80 MIRANDA v. CARPIO (Nufuar) accident.
Sept. 26, 2011 | Peralta | Canon 20 3. In Miranda’s Affidavit, they agreed that Miranda was to pay Atty. Carpio
PETITIONER​: Valentin Miranda
RESPONDENTS​: Atty. Macario Carpio
SUMMARY​: Miranda engaged the services of Atty. Carpio for the registration
of his parcel of land. Miranda paid Atty. Carpio the fees due to the latter,but
during the last hearing of the case, Atty. Carpio demanded the additional amount
of PhP10,000.00 for the preparation of a memorandum plus 20% of the total area
of the subject property as additional fees for his services. Miranda did not accede
to this demand for it was contrary to their agreement and he was just a co-owner
of the said parcel of land. Miranda was awarded the land but when he went to
get the owner’s duplicate of the OCT, he was surprised that it had already been
claimed by Atty. Carpio. Atty. Carpio says that he would deliver the owner’s
duplicate upon payment of the additional fee and 20% share in the property.
Miranda again refused the demand and filed the present disbarment case against
Atty. Carpio. In defense of his actions, Atty. Carpio relied on his alleged
retaining lien. The SC states that t​here was no proof of any agreement between
the Miranda and Atty. Carpio that the latter ​is entitled to an additional
professional fee consisting of 20% of the total area covered by OCT No. 0-94.
The agreement between the parties only shows that Atty. Carpio will be paid the
acceptance fee and the appearance fees, which the respondent has duly received.
Clearly, there is no ​unsatisfied claim for attorney's fees ​that would entitle Atty.
Carpio to retain his client's property. Hence, he ​could not validly withhold the
title of his client absence a clear and justifiable claim. Atty. Carpio’s inexcusable
act of withholding the property belonging to his client and imposing
unwarranted fees in exchange for the release of said title deserve the imposition
of disciplinary sanction.
DOCTRINE​:An attorney's retaining lien is fully recognized if the presence of
the following elements concur: (1) lawyer-client relationship; (2) lawful
possession of the client's funds, documents and papers; and (3) ​unsatisfied claim
for attorney's fees​.
FACTS:
1. Valentin Miranda is one of the owners of a parcel of land in Las Pias, Metro
Manila.
2. In 1994, Miranda initiated Land Registration Commission (LRC) Case No.
M-226 for the registration of the aforesaid property. The case was filed
before the RTC of Las Pinas City.
a. During the course of the proceedings, he engaged the services of
respondent Atty. Carpio as counsel in the said case when his
original counsel, Atty. Samuel Marquez, figured in a vehicular
PhP20,000.00 as acceptance fee and PhP2,000.00 as appearance fee.
a. Miranda paid Atty. Carpio the amounts due him, as evidenced by
receipts duly signed by the latter.
b. During the last hearing of the case, Atty. Carpio demanded the
additional amount of PhP10,000.00 for the preparation of a
memorandum, which he said would further strengthen
complainant's position in the case, plus 20% of the total area of the
subject property as additional fees for his services.
4. Miranda did not accede to Atty. Carpio’s demand for it was contrary to their
agreement. Moreover, Miranda co-owned the subject property with his
siblings, and he could not have agreed to the amount being demanded by
Atty. Carpio without the knowledge and approval of his co-heirs.
a. As a result of complainant's refusal to satisfy Atty. Carpio’'s
demands, the latter became furious and their relationship became
sore.
5. Decision was rendered in LRC Case No. M-226, granting the petition for
registration. This became final and executory.
6. On April 3, 2000, Miranda went to the RD to get the owner's duplicate of
the OCT bearing No. 0-94.
a. He was surprised to discover that the same had already been
claimed by and released to Atty. Carpiot on March 29, 2000.
7. On May 4, 2000, Miranda talked to Atty. Carpio on the phone and asked
him to turn over the owner's duplicate of the OCT, which he had claimed
without Miranda’'s knowledge, consent and authority.
a. Atty. Carpio insisted that Miranda first pay him the PhP10,000.00
and the 20% share in the property equivalent to 378 square meters,
in exchange for which, Atty. Carpio would deliver the owner's
duplicate of the OCT.
b. Once again, Miranda refused the demand, for not having been
agreed upon.
8. In a letter, Miranda reiterated his demand for the return of the owner's
duplicate of the OCT. On June 11, 2000, he made the same demand over the
telephone.
a. Atty. Carpio reiterated his previous demand and angrily told
Miranda to comply, and threatened to have the OCT cancelled if
the latter refused to pay him.
9. Miranda learned that Atty. Carpio registered an adverse claim on the subject
OCT wherein he claimed that the agreement on the payment of his legal
services was 20% of the property and/or actual market value.
10. To date, Atty. Carpio has not returned the owner's duplicate of OCT No.
0-94 to Miranda and his co-heirs despite repeated demands to effect the
same.
11. In seeking the disbarment or the imposition of the appropriate penalty upon
 Atty. Carpio, Miranda invokes the following provisions of the Code of
Professional Responsibility:
a. Canon 20. A lawyer shall charge only fair and reasonable fees.
b. Canon 16. A lawyer shall hold in trust all moneys and properties of
his client that may come into his possession.
c. Canon 16.03. A lawyer shall deliver the funds and properties of his
client when due or upon demand. x x x
12. In defense of his actions, Atty. Carpio relied on his alleged retaining lien.
He admitted that he did not turn over to complainant the owner's duplicate
of OCT No. 0-94 because of Miranda’s refusal, notwithstanding repeated
demands, to complete payment of his agreed professional fee consisting of
20% of the total area of the property covered by the title,
a. Atty. Carpio admitted the receipt PhP32,000.00, however, he
alleged that the amount earlier paid to him will be deducted from
the 20% of the current value of the subject lot. He alleged that the
agreement was not reduced into writing, because the parties
believed each other based on their mutual trust. He denied that he
demanded the payment of PhP10,000.00 for the preparation of a
memorandum, since he considered the same unnecessary.
b. Atty. Carpio also invoked the principle of ​quantum meruit to
justify the amount being demanded by him.
13. IBP-CBD recommended that Atty. Carpio be suspended from the practice
of law for a period of six months for unjustly withholding from complainant
the owner's duplicate in the exercise of his so-called attorney's lien.
a. IBP Board of Governors adopted and approved the Report and
Recommendation of the IBP-CBD.
ISSUE:
1. WoN Carpio is guilty of violating the CPR? YES
RULING: ​WHEREFORE​, Atty. Macario D. Carpio is ​SUSPENDED from the
practice of law ​for a period of six (6) months, effective upon receipt of this Decision.
He is ordered to ​RETURN to the complainant the owner's duplicate of OCT No.
0-94 immediately upon receipt of this decision.He is ​WARNED that a repetition of
the same or similar act shall be dealt with more severely.
RATIO:
1. Atty. Carpio’s claim for his unpaid professional fees that would legally
give him the right to retain the property of his client until he receives
what is allegedly due him has been paid has no basis and, thus, is
invalid.
2. An attorney's retaining lien is fully recognized if the presence of the
following elements concur: (1) lawyer-client relationship; (2) lawful
possession of the client's funds, documents and papers; and (3) ​unsatisfied
claim for attorney's fees​.
a. Further, the attorney's retaining lien is a general lien for the
balance of the account between the attorney and his client, and
applies to the documents and funds of the client which may come
into the attorney's possession in the course of his employment
3. As correctly found by the ​IBP-CBD, there was no proof of any agreement
between the Miranda and Atty. Carpio that the latter ​is entitled to an
additional professional fee consisting of 20% of the total area covered by
OCT No. 0-94. The agreement between the parties only shows that Atty.
Carpio will be paid the acceptance fee and the appearance fees, which the
respondent has duly received.
a. Clearly, there is no ​unsatisfied claim for attorney's fees ​that would
entitle Atty. Carpio to retain his client's property. Hence, he ​could
not validly withhold the title of his client absence a clear and
justifiable claim.
4. Atty. Carpio’s unjustified act of holding on to Miranda’s title with the
obvious aim of forcing him to agree to the amount of attorney's fees sought
is an alarming abuse by the exercise of an attorney's retaining lien, which by
no means is an absolute right, and cannot at all justify inordinate delay in
the delivery of money and property to his client when due or upon demand.
5. Atty. Carpio failed to live up to his duties as a lawyer by unlawfully
withholding and failing to deliver the title of the complainant, despite
repeated demands, in the guise of an alleged entitlement to additional
professional fees. He has breached Rule 1.01 of Canon 1 and Rule 16.03 of
Canon 16 of the Code of Professional Responsibility
6. Further, in collecting from complainant exorbitant fees, Atty. Carpio
violated Canon 20 of the CPR, which mandates that a lawyer shall charge
only fair and reasonable fees.
a. It is highly improper for a lawyer to impose additional professional
fees upon his client which were never mentioned nor agreed upon
at the time of the engagement of his services.
