment must be regarded as established . . .

Considering the foregoing, the Investigating Commissioner's recommendation to impose on respondent

the penalty of reprimand and restitution of the amount loaned by him is clearly inadequate. On the other
hand, the penalty of indefinite suspension with restitution imposed by the IBP Board of Governors is too
harsh in view of respondent's apparent lack of intent to defraud complainant and of the fact that this
appears to be his first administrative transgression. It is the penalty imposed in Igual v. Javier10 which
applies to this case. In that case, this Court ordered the respondent suspended for one month from the
practice of law and directed him to pay the amount given him by his clients within 30 days from notice for
his failure to return the money in question notwithstanding his admission that he did not use the money
for the filing of the appellee's brief, as agreed by them, because of an alleged quarrel with his clients.

Anent petitioner's allegation regarding the lack of hearing during the IBP investigation, suffice it to say that
he waived such right when he failed to comment on petitioner's motion to submit the case for resolution
on the basis of the pleadings theretofore filed despite due notice to him, not to mention the fact that it was
he who had requested the postponement of the two hearings scheduled by the Investigating
Commissioner.

WHEREFORE, the Court finds petitioner guilty of violation of Rule 16.04 of the Code of Professional
Responsibility and orders him suspended from the practice of law for a period of one (1) month and to
pay to respondent, within 30 days from notice, the amount of P25,000.00 with interest at the legal rate,
computed from December 12, 1996.
SO ORDERED.

Bellosillo, Quisumbing and De Leon Jr., JJ ., concur.

Buena, J., on official business abroad.

________________

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

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

BENEDICTO LEVISTE, petitioner,

vs.
THE COURT OF APPEALS, HON. JUDGE LUIS B. REYES, COURT OF FIRST INSTANCE OF MANILA,
ROSA DEL ROSARIO, RITA BANU, CARMEN DE GUZMAN-MARQUEZ, JESUS R. DE GUZMAN,
RAMON R. DE GUZMAN, JACINTO R. DE GUZMAN and ANTONIO R. DE GUZMAN, respondents.

Benedicto Leviste for and in his own behalf.

Gatchalian, Ignacio & Associates for respondents de Guzman.

GRIÑO-AQUINO, J.:

The issue in this case is whether or not an attorney who was engaged on a contingent fee basis may, in
order to collect his fees, prosecute an appeal despite his client's refusal to appeal the decision of the trial
court.

On September 7, 1963, the petitioner, a practicing attorney, entered into a written agreement with the
private respondent Rosa del Rosario to appear as her counsel in a petition for probate of the holographic
will of the late Maxima C. Reselva. Under the will, a piece of real property at Sales Street, Quiapo, Manila,
was bequeathed to Del Rosario. It was agreed that petitioner's contigent fee would be thirty-five per cent
(35%) of the property that Rosa may receive upon the probate of the will (Annex "A", p. 59, Rollo).

In accordance with their agreement, Leviste performed the following services as Del Rosario's counsel:

(1) Thoroughly researched and studied the law on probate and succession;

(2) Looked for and interviewed witnesses, and took their affidavits;

(3) Filed the petition for. probate is Special Proceeding No. 58325;

(4) Made the proper publications;

(5) Presented at the trial the following witnesses:

a) Eleuterio de Jesus

b) Lucita de Jesus
c) Purita L. Llanes

d) Rita Banu

e) Jesus Lulod.

On August 20, 1965, Leviste received a letter from Ms. Del Rosario, informing him that she was
terminating his services as her counsel due to "conflicting interest." This consisted, according to the letter,
in petitioner's moral obligation to protect the interest of his brother-in-law, Gaudencio M. Llanes, whom
Del Rosario and the other parties in the probate proceeding intended to eject as lessee of the property
which was bequeathed to Del Rosario under the will (Annex "B", p. 60, Rollo).

On September 20, 1965, petitioner filed a "Motion to Intervene to Protect His Rights to Fees for
Professional Services." (Annex "B", p. 60, Rollo.)

In an order dated November 12, 1965 the trial court denied his motion on the ground that he had "not filed
a claim for attorney's fees nor recorded his attorney's lien." (p. 3, Rollo.)

On November 23, 1965, petitioner filed a "Formal Statement of Claim for Attorney's Fees and Recording
of Attorney's Lien,' which was noted in the court's order of December 20, 1965 (Annexes "D" and "E", pp.
63 & 64, Rollo).

Although the order denying his motion to intervene had become final, petitioner continued to receive
copies of the court's orders, as well the pleadings of the other parties in the case. He also continued to file
pleadings. The case was submitted for decision without the respondents' evidence.

On November 23, 1966, Del Rosario and Rita Banu, the special administratrix-legatee, filed a "Motion To
Withdraw Petition for Probate" alleging that Del Rosario waived her rights to the devise in her favor and
agreed that the De Guzman brothers and sisters who opposed her petition for probate, shall inherit all the
properties left by the decedent. (Annex "F", p. 65, Rollo.)

In an order of April 13, 1967 the trial court denied the motion to withdraw the petition for being contrary to
public policy (Annex "G", pp. 66-67, Rollo).

Nonetheless, on August 28, 1967, the court disallowed the will, holding that the legal requirements for its
validity were not satisfied as only two witnesses testified that the will and the testatrix's signature were in
the handwriting of Maxima Reselva.

The petitioner filed an appeal bond, notice of appeal, and record on appeal. The private respondents filed
a motion to dismiss the appeal on the ground that petitioner was not a party in interest.

The petitioner opposed the motion to dismiss his appeal, claiming that he has a direct and material
interest in the decision sought to be reviewed. He also asked that he be substituted as party-petitioner, in
lieu of his former client, Ms. Del Rosario.

On March 28, 1968, the trial judge dismissed the appeal and denied petitioner's motion for substitution.

The petitioner filed in the Court of Appeals a petition for mandamus (CA-G.R. No. 41248) praying that the
trial court be ordered to give due course to his appeal and to grant his motion for substitution.

On May 22, 1968, the Court of Appeals dismissed the petition for being insufficient in form and substance
as the petitioner did not appear to be the proper party to appeal the decision in Special Proceeding No.
58325 (Annex 1, p. 77, Rollo).

Upon the denial of his motion for reconsideration, petitioner appealed by certiorari to this Court, assigning
the following errors against the Court of Appeals' resolution:
1. The Court of Appeals erred in finding that the petitioner appears not to be the proper party to appeal
the decision in Sp. Proc. No. 58325 of the Court of First Instance of Manila.

2. Assuming the petitioner's right of appeal is doubtful, the Court of Appeals erred in dismissing his
petition for mandamus; and

3. The Court of Appeals erred in not reversing the decision in Sp. Proc. No. 58325 denying the probate of
the holographic will of the late Maxima C. Reselva, said decision being patently erroneous.

Under his first assignment of error, petitioner argues that by virtue of his contract of services with Del
Rosario, he is a creditor of the latter, and that under Article 1052 of the Civil Code which provides:

ART. 1052. If the heir repudiates the inheritance to the prejudice of his own creditors, the latter may
petition the court to authorize them to accept it in the name of the heir.

The acceptance shall benefit the creditors only to an extent sufficient to cover the amount of their credits.
The excess, should there be any, shall in no case pertain to the renouncer, but shall be adjudicated to the
persons to whom, in accordance with the rules established in this Code, it may belong.

he has a right to accept for his client Del Rosario to the extent of 35% thereof the devise in her favor
(which she in effect repudiated) to protect his contigent attorney's fees.

The argument is devoid of merit. Article 1052 of the Civil Code does not apply to this case. That legal
provision protects the creditor of a repudiating heir. Petitioner is not a creditor of Rosa del Rosario. The
payment of his fees is contingent and dependent upon the successful probate of the holographic will.
Since the petition for probate was dismissed by the lower court, the contingency did not occur. Attorney
Leviste is not entitled to his fee.

Furthermore, Article 1052 presupposes that the obligor is an heir. Rosa del Rosario is not a legal heir of
the late Maxima C. Reselva. Upon the dismissal of her petition for probate of the decedent's will, she lost
her right to inherit any part of the latter's estate. There is nothing for the petitioner to accept in her name.

This Court had ruled in the case of Recto vs. Harden, 100 Phil. 1427, that "the contract (for contingent
attorney's fees) neither gives, nor purports to give, to the appellee (lawyer) any right whatsoever, personal
or real, in and to her (Mrs. Harden's) aforesaid share in the conjugal partnership. The amount thereof is
simply a basis for the computation of said fees."

The Court of Appeals did not err in dismissing the petition for mandamus, for while it is true that, as
contended by the petitioner, public policy favors the probate of a will, it does not necessarily follow that
every will that is presented for probate, should be allowed. The law lays down procedures which should
be observed and requisites that should be satisfied before a will may be probated. Those procedures and
requirements were not followed in this case resulting in the disallowance of the will. There being no valid
will, the motion to withdraw the probate petition was inconsequential.

Petitioner was not a party to the probate proceeding in the lower court. He had no direct interest in the
probate of the will. His only interest in the estate is an indirect interest as former counsel for a prospective
heir. In Paras vs. Narciso, 35 Phil. 244, We had occassion to rule that one who is only indirectly
interested in a will may not interfere in its probate. Thus:

... the reason for the rule excluding strangers from contesting the will, is not that thereby the court maybe
prevented from learning facts which would justify or necessitate a denial of probate, but rather that the
courts and the litigants should not be molested by the intervention in the proceedings of persons with no
interest in the estate which would entitle them to be heard with relation thereto. (Paras vs. Narciso, 35
Phil. 244, 246.)
Similary, in Morente vs. Firmalino, 40 O.G. 21st Supp. 1, We held:

We are of the opinion that the lower court did not err in holding that notice of an attorney's lien did not
entitle the attorney-appellant to subrogate himself in lieu of his client. It only gives him the right to collect a
certain amount for his services in case his client is awarded a certain sum by the court.

WHEREFORE, the petition for certiorari is denied for lack of merit. Costs against the petitioner.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ, concur.

________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-19695 November 17, 1922

JUAN S. RUSTIA, petitioner,

vs.
THE JUDGE OF FIRST INSTANCE OF BATANGAS, Thirteenth Judicial District, Honorable FRANCISCO
DOMINGUEZ, ROSA H. DE PORCUNA and her husband JUSTO M. PORCUNA and EULALIA
MAGSOMBOL, respondents.

The petitioner in his own behalf.

The respondents Porcunas in their own behalf.
Jose Mayo Librea for the other respondents.

OSTRAND, J.:

This is a petition for a writ of certiorari, the petitioner alleging that the respondent Judge of the Court of
First Instance exceeded his jurisdiction in dismissing a pending action at the instance of the parties but
without the intervention of the attorney for the plaintiff in the case, the herein petitioner.

It appears from the record that on July 31, 1921, the respondent Justo Porcuna, for himself and on behalf
of his wife, the respondent Rosa H. de Porcuna, by means of a written contract, retained the petitioner to
represent them as their lawyer in case No. 1435 then pending in the Court of First Instance of Batangas
and in which Rosa H. de Porcuna was the plaintiff and one Eulalia Magsombol was the defendant. The
contract fixed the petitioner's fee at P200 in advance with an additional contigent fee of P1,300. It was
also provided in the contract that Justo Porcuna should not compromise the claim against the defendant
in the case without express consent of his lawyer, the herein petitioner.

After trial, the petitioner then being plaintiffs' attorney of record, the Court of First Instance, under date of
December 24, 1921, rendered judgment in favor of Justo Porcuna and Rosa H. de Porcuna ordering the
defendant Eulalia Magsombol to return to them 602 pieces of cloth or in default thereof to pay to them the
sum of P3,250. On January 14, 1922, Eulalia Magsombol filed her exception to the judgment and on the
following day presented a motion for a new trial, which was denied on the 21st of the same month. She
thereupon gave notice of appeal and presented a bill of exceptions which was approved on February 20,
1922. On March 2, 1922, and before the transmission of the bill of exceptions to this court, the plaintiffs
presented the following motion in the Court of First Instance.
The plaintiffs, without any further intervention of their attorney, now appear before this Honorable Court
and respectfully aver:

That, through Mr. Miguel Olgado, they already settled this case with the herein defendant.

That the basis of the compromise is that we, the plaintiffs, finally agree that we should be paid the amount
of eight hundred pesos (P800) in two installments; P300 to be paid on this same date, and the remaining
five hundred pesos (P500) at the end of March, 1922.

That we, the plaintiffs, recognize not to have any further rights in this case than to the aforesaid amount of
eight hundred pesos (P800) and that this is the total amount the defendant Eulalia Magsombol should pay
us, and we have no right whatever to any other amount than the aforementioned.

That we have not sold to any other person our rights as plaintiffs in this case.

Wherefore, the plaintiffs respectfully request the dismissal of this case without any pronouncement as to
costs, and that the appeal interposed by the defendant be further dismissed.

Batangas, Batangas, P.I., March 2, 1922.

(Sgd.) ROSA H. PORCUNA

Plaintiff

JUSTO M. PORCUNA
Plaintiff .

The defendant, through here attorney, Jose Mayo Librea, having signified her assent to the motion, the
Court of First Instance on the same day, March 2, dismissed the action without notice to counsel for the
plaintiffs.

The petitioner alleges that he did not discover the dismissal of the action until April 4, 1922. After an
unsuccessful effort to obtain a reconsideration of the order of dismissal from the trial court, he filed the
present petition for a writ of certiorari. By resolution dated October 24, 1922, this court denied the petition
and upon motion of the petitioner we shall now briefly state our reason for such denial.lawph!l.net

The burden of the petitioner's contention is (1) that he, as attorney of record, was entitled to notice of his
client's motion to dismiss the case, and (2) that after the approval of the bill of exceptions the lower court
had lost jurisdiction of the case and had no power to dismiss it. A moment's reflection should make it clear
that neither of these propositions is tenable.

Both at the common law and under section 32 of the Code of Civil Procedure a client may dismiss his
lawyer at any time or at any stage of the proceedings and there is nothing to prevent a litigant from
appearing before the court to conduct his own litigation. (Sec. 34, Code of Civil Procedure.) The client has
also an undoubted right to compromise a suit without the intervention of his lawyer.

Though there is a valid agreement for the payment to the attorney of a large proportion of the sum
recovered in case of success, this does not give the attorney such an interest in the cause of action that it
prevents plaintiff from compromising the suit. (4 Cyc., 990, and authorities cited in Note 6; see also
Louque vs. Dejan, 129 La., 519; Price vs. Western Loan and Savings Co., 19 Ann. Cas., 589 and Note.)

In the present instance the clients did nothing that they did not have a perfect right to do. By appearing
personally and presenting a motion they impliedly dismissed their lawyer. The petitioner's contingent
interest in the judgment rendered did not appear of record. Neither as a party in interest nor as an
attorney was he therefore entitled to notice of the motion.
As to the second proposition that the court below could not dismiss the case after the bill of exceptions
had been approved, it is very true upon such approval the lower court loses its jurisdiction over all
contentious matters connected with the issues in the case. But there is nothing to prevent all of the
parties by agreement to withdraw the bill of exceptions with the consent of said court and resubmit the
case to the jurisdiction of the court. That was all that was done in this case. A valid agreement between
the parties to a case is the law of the case in everything covered by the agreement. (Civil Code, art. 1091;
Compañia General de Tabacos vs. Obed, 13 Phil., 391.) The petitioner might have protected his interests
by entering an attorney's lien under section 37 of the Code of Civil Procedure.

The petition for a writ of certiorari was therefore properly denied. So ordered.

Araullo, C. J., Street, Malcolm, Avanceña, Villamor, Johns, and Romualdez, JJ., concur.

__________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-24163 April 28, 1969

REGINO B. ARO, petitioner,

vs.
THE HON. ARSENIO NAÑAWA, Presiding Judge of Branch IV, Court of First Instance of Laguna, LUIS
MAGTIBAY, PABLO MAGTIBAY, AURELLO MARTINEZ, GREGORIO LONTOK, MARIA MENDOZA,
MAXIMO PORTO and ROSARlO ANDAYA, respondents.

Regino B. Aro in his own behalf as petitioner.

Enrique C. Villanueva for respondents.

BARREDO, J.:

Original petition: (1) for certiorari to annul the order of the Court of First Instance of Laguna, dated
November 21, 1964, dismissing its Civil Case No. SC-525 "without prejudice to the right of Atty. Regino B.
Aro (petitioner herein) to file a separate action against both the plaintiffs and defendants (private
respondents herein) with respect to his alleged attorney's fees", as well as its order dated January 9,
1965, denying petitioner's motion for reconsideration thereof for lack of merit and (2) for mandamus to
compel respondent Judge to take cognizance of petitioner's opposition and countermotion or petition
dated November 3, 1964 and to resolve the same on the merits.

There appears to be no dispute as to the following facts alleged in the petition:

2. That the services of herein petitioner, as practising attorney, was engaged by respondents Luis
Magtibay and Pablo Magtibay for the prosecution of their claim, as heirs, in the estate of their deceased
uncle Lucio Magtibay, consisting of properties which were in the possession of the respondents Aurelia
Martinez,1spouses Gregorio Lontok and Maria Mendoza and spouses Maximo Porto and Rosario
Andaya.

3. That being without means to prosecute their claim against the persons concerned, respondents Luis
Magtibay and Pablo Magtibay agreed with herein petitioner to avail of his services and entrust the
prosecution of their claim on a contingent basis as shown in the agreement, copy of which is hereto
attached as Annex 'A' and is made an integral part hereof.2
4. That by virtue of said agreement, herein petitioner took the necessary steps to gather the needed
papers and documents for the filing of a petition to litigate as pauper and a complaint in the Court of First
Instance of Laguna, in which respondents Luis Magtibay and Pablo Magtibay were the plaintiffs and the
other respondents, excepting the respondent Judge, were the defendants, ....

5. That said petition to litigate as pauper filed by herein petitioner for respondents Luis Magtibay and
Pablo Magtibay was granted by the respondent Judge as per the order dated September 10, 1964, .....

6. That to plaintiffs' complaint in Civil Case No. SC-525, the defendants in said case interposed a motion
to dismiss dated September 29, 1964....3

7. That to the said motion to dismiss herein petitioner, as attorney for the plaintiffs (now respondents Luis
Magtibay and Pablo Magtibay) filed an opposition dated October 5, 1964.....4

8. That after the hearing of the motion to dismiss filed by the defendants and the opposition thereto by the
plaintiffs, which finally took place on October 24, 1964, the respondent Judge issued its resolution or
order dated October 24, 1964, denying the motion to dismiss, ....5

9. That on the very day of and after the hearing of the motion to dismiss, or on October 24, 1964, before
receipt of a copy of the said order (Annex 'G'), there was a conversation which took place between herein
petitioner and the attorney of the defendants, Atty. Rustico de los Reyes, Jr., in the civil case and one
who was then acting as a sort of spokesman for the defendants (Ex-Mayor Cordova of Sta. Maria,
Laguna) for the amicable settlement of the case between the plaintiffs and the defendants to the effect
that a certain property of the spouses Lucio Magtibay (deceased) and respondent Aurelia Martinez, worth
P3,000.00, would be given to the plaintiffs in full settlement of their claim, as share in the properties left by
their deceased uncle Lucio Magtibay, it having been agreed by herein petitioner and Atty. de los Reyes
and the spokesman of the defendants that for the purpose of said amicable settlement, the plaintiffs or
one of them and herein petitioner would go to Sta. Maria, Laguna, on October 23, 1964.

10. That having given notice to the plaintiffs (now respondents Luis Magtibay and Pablo Magtibay) at their
given address in Calauag, Quezon to come to Candelaria for the purpose of going to Sta. Maria, Laguna
on October 23, 1964, petitioner had waited for said plaintiffs to go to his office on or before said date for
the engagement mentioned, but due to their (plaintiffs') failure to come to Candelaria, petitioner had to
send a telegram to Ex-Mayor Cordova notifying him of his (petitioner's) and plaintiffs' not being able to go
to Sta. Maria because of the failure of any of the plaintiffs to come to Candelria, ....

11. That it was only on October 28, 1964, when herein petitioner received a copy of the order dated
October 24, 1964 (Annex "G") and to his surprise he also received on the said day a second motion to
dismiss dated October 26, 1964; together with Annex "A" of said motion, which is entitled KASULATAN
NG PAGHAHATIAN NA LABAS SA HUKUMAN AT PAGPAPALABI, dated October 23, 1964 at Sta. Cruz,
Laguna and signed by the plaintiffs and defendant Aurelia Martinez (the three being now respondents in
this case), it having been made to appear in said Annex "A" of the second motion to dismiss, among
others, that the plaintiffs and defendant Aurelia Martinez had made an extrajudicial partition of the
properties of the deceased Lucio Magtibay and the said Aurelia Martinez adjudicating to the plaintiffs one-
fourth (¼) share in the properties of the spouses and three-fourth (3/4) share of the defendant Aurelia
Martinez, but making it appear also that said plaintiffs waived their share in favor of Aurelia Martinez, ...,
thru which fraudulent waiver, herein petitioner was deprived of his contingent fees, agreed upon, as
evidenced by Annex "A" of this petition.6

xxx xxx xxx

14. That petitioner filed by registered mail, on November 4, 1964, his "OPPOSITION TO THE SECOND
MOTION TO DISMISS AND COUNTER-MOTION OR PETITION TO SET ASIDE DEED OF
EXTRAJUDICIAL PARTITION AND WAIVER DATED OCTOBER 23, 1964 AND TO RECORD
ATTORNEY'S LIEN", dated November 3, 1964, wherein he (petitioner) prayed, among others, invoking
the provisions of Section 5(d) and Section 6, Rule 135 of the Revised Rules of Court, for the protection of
the rights of herein petitioner as an officer of the Court, to wit:

(a) to deny the second motion to dismiss and get aside and annul the deed of extrajudicial partition and
waiver dated October 23, 1964;

(b) to fix the compensation of herein counsel in the proportion of one-third (1/3) of the shares of plaintiffs,
if in land, or in the amount of P1,000.00, if in cash, and to record the same and expenses advanced by
him for the plaintiffs in the sum of P22.15 as lien in favor of herein claimant-petitioner over the properties
in litigation, particularly over the one-fourth (1/4) share of the plaintiffs in all the properties of the spouses;

xxx xxx xxx

(d) as an alternative to prayer (a) above, to grant the second motion to dismiss, subjecting, however, the
properties in litigation and subject-matters of the extrajudicial partition and waiver to the lien for attorney's
fees and expenses in favor of herein claimant-petitioner, after fixing said attorney's fees as prayed for in
(b) above.

xxx xxx xxx

15. That on the day f finally set for the hearing of the second motion to dismiss, as well as of the counter-
motion or petition, or on November 21, 1964, because of the inquiries or interpellation made by
respondent Judge to herein petitioner as to whether there is a Philippine precedent which allows or
directs the protection by the Court of the rights of any of its officers (lawyer) against any collusion
perpetrated by the parties in a case to defraud or cheat an attorney of his compensation agreed upon by
him and his clients, and his answer that insofar as his researches were concerned, he could not find any,
although there are a number of cases to that effect in American jurisdiction, the respondent Judge had
opined in open court that the claim for and the fixing of the attorney's fees should better be done in a
separate action and, in spite of petitioner's memorandum citing American authorities to the effect that,

Though a party may without the consent of his attorney money make a bona fide adjustment with the
adverse party and dismiss an action or suit before a judgment or a decree has been rendered thereon, if
it appears, however, that such settlement was collosive and consummated pursuant to the intent of both
parties to defraud the attorney, the court in which the action was pending may interfere to protect him as
one of its officers, by setting aside the order of dismissal, .... (Jackson vs. Stearns, 48 Ore. 25, 84 Pac.
798).

... the respondent Judge, instead of denying the second motion to dismiss and fixing his attorney's fees in
the said case and recording the same as lien, ... dismissed the case and refused to give herein petitioner
any kind of immediate protection to safeguard his rights ... in said Civil Case No. SC-525 of the Court of
First Instance of Laguna.

16. That by the express terms of the agreement, Annex "A" of this petition, plaintiffs in Civil Case No. SC-
525 had expressly ceded to herein petitioner one-half (½) [later verbally reduced to one-third (1/3) or
P1,000.00] or whatever share they would get from the estate of their deceased uncle Lucio Magtibay, and
the defendants in said Civil Case had full knowledge of said right of herein petitioner in the properties in
controversy from and after the time they were served with summons and copies of the complaint in said
civil case — because of the allegations contained in par. 10 thereof. 7 [Emphasis by the Court]

18. That on December 5, 1964, herein petitioner filed his motion for reconsideration dated December 4,
1664 asking for the reconsideration of the order dated November 21, 1964, ....

19. That the motion for reconsideration was denied by the court, thru the respondent Judge, as per the
order dated January 9, 1965, ....
Upon these facts, petitioner tries to make out before this Court a case of certiorari for grave abuse of
discretion on the part of respondent Judge in dismissing the case on the basis of the compromise
agreement of the parties, entered into at the back of petitioner notwithstanding the reservation made in
his favor to file an action against both parties "with respect to his alleged attorney's fees", as well as a
case of mandamus "to order and command the said respondent judge" to take cognizance of and resolve
his opposition and counter-motion for the court to fix the compensation he should be paid. Unable to find
any local precedent to support his position, he cites American authorities thus:

In the American jurisdiction, it would seem that, even without the specific provisions of the rules of court
cited above, courts had always intervened, in the mere exercise of their inherent powers, to protect
attorneys against collusive agreements or fraudulent settlements entered into by the parties in a case to
cheat attorneys out of their costs or of their fees. Thus, it was held or had been stated in:

(a) Coughlin vs. N.Y. Cont. & H.R.R. Co., 71 N.Y. 443, 27 Am. Rep. 75.

... But since the time of Lord Mansfield, it has been the practice of courts to intervene to protect attorneys
against settlement made to cheat them out of their costs. If an attorney has commenced an action, and
his client settles it with the opposite party before judgment, collusively, to deprive him of his costs, the
court will permit the attorney to go on with the suit for the purpose of collecting his costs. Swain v. Senate,
5 Bos. & Pul. 99; Cole v. Bennett, 6 Price, 15; Moore v. Cook, 13 Id. 473; Talcott v. Bronson, 4 Paige,
501; Rusquin v. The Knickerbocker Stage Col., 12 Abb. Pr 324; Ward v. Syme, 9 How. Pr. 16; McDonald
v. Napier, 14 Ga. 89.

There are many cases where this had been allowed to be done. It is impossible to ascertain precisely
when this practice commenced, nor how originated, nor upon what principle it was based. It was not upon
the principle of a lien, because an attorney has no lien upon the cause of as it upon the action before
judgment for his costs; nor was it upon principle that his services had produced the money paid his client
upon the settlement, because that could not be known, and in fact no money may have been paid upon
the settlement. So far as I can perceive, it was based upon no principle. It was a mere arbitrary exercise
of power by the courts; not arbitrary in the sense that it was unjust or improper, but in the sense that it
was not based upon any right or principle recognized in other cases. The parties being in court, and a suit
commenced and pending, for the purpose of protecting attorneys who were their officers and subject to
their control, the courts invented this practice and assumed this extraordinary power to defeat attempts to
cheat the attorneys out of their costs. The attorney's fees were fixed in definite sums, easily determined
by taxation and this power was exercised to secure them their fees. (pp. 76-77)

(b) Randall v. Van Wagenan et al., 22 N.E. 361, 362.lawphi1.nêt

... But where such settlement is made collusively for the purpose of defrauding the attorney out of his
costs, courts have been accustomed to intervene, and to protect the attorney by permitting him to
proceed with the suit, and, if he is able to establish a right to recover on the cause of action as it originally
stood, to permit such recovery to the extent of his costs in the action. Coughlin v. Railroad Co., 71 N. Y.
443, and pages cited. And the court will set aside an order of discontinuance if it stands in the way. This
is an adequate remedy, and we think the exclusive remedy where the suit has been fraudulently settled
by the parties before judgment to cheat the attorney out of his costs. We have found no case of an
equitable action to enforce the inchoate right of an attorney, under such circumstances, and no such
precedent ought, we think, to be established.

(c) Jackson v. Stearns, et al., 43 Ore 25, 84 Pac. 798.