b. At the outset, Atty. Carpio should have informed Miranda of all
the fees or possible fees that he would charge before handling the
case and not towards the near conclusion of the case. This is
essential in order for the complainant to determine if he has the
financial capacity to pay respondent before engaging his services.
7. Atty. Carpio’s further submission that he is entitled to the payment of
additional professional fees on the basis of the principle of ​quantum meruit
has no merit.
a. "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.". The
principle of ​quantum meruit applies if a lawyer is employed
without a price agreed upon for his services. In such a case, he
would be entitled to receive what he merits for his services, as
much as he has earned.
8. In the present case, the parties had already entered into an agreement as to
 the attorney's fees, and thus, the principle of ​quantum meruit does not fully
find application because Atty. Carpio is already compensated by such
agreement.
9. The Court notes that Atty. Carpio did not inform Miranda that he will be the
one to secure the owner's duplicate of the OCT from the RD and failed to
immediately inform complainant that the title was already in his possession.
10. A lawyer must conduct himself, especially in his dealings with his clients,
with integrity in a manner that is beyond reproach. His relationship with his
clients should be characterized by the highest degree of good faith and
fairness. ​By keeping secret with the client his acquisition of the title, Atty.
Carpio was not fair in his dealing with his client.
a. Atty. Carpio could have easily informed the Miranda immediately
of his receipt of the owner's duplicate of the OCT in order to save
his client the time and effort in going to the RD to get the title.
11. Atty. Carpio’s inexcusable act of withholding the property belonging to his
client and imposing unwarranted fees in exchange for the release of said
title deserve the imposition of disciplinary sanction.
a. Hence, the ruling of the IBP Board of Governors, adopting and
approving with modification the report and recommendation of the
IBP-CBD that he be suspended from the practice of law for a
period of six (6) months and that he be ordered to return the
complainant's owner's duplicate of OCT No. 0-94 is hereby
affirmed.
 81 CORAZON M. DALUPAN V. ATTY. GLENN C. GACOTT (GIO)
29 June 2015 | Villarama, Jr., J. | Attorney’s Fee
PETITIONER: Corazon Dalupan
RESPONDENTS: Atty. Glenn C. Gacott
SUMMARY: Dalupan engaged the services of Atty. Gacott in several criminal
cases for a legal free of ₱10,000. ₱5,000 as initial payment for his acceptance fee
was paid by Dalupan. Dalupan requested that Atty. Gacott draft a Motion to
Reduce Bail Bond. However, Atty. Gacott denied such request, claiming that it
was beyond the scope of his retainer services. The remaining balance was
thereafter paid to Atty. Gacott. Later, Dalupan terminated the services of Atty.
Gacott for loss of confidence, triggered by Atty. Gacott’s failure to appear in
required hearings. Hence, the present disbarment case was filed by Dalupan. An
Order (pursuant to the criminal cases) was issued by the MTC which relieved Atty.
Gacott of any responsibility from the case. The Investigating Commissioner
recommended the dismissal of the disbarment case but ordered the return of
₱5,000 to Dalupan since Atty. Gacott did not perform any substantial legal work.
The IBP Board of Governors approved the Report.
W/N Atty. Gacott should return the payment — NO.
The Court said that the IBP acted in excess of jurisdiction when it ordered the
return of the sum when the MTC Order did not even order restitution of the same.
The parties clearly intended the payment of ₱5,000 to serve as acceptance fee of
Atty. Gacott, and not attorney’s fee. Moreover, both parties expressly claimed that
they intended such payment as the acceptance fee of Atty. Gacott.
There is a distinction between attorney’s fee and acceptance fee. In its ordinary
sense, attorney’s fee refers to the reasonable compensation paid to a lawyer by his
client for legal services rendered. Meanwhile, in its extraordinary concept,
attorney’s fee is awarded by the court to the successful litigant to be paid by the
losing party as indemnity for damages. Acceptance fee refers to the charge
imposed by the lawyer for merely accepting the case.
Secondly, Atty. Gacott did not commit any fault or negligence which would entail
the return of the acceptance fee. Other than her bare allegations, Dalupan failed to
present any evidence to support her claim that Atty. Gacott committed
abandonment or neglect of duty. Ultimately, the Court is constrained to affirm the
factual findings of the Investigating Commissioner that the presumption of
regularity should prevail in favour of Atty. Gacott.
DOCTRINE:
Attorney’s fee refers to the reasonable compensation paid to a lawyer by his client
for legal services rendered, or the award granted by the court to the successful
litigant to be paid by the losing party as indemnity for damages.
Acceptance fee refers to the charge imposed by the lawyer for merely accepting
the case. This is to compensate a lawyer for the opportunity cost by merely
accepting the case of the client.
FACTS:
1. Corazon Dalupan (Dalupan) claimed that she was a defendant in a criminal
case for grave slander. Meanwhile, her son, Wilmer, was also a defendant in
a separate criminal case for grave slander and malicious.
2. The Dalupans engaged the legal services of the Atty. Glenn Gacott (Atty.
Gacott) who, then, charged an acceptance fee of ₱10,000. Dalupan paid Atty.
Gacott ₱5,000 as initial payment for his acceptance fee.
3. Dalupan, thereafter, requested Atty. Gacott to draft a Motion to Reduce Bail
Bond. However, Atty. Gacott said it was beyond the scope of his retainer
services. Thus, Dalupan caused a certain Rolly Calbento to draft the the
Motion which was, however, signed by the Atty. Gacott.
4. Dalupan paid Atty. Gacott the remaining balance of ₱5,000 for his acceptance
fee. When Dalupan asked for an Official Receipt from Atty. Gacott, the latter
refused saying that there was no need for the issuance of a receipt.
5. On that same day, Dalupan also paid Atty. Gacott ₱500 for his appearance
fee in the preliminary conference and arraignment which occurred on the
same day.
6. Allegedly, Atty. Gacott neglected his duties as counsel and failed to attend
any of the hearings before the MTC. In view of the Atty. Gacott’s repeated
absences before the MTC, Judge Jocelyn S. Dilig issued an Order which
appointed a counsel de oficio to represent the Dalupan.
7. Aggrieved, Dalupan filed the instant complaint for disbarment against Atty.
Gacott.
8. Atty. Gacott denied the allegations against him and countered that Dalupan
proceeded to his law office and demanded that the latter negotiate with the
MTC judge to ensure the grant of the Motion of Bail.
9. When Atty. Gacott refused the demand of Dalupan, the latter replied at the
top of her voice: “Binabayaran kita, bakit hindi mo ginagawa ang gusto ko?”
He replied with, "Hindi po lahat ng gusto ninyo ay gagawin ko, sa tama
lamang po tayo, abogado po ninyo ako, hindi ako fixer."
10. In explaining his absence in the required hearings, Atty. Gacott attributed his
failure to appear before the MTC to the inefficiency of the process server of
the said court.
11. Dalupan told Atty. Gacott that she was terminating the latter’s services on the
ground of loss of trust and confidence. Dalupan also told Atty. Gacott that
she engaged the services of Atty. Roland Pay to replace Atty. Gacott.
12. The MTC of Puerto Princesa City issued an Order which relieved Dalupan of
any responsibility in Criminal Case Nos. 12585 and 12586. The Order stated
that “Atty. Glenn Gacott is hereby relieved of any responsibility in the further
prosecution of the above-captioned cases.”
13. In view of the above Order, Atty. Gacott argued that he was not guilty of
abandonment or neglect of duty because it was Dalupan who willfully
 terminated his services even without fault or negligence on his part.
14. Investigating Commissioner Wilfredo E.J.E Reyes recommended the
dismissal of the complaint for disbarment against Atty. Gacott. He also
recommended that Atty. Gacott return the payment of the attorney’s fee to
Dalupan in the amount of ₱5,000.
15. The Commissioner opined that Atty. Gacott cannot be held liable for
abandonment or neglect of duty because it was Dalupan who discharged Atty.
Gacott for loss of trust and confidence. This was confirmed by the act of
Dalupan in withdrawing all her records from the law office of Atty. Gacott.
16. The Commissioner also found that Atty. Gacott did not perform any
substantial legal work on behalf of Dalupan. Hence, herecommended that
Atty. Gacott return the amount of ₱5,000 Dalupan.
17. The IBP Board of adopted and approved en toto the Report and
Recommendation of the Investigating Commissioner.
attorney’s fee, he, therefore, mistakenly concluded that Atty. Gacott should
return the same as he did not perform any substantial legal work on behalf of
Dalupan.
7. However, as previously mentioned, the payment of acceptance fee does not
depend on the nature and extent of the legal services rendered.
8. Secondly, Atty. Gacott did not commit any fault or negligence which would
entail the return of the acceptance fee. Other than her bare allegations,
Dalupan failed to present any evidence to support her claim that Atty. Gacott
committed abandonment or neglect of duty.
9. Ultimately, the Court is constrained to affirm the factual findings of the
Investigating Commissioner that the presumption of regularity should prevail
in favour of Atty. Gacott.

ISSUE:
1. W/N Atty. Gacott should return the payment of the attorney’s fee to Dalupan
in the amount of ₱5,000 — NO.

RULING:

RATIO:

First Issue
1. The Court disagreed with the conclusion of the Investigating Commissioner
that Atty. Gacott should return the payment of the attorney’s fee to Dalupan
in the amount of ₱5,000. It agreed that the IBP acted in excess of jurisdiction
when it ordered the return of the sum when the MTC Order did not even order
restitution of the same.
2. There is a distinction between attorney’s fee and acceptance fee. In its
ordinary sense, attorney’s fee refers to the reasonable compensation paid to a
lawyer by his client for legal services rendered. Meanwhile, in its
extraordinary concept, attorney’s fee is awarded by the court to the successful
litigant to be paid by the losing party as indemnity for damages.
3. In the present case, the Investigating Commissioner referred to the attorney’s
fee in its ordinary concept.
4. Acceptance fee refers to the charge imposed by the lawyer for merely
accepting the case. This is because once the lawyer agrees to represent a client,
he is precluded from handling cases of the opposing party based on the
prohibition on conflict of interest. Thus, the incurs an opportunity cost by
merely accepting the case of the client which is therefore indemnified by the
payment of acceptance fee.
5. The parties clearly intended the payment of ₱5,000 to serve as acceptance fee
of Atty. Gacott, and not attorney’s fee. Moreover, both parties expressly
claimed that they intended such payment as the acceptance fee of Atty. Gacott.
6. Since the Investigating Commissioner made an erroneous reference to
 82 CHANG v. HIDALGO (JICA)
April 6, 2016 | Leonen, ​J.​ | Canons 17, 18, 19
Salafranca​: Helen Chang
HidalgoS​: Atty. Jose R. Hidalgo
SUMMARY​: Chang Helen Chang filed this administrative Complaint before the
Office of the Bar Confidant. In her Complaint, Chang alleged that she engaged
the services of Atty. Hidalgo as legal counsel to represent her in several
collection cases pending in various courts. Chang claimed that despite receiving
a total of P61,500.00, Atty. Hidalgo did not attend any of the hearings in the
collection cases and, instead, sent another lawyer without her consent. Chang
prayed that Atty. Hidalgo be administratively disciplined. In a Resolution, this
Court considered the submission of the comment as waived and referred the case
"to the Integrated Bar of the Philippines for investigation, report[,] and
recommendation[.]" The Investigating Commissioner found Atty. Hidalgo guilty
of gross misconduct and of violating Canons 17, 18, and 19 of the Code of
Professional Responsibility. The Board of Governors of the Integrated Bar of the
Philippines passed a Resolution adopting with modification the Report and
Recommendation of the Investigating Commissioner. Atty. Hidalgo moved for
reconsideration. The Board of Governors denied Atty. Hidalgo's Motion for
Reconsideration.
ISSUE​/S:
W/N Atty. Jose R. Hidalgo is guilty of gross misconduct for failing to render
legal services despite receipt of payment of legal fees. ​YES.
In an administrative case against a lawyer, Chang has the burden of proof to
show by preponderance of evidence that Hidalgo was remiss of his or her duties
and has violated the provisions of the Code of Professional Responsibility. Here,
it is established that Hidalgo was engaged as counsel for Chang to represent her
in various collection cases and that he received P61,500.00 from her as
attorney's fees. Hidalgo also admitted withdrawing from the cases allegedly due
to Chang’s uncooperative demeanor. However, there is no showing that Chang
agreed to the withdrawal, or that Hidalgo filed the proper motion before the
courts where the cases were pending. During the mandatory conferences before
the Integrated Bar of the Philippines, Chang appeared but Hidalgo did not make
any appearance despite receiving notice. In Layos v. Villanueva, this Court
reiterated that a "lawyer must constantly keep in mind that his [or her] actions,
omissions, or nonfeasance would be binding upon his [or her] client."
DOCTRINE​: Hidalgo's acts constitute violations of Canon 17 and Canon 18,
Rule 18.03 of the Code of Professional Responsibility, which state:
CANON 17 — A lawyer owes fidelity to the cause of his client and he shall be
mindful of the trust and confidence reposed in him.
CANON 18 — A lawyer shall serve his client with competence and diligence.
Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him, and his
negligence in connection therewith shall render him liable.
FACTS:
1. Chang Helen Chang filed this administrative Complaint before the Office of
the Bar Confidant.
a. Chang prayed that this Court discipline Hidalgo Atty. Jose R.
Hidalgo for being remiss in his duties as her counsel and as an
officer of the court.
b. She claimed that Atty. Hidalgo failed to "handle [her] cases to the
best of his ability and to deal with [her] in all honesty and candor."
2. In her Complaint, Chang alleged that she engaged the services of Atty.
Hidalgo as legal counsel to represent her in several collection cases pending
in various courts.
a. Pursuant to the contract they executed, Chang issued five (5)
checks in favor of Atty. Hidalgo totaling P52,000.00.
b. Atty. Hidalgo also collected P9,500.00 as "hearing fee."
c. Chang claimed that despite receiving a total of P61,500.00, Atty.
Hidalgo did not attend any of the hearings in the collection cases
and, instead, sent another lawyer without her consent.
d. The other lawyer failed to attend all hearings, which resulted in the
dismissal of the cases.
e. Chang prayed that Atty. Hidalgo be administratively disciplined.
3. Atty. Hidalgo was required to comment on the Complaint in the Resolution.
a. The Notice of Resolution sent to Atty. Hidalgo in the address
provided by Chang was returned unserved with the notation that
Atty. Hidalgo had moved out from the address.
4. Chang was then ordered to submit Atty. Hidalgo's correct and present
address.
5. Still, notices of the Resolution sent to these addresses were returned
unserved with the notation that the addressee, Atty. Hildalgo, had already
moved out.
6. Finally, Atty. Hidalgo received the Notice of the Resolution requiring him
to comment.
a. However, he still failed to do so.
b. Thus, in a Resolution, this Court considered the submission of the
comment as waived and referred the case "to the Integrated Bar of
the Philippines for investigation, report[,] and recommendation[.]"
7. The Commission on Bar Discipline of the Integrated Bar of the Philippines
then set a Mandatory Conference/Hearing.
a. During the mandatory conference, only Chang appeared.
b. The Investigating Commissioner noted that the notice for Atty.
Hidalgo was returned and not served on him.
 c. In the Order, the Investigating Commissioner directed Atty.
Hidalgo to file his Comment.
i. This Order was received by Atty. Hidalgo.
8. The Commission on Bar Discipline received a handwritten and unverified
Comment from Atty. Hidalgo.
a. In his Comment, Atty. Hidalgo admitted that Chang retained him
as counsel but countered that he attended the hearings.
b. He denied allowing another lawyer to appear on his behalf
c. Although he denied waiving his appearance fee, he claimed that he
did not receive "such a sum [referring to the acceptance fee] from
[Chang] mainly because of the length of time [that] passed.”
d. Atty. Hidalgo insisted that due to the "transigent and
uncooperative" attitude of Chang, he decided that he "could no
longer perform [his job as Chang's counsel] adequately."
e. He reasoned that he could not put up an effective defense due to
his illness and his impoverished state.
f. He prayed that the administrative case against him be dismissed.
9. After receiving the Comment, the Investigating Commissioner noted that it
was not verified, in violation of the Rules of Procedure of the Integrated Bar
of the Philippines.
a. Thus, the Investigating Commissioner did not consider it.
b. Instead, he set another mandatory conference.
10. The Investigating Commissioner found Atty. Hidalgo guilty of gross
misconduct and of violating Canons 17, 18, and 19 of the Code of
Professional Responsibility.
11. The Investigating Commissioner's Report and Recommendation
recommended the following:
a. x x SUSPENDED for a period of TWO (2) YEARS from the
practice of law, with a STERN WARNING that a repetition of the
same or a similar act will be dealt with more severely.
12. The Board of Governors of the Integrated Bar of the Philippines passed a
Resolution adopting with modification the Report and Recommendation of
the Investigating Commissioner.
a. The Board of Governors recommended decreasing the penalty to
one (1) year suspension from the practice of law and "[ordering
[him] to [r]eturn the amount of Sixty One thousand (P61,000.00)
[sic] Pesos to Chang [Chang] within thirty (30) days from receipt
of notice with legal interest reckoned from the time the demand
was made."
13. Atty. Hidalgo moved for reconsideration.
a. This time, he admitted receiving money from Chang as agreed
attorney's fees.
b. He reiterated that he attended the hearings set for the cases.
c. However, he claimed that he filed a Notice of Withdrawal as
Counsel due to Chang's stubbornness and uncooperative behavior
in the handling of the cases.
d. Since he transferred residence, he was not able to verify if the
court granted his Notice of Withdrawal.
e. Nonetheless, Atty. Hidalgo alleged that he was entitled to the
acceptance fees for exerting time and effort in the preparation of
the cases and in the collation of evidence.
i. He maintained that the return of the fees, as ordered by
the Board of Governors of the Integrated Bar of the
Philippines, was not possible because his only means of
income was the Social Security System pension he has
been receiving, and even that was not enough for his
health maintenance.
14. The Board of Governors denied Atty. Hidalgo's Motion for
Reconsideration.
ISSUE/S:
1. W/N Atty. Jose R. Hidalgo is guilty of gross misconduct for failing to
render legal services despite receipt of payment of legal fees.
RULING: WHEREFORE, Hidalgo Atty. Jose R. Hidalgo is found guilty of
violating Canon 17 and Canon 18, Rule 18.03 of the Code of Professional
Responsibility. He is SUSPENDED from the practice of law for a period of one (1)
year, with warning that repetition of the same or similar acts will merit a more severe
penalty. Hidalgo is also ORDERED to return to Chang Helen Chang the amount of
P61,500.00, with interest at 6% per annum from the date of promulgation of this
Resolution until fully paid.
RATIO:
1. In an administrative case against a lawyer, Chang has the burden of proof to
show by preponderance of evidence that Hidalgo was remiss of his or her
duties and has violated the provisions of the Code of Professional
Responsibility.
2. Here, it is established that Hidalgo was engaged as counsel for Chang to
represent her in various collection cases and that he received P61,500.00
from her as attorney's fees.
3. Hidalgo also admitted withdrawing from the cases allegedly due to Chang’s
uncooperative demeanor.
a. However, there is no showing that Chang agreed to the withdrawal,
or that Hidalgo filed the proper motion before the courts where the
cases were pending.
4. During the mandatory conferences before the Integrated Bar of the
Philippines, Chang appeared but Hidalgo did not make any appearance
despite receiving notice.
5. Hidalgo failed to present proof that he performed any act in relation to
Chang's collection cases or attended the hearings for the collection cases.
a. Instead, Hidalgo merely claimed:
6. Hidalgo's acts constitute violations of Canon 17 and Canon 18, Rule 18.03 penalty of suspension from the practice of law for a period of one (1)
of the Code of Professional Responsibility, which state: year.
a. CANON 17 — A lawyer owes fidelity to the cause of his client a. In several cases, the Court has imposed the penalty of one (1) year
and he shall be mindful of the trust and confidence reposed in him. suspension from the practice of law for violation of Canons 17 and
b. CANON 18 — A lawyer shall serve his client with competence 18 of the Code of Professional Responsibility.
and diligence. b. Further, restitution of acceptance fees to Chang is proper.
i. Rule 18.03 A lawyer shall not neglect a legal matter i. Hidalgo failed to present any evidence to show his alleged
entrusted to him, and his negligence in connection efforts for the cases.
therewith shall render him liable. ii. He failed to attend any of the hearings before the
7. In Layos v. Villanueva​, this Court reiterated that a "lawyer must constantly Commission on Bar Discipline.
keep in mind that his [or her] actions, omissions, or nonfeasance would be iii. There is no reason for Hidalgo to retain the professional
binding upon his [or her] client." fees paid by Chang for her collection cases when there
8. Due to Hidalgo's withdrawal as Chang's counsel for the cases, he did not was no showing that Hidalgo performed any act in
anymore attend any of the hearings. furtherance of these cases.
a. Since the withdrawal was without the conformity of Chang, new
counsel was not engaged.
b. This necessarily resulted in the summary dismissal of the
collection cases as alleged by Chang.
9. Chang could have obtained the services of another lawyer to represent her
and handle her cases with the utmost zeal and diligence expected from
officers of the court.
a. However, Hidalgo simply opted to withdraw from the cases
without complying with the requirements under the Rules of Court
and in complete disregard of his obligations towards his client.
10. In Ramirez v. Buhayang-Margallo​: The relationship between a lawyer and a
client is "imbued with utmost trust and confidence."
a. Lawyers are expected to exercise the necessary diligence and
competence in managing cases entrusted to them.
b. They commit not only to review cases or give legal advice, but
also to represent their clients to the best of their ability without
need to be reminded by either the client or the court.
11. Similarly, in Nonato v. Fudolin, Jr.​: A lawyer is bound to protect his client's
interests to the best of his ability and with utmost diligence.
a. He should serve his client in a conscientious, diligent, and efficient
manner; and provide the quality of service at least equal to that
which he, himself, would expect from a competent lawyer in a
similar situation.
b. By consenting to be his client's counsel, a lawyer impliedly
represents that he will exercise ordinary diligence or that
reasonable degree of care and skill demanded by his profession,
and his client may reasonably expect him to perform his
obligations diligently.
c. The failure to meet these standards warrants the imposition of
disciplinary action.
12. The Court sustains the Integrated Bar of the Philippines' recommended
 83. IGNACIO V. ALVIAR (MEDINA) Justice if there was already a case filed in court. After this, Aty. Alviar asked
July 17, 2017 | Tijam, J. | Canon 20 for the remaining balance of P 50,000. Subsequently, he filed his notice of
appearance for Ignacio’s son.
4. Sometime in April 2014, Atty. Alviar told Ignacio that he cannot attend at the
PETITIONER: Jocelyn Ignacio
arraignment because of a scheduled hearing. He, however, committed to
RESPONDENTS: Atty. Daniel T. Alviar
either find a way to attend the hearing or ask another lawyer-friend to attend
it for him.
SUMMARY: Ignacio hired Atty. Alviar to represent her son who was charged
5. Ignacio then replied telling him that they seek the intercession of another
with violations of comprehensive drugs act. It was agreed that Ignacio will pay
lawyer since Atty. Alviar can’t attend. She also asked Atty. Alviar to give her
Atty Alviar P100,000. Ignacio immediately paid P 20,000; P 30,000 and after
back the P100,000 paid less the preparatory legal services Atty. Alviar
some time the remaining balance of P50,000. Atty Alviar visited Ignacio’s son
rendered. Atty. Alviar denied having received this letter.
only once and for only twenty minutes. He also requested copies of the case from
6. On the day of arraignment, Atty. Alviar failed to attend and no lawyer friend
the City Prosecutor of Pasay and confirmed before the Halls of Justice if case has
of his came. This prompted Ignacio to write another letter asking Atty. Alviar
already been filed. Atty Alviar, however, told Ignacio that he cannot attend the
to formally withdraw as counsel and emphasized that without such Ignacio
arraignment of her son due to prior scheduled hearing, he promised her that either
cannot secure another lawyer for her son. She again reiterated to give back
he’ll find ways to attend or send a lawyer friend in his behalf. Ignacio told him,in
the P100,000 minus the legal services rendered. Atty. Alviar failed to take
a letter, that she would just like to find a new lawyer and requested Atty. Alviar
heed. Hence, this administrative complaint.
to return the P100k paid less legal services rendered. Atty. Alviar denied having
7. Report and Recommendation of the Commission on Bar discipline
received this letter. On the arraignment, Atty Alviar failed to attend and he
recommended six-month suspension and ordered the restitution of P 100,000.
likewise did not send any friend of his. According to him, he forgot about the date
8. IBP Board of Governors modified the recommendation to REPRIMAND
of arraignment. Ignacio then sent another letter requesting for the formal
WITH STERN WANING
termination of the services and the restitution of P100k less legal services
rendered. This was unheeded. Hence, this complaint. The IBP recommended
reprimand and restitution of P100k. The Court modified. The Court ruled that
ISSUE/s:
Atty. Alviar was negligent in handling the case. It ordered the restitution of
1. W/N Atty. Alviar is guilty of negligence in handling the case- Yes
P97,000. In coming up with the amount, the Court considered the principle of
2. W/N the acceptance fee of Php 100,000 was reasonable- No
quantum meruit and criteria set in CPR Canon 20.
RULING: WHEREFORE, We find Atty. Daniel T. Alviar LIABLE for violation of
DOCTRINE:
If restitution is ordered the principle of quantum meruit (as much as he deserves) Canon 18 and Rule 18.03 of the Code of Professional Responsibility and he is hereby
may serve as basis on the amount to be returned. Canon 20 Rule 1.01 also REPRIMANDED with a stern warning that a repetition of the same or similar act
provides for the criteria to be considered in setting the amount. (See Ratio 11 for would be dealt with more severely. Atty. Daniel T. Alviar is ordered to RESTITUTE
the list.) to complainant the amount of PhP97,000 out of the Php100,000 acceptance fee.