... Though a party may, without the consent of his attorney, make a bona fide adjustment with the adverse
party, and dismiss an action or suit before a judgment or a decree has been rendered therein, if it
appears, however, that such settlement was collusive and consummated pursuant to the intent of both
parties to defraud the attorney, the court in which the action or suit was pending may interfere to protect
him, as one of its officers, by setting aside the order of dismissal and permitting him to proceed in the
cause in the name of his client to final determination to ascertain what sum of money, or interest in the
subject-matter, if any, is due him for his services when fully performed. Jones v. Morgage 99 Am. Dec.
458; Randall v. Van Wagenen (N.Y.) 22 N.E. 361, 12 Am. St. Rep. 828. (p. 800)

Before a court will set aside an order dismissing a suit or an action, made upon stipulation of the parties,
without the consent of plaintiff's attorney, and allow the latter to proceed with the cause in the name of his
client, to determine the amount of fees due him, it must appear that the defendant participated in the
fraudulent intent to deprive the attorney of his compensation. Courtney v. McGavock, 25 Wis. 619. When
no adequate consideration is given by the defendant for the settlement and discharge of an action or a
suit, the insufficiency of the inducement to the contract affords evidence of his bad faith. Young v.
Dearborn, 27 N.E. 324. It will be remembered that the complaint alleges that the value of the real property
in question is $3,000.00, and that Stearns executed to Wilson a deed to the premises for a nominal
consideration. This is a sufficient averment of the defendant's intent to deprive the plaintiff of his
compensation thereby imputing to Wilson bad faith. (p. 800)

(d) Desaman v. Butler Bros., 188 Minn. 198, 136 N.W. 747.

We have recently held that a client has always the right to settle his cause of action and stop litigation at
any stage of the proceeding, subject, however, to the right of the attorney to receive compensation for
services rendered. Burho v. Camichael 135 N.W. 386. It is therefore contended by defendant that a
litigant retains the unrestricted right to determine for what amount the cause of action may be settled,
and, having so done, the lien of his attorney for services is measured by the amount determined on and
actually settled for. Conceding, without deciding, that this may be true of any time prior to the rendition of
a verdict in the action which the attorney has been employed to bring, we are of opinion that after verdict
fixing the amount of a plaintiff's cause of action a secret and collusive compromise between parties
litigant does not affect the amount of the attorney's lien...; but therein is also clearly indicated by Mr.
Justice Brown that, if there be fraud and collusion to deprive the attorney of his lien, the settlement will not
be permitted to accomplish such result. (p. 748)

To be sure, these authorities are quite persuasive, but contrary to petitioner's impression, there is already
a precedent setting decision of this Court handed down way back in 1922 in a case very similar to his,
that in Rustia vs. the Judge of the Court of First Instance of Batangas, et al., 44 Phil. 62. As it is very brief,
it can be quoted in full:

This is a petition for a writ of certiorari, the petitioner alleging that the respondent Judge of the Court of
First Instance exceeded his jurisdiction in dismissing a pending action at the instance of the parties but
without the intervention of the attorney for the plaintiff in the case, the herein petitioner.

It appears from the record that on July 31, 1921, the respondent Justo Porcuna, for himself and on behalf
of his wife, the respondent Rosa H. de Porcuna, by means of a written contract, retained the petitioner to
represent them as their lawyer in case No. 1435 then pending in the Court of First Instance of Batangas
and in which Rosa H. de Porcuna was the plaintiff and one Eulalia Magsombol was the defendant. The
contract fixed the petitioner's fee at P200 in advance with an additional contingent fee of P1,300. It was
also provided in the contract that Justo Porcuna should not compromise the claim against the defendant
in the case without express consent of his lawyer, the herein petitioner.

After trial, the petitioner then being plaintiff's attorney of record, the Court of First Instance, under date of
December 24, 1921, rendered judgment in favor of Justo Porcuna and Rosa H. de Porcuna ordering the
defendant Eulalia Magsombol to return to them 602 pieces of cloth or in default thereof to pay to them the
sum of P3,250. On January 14, 1922, Eulalia Magsombol filed her exception to the judgment and on the
following day presented a motion for a new trial, which was denied on the 21st of the same month. She
thereupon gave notice of appeal and presented a bill of exceptions which was approved on February 20,
1922. On March 2, 1922, and before the transmission of the bill of exceptions to this court, the plaintiffs
presented the following motion in the Court of First Instance:

The plaintiffs, without any further intervention of their attorney, now appear before this Honorable Court
and respectfully aver:
That, through Mr. Miguel Olgado they already settled this case with the herein defendant.

That the basis of the compromise is that we, the plaintiffs, finally agree that we should be paid the amount
of eight hundred pesos (P800) in two installments; P300 to be paid on this same date, and the remaining
five hundred pesos (P500) at the end of March, 1922.

That we, the plaintiffs, recognize not to have any further rights in this case than to the aforesaid amount of
eight hundred pesos (P800) and that this is the total amount the defendant Eulalia Magsombol should pay
us, and we have no right whatever to any other amount than the aforementioned.

That we have not sold to any other person our rights as plaintiffs in this case.

Wherefore, the plaintiffs respectfully request the dismissal of this case, without any pronouncement as to
costs, and that the appeal interposed by the defendant be further dismissed.

Batangas, Batangas, P.I., March 2, 1922.

(Sgd) ROSA H. PORCUNA

Plaintiff

JUSTO M. PORCUNA
Plaintiff

The defendant, through her attorney, Jose Mayo Librea, having signified her assent to the motion, the
Court of First Instance on the same day, March 2, dismissed the action without notice to counsel for the
plaintiffs.

The petitioner alleges that he did not discover the dismissal of the action until April 4, 1922. After an
unsuccessful effort to obtain a reconsideration of the order of dismissal from the trial court, he filed the
present petition for a writ of certiorari. By resolution dated October 24, 1922, this court denied the petition
and upon motion of the petitioner we shall now briefly state our reasons for such denial.

The burden of the petitioner's contention is (1) that he, as attorney of record, was entitled to notice of his
client's motion to dismiss the case, and (2) that after the approval of the bill of exceptions the lower court
had lost jurisdiction of the case and had no power to dismiss it. A moment's reflection should make it clear
that neither of these propositions is tenable.

Both at the common law and under section 32 of the Code of Civil Procedure a client may dismiss his
lawyer at any time or at any stage of the proceedings and there is nothing to prevent a litigant from
appearing before the court to conduct his own litigation. (Sec. 34, Code of Civil Procedure.) The client has
also an undoubted right to compromise a suit without the intervention of his lawyer.

Though there is a valid agreement for the payment to the attorney of a large proportion of the sum
recovered in case of success this does not give the attorney such an interest in the cause of action that it
prevents plaintiff from compromising the suit. (4 Cyc. 990, and authorities cited in Note 6; see also
Louque vs. Dejan 129 La. 519; Price vs. Western Loan & Savings Co., 19 Am. Cas. 589 and Note.)

In the present instance the clients did nothing that they did not have a perfect right to do. By appearing
personally and presenting a motion they impliedly dismissed their lawyer. The petitioner's contingent
interests in the judgment rendered did not appear of record. Neither as a party in interest nor as and
attorney was he therefore entitled to notice of the motion.
As to the second proposition that the court below could not dismiss the case after the bill of exceptions
had been approved, it is very true that upon such approval the lower court loses its jurisdiction over all
contentious matters connected with the issues in the case. But there is nothing to prevent all of the
parties by agreement to withdraw the bill of exceptions with the consent of said court and resubmit the
case to the jurisdiction of the court. That was all that was done in this case. A valid agreement between
the parties to a case is the law of the case in everything covered by the agreement. (Civil Code, art. 1091;
Compania General de Tabacos vs. Obed, 13 Phil. 391.) The petitioner might have protected his interests
by entering an attorney's lien under section 37 of the Code of Civil Procedure.

The petition for a writ of certiorari was therefore properly denied. So ordered.

The difference We perceive, however, between petitioner's case, on the one hand, and that of Atty.
Rustia, in the above decision, on the other, is that in the latter's case, neither the court nor the party
adverse to his clients were aware of the exact agreement as to his fees, whereas in the case of petitioner,
both the court and the other parties knew the terms of the contract for professional services between
petitioner and his clients, the Magtibay brothers, because the written contract therefor, Annex A, was
made part of the complaint, and none seriously disputes its authenticity. Besides, the court had already
dismissed the case when Atty. Rustia raised the question of his fees before the court; in petitioner's
instance, he opposed the motion to dismiss and pleaded with the court to protect his rights as officer of
the court before the first order in question was issued by respondent judge. Were it not for these
differences, We would have inclined towards denying the herein petition in line with the Rustia ruling that,
in any event, certiorari is not the appropriate remedy, the American authorities cited by petitioner not
withstanding.

Withal, there is another Philippine case which Us to sustain petitioner. In the case of Recto vs. Harden,
100 Phil. 440, Atty. Claro M. Recto found himself practically in the same situation as petitioner herein.
After Atty. Recto had rendered services to Mrs. Esperanza P. de Harden in a protracted suit against her
husband for the purposes of securing an increase of her and her daughter's monthly support, (the
spouses were separated), to P10,000.00 and of protecting and preserving her rights in the properties of
the conjugal partnership, which suit lasted from 1941 to 1949, and after the Court of First Instance of
Manila had rendered a judgment favorable to Mrs. Harden acknowledging, inter alia, her rights to the
assets of the conjugal partnership, which turned out to be P4,000,000, and awarding her a monthly
support of P2,500, practically as prayed for in Atty. Recto's pleadings, while the case was already
pending on appeal before this Court, Mrs. Harden and her husband, Mr. Fred Harden, entered into a
compromise of their case, without the knowledge of Atty. Recto, whereby said spouses "purportedly
agreed to settle their differences in consideration of the sum of P5,000 paid by Mr. Harden to Mrs.
Harden, and a monthly pension of $500 to be paid by him to her; (2) Mr. Harden created a trust fund of
$20,000 from which said monthly pension of $500 would be taken; and (3) Mr. and Mrs. Harden had
mutually released and forever discharged each other from all actions, debts, duties, accounts, demands
and claims to the conjugal partnership, in consideration of the sum of $1." (p. 435)

Whereupon Atty. Recto filed a motion with this Court praying that:

a) Pending the resolution of this motion, the receiver appointed herein be authorized to continue holding
the properties above mentioned in his custody in order not to defeat the undersigned's inchoate lien on
them;

b) A day set aside to receive the evidence of the undersigned and those of the plaintiff and the defendant
Fred M. Harden, in order to determine the amount of fees due to the undersigned, by the appointment of
a referee or commissioner for the reception of such evidence;

c) After due hearing, the undersigned be declared entitled to the sum of P400,000 as his fees for services
rendered in behalf of the plaintiff in this case, under paragraph 3 of the contract, Annex "A" and to that
end a charging lien therefore be established upon the properties above-mentioned;
d) And the receiver be ordered to pay to the undersigned the full amount of the fees to which the latter is
found to be entitled.

This motion was objected to by Mr. Hardens counsel, who in turn, moved for the dismissal of the case, to
which Atty. Recto objected. Under these circumstances, this Court acceded to Atty. Recto's prayer that
the case be not dismissed, that the receivership be maintained except as to certain properties not
material to mention here, and that the case be remanded to the lower court so that his fees may be
determined and ordered paid. Upon the remand of the case to the lower court, a commissioner was
appointed to hear the matter of the amount of the fees in question, and after the commissioner had
submitted a report recommending the payment to Atty. Recto of the 20,70 attorney's fees stipulated in the
contract for his services, equivalent to P369,410.04, the court rendered judgment as follows:

The contingent fee to which the claimant is entitled under paragraph 3 of the contract, Exhibit JJJ or 20, is
20% of P1,920,554.85 or the sum of P384,110.97.

WHEREFORE, this Court hereby approves the recommendation of the Commissioner with the above-
stated modification, and finds that Attorney Claro M. Recto is entitled to the sum of THREE HUNDRED
EIGHTY-FOUR THOUSAND ONE HUNDRED AND TEN PESOS AND NINETY-SEVEN CENTAVOS
(P384,110.97), representing 20% of Esperanza P. de Harden's share in the conjugal properties owned by
her and her husband, Fred M. Harden, as contingent fee stipulated in paragraph 3 of the Contract of
Professional Services, Exhibit JJJ or 20, and the said Esperanza P. de Harden is hereby ordered to pay
the said amount above-stated.

On appeal from this judgment to this Court, the same was affirmed, the decision stating pertinently in part:

The last objection is based upon principles of equity, but, pursuant thereto, one who seeks equity must
come with clean hands (Bastida et al. vs. Dy Buncio & Co., 93 Phil. 195; 30 C.J.S. 475), and appellants
have not done so, for the circumstances surrounding the case show, to our satisfaction, that their
aforementioned agreements, ostensibly for the settlement of the differences between husband and wife,
were made for the purpose of circumventing or defeating the rights of herein appellee, under his above-
quoted contract of services with Mrs. Harden. Indeed, having secured a judgment in her favor,
acknowledging her rights to the assets of the conjugal partnership, which turned out to be worth almost
P4,000,000 in addition to litis expensae in the sum of P175,000, it is inconceivable that Mrs. Harden
would have waived such rights, as well as the benefits of all orders and judgments in her favor, in
consideration of the paltry sum of $5,000 allegedly paid to her by Mr. Harden and the additional sum of
$20,000 to be paid by him in installments, at the rate of $500 a month. In fact, no explanation has been
given for this moat unusual avowed settlement between Mr. and Mrs. Harden. One can not even consider
the possibility of a reconciliation between the spouses, the same being inconsistent with the monetary
consideration for said alleged settlement. What is more, the records show that the relations between said
spouses — which were bad indeed, not only in July, 1941, when Mrs. Harden engaged the services of the
appellee, but, even, before, for Mr. and Mrs. Harden were separated since 1938 — had worsened
considerably thereafter, as evidenced by an action for divorce filed by Mr. Harden in New Jersey, in July
1948, upon the ground of repeated acts of infidelity allegedly committed by Mrs. Harden in 1940 and
1941.

On the same considerations of equity, and for the better protection of lawyers, who, trusting in the good
faith of their clients, render professional services on contingent basis, and so that it may not be said that
this Court, sanctions in any way the questionable practice of clients of compromising their cases at the
back of their counsel with the consequence that the stipulated contingent fees of the lawyer are either
unreasonably reduced or even completely rendered without basis, as in this case — wherein the clients
waived the whole of their rights in favor of their opponent after the latter had acknowledged, in effect, the
correctness of said clients' contention — We have decided to grant the herein petition, in so far as the
rights of petitioner have been prejudiced by the questioned compromise agreement. While We here
reaffirm the rule that "the client has an undoubted right to compromise a suit without the intervention of
his lawyer", 8 We hold that when such compromise is entered into in fraud of the lawyer, with intent to
deprive him of the fees justly due him, the compromise must be subject to the said fees, and that when it
is evident that the said fraud is committed in confabulation with the adverse party who had knowledge of
the lawyer's contingent interest or such interest appears of record and who would benefit under such
compromise, the better practice is to settle the matter of the attorney's fees in the same proceeding, after
hearing all the affected parties and without prejudice to the finality of the compromise in so far as it does
not adversely affect the rights of the lawyer. Surely, "the client cannot, by setting, compromising or
dismissing his suit during its pendency, deprive the attorney of his compensation for the agreed amount,
unless the lawyer consents to such settlement, compromise or dismissal", (Legal and Judicial Ethics by
Martin, 1967 Rev. Ed p. 121) for the, attorney is or "Shall be entitled to have and recover from his client -
a reasonable compensation (not more) for his services, with a view to the importance of the subject-
matter of the controversy, the extent of the services rendered, and the professional standing of the
attorney", (Sec. 24, Rule 138, on Attorney and Admission to Bar) albeit, under Canon 12 of the Canons of
Professional Ethics, "in fixing fees, it should not be forgotten that the profession is a branch of the
administration of justice and not a mere money-getting trade."

True it is also that "a client may, at anytime, dismiss his attorney or substitute another in his place", (Sec.
26, Rule 138) but it must be emphasized that the same provision, which is an incorporation of Republic
Act 636 into the Rules of Court, also provides that "if the contract between client and attorney had been
reduced to writing and the dismissal of the attorney was without justifiable cause, he shall be entitled to
recover from the client full compensation ..." In the case at bar, by entering into the compromise
agreement in question and even inserting therein a prayer to the court to dismiss their case filed by
petitioner, (see footnote 6, ante) petitioner's clients impliedly dismissed him. (Rustia vs. the Court, etc.,
supra.) Such implied dismissal appears to Us to have been made without justifiable cause, none is urged
anywhere in the record, and so, the above-quoted provision of Section 26, Rule 138 applies here. The
terms of the compromise in question, as spelled out in Annex A of Annex I of the petition, indicate clearly
that Aurelia Martinez, the defendant aunt in-law of petitioner's clients, acknowledged that the rights of said
clients were practically as alleged by petitioner in the complaint he filed for them. In other words, through
the services of petitioner, his clients secured, in effect, a recognition, which had been previously denied
by their aunt-in-law, that they were entitled to a ¼ share in the estate left by their uncle. We hold that
under these circumstances, and since it appears that said clients have no other means to pay petitioner,
since they instituted their case as paupers, and that their aunt-in-law was aware of the terms of their
contract of professional services with petitioner', said clients had no right to waive the portion of their such
acknowledged rights in favor of their opponent to the extent that such waiver would prejudice the
stipulated contingent interest of their lawyer and their aunt-in-law had no right to accept such waiver
unqualified. The Civil Code enjoins that:

ART. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.

Under the circumstance extant in the record, it is clear that the compromise agreement in question falls
short of the moral requirements of this quoted article of the Civil Code. If for this reason alone, it should
not be allowed to prejudice the rights of petitioner. Accordingly, as all of these circumstances were
presented to respondent judge before he issued the challenged order of dismissal and all the parties were
heard thereon, it was incumbent upon His Honor, in equity and to avoid multiplicity of suits, particularly,
because the amount claimed by petitioner is only P1,000.00, to have directly passed upon petitioner's
claim, and not having done so, it would appear that the court a quo abused its discretion gravely enough
to warrant the writ of certiorari herein prayed for in so far as the questioned orders prejudiced petitioner's
right to the fees for the professional services which appear to have been creditably rendered by him.
Respondents allege that the judgment of dismissal in question is already final because no appeal was
taken therefrom, but since We hold that the same was rendered with enough grave abuse of discretion to
warrant the certiorari prayed for, such alleged finality could not have materialized; obviously, petitioner
could not have appealed, not being a party in the case.

IN VIEW OF THE FOREGOING, the orders of the respondent court dated November 21, 1964 and
January 9, 1965 in Civil Case No. SC-525 are hereby set aside in so far as they prejudice the payment of
petitioner's claim of attorney's fees in the form of either one-third of the ¼ share acknowledged as his
clients in the compromise in question or P1,000.00, which should constitute as a lien on the said share, in
spite of the waiver thereof in favor of respondent Aurelia Martinez. It is unnecessary to consider the
petition for mandamus. Costs against, private respondents.

Reyes, J.B.L., Dizon,: Makalintal, Zaldivar, Sanchez, Fernando and Teehankee, JJ., concur.
Concepcion, C.J. and Castro, J., are on leave.
Capistrano, J., took no part.

_____________

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 179892-93 January 30, 2009

ATTY. VICTORIANO V. OROCIO, Petitioner,

vs.
EDMUND P. ANGULUAN, LORNA T. DY and NATIONAL POWER CORPORATION, Respondents.

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition1 for Review on Certiorari under Rule 45 of the Rules of Court seeking to set aside
the Resolution2 dated 31 October 2006, Decision3 dated 29 January 2007, and Resolution4 dated 27
September 2007, of the Court of Appeals in CA-G.R. SP Nos. 95786 and 95946.

The facts culled from the records are as follows:

On 26 September 1978, the National Power Corporation Board of Directors (NAPOCOR Board), pursuant
to its specific power and duty to fix the compensation, allowance and benefits of the NAPOCOR
employees under Section 6(c) of Republic Act No. 6395, as amended, passed Resolution No. 78-119
approving the grant of a monthly welfare allowance equivalent to 10% of an employee’s basic pay to all
NAPOCOR employees effective 1 October 1978.5 Pursuant thereto, the NAPOCOR Welfare Plan
Committee, renamed and reconstituted later on as the NAPOCOR Welfare Fund Board of Trustees
(NAPOCOR-WFBT), issued and promulgated a charter for the NAPOCOR Welfare Fund which includes
the following provisions:

ARTICLE VII
TERMINATION/AMENDMENT OF THE PLAN

"Section 1. Termination/Amendment of the Plan – The Board of Directors may amend, revise, repeal any
or all of the provisions herein contained and/or terminate the Plan, subject to the pertinent provisions of
the Trust Agreement.

Section 2. Payment of Member’s share – In the event of termination of the Plan, the balance to the credit
of each member and the General Reserve for Employee Benefits shall be paid to the members in full. The
accumulated amount in the General Reserve for Employee Benefits shall be distributed among the
members in the proportion to the amount outstanding to their credit as of the time of termination.6

The NAPOCOR Board subsequently passed Resolution No. 82-172 fixing a NAPOCOR employee’s
contribution to the NAPOCOR Welfare Fund in a sum equivalent to 5% of his basic pay.7
Almost two decades thereafter, on 8 June 2001, Congress passed Republic Act No. 9136, otherwise
known as the Electric Power Industry Reform Act (EPIRA). EPIRA directed the restructuring of the power
industry which includes the reorganization of NAPOCOR. Following the directive of EPIRA, the
NAPOCOR Board passed Resolution No. 2003-43 on 26 March 2003 abolishing the NAPOCOR Welfare
Fund Department and other departments, and dissolving the NAPOCOR Welfare Fund upon the
effectivity of EPIRA on 26 June 2001.8 Consequently, some of the employees in the NAPOCOR Welfare
Fund Department and in other departments (who were also members of the NAPOCOR Welfare Fund)
resigned, retired or separated from service. Thereafter, the liquidation and dissolution process for the
NAPOCOR Welfare Fund commenced.

On 11 May 2004, the NAPOCOR-WFBT, with authority from the Commission on Audit, approved
Resolution No. 2004-001 authorizing the release of ₱184 million (which represented 40% of the liquid
assets of NAPOCOR Welfare Fund in the total amount of ₱462 million as of 16 April 2004) for distribution
to the NAPOCOR Welfare Fund members who resigned, retired, or separated upon the effectivity of
EPIRA on 26 June 2001 (EPIRA separated members).9

Pursuant to Resolution No. 2004-001, herein respondent Edmund P. Anguluan (Anguluan), as Ex-Officio
Chairman of NAPOCOR-WFBT, issued a memorandum on 17 May 2004 to implement the release of
₱184 million only to the EPIRA separated members to the exclusion of the NAPOCOR employees (who
were also members of the NAPOCOR Welfare Fund) who have resigned, retired, or separated prior to the
effectivity of EPIRA (non-EPIRA separated members).10

This prompted Mrs. Perla A. Segovia (Segovia), former Vice-President of Human Resources and
Administration and former Ex-Officio Chairman of the NAPOCOR-WFBT, in behalf of the 559 non-EPIRA
separated members and in her own personal capacity, to write a letter to Mr. Rogelio M. Murga, then
NAPOCOR President, demanding their equal shares in the remaining assets of the NAPOCOR Welfare
Fund and access to information and records thereof.11

On 13 July 2004, there being no action or response on her letter, Segovia, together with Mrs. Emma C.
Baysic (Baysic), former President of the NAPOCOR Employees Association and former member of the
NAPOCOR-WFBT, in their personal capacities and on behalf of the 559 non-EPIRA separated members,
filed with the Quezon City Regional Trial Court (RTC), Branch 217, a Petition for Mandamus, Accounting
and Liquidation with a Prayer for the Issuance of Temporary Restraining Order and Injunction against
respondents NAPOCOR, the NAPOCOR Board, Anguluan (as NAPOCOR Vice-President, Human
Resources, Administration and Finance Department) and Lorna T. Dy (as NAPOCOR Senior Department
Manager on Finance).12 The Petition was docketed as Civil Case No. Q04-53121.

Segovia, Baysic and the 559 non-EPIRA separated members were represented in Civil Case No. Q04-
53121 by petitioner Atty. Victoriano V. Orocio under a "Legal Retainer Agreement"13 dated 1 September
2004, pertinent portions of which are reproduced below:

SUBJECT: Petition for Mandamus with Damages Temporary Restraining Order/Injunction, etc. with the
Court "NPC RETIREES versus NPC, NP Board of Directors, et. al. before the RTC Quezon City for the
payment/settlement of their claims for NPC Welfare Fund (P462 Million assets and other assets liquid or
non-liquid).

Dear Ms. Segovia and Ms. Baysic:

In connection with the above-stated subject, hereunder are our terms and conditions, to wit:

1. No acceptance fee;

2. All costs of litigation ([filing] and docket fees, etc.), miscellaneous and out-of-pocket expenses the
prosecution of said action shall be for the account of the clients;

3. No appearance/meeting fee;
4. Contingency or success fees of fifteen percent (15%) of whatever amounts/value of assets (liquid
and/or non-liquid) are recovered;

5. This Retainer Agreement serves as Legal Authority for the Law Firm to receive and/or collect its
contingency/success fee without further demand.

On 22 February 2006, the parties in the above-mentioned case, duly assisted by their respective
counsels, executed a Compromise Agreement14 whereby they agreed to amicably settle their dispute
under the following terms and conditions:

COMPROMISE AGREEMENT

xxxx

WHEREAS, the parties have agreed to settle the instant case amicably.

PREMISES CONSIDERED, the parties herein have agreed as follows:

1. Both the NPC EPIRA separated members (those members of the Welfare Fund affected by the EPIRA
law and ceased to be members of the Welfare Fund anytime from June 26, 2001 [effectivity of the EPIRA
LAW] to March 1, 2003 [implementation of the EPIRA law and date of abolition of the Welfare Fund]) and
NPC non-EPIRA separated members (those who ceased to be members of the Fund prior to June 26,
2001) are entitled to "Earnings Differential" of the NPC Welfare Fund;

2. "Corrected Earnings Differential" refers to a benefit which is a result of re-computation of Member’s

Equity Contributions and Earnings using the correct rates of return vis-à-vis what was used when they
were separated. Period covered by the discrepancy is from 1989 to 2003. Hence, affected are WF
members separated anytime within the period 1989 to 2003;

xxxx

4. The Corrected Earnings Differential of all affected WF separated members shall earn 6% legal interest
per annum computed from the separation of the members from service up to March 31, 2006 for all the
non-EPIRA separated members and May 31, 2006 for the EPIRA separated members;

5. As of March 2006, the estimated Corrected Earnings Differential for the non-EPIRA separated
members is ₱119.196 Million while for the EPIRA separated members is ₱173.589 Million or a total of
₱292.785 Million, inclusive of the 6% legal interest;

6. In conformity with the Retainer Agreement dated September 1, 2004 between Mrs. Perla A. Segovia,
Mrs. Emma Y. Baysic and Atty. Victoriano V. Orocio; and Irrevocable Special Power of Attorney dated
July 20, 2005 executed by Mrs. Perla A. Segovia and Mrs. Emma Y. Baysic in favor of Atty. Victoriano V.
Orocio, counsel for petitioners, (copies attached as Annexes "A" and "B" respectively), 15% attorney’s
fees shall be deducted from the corresponding Corrected Earnings Differential of those non-EPIRA
separated members who have already executed the corresponding Special Power of Attorney/Written
Authority for the deduction/payment of said attorney’s fees, and shall be paid to V.V. Orocio and
Associates Law Office, represented by Atty. Victoriano V. Orocio, as compensation for his legal services
as counsel for the non-EPIRA separated members subject to deduction of applicable taxes;

xxxx

15. The parties herein shall exert their best effort in order that the terms and conditions of this agreement
are implemented and complied with in the spirit of fairness, transparency and equity;
16. This Agreement is not contrary to law, good customs, public order or public policy and is voluntarily
entered into by the parties of their own free will.15

The parties filed with the RTC the very next day, 23 February 2006, a Joint Motion before the RTC for the
approval of their Compromise Agreement.16 The RTC rendered a Decision on 3 April 2006 granting the
parties’ Joint Motion and approving the said Compromise Agreement.17

On 10 April 2006, petitioner filed with the RTC a Motion for Approval of Charging (Attorney’s) Lien.
Petitioner asked the RTC to issue an order declaring him entitled to collect an amount equivalent to 15%
of the monies due the non-EPIRA separated members as his attorney’s fees in conformity with the
Compromise Agreement.18 In an Order dated 15 May 2006, the RTC granted petitioner’s motion and
decreed that he is entitled to collect the amount so demanded.19

On 20 June 2006, petitioner filed with the RTC a Motion for the Issuance of a Writ of Execution of the
RTC Order dated 15 May 2006.20 Respondents opposed the motion on the ground that there was no
stipulation in the Compromise Agreement to the effect that petitioner is entitled to collect an amount
equivalent to 15% of the monies due the non-EPIRA separated members. Respondents contended that
the amount of ₱119,196,000.00 due the non-EPIRA separated members under the compromise
agreement was a mere estimate and, as such, cannot be validly used by petitioner as basis for his claim
of 15% attorney’s fees.21

The RTC issued an Order on 25 July 2006 granting petitioner’s Motion22 and, accordingly, a Writ of
Execution of the RTC Order dated 15 May 2006 was issued on 26 July 2006. Pursuant to the said Writ of
Execution, RTC Branch Sheriff Reynaldo B. Madoloria (Sheriff Madoloria) issued a Notice of Garnishment
to Ms. Aurora Arenas (Arenas), Assistant Vice-President and Business Manager of the Philippine
National Bank (PNB)-NAPOCOR Extension Office, Diliman, Quezon City, and to Mr. Emmanuel C.
Mendoza (Mendoza), Unit Head of the Landbank of the Philippines-NAPOCOR Extension Office, Diliman,
Quezon City.23

Respondents filed a Motion for Reconsideration of the RTC Order dated 25 July 2006.24

On 12 August 2006, Sheriff Madoloria served to Arenas an "Order for Delivery of Money."25

Respondents Anguluan and Dy filed before the Court of Appeals on 22 August 2006 a Petition for
Certiorari under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No. 95786, assailing the RTC
Order dated 25 July 2006 and praying that a temporary restraining order and/or a writ of preliminary
injunction be issued enjoining the implementation of the said RTC order.26 Respondent NAPOCOR filed
with the Court of Appeals on the same date another Petition for Certiorari under Rule 65 of the Rules of
Court, docketed as CA-G.R. SP No. 95946, also challenging the RTC Order dated 25 July 2006 and
praying that it be set aside and a temporary restraining order and/or a writ of preliminary injunction be
issued prohibiting the RTC from enforcing the said order and the corresponding writ of execution and
notice of garnishment.27 Subsequently, respondent NAPOCOR filed a Motion to Consolidate CA-G.R. SP
No. 95946 with CA-G.R. SP No. 95786 which was granted by the appellate court.28

On 31 October 2006, the Court of Appeals issued a Resolution granting respondents’ application for a
TRO and writ of preliminary injunction. It enjoined the RTC from implementing its Order dated 25 July
2006 and the corresponding writ of execution and notice of garnishment during the pendency of CA-G.R.
SP No. 95946 and No. 95786. Petitioner filed a motion for reconsideration of the said resolution.29

On 29 January 2007, the Court of Appeals promulgated its Decision annulling and setting aside: (1) the
RTC Order dated 25 July 2006; (2) the corresponding Writ of Execution dated 26 July 2006; (3) the
Notice of Garnishment dated 28 July 2006; and (4) Order for Delivery of Money dated 10 August 2006. It
also held that petitioner was entitled only to an amount of ₱1,000,000.00 as attorney’s fees on the basis
of quantum meruit.
The Court of Appeals held that the amount of ₱17,794,572.70 sought to be collected by petitioner as
attorney’s fees, equivalent to 15% of the ₱119,196,000.00 estimated corrected earnings differential for
non-EPIRA separated members, was excessive based on the following reasons: (1) the corrected
earnings differential in the amount of ₱119,196,000.00 due the non-EPIRA separated members was a
mere estimate and was hypothetical. Thus, petitioner was unjustified in using said amount as basis for his
15% attorney’s fees; (2) there was hardly any work by petitioner since (a) the compromise agreement was
reached without trial or hearing on the merits; (b) there was no issue regarding the release and
distribution of the NAPOCOR Welfare Fund to the non-EPIRA separated members as the enactment of
EPIRA, not the efforts of petitioner, made such distribution possible; (c) there was no issue on how much
each non-EPIRA separated members would receive because the amount of their respective contribution
was duly recorded by the respondents; (d) respondents have already distributed the corrected earnings
differential to some non-EPIRA separated members, and have given petitioner his corresponding partial
attorney’s fees amounting to ₱3,512,007.32; (e) most of the non-EPIRA separated members have not yet
received their share under the compromise agreement but petitioner, who was merely their agent, was
already given partial payment as attorney’s fees; (f) the amount of ₱17,794,572.70 represents "only less
than one fourth partial release of the NAPOCOR Welfare Fund which means that the equivalent of three-
fourths more would be demanded [by petitioner] in the future;" and (3) the money claim of the non-EPIRA
separated members was settled through a compromise agreement and not won by petitioner in a trial on
the merits.