FACTS: RATIO:
1. Ignacio hired the services of Atty. Alviar for the former’s son who was
charged with violations of Comprehensive Drugs Act. Atty. Alviar agreed to Atty. Alviar’s Negligence
represent the son of Ignacio for a stipulated price of P 100,000. He, likewise,
stated that he could refer the matter to the CHR to investigate the alleged 1. The Court ruled that once the lawyer accepted money from the client, there
illegal arrest of Ignacio’s son. forms lawyer-client relationship. From then on, the lawyer shall owe fidelity
2. Thereafter, Ignacio paid initial payments of P 20,000 andP30,000. Atty. to his client. He owes his client to competently and diligently attend to the
Alviar then visited the son of Ignacio at the PDEA detention cell where he legal matter entrusted to him. These, Atty. Alviar has fail to do.
talked to him for about 20 minutes.
3. Atty. Alviar, thru his secretary, requested from the city prosecutor of Pasay
copied of the case of Ignacio’s son. He also verified twice from the Hall of
 2. Atty. Alviar saw only the son of Ignacio once and only for 20 minutes. He 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
likewise failed to attend or send someone at the arraignment. His excuse of professional knowledge. A written contract for services shall control the amount to
forgetting the date of arraignment is inexcusable. be paid therefor unless found by the court to be unconscionable or unreasonable.
3. His nonchalant attitude towards Iganacio’s request of restitution of the 11. Criteria found in the Code of Professional Responsibility are also to be
amount paid shows his negligence. Atty. Alviar claimed that Ignacio failed considered in assessing the proper amount:
to talk to him. If it were true that complainant already failed to communicate Canon 20, Rule 20.01 provides:
with him, the least respondent could have done was to withdraw his CANON 20 A LAWYER SHALL CHARGE ONLY FAIR AND REASONABLE
FEES.
appearance as counsel. But even this measure, it appears, respondent failed Rule 20.01. A lawyer shall be guided by the following factors in determining his fees:
to perform. His failure to take such action speaks of his negligence
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;
Acceptance Fee of P100,000 d) The skill demanded;
e) The probability of losing other employment as a result of acceptance of the
proffered case;
4. The Court first distinguished the difference of attorney’s fee and an f) The customary charges for similar services and the schedule of fees of the IBP
acceptance fee. The former depends on the nature and extent of the legal Chapter to which he belongs;
services rendered, while the other does not. g) The amount involved in the controversy and the bene ts resulting to the client
5. On one hand, attorney's fee is understood both in its ordinary and from the service;
h) The contingency or certainty of compensation;
extraordinary concept. In its ordinary concept, attorney's fee refers to the i) The character of the employment, whether occasional or established; and
reasonable compensation paid to a lawyer by his client for legal services j) The professional standing of the lawyer.
rendered. While, in its extraordinary concept, attorney's fee is awarded by the
court to the successful litigant to be paid by the losing party as indemnity for 12. Here, respondent only conferred once with the complainant's son for 20
damages. In the present case, the Investigating Commissioner referred to the minutes, led his entry of appearance, obtained copies of the case records
attorney's fee in its ordinary concept. and inquired twice as to the status of the case. For his efforts and for the
6. On the other hand, acceptance fee refers to the charge imposed by the lawyer particular circumstances in this case, respondent should be allowed a
for mere acceptance of the case. The rationale for the fee is because once the reasonable compensation of PhP3,000. The remainder, or PhP97,000 should
lawyer agrees to represent a client, he is precluded from handling cases of the be returned to the complainant.
opposing party based on the prohibition on conflict of interest. The
opportunity cost of mere acceptance is thus indemnified by the payment of
acceptance fee. However, since acceptance fee compensates the lawyer only
for lost opportunity, the same is not measured by the nature and extent of the
legal services rendered.
7. Here, Atty. Alviar referred to the P 100,00 as his acceptance fee while Ignacio
claimed that the said amount was for the legal services rendered. The Court
noted that Ignacio immediately paid the sums of P 20,00; 30,00; and 50,000
undoubtedly they may be regarded as acceptance fee.
8. The Court said that jurisprudence provides that the Court has ordered the
return of the acceptance fee if the lawyer was negligent in handling the case.
9. The next question then is how much of the acceptance fee should be returned.
The principle of quantum meruit (as much as he deserves) may serve as basis.
This principle is a device to prevent undue enrichment based on the equitable
postulate that it is unjust for a person to retain benefit without working for it.
10. The Rules of Court also provides in Section 24, Rule 138:
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
 84 Cortez v. Hernando (MALAYO)
March 12, 2018 | Tijam, J. | Canon 20
PETITIONER: Eugenion Cortez
RESPONDENTS: Atty. Hernando Cortes
SUMMARY: Complainant Eugenio engaged the service of Atty. Cortes in an
illegal dismissal case. Eugenio won and the employer issued 3 checks in the
amount of P1.1M. After the maturity of the first check, Eugenio with Atty. Cortes
and his wife opened an account to deposit the said check. Atty. Cortes personally
facilitated the opening and asked Eugenio to stay outside. Atty. Cortes insisted
that 50% of the total awarded claims belongs to him as attorney's fees. Atty.
Cortes became hysterical and imposingly maintained that 50% of the total
awarded claims belongs to him. Eugenio then tried to pacify Atty. Cortes and his
wife by giving the third check amounting to 275,000. Atty. Cortes denied that
they agreed on a 12% contingency fee by way of attorney's fees. Eugenio is a
relative of his, but considering that the case was to be filed in Pampanga and he
resided in Las Piñas, he would only accept the case on a fifty-fifty sharing
arrangement. the IBP recommended the six-month suspension. The SC ruled
that the 50-50 sharing was exorbitant. The proper penalty is suspension for 3
months.
DOCTRINE: The amount of attorney's fees is fixed on the basis of quantum
meruit, i.e., the reasonable worth of the attorneys services. Courts may ascertain
also if the attorney's fees are found to be excessive, what is reasonable under the
circumstances.
FACTS:
1. Complainant Eugenio Cortez (Eugenio na lang kasi same silang Cortez/s) alleged
that he engaged the services of Atty. Cortes as his counsel in an illegal dismissal
case against Philippine Explosives Corporation (PEC). He further alleged that he
and Atty. Cortes had a handshake agreement on a 12% contingency fee as and by
way of attorney's fees.
2. Atty. Cortes prosecuted his claims for illegal dismissal which was decided in
favor of Eugenio. Eugenio won and PEC paid ₱1, 100,000 in three staggered
payments. PEC then issued 3 checks to meet the amount
3. After the maturity of the first check, Eugenio went to China Bank, Southmall Las
Pinas with Atty. Cortes and his wife to open an account to deposit the said check.
Atty. Cortes asked Eugenio to wait outside the bank while Atty. Cortes personally
facilitated the opening of the account. After thirty minutes, he was asked to go
inside and sign a joint savings account with Atty. Cortes.
4. When Eugenio was about to withdraw the amount of the initial check deposited,
Atty. Cortes arrived with his wife and ordered the bank teller to hold off the
transaction. When Eugenio asked why he did that, Atty. Cortes answered that
50% of the total awarded claims belongs to him as attorney's fees. When Eugenio
questioned him, Atty. Cortes became hysterical and imposingly maintained that
50% of the total awarded claims belongs to him.
5. Eugenio then tried to pacify Atty. Cortes and his wife and offered to pay
₱200,000, and when Atty. Cortes rejected it, he offered the third check amounting
to ₱275,000, but Atty. Cortes still insisted on the 50% of the total award. Eugenio
was then forced to endorse the second and third checks (275,000 each) to Atty.
Cortes, after which he was able to withdraw the proceeds of the first check
(500,000).
6. With the help of the lawyers in the IBP, Eugenio was able to have the drawer of
the checks cancel one of the checks endorsed to Atty. Cortes before he was able
to encash the same.
7. Atty. Cortes denied that they agreed on a 12% contingency fee by way of
attorney's fees. Eugenio is a relative of his, but considering that the case was to
be filed in Pampanga and he resided in Las Piñas, he would only accept the case
on a fifty-fifty sharing arrangement.
8. Atty. Cortes alleged that the checks were issued pursuant to the pre-execution
agreement reached by the parties at the office of Labor Arbiter. They agreed that
the amount of the first check be divided fifty-fifty, the whole of the second check
would be Eugenio’s, and the third check would be his.
9. Atty. Cortes further alleged that he had to assist Eugenio in the opening of an
account to deposit the checks. Atty. Cortes had to convince the bank manager to
accept the checks issued in the name of Eugene E. Cortez despite the fact that
Eguenio’s ID's are all in the name of Eugenio E. Cortez. He claimed that anyone
in his place would have demanded for the holding off of the transaction because
of the base ingratitude, patent deception and treachery of complainant.
10. Atty. Cortes posited that the check forms part of the judgment award to which he
had a lien corresponding to his attorney's fees and complainant should have at
least invited him to witness the "harvest of the fruits."
11. He insisted that the alleged 12% agreement is false, being merely a concoction
of Eugenio’s fertile and unstable mind. He also pointed out that the fifty-fifty
sharing arrangement is not unconscionably high because the complainant was
given the option to hire other lawyers, but still he engaged his services.
12. After hearing and submission of position papers, the IBP Commission on Bar
Discipline, in a Report and Recommendation dated April 11, 2007,
recommended the six-month suspension of Atty. Cortes. MR denied.
ISSUE:
W/N the acts complained of constitute misconduct on the part of Atty. Cortes,
which would subject him to disciplinary action – YES
DISPOSITION: WHEREFORE, premises considered, respondent Atty.
Hernando P. Cortes is found GUILTY of violation of Canon 20 of the Code of
Professional Responsibility and is hereby SUSPENDED from the practice of law
for three (3) months, and is ordered to return to complainant Eugenio E. Cortez the
amount he received in excess of the 12% allowable attorney's fees.
RATIO: pursuits which enjoy a greater deal of freedom from governmental interference,
1. A contingent fee arrangement is valid in this jurisdiction. It is generally is impressed with a public interest, for which it is subject to State regulation.
recognized as valid and binding, but must be laid down in, an express contract. 12. Here, considering that Eugenio was amenable to a 12% contingency fee, and
The amount of contingent fee agreed upon by the parties is subject to the which we likewise deem to be the reasonable worth of the attorney's services
stipulation that counsel will be paid for his legal services only if the suit or rendered by Atty. Cortes under the circumstances, Atty. Cortes is hereby
litigation prospers. adjudged to return to complainant the amount he received in excess of 12% of
2. In this case, the parties did not have an express contract as regards the payment the total award. If the Law has to remain an honorable profession and has to
of fees. Eugenio alleges that the contingency fee was fixed at 12% via a attain its basic ideal, those enrolled in its ranks should not only master its tenets
handshake agreement, while Atty. Cortes counters that the agreement was 50%. and principles but should also, by their lives, accord continuing fidelity to such
3. The IBP Commission on Discipline pointed out that since what respondent tenets and principles.
handled was merely a labor case, his attorney's foes should not exceed 10%, 13. The recommended suspension of six months is too harsh and considering that
the rate allowed under Article 111 of the Labor Code. Atty. Cortes is nearing ninety years old and that there was no question that Atty.
4. Although the 50% contingency fee was excessive, SC does not agree that the Cortes was able to get a favorable outcome, a reduction of the suspension is
10% limitation as provided in Article 111 is automatically applicable. In proper. We then reduce and sanction Atty. Cortes to a three-month suspension
jurisprudence, Article 111 of the Labor Code deals with the extraordinary from the practice of law.
concept of attorneys 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.
5. Necessarily, the 10% limitation of the Labor Code would not be applicable.
Beyond the limit fixed by Article 111, such as between the lawyer and the
client, the attorney's fees may exceed 10% on the basis of quantum meriut. But
the 50% insisted by Atty. Cortes is excessive.
6. Generally, the amount of attorney's fees due is that stipulated in the retainer
Agreement which is conclusive as to the amount of the lawyers compensation.
7. 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 attorneys services. Courts
may ascertain also if the attorney's fees are found to be excessive, what is
reasonable under the circumstances. In no case, however, must a lawyer be
allowed to recover more than what is reasonable, pursuant to the Rules of Court.
8. Canon 20 of the Code of Professional Responsibility states that "A lawyer shall
charge only fair and reasonable fees." Rule 20.01 of the same canon enumerates
the factors which should guide a lawyer in determining his fees.
9. Here, as set out by Atty. Cortes himself fEugenio’s case was merely grounded
on Eugenio’s alleged absence without leave for the second time and challenging
the plant manager, the complainant's immediate superior, to a fist fight. He also