The Court of Appeals determined that petitioner was entitled only to an amount of ₱1,000,000.00 as
attorney’s fees on the basis of quantum meruit. However, since petitioner already received ₱3,512,007.32
from respondents as partial payment of his supposed 15% attorney’s fees, it ruled that such amount was
more than sufficient and petitioner was not entitled to claim anymore the additional amount of
₱14,282,565.38. The fallo of the Decision of the Court of Appeals reads:

WHEREFORE, premises considered, the assailed July 25, 2006 Order, the July 26, 2006 Writ of
Execution, the July 28, 2006 Notice of Garnishment, and the August 10, 2006 Order of Delivery of Money
are hereby ANNULLED and SET ASIDE, and a new one is ordered, CAPPING at ₱3,512,007.32, the
amount manifested to have already been received from the welfare fund as attorneys fees, as the
maximum amount that may be billed or collected as attorneys fees from the whole welfare fund – which
amount is NOTED to have already exceeded what this court had fixed at ₱1,000,000.00 as the
reasonable amount, on quantum meruit, that may be collected as attorneys’ fees, pursuant to the
guidelines codified in Rule 20.01, Canon 20 of the Code of Professional Responsibility.30

Petitioner filed a motion for reconsideration of the aforementioned Decision but this was denied by the
Court of Appeals in its Resolution dated 27 September 2007.31

Hence, petitioner brought the instant petition before us assigning the following errors:

I.

THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS EDMUND P. ANGULUAN,

LORNA T. DY AND NATIONAL POWER CORPORATION (NPC) ARE ENTITLED TO [PRELIMINARY]
INJUNCTION AS THEY HAVE MATERIAL AND SUBSTANTIAL RIGHTS, WHICH ARE CLEAR AND
UNMISTAKABLE, i.e. RIGHTS OF BEING CLIENTS TO QUESTION THE REASONABLENESS OF THE
ATTORNEY’S FEES OF A LAWYER. THIS ALLEGED RIGHT IS NON-EXISTENT AND IN FACT
FABRICATED CONSIDERING THAT THE RESPONDENTS ARE NOT THE CLIENTS AT ALL OF
PETITIONER, ATTY. VICTORIANO V. OROCIO;

II.

THE COURT OF APPEALS ERRED IN RULING THAT THE FIFTEEN PERCENT (15%)
CONTINGENCY/SUCCESS FEE OF PETITIONER VICTORIANO V. OROCIO IS UNCONSCIONABLE
AND UNREASONABLE DESPITE THE UNDISPUTED FACT THAT THE SAID ATTORNEY’S FEES IS
AMONG THE TERMS AND CONDITIONS OF A JUDICIALLY APPROVED COMPROMISE
AGREEMENT AND COURT ORDER APPROVING HIS CHARGING LIEN, WHICH AGREEMENT AND
ORDER HAVE ALREADY BECOME FINAL AND EXECUTORY.32

In his first assigned error, petitioner assails the Resolution dated 31 October 2006 of the Court of Appeals
granting respondents’ application for a writ of preliminary injunction.lawphil.net He claims that the Court of
Appeals issued a writ of preliminary injunction in favor of respondents because petitioner allegedly
violated respondents’ material and substantial right as petitioner’s clients to pay only reasonable
attorney’s fees. Petitioner asserts that none of the respondents is his client in the present case; that even
respondents themselves have not alleged or claimed that they are his clients; that the amount of
attorney’s fees he claimed was chargeable on a portion of the NAPOCOR Welfare Fund due his clients,
the non-EPIRA separated employees; that if anyone would be injured by his claim of attorney’s fees, it
would be his clients, the non-EPIRA separated employees, and not respondents; that none of his clients
has questioned or complained about the amount of attorney’s fees he is claiming; that respondents are
not the real parties-in-interest and at most are merely nominal parties-in-interest; that as mere nominal
parties-in-interest, respondents are not entitled to a writ of preliminary injunction under the Rules of Court;
and that the requisites for the proper issuance of a writ of preliminary injunction are lacking in the instant
case.33

In its Resolution dated 31 October 2006, the Court of Appeals granted respondents’ application for a writ
of preliminary injunction based on the following reasons:

This Court finds that [herein respondents] have prima facie established [their] compliance with strict
requirements for issuance of a writ of preliminary injunction in this case. Under the leading case of
Valencia vs. Court of Appeals, 352 SCRA 72 (2001), the requisites of preliminary injunction are as
follows: (a) the invasion of the right of [herein respondents] is material and substantial; (b) the right of
[herein respondents] is clear and unmistakable; and (c) there is an urgent and paramount necessity for
the writ to prevent serious irreparable damage to [herein respondents].

The right of [herein respondents] alleged to have been invaded is that a client has the right to pay only a
reasonable amount of attorney’s fees and only for services actually rendered – which is clearly and
unmistakably available to all clients. What [herein respondents] are claiming is a material and substantial
right. This Court finds that [herein respondents] have prima facie established an urgent and paramount
necessity for the issuance of the writ of preliminary injunction prayed for, to avoid irreparable injury to
[herein respondents]. x x x.

As can be gleaned from the foregoing, the basis of the Court of Appeals in granting the writ was
petitioner’s alleged violation or invasion of respondents’ right, as petitioner’s clients, to pay only a
reasonable amount of attorney’s fees to, and only for services actually rendered by, petitioner.

The Court of Appeals is clearly mistaken.

It should be made clear that petitioner is the counsel for the non-EPIRA separated members in the latter’s
quest to claim their shares in the NAPOCOR Welfare Fund. Petitioner was never hired or employed by
respondents as their counsel in the cases at bar. Respondents themselves do not claim or allege that
they are clients of petitioner. In fact, petitioner is representing the non-EPIRA separated members, the
opposing party to the respondents in the present cases.

Further, the amount of attorney’s fees being claimed by petitioner is chargeable to the ₱119,196,000.00
corrected earnings differential of his clients, the non-EPIRA separated members. Respondents have
actually partially distributed such amount to some non-EPIRA separated members pursuant to the
Compromise Agreement. In other words, the non-EPIRA separated members are the lawful
owners/beneficiaries of the amount from which petitioner’s attorney’s fees had been and shall be taken.

Hence, if anyone would be injured by petitioner’s claim for attorney’s fees, it would be his clients, the non-
EPIRA separated members, and not respondents. It appears, however, that none of the non-EPIRA
separated members has questioned or complained about petitioner’s claim for attorney’s fees.
A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment
or final order, requiring a party or a court, agency or a person to refrain from a particular act or acts.34 A
writ of preliminary injunction is a provisional remedy, an adjunct to a main suit, as well as a preservative
remedy issued to preserve the status quo of the things subject of the action or the relations between the
parties during the pendency of the suit.35 For a writ of preliminary injunction to issue, the applicant is
tasked to establish and convincingly show the following: (1) a right in esse or a clear and unmistakable
right to be protected; (2) a violation of that right; and (3) there is an urgent and permanent act and urgent
necessity for the writ to prevent serious damage.36

A clear legal right means one clearly founded on or granted by law or is enforceable as a matter of law.37
The existence of a right violated is a prerequisite to the granting of a writ of preliminary injunction.38 A
writ of preliminary injunction will not issue to protect a right not in esse and which may never arise.39 It
may be issued only if the applicant has clearly shown an actual existing right that should be protected
during the pendency of the principal action.40 In the absence of a clear legal right, or when the
applicant’s right or title is doubtful or disputed, preliminary injunction is not proper.41

It is evident from the foregoing that respondents do not have a clear right or right in esse to pay only a
reasonable amount of attorney’s fees to the petitioner because such right belongs solely to petitioner’s
clients, the non-EPIRA separated members. There can be no violation of a right which does not exist in
the first place. Also, there was no necessity for the writ of preliminary injunction since the non-EPIRA
separated members do not claim any damage or injury caused by the execution of the RTC Order dated
15 May 2006. Even assuming that respondents would probably suffer damages as administrators or
custodians of the NAPOCOR Welfare Fund if the writ of preliminary injunction was not granted, our ruling
would still be the same. We have held that the possibility of irreparable damage without proof of an actual
existing right is not a ground for the issuance of a writ of preliminary injunction.42 Given these
considerations, we hold that the issuance by the Court of Appeals of a writ of preliminary injunction in
favor of respondents in its Resolution, dated 31 October 2006, was improper.lawphil.net

With regard to his second assigned error, petitioner maintained that his claim for attorney’s fees
equivalent to 15% of the ₱119,196,000.00 estimated corrected earnings differential due the non-EPIRA
separated members was not unreasonable or unconscionable because such amount was expressly
agreed upon in the Compromise Agreement between the non-EPIRA separated members and
respondents. The Compromise Agreement was submitted to the RTC for approval through the joint
motion of the non-EPIRA separated members and respondents, and the RTC had rendered a final and
executory decision approving the same. By virtue of res judicata, the Court of Appeals cannot alter or
change the terms of the Compromise Agreement by prohibiting petitioner from collecting his stipulated
amount of attorney’s fees.43

Petitioner also avers that the amount of ₱17,794,572.70, which is equivalent to 15% of the
₱119,196,000.00 estimated corrected earnings differential due the non-EPIRA separated members from
the NAPOCOR Welfare Fund is already the total, not partial, amount he is claiming as attorney’s fees;
that the ₱119,196,000.00 estimated corrected earnings differential due the non-EPIRA separated
members from the NAPOCOR Welfare Fund is not hypothetical, such amount having been actually
computed and fixed by respondents themselves without the participation of petitioner and his clients, the
non-EPIRA separated members; that he did a lot of legal work and utilized his legal skills on discovery
procedures to force respondents to enter into the Compromise Agreement with the non-EPIRA separated
members; that the passage of EPIRA merely paved the way for the distribution of the remaining assets of
the NAPOCOR Welfare Fund; that if not for his legal work and skills, the non-EPIRA separated members
would not have received their lawful shares in the remaining assets of the NAPOCOR Welfare Fund; and
that his claim for 15% attorney’s fees is supported by jurisprudence.44

An attorney’s fee, in its ordinary concept, refers to the reasonable compensation paid to a lawyer for the
legal services he has rendered to a client.45 The client and his lawyer may enter into a written contract
whereby the latter would be paid attorney’s fees only if the suit or litigation ends favorably to the client.
This is called a contingency fee contract. The amount of attorney’s fees in this contract may be on a
percentage basis, and a much higher compensation is allowed in consideration of the risk that the lawyer
may get nothing if the suit fails.46 In the case at bar, the non-EPIRA separated members and petitioner
voluntarily entered into a contingency fee contract whereby petitioner did not receive any acceptance fee
or appearance/meeting fee. The non-EPIRA separated members expressly agreed to pay petitioner
"contingency or success fees of fifteen percent (15%) of whatever amount/value of assets (liquid and/or
non-liquid)" recovered; and authorized petitioner’s law firm "to receive and/or collect its
contingency/success fee without further demand."

Contingent fee contracts are permitted in this jurisdiction 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 litigation. Oftentimes, the contingent fee arrangement is
the only means by which the poor clients can have their rights vindicated and upheld." Further, such
contracts are sanctioned by Canon 13 of the Canons of Professional Ethics.47

However, in cases where contingent fees are sanctioned by law, the same should be reasonable under
all the circumstances of the case, and should always be subject to the supervision of a court, as to its
reasonableness, such that under Canon 20 of the Code of Professional Responsibility, a lawyer is tasked
to charge only fair and reasonable fees.48

A stipulation on a lawyer’s compensation in a written contract for professional services ordinarily controls
the amount of fees that the contracting lawyer may be allowed, unless the court finds such stipulated
amount to be unreasonable or unconscionable. If the stipulated amount for attorney’s fees is excessive,
the contract may be disregarded even if the client expressed their conformity thereto.49 Attorney’s fees
are unconscionable if they affront one’s sense of justice, decency or reasonableness, or if they are so
disproportionate to the value of the services rendered. In such a case, courts are empowered to reduce
the attorney’s fee or fix a reasonable amount thereof taking into consideration the surrounding
circumstances and the established parameters.50

The principle of quantum meruit (as much as he deserves) may be a basis for determining the reasonable
amount of attorney’s fees. Quantum meruit is a device to prevent undue enrichment based on the
equitable postulate that it is unjust for a person to retain benefit without paying for it. It is applicable even
if there was a formal written contract for attorney’s fees as long as the agreed fee was found by the court
to be unconscionable. In fixing a reasonable compensation for the services rendered by a lawyer on the
basis of quantum meruit, factors such as the time spent, and extent of services rendered; novelty and
difficulty of the questions involved; importance of the subject matter; skill demanded; probability of losing
other employment as a result of acceptance of the proferred case; customary charges for similar services;
amount involved in the controversy and the benefits resulting to the client; certainty of compensation;
character of employment; and professional standing of the lawyer, may be considered.51

It appears that the non-EPIRA separated members chose petitioner as their counsel because the latter,
as former member of the NAPOCOR-WFBT for two terms or four years, is familiar and knowledgeable on
the operation of the NAPOCOR Welfare Fund.52 Yet, according to the contingency fee contract
agreement between petitioner and the non-EPIRA separated members, petitioner received no
acceptance fee and appearance/meeting fee when he took on the non-EPIRA separated members’ case.
Petitioner’s attorney’s fees were absolutely dependent on the success of non-EPIRA separated members’
claim on the NAPOCOR Welfare Fund. Despite these circumstances, petitioner worked diligently in
advocating the claims of the non-EPIRA separated members against respondents as shown by the
following: (1) petitioner took pains in verifying the identity and claim of each of the 559 non-EPIRA
separated members on the NAPOCOR Welfare Fund; (2) petitioner prepared and filed a well-researched
and well-argued petition with the RTC for the claims of the non-EPIRA separated members;53 (3) he
prepared and presented several witnesses and numerous pertinent documents before the RTC in support
of their application for the issuance of a temporary restraining order and/or writ of preliminary injunction
against respondents’ plan to exclude the non-EPIRA separated members from receiving their shares in
the NAPOCOR Welfare Fund; (4) he participated, as non-EPIRA separated members’ counsel, in the
conduct of several hearings regarding the said application for the issuance of temporary restraining order
and/or writ of preliminary injunction;54 (5) he obtained a temporary restraining order and a writ of
preliminary injunction from the RTC which enjoined/prohibited respondents from excluding the non-EPIRA
separated members from their shares in the NAPOCOR Welfare Fund;55 (6) he held numerous
conferences with the non-EPIRA separated members wherein he apprised the latter of the status of their
claims and his legal strategies pertinent thereto;56 and (7) he exerted utmost efforts which eventually led
to the execution of the Compromise Agreement between the non-EPIRA separated members and
respondents.

By reason of petitioner’s dedication and persistence as can be gleaned above, respondents finally agreed
to settle amicably with the non-EPIRA separated members as regards the latter’s claim for shares in the
NAPOCOR Welfare Fund by virtue of the Compromise Agreement.

Undoubtedly, were it not for petitioner’s vigilance and zeal, respondents would not have executed the
Compromise Agreement with the non-EPIRA separated members. Hence, it is fair to conclude that
petitioner was entitled to a reasonably high compensation.

However, petitioner’s attorney’s fees in the amount of ₱17,794,572.70 or equivalent to 15% of the ₱
119,196,000.00 corrected earnings differential of the non-EPIRA separated members should be equitably
reduced.

In NPC Drivers and Mechanics Association (NPC DAMA) v. The National Power Corporation (NPC),57
we awarded separation pay in lieu of reinstatement plus backwages to several NPC employees because
they were illegally dismissed by the NPC. The NPC employees were represented by a certain Atty.
Cornelio P. Aldon (Atty. Aldon) and Atty. Victoriano V. Orocio, (the petitioner in the instant cases) under a
legal retainer agreement which provides: (1) no acceptance fee; (2) miscellaneous/out of pocket
expenses in the amount of ₱25,000.00; and (3) twenty-five percent (25%) of whatever amounts/monies
are recovered in favor of said NPC personnel contingent on the success of the case. Atty. Aldon and Atty.
Orocio filed a Motion for Approval of Charging (Attorney’s) Lien pursuant to the legal retainer agreement.
Although we granted the said motion, we reduced the amount of attorney’s fees which was chargeable on
the monies recoverable by the NPC employees from 25% to 10% because:

While we duly recognize the right of Atty. Aldon and Atty. Orocio to a charging lien on the amounts
recoverable by petitioners pursuant to our 26 September 2006 Decision, nevertheless, we deem it proper
to reduce the same. Under Section 24, Rule 138 of the Rules of Court, a written contract for services shall
control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable.
The amounts which petitioners may recover as the logical and necessary consequence of our Decision of
26 September 2006, i.e., backwages and separation pay (in lieu of reinstatement), are essentially the
same awards which we grant to illegally dismissed employees in the private sector. In such cases, our
Labor Code explicitly limits attorney’s fees to a maximum of 10% of the recovered amount. Considering
by analogy the said limit on attorney’s fees in this case of illegal dismissal of petitioners by respondent
NPC, a government-owned and controlled corporation; plus the facts that petitioners have suffered
deprivation of their means of livelihood for the last five years; and the fact that this case was originally
filed before us, without any judicial or administrative proceedings below; as well as the fundamental
ethical principle that the practice of law is a profession and not a commercial enterprise, we approve in
favor of Atty. Aldon and Atty. Orocio a charging lien of 10% (instead of 25%) on the amounts recoverable
by petitioners from NPC pursuant to our Decision dated 26 September 2006.

The abovementioned case may be reasonably applied by analogy in the instant case since they have
substantially similar circumstances. In the case before us, although the non-EPIRA separated members
were not illegally dismissed, they were, nevertheless, separated from work by reason of EPIRA. In
addition, the non-EPIRA separated members had a legal retainer agreement/contingency fee contract
with petitioner as their counsel.

It should also be emphasized that the practice of law is a profession not a moneymaking venture. A
lawyer is not merely the defender of his client’s cause and a trustee of his client’s cause of action and
assets; he is also, and first and foremost, an officer of the court and participates in the fundamental
function of administering justice in society. It follows that a lawyer’s compensation for professional
services rendered is subject to the supervision of the court, not just to guarantee that the fees he charges
and receives remain reasonable and commensurate with the services rendered, but also to maintain the
dignity and integrity of the legal profession to which he belongs. Upon taking his attorney’s oath as an
officer of the court, a lawyer submits himself to the authority of the courts to regulate his right to charge
professional fees.58

Thus, taking into account the foregoing circumstances and recognized principles, the 15% attorney’s fees
of petitioner should be reduced to 10%. As such, petitioner is entitled to collect only, as attorney’s fees,
an amount equivalent to 10% of the ₱119,196,000.00 or ₱11,919,600.00.

We note, however, that the compromise agreement was partially implemented in the first week of April
2006 with the payment of ₱23,416,000.00 to some non-EPIRA separated members.59 Petitioner
admitted having already received an amount of ₱3,512,007.32 as his attorney’s fees on the said partial
payment of ₱23,416,000.00.60 Accordingly, the amount of ₱3,512,007.32 received by petitioner as
attorney’s fees should be deducted from the fixed 10% attorney’s fees or the amount of ₱11,919,600.00.
Per computation, petitioner is entitled to recover the amount of ₱8,407,592.68 as attorney’s fees.

WHEREFORE, premises considered, the Resolution of the Court of Appeals dated 31 October 2006 in
CA-G.R. SP Nos. 95786 and 95946 granting the issuance of a writ of preliminary injunction is hereby
ANNULLED and SET ASIDE. The Decision and Resolution, dated 29 January 2007 and 27 September
2007, respectively, of the Court of Appeals in CA-G.R. SP Nos. 95786 and 95946 are hereby AFFIRMED
with the MODIFICATION that petitioner is entitled to recover attorney’s fees in the amount of
₱8,407,592.68 on the corrected earnings differential of the non-EPIRA separated members. No costs.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

______________

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 104600 July 2, 1999

RILLORAZA, AFRICA, DE OCAMPO and AFRICA, petitioner,

vs.
EASTERN TELECOMMUNICATIONS PHILS., INC. and PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, respondents.

PARDO, J.:

The basic issue submitted for consideration of the Court is whether or not petitioner is entitled to recover
attorney's fees amounting to Twenty Six Million Three Hundred Fifty Thousand Seven Hundred Seventy
Nine Pesos and Ninety One Centavos (P26,350,779.91) for handling the case for its client Eastern
Telecommunications Philippines, Inc. filed with the Regional Trial Court, Makati, though its services were
terminated in midstream and the client directly compromised the case with the adverse party.
The Facts

In giving due course to the petition, we carefully considered the facts attendant to the case. On August
28, 1987, Eastern Telecommunications Philippines, Inc. (ETPI) represented by the law firm San Juan,
Africa, Gonzales and San Agustin (SAGA), filed with the Regional Trial Court, Makati, a complaint for
recovery of revenue shares against Philippine Long Distance Telephone Company (PLDT). Atty.
Francisco D. Rilloraza, a partner of the firm appeared for ETPI.

After ETPI rested its case, it paid SAGA the billed amount of One Hundred Thousand Pesos
(P100,000.00). On September 18, 1987, the trial court issued a resolution granting ETPI's application for
preliminary restrictive and mandatory injunctions. During this period, SAGA was dissolved and four of the
junior partners formed the law firm Rilloraza, Africa, De Ocampo & Africa (RADA), which took over as
counsel in the case for ETPI. The latter signed a retainer agreement with counsel dated October 1, 1987.
1

Petitioners presented the three aspects of the main case in the trial court. First, the traffic revenue shares
which ETPI sought to recover from PLDT in accordance with the contract between them. Second, ETPI
sought preventive injunctive relief against the PLDT's threats to deny ETPI access to the Philippines
international gateway switch. Third, ETPI called this the "foreign correspondentships aspect" where ETPI
sought preventive injunctive relief against PLDT's incursions and inducements directed at ETPI's foreign
correspondents in Hongkong, Taiwan and Singapore, to break their correspondentship contracts with
PLDT, using the threat of denying them access to the international gateway as leverage.

In this connection, ETPI filed with the trial court two urgent motions for restraining order, one on October
30, 1987 and another on November 4, 1987. As the applications were not acted upon, ETPI brought the
case up to the Court of Appeals by petition for certiorari.

On June 28, 1988, petitioner received a letter from ETPI signed by E. M. Villanueva, President and Chief
Executive Officer. In substance, the letter stated that ETPI was terminating the retainer contract dated
October 1, 1987, effective June 30, 1988.

On June 29, 1988, petitioner filed with the Regional Trial Court a notice of attorney's lien, furnishing
copies to the plaintiff ETPI, to the signatory of the termination letter and PLDT. On the same date,
petitioner additionally sent a letter to ETPI attaching its partial billing statement. In its notice, RADA
informed the court that there were negotiations towards a compromise between ETPI and PLDT.

In April 1990, petitioner confirmed that indeed the parties arrived at an amicable settlement and that the
same was entered as a judgment. On April 26, 1990, petitioner filed a motion for the enforcement of
attorney's lien with the Regional Trial Court of Makati and then appraised the Supreme Court thereof by
manifestation. 2 We noted the manifestation in a resolution dated July 23, 1990.

On May 24, 1990, PLDT filed with the trial court a manifestation that it is not a party to nor in any manner
involved in the attorney's lien being asserted by Atty. Rilloraza for and in behalf of the law firm, 3 while
ETPI filed its opposition thereto on June 11, 1990.

The Lower Court's Ruling

The trial court in its resolution dated September 14, 1990 denied the motion for enforcement of attorney's
lien. Thus:

WHEREFORE, premises considered, the court finds that the Notice of Attorney's Lien filed by the law firm
of Rilloraza, Africa, De Ocampo and Africa has no basis in fact and in law, and therefore denies the
Motion for Enforcement of Attorney's Lien.

SO ORDERED.
Makati, Metro Manila, September 4, 1990.

(s/t) ZEUS C, ABROGAR

Judge 4

On October 10, 1990, petitioner filed with the trial court a notice of appeal from the above-mentioned
order to the Supreme Court. On November 6, 1990, ETPI filed a Motion to Dismiss Appeal contending
that the case could be brought to the Supreme Court only via a petition for review on certiorari, not by a
mere notice of appeal. In an order dated January 16, 1991, the trial court dismissed RADA's appeal.

The trial court said:

There is no more regular appeal from the Regional Trial Court to the Supreme Court. Under the
amendment of Section 17 of the Judiciary Act by R.A. 5440, orders and judgments of the Regional Trial
Court may be elevated to the Supreme Court only by petition for review on certiorari.

xxx xxx xxx

Wherefore, premises considered, the order dated September 14, 1990 is hereby reconsidered and set
aside. The Notice of Appeal filed by movant RADA is dismissed.

SO ORDERED.

Given this 16th day of January, 1991, at Makati, Metro Manila.

(s/t) ZEUS C, ABROGAR

Judge 5

Hence, on February 9, 1991, petitioner filed a petition for certiorari with the Supreme Court, which we
remanded to the Court of Appeals. The latter dismissed the petition in a decision promulgated on
November 14, 1991, 6 ruling that the judge committed no abuse of discretion in denying petitioner's
motion for enforcement of attorney's lien. Thus:

We therefore rule that respondent judge committed no abuse of discretion, much less a grave one, in
denying petitioner's motion for enforcement of attorney's lien.

Assuming that respondent judge committed an error in denying petitioner's motion for enforcement of
attorney's lien, it cannot be corrected by certiorari.

WHEREFORE, the writs prayed for are DENIED, and the petition is hereby DISMISSED, with cost against
petitioner.

SO ORDERED.

(s/t) REGINA G. ORDOÑEZ-BENITEZ

Associate Justice

WE CONCUR:

(s/t) JOSE A. R. MELO (s/t) EMETERIO C, CUI

Associate Justice Associate Justice 7

DISCUSSION

A. The Procedural Aspect

There is nothing sacrosanct about procedural rules, which are liberally construed in order to promote their
objectives and assist the parties in obtaining just, speedy and inexpensive determination of every action
or proceeding. 8 In analogous case, 9 we ruled that where the rigid application of the rules would frustrate
substantial justice 10, or bar the vindication of a legitimate grievance, the courts are justified in exempting
a particular case from the operation of the rules.

In A-One Feeds, Inc. vs. Court of Appeals, we said —

Litigations should, as much as possible, be decided on the merits and not on technicality. Dismissal of
appeals purely on technical grounds is frowned upon, and the rules of procedure ought not to be applied
in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice and
thereby defeat their very claims. As has been the constant ruling of this Court, every party litigant should
be afforded the amplest opportunity for the proper and just determination of his cause, free from the
constraints of technicalities. 11

A basic legal principle is that no one shall be unjustly enriched at the expense of another. 12 This
principle is one of the mainstays of every legal system for centuries and which the Civil Code echoes:

Art. 22. Every person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground, shall return
the same to him. 13

The Code Commission, its report, emphasized that:

It is most needful that this ancient principle be clearly and specifically consecrated in the proposed Civil
Code to the end that in cases not foreseen by the lawmaker, no one may unjustly benefit himself to the
prejudice of another. The German Civil Code has a similar provision (Art. 812). 14

With this in mind, one could easily understand why, despite technical deficiencies, we resolved to give
due course to this petition. More importantly, the case on its face appears to be impressed with merit.

B. The Attorney's Fees

We understand that Atty. Francisco Rilloraza handled the case from its inception until ETPI terminated
the law firm's services in 1988. Petitioner's claim for attorney's fees hinges on two grounds: first, the fact
that Atty. Rilloraza personally handled the case when he was working for SAGA; and second, the retainer
agreement dated October 1, 1987.

We agree that petitioners are entitled to attorneys' fees. We, however, are not convinced with the
petitioner's arguments that the services RADA rendered merit the amount they are claiming.

First, petitioner contends that Atty. Rilloraza initiated the filing of the complaint. When a client employs the
services of a law firm, he does not employ the services of the lawyer who is assigned to personally
handle the case. Rather, he employs the entire law firm. In the event that the counsel appearing for the
client resigns, the firm is bound to provide a replacement. Thus, RADA could not claim to have initiated
the filing of the complaint considering that ETPI hired SAGA. What is more, on September 17, 1987, ETPI
paid SAGA the amount of One Hundred Thousand Pesos (P100,00.00) 15 representing services
performed prior to September 17, 1987. SAGA assigned one of its associates, Atty. Francisco Rilloraza,
to handle the case for the firm. Although Atty. Rilloraza handled the case personally, he did so for and in
behalf of SAGA.
Second, petitioner claims that under the retainer agreement, which provides:

6.2 B.Court Cases:

Should recourse to judicial action be necessary to effect collection or judicial action be taken by adverse
party, our attorney's fees shall be fifteen percent (15%) of the amounts collected or the value of the
property acquired or liability saved. 16

the firm is entitled to the fees agreed upon.

However, the retainer agreement has been terminated. True, Attorney Rilloraza played a vital role during
the inception of the case and in the course of the trial. We cannot also ignore the fact that an attorney-
client relationship between petitioner and respondent no longer existed during its culmination by amicable
agreement. To award the attorneys' fees amounting to 15% of the sum of One Hundred Twenty Five
Million Six Hundred Seventy One Thousand Eight Hundred Eighty Six Pesos and Four Centavos
(P125,671,886.04) plus Fifty Million Pesos (P50,000,000.00) paid by PLDT to ETPI would be too
unconscionable.1âwphi1.nêt

"In any case, whether there is an agreement or not, the courts shall fix a reasonable compensation which
lawyers may receive for their professional services. "17 "A lawyer has the right to be paid for the legal
services he has extended to his client, which compensation must be reasonable." 18 A lawyer would be
entitled to receive what he merits for his services. Otherwise stated, the amount must be determined on a
quantum meruit basis.

"Quantum meruit, meaning 'as much as he deserved' is used as a basis for determining the lawyer's
professional fees in the absence of a contract but recoverable by him from his client. 19 Recovery of
attorney's fees on the basis of quantum meruit is authorized when (1) there is no express contract for
payment of attorney's fees agreed upon between the lawyer and the client; (2) when although there is a
formal contract for attorney's fees, the fees stipulated are found unconscionable or unreasonable by the
court; and (3) when the contract for attorney's fee's is void due to purely formal defects of execution; (4)
when the counsel, for justifiable cause, was not able to finish the case to its conclusion; (5) when lawyer
and client disregard the contract for attorney's
fees, 20

In fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum
meruit, the elements to be considered are generally (1) the importance of the subject matter in
controversy, (2) the extent of services rendered, and (3) the professional standing of the lawyer. A
determination of these factors would indispensably require nothing less than a full-blown trial where
private respondents can adduce evidence to establish the right to lawful attorney's fees and for petitioner
to oppose or refute the same. 21 The trial court has the principal task of fixing the amount of attorney's
fees. 22 Hence, the necessity of a hearing is beyond cavil.

C. Charging Lien

Petitioner contends that pursuant to Rule 138 of the Revised Rules of Court, it is entitled to a charging
lien. The rule provides:

Sec. 37. Attorney's liens. — An attorney shall have a lien upon the funds, documents and papers
of his client, which have lawfully come into his possession and may retain the same until his lawful fees
and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also
have a lien to the same extent upon all judgments for the payment of money, and executions issued in
pursuance of such judgments, which he has secured in a litigation of his client, from and after the time
when he shall have caused a statement of his claim of such lien to be entered upon the records of the
court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to
be delivered to his client and to the adverse party; and he shall have the same right and power over such
judgments and executions as his client would have to enforce his lien and secure the payment of his just
fees and disbursements." (Emphasis supplied).

We do not agree. A charging lien to be enforceable as security for the payment of attorney's fees requires
as a condition sine qua non a judgment for money and execution in pursuance of such judgment secured
in the main action by the attorney in favor of his client 23. A charging lien presupposes that the attorney
has secured a favorable money judgment for his client. 24 From the facts of the case it would seem that
petitioner had no hand in the settlement that occurred, nor did it ever obtain a favorable judgment for
ETPI.

ETPI entered into a compromise agreement when it ended the services of petitioner and through the
effort of ETPI's new lawyers, the law firm Romulo, Mabanta, Buenaventura, Sayoc and De los Angeles.
Whether there was bad faith in the substitution of the lawyers to avoid compliance with the retainer
agreement could only be determined after a trial of the case on the merits.

This decision, however, should not be interpreted as to impose upon petitioner any additional burden in
collecting its attorney's fees. The petitioner must avail itself of the proper remedy in order to forestall the
possibility of any injustice on or unjust enrichment of any of the parties.

The Judgment (Fallo)

ACCORDINGLY, the Court GRANTS the petition, REVERSES the decision of the Court of Appeals in CA-
G. R. SP No. 24463 and REMANDS the case to the court of origin for the determination of the amount of
attorney's fees to which petitioner is entitled.

No costs.

SO ORDERED

Davide, Jr., C.J. Kapunan and Ynares-Santiago, JJ., concur.

Melo, J., took no part.

_______________

SECOND DIVISION

[A.C. No. 1261. December 29, 1983.]

TAN TEK BENG, Complainant, v. TIMOTEO A. DAVID, Respondent.

Basilio Lanoria for complainant.

Timoteo A. David for and in his own behalf.

SYLLABUS

1. LEGAL ETHICS; MEMBER OF THE BAR; SOLICITING CASES AT LAW FOR THE PURPOSE
OF GAIN; CONSTITUTES MALPRACTICE. — Where in the agreement lawyer David not only agreed to
give one-half of his professional fees to an intermediary or commission agent but he also bound himself
not to deal directly with the clients, the Court held that the said agreement is void because it was
tantamount to malpractice which is "the practice of soliciting cases at law for the purpose of gain, either
personally or through paid agents or brokers" (Sec. 27, Rule 138, Rules of Court). Malpractice ordinarily
refers to any malfeasance or dereliction of duty committed by a lawyer. Section 27 gives a special and
technical meaning to the term "malpractice" (Act No. 2828, amending Sec. 21 of Act No. 190). That
meaning is in consonance with the elementary notion that the practice of law is a profession, not a
business. "The lawyer may not seek or obtain employment by himself or through others for to do so would
be unprofessional" (2 R.C.L. 1097 cited in In re Tagorda, 33 Phil. 37, 42).

2. ID.; ID.; ID.; UNPROFESSIONAL CONDUCT; CAUSE FOR CENSURE. — The

commercialization of law practice is condemned in certain canons of professional ethics adopted by the
American Bar Association. "Unprofessional conduct in an attorney is that which violates the rules or
ethical code of his profession or which is unbecoming a member of that profession" (Note 14, 7 C.J.S.
743). We censure lawyer David for having entered and acted upon such void and unethical agreement.
We discountenance his conduct, not because of the complaint of Tan Tek Beng (who did not know legal
ethics) but because David should have known better.

DECISION

AQUINO, J.:

The issue in this case is whether disciplinary action should be taken against lawyer Timoteo A. David
(admitted to the bar in 1945) for not giving Tan Tek Beng, a nonlawyer (alleged missionary of the Seventh
Day Adventists), one-half of the attorney’s fees received by David from the clients supplied by Tan Tek
Beng. Their agreement reads:jgc:chanrobles.com.ph

"December 3, 1970

"Mr. Tan Tek Beng

"Manila

"Dear Mr. Tan:chanrob1es virtual 1aw library

In compliance with your request, I am now putting into writing our agreement which must be followed in
connection with the accounts that you will entrust to me for collection. Our terms and conditions shall be
as follows:jgc:chanrobles.com.ph

"1. On all commission or attorney’s fees that we shall receive from our clients by virtue of the
collection that we shall be able to effect on their accounts, we shall divide fifty-fifty. Likewise you are
entitled to commission, 50/50 from domestic, inheritance and commercial from our said clients or in any
criminal cases where they are involved.

"2. I shall not deal directly with our clients without your consent.

"3. You shall take care of collecting our fees as well as advances for expenses for the cases referred
to us by our clients and careful in safeguarding our interest.

"4. It is understood that legal expenses that we shall recover from the debtors shall be turned over to
our clients. Other clients who directly or indirectly have been approached or related (sic) to you as a result
of your labor are your clients.

"I hereby pledge in the name of God, our Heavenly Father, that I will be sincere, honest and fair with you
in connection with our transactions with our clients. Likewise you must be sincere, honest and fair with
me.

Very truly yours,

(Sgd.) Illegible

TIMOTEO A. DAVID

"P.S.

I will be responsible for all documents entrusted me by our clients.

(Sgd.) Initial

"CONFORME to the above and likewise will reciprocate my sincerity to Atty. David as stated in the last
paragraph of this letter.

(Sgd.) Tan Tek Beng

MR. TAN TEK BENG"

The foregoing was a reiteration of an agreement dated August 5, 1969. Note that in said agreement
lawyer David not only agreed to give one-half of his professional fees to an intermediary or commission
agent but he also bound himself not to deal directly with the clients.

The business relationship between David and Tan Tek Beng did not last. There were mutual accusations
of doublecross. For allegedly not living up to the agreement, Tan Tek Beng in 1973 denounced David to
Presidential Assistant Ronaldo B. Zamora, to the Office of Civil Relations at Camp Crame and to this
Court. He did not file any civil action to enforce the agreement.

In his 1974 comment, David clarified that the partnership was composed of himself as manager, Tan Tek
Beng as assistant manager and lawyer Pedro Jacinto as president and financier. When Jacinto became ill
and the costs of office maintenance mounted, David suggested that Tan Tek Beng should also invest
some money or shoulder a part of the business expenses but Tan Tek Beng refused.chanrobles.com :
virtual law library

This case was referred to the Solicitor General for investigation, report and recommendation. Hearings
were scheduled from 1974 to 1981. It was proposed that respondent should submit a stipulation of facts
but that did not materialize because the scheduled hearings were not held due to the nonavailability of
Tan Tek Beng and his counsel.

On September 16, 1977 Tan Tek Beng died at the Philippine Union Colleges Compound, Baesa,
Caloocan City but it was only in the manifestation of his counsel dated August 10, 1981 that the Solicitor
General’s Office was informed of that fact. A report on this case dated March 21, 1983 was submitted by
the Solicitor General to this Court.

We hold that the said agreement is void because it was tantamount to malpractice which is "the practice
of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers" Sec.
27, Rule 138, Rules of Court). Malpractice ordinarily refers to any malfeasance or dereliction of duty
committed by a lawyer. Section 27 gives a special and technical meaning to the term "malpractice" (Act
No. 2828, amending sec. 21 of Act No. 190).

That meaning is in consonance with the elementary notion that the practice of law is a profession, not a
business. "The lawyer may not seek or obtain employment by himself or through others for to do so would
be unprofessional" (2 R.C.L. 1097 cited in In re Tagorda, 53 Phil. 37, 42; Malcolm, J., Jayme v. Bualan,
58 Phil. 422; Arce v. Philippine National Bank, 62 Phil. 569). The commercialization of law practice is
condemned in certain canons of professional ethics adopted by the American Bar
Association:jgc:chanrobles.com.ph
"34. Division of Fees. — No division of fees for legal services is proper, except with another lawyer,
based upon a division of service or responsibility."cralaw virtua1aw library

"35. Intermediaries. — The professional services of a lawyer should not be controlled or exploited by
any law agency, personal or corporate, which intervenes between client and lawyer. A lawyer’s
responsibilities and qualifications are individual. He should avoid all relations which direct the
performance of his duties by or in the interest of such intermediary. A lawyer’s relation to his client should
be personal, and the responsibility should be direct to the client. . . ."cralaw virtua1aw library

"38. Compensation, Commissions and Rebates. — A lawyer should accept no compensation,

commissions, rebates or other advantages from others without the knowledge and consent of his client
after full disclosure." (Appendix, Malcolm, Legal Ethics).

We censure lawyer David for having entered and acted upon such void and unethical agreement. We
discountenance his conduct, not because of the complaint of Tan Tek Beng (who did not know legal
ethics) but because David should have known better.chanrobles law library

"Unprofessional conduct in an attorney is that which violates the rules or ethical code of his profession or
which is unbecoming a member of that profession" (Note 14, 7 C.J.S. 743).

WHEREFORE, respondent is reprimanded for being guilty of malpractice. A copy of this decision should
be attached to his record in the Bar Confidant’s office.

SO ORDERED.

Concepcion, Jr., Guerrero, Abad Santos, De Castro and Escolin, JJ., concur.

Makasiar (Chairman), J., took no part.

________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 46396 September 30, 1939

ALEJANDRO DE GUZMAN, petitioner,

vs.
VISAYAN RAPID TRANSIT CO., INC., NEGROS TRANSPORTATION CO., INC., and NICOLAS
CONCEPCION, respondents.

Licerio Floirendo and Eulogio de Guzman for petitioner.

E.P. Virata for respondents.

LAUREL, J.:

This is a petition for certiorari to review the decision of the Court of Appeals of September 20, 1938, in the
above-entitled case on various alleged errors of law.

The Visayan Rapid Transit Co. and the Negros Transportation Co., Inc., during the time the legal services
are claimed to have been rendered by the petitioner, were operating automobile lines in the Province of
Occidental Negros. The respondent, Nicolas Concepcion, was at the time the president, general
manager, and controlling stockholder of these two transportation companies. In January, 1933,
Concepcion engaged the professional services of the petitioner, who was then a law practitioner in the
City of Manila. The employment was for the purpose of obtaining the suppression, reduction and refund of
certain toll rates on various bridges along the line operated by the respondent transportation companies.
According to the petitioner, these toll bridges are in places known as Bago, Calatrava, Danao, Hinigiran,
Malogo, Talavan-Dacu, Talabangay, Bagacay, Binmalayan and Sicaba. At the time of the employment of
the petitioner, it appears that the respondent transportation companies had paid the sum of P89,816.70
as toll charges up to December 31, 1932, an amount said to represent one-seventh of their gross income
up to that date, and in view of their high rates, the payment of the toll charges were detrimental to the
transportation business of the respondent if not remedied in time. The herein petitioner accordingly took
steps to obtain first the suppression, and later the reduction of toll rates on said bridges and also the
refund of P50,000 of toll charges already collected by the Province of Occidental Negros. For this
purpose, he appears to have signed Exhibit A which Concepcion brought to Manila, asking that the Bago
and Malogo bridges be declared free, and said petition was filed with the Secretary of Public Works and
Communications in January, 1933.

Believing that the suppression of tolls on the Bago and Malogo bridges could not be effected, the
petitioner filed with the said Secretary of Public Works and Communication, petition Exhibit B asking for
the reduction of toll charges over the eleven (11) bridges in Occidental Negros. This fact was brought to
the knowledge of Nicolas Concepcion who in turn wrote to the petitioner, Exhibit K-1, the pertinent part of
which reads thus:

Now compadre if this toll business will not all be effected I would like to request you therefore to work for
at least 50 per cent reduction on all toll bridges, so that our little business will prosper a bit. We will
always hope of course for the best to come. (In English.)

The Insular authorities readily saw the justice of the transportation companies' petition and urged the
provincial board of Occidental Negros to act favorably. The provincial board, however, declined to follow
the suggestion. The Secretary of Commerce and Public Works warned the provincial officials by sending
them the communication, dated April 23, 1934, with the admonition that "if the toll rates have not been
revised by . . . June 15, 1934, this office, much to its regrets, will be forced to withdraw its approval of the
existing toll rates." By reason of this communication, the provincial board, on March 7, 1934, with the
conformity of Nicolas Concepcion, adopted a resolution reducing the tolls for 2-ton trucks or more, the
only kind of motor vehicles operated by the respondents, from P1.20 to P0.50 on one bridge, and from
P1.20 to 0.40 on the other. And on April 10, 1935 "upon authority of the Insular Auditor, concurred in by
the Department of the Interior" the provincial board refunded P50,000 as bridge tolls illegally collected
from the Visayan Rapid Transit Company, Inc., and the Negros Transportation Company, Inc., said
amount to be applied to future payments for tolls by said companies. As a result of this reduction of tolls,
the respondents have been benefited with an economy of P78,448 for every eighteen months. (Exhibit V.)

The various incidental questions raised by the petitioner revolves around the reasonable compensation to
which he is entitled, and we pass on to the consideration of this point.

Although the professional services rendered by the petitioner are purely administrative and did not require
a high degree of professional skill and experience, the fact remains that these services were rendered
and were productive of substantial beneficial results to his clients. It is clear that for these services the
petitioner is entitled to compensation, and the only question is the reasonable amount to which he is
entitled. He claimed in the lower court the sum of P20,000. The trial court awarded him P10,000. On
appeal, the Court of Appeals reduced this amount to P3,500.

Section 29 of the Code of Civil Procedure provides that "a lawyer shall be entitled to have and recover
from his client no more than a reasonable compensation for the services rendered, with a view to the
importance of the subject matter of the controversy, to the extent of the services rendered, and the
professional standing of the lawyer . . .." The following are the circumstances to be considered in
determining the compensation of an attorney: the amount and character of the services rendered; the
labor, time, and trouble involved; the nature and importance of the litigation or business in which the
services were 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 services; the professional character and social standing of the attorney; the results
secured; and whether or not the fee is absolute or contingent, it being a recognized rule that an attorney
may properly charge a much a larger fee when it is to be contingent that when it is not. The financial
ability of the defendant may also be considered not to enhance the amount above a reasonable
compensation, but to determine whether or not he is able to pay a fair and just compensation for the
services rendered, or as as incident in ascertaining the importance and gravity of the interests involved in
the litigation. (Delgado vs. De la Rama, 43 Phil., 419; Panis vs. Yangco, 52 Phil., 499.)

The services of the petitioner in this case were not limited to the preparation and filing with the authorities
concerned of the petitions Exhibits A and B and other papers submitted in evidence, for he appears to
have had various conferences with the Secretary of Public Works and Communications, the Secretary of
the Interior, the Secretary of Labor and the Insular Auditor, and had otherwise taken steps to secure the
objectives of his clients. The importance, merits and value of professional services of a lawyer are
measured not alone by his work taken separately, but by his work taken as a whole. There are services
which, when taken separately, may not in themselves have any noticeable special merit, but when
considered in connection with the other works and services of the lawyer to which they are related,
acquire an unquestionable value. That is why even the time employed is not itself an appropriate basis for
fixing the compensation. (Haussermann vs. Rahmeyer, 12 Phil., 350; Bachrach vs. Teal and Teal Motor
Co., 53 Phil., 631, 634.)

The respondents in their brief insinuate that the services of the petitioner were unsolicited and
unauthorized. The trial court as well as the Court of Appeals, upon the proof submitted, concluded that
the employment of the petitioner was duly made and solicited by the president and manager of the
respondent corporations, and such finding cannot be disturbed. "It is elementary that an attorney is
entitled to have and receive the just and reasonable compensation for services performed at the special
instance and request of his client . . . That is to say, as long as the plaintiff was honestly and in good faith
trying to serve and represent the interest of the client, he should have a reasonable compensation for his
services. . . ." (Wolfson vs. Anderson, 48 Phil., 672, 675.)

The amount of the professional fees to be paid to the petitioner had not been fixed, but the intention and
promise to pay him is evidently shown by the records in this case. And in any case, whether there is an
agreement or not, the courts can fix a reasonable compensation which lawyers should receive for their
professional services. (Panis vs. Yangco, 52 Phil., 499, 502.)

No hard and fast rule can be stated which will serve even as a guide in determining what is or what is not
a reasonable fee. That must be determined from the facts in each case. (2 Thornton on Attorney at Law,
p. 783.)

We have noted in the beginning that the services here were rendered in a case of an administrative
nature. But that does not alter the application of the proper rule:

Professional services, to prepare and advocate just claims for compensation, are as legitimate as
services rendered in court in arguing a cause to convince a court or jury that the claim presented or the
defense set up against a claim presented by the other party ought to be allowed or rejected. Parties in
such cases require advocates; and the legal profession must have a right to accept such employment and
to receive compensation for their services; nor can courts of justice adjudge such contracts illegal, if they
are free from any taint of fraud, misrepresentation, or unfairness. (Stanton vs. Embry, 23 Law. ed [U.S.],
983, 985.)

As warranted by the records, it is obvious that as a result of the reduction of the rates of the toll of the
bridges in the said province, the respondents were benefited with an economy of P78,448. The refund to
the said corporations of the amount of P50,000 is a great relief and enhancement of their business. Facts
and circumstances considered, we are of the opinion that the reasonable compensation of the petitioner
is P7,000, deducting therefrom, however, the sum of P1,280 which the petitioner had already received.
The judgment of the Court of Appeals is accordingly modified, without pronouncement regarding costs.
So ordered.

Avanceña, C.J., Villa-Real, Imperial, Diaz, and Concepcion, JJ., concur.

_____________

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 77439 August 24, 1989

DONALD DEE petitioner,

vs.
COURT OF APPEALS and AMELITO MUTUC, respondents.

Tanjuatco, Oreta & Tanjuatco for petitioner.

Amelito R. Mutuc for and in his own behalf

REGALADO, J.:

Petitioner assails the resolution of respondent court, dated February 12,1987, reinstating its decision
promulgated on May 9, 1986 in AC-G.R. CV No. 04242 wherein it affirmed the decision of the that court
holding that the services rendered by private respondent was on a professional, and not on a gratis et
amore basis and ordering petitioner to pay private respondent the sum of P50,000.00 as the balance of
the latter's legal fee therefor.

The records show that sometime in January, 1981, petitioner and his father went to the residence of
private respondent, accompanied by the latter's cousin, to seek his advice regarding the problem of the
alleged indebtedness of petitioner's brother, Dewey Dee, to Caesar's Palace, a well-known gambling
casino at Las Vegas, Nevada, U.S.A. Petitioner's father was apprehensive over the safety of his son,
Dewey, having heard of a link between the mafia and Caesar's Palace and the possibility that his son
may be harmed at the instance of the latter. 1

Private respondent assured petitioner and his father that he would inquire into the matter, after which his
services were reportedly contracted for P100,000. 00. From his residence, private respondent called up
Caesar's Palace and, thereafter, several long distance telephone calls and two trips to Las Vegas by him
elicited the information that Dewey Dee's outstanding account was around $1,000,000.00. Further
investigations, however, revealed that said account had actually been incurred by Ramon Sy, with Dewey
Dee merely signing for the chits. Private respondent communicated said information to petitioner's a
father and also assured him that Caesar's Palace was not in any way linked to the mafia.2

In June, 1981, private respondent personally talked with the president of Caesar's Palace at Las Vegas,
Nevada. He advised the president that for the sake and in the interest of the casino it would be better to
make Ramon Sy answer for the indebtedness. The president told him that if he could convince Ramon Sy
to acknowledge the obligation, Dewey Dee would be exculpated from liability for the account. Upon
private respondent's return to Manila, he conferred with Ramon Sy and the latter was convinced to
acknowledge the indebtedness. In August, 1981, private respondent brought to Caesar's Palace the letter
of Ramon Sy owning the debt and asking for a discount. Thereafter, the account of Dewey Dee was
cleared and the casino never bothered him. 3
Having thus settled the account of petitioner's brother, private respondent sent several demand letters to
petitioner demanding the balance of P50,000.00 as attorney's fees. Petitioner, however, ignored said
letters. On October 4, 1982, private respondent filed a complaint against petitioner in the Regional Trial
Court of Makati, Branch CXXXVI, for the collection of attorney's fees and refund of transport fare and
other expenses.4

Private respondent claimed that petitioner formally engaged his services for a fee of P100,000.00 and
that the services he rendered were professional services which a lawyer renders to a client. Petitioner,
however, denied the existence of any professional relationship of attorney and client between him and
private respondent. He admits that he and his father visited private respondent for advice on the matter of
Dewey Dee's gambling account. However, he insists that such visit was merely an informal one and that
private respondent had not been specifically contracted to handle the problem. On the contrary,
respondent Mutuc had allegedly volunteered his services "as a friend of defendant's family" to see what
he could do about the situation. As for the P50,000.00 inceptively given to private respondent, petitioner
claims that it was not in the nature of attomey's fees but merely "pocket money" solicited by the former for
his trips to Las Vegas and the said amount of P50,000.00 was already sufficient remuneration for his
strictly voluntary services.

After trial, the court a quo rendered judgment ordering herein petitioner to pay private respondent the sum
of P50,000.00 with interest thereon at the legal rate from the filing of the complaint on October 4, 1982
and to pay the costs. All other claims therein of private respondent and the counterclaim of petitioner
were dismissed. 5 On appeal, said judgment was affirmed by the then Intermediate Appellate Court on
May 9, 1986. 6

Petitioner, in due time, filed a motion for reconsideration contending that the Appellate Court overlooked
two important and decisive factors, to wit: (1) At the time private respondent was ostensibly rendering
services to petitioner and his father, he was actually working "in the interest" and "to the advantage" of
Caesar's Palace of which he was an agent and a consultant, hence the interests of the casino and private
respondent were united in their objective to collect from the debtor; and (2) Private respondent is not
justified in claiming that he rendered legal services to petitioner and his father in view of the conflicting
interests involved.

In its resolution of July 31, 1986, respondent court reconsidered its decision and held that the sum of
P50,000.00 already paid by petitioner to private respondent was commensurate to the services he
rendered, considering that at the time he was acting as counsel for petitioner he was also acting as the
collecting agent and consultant of, and receiving compensation from, Caesar's Palace.7 However, upon a
motion for reconsideration thereafter filed by private respondent, the present respondent Court of Appeals
issued another resolution, dated February 12, 1987, reinstating the aforesaid decision of May 9, 1986.8

Petitioner is now before us seeking a writ of certiorari to overturn the latter resolution.

It is necessary, however, to first clear the air of the questions arising from the change of stand of the First
Civil Cases Division of the former Intermediate Appellate Court when, acting on the representations in
petitioner's undated motion for reconsideration supposedly filed on May 28,1986, it promulgated its July
31, 1986 resolution reconsidering the decision it had rendered in AC-G.R. CV No. 04242. Said resolution
was, as earlier noted, set aside by the Twelfth Division of the reorganized Court of Appeals which, at the
same time, reinstated the aforesaid decision.

Because of its clarificatory relevance to some issues belatedly raised by petitioner, which issues should
have been disregarded 9 but were nevertheless auspiciously discussed therein, at the risk of seeming
prolixity we quote hereunder the salient portions of the assailed resolution which demonstrate that it was
not conceived in error.