claimed that the travel from his home in Las Piñas City to San Fernando,
Pampanga was costly and was an ordeal.
10. Also, Atty. Cortes admitted that Eugenio was a close kin of his, and that
Eugenio appealed to his services because, since his separation from work, he
had no visible means of income and had so many mouths to feed. Based on
these circumstances, the contingent fee here claimed by Atty. Cortes was
grossly excessive and unconscionable.
11. Lawyering is not a moneymaking venture and lawyers are not merchants. Law
advocacy, 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
 Palencia vs. Linsangan (JAY edited by LIM)
July 10, 2018 | Per Curiam | Canon 16
PETITIONER: JERRY PALENCIA
RESPONDENTS: ATTY. PEDRO L. LINSANGAN, ATTY. GERARD M.
LINSANGAN, AND ATTY. GLENDA M. LINSANGAN-BINOYA
SUMMARY: Jerry Palencia (Palencia) is an OFW who was injured when he fell
into an elevator shaft. While in the hospital, a paralegal of the Linsangans
repeatedly visited Palencia and encouraged him to engage the service of the
Linsangans and file a suit against the company. Eventually Palencia agreed and
in their agreement it was stated that 35% of the recovery or settlement fees to be
received would constitute attorney’s fees. Thereafter respondents also engaged
the services of Gurbani and Co, and lawfirm and Singapore to proceed with the
case. The case progressed to the high court of Singapore where Palencia was
awared with amount of $95,000. Gurbani took 35% of this, and it was reduced
by another 35% by the Linsangans, and $5,000 was given to an Justice Gancayo
for the expertise he provided. This left Palencia with $18,132 which he refused
to accept. Palencia stated that their agreement stated that the 35% attorney’s fees
should have only been deducted once in favor of the Linsangans and Gurbani,
and should not have been treated as separate. WoN Linsangans violated CPR.
The court the Linsangans (except Glenda) guilty of ambulance chasing, and
gross misconduct. Canon 16 states that Canon 16 and its rules remind a lawyer
to: (1) hold in trust all moneys and properties of his client that may come into his
possession; (2) deliver the funds and property of his client when due or upon
demand subject to his retaining lien; and (3) account for all money or property
collected or received for or from his client. The court sided with Palencia about
the 35% attorney’s fees, and should have only been deducted once. Respondents,
instead of forcibly deducting the attorney’s fees, should have gone to the court
for a judicial determination of attorney’s fees. Furthermore, the Linsangans
failed to turn over the amount to Palencia for two years, and instead they kept
the money in their own vault. Having a lien over the fees does not allow a lawyer
to unilaterally appropriate the amount for himself.
DOCTRINE:!Money collected by a lawyer on a judgment rendered in favor of
his client constitutes trust funds and must be immediately paid over to the client.
As he holds such funds as agent or trustee, his failure to pay or deliver the same
to the client after demand constitutes conversion. Thus, whenever a lawyer
collects money as a result of a favorable judgment, he must promptly report and
account the money collected to his client.
The fact alone that a lawyer has a lien for his attorney's fees on money in his
hands collected for his client does not entitle him to unilaterally appropriate his
client's money for himself.
FACTS:
1. Complainant was an overseas Filipino worker seafarer who was seriously
injured during work when he fell into the elevator shaft of the vessel M/T
"Panos G" flying a Cyprus flag.
a. After initial treatment in Singapore, complainant was discharged
and flown to the Philippines to continue his medical treatment and
rehabilitation.
b. While confined at the Manila Doctors Hospital, one "Moises," and
later Jesherel L. Millena (Jesherel), paralegals in respondents' law
office, approached complainant.
c. They convinced him to engage the services of respondents' law
office in order to file a suit against his employers for indemnity.
d. After several visits from the paralegals and respondent Atty. Pedro
Linsangan, complainant executed (1) an Attorney-Client Contract,
and (2) a Special Power of Attorney, where he engaged the legal
services of respondents and Gurbani & Co., a law firm based in
Singapore, and agreed to pay attorney's fees of 35% of any
recovery or settlement obtained for both.
2. Respondents and Gurbani & Co. also filed a tort case against the owners of
"Panos G" before the High Court of Singapore (Singapore case).
a. For this case, respondents engaged the services of Papadopoulos,
Lycourgos & Co., a law firm based in Cyprus, to draft a written
opinion on the issues involving Cyprus law, among others.
b. They also engaged the services of retired Justice Emilio Gancayco
(Justice Gancayco) for his expert opinion regarding various issues
raised by defendant's lawyer and representatives.
3. Thereafter, negotiations led to a settlement award in favor of complainant in
the amount of US$95,000.00. Gurbani & Co. remitted to respondents the
amount of US$59,608.40.
a. From this amount, respondents deducted: (l) US$5,000.00 as
payment to Justice Gancayco; (2) their attorney's fees equivalent to
35%; and (3) other expenses, leaving the net amount of
US$18,132.43 for complainant.
4. Respondents tendered the amount of US$20,756.05 (representing the
US$18,132.43) to complainant, which the latter refused.
5. As complainant contested the amount comprised of the expenses and
attorney's fees deducted, the following civil actions ensued between
complainant and respondents:
a. On September 12, 2005, respondents filed an action for
preliminary mandatory injunction to compel complainant to
receive the amount tendered.
i. This case was dismissed by the RTC, and the dismissal
was eventually upheld by this Court on July 7, 2008.
 b. On September 22, 2005, complainant filed with the RTC of Ligao
City an action for accounting, remittance of settlement amounts
and damages
i. On June 16, 2011, the RTC ruled in favor of complainant
and ordered respondents to make proper accounting,
among others.
ii. Although the RTC upheld the stipulated attorney's fees as
binding between the parties, it determined that the fees are
lumped for both respondents and Gurbani & Co.
iii. On appeal, the CA affirmed the RTC's Decision but
reduced the rate of attorney's fees to 10%. This Court
affirmed the CA Decision in our Resolution dated
February 20, 2013 in G.R. No. 205088. An Entry of
Judgment was issued on August 8, 2013.
6. On March 28, 2007, complainant also filed the subject letter--Complaint
with the Integrated Bar of the Philippines (IBP) Commission on Bar
Discipline (CBD).
a. He requested that an investigation be conducted and the
corresponding disciplinary action be imposed upon respondents for
committing the following unethical acts: (1) refusing to remit the
amount collected in the Singapore case worth US$95,000.00, and
in offering only US$20,756.05; (2) depositing complainant's
money into their own account; and (3) engaging in "ambulance
chasing" by deploying their agents to convince complainant to hire
respondents' services while the former was still bedridden in the
hospital.
7. In their answer, respondents explained that complainant retained
respondents and Gurbani & Co.'s services in 2004 for purposes of filing a
claim against the ship owner, its agents and principals.
8. Respondents denied that they deposited the amount to their own account.
They claimed that the amount of US$20,756.05 has been placed for
safekeeping in a vault located inside their office ever since. On May 3,
2007, after their receipt of the complaint and the IBP-CBD's Order dated
April 3, 2007, they decided to deposit the money with Bank of the
Philippine Islands in an interest savings account, in trust for complainant.
9. As to the allegations of ambulance chasing, respondents averred that they
provide free legal advice to the public. It was in the course of this public
service when they met complainant.
10. After proceedings, the IBP-CBD in its Report and Recommendation ruled
that respondents violated the canons of the Code of Professional
Responsibility (CPR): ( l) in soliciting legal business through their agents
while complainant was in the hospital; (2) in failing to account for, and
deliver the funds and property of his client when due or upon demand; and
(3) in hiring the services of a foreign law firm and another lawyer without
prior knowledge and consent of complainant of the fees and expenses to be
incurred.
a. The IBP-CBD found that all three respondents connived and thus
recommended that all respondents be suspended from the
practice of law for a period of one year.
ISSUE:
1. WoN respondents are all guilty for violating the canons? NO, only Pedro
and Gerard are guilty.
RULING: WHEREFORE, we find respondents Attys. Pedro L. Linsangan and
Gerard M. Linsangan GUILTY. Accordingly, we SUSPEND respondents Attys.
Pedro Linsangan and Gerard Linsangan from the practice of law for TWO YEARS
effective upon finality of this Decision, with a WARNING that a repetition of the
same or similar act in the future will be dealt with more severely. The complaint
against Atty. Glenda M. Linsangan-Binoya is DISMISSED.
RATIO:
First Issue
1. We adopt the findings of the IBP on the unethical conduct of respondents
Attys. Pedro L. Linsangan and, Gerard M. Linsangan. We, however,
absolve respondent Atty. Glenda M. Linsangan-Binoya for lack of any
evidence as to her participation in the acts complained of.
2. The practice of law is a profession and not a business. Lawyers are
reminded to avoid at all times any act that would tend to lessen the
confidence of the public in the legal profession as a noble calling, including,
among others, the manner by which he makes known his legal services.
3. A lawyer in making known his legal services must do so in a dignified
manner. They are prohibited from soliciting cases for the purpose of gain,
either personally or through paid agents or brokers. The CPR explicitly
states that "[a] lawyer shall not do or permit to be done any act designed
primarily to solicit legal business.”
a. Corollary to this duty is for lawyers not to encourage any suit or
proceeding for any corrupt motive or interest. Thus, "ambulance
chasing," or the solicitation of almost any kind of business by
an attorney, personally or through an agent, in order to gain
employment, is proscribed.
4. Here, there is sufficient evidence to show that respondents violated these
rules.
5. The relationship between a lawyer and his client is highly fiduciary. This
relationship holds a lawyer to a great degree of fidelity and good faith
especially in handling money or property of his clients.
a. Thus, Canon 16 and its rules remind a lawyer to: (1) hold in trust
all moneys and properties of his client that may come into his
possession; (2) deliver the funds and property of his client
 when due or upon demand subject to his retaining lien; and (3)
account for all money or property collected or received for or
from his client.
6. Money collected by a lawyer on a judgment rendered in favor of his client
constitutes trust funds and must be immediately paid over to the client.
a. As he holds such funds as agent or trustee, his failure to pay or
deliver the same to the client after demand constitutes conversion.
Thus, whenever a lawyer collects money as a result of a favorable
judgment, he must promptly report and account the money
collected to his client.
7. It is the lawyer's duty to give a prompt and accurate account to his client.
a. Upon the collection or receipt of property or funds for the benefit
of the client, his duty is to notify the client promptly and, absent a
contrary understanding, pay or remit the same to the client, less
only proper fees and disbursements, as soon as reasonably
possible.
8. We find that while respondents gave prompt notice to complainant of their
receipt of money collected in the latter's favor, they were amiss in their
duties to give accurate accounting of the amounts due to complainant, and
to return the money due to client upon demand.
9. Clearly, the stipulated rate referred to the combined professional fees of
both respondents and their collaborating Singapore counsel, Gurbani & Co.
10. Respondents proceeded to deduct separate fees on top of the amount already
deducted by Gurbani & Co. Complainant contested this deduction and
refused to accept the amount being tendered by respondents. Since a claim
for attorney's fees may be asserted either in the very action in which the
services of a lawyer had been rendered, or in a separate action, respondents,
instead of forcibly deducting their share, should have moved for the judicial
determination and collection of their attorney's fees. The fact alone that a
lawyer has a lien for his attorney's fees on money in his hands collected for
his client does not entitle him to unilaterally appropriate his client's money
for himself.
11. Worse, respondents allegedly kept the money inside the firm's vault for two
years until they were made aware of the disciplinary complaint against them
before the IBP-CBD. However, as noted by the IBP-CBD in its Report and
Recommendation:
a. [T]he defense of respondents that they kept in their office vault the
share of complainant as computed by them in the amount of
US$18,132.43, hence, they forgot the same and remembered it
only when they received the Order of this Commission for them to
file an Answer to complainant's Complaint [which is more than 2
years] is rather highly incredible considering that it involves a
substantial amount, the series of communications between the
parties, and the Civil cases subsequently filed.
12. Even if we give credence to this explanation, it is improper for the lawyer
to put his client's funds in his personal safe deposit vault. Funds
belonging to the client should be deposited in a separate trust account in a
bank or trust company of good repute for safekeeping.
13. It is apparent from the foregoing that respondents failed to handle their
client's money with great degree of fidelity.
14. The violation of the lawyer's oath and/or breach of the ethics of the legal
profession embodied in the CPR may, depending on the exercise of sound
judicial discretion based on the surrounding facts, result in the suspension