The reason for then IAC's action is that it deemed the P50,000.00 plaintiff-appellee had previously
received from defendant-appellant as adequate compensation for the services rendered by am for
defendant-appellant, considering that at the time plaintiff-appellee was acting as counsel for defendant-
appellant, he was also acting as the collecting agent and consultant of, and receiving compensation from
Caesar's Palace in Las Vegas, Nevada, the entity with whom defendant-appellant was having a problem
and for which he had engaged the services of plaintiff-appellee. The crux of the matter, therefore, is
whether or not the evidence on record justifies this finding of the IAC.

Plaintiff-appellee maintains that his professional services to defendant-appellant were rendered between
the months of July and September of 1981, while his employment as collection agent and consultant of
Caesar's Palace covered the period from December 1981 to October 1982. This positive testimony of
plaintiff-appellee, however, was disregarded by the IAC for the following reasons:

1. In August l983, plaintiff-appellee testified that he was a representative of Caesar's Palace in the
Philippines 'about two or three years ago.' From this the IAC concluded that the period covers the time
plaintiff-appellee rendered professional services to defendant-appellant.

We do not think that IAC's conclusion is necessarily correct. When plaintiff-appellee gave the period
'about two or three years ago,' he was merely stating an approximation. Considering that plaintiff-appellee
was testifying in August 1983, and his employment with Caesar's Palace began in December 1981, the
stated difference of two years is relatively correct. . . .

2. The plaintiff appellee had testified that he was working for the sake,' 'in the interest,' and 'to the
advantage' of Caesar's Palace. x x x "We detect nothing from the above which would support IAC's
conclusion that plaintiff-appellee was then in the employ of Caesar's Palace. What is gathered is that
plaintiff-appellee was simply fulfilling a condition which plaintiff-appellee had proposed to, and was
accepted by, Caesar's Palace, for the release of Dewey Dee from his obligation to Caesar's Palace.

3. Caesar's Palace would not have listened to, and acted upon, the advice of plaintiff-appellee if he
were no longer its consultant and alter ego.

Why not? We are witnesses to many successful negotiations between contending parties whose
representing lawyers were not and were never in the employ of the opposite party. The art of negotiation
is precisely one of the essential tools of a good practitioner, and mastery of the art takes into account the
circumstance that one may be negotiating, among others, with a person who may not only be a complete
stranger but antagonistic as well. The fact that plaintiff-appellee was able to secure a favorable
concession from Caesar's Palace for defendant-appellant does not justify the conclusion that it could
have been secured only because of plaintiff-appellee's professional relationship with Caesar's Palace. It
could have been attributable more to plaintiff-appellee's stature as a former ambassador of the
Philippines to the United States, his personality, and his negotiating technique.

Assuming, however, that plaintiff-appellee was employed by Caesar's Palace during the time that he was
rendering professional services for defendant-appellant, this would not automatically mean the denial of
additional attorney's fees to plaintiff appellee. The main reason why the IAC denied plaintiff-appellee
additional compensation was because the latter was allegedly receiving compensation from Caesar's
Palace, and, therefore, the amount of P50,000.00 plaintiff-appellee had previously received from
defendant-appellant is 'reasonable and commensurate. This conclusion, however, can only be justified if
the fact and amount of remuneration had been established. These were not proven at all. No proof was
presented as to the nature of plaintiff-appellee's remuneration, and the mode or manner in which it was
paid.. . .10

Both the lower court and the appellate court concur in their findings that there was a lawyer-client
relationship between petitioner and private respondent Mutuc. We find no reason to interfere with this
factual finding. There may be instances when there is doubt as to whether an attorney-client relationship
has been created. The issue may be raised in the trial court, but once the trial court and the Court of
Appeals have found that there was such a relationship the Supreme Court cannot disturb such finding of
fact, 11 absent cogent reasons therefor.
The puerile claim is advanced that there was no attorney-client relationship between petitioner and
private respondent for lack of a written contract to that effect. The absence of a written contract will not
preclude the finding that there was a professional relationship which merits attorney's fees for
professional services rendered. Documentary formalism is not an essential element in the employment of
an attorney; the contract may be express or implied. To establish the relation, it is sufficient that the
advice and assistance of an attorney is sought and received in any matter pertinent to his profession. An
acceptance of the relation is implied on the part of the attorney from his acting on behalf of his client in
pursuance of a request from the latter.12

There is no question that professional services were actually rendered by private respondent to petitioner
and his family. Through his efforts, the account of petitioner's brother, Dewey Dee, with Caesar's Palace
was assumed by Ramon Sy and petitioner and his family were further freed from the apprehension that
Dewey might be harmed or even killed by the so-called mafia. For such services, respondent Mutuc is
indubitably entitled to receive a reasonable compensation and this right cannot be concluded by
petitioner's pretension that at the time private respondent rendered such services to petitioner and his
family, the former was also the Philippine consultant of Caesar's Palace.

On the first aspect, the evidence of record shows that the services of respondent Mutuc were engaged by
the petitioner for the purposes hereinbefore discussed. The previous partial payments totalling
P50,000.00 made by petitioner to respondent Mutuc and the tenor of the demand letters sent by said
private respondent to petitioner, the receipt thereof being acknowledged by petitioner, ineluctably prove
three facts, viz: that petitioner hired the services of private respondent Mutuc; that there was a prior
agreement as to the amount of attorney's fees to be given to the latter; and there was still a balance due
and payable on said fees. The duplicate original copy of the initial receipt issued and signed in this
connection by private respondent reads:

RECEIVED from Mr. Donald Dee, for professional services rendered, the sum of THIRTY THOUSAND
PESOS (P30,000.00) as partial payment, leaving a balance of SEVENTY THOUSAND PESOS
(P70,000.00), payable on demand.

Makati, Metro Manila, July 25,1981.13

Thereafter, several demand letters for payment of his fees, dated August 6, 1981, December 2, 1981,
January 29, 1982, March 7, 1982, and September 7, 1982 were sent by private respondent to petitioner,
14 all to no avail.

On the second objection, aside from the facts stated in the aforequoted resolution of respondent Court of
Appeals, it is also not completely accurate to judge private respondent's position by petitioner's
assumption that the interests of Caesar's Palace were adverse to those of Dewey Dee. True, the casino
was a creditor but that fact was not contested or opposed by Dewey Dee, since the latter, as verifications
revealed, was not the debtor. Hence, private respondent's representations in behalf of petitioner were not
in resistance to the casino's claim but were actually geared toward proving that fact by establishing the
liability of the true debtor, Ramon Sy, from whom payment was ultimately and correctly exacted. 15

Even assuming that the imputed conflict of interests obtained, private respondent's role therein was not
ethically or legally indefensible. Generally, an attorney is prohibited from representing parties with
contending positions. However, at a certain stage of the controversy before it reaches the court, a lawyer
may represent conflicting interests with the consent of the parties.16 A common representation may work
to the advantage of said parties since a mutual lawyer, with honest motivations and impartially cognizant
of the parties' disparate positions, may well be better situated to work out an acceptable settlement of
their differences, being free of partisan inclinations and acting with the cooperation and confidence of said
parties.

Here, even indulging petitioner in his theory that private respondent was during the period in question an
agent of Caesar's Palace, petitioner was not unaware thereof, hence he actually consented to and cannot
now decry the dual representation that he postulates. This knowledge he admits, thus:
It is a fair question to ask why, of all the lawyers in the land, it was the private respondent who was
singled out by the petitioner's father for consultation in regard to an apparent problem, then pending in
Caesar's Palace. The testimony of Arthur Alejandrino, cousin to private respondent, and the admission of
the private respondent himself supply the answer. Alejandrino testified that private respondent was the
representative of Caesar's Palace in the Philippines (p. 23, t.s.n., Nov. 29, 1983).lâwphî1.ñèt Private
respondent testified that he was such representative tasked by the casino to collect the gambling losses
incurred by Filipinos in Las Vegas. (p. 5, t.s.n., Sept. 21, 1983). 17

A lawyer is entitled to have and receive the just and reasonable compensation for services rendered at
the special instance and request of his client and as long as he is honestly and in good faith trying to
serve and represent the interests of his client, the latter is bound to pay his just fees.18

WHEREFORE, the resolution of respondent Court of Appeals, dated February 12,1987, reinstating its
original decision of May 9, 1986 is hereby AFFIRMED, with costs against l petitioner.

SO ORDERED.

Melencio-Herrera, (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.

_________________

Ross v. Scannell
Annotate this Case
97 Wn.2d 598 (1982)

647 P.2d 1004

LAWRENCE M. ROSS, Appellant, v. WILLIAM G. SCANNELL, Respondent.

No. 47861-9.

The Supreme Court of Washington, En Banc.

July 8, 1982.

Kenneth S. Kessler, for appellant.

Weinrich, Gilmore & Adolph, P.S., A. Peter Parsons, and Scott L. Schmidtman, for respondent.

DIMMICK, J.

This case was certified here by the Court of Appeals, Division Three. The issues as certified are:

1. Does RCW 60.40.010 (Washington's attorney lien statute) allow an attorney to file a lien on the real
property of his client?

2. Can an attorney recover fees, based on a contingency fee agreement if, prior to full completion of the
contingency, the attorney ceases to render the required legal services for his client?

3. Can an attorney recover any fees if the attorney has acted unethically in the course of providing the
services for which the fees are claimed due?

*600 We answer the first two questions in the negative, and are unable, given the state of this record, to
answer the third.
Appellant Lawrence M. Ross is a lawyer practicing in Tacoma and respondent/cross appellant William G.
Scannell, a former business partner and client of Ross, is a real estate broker in Pierce County. The facts
are as follows:

In December 1976 Scannell entered into negotiations with Wayne B. Knight and others for the purchase
of 1,410 acres of land in Klickitat County and deposited $2,500 as earnest money. Scannell then
contacted Ross and inquired if he knew of any investors who might be interested in the property. Two of
Ross' clients, Mr. Topel and Mr. Campbell, his law partner, Mr. Griffies, a Mr. McKinney, and Ross
decided to become partners in the joint venture for the purchase of the land.

The land purchase was not completed due to the sellers' refusal and/or inability to clear title to all the
acreage and sell to the joint venture. Thus ended the proposed joint venture. Acting upon Ross' advice,
Scannell commenced an action against sellers entitled Scannell v. Knight, et al. (Klickitat County cause
12828) in which Scannell sought specific performance and damages. By agreement of counsel, the
venue of the action was changed to Pierce County where it was tried. Scannell and Ross orally agreed at
the outset of the action that Ross would receive a contingent fee.

After the action against sellers had commenced, one of the former joint venturers, McKinney, commenced
an action against Scannell for breach of fiduciary duty. Ross agreed to represent Scannell in this action
simultaneously with the Knight action.

On November 3, 1977, the oral fee agreement was reduced to writing in a letter from Ross and
acknowledged by Scannell. The letter stated in pertinent part:

I have agreed to represent you on such basis with the understanding that all actual costs incurred will be
paid by yourself, but that payment of attorney fees will be *601 based on the result of each action. It is my
understanding that any damages awarded in connection with either action over and above costs incurred
will be shared with you receiving two-thirds of such damages and I to receive one-third. It is understood,
however, that as the recovery may involve the granting of a specific performance for the purchase of a
certain portion of the property, that in that event we will share on the same proportionate basis any
commission, finder's fee or other similar fee which you receive in connection with the sale of that portion
of the property or its placement with the venture or partnership.
Early in the Knight litigation Ross realized he was potentially a key witness in the case. Although
disputed, Scannell testified that he told Ross of this possibility shortly after the transaction failed to close.
Ross assured his client that he could serve as both witness and attorney and continued work on the case.
Finally, just prior to trial Ross retained the services of Mr. Warren Peterson on an hourly basis to try the
case. Ross assisted Peterson during the trial although he was the principal witness for Scannell.

The trial court entered judgment for Scannell in the Knight matter. In addition to granting specific
performance for 960 acres of the 1,410 originally contracted for, damages were awarded in the amount of
$32,499, plus the return of the $2,500 earnest money (plus interest) originally deposited by Scannell.

In October 1978, Scannell entered into negotiations for the sale of a portion of the property obtained in
the Knight litigation. Ross was privy to those negotiations and learned that his client was about to realize
a substantial profit upon the resale of the property. Scannell offered Ross a one-third equity participation
in the property with full credit for fees of one-third of the damages which had been applied toward the
purchase price. At this time Ross informed Scannell that he was entitled to one-third of the profits that
Scannell might derive from the sale, as well as one-third of the damages. Ross continued to insist upon
*602 these profits even though, as he admitted, the contingency fee agreement letter that he drafted
made absolutely no mention of profits. Scannell disputed that one-third of the profits from the sale of the
land should go to Ross, absent further contribution from him toward the purchase price of the property.

After this dispute as to fees arose Ross asked Topel and Campbell, two of the former joint venturers, to
pay the fees owed trial counsel Peterson. Although Ross asserted that he did not represent Topel and
Campbell, he did state that he believed there was a serious question that Scannell was in fact
representing their interests in the Knight action and that Scannell held the property subject to a resulting
trust in favor of Topel and Campbell. Apparently Ross did not discuss with Scannell or Topel and
Campbell the possible problems regarding any conflict of interests in their claims. Topel and Campbell
are currently suing Scannell alleging that they each are entitled to one-third interest in the property.

Scannell experienced difficulty in obtaining a contract for the conveyance of the property in accordance
with the judgment requiring specific performance and Mr. Knight refused to grant necessary easement
across adjoining property. In view of their dispute over fees, Ross did not represent Scannell in clearing
up this matter. Thus, in December 1978 Scannell had still not obtained title to the property.

Scannell reluctantly paid Ross' unreimbursed costs and retained the services of the law firm of Johnson,
Lane & Gallagher who after several posttrial hearings obtained a properly executed contract with an
easement. Ross testified that the services provided by the new law firm were a part of the litigation and
he would have performed them if there had not been a falling-out with regard to the fees. Scannell paid
Johnson, Lane & Gallagher $3,023 in connection with the completion of the specific performance action.

Shortly after Scannell refused to agree to give Ross one-third of any profits from the future sale of the
property, Ross filed a claim of attorney's lien which included the legal *603 description of the property
involved in the Knight action. Ross filed his claim with the Pierce County Superior Court. Then, with the
admitted purpose of clouding title to the property, Ross mailed a copy of the claim of lien and property
description to the title company in Klickitat County and filed the lien with the Klickitat County Superior
Court after obtaining a new cause number in Klickitat County and filing an abstract of the Pierce County
judgment.

At that time Scannell had entered into an agreement with prospective purchasers to sell 790 of the 960
acres at a price of $456 per acre. Ross computed the amount of his claim of lien based upon this sale
price and claimed a total of $92,551.61 attorneys fees. Due solely to the cloud on the title caused by
Ross' unadjudicated claim of attorney lien, Scannell was unable to deliver marketable title and the
purchasers canceled the transaction.

Ross sued Scannell in Klickitat County to collect the contingent fee and foreclose the attorney's lien.
Scannell counterclaimed for damages resulting from the loss of sale and for slander of title. The property
had not sold at the time of trial, and due to economic conditions and local governmental restrictions, the
land had a reduced value of $400 per acre.

The trial court found in favor of Ross attaching the lien and clouding title to the real property. The court,
however, did not uphold Ross' percentage-of-profits theory of attorneys fees for $92,551.61, and instead
awarded him $21,443 pursuant to the contingent fee agreement. The court accordingly denied Scannell's
counterclaim. This appeal by both parties followed.

I
The first issue, never before addressed by this court, is whether RCW 60.40.010 allows an attorney to file
a lien on the real property of a client. The statute provides:

An attorney has a lien for his compensation, whether specially agreed upon or implied, as hereinafter
provided: (1) Upon the papers of his client, which have come into *604 his possession in the course of his
professional employment; (2) upon money in his hands belonging to his client; (3) upon money in the
hands of the adverse party in an action or proceeding, in which the attorney was employed, from the time
of giving notice of the lien to that party; (4) upon a judgment to the extent of the value of any services
performed by him in the action, or if the services were rendered under a special agreement, for the sum
due under such agreement, from the time of filing notice of such lien or claim with the clerk of the court in
which such judgment is entered, which notice must be filed with the papers in the action in which such
judgment was rendered, and an entry made in the execution docket, showing name of claimant, amount
claimed and date of filing notice.
This statute, in existence since 1881, provides a delineated and limited statutory attorney's lien designed
to be a tool in the collection of fees. The statute in part is merely declaratory of the general or retaining
lien recognized at common law. This possessory and passive lien gives an attorney the right to retain
papers and documents which come into the attorney's possession during the course of his professional
employment. It is a possessory and passive lien and is not enforceable by foreclosure and sale. See
Gottstein v. Harrington, 25 Wash. 508, 65 P. 753 (1901); Stevens, Our Inadequate Attorney's Lien
Statutes A Suggestion, 31 Wash. L. Rev. 1 (1956).

The statute, however, also goes beyond the common law in recognizing the special or charging lien. This
lien is upon the judgment obtained for the client as a result of the attorney's professional services to
secure his compensation. RCW 60.40.010(4). Such a lien has the capacity to be adjudicated and
enforced. See State ex rel. Angeles Brewing & Malting Co. v. Superior Court, 89 Wash. 342, 154 P. 603
(1916); Gottstein; Stevens, supra.

Many states either do not statutorily recognize attorneys' liens or only recognize the general or retaining
lien.[1] The *605 statutory provisions of the states recognizing charging liens on judgments vary. A few
states specifically allow the lien to attach to real property.[2] Others provide for a charging lien on the
client's cause of action or judgment and any proceeds therefrom or property recovered.[3] Five states,
including Washington, recognize a charging lien upon the judgment only.[4]

[1, 2] One of the states with a statute similar to ours has held that the attorney lien statute must be strictly
followed and not judicially expanded to reach real property as fruits of a judgment. Keehn v. Keehn, 115
Iowa 467, 88 N.W. 957 (1902). We agree with this analysis. As noted above RCW 60.40.010(4) is in
derogation of the common law and therefore must be strictly construed. See A.A.C. Corp. v. Reed, 73
Wn.2d 612, 440 P.2d 465 (1968). If the Legislature had intended attorneys' liens to attach to real property
as proceeds of a judgment, it would have included a provision to that effect as other states have done.
We note that the Legislature has not left an attorney remediless in collecting fees after the attorney-client
relationship has been terminated. He has, among other remedies afforded general creditors, the ability to
reduce his fees to judgment and thus subject his client's real property to a judgment lien pursuant to RCW
4.56. If additional measures are necessary, *606 the attorney may post a bond and proceed with a writ of
attachment pursuant to RCW 7.12. The attorney must, of course, balance these rights with the Code of
Professional Responsibility EC 2-23:

A lawyer should be zealous in his efforts to avoid controversies over fees with clients and should attempt
to resolve amicably any differences on the subject. He should not sue a client for a fee unless necessary
to prevent fraud or gross imposition by the client.
The analysis requiring strict construction of the attorney lien statute is especially persuasive in light of the
dangers of our countenancing the practice of attorneys attaching liens to real property for unadjudicated
and unliquidated claims. Although we recognize the common problems faced by attorneys in collecting
their well deserved fees, the reasons for our hesitancy are apparent. The result of our approving the
practice would allow members of the bar to cloud title to real property with "claims of attorney lien" without
resort to any adjudication of such claims. The potential for economic coercion by attorneys is obvious. In
today's economic setting a client may well be forced to settle the attorney's claim for fees, no matter how
unfounded, simply to gain the ability to convey, lease or otherwise utilize the "liened" property. A similar
objection was recognized in Humphrey v. Browning, 46 Ill. 476 (1868), where the Supreme Court of
Illinois held that if unadjudicated liens were allowed for the professional services of lawyers, no one could
foresee the difficulties and confusion that would result, as every tract of land which had been the subject
of litigation would lose most of its exchangeable value from an apprehension of some latent lien in favor
of an attorney.

In fact, the only state with a statute similar to ours that has allowed the practice recognized these dangers
but discounted them in favor of giving attorneys an additional tool to collect fees.[5] The Colorado
Supreme Court in Fillmore v. *607 Wells, 10 Colo. 228, 15 P. 343 (1887) stated:

Again, [an] objection ... is thus stated in Forsythe v. Beveridge, 52 Ill. 268: "There would be cases in
which a very unreasonable portion of the fruits would be demanded by the attorney, and collected under
the pressure he could bring to bear upon his client." This objection is declared by the learned court to be
of "great weight."
10 Colo. at 235. We are convinced that the dangers of extending our statute beyond its terms are too
great to discount.

The dangers of allowing attorneys to file liens for unadjudicated, unliquidated claims thus clouding title are
especially clear in the instant case. The contingent fee contract relied upon is ambiguous. Ross did not try
the action due to a conflict of interest which he should have been aware of before accepting the case.
After the trial, difficulties arose and Ross abandoned the case before securing title to the property for his
client. Another attorney had to complete the case. Throughout the action Scannell expressed
disagreement as to the amount of attorney fees owed. Ross filed a lien in Pierce County (where the
cause was tried by agreement of the parties), in Klickitat County (where the land was located), and with
the title company, with the admitted purpose of clouding title. Purchasers canceled a transaction with
Scannell when they were denied a clear title and since that time the land has decreased in value. In
addition, less than one-quarter of Ross' lien was allowed at trial.

In an age when the ethics of the bar are scrutinized in every quarter, we must hold that the result reached
by the trial court is one neither contemplated by the attorney lien statute nor in accord with the public
interest. Accordingly, we remand this matter to the trial court to determine whether Ross' actions
constituted slander of title as defined *608 in Lee v. Maggard, 197 Wash. 380, 85 P.2d 654, 87 P.2d 106
(1938).

II
The second issue is whether an attorney can recover fees based on a contingency fee contract if, prior to
full consideration of the contingency, the attorney ceases to render the required legal services for his
client. We hold that under the circumstances of this case an attorney may not recover on the contract but
must seek recovery of fees on the theory of quantum meruit.

The letter agreement stated that if the court granted specific performance, attorney fees were to be based
upon a commission or fee received by Scannell upon his selling or otherwise transferring the property.
The parties obviously agreed that Ross would not only represent Scannell in obtaining the judgment for
specific performance but also in finalizing the transfer of the land. Ross in his testimony, in fact, admitted
that such services would have been performed by him pursuant to the contract. After trial, wherein
Scannell was represented by Peterson and not Ross, the parties became involved in an argument over
litigation costs and fees. At this point Scannell contacted another law firm to complete the transaction. It is
not clear from the record whether Ross refused to continue performance until the controversy was
resolved or whether Scannell picked up the files and took the matter to other lawyers, precluding Ross
from continuing. In any event, other counsel completed the task of obtaining a necessary easement and a
contract for conveying the land. Ross points out that he did complete the defense of the McKinney suit by
getting the complaint dismissed, but it is to be remembered that he accepted this matter after the original
contingent fee arrangement was made and agreed to defend it for no additional fees.

[3] The settled law in this state is expressed in Ramey v. Graves, 112 Wash. 88, 91, 191 P. 801 (1920):

The rule is that, where the compensation of an attorney *609 is to be paid to him contingently on the
successful prosecution of a suit and he is discharged or prevented from performing the service, the
measure of damages is not the contingent fee agreed upon, but reasonable compensation for the
services actually rendered.
This general rule has been clarified throughout the years. We have noted that "damages" was an inexact
use of terms and was intended to mean merely "recovery." Wright v. Johanson, 132 Wash. 682, 233 P.
16, adhered to on reh'g, 135 Wash. 696, 236 P. 807 (1925). In Cavers v. Old Nat'l Bank & Union Trust
Co., 166 Wash. 449, 7 P.2d 23 (1932), we quoted the general rule and held that the case at bar was not
one in which an attorney had been discharged "after completing or substantially completing" the agreed
services. Cavers, at 452.

We recognize as the court did in Cavers that the general rule does not necessarily foreclose recovery of
fees pursuant to a contingency fee contract if an attorney substantially performs the contingency.
However, the instant case does not present such a situation. There was no express finding by the trial
court that Ross substantially completed performance of the contract. It is apparent that Ross did not fully
or substantially perform the contingency agreed upon by the parties.

Thus, we conclude that if Ross is entitled to attorney fees, the measure of those fees is not the contingent
fee agreed upon but the reasonable value of the services rendered. We cannot determine the value of the
services from the record and remand this matter to the trial court.

III
The last issue certified inquires whether an attorney who has acted unethically in the course of providing
services is entitled to any fees at all. We are unable to determine from the record that any of the
questions of unethical conduct raised in Scannell's brief were presented to the trial court.

The charges of unethical conduct herein are grave. Scannell asserts that Ross violated: CPR DR 2-106
prohibiting an attorney from collecting an illegal or clearly excessive *610 fee; CPR DR 5-103 prohibiting
an attorney from acquiring a proprietary interest in the client's cause of action; CPR DR 5-102(A)
requiring an attorney to withdraw from the conduct of the trial if the lawyer learns or it is obvious that he
ought to be called as a witness on behalf of his client unless such testimony falls within the exceptions
listed in CPR DR 5-101(B); CPR DR 5-105 restricting an attorney from representing multiple clients if his
independent professional judgment is impaired; and CPR DR 5-107 requiring an attorney to avoid
influence by others than his client. Such charges are normally heard by a disciplinary committee of the
Washington State Bar Association. However, a trial court may consider such allegations in determining
attorneys fees.

[4] Accordingly, on remand we instruct the trial court to consider the charges of unethical conduct in
relation to several principles enunciated by this court in determining the amount of fees due Ross.
Professional misconduct may be grounds for denying an attorney his fees. Yount v. Zarbell, 17 Wn.2d
278, 135 P.2d 309 (1943). In addition, as stated in Dailey v. Testone, 72 Wn.2d 662, 664, 435 P.2d 24
(1967):

When an attorney is guilty of fraudulent acts or gross misconduct in violation of a statute or against public
policy, the client may have a complete defense to the attorney's action for fees.
In sum, we reverse and remand this action to the trial court to determine whether Ross' actions
constituted slander of title and what, if any, damages Scannell is entitled to receive. Upon remand we
also instruct the trial court to determine what, if any, fees are owed Ross upon a theory of quantum
meruit, and not on the ambiguous, uncompleted contingent fee agreement.

BRACHTENBACH, C.J., UTTER, DOLLIVER, WILLIAMS, and DORE, JJ., and CUNNINGHAM, J. Pro
Tem., concur. ROSELLINI, J. (dissenting)

The majority reads the attorney *611 lien provision out of RCW 60.40.010(4). The rationale for so doing is
based on an improbable assumption. The majority states on page 606:

The result of our approving the practice [RCW 60.40.010(4)] would allow members of the bar to cloud title
to real property with "claims of attorney lien" without resort to any adjudication of such claims. The
potential for economic coercion by attorneys is obvious. In today's economic setting a client may well be
forced to settle the attorney's claim for fees, no matter how unfounded, simply to gain the ability to
convey, lease or otherwise utilize the "liened" property.
I cannot conceive of an attorney violating his oath of office and subjecting himself to a disciplinary
proceeding by doing what is suggested by the majority's rationale. In my opinion, attorneys have high
professional and ethical standards and would not jeopardize the standards nor their right to practice law
under these circumstances.

An attorney has a lien for his compensation, whether specially agreed upon or implied, as hereinafter
provided: ... (4) upon a judgment to the extent of the value of any services performed by him in the action,
or if the services were rendered under a special agreement, for the sum due under such agreement, from
the time of filing notice of such lien or claim with the clerk of the court in which such judgment is entered,
which notice must be filed with the papers in the action in which such judgment was rendered, and an
entry made in the execution docket, showing name of claimant, amount claimed and date of filing notice.
RCW 60.40.010(4) in pertinent part.

If the words "upon a judgment to the extent of the value of any services performed by [an attorney]" mean
anything, they mean that the lien reaches the fruits of the judgment. There is nothing in them which
confines their scope to money judgments.

It is true that subsections 1 and 2 of the attorney lien statute are possessory liens. However, under
subsections 3 and 4 nonpossessory liens are created.

Subsection 3 provides that an attorney has a lien for his *612 compensation

upon money in the hands of the adverse party in an action or proceeding, in which the attorney was
employed, from the time of giving notice of the lien to that party[.]
Many liens are nonpossessory, e.g., RCW 60.04, mechanics' and materialmen's liens; RCW 60.14, lien
for agricultural dusting or spraying; RCW 60.22, lien for furnishing fertilizers, pesticides, weed killers;
RCW 60.24, lien for labor and services on timber and lumber. These are nonpossessory liens and do not
appear to have caused any of the dire consequences envisioned by the majority.

The attorney's lien on a judgment can be filed only where an attorney was successful in obtaining the
judgment. The trial record discloses that after judgment was entered in the Pierce County trial action,
Ross and Scannell became involved in an argument over litigation costs and the fee agreement. Ross
had successfully completed the defense of the McKinney suit by getting the complaint dismissed. The
question whether there was incomplete performance by Ross was resolved by the trial court here in favor
of the attorney. While we would have preferred a more detailed finding on the issue, the trial court stated
in finding of fact 7: "Plaintiff [Ross] represented defendant throughout the Knight, et al, suit until
differences arose between the parties after judgment had been entered." The majority substitutes its own
findings for those of the trial court.

Consistent with the second paragraph of its memorandum opinion the trial court, in its formal conclusions
of law, found that Ross is entitled to the contingent fee. It approved Ross' filing of the notice of attorney's
lien, fixed the amount of the fee, and foreclosed the lien. Granted, the amount allowed was less than that
which was claimed, but the question involved complex factors.

As provided in the statute, Ross filed a claim of lien under the Pierce County cause number on which a
judgment was entered. Venue in the cause had by agreement been transferred to Pierce County from
Klickitat County *613 where the real property involved in the suit was situated and where the initial action
had been instituted. After the judgment was entered in Pierce County, a new cause number was obtained
in Klickitat County. An abstract of the Pierce County judgment was filed under that number, as was Ross'
claim of lien.

The trial court found this procedure to be proper and I agree that this procedure is allowable under RCW
60.40.010(4). It is a lien upon the judgment, obtained for a claimant as a result of the attorney's
professional services, to secure his compensation for such services in that particular case. Such a lien
has the capacity to be adjudicated and ultimately enforced. State ex rel. Angeles Brewing & Malting Co. v.
Superior Court, 89 Wash. 342, 154 P. 603 (1916).

The charging lien attaches to the fruits of the judgment when that judgment involves real property, just as
it attaches to cash proceeds where there is a money judgment. I am persuaded that if the attorney whose
skill and effort produces the judgment is entitled to protect his compensation through a lien on the
judgment, he is entitled to have the lien attach to the fruits of the judgment.

The lien filed under RCW 60.40.010(4) attaches to the underlying real property that is the subject matter
of the judgment concerned. I agree with the statement of the Supreme Court of Colorado in the early case
of Fillmore v. Wells, 10 Colo. 228, 233, 15 P. 343 (1887):
The attorney's lien, in so far as it relates to judgments, may be accurately defined as a right conferred by
statute, or recognized by the common law, to have his compensation or costs, or both, directly secured by
the fruits of the judgment. To declare him entitled to a lien upon the judgment, without permitting him,
through such lien, to reach and control the subject-matter of the recovery, would be bestowing upon him
the shadow, and withholding the substance. He would be no better off than are other general creditors of
his client. What equitable consideration supports the conclusion that he should be secured in this way by
the fruits of a money judgment, *614 and yet, as to the fruits of a decree or judgment relating to realty,
that he should occupy the attitude of a mere general creditor? The fruits of the latter judgment are often
far more valuable to his client than are the fruits of the former. Cases involving the title to or the
possession of real estate present questions quite as complicated and difficult, and demand of the attorney
quite as much learning and labor, as do those relating to damages for torts, or for the violation of simple
contracts.
As the majority acknowledges, the Colorado Legislature approved that interpretation by enacting a law
making it explicit. Evidently the Colorado Legislature did not assume, as the majority does here, that the
lien right would be abused. The Legislature of Washington has recognized that an attorney is "worthy of
his hire" as are others who perform services and has granted him lien rights accordingly. The court should
not be niggardly in its construction of those rights.

As for the contention that the attorney violated the code of professional ethics, it was not argued before
the trial court. Consequently that court did not err in failing to make findings with respect to the matter. If
the defendant wishes to pursue complaints, it should be addressed to the disciplinary committee of the
bar association.

I would affirm the trial court.

Reconsideration denied September 29, 1982.

_____________

FIRST DIVISION

A.C. No. 6210 December 9, 2004

FEDERICO N. RAMOS, complainant,

vs.
ATTY. PATRICIO A. NGASEO, respondent.

DECISION

YNARES-SANTIAGO, J.:

This is a complaint for suspension of respondent Atty. Patricio A. Ngaseo for violation of the Code of
Professional Responsibility and Article 1491 of the Civil Code by demanding from his client, complainant
Federico N. Ramos, the delivery of 1,000 square meters of land, a litigated property, as payment for his
appearance fees.

The facts as narrated by the complainant are as follows:

Sometime in 1998, complainant Federico Ramos went to respondent Atty. Patricio Ngaseo's Makati office
to engage his services as counsel in a case1 involving a piece of land in San Carlos, Pangasinan.
Respondent agreed to handle the case for an acceptance fee of P20,000.00, appearance fee of
P1,000.00 per hearing and the cost of meals, transportation and other incidental expenses. Complainant
alleges that he did not promise to pay the respondent 1,000 sq. m. of land as appearance fees.2

On September 16, 1999, complainant went to the respondent's office to inquire about the status of the
case. Respondent informed him that the decision was adverse to them because a congressman exerted
pressure upon the trial judge. Respondent however assured him that they could still appeal the adverse
judgment and asked for the additional amount of P3,850.00 and another P2,000.00 on September 26,
2000 as allowance for research made.3

Although an appeal was filed, complainant however charges the respondent of purposely failing to submit
a copy of the summons and copy of the assailed decision. Subsequently, complainant learned that the
respondent filed the notice of appeal 3 days after the lapse of the reglementary period.

On January 29, 2003, complainant received a demand-letter from the respondent asking for the delivery
of the 1,000 sq. m. piece of land which he allegedly promised as payment for respondent's appearance
fee. In the same letter, respondent also threatened to file a case in court if the complainant would not
confer with him and settle the matter within 30 days.

Respondent alleged that sometime in the late 1997, a former client, Federico Ramos and his brother,
Dionisio, went to his Makati office to engage his professional services in connection with a 2-hectare
parcel of land situated in San Carlos, Pangasinan which the complainant's family lost 7 years earlier
through an execution sale in favor of one Alfredo T. Castro. Complainant, who was deaf and could only
speak conversational Tagalog haltingly, was assisted by his brother Dionisio. They came all the way from
Pangasinan because no lawyer in San Carlos City was willing to handle the case. Complainant, through
Dionisio, avers that he has consulted 2 local lawyers but did not engage their services because they were
demanding exorbitant fees. One local lawyer was willing to handle the case for at least one-half of the
land involved as his attorney's fee, plus cash expenses, while the other asked for ¼ of the land in addition
to a large sum of money. Respondent agreed to handle the case for an acceptance fee of P60,000.00
plus an appearance fee of P3,000.00 per hearing. Complainant told him that he would consult his siblings
on the matter.

Six months later, i.e., in April 1998, complainant, assisted by one Jose Castillo, went to respondent's
office to discuss the legal fees. Complainant, through Castillo, told respondent that he was willing to pay
an acceptance fee of P40,000.00, P20,000.00 of which shall be paid upon engagement and the
remaining P20,000.00 to be paid after their treasure hunt operations in Nueva Viscaya were terminated.
Further, complainant offered, in lieu of P3,000.00 per appearance, 1,000 sq. m. of land from the land
subject matter of the case, if they win, or from another piece of property, if they lose. In addition,
complainant also offered to defray the expenses for transportation, meals and other incidental expenses.
Respondent accepted the complainant's offer.

Respondent claims that after the trial court dismissed Civil Case No. SCC 2128, he filed a timely notice of
appeal and thereafter moved to be discharged as counsel because he had colon cancer. Complainant,
now assisted by one Johnny Ramos, implored respondent to continue handling the case, with an offer to
double the 1,000 sq. m. piece of land earlier promised and the remaining balance of P20,000.00
acceptance fee. Johnny Ramos made a written commitment and gave respondent's secretary P2,000.00
of the P3,850.00 expenses for the preparation of the appellant's brief.

On July 18, 2001, the Court of Appeals rendered a favorable decision ordering the return of the disputed
2-hectare land to the complainant and his siblings. The said decision became final and executory on
January 18, 2002. Since then complainant allegedly failed to contact respondent, which compelled him to
send a demand letter on January 29, 2003.

On February 14, 2003, complainant filed a complaint before the IBP charging his former counsel,
respondent Atty. Ngaseo, of violation of the Code of Professional Responsibility for demanding the
delivery of 1,000 sq. m. parcel of land which was the subject of litigation.
In a report dated July 18, 2003, IBP Commissioner Rebecca Villanueva-Maala found the respondent
guilty of grave misconduct and conduct unbecoming of a lawyer in violation of the Code of Professional
Responsibility and recommended that he be suspended from the practice of law for 1 year.4

On August 30, 2003, the IBP Board of Governors passed Resolution No. XVI-2003-47 the full text of
which reads:5

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and
Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this
Resolution/Decision as Annex "A"; and, finding the recommendation fully supported by the evidence on
record and the applicable laws and rules, with modification, and considering that respondent have
violated the Code of Professional Responsibility for grave misconduct and conduct unbecoming of a
lawyer Atty. Patricio A. Ngaseo is hereby SUSPENDED from the practice of law for six (6) months.

On December 11, 2003, respondent filed a petition for review assailing IBP Resolution No. XVI-2003-47
for having been issued without or in excess of jurisdiction.6

Respondent argues that he did not violate Article 1491 of the Civil Code because when he demanded the
delivery of the 1,000 sq. m. of land which was offered and promised to him in lieu of the appearance fees,
the case has been terminated, when the appellate court ordered the return of the 2-hectare parcel of land
to the family of the complainant.

Respondent further contends that he can collect the unpaid appearance fee even without a written
contract on the basis of the principle of quantum meruit. He claims that his acceptance and appearance
fees are reasonable because a Makati based legal practitioner, would not handle a case for an
acceptance fee of only P20,000.00 and P1,000.00 per court appearance.

Under Article 1491(5) of the Civil Code, lawyers are prohibited from acquiring either by purchase or
assignment the property or rights involved which are the object of the litigation in which they intervene by
virtue of their profession.7 The prohibition on purchase is all embracing to include not only sales to private
individuals but also public or judicial sales. The rationale advanced for the prohibition is that public policy
disallows the transactions in view of the fiduciary relationship involved, i.e., the relation of trust and
confidence and the peculiar control exercised by these persons.8 It is founded on public policy because,
by virtue of his office, an attorney may easily take advantage of the credulity and ignorance of his client
and unduly enrich himself at the expense of his client.9 However, the said prohibition applies only if the
sale or assignment of the property takes place during the pendency of the litigation involving the client's
property. Consequently, where the property is acquired after the termination of the case, no violation of
paragraph 5, Article 1491 of the Civil Code attaches.

Invariably, in all cases where Article 1491 was violated, the illegal transaction was consummated with the
actual transfer of the litigated property either by purchase or assignment in favor of the prohibited
individual. In Biascan v. Lopez, respondent was found guilty of serious misconduct and suspended for 6
months from the practice of law when he registered a deed of assignment in his favor and caused the
transfer of title over the part of the estate despite pendency of Special Proceedings No. 98037 involving
the subject property.10 In the consolidated administrative cases of Valencia v. Cabanting,11 the Court
suspended respondent Atty. Arsenio Fer Cabanting for six (6) months from the practice of law when he
purchased his client's property which was still the subject of a pending certiorari proceeding.

In the instant case, there was no actual acquisition of the property in litigation since the respondent only
made a written demand for its delivery which the complainant refused to comply. Mere demand for
delivery of the litigated property does not cause the transfer of ownership, hence, not a prohibited
transaction within the contemplation of Article 1491. Even assuming arguendo that such demand for
delivery is unethical, respondent's act does not fall within the purview of Article 1491. The letter of
demand dated January 29, 2003 was made long after the judgment in Civil Case No. SCC-2128 became
final and executory on January 18, 2002.
We note that the report of the IBP Commissioner, as adopted by the IBP Board of Governors in its
Resolution No. XVI-2003-47, does not clearly specify which acts of the respondent constitute gross
misconduct or what provisions of the Code of Professional Responsibility have been violated. We find the
recommended penalty of suspension for 6 months too harsh and not proportionate to the offense
committed by the respondent. The power to disbar or suspend must be exercised with great caution. Only
in a clear case of misconduct that seriously affects the standing and character of the lawyer as an officer
of the Court and member of the bar will disbarment or suspension be imposed as a penalty.12 All
considered, a reprimand is deemed sufficient and reasonable.

WHEREFORE, in view of the foregoing, respondent Atty. Patricio A. Ngaseo is found guilty of conduct
unbecoming a member of the legal profession in violation of Rule 20.04 of Canon 20 of the Code of
Professional Responsibility. He is REPRIMANDED with a warning that repetition of the same act will be
dealt with more severely.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., concur.

____________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-26868 February 27, 1969

IN THE MATTER OF ATTORNEY LOPE E. ADRIANO Member of the Philippine Bar. PEOPLE OF THE
PHILIPPINES, plaintiff-appellee,
vs.
REMIGIO ESTEBIA, accused-appellant.

SANCHEZ, J.:

Once again, this Court is confronted with the unwanted task of ascertaining whether certain acts and
conduct of a member of the Bar deserve disciplinary action.

The problem arose because of facts that follow:

One Remigio Estebia was convicted of rape by the Court of First Instance of Samar, 1 and sentenced to
suffer the capital punishment. His case came up before this Court on review.

On December 14, 1966, Lope E. Adriano, a member of the Bar, was appointed by this Court as Estebia's
counsel de oficio. In the notice of his appointment, Adriano was required to prepare and file his brief
within thirty days from notice. He was advised that to enable him to examine the case, the record would
be at his disposal. Adriano received this notice on December 20, 1966. On January 19, 1967, Adriano
sought for a 30-day extension to file appellant's brief in mimeographed form. On February 18, Adriano
again moved for a 20-day extension (his second). This was followed by a third filed on March 8, for fifteen
days. And a fourth on March 27, also for fifteen days. He moved for a "last" extension of ten days on April
11. On April 21, he even sought a special extension of five days. All these motions for extension were
granted. The brief was due on April 26, 1967. But no brief was filed.

On September 25, 1967, Adriano was ordered to show cause within ten days from notice thereof why
disciplinary action should not be taken against him for failure to file appellant's brief despite the lapse of
the time therefor. Adriano did not bother to give any explanation.
For failing to comply with the September 25, 1967 resolution, this Court, on October 3, 1968, resolved to
impose upon him a fine of P500 payable to this Court within fifteen days from notice with a warning that
upon further non-compliance with the said resolution of September 25, 1967 within the same period of
fifteen days, "more drastic disciplinary action will be taken against him." Still, counsel paid no heed.

Finally, on December 5, 1968, this Court ordered Adriano to show cause within ten days from notice
thereof why he should not be suspended from the practice of law "for gross misconduct and violation of
his oath of office as attorney." By express order of this Court, the resolution was personally served upon
him on December 18, 1968. He ignored the resolution.

Upon the facts just narrated, we now pass judgment.

1. By specific authority, this Court may assign an attorney to render professional aid to a destitute
appellant in a criminal case who is unable to employ an attorney. Correspondingly, a duty is imposed
upon the lawyer so assigned "to render the required service." 2 A lawyer so appointed "as counsel for an
indigent prisoner", our Canons of Professional Ethics demand, "should always exert his best efforts" in
the indigent's behalf. 3

No excuse at all has been offered for non-presentation of appellant's brief. And yet, between December
20, 1966, when he received notice of his appointment, and December 5, 1968, when the last show cause
order was issued by this Court, more than sufficient time was afforded counsel to prepare and file his brief
de oficio. The death sentence below imposed was upon a plea of guilty. The record of the proceedings
leading to the lower court's sentence consists of but 31 pages. Counsel had the record since January 19,
1967. In fact, in his third motion for extension of time, he manifested that the drafting of apellant's brief "is
more than half-way through" and that "additional time is needed to review, effectuate the necessary
corrections, put in final form and print the said brief." In his motion for fourth extension, he intimated that
the preparation of the brief "is almost through" and that "additional time is needed to redraft and rehash
some significant portions of said brief and have the same stencilled and mimeographed upon completion
of a definitive text." His motion for last (fifth) extension of time came with the excuse that he "suddenly got
sick (influenza) in the course of redrafting and rehashing some significant portions of said brief, which
ailment hampered and interrupted his work thereon for sometime." Finally, in his "Special Extension of
Time" to file brief, he claimed that he needed only five days from April 21, 1967 to put said brief in final
form and have the same stencilled and mimeographed.lawphi1.nêt

In the face of the fact that no brief has ever been filed, counsel's statements in his motions for extension
have gone down to the level of empty and meaningless words; at best, have dubious claim to veracity.

It is true that he is a court-appointed counsel. But we do say that as such counsel de oficio, he has as
high a duty to the accused as one employed and paid by defendant himself. Because, as in the case of
the latter, he must exercise his best efforts and professional ability in behalf of the person assigned to his
care. His is to render effective assistance. The accused defendant expects of him due diligence, not mere
perfunctory representation. We do not accept the paradox that responsibility is less where the defended
party is poor. It has been said that courts should "have no hesitancy in demanding high standards of duty
of attorneys appointed to defend indigent persons charged with crime." 4 For, indeed, a lawyer who is a
vanguard in the bastion of justice is expected to have a bigger dose of social conscience and a little less
of self interest. Because of this, a lawyer should remain ever conscious of his duties to the indigent he
defends.

Worth remembering is the 1905 case of In the matter of Jose Robles Lahesa. 5 He was counsel de oficio
before the Supreme Court in two cases: one for robo en cuadrilla and the other for homicide. He failed to
take any action in behalf of the defendants in both eases. This Court imposed upon him a fine of P200.
Significant is the pronouncement we there made that: "This court should exact from its officers and
subordinates the most scrupulous performance of their official duties, especially when negligence in the
performance of those duties necessarily result in delays in the prosecution of criminal cases and the
detention of accused persons pending appeal." The validity of the foregoing observation remains to the
present day. 6 It applies to the present case.

Here, appellant was without brief since December 20, 1966. The effect of this long delay need not be
essayed. We, therefore, find that Attorney Lope E. Adriano has violated his oath that he will conduct
himself as a lawyer according to the best of his "knowledge and discretion".

2. An attorney's duty of prime importance is "[t]o observe and maintain the respect due to the courts of
justice and judicial officers. The first Canon of the Code of Ethics enjoins a lawyer "to maintain towards
the Courts a respectful attitude, not for the sake of the temporary incumbent of the judicial office, but for
the maintenance of its supreme importance." By the oath of office, the lawyer undertook to "obey the laws
as well as the legal orders of the duly constituted authorities." In People vs. Carillo, 8 this Court's pointed
observation was that as an officer of the court, it is a lawyer's "sworn and moral duty to help build and not
destroy unnecessarily that high esteem and regard towards the courts so essential to the proper
administration of justice."

Here, we have a clear case of an attorney whose acts exhibit willful dis-obedience of lawful orders of this
Court. A cause sufficient is thus present for suspension or disbarment. 9 Counsel has received no less
than three resolutions of this Court requiring compliance of its orders. To be recalled is that on September
25, 1967, this Court directed him, in ten days from notice, to show cause why disciplinary action should
not be taken against him for his failure to file appellant's brief despite the lapse of the time therefor.
Nothing was done by counsel for over a year. To impress upon counsel the gravity of his repeated failure
to obey this Court's orders, on October 3,1968, a fine of P500 was clamped upon him. He was directed to
pay that fine in ten days. He was in that order also required to file his brief in fifteen days. He was warned
that more drastic disciplinary action would be taken upon his failure to do either. Still he remained
unmoved. Then, this Court issued the peremptory order of December 5, 1968 commanding him to show
cause within ten days from notice thereof why he should not be suspended from the practice of law for
gross misconduct and violation of his oath of office. The Court made it certain that this order would reach
him. He personally acknowledged receipt thereof. He has not paid the fine. He has done nothing.

This is 1969. No brief has as yet been filed. And this, inspite of the fact that as early as March 27, 1967,
when he moved for a fourth extension of time to file his brief de oficio, he represented to this Court that all
that was needed was to redraft and to rehash some significant portions of the brief which was almost
through and to have the same stencilled and mimeographed upon completion of a definitive text.

Disrespect is here present. Contumacy is as patent. Disciplinary action is in order.

Controlling here is the 1961 decision In the Matter of Atty. Filoteo Dianala Jo. 10 There, as here, counsel
failed to file appellant's brief (in a criminal case) despite extensions of time granted him by this Court.
Likewise, this Court issued a show-cause order why disciplinary action should not be taken against him.
The explanation was considered unsatisfactory. This Court imposed a fine of P50 payable in ten days
from notice. Attorney Dianala Jo did not pay that fine. Came the subsequent resolution of this Court
advising him to pay the fine, otherwise, he would be arrested and confined to jam. This warning was not
heeded. On November 18, 1960, the Court resolved to give him ten days from notice within which to
explain why he should not be suspended from the practice of law. Despite receipt of this notice, he did not
care to explain his behaviour which this Court considered as "consumacy and unwillingness to comply
with the lawful orders of this Court of which he is an officer or to conduct himself as a lawyer should, in
violation of his oath of office." He was suspended from the practice of law for three months.

In the present case, counsel's pattern of conduct, it would seem to us, reveals a propensity on the part of
counsel to benumb appreciation of his obligation as counsel de oficio and of the courtesy and respect that
should be accorded this Court.

For the reasons given, we vote to suspend Attorney Lope E. Adriano from the practice of law throughout
the Philippines for a period of one (1) year.
Let a copy of this resolution be attached to the personal record, in this Court, of Lope E. Adriano as
member of the Bar. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Capistrano, Teehankee
and Barredo, JJ., concur.

_____________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

A.C. No. 9872 January 28, 2014

NATIVIDAD P. NAVARRO and HILDA S. PRESBITERO, Complainants,

vs.
ATTY. IVAN M. SOLIDUM, JR., Respondent.

DECISION

PER CURIAM:

This case originated from a complaint for disbarment, dated 26 May 2008, filed by Natividad P. Navarro
(Navarro) and Hilda S. Presbitero (Presbitero) against Atty. Ivan M. Solidum, Jr. (respondent) before the
Integrated Bar of the Philippines Commission on Bar Discipline (IBP-CBD).

From the Report, dated 1July 2009, of the IBP-CBD, we gathered the following facts of the case:

On 4 April 2006, respondent signed a retainer agreement with Presbitero to follow up the release of the
payment for the latter’s 2.7-hectare property located in Bacolod which was the subject of a Voluntary
Offer to Sell (VOS) to the Department of Agrarian Reform (DAR). The agreement also included the
payment of the debts of Presbitero’s late husband to the Philippine National Bank (PNB), the sale of the
retained areas of the property, and the collection of the rentals due for the retained areas from their
occupants. It appeared that the DAR was supposed to pay ₱700,000 for the property but it was
mortgaged by Presbitero and her late husband to PNB for ₱1,200,000. Presbitero alleged that PNB’s
claim had already prescribed, and she engaged the services of respondent to represent her in the matter.
Respondent proposed the filing of a case for quieting of title against PNB. Respondent and Presbitero
agreed to an attorney’s fee of 10% of the proceeds from the VOS or the sale of the property, with the
expenses to be advanced by Presbitero but deductible from respondent’s fees. Respondent received
₱50,000 from Presbitero, supposedly for the expenses of the case, but nothing came out of it.

In May 2006, Presbitero’s daughter, Ma. Theresa P. Yulo (Yulo), also engaged respondent’s services to
handle the registration of her 18.85-hectare lot located in Nasud-ong, Caradio-an, Himamaylan, Negros.
Yulo convinced her sister, Navarro, to finance the expenses for the registration of the property.
Respondent undertook to register the property in consideration of 30% of the value of the property once it
is registered. Respondent obtained ₱200,000 from Navarro for the registration expenses. Navarro later
learned that the registration decree over the property was already issued in the name of one Teodoro
Yulo. Navarro alleged that she would not have spent for the registration of the property if respondent only
apprised her of the real situation of the property.

On 25 May 2006, respondent obtained a loan of ₱1,000,000 from Navarro to finance his sugar trading
business. Respondent and Navarro executed a Memorandum of Agreement (MOA) and agreed that the
loan (a) shall be for a period of one year; (b) shall earn interest at the rate of 10% per month; and (c) shall
be secured by a real estate mortgage over a property located in Barangay Alijis, Bacolod City, covered by
Transfer Certificate of Title No. 304688. They also agreed that respondent shall issue postdated checks
to cover the principal amount of the loan as well as the interest thereon. Respondent delivered the checks
to Navarro, drawn against an account in Metrobank, Bacolod City Branch, and signed them in the
presence of Navarro.

In June 2006, respondent obtained an additional loan of ₱1,000,000 from Navarro, covered by a second
MOA with the same terms and conditions as the first MOA. Respondent sent Navarro, through a
messenger, postdated checks drawn against an account in Bank of Commerce, Bacolod City Branch.
Respondent likewise discussed with Navarro about securing a "Tolling Agreement" with Victorias Milling
Company, Inc. but no agreement was signed.

At the same time, respondent obtained a loan of ₱1,000,000 from Presbitero covered by a third MOA,
except that the real estate mortgage was over a 263-square-meter property located in Barangay Taculing,
Bacolod City. Respondent sent Presbitero postdated checks drawn against an account in Metrobank,
Bacolod City Branch.

Presbitero was dissatisfied with the value of the 263-square-meter property mortgaged under the third
MOA, and respondent promised to execute a real estate mortgage over a 1,000-square-meter parcel of
land adjacent to the 4,000-square-meter property he mortgaged to Navarro.

However, respondent did not execute a deed for the additional security.

Respondent paid the loan interest for the first few months. He was able to pay complainants a total of
₱900,000. Thereafter, he failed to pay either the principal amount or the interest thereon. In September
2006, the checks issued by respondent to complainants could no longer be negotiated because the
accounts against which they were drawn were already closed. When complainants called respondent’s
attention, he promised to pay the agreed interest for September and October 2006 but asked for a
reduction of the interest to 7% for the succeeding months.

In November 2006, respondent withdrew as counsel for Yulo. On the other hand, Presbitero terminated
the services of respondent as counsel. Complainants then filed petitions for the judicial foreclosure of the
mortgages executed by respondent in their favor. Respondent countered that the 10% monthly interest on
the loan was usurious and illegal. Complainants also filed cases for estafa and violation of Batas
Pambansa Blg. 22 against respondent.

Complainants alleged that respondent induced them to grant him loans by offering very high interest
rates. He also prepared and signed the checks which turned out to be drawn against his son’s accounts.
Complainants further alleged that respondent deceived them regarding the identity and value of the
property he mortgaged because he showed them a different property from that which he owned.
Presbitero further alleged that respondent mortgaged his 263-square-meter property to her for
₱1,000,000 but he later sold it for only ₱150,000.

Respondent, for his defense, alleged that he was engaged in sugar and realty business and that it was
Yulo who convinced Presbitero and Navarro to extend him loans. Yulo also assured him that Presbitero
would help him with the refining of raw sugar through Victorias Milling Company, Inc. Respondent alleged
that Navarro fixed the interest rate and he agreed because he needed the money. He alleged that their
business transactions were secured by real estate mortgages and covered by postdated checks.
Respondent denied that the property he mortgaged to Presbitero was less than the value of the loan. He
also denied that he sold the property because the sale was actually rescinded. Respondent claimed that
the property he mortgaged to Navarro was valuable and it was actually worth more than ₱8,000,000.

Respondent alleged that he was able to pay complainants when business was good but he was unable to
continue paying when the price of sugar went down and when the business with Victorias Milling
Company, Inc. did not push through because Presbitero did not help him. Respondent also denied that he
was hiding from complainants.
Respondent further alleged that it was Yulo who owed him ₱530,000 as interest due for September to
December 2005. He denied making any false representations. He claimed that complainants were aware
that he could no longer open a current account and they were the ones who proposed that his wife and
son issue the checks. Respondent further alleged that he already started with the titling of Yulo’s lot but
his services were terminated before it could be completed.

A supplemental complaint was filed charging respondent with accepting cases while under suspension. In
response, respondent alleged that he accepted Presbitero’s case in February 2006 and learned of his
suspension only in May 2006.

After conducting a hearing and considering the position papers submitted by the parties, the IBP-CBD
found that respondent violated the Code of Professional Responsibility.

The IBP-CBD found that respondent borrowed ₱2,000,000 from Navarro and ₱1,000,000 from Presbitero
which he failed to pay in accordance with the MOAs he executed. The IBP-CBD found that based on the
documents presented by the parties, respondent did not act in good faith in obtaining the loans. The IBP-
CBD found that respondent either promised or agreed to pay the very high interest rates of the loans
although he knew them to be exorbitant in accordance with jurisprudence. Respondent likewise failed to
deny that he misled Navarro and her husband regarding the identity of the property mortgaged to them.
Respondent also mortgaged a property to Presbitero for ₱1,000,000 but documents showed that its value
was only ₱300,000. Documents also showed that he sold that property for only ₱150,000. Respondent
conspired with Yulo to secure loans by promising her a 10% commission and later claimed that they
agreed that Yulo would "ride" on the loan by borrowing ₱300,000 from the amount he obtained from
Navarro and Presbitero. Respondent could not explain how he lost all the money he borrowed in three
months except for his claim that the price of sugar went down.