or disbarment of a member of the Bar.
15. While we find respondents Attys. Pedro Linsangan and Gerard Linsangan to
have violated Rule 1.03, Rule 2.03, Canon 3, Canon 16, Rule 16.01, and
Rule 16.03 of the CPR, the records do not support respondent Atty.
Glenda Linsangan-Binoya's participation in their unethical activities.
a. Complainant himself admits that he only dealt with respondents
Attys. Pedro and Gerard Linsangan. Thus, we hold that the case
against Atty. Glenda Linsangan-Binoya be dismissed.
16. The penalty for violation of Canon 16 of the CPR usually ranges from
suspension for six months, to suspension for one year, or two years, and
even disbarment depending on the amount involved and the severity of the
lawyer's misconduct.
17. More importantly, respondents' acts do not merely constitute a violation of
Canon 16 and its rules, but already amounts to gross misconduct. First,
respondents breached the trust reposed in them when they betrayed the
express language of their Attorney-Client Contract that they are only
entitled to a single 35% attorney's fees together with the Singapore
counsels. Second, their actions following complainant's objection manifests
their disregard of their fiduciary duties.
18. For both violations, we adopt the recommendation of the IBP Board of
Governors of the imposition of two-year suspension for respondents Attys.
Pedro L. Linsangan and Gerard M. Linsangan.
a. We emphasize that this penalty of two years of suspension
corresponds to the compounded infractions of the violations of
Rule 1.03, Rule 2.03, Canon 3, Canon 16, Rule 16.01, and Rule
16.03 of the CPR: (1) the penalty of suspension of one year is
imposed for the violation of the proscription on ambulance
chasing; and (2) the penalty of one year suspension for gross
misconduct consisting in the failure or refusal, despite demand, of
a lawyer to account for and return money or property belonging to
a client.
 BALINGIT v. CERVANTES (LAXAMANA)
November 9, 2016 | Jardaleza, J. | Canon 20
PETITIONER: Jose Antonio F. Balingit Sr.
RESPONDENTS: Atty. Renato M. Cervantes And Atty. Teodoro B. Delarmente
SUMMARY: Jose Antonio Balingit, Jr. and Carlo Balingit Carlo, who were in
their motorcyles, figured in a head-on collision with the car driven by David A.
Alizadeh. Carlo sustained serious physical injuries; Jose Jr. was pronounced dead
on arrival at the hospital.
An information for criminal negligence was filed against David. Balingit Sr.,
together with Carlo, Kristopher, and the heirs of Jose Antonio Jr., who engaged
the legal services of Atty. Cervantes and Atty. Delarmente in filing a separate
civil suit for damages and an administrative case with the Professional Regulation
Commission (PRC) against David to suspend David’s license to practice
medicine.
Jose Antonio Sr. paid the sum of P45,000.00 as partial acceptance fee for the
filing of the civil suit for damages as evidenced by a handwritten receipt issued
by Atty. Delarmente. In addition, Atty. Cervantes allegedly received P10,000.00
from Imelda Balingit (Imelda), complainant's daughter-in-law, without issuing
any receipt. However, despite such payments, respondent lawyers have failed
to institute the separate civil suit for damages agreed upon.
Parties to the criminal case executed a compromise agreement where David
promised to pay the victims P1M. Atty. Cervantes, upon discovering such
agreement demanded 10% of the amount of the compromise as attorney's fees
and P5,000.00 as appearance fee from complainant. Complainants refused to heed
such demand of payment. Atty. Cervantes filed a criminal complaint for estafa
against complainant, his wife, and his sons.
SC ruled that respondents are guilty of being remiss in their duties as counsels
for complainant. When a lawyer accepts a case, he undertakes to give his utmost
attention, skill, and competence to it. His client has the right to expect that he will
discharge his duties diligently and exert his best efforts, learning, and ability to
prosecute or defend his client's cause with reasonable dispatch.
Indeed, it is highly improper for a lawyer to impose additional professional
fees upon his client which were never mentioned nor agreed upon at the time
of the engagement of his services.
Assuming respondents are entitled to additional payment of professional fees,
their manner of enforcing it still warrants disciplinary sanction. Rule 20.4 of the
CPR advises lawyers to avoid controversies with clients concerning their
compensation and to resort to judicial action only to prevent imposition, injustice
or fraud. The estafa and deportation proceedings filed against complainant and
his family were meant to harass and compel the latter to accede to respondents'
demand for additional professional fees.
DOCTRINE:
Indeed, it is highly improper for a lawyer to impose additional professional fees
upon his client which were never mentioned nor agreed upon at the time of the
engagement of his services.
Rule 20.4 of the CPR advises lawyers to avoid controversies with clients
concerning their compensation and to resort to judicial action only to prevent
imposition, injustice or fraud.
Main complainant: Jose Antonio F. Balingit Sr.
Other complainants: Carlo, Kristopher, and the heirs of Jose Antonio Jr.
Respondent lawyers: Atty. Renato M. Cervantes And Atty. Teodoro B. Delarmente
FACTS:
1. Jose Balingit Sr. is a former Filipino citizen who subsequently became a
naturalized British citizen.
2. His two sons, Jose Antonio Balingit, Jr. Jose Antonio, Jr. and Carlo Balingit
Carlo, who were on board their respective motorcycles, figured in a head-on
collision with the car driven by David A. Alizadeh.
3. Carlo sustained serious physical injuries, while Jose Antonio, Jr. was
pronounced dead on arrival at the hospital.
a. Kristopher Rocky Kabigting, Jr. (Kristopher), Jose Antonio Jr.'s
passenger, also suffered physical injuries.
b. As a result, an information for criminal negligence was filed
against David with the Municipal Trial Court in Cities (MTCC),
Antipolo City.
4. Balingit Sr., together with Carlo, Kristopher, and the heirs of Jose Antonio
Jr., engaged the legal services of Atty. Cervantes and Atty. Delarmente in
filing a separate civil suit for damages and an administrative case with the
Professional Regulation Commission (PRC) against David.
a. David recently passed the physician board exam at that time.
5. Thus, Atty. Cervantes sent a demand letter to David for payment of
P2,000,000.00 plus 25% thereof as attorney's fees.
6. Also, Atty. Cervantes sent a letter to the PRC informing the latter of the
pending criminal case against David and requesting that the issuance of
David's license to practice medicine be deferred or suspended until the
termination of David's criminal case.
7. PRC replied and informed Atty. Cervantes of the requirements in order to file
an administrative case against David.
8. Meanwhile, Atty. Cervantes prepared and signed an agreement embodying
the terms of the legal services engagement.
9. Addressed to Kristopher, Carlo, and the heirs of Jose Antonio, Jr., the
 Agreement provided:
a. This will formalize our agreement whereby our law firm shall
represent you in the civil case for damages to be filed against
DAVID A. ALIZADEH, …
b. Acceptance Fee. P30,000.00 to be paid upon the signing
c. Appearance Fee. P4,000.00 for every appearance by any of our
lawyer/s before the court;
d. Success Fee. 20% of any amount that may be actually collected by
reason of the successful handling of the case;
e. Official and other Fees, such as docket fees, transcript of
stenographic notes, expenses for messengerial, mailing,
photocopying services and expenses for representation shall be for
your account.
10. Kristopher, Carlo, and the heirs of Jose Antonio, Jr. did not sign the
Agreement.
11. Still, Jose Antonio Sr. paid the sum of P45,000.00 as partial acceptance fee
for the filing of the civil suit for damages as evidenced by a handwritten
receipt issued by Atty. Delarmente.
12. In addition, Atty. Cervantes allegedly received P10,000.00 from Imelda
Balingit (Imelda), complainant's daughter-in-law, without issuing any
receipt.
13. However, despite such payments, respondent lawyers have failed to
institute the separate civil suit for damages agreed upon.
14. The criminal case was referred to mediation by the trial court for possible
settlement of the civil aspect of the case.
a. During the negotiations, parties agreed to settle.
b. David agreed to pay P1,000,000.00 in exchange for the execution of
an affidavit of desistance in the criminal case and dismissal and/or
withdrawal of any civil case for damages.
15. Atty. Cervantes, upon discovering such agreement demanded 10% of the
amount of the compromise as attorney's fees and P5,000.00 as appearance fee
from complainant.
16. Atty. Cervantes sent a demand letter to complainant seeking payment of
P100,000.00 as attorney's fees, representing 10% of the amount of the
compromise, and appearance fee of P5,000.00 for his attendance in the
November 9, 2011 hearing.
17. Complainants still refused to pay, Atty. Cervantes filed a criminal complaint
for estafa against complainant, his wife, and his sons, as well as a complaint
for deportation with the Bureau of Immigration, on the ground that they are
undesirable British aliens.
18. Jose Balingit filed the present disbarment case against Atty. Cervantes and
Atty. Delarmante before the Integrated Bar of the Philippines-Commission
on Bar Discipline (IBP-CBD).
ARGUMENTS OF ATTY. CERVANTES AND ATTY. DELARMENTE
19. Atty. Cervantes denies receiving P10,000.00 from Imelda and claims that he
learned of complainant's payment of P45,000.00 only later.
20. As for his failure to le the separate civil suit for damages, Atty. Cervantes
claims that he has not received the acceptance and docket fees to file the case.
21. Atty. Cervantes also argues that the Compromise Agreement has no legal
effect since Jose Balingit Sr. is not a compulsory heir of Jose Antonio, Jr.,
who was legally married with two (2) children.
a. Hence, it should have been the heirs of the deceased that entered into
the Compromise Agreement.
22. Atty. Cervantes asserts that he should be paid his portion of the settlement as
his attorney's fees since it was due to the demand letters he sent to David and
the complaint he led with the PRC that moved David's family to enter into a
Compromise Agreement.
23. Investigating Commissioner Atty. Peter Irving C. Corvera (Commissioner
Corvera) set the case for mandatory conference and required the parties to
submit their respective mandatory conference briefs.
a. Respondents, however, did not submit their conference briefs and
repeatedly failed to appear.
b. Respondents again failed to submit their verified position papers.
24. Commissioner Corvera found respondents guilty of grave misconduct and
violation of Rule 1.03, Canon 15, Canon 20, and Rule 20.04 of the Code of
Professional Responsibility (CPR) and recommended that they be suspended
from the practice of law 6 months.
25. IBP Board of Governors passed Resolution adopting and approving the
Report and Recommendation of the Investigating Commissioner but
reducing the penalty to suspension from the practice of law for 3 months.
ISSUE/s:
1. WoN respondent lawyers violated the CPR – YES
RULING: WHEREFORE, Atty. Teodoro B. Delarmente and Atty. Renato M.
Cervantes are hereby SUSPENDED from the practice of law for six (6) months.
Both are STERNLY WARNED that a repetition of the same or similar acts shall be
dealt with more severely. They are also DIRECTED to return to complainant the
amount of P45,000.00. Finally, respondents are DIRECTED to report to this Court
the date of their receipt of this Decision to enable this Court to determine when their
suspension shall take effect.
RATIO: [for Canon 20 – see Ratio 9-14 ☺)
1. Respondents are guilty of being remiss in their duties as counsels for
complainant.
2. It is a core ethical principle that lawyers owe fidelity to their clients' cause
and must always be mindful of the trust and confidence reposed in them.
3. They are duty bound to observe candor, fairness, and loyalty in all their
dealings and transactions with their clients.
4. Every case lawyers handle deserves their full and undivided attention,
diligence, skill and competence, regardless of its importance and whether
they accept it for a fee or for free, and to constantly keep in mind that not
only the property but also the life of their clients may be at stake.
5. Relevant provisions of the CPR provide:
a. CANON 15 — A lawyer shall observe candor, fairness and loyalty
in all his dealings and transactions with his clients.
b. CANON 16 — A lawyer shall hold in trust all moneys and
properties of his client that may come into his profession.
c. Rule 16.01 — A lawyer shall account for all money or property
collected or received for or from the client.
d. CANON 17 — A lawyer owes fidelity to the cause of his client and
he shall be mindful of the trust and confidence reposed in him.
e. CANON 18 — A lawyer shall serve his client with competence and
diligence.
6. Respondents clearly transgressed the foregoing rules when they failed and
refused to file the separate civil action for damages against David despite
their receipt of payment and the relevant documents from complainant.
7. The receipt Atty. Delarmente issued clearly indicated that the sum of
P45,000.00 paid by the complainant covers the acceptance and filing fees for
the civil suit.
8. When a lawyer accepts a case, he undertakes to give his utmost attention,
skill, and competence to it. His client has the right to expect that he will
discharge his duties diligently and exert his best efforts, learning, and ability
to prosecute or defend his client's cause with reasonable dispatch.
9. Worse, Atty. Cervantes demanded payment of P5,000.00 appearance fee and
10% of the settlement as success fee even though the hearing was for the
criminal case and the Compromise Agreement was entered in the course of
the criminal proceedings; outside the scope of respondents' engagement.
10. Indeed, it is highly improper for a lawyer to impose additional
professional fees upon his client which were never mentioned nor agreed
upon at the time of the engagement of his services.
11. Assuming respondents are entitled to additional payment of professional fees,
their manner of enforcing it still warrants disciplinary sanction. Rule 20.4 of
the CPR advises lawyers to avoid controversies with clients concerning their
compensation and to resort to judicial action only to prevent imposition,
injustice or fraud.
a. This is because matters of fees present an irreconcilable conflict of
interests between a client and his lawyer.
b. Suits to collect fees should be avoided and should be filed only when
circumstances force lawyers to resort to it, such as
i. "when [a] conflict has reached such point that it only
becomes the lawyer's duty to withdraw from the action but
to assert his right to compensation because of the
intolerable attitude assumed by his client,....
12. In these exceptional circumstances, 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.
13. Thus, in Malvar v. Kraft Food Philippines, Inc.
a. A filing of a motion for intervention was rules as a measure to
protect a counsel's right to the fees agreed upon with his client.
b. Alternatively, an aggrieved lawyer may also file an independent
civil action against his client for the payment of his fees. The former
is preferable to avoid multiplicity of suits.
14. In the present case, when complainant refused to pay, Atty. Cervantes
proceeded to file a criminal case for estafa and deportation proceedings
against complainant and his family.
a. We find that the estafa and deportation proceedings filed against
complainant and his family were meant to harass and compel the
latter to accede to respondents' demand for additional professional
fees.
Whether respondents should be directed to return the filing fees they received from
complainant [Yes]
15. If the matter involves violations of the lawyer's oath and code of conduct,
then it falls within the Court's disciplinary authority.
16. However, if the matter arose from acts which carry civil or criminal liability,
and which do not directly require an inquiry into the moral fitness of the
lawyer, then the matter would be a proper subject of a judicial action which
is understandably outside the purview of the Court's disciplinary authority.
a. [this case falls under the former]
17. When the matter subject of the inquiry pertains to the mental and moral
fitness of the respondent to remain as member of the legal fraternity, the issue
of whether the respondent be directed to return the amount received from his
client shall be deemed within the Court's disciplinary authority.
18. In addition, we have previously held that when a lawyer receives money from
his client for a particular purpose and the lawyer does not use the money for
such purpose, the lawyer must immediately return the money to his client.
 JACINTO v. BANGOT (PATGAL)
October 5, 2016 | Bersamin, J. | Canon 20
PETITIONER: Spouses Emilio and Alicia Jacinto
RESPONDENTS: Atty. Emelie P. Bangot, Jr.
SUMMARY: To prevent the intrusion of a private survey team on their property,
Spouses Jacinto sought the legal services of Atty. Bangot Jr., who in turn filed a
Motion for Information. In return for his legal services, Spouses Jacinto signed a
Memorandum of Agreement prepared by Atty. Bangot Jr. which states that the
latter shall get 300 sq. m., contrary to the original agreement of 250 sq. m. from
the spouses’ property. The portion to be given to their counsel involved their
daughter’s, so the spouses offered to pay Atty. Bangot in cash but the latter
refused. Feeling deceived, the spouses sought to revoke the MOA. W/N Bangot
violated CPR? Yes. There is an apparent disproportion between the amount of
attorney’s fees and the service rendered. The worth of such minimal effort does
not warrant for the stipulation in the MOA. It is evident that counsel was bent on
obtaining the lot than in protecting his client’s interest. He exhibited this zeal by
refusing to receive cash instead of the land. This reflected his deceitfulness,
dishonesty, and unreasonableness in dealing with his client.
DOCTRINE:
A lawyer shall observe candor, honesty and fairness in dealing with his clients,
and shall only charge fair and reasonable fees for his legal services. He should not
excessively estimate the value of his professional services. In drawing up the terms
of his professional engagement, he should not practice deceit. The clients are
entitled to rescind the written agreement on his professional fees if the terms
thereof contravened the true agreement of the parties.
FACTS:
1. Spouses Emilio and Alicia Jacinto, then 81 and 76 years of age,
respectively filed an administrative case against Atty. Emelie P. Bangot, Jr.
for the latter's unjust and dishonest treatment of them as his clients.
2. A private survey team had conducted a survey of Cad. 237 Lot No. 1351
on pursuant to the order of the Regional Trial Court, Branch 39, in Cagayan
de Oro City in connection with the reconstitution of the lost certificate of
title of said lot by the owners
a) after conducting the perimeter survey, the survey team had tried
to enter the premises owned by spouses but they had prevented
the team from doing so because their premises had already
been segregated by virtue of the issuance of Original Certificate
of Title
b) survey team desisted from proceeding with the survey of their
land but had nonetheless informed them that they would return
another time for the survey
3. this had forced them to consult a lawyer on the legal remedies to prevent
the intrusion on their property
4. They engaged the services of Atty Bangot, briefing him on their concern,
and delivering to him the documents pertinent to their land
5. After scrutinizing the documents, he had told them that he would be
initiating a case for certiorari in their behalf to nullify the order for the
reconstitution of the lost title covering Cad. 237 Lot No. 1351; that he had
then insinuated that one of their lots would be his attorney's fees
a) they had not initially agreed to the insinuation because the lots had
already been allocated to each of their seven children, but they
had ultimately consented to giving him only a portion of one Lot
6. He also prepared a MOA to evidence the said agreement
a) The complainants recalled that on October 17, 2008 the
respondent requested them to proceed to his law office.
b) They allegedly signed without reading the full contents of the
memorandum
c) They were surprised to know that the terms of the MOA did not
reflect the true intentions in previous discussion. A different area
of a lot had been written, when Emilio Bangot had already
disposed
d) They went to Atty. Bangot to revoke the MOA because they felt
as if they were deceived.
e) They allege that Atty Bangot took advantage of their old age, thus
breaking the trust and confidence that a lawyer should uphold at
 all times in the exercise of one’s profession
f) They offered to pay him in cash but he refused to revoke the MOA
because accordingly, he would consult his wife which finally did
not materialize because his wife was not amenable which in effect
showed that they have vested interest on the property and they are
bent on taking the property at any cause.
7. They came to know that the Manifestation filed by Atty. Bangot is not a
preparatory pleading for certiorari, that in no way could it even stop the
intrusion into the property.
a) “Basically, we were deceived by Atty. Bangot into believing that
the Manifestation he filed would stop any legal disturbance on our
property and the same is preparatory for certiorari.”
8. On his part, the respondent denied the allegations of the complainants. He
insisted that the complaint against him was a harassment tactic designed to
intimidate him from seeking judicial remedies to settle their dispute on the
validity of the MOA
a) Among his other arguments: the MOA was valid; that
the Manifestation for Information he had filed in court prevented
the intrusion into the complainants’ land; that the administrative
complaint was designed to insure the derailment of his application
for a judgeship position, and to cover up the negligence of the
complainants’ counsel as the plaintiffs in Civil Case No. 2008-
302 (for annulment and/or rescission of agreement), which case
was dismissed for failure to comply with the requirement for the
prior barangay conciliation proceedings; and that they had
voluntarily signed the MOA without intimidation, fraud or undue
influence
9. IBP Commissioner ruled that the complaint against Atty. Bangot is
meritorious, and recommended that the respondent be suspended from the
practice of law for one year for his unfair and injudicious treatment of the
complainants as his clients.
10. IBP Board of Governors increased the duration of the respondent's
recommended penalty to suspension from the practice of law for two years
ISSUE:
1. W/N Atty Bangot violated his ethical duties as a member of the Bar in his
dealings with the complainants? – YES
2. Was the MOA fair to the parties and entered in good faith? - NO
RULING: WHEREFORE, this Court FINDS and HOLDS respondent ATTY.
EMELIE P. BANGOT, JR. guilty of violation of the Lawyer's Oath and of
the Code of Professional Responsibility; SUSPENDS him from the practice of
law for five (5) years effective upon notice of this decision, with warning that
sterner sanctions will be meted on him for a similar offense;
and DECLARES that he is not entitled to recover any attorney's fees from the
complainants.
RATIO:
1. From findings of IBP Commissioner
a) Conduct of Atty. Bangot had manifested an instinctive interest in
the property of the spouses
i. He had the MOA executed at the same time he filed the
Manifestation for Information before the court that was
hearing LRC Case No. 98-010
b) They had agreed that payment of Respondent's attorney's fees by
way of a real property would come from TCT No. 121709 and not
T-121708. Spouses explained that the latter lot had already been
committed to their seven (7) children especially because this lot
is situated in a prime location. Atty. Bangot knew
straightforwardly that lot 121708 was a better lot yet Respondent
gave a different account of their agreement and took advantage of
the frailty and advance ages
c) Most shocking of all is the apparent inequity or disproportion
between the amount of attorney's fees (measured from the value
of the property taken by Respondent) and the effort or service
already performed or still to be performed by him. The
Complainants were not made parties to the LRC case or any other
case and Respondent filed a mere two-paged Manifestation for
Information in court which he did almost effortlessly. Respondent
stuck to his tale that the Complainants had signed [the] MOA and
despite his minimal representation of the Complainants in court,
 he held on to his idea that he had taken from his clients valid title
to a million [pesos] worth of real estate in payment of his fees.
2. The court adopts the findings of the IBP Commissioner
3. To determine the reasonableness of attorney's fees, the following factors as
enumerated in Rule 20.1 of the Code of Professional Responsibility may
serve as a guide, to wit: (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.
4. Although he did claim that the filing of the Manifestation for
Information had prevented any intrusion on their property, thereby
fulfilling his end of the contract, the worth of such minimal effort was
exaggerated and disproportionate when taken in the context of the
attorney's fees being Lot No. 37925-G with 300 square meters in area.
a) The two-paged Manifestation for Information was not even the
procedural precursor of the promised petition for certiorari.
b) Moreover, he did not actually file the petition for certiorari as he
had promised.
5. He did nothing more after filing the Manifestation for Information. He
certainly transgressed the Lawyer's Oath by receiving property of a
substantial value from the complainants after having made them believe
that he could ensure their land from intrusion by third parties.
6. He even refused their offer to give cash for his attorney's fees instead of
the land. We sadly note in this connection that his changing the property
ostensibly agreed upon with the bigger lot as payment for his legal
services[14] reflected his deceit at the start of the relationship. He
maintained the deceit by ultimately enforcing the MOA against them
through the action for specific performance.
7. the agreement was not a contingent fee arrangement. Indeed, a contingent
fee arrangement is a contract in writing in which the fee, usually a fixed
percentage of what may be recovered in the action, is made to depend upon
the success in the effort to enforce or defend a supposed right.
8. The amount of the 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) Canon 13 of the Canons of Professional Ethics states that "a
contract for a contingent fee, when 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."
9. Considering that a contingent fee arrangement is susceptible to abuse, the
courts should closely scrutinize it to protect the client from unjust charges.
The court looks in large measure at the reasonableness of the stipulated fee
under the circumstances of each case.
10. All the foregoing circumstances established that the respondent was
deceitful, dishonest and unreasonable in his dealings with the complainants
as his clients. He thus violated his Lawyer's Oath, whereby he vowed,
among others, to do no falsehood, and not to consent to the doing of any
falsehood, as well as not to delay any man's cause for money or malice but
to conduct himself as a lawyer according to the best of his knowledge and
discretion "with all good fidelity as well to the courts as to [his] clients. He
also breached the following canons of the Code of Professional
Responsibility:
Rule 1.01 - A lawyer shall not engage in unlawful, dishonest immoral or
deceitful conduct.
Canon 15 A lawyer shall observe candor, fairness and loyalty in all his
dealings and transactions with his clients.
Canon 17 A lawyer owes fidelity to the cause of his client and he shall be
mindful of the trust and confidence reposed in him.
Canon 18.03 A lawyer shall not neglect a legal matter entrusted to him, and
his negligence in connection therewith shall render him liable.
 fees in view of the worthlessness of the professional services he supposedly
Canon 20- A lawyer shall charge only fair and reasonable fees. Rule 20.4 rendered.
A lawyer shall avoid controversies with clients concerning his
compensation and shall resort to judicial action only to prevent imposition,
injustice or fraud.