The IBP-CBD found that respondent misled Navarro and Presbitero regarding the issuance of the
postdated checks, and there was nothing in the records that would show that he informed them that it
would be his wife or son who would issue the checks. The IBP-CBD also found that respondent had not
been transparent in liquidating the money he received in connection with Presbitero’s VOS with DAR. He
was also negligent in his accounting regarding the registration of Yulo’s property which was financed by
Navarro.

The IBP-CBD found that respondent was guilty of violating Rule 1.01 of the Code of Professional
Responsibility for committing the following acts:

(1) signing drawn checks against the account of his son as if they were from his own account;

(2) misrepresenting to Navarro the identity of the lot he mortgaged to her;

(3) misrepresenting to Presbitero the true value of the 263-square-meter lot he mortgaged to her;

(4) conspiring with Yulo to obtain the loans from complainants;

(5) agreeing or promising to pay 10% interest on his loans although he knew that it was exorbitant; and

(6) failing to pay his loans because the checks he issued were dishonored as the accounts were already
closed.

The IBP-CBD also found that respondent violated Canon 16 and Rule 16.01 of the Code of Professional
Responsibility when he failed to properly account for the various funds he received from complainants.

In addition, the IBP-CBD found that respondent violated Rule 16.04 of the Code of Professional
Responsibility which prohibits borrowing money from a client unless the client’s interest is fully protected
or the client is given independent advice.
On the matter of practicing law while under suspension, the IBP-CBD found that the records were not
clear whether the notice of suspension respondent received on 29 May 2006 was the report and
recommendation of the IBP-CBD or the final decision of this Court. The IBP-CBD likewise found that there
was insufficient evidence to prove that respondent mishandled his cases.

The IBP-CBD recommended that respondent be meted the penalty of disbarment.

In Resolution No. XIX-2011-267 dated 14 May 2011, the IBP Board of Governors adopted and approved
the recommendation of the IBP-CBD with modification by reducing the recommended penalty from
disbarment to suspension from the practice of law for two years. The IBP Board of Governors likewise
ordered respondent to return the amount of his unpaid obligation to complainants.

Complainants filed a motion for reconsideration, praying that the penalty of disbarment be instead
imposed upon respondent.

The only issue in this case is whether respondent violated the Code of Professional Responsibility.

The records show that respondent violated at least four provisions of the Code of Professional
Responsibility.

Rule 1.01 of the Code of Professional Responsibility provides:

Rule 1.01. - A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

With respect to his client, Presbitero, it was established that respondent agreed to pay a high interest rate
on the loan he obtained from her. He drafted the MOA. Yet, when he could no longer pay his loan, he
sought to nullify the same MOA he drafted on the ground that the interest rate was unconscionable. It was
also established that respondent mortgaged a 263-square-meter property to Presbitero for ₱1,000,000
but he later sold the property for only ₱150,000, showing that he deceived his client as to the real value of
the mortgaged property. Respondent’s allegation that the sale was eventually rescinded did not distract
from the fact that he did not apprise Presbitero as to the real value of the property.

Respondent failed to refute that the checks he issued to his client Presbitero and to Navarro belonged to
his son, Ivan Garcia Solidum III whose name is similar to his name. He only claimed that complainants
knew that he could no longer open a current bank account, and that they even suggested that his wife or
son issue the checks for him. However, we are inclined to agree with the IBP-CBD’s finding that he made
complainants believe that the account belonged to him. In fact, respondent signed in the presence of
Navarro the first batch of checks he issued to Navarro. Respondent sent the second batch of checks to
Navarro and the third batch of checks to Presbitero through a messenger, and complainants believed that
the checks belonged to accounts in respondent’s name.

It is clear that respondent violated Rule 1.01 of the Code of Professional Responsibility. We have ruled
that conduct, as used in the Rule, is not confined to the performance of a lawyer’s professional duties.1 A
lawyer may be disciplined for misconduct committed either in his professional or private capacity.2 The
test is whether his conduct shows him to be wanting in moral character, honesty, probity, and good
demeanor, or whether it renders him unworthy to continue as an officer of the court.3

In this case, the loan agreements with Navarro were done in respondent’s private capacity. Although
Navarro financed the registration of Yulo’s lot, respondent and Navarro had no lawyer-client relationship.
However, respondent was Presbitero’s counsel at the time she granted him a loan. It was established that
respondent misled Presbitero on the value of the property he mortgaged as a collateral for his loan from
her. To appease Presbitero, respondent even made a Deed of Undertaking that he would give her
another 1,000-square-meter lot as additional collateral but he failed to do so.
Clearly, respondent is guilty of engaging in dishonest and deceitful conduct, both in his professional
capacity with respect to his client, Presbitero, and in his private capacity with respect to complainant
Navarro. Both Presbitero and Navarro allowed respondent to draft the terms of the loan agreements.
Respondent drafted the MOAs knowing that the interest rates were exorbitant. Later, using his knowledge
of the law, he assailed the validity of the same MOAs he prepared. He issued checks that were drawn
from his son’s account whose name was similar to his without informing complainants. Further, there is
nothing in the records that will show that respondent paid or undertook to pay the loans he obtained from
complainants.

Canon 16 and Rule 16.01 of the Code of Professional Responsibility provide:

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.

The fiduciary nature of the relationship between the counsel and his client imposes on the lawyer the duty
to account for the money or property collected or received for or from his client.4 We agree with the IBP-
CBD that respondent failed to fulfill this duty. In this case, the IBP-CBD pointed out that respondent
received various amounts from complainants but he could not account for all of them.

Navarro, who financed the registration of Yulo’s 18.85-hectare lot, claimed that respondent received
₱265,000 from her. Respondent countered that ₱105,000 was paid for real estate taxes but he could not
present any receipt to prove his claim. Respondent also claimed that he paid ₱70,000 to the surveyor but
the receipt was only for ₱15,000. Respondent claimed that he paid ₱50,000 for filing fee, publication fee,
and other expenses but again, he could not substantiate his claims with any receipt. As pointed out by the
IBP-CBD, respondent had been less than diligent in accounting for the funds he received from Navarro
for the registration of Yulo’s property.

Unfortunately, the records are not clear whether respondent rendered an accounting to Yulo who had
since passed away.

As regards Presbitero, it was established during the clarificatory hearing that respondent received
₱50,000 from Presbitero. As the IBP-CBD pointed out, the records do not show how respondent spent
the funds because he was not transparent in liquidating the money he received from Presbitero.

Clearly, respondent had been negligent in properly accounting for the money he received from his client,
Presbitero.1âwphi1 Indeed, his failure to return the excess money in his possession gives rise to the
presumption that he has misappropriated it for his own use to the prejudice of, and in violation of the trust
reposed in him by, the client.5

Rule 16.04 of the Code of Professional Responsibility provides:

Rule 16.04. - A lawyer shall not borrow money from his client unless the client’s interests are fully
protected by the nature of the case or by independent advice. Neither shall a lawyer lend money to a
client except, when in the interest of justice, he has to advance necessary expenses in a legal matter he
is handling for the client.

Here, respondent does not deny that he borrowed ₱1,000,000 from his client Presbitero. At the time he
secured the loan, respondent was already the retained counsel of Presbitero.

While respondent’s loan from Presbitero was secured by a MOA, postdated checks and real estate
mortgage, it turned out that respondent misrepresented the value of the property he mortgaged and that
the checks he issued were not drawn from his account but from that of his son. Respondent eventually
questioned the terms of the MOA that he himself prepared on the ground that the interest rate imposed
on his loan was unconscionable. Finally, the checks issued by respondent to Presbitero were dishonored
because the accounts were already closed. The interest of his client, Presbitero, as lender in this case,
was not fully protected. Respondent violated Rule 16.04 of the Code of Professional Responsibility, which
presumes that the client is disadvantaged by the lawyer’s ability to use all the legal maneuverings to
renege on his obligation.6 In his dealings with his client Presbitero, respondent took advantage of his
knowledge of the law as well as the trust and confidence reposed in him by his client.

We modify the recommendation of the IBP Board of Governors imposing on respondent the penalty of
suspension from the practice of law for two years. Given the facts of the case, we see no reason to
deviate from the recommendation of the IBP-CBD imposing on respondent the penalty of disbarment.
Respondent failed to live up to the high standard of morality, honesty, integrity, and fair dealing required
of him as a member of the legal profession.7 Instead, respondent employed his knowledge and skill of the
law and took advantage of his client to secure undue gains for himself8 that warrants his removal from
the practice of law. Likewise, we cannot sustain the IBP Board of Governors’ recommendation ordering
respondent to return his unpaid obligation to complainants, except for advances for the expenses he
received from his client, Presbitero, that were not accounted at all. In disciplinary proceedings against
lawyers, the only issue is whether the officer of the court is still fit to be allowed to continue as a member
of the Bar.9 Our only concern is the determination of respondent’s administrative liability.10

Our findings have no material bearing on other judicial action which the parties may choose to file against
each other.11 Nevertheless, when a lawyer receives money from a client for a particular purpose
involving the client-attorney relationship, he is bound to render an accounting to the client showing that
the money was spent for that particular purpose.12 If the lawyer does not use the money for the intended
purpose, he must immediately return the money to his client.13 Respondent was given an opportunity to
render an accounting, and he failed. He must return the full amount of the advances given him by
Presbitero, amounting to ₱50,000.

WHEREFORE, the Court finds Atty. Ivan M. Solidum, Jr. GUILTY of violating Rule 1.01, Canon 16, Rule
16.01, and Rule 16.04 of the Code of Professional Responsibility. Accordingly, the Court DISBARS him
from the practice of law effective immediately upon his receipt of this Decision.

Atty. Solidum is ORDERED to return the advances he received from Hilda S. Presbitero, amounting to
₱50,000, and to submit to the Office of the Bar Confidant his compliance with this order within thirty days
from finality of this Decision.

Let copies of this Decision be furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines for distribution to all its chapters, and the Office of the Court Administrator for dissemination to
all courts all over the country. Let a copy of this Decision be attached to the personal records of
respondent.

SO ORDERED.

MARIA LOURDES P. A. SERENO

_______________

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 173188 January 15, 2014

THE CONJUGAL PARTNERSHIP OF THE SPOUSES VICENTE CADAVEDO AND BENITA ARCOY-
CADAVEDO (both deceased), substituted by their heirs, namely: HERMINA, PASTORA, Heirs of
FRUCTUOSA, Heirs of RAQUEL, EVANGELINE, VICENTE, JR., and ARMANDO, all surnamed
CADAVEDO, Petitioners,
vs.
VICTORINO (VIC) T. LACAYA, married to Rosa Legados, Respondents.

DECISION

BRION, J.:

We solve in this Rule 45 petition for review on certiorari1 the challenge to the October 11, 2005 decision2
and the May 9, 2006 resolution3 of the Court of Appeals (CA) inPetitioners, CA-G.R. CV No. 56948. The
CA reversed and set aside the September 17, 1996 decision4 of the Regional Trial Court (RTC), Branch
10, of Dipolog City in Civil Case No. 4038, granting in part the complaint for recovery of possession of
property filed by the petitioners, the Conjugal Partnership of the Spouses Vicente Cadavedo and Benita
Arcoy-Cadavedo against Atty. Victorino (Vic) T. Lacaya, married to Rosa Legados (collectively, the
respondents).

The Factual Antecedents

The Spouses Vicente Cadavedo and Benita Arcoy-Cadavedo (collectively, the spouses Cadavedo)
acquired a homestead grant over a 230,765-square meter parcel of land known as Lot 5415 (subject lot)
located in Gumay, Piñan, Zamboanga del Norte. They were issued Homestead Patent No. V-15414 on
March 13, 1953andOriginal Certificate of Title No. P-376 on July 2, 1953.On April30, 1955, the spouses
Cadavedo sold the subject lot to the spouses Vicente Ames and Martha Fernandez (the spouses Ames)
Transfer Certificate of Title (TCT) No. T-4792 was subsequently issued in the name of the spouses Ames.

The present controversy arose when the spouses Cadavedo filed an action5 before the RTC(then Court
of First Instance) of Zamboanga City against the spouses Ames for sum of money and/or voiding of
contract of sale of homestead after the latter failed to pay the balance of the purchase price. The spouses
Cadavedo initially engaged the services of Atty. Rosendo Bandal who, for health reasons, later withdrew
from the case; he was substituted by Atty. Lacaya.

On February 24, 1969, Atty. Lacaya amended the complaint to assert the nullity of the sale and the
issuance of TCT No. T-4792 in the names of the spouses Ames as gross violation of the public land law.
The amended complaint stated that the spouses Cadavedo hired Atty. Lacaya on a contingency fee
basis. The contingency fee stipulation specifically reads:

10. That due to the above circumstances, the plaintiffs were forced to hire a lawyer on contingent basis
and if they become the prevailing parties in the case at bar, they will pay the sum of ₱2,000.00 for
attorney’s fees.6

In a decision dated February 1, 1972, the RTC upheld the sale of the subject lot to the spouses Ames.
The spouses Cadavedo, thru Atty. Lacaya, appealed the case to the CA.

On September 18, 1975, and while the appeal before the CAin Civil Case No. 1721was pending, the
spouses Ames sold the subject lot to their children. The spouses Ames’ TCT No. T-4792 was
subsequently cancelled and TCT No. T-25984was issued in their children’s names. On October 11, 1976,
the spouses Ames mortgaged the subject lot with the Development Bank of the Philippines (DBP) in the
names of their children.

On August 13, 1980, the CA issued itsdecision in Civil Case No. 1721,reversing the decision of the RTC
and declaring the deed of sale, transfer of rights, claims and interest to the spouses Ames null and void
ab initio. It directed the spouses Cadavedo to return the initial payment and ordered the Register of
Deeds to cancel the spouses Ames’ TCT No. T-4792 and to reissue another title in the name of the
spouses Cadavedo. The case eventually reached this Court via the spouses Ames’ petition for review on
certiorari which this Court dismissed for lack of merit.
Meanwhile, the spouses Ames defaulted in their obligation with the DBP. Thus, the DBP caused the
publication of a notice of foreclosure sale of the subject lot as covered by TCT No. T-25984(under the
name of the spouses Ames’ children). Atty. Lacaya immediately informed the spouses Cadavedo of the
foreclosure sale and filed an Affidavit of Third Party Claim with the Office of the Provincial Sheriff on
September 14, 1981.

With the finality of the judgment in Civil Case No. 1721,Atty. Lacaya filed on September 21, 1981 a
motion for the issuance of a writ of execution.

On September 23, 1981,and pending the RTC’s resolution of the motion for the issuance of a writ of
execution, the spouses Ames filed a complaint7 before the RTC against the spouses Cadavedo for
Quieting of Title or Enforcement of Civil Rights due Planters in Good Faith with prayer for Preliminary
Injunction. The spouses Cadavedo, thru Atty. Lacaya, filed a motion to dismiss on the ground of res
judicata and to cancel TCT No. T-25984 (under the name of the spouses Ames’ children).

On October 16, 1981, the RTC granted the motion for the issuance of a writ of execution in Civil Case No.
1721,andthe spouses Cadavedo were placed in possession of the subject lot on October 24, 1981. Atty.
Lacaya asked for one-half of the subject lot as attorney’s fees. He caused the subdivision of the subject
lot into two equal portions, based on area, and selected the more valuable and productive half for himself;
and assigned the other half to the spouses Cadavedo.

Unsatisfied with the division, Vicente and his sons-in-law entered the portion assigned to the respondents
and ejected them. The latter responded by filing a counter-suit for forcible entry before the Municipal Trial
Court (MTC); the ejectment case was docketed as Civil Case No. 215. This incident occurred while Civil
Case No. 3352was pending.

On May 13, 1982, Vicente andAtty. Lacaya entered into an amicable settlement (compromise
agreement)8 in Civil Case No. 215 (the ejectment case), re-adjusting the area and portion obtained by
each. Atty. Lacaya acquired 10.5383 hectares pursuant to the agreement. The MTC approved the
compromise agreementin a decision dated June 10, 1982.

Meanwhile, on May 21, 1982, the spouses Cadavedo filed before the RTC an action against the DBP for
Injunction; it was docketed as Civil Case No. 3443 (Cadavedo v. DBP).The RTC subsequently denied the
petition, prompting the spouses Cadavedo to elevate the case to the CAvia a petition for certiorari. The
CA dismissed the petition in its decision of January 31, 1984.

The records do not clearly disclose the proceedings subsequent to the CA decision in Civil Case No.
3443. However, on August 18, 1988, TCT No. 41051was issued in the name of the spouses Cadavedo
concerning the subject lot.

On August 9, 1988, the spouses Cadavedo filed before the RTC an action9 against the respondents,
assailing the MTC-approved compromise agreement. The case was docketed as Civil Case No. 4038 and
is the root of the present case. The spouses Cadavedo prayed, among others, that the respondents be
ejected from their one-half portion of the subject lot; that they be ordered to render an accounting of the
produce of this one-half portion from 1981;and that the RTC fix the attorney’s fees on a quantum meruit
basis, with due consideration of the expenses that Atty. Lacaya incurred while handling the civil cases.

During the pendency of Civil Case No. 4038, the spouses Cadavedo executed a Deed of Partition of
Estate in favor of their eight children. Consequently, TCT No. 41051 was cancelled and TCT No. 41690
was issued in the names of the latter. The records are not clear on the proceedings and status of Civil
Case No. 3352.

The Ruling of the RTC

In the September 17, 1996 decision10 in Civil Case No. 4038, the RTC declared the contingent fee of
10.5383 hectares as excessive and unconscionable. The RTC reduced the land area to 5.2691 hectares
and ordered the respondents to vacate and restore the remaining 5.2692hectares to the spouses
Cadavedo.

The RTC noted that, as stated in the amended complaint filed by Atty. Lacaya, the agreed attorney’s fee
on contingent basis was ₱2,000.00. Nevertheless, the RTC also pointed out that the parties novated this
agreement when they executed the compromise agreement in Civil Case No. 215 (ejectment case),
thereby giving Atty. Lacaya one-half of the subject lot. The RTC added that Vicente’s decision to give
Atty. Lacaya one-half of the subject lot, sans approval of Benita, was a valid act of administration and
binds the conjugal partnership. The RTC reasoned out that the disposition redounded to the benefit of the
conjugal partnership as it was done precisely to remunerate Atty. Lacaya for his services to recover the
property itself.

These considerations notwithstanding, the RTC considered the one-half portion of the subject lot, as Atty.
Lacaya’s contingent fee,excessive, unreasonable and unconscionable. The RTC was convinced that the
issues involved in Civil Case No. 1721were not sufficiently difficult and complicated to command such an
excessive award; neither did it require Atty. Lacaya to devote much of his time or skill, or to perform
extensive research.

Finally, the RTC deemed the respondents’ possession, prior to the judgment, of the excess portion of
their share in the subject lot to be in good faith. The respondents were thus entitled to receive its fruits.

On the spouses Cadavedo’s motion for reconsideration, the RTC modified the decision in its resolution11
dated December 27, 1996. The RTC ordered the respondents to account for and deliver the produce and
income, valued at ₱7,500.00 per annum, of the 5.2692hectares that the RTC ordered the spouses
Amesto restore to the spouses Cadavedo, from October 10, 1988 until final restoration of the premises.

The respondents appealed the case before the CA.

The Ruling of the CA

In its decision12 dated October 11, 2005, the CA reversed and set aside the RTC’s September 17, 1996
decision and maintained the partition and distribution of the subject lot under the compromise agreement.
In so ruling, the CA noted the following facts: (1) Atty. Lacaya served as the spouses Cadavedo’s counsel
from 1969 until 1988,when the latter filed the present case against Atty. Lacaya; (2) during the nineteen
(19) years of their attorney-client relationship, Atty. Lacaya represented the spouses Cadavedo in three
civil cases –Civil Case No. 1721, Civil Case No. 3352, and Civil Case No. 3443; (3) the first civil case
lasted for twelve years and even reached this Court, the second civil case lasted for seven years, while
the third civil case lasted for six years and went all the way to the CA;(4) the spouses Cadavedo and Atty.
Lacaya entered into a compromise agreement concerning the division of the subject lot where Atty.
Lacaya ultimately agreed to acquire a smaller portion; (5) the MTC approved the compromise agreement;
(6) Atty. Lacaya defrayed all of the litigation expenses in Civil Case No. 1721; and (7) the spouses
Cadavedo expressly recognized that Atty. Lacaya served them in several cases.

Considering these established facts and consistent with Canon 20.01 of the Code of Professional
Responsibility (enumerating the factors that should guide the determination of the lawyer’s fees), the CA
ruled that the time spent and the extent of the services Atty. Lacaya rendered for the spouses Cadavedo
in the three cases, the probability of him losing other employment resulting from his engagement, the
benefits resulting to the spouses Cadavedo, and the contingency of his fees justified the compromise
agreement and rendered the agreed fee under the compromise agreement reasonable.

The Petition

In the present petition, the petitioners essentially argue that the CA erred in: (1) granting the attorney’s
fee consisting of one-half or 10.5383 hectares of the subject lot to Atty. Lacaya, instead of confirming the
agreed contingent attorney’s fees of ₱2,000.00; (2) not holding the respondents accountable for the
produce, harvests and income of the 10.5383-hectare portion (that they obtained from the spouses
Cadavedo) from 1988 up to the present; and (3) upholding the validity of the purported oral contract
between the spouses Cadavedo and Atty. Lacaya when it was champertous and dealt with property then
still subject of Civil Case No. 1721.13

The petitioners argue that stipulations on a lawyer’s compensation for professional services, especially
those contained in the pleadings filed in courts, control the amount of the attorney’s fees to which the
lawyer shall be entitled and should prevail over oral agreements. In this case, the spouses Cadavedo and
Atty. Lacaya agreed that the latter’s contingent attorney’s fee was ₱2,000.00 in cash, not one-half of the
subject lot. This agreement was clearly stipulated in the amended complaint filed in Civil Case No. 1721.
Thus, Atty. Lacaya is bound by the expressly stipulated fee and cannot insist on unilaterally changing its
terms without violating their contract.

The petitioners add that the one-half portion of the subject lot as Atty. Lacaya’s contingent attorney’s fee
is excessive and unreasonable. They highlight the RTC’s observations and argue that the issues involved
in Civil Case No. 1721, pursuant to which the alleged contingent fee of one-half of the subject lot was
agreed by the parties, were not novel and did not involve difficult questions of law; neither did the case
require much of Atty. Lacaya’s time, skill and effort in research. They point out that the two subsequent
civil cases should not be considered in determining the reasonable contingent fee to which Atty. Lacaya
should be entitled for his services in Civil Case No. 1721,as those cases had not yet been instituted at
that time. Thus, these cases should not be considered in fixing the attorney’s fees. The petitioners also
claim that the spouses Cadavedo concluded separate agreements on the expenses and costs for each of
these subsequent cases, and that Atty. Lacaya did not even record any attorney’s lien in the spouses
Cadavedo’s TCT covering the subject lot.

The petitioners further direct the Court’s attention to the fact that Atty. Lacaya,in taking over the case from
Atty. Bandal, agreed to defray all of the litigation expenses in exchange for one-half of the subject lot
should they win the case. They insist that this agreement is a champertous contract that is contrary to
public policy, prohibited by law for violation of the fiduciary relationship between a lawyer and a client.

Finally, the petitioners maintain that the compromise agreement in Civil Case No. 215 (ejectment case)
did not novate their original stipulated agreement on the attorney’s fees. They reason that Civil Case No.
215 did not decide the issue of attorney’s fees between the spouses Cadavedo and Atty. Lacaya for the
latter’s services in Civil Case No. 1721.

The Case for the Respondents

In their defense,14 the respondents counter that the attorney’s fee stipulated in the amended complaint
was not the agreed fee of Atty. Lacaya for his legal services. They argue that the questioned stipulation
for attorney’s fees was in the nature of a penalty that, if granted, would inure to the spouses Cadavedo
and not to Atty. Lacaya.

The respondents point out that: (1) both Vicente and Atty. Lacaya caused the survey and subdivision of
the subject lot immediately after the spouses Cadavedo reacquired its possession with the RTC’s
approval of their motion for execution of judgment in Civil Case No. 1721; (2) Vicente expressly ratified
and confirmed the agreement on the contingent attorney’s fee consisting of one-half of the subject lot; (3)
the MTC in Civil Case No. 215 (ejectment case) approved the compromise agreement; (4) Vicente is the
legally designated administrator of the conjugal partnership, hence the compromise agreement ratifying
the transfer bound the partnership and could not have been invalidated by the absence of Benita’s
acquiescence; and (5) the compromise agreement merely inscribed and ratified the earlier oral
agreement between the spouses Cadavedo and Atty. Lacaya which is not contrary to law, morals, good
customs, public order and public policy.

While the case is pending before this Court, Atty. Lacaya died.15 He was substituted by his wife -Rosa -
and their children –Victoriano D.L. Lacaya, Jr., Rosevic Lacaya-Ocampo, Reymar L. Lacaya, Marcelito L.
Lacaya, Raymundito L. Lacaya, Laila Lacaya-Matabalan, Marivic Lacaya-Barba, Rosalie L. Lacaya and
Ma. Vic-Vic Lacaya-Camaongay.16

The Court’s Ruling

We resolve to GRANT the petition.

The subject lot was the core of four successive and overlapping cases prior to the present controversy. In
three of these cases, Atty. Lacaya stood as the spouses Cadavedo’s counsel. For ease of discussion, we
summarize these cases (including the dates and proceedings pertinent to each) as follows:

Civil Case No. 1721 – Cadavedo v. Ames (Sum of money and/or voiding of contract of sale of
homestead), filed on January 10, 1967. The writ of execution was granted on October 16, 1981.

Civil Case No. 3352 – Ames v. Cadavedo (Quieting of Title and/or Enforcement of Civil Rights due
Planters in Good Faith with Application for Preliminary injunction), filed on September 23, 1981.

Civil Case No. 3443 – Cadavedo v. DBP (Action for Injunction with Preliminary Injunction), filed on May
21, 1982.

Civil Case No. 215 –Atty. Lacaya v. Vicente Cadavedo, et. al. (Ejectment Case), filed between the latter
part of 1981 and early part of 1982. The parties executed the compromise agreement on May 13, 1982.

Civil Case No. 4038 –petitioners v. respondents (the present case).

The agreement on attorney’s fee

consisting of one-half of the subject
lot is void; the petitioners are entitled
to recover possession

The core issue for our resolution is whether the attorney’s fee consisting of one-half of the subject lot is
valid and reasonable, and binds the petitioners. We rule in the NEGATIVE for the reasons discussed
below.

A. The written agreement providing for

a contingent fee of ₱2,000.00 should prevail
over the oral agreement providing for one-
half of the subject lot

The spouses Cadavedo and Atty. Lacaya agreed on a contingent fee of ₱2,000.00 and not, as asserted
by the latter, one-half of the subject lot. The stipulation contained in the amended complaint filed by Atty.
Lacaya clearly stated that the spouses Cadavedo hired the former on a contingency basis; the Spouses
Cadavedo undertook to pay their lawyer ₱2,000.00 as attorney’s fees should the case be decided in their
favor.

Contrary to the respondents’ contention, this stipulation is not in the nature of a penalty that the court
would award the winning party, to be paid by the losing party. The stipulation is a representation to the
court concerning the agreement between the spouses Cadavedo and Atty. Lacaya, on the latter’s
compensation for his services in the case; it is not the attorney’s fees in the nature of damages which the
former prays from the court as an incident to the main action.

At this point, we highlight that as observed by both the RTC and the CA and agreed as well by both
parties, the alleged contingent fee agreement consisting of one-half of the subject lot was not reduced to
writing prior to or, at most, at the start of Atty. Lacaya’s engagement as the spouses Cadavedo’s counsel
in Civil Case No. 1721.An agreement between the lawyer and his client, providing for the former’s
compensation, is subject to the ordinary rules governing contracts in general. As the rules stand,
controversies involving written and oral agreements on attorney’s fees shall be resolved in favor of the
former.17 Hence, the contingency fee of ₱2,000.00 stipulated in the amended complaint prevails over the
alleged oral contingency fee agreement of one-half of the subject lot.

B. The contingent fee agreement between

the spouses Cadavedo and Atty. Lacaya,
awarding the latter one-half of the subject
lot, is champertous

Granting arguendo that the spouses Cadavedo and Atty. Lacaya indeed entered into an oral contingent
fee agreement securing to the latter one-half of the subject lot, the agreement is nevertheless void.

In their account, the respondents insist that Atty. Lacaya agreed to represent the spouses Cadavedo in
Civil Case No. 1721 and assumed the litigation expenses, without providing for reimbursement, in
exchange for a contingency fee consisting of one-half of the subject lot. This agreement is champertous
and is contrary to public policy.18

Champerty, along with maintenance (of which champerty is an aggravated form), is a common law
doctrine that traces its origin to the medieval period.19 The doctrine of maintenance was directed "against
wanton and in officious intermeddling in the disputes of others in which the intermeddler has no interest
whatever, and where the assistance rendered is without justification or excuse."20 Champerty, on the
other hand, is characterized by "the receipt of a share of the proceeds of the litigation by the
intermeddler."21 Some common law court decisions, however, add a second factor in determining
champertous contracts, namely, that the lawyer must also, "at his own expense maintain, and take all the
risks of, the litigation."22

The doctrines of champerty and maintenance were created in response "to medieval practice of assigning
doubtful or fraudulent claims to persons of wealth and influence in the expectation that such individuals
would enjoy greater success in prosecuting those claims in court, in exchange for which they would
receive an entitlement to the spoils of the litigation."23 "In order to safeguard the administration of justice,
instances of champerty and maintenance were made subject to criminal and tortuous liability and a
common law rule was developed, striking down champertous agreements and contracts of maintenance
as being unenforceable on the grounds of public policy."24

In this jurisdiction, we maintain the rules on champerty, as adopted from American decisions, for public
policy considerations.25 As matters currently stand, any agreement by a lawyer to "conduct the litigation
in his own account, to pay the expenses thereof or to save his client therefrom and to receive as his fee a
portion of the proceeds of the judgment is obnoxious to the law."26 The rule of the profession that forbids
a lawyer from contracting with his client for part of the thing in litigation in exchange for conducting the
case at the lawyer’s expense is designed to prevent the lawyer from acquiring an interest between him
and his client. To permit these arrangements is to enable the lawyer to "acquire additional stake in the
outcome of the action which might lead him to consider his own recovery rather than that of his client or to
accept a settlement which might take care of his interest in the verdict to the sacrifice of that of his client
in violation of his duty of undivided fidelity to his client’s cause."27

In Bautista v. Atty. Gonzales,28 the Court struck down the contingent fee agreement between therein
respondent Atty. Ramon A. Gonzales and his client for being contrary to public policy. There, the Court
held that an reimbursement of litigation expenses paid by the former is against public policy, especially if
the lawyer has agreed to carry on the action at his expense in consideration of some bargain to have a
part of the thing in dispute. It violates the fiduciary relationship between the lawyer and his client.29

In addition to its champertous character, the contingent fee arrangement in this case expressly
transgresses the Canons of Professional Ethics and, impliedly, the Code of Professional Responsibility.30
Under Rule 42 of the Canons of Professional Ethics, a lawyer may not properly agree with a client that
the lawyer shall pay or beat the expense of litigation.31 The same reasons discussed above underlie this
rule.
C. The attorney’s fee consisting of
one-half of the subject lot is excessive
and unconscionable

We likewise strike down the questioned attorney’s fee and declare it void for being excessive and
unconscionable.1âwphi1 The contingent fee of one-half of the subject lot was allegedly agreed to secure
the services of Atty. Lacaya in Civil Case No. 1721.Plainly, it was intended for only one action as the two
other civil cases had not yet been instituted at that time. While Civil Case No. 1721 took twelve years to
be finally resolved, that period of time, as matters then stood, was not a sufficient reason to justify a large
fee in the absence of any showing that special skills and additional work had been involved. The issue
involved in that case, as observed by the RTC(and with which we agree), was simple and did not require
of Atty. Lacaya extensive skill, effort and research. The issue simply dealt with the prohibition against the
sale of a homestead lot within five years from its acquisition.

That Atty. Lacaya also served as the spouses Cadavedo’s counsel in the two subsequent cases did not
and could not otherwise justify an attorney’s fee of one-half of the subject lot. As assertedby the
petitioners, the spouses Cadavedo and Atty. Lacaya made separate arrangements for the costs and
expenses foreach of these two cases. Thus, the expenses for the two subsequent cases had been
considered and taken cared of Based on these considerations, we therefore find one-half of the subject
lot as attorney’s fee excessive and unreasonable.

D. Atty. Lacaya’s acquisition of

the one-half portion contravenes
Article 1491 (5) of the Civil Code

Article 1491 (5) of the Civil Code forbids lawyers from acquiring, by purchase or assignment, the property
that has been the subject of litigation in which they have taken part by virtue of their profession.32 The
same proscription is provided under Rule 10 of the Canons of Professional Ethics.33

A thing is in litigation if there is a contest or litigation over it in court or when it is subject of the judicial
action.34 Following this definition, we find that the subject lot was still in litigation when Atty. Lacaya
acquired the disputed one-half portion. We note in this regard the following established facts:(1)on
September 21, 1981, Atty. Lacaya filed a motion for the issuance of a writ of execution in Civil Case No.
1721; (2) on September 23, 1981, the spouses Ames filed Civil Case No. 3352 against the spouses
Cadavedo; (3)on October 16, 1981, the RTC granted the motion filed for the issuance of a writ of
execution in Civil Case No. 1721 and the spouses Cadavedo took possession of the subject lot on
October 24, 1981; (4) soon after, the subject lot was surveyed and subdivided into two equal portions,
and Atty. Lacaya took possession of one of the subdivided portions; and (5) on May 13, 1982, Vicente
and Atty. Lacaya executed the compromise agreement.

From these timelines, whether by virtue of the alleged oral contingent fee agreement or an agreement
subsequently entered into, Atty. Lacaya acquired the disputed one-half portion (which was after October
24, 1981) while Civil Case No. 3352 and the motion for the issuance of a writ of execution in Civil Case
No. 1721were already pending before the lower courts. Similarly, the compromise agreement, including
the subsequent judicial approval, was effected during the pendency of Civil Case No. 3352. In all of
these, the relationship of a lawyer and a client still existed between Atty. Lacaya and the spouses
Cadavedo.

Thus, whether we consider these transactions –the transfer of the disputed one-half portion and the
compromise agreement –independently of each other or resulting from one another, we find them to be
prohibited and void35 by reason of public policy.36 Under Article 1409 of the Civil Code, contracts which
are contrary to public policy and those expressly prohibited or declared void by law are considered in
existent and void from the beginning.37
What did not escape this Court’s attention is the CA’s failure to note that the transfer violated the
provisions of Article 1491(5) of the Civil Code, although it recognized the concurrence of the transfer and
the execution of the compromise agreement with the pendency of the two civil cases subsequent to Civil
Case No. 1721.38 In reversing the RTC ruling, the CA gave weight to the compromise agreement and in
so doing, found justification in the unproved oral contingent fee agreement.

While contingent fee agreements are indeed recognized in this jurisdiction as a valid exception to the
prohibitions under Article 1491(5) of the Civil Code,39 contrary to the CA’s position, however, this
recognition does not apply to the present case. A contingent fee contract is an agreement in writing where
the fee, often a fixed percentage of what may be recovered in the action, is made to depend upon the
success of the litigation.40 The payment of the contingent fee is not made during the pendency of the
litigation involving the client’s property but only after the judgment has been rendered in the case handled
by the lawyer.41

In the present case, we reiterate that the transfer or assignment of the disputed one-half portion to Atty.
Lacaya took place while the subject lot was still under litigation and the lawyer-client relationship still
existed between him and the spouses Cadavedo. Thus, the general prohibition provided under Article
1491 of the Civil Code, rather than the exception provided in jurisprudence, applies. The CA seriously
erred in upholding the compromise agreement on the basis of the unproved oral contingent fee
agreement.

Notably, Atty. Lacaya, in undertaking the spouses Cadavedo’s cause pursuant to the terms of the alleged
oral contingent fee agreement, in effect, became a co-proprietor having an equal, if not more, stake as
the spouses Cadavedo. Again, this is void by reason of public policy; it undermines the fiduciary
relationship between him and his clients.42

E.The compromise agreement could not

validate the void oral contingent fee
agreement; neither did it supersede the
written contingent fee agreement

The compromise agreement entered into between Vicente and Atty. Lacaya in Civil Case No. 215
(ejectment case) was intended to ratify and confirm Atty. Lacaya’s acquisition and possession of the
disputed one-half portion which were made in violation of Article 1491 (5) of the Civil Code. As earlier
discussed, such acquisition is void; the compromise agreement, which had for its object a void
transaction, should be void.

A contract whose cause, object or purpose is contrary to law, morals, good customs, public order or
public policy is in existent and void from the beginning.43 It can never be ratified44 nor the action or
defense for the declaration of the in existence of the contract prescribe;45 and any contract directly
resulting from such illegal contract is likewise void and in existent.46

Consequently, the compromise agreement did not supersede the written contingent fee agreement
providing for attorney’s fee of ₱2,000.00; neither did it preclude the petitioners from questioning its validity
even though Vicente might have knowingly and voluntarily acquiesced thereto and although the MTC
approved it in its June 10, 1982 decision in the ejectment case. The MTC could not have acquired
jurisdiction over the subject matter of the void compromise agreement; its judgment in the ejectment case
could not have attained finality and can thus be attacked at any time. Moreover, an ejectment case
concerns itself only with the issue of possession de facto; it will not preclude the filing of a separate action
for recovery of possession founded on ownership. Hence, contrary to the CA’s position, the petitioners–in
filing the present action and praying for, among others, the recovery of possession of the disputed one-
half portion and for judicial determination of the reasonable fees due Atty. Lacaya for his services –were
not barred by the compromise agreement.

Atty. Lacaya is entitled to receive attorney’s fees on a quantum meruit basis

In view of their respective assertions and defenses, the parties, in effect, impliedly set aside any express
stipulation on the attorney’s fees, and the petitioners, by express contention, submit the reasonableness
of such fees to the court’s discretion. We thus have to fix the attorney’s fees on a quantum meruit basis.

"Quantum meruit—meaning ‘as much as he deserves’—is used as basis for determining a lawyer’s
professional fees in the absence of a contract x x x taking into account certain factors in fixing the amount
of legal fees."47 "Its essential requisite is the acceptance of the benefits by one sought to be charged for
the services rendered under circumstances as reasonably to notify him that the lawyer performing the
task was expecting to be paid compensation"48 for it. The doctrine of quantum meruit is a device to
prevent undue enrichment based on the equitable postulate that it is unjust for a person to retain benefit
without paying for it.49

Under Section 24, Rule 138 of the Rules of Court50 and Canon 20 of the Code of Professional
Responsibility,51 factors such as the importance of the subject matter of the controversy, the time spent
and the extent of the services rendered, the customary charges for similar services, the amount involved
in the controversy and the benefits resulting to the client from the service, to name a few, are considered
in determining the reasonableness of the fees to which a lawyer is entitled.

In the present case, the following considerations guide this Court in considering and setting Atty. Lacaya’s
fees based on quantum meruit: (1) the questions involved in these civil cases were not novel and did not
require of Atty. Lacaya considerable effort in terms of time, skill or the performance of extensive research;
(2) Atty. Lacaya rendered legal services for the Spouses Cadavedo in three civil cases beginning in 1969
until 1988 when the petitioners filed the instant case; (3) the first of these civil cases (Cadavedo v. Ames)
lasted for twelve years and reaching up to this Court; the second (Ames v. Cadavedo) lasted for seven
years; and the third (Cadavedo and Lacaya v. DBP) lasted for six years, reaching up to the CA; and (4)
the property subject of these civil cases is of a considerable size of 230,765 square meters or 23.0765
hectares.

All things considered, we hold as fair and equitable the RTC’s considerations in appreciating the
character of the services that Atty. Lacaya rendered in the three cases, subject to modification on
valuation. We believe and so hold that the respondents are entitled to two (2) hectares (or approximately
one-tenth [1/10] of the subject lot), with the fruits previously received from the disputed one-half portion,
as attorney’s fees. They shall return to the petitioners the remainder of the disputed one-half portion.

The allotted portion of the subject lot properly recognizes that litigation should be for the benefit of the
client, not the lawyer, particularly in a legal situation when the law itself holds clear and express protection
to the rights of the client to the disputed property (a homestead lot). Premium consideration, in other
words, is on the rights of the owner, not on the lawyer who only helped the owner protect his rights.
Matters cannot be the other way around; otherwise, the lawyer does indeed effectively acquire a property
right over the disputed property. If at all, due recognition of parity between a lawyer and a client should be
on the fruits of the disputed property, which in this case, the Court properly accords.

WHEREFORE, in view of these considerations, we hereby GRANT the petition. We AFFIRM the decision
dated September 17, 1996 and the resolution dated December 27, 1996of the Regional Trial Court of
Dipolog City, Branch 10,in Civil Case No. 4038, with the MODIFICATION that the respondents, the
spouses Victorino (Vic) T. Lacaya and Rosa Legados, are entitled to two (2) hectares (or approximately
one-tenth [1/10] of the subject lot) as attorney’s fees. The fruits that the respondents previously received
from the disputed one-half portion shall also form part of the attorney’s fees. We hereby ORDER the
respondents to return to the petitioners the remainder of the 10.5383-hectare portion of the subject lot
that Atty. Vicente Lacaya acquired pursuant to the compromise agreement.

SO ORDERED.

ARTURO D. BRION
Associate Justice
___________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-27394 October 13, 1967

ARMANDO V. AMPIL, petitioner,

vs.
THE HONORABLE JUDGE CORAZON JULIANO-AGRAVA, ANTONIO M. PEREZ and BENIGNO
PEREZ Y TUAZON, respondents.

Leonardo Abola for respondent.

No apperance for the petioner.

RESOLUTION

DIZON, J.:

In his petition for certiorari filed on March 31, 1967, petitioner prayed for the issuance of a writ of
preliminary injunction temporarily restraining the respondents from enforcing and/or executing the order
marked as Annex D attached thereto, at any time during the pendency of the present case. We granted
the petition for the issuance of the writ aforesaid upon the filing of a P1,000.00 bond.

We have now before Us a motion filed by respondent Antonio M. Perez praying that said writ be lifted as
against him and that petitioner be ordered to deliver to him the properties covered by Transfer Certificates
of Title Nos. 24927 and 24928 of the City of Manila, said properties having been already awarded to him
by virtue of a compromise agreement entered into between the parties in G. R. No. L-19711 and
approved by Us on November 17, 1966.

Our resolution of August 30, 1967 required petitioner to comment, within five days from notice, on the
aforesaid motion, but the record shows that up to this time no such comment has been submitted by him.

It being a fact that the compromise agreement mentioned heretofore was approved by Us; that by virtue
thereof the properties covered by Transfer Certificates of Title Nos. 24927 and 24928 of the City of Manila
were awarded to respondent Antonio M. Perez, and that said certificates of title are presently in the
possession of petitioner, petitioner is hereby ordered to deliver said certificates of title to respondent
Antonio M. Perez, upon the filing and approval of a bond in the sum of P25,000.00 answerable for
whatever damages may be suffered by him (petitioner) in connection with his claim for attorney's fees
against his former client, Angela Tuason de Perez, by reason of the lifting of the writ of preliminary
injunction mentioned heretofore.

Reyes, J.B.L., Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.
Concepcion, C.J. and Bengzon, J.P., J., are on official leave, took no part.

________________

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
G.R. No. L-26137 September 23, 1968

EUGENIO V. VILLANUEVA, JR., petitioner,

vs.
HON. Jose R. QUERUBIN, in his capacity as Judge of the Court of First Instance of Negros Occidental,
ELVIRA GUANZON and MIGUEL MATTI, respondents.

Jose W. Diokno and Eugenio Villanueva & Associates for petitioner.

Judge Jose R. Querubin for and in his own behalf.
Soto & Banzon for private respondents.

FERNANDO, J.:

Petitioner Eugenio V. Villanueva, Jr., a member of the Philippine Bar, prays for the issuance of the writ of
certiorari to annul the order of respondent judge of June 1, 1966, requiring him "to surrender the
documents and papers" which allegedly had lawfully come to his possession in his professional capacity
as counsel of Elvira Guanzon and Miguel Matti in Civil Case No. 7725 of the Court of First Instance of
Negros Occidental, pending before respondent Judge. It turned out that petitioner was dismissed, while
the trial of the above-entitled case was still in progress and before petitioner's attorney's fees were fixed
and paid. He would likewise have this Court annul the order of the respondent Judge, dated June 3,
1966, declaring petitioner in contempt of Court and ordering his arrest for having failed to surrender the
aforementioned documents and papers. Prohibition is likewise sought to restrain respondent Judge from
enforcing its aforementioned orders of June 1, 1966 and June 3, 1966. There is equally a plea for
mandamus to compel respondents to recognize petitioner's retaining lien over such documents and
papers.1 As will hereafter be made more explicit, the question presented possesses an element of
novelty.

His former clients, Elvira Guanzon and Miguel Matti, were made respondents in addition to the Honorable
Jose R. Querubin, Judge of the Court of First Instance of Negros Occidental.

The statement of facts, as set forth in the petition, revealed that respondents Elvira Guanzon and Miguel
Matti, Board Members of Negros Occidental, engaged the professional services of petitioner for the
purpose of filing an action against the Provincial Governor, Vice-Governor, Treasurer, Auditor and
Secretary to the Provincial Board of Negros Occidental. On November 4, 1965, petitioner filed an action
for injunction, recovery of a sum of money and damages with preliminary injunction, Civil Case No. 7725
of the Court of First Instance of Negros Occidental, against such provincial officials. On the same day, the
hearing on the preliminary injunction was held, the writ being granted. 2

Thereafter, several hearings took place, petitioner asserting that "he gave all his time, effort and utmost
ability to protect the interest of his clients." In his preparation of the case, petitioner was able to acquire
documents and papers which were subsequently presented and marked as exhibits during the trial
thereof. On March 19, 1966, however, respondents Elvira Guanzon and Miguel Matti requested petitioner
to allow them to have the expediente of Civil Case No. 7725 under the pretext that they would study the
records to prepare them for a conference. At the resumption of the trial of Civil Case No. 7725 on April
14, 1966, petitioner was surprised when in open court, his clients, respondents Guanzon and Matti,
"manifested before the respondent Judge that they were already terminating the services of petitioner. In
the course of their manifestation, said respondents read their letters, addressed to petitioner, advising the
latter of the termination of his professional services." 3

On May 10, 1966, petitioner filed with the respondent Judge, a pleading opposing his dismissal as
counsel. On June 1, 1966, "without resolving the above opposition and motion, respondent Judge issued
an order requiring petitioner to 'deposit with the Clerk of Court all the documents presented by him and
marked as exhibits during the hearing conducted by him, so that same will be presented as exhibits
before closing the evidence of the plaintiffs,' . . . ." 4
The petition goes on to state: "Immediately upon receipt of this order on the same day, June 1, 1966,
petitioner filed a manifestation and motion informing the respondent Judge that 'all said documents are in
Manila where they were brought because they were the subject of conference with Atty. Jose W. Diokno
recently and therefore the same could not be delivered to the Clerk of Court, because it is humanly
impossible to do so,' and moving 'that the said ... order issued in the absence of [petitioner] be held in
abeyance to give [him] the time, the means and the opportunity to go to Manila.' ...; Respondent Judge,
however, orally denied on the same day petitioner's manifestation and motion and forthwith ordered the
latter's incarceration in the provincial jail of Negros Occidental. After repeated but respectful entreaties,
and after raising the point that he has a charging lien over the documents which is dependent upon his
possession of said documents, petitioner was allowed to go free but with a warning if within eighteen [18]
hours, should fail to surrender the documents, a warrant for his arrest would be issued. On the same day,
petitioner flew to Manila to get the documents. However, on June 2, 1966, petitioner received a long
distance call from his office informing him that the respondent Judge had declared him in contempt of
Court and issued a warrant for his arrest for his failure to surrender the documents. . . . ." 5

It is the allegation of petitioner that he "has no appeal or adequate remedy in the ordinary course of law to
protect not only his rights and honor but, what is more important, the decorum and respectability of the
legal profession, from the arbitrary and unreasoning actuations and orders of the respondent Judge, save
this petition." 6 It is petitioner's contention further that "the documents and papers which respondent
Judge requires petitioner to surrender had lawfully come to [his] possession in the course of his
employment by his clients, the respondents Elvira Guanzon and Matti. In gathering these documents
which he successfully utilized as evidence in Civil Case No. 7725, petitioner — bound by his loyalty and
relationship of trust to his clients — had to spend considerable time, effort and money. When, therefore,
respondents Guanzon and Matti terminated petitioner's services without paying his lawful attorney's fees,
petitioner acquired the right — and the respondents, particularly respondent Judge, are bound to
recognize this right — to retain all these documents and papers until his fees are paid. [Respondent
Judge in] issuing orders requiring petitioner to surrender the said documents . . . and declaring him in
contempt of court, and issuing a warrant for his arrest because of his failure to do so, . . . has acted
without jurisdiction and in manifest violation of law and jurisprudence. Petitioner respectfully submits,
therefore, that the writs therein prayed for lie and should issue." 7

On the 8th day of June, 1966, this Court adopted a resolution giving due course to the above petition for
certiorari, prohibition and mandamus. A restraining order effective immediately up to and includiing June
24, 1966, the hearing being set for June 22, 1966, forms part of the aforesaid resolution.

Respondent Judge himself filed an answer the pertinent portion of which contained the following: "That
this certiorari case stemmed from orders of the undersigned dated June 1, June 3 and June 6, 1966, in
connection with Civil Case 7725, Guanzon, et al. vs. Gomez, et al., for injunction. Atty. Eugenio
Villanueva., Jr., filed said case on behalf of Board Member Elvira Guanzon and Miguel Matti to stop
Governor Benjamin M. Gomez, Treasurer Juan D. Taala and Provincial Auditor Tereso Bomediano from
disbursing funds of the government for electioneering purposes. A writ of preliminary injunction was
issued. The case was set for hearing on the merits. Before the presentation of the plaintiffs' evidence, the
plaintiffs wanted Attys. Alfredo Soto and Francisco G. Banzon, to handle the presentation of evidence but
after a huddle among the plaintiffs' lawyers, the Court granted Atty. Villanueva to present the plaintiffs'
first witness inasmuch as he personally examined the documentary evidence. When he was about to
present his second witness, Atty. Elvira Guanzon submitted a written notice dispensing with the services
of Atty. Villanueva. Due to the fact that he was still acting as counsel for plaintiff Matti, he was allowed to
proceed with the presentation of his second witness. In the afternoon session, Atty. Villanueva received a
written notice of his dismissal as counsel for plaintiff Matti. The Court allowed Attys. Soto & Banzon to
take over the presentation of evidence. Upon petition, Atty. Villanueva, Jr. was allowed to continue his
appearance as amicus curiae. After the testimony of the second witness, Attys. Soto and Banzon asked
that the exhibits be deposited with the Clerk of Court. Atty. Villanueva prayed that he be given custody of
the exhibits, consisting of public documents, which the Court granted, with the understanding that said
exhibits be made available when needed by the Court. The hearing was continued for another date. Atty.
Villanueva did not appear. The Court set three days successively for the next hearing of the case with the
view to terminate it as expeditiously as possible. When the plaintiffs finished the presentation of their oral
evidence, Attys. Soto & Banzon asked that Atty. Villanueva, Jr. be ordered to bring to Court the exhibits
under his custody for formal presentation of said documentary evidence. Hence the controversial orders
were issued;. . . ." 8

It was likewise explained by respondent Judge that petitioner was given up to the afternoon of June 1,
1966 to produce the exhibits under his custody. After manifesting that such exhibits were in the
possession of Senator Diokno, petitioners were given forty-eight hours to produce the same. It was by
virtue of his failure either to appear on the next day as well as in the morning session of June 3, 1966 that
respondent Judge issued the order for the arrest of petitioner. 9

It was further stressed in the answer of respondent Judge that the ruling in Rustia vs. Abeto, "has
absolutely no application in this present case at bar." It stands as authority for "the right of attorney's
retaining lien over the documents and moneys turned over by a client to his counsel." Here, "the
documents consist of public records, which were brought to Court in virtue of a subpoena duces tecum.
The said documents were marked as Exhibits and Atty. Villanueva was given permission to have under
his custody the said exhibits with the understanding that same should be made available in case the
Court orders their production thereof." His defiance of the court orders to produce such exhibits amounted
to contempt. 10 Respondent Judge would rely on his power to discipline and punish erring practitioners.
11 For him, the dismissal of the petition is called for.

Respondent Judge prays for the dismissal of this petition. His plea must be granted. No certiorari lies as
the orders complained of were not issued without or in excess of jurisdiction or with grave abuse of
discretion. The enforcement thereof cannot be restrained by prohibition. Neither is petitioner entitled to
mandamus to compel respondent Judge to recognize his alleged retaining lien over the disputed
documents and papers.

As admitted in the petition, the documents and papers in question were introduced as exhibits; moreover,
as set forth in the answer of respondent Judge, they consist of public documents. There is no occasion,
therefore, for the privilege of a retaining lien granted an attorney to be availed of. It would be to extend its
scope beyond unwarranted limits to make it applicable to the kind of documents and papers of such
character. Moreover, it would be to curtail unduly the inherent power of a judicial tribunal in the conduct of
the proceedings before it if it is to be held bereft of power to compel the surrender of such documents.
Such an undesirable eventuality this Court cannot willingly allow to pass.

Rustia v. Abeto, 12 a 1941 decision, is relied upon by petitioner. Such a reliance is misplaced. It does not
aid its cause at all, as correctly stated by respondent Judge. That was a petition for certiorari and
mandamus to declare null and void certain orders of respondent Judge in an intestate case before him as
well as to compel the return to the petitioner of a transfer certificate of title and to recognize his retaining
lien over certain "documents, papers, funds and properties of the deceased" in such intestate proceeding.
Petitioner, likewise a member of the Philippine Bar, rendered professional services as counsel for the
administratrix. After being relieved of his services as attorney, he presented a bill for professional
services, the claim being submitted for resolution of respondent Judge. He sought not only the immediate
payment of his honorarium but likewise a retaining lien over all funds, documents and papers in his
possession until he was fully paid. His plea was rejected. Instead, the respondent court required petitioner
to deliver the certificate of title in question to the probate clerk of court of the Court of First Instance of
Manila. Petitioner complied but three days thereafter instituted this proceeding for certiorari and
mandamus.1awphîl.nèt

In the decision of the Court granting the writ prayed for, the opinion being penned by Justice Laurel, it
was stressed: "That the petitioner rendered professional services in behalf of the respondent
administratrix and other heirs of the deceased, Antonio de la Riva, is not disputed. We are not concerned
with the disagreement between the petitioner and the respondent administratrix as to the value of the said
professional services, nor with the alleged preferential right of the petitioner to the payment of his fees, as
they are not at issue in the instant proceedings. Suffice it to state here that the petitioner has already
interposed an appeal from the orders of December 3, 1940, and January 3, 1941, which orders, among
other things, reduced the professional fees claimed by the petitioner from P32,330 to P2,000. Moreover,
such dispute does not, and cannot, affect the general or retaining lien conceded to the petitioner by the
first sentence of section 33 of No. 127 of the Rules of Court, which provides that 'An attorney shall have a
lien upon the funds, documents and papers of his client which have lawfully come into his possession,
and may retain the same until his lawful fees and disbursements have been paid, and may apply such
funds to the satisfaction thereof.' The general, possessory, or retaining lien of an attorney attaches to all
property, papers, books, documents, or securities of the client that come to the attorney professionally or
in the course of his professional employment, such as a bond, a municipal warrant, a promissory note or
other negotiable papers, an account, a voucher, a bank book, a letter or writing, a contract, insurance
policy, or lease, a deed, or a mortgage." 13

Later, the opinion likewise stated: "We are aware of the inconvenience that may accrue to the client
because of the retention of important papers by an attorney claiming fees for services rendered, but this
is the reason and essence of the lien. Withal, the courts may require the attorney to deliver up the papers
in his possession which may serve to embarrass his client, provided the client files proper security for the
attorney's compensation. This proceeds from the power of the courts to control its own officers and to
compel attorneys to act equitably and fairly towards their clients." 14

It is thus obvious that even if the most expansive interpretation be accorded the rather generous
recognition of an attorney's retaining lien, the situation presented by this controversy falls outside its
operation. What must be stressed anew is that if petitioner were to be indulged in his refusal to abide by
the lawful orders of respondent Judge, the proper and due respect to which a court of justice is by right
entitled would be diminished. That cannot be permitted.

The disputed documents and papers were public in character. Moreover, they were introduced as
exhibits. They were properly subject to the court's custody. The intransigence of the petitioner in his
persistence to continue in possession of the same based on his erroneous belief as to the extent of the
privilege of a retaining lien, to impart a semblance of legality to his defiance, must not be, as earlier noted,
accorded the imprimatur of the approval of this Tribunal. If such were not the law, the resulting injury to a
fair and efficient administration of justice might well prove to be incalculable. Against such a deplorable
consequence this Court must resolutely set its face.

The record is bereft of the slightest indication that in acting as he did, respondent Judge laid himself open
to any accusation of failing to follow the dictates of the law. There is no occasion then for the supervisory
authority of this Tribunal to come into play. The orders of respondent Judge complained of can stand the
test of the most vigorous scrutiny.

WHEREFORE, this petition for certiorari, prohibition and mandamus is dismissed. With costs against
petitioner.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Angeles, JJ., concur.
Concepcion, C.J., took no part.