11. the Law is neither a trade nor a craft but a profession whose basic ideal is
to render public service and to secure justice for those who seek its aid.

12. The respondent's behavior and deceit demonstrated a preference for self-
gain that transgressed his sworn duty of fidelity, loyalty and devotion to his
clients' cause. His betrayal of his clients' trust besmirched the honorable
name of the Law Profession. These considerations justify suspending him
from the practice of law.

13. Moreover, when he filed an MR to the IBP, he attributed the filing of the
administrative charge to the lawyer representing the spouses in the suit
afainst him as one who has influential hands in the hierarchy of the IBP.

a) The attribution was bereft of factual and legal justifications,

however, because he did not even attempt to establish it with
satisfactory proof.

b) malicious and unfounded in view of the record establishing his

serious ethical violations. He displayed an unmitigated lack of
professionalism by casting aspersions against his peers

14. Although the complainants appeared to have initially bound themselves to

give a part of their land as the respondent's professional fees, they did so
apparently because he had misrepresented to them the gravity and
extent of their legal matter. His misrepresentation was undeniably
calculated to make them part with their valuable asset in lieu of cash. He
did not thereafter render any worthy professional legal service in their favor.

15. Even if this charge was his first infraction, the grossness of his violations
of the Lawyer's Oath and the various relevant canons of the Code of
Professional Responsibility quoted earlier absolutely warranted his
suspension from the practice of law for five years effective upon his receipt
of this decision, with warning of sterner sanctions should he hereafter
commit a similar offense.

16. In addition, Atty. Bangot should not be entitled to receive any attorney's
 SESBREÑO vs. CA (PATTY)
June 8, 1995 | J. Romero| Retainer/Contingent Fees
PETITIONER: RAUL SESBREÑO
RESPONDENTS: HON. COURT OF APPEALS, and PATRICIO GIAN,
SOTERO BRANZUELA, ANDRES C. YPIL, SANTIAGO BACAYO,
BRIGIDO COHITMINGAO, VICTORINO DINOY, GUILLERMO MONTEJO
and EMILIO RETUBADO
SUMMARY: 52 employees employed Raul Sesbreño as a counsel in case for
recovery of backwages and reinstatement filed against the Province of Cebu. A
compromise agreement was later on agreed upon wherein 2.3 Million was given
as partial satisfaction of the backwages of the employees but employees waived
their right to reinstatement. 10 employees in this case sued and argued that 40%
attorney’s fees shall be obtained only from their backwages and not from the
whole amount of the judgment/compromise agreement [because the whole
judgment/compromise agreement may include other payments aside from their
backwages.] The RTC said that 60% of their backwages shall be given to
Sesbreño – 40% is for attorney’s fees and 20% is for Sesbreño’s expenses. Then
in the MR – it was lowered to 50%. But when it reached the CA – it only ruled
on 20%. The issue is whether or not the contingent stated in his contract with the
employees be upheld. NO, because it was excessive and unconscionable. It is
excessive given the amount of work he has done. It is unconscionable because the
employees here lost their livelihood and hence they employed Sesbreño to
recover income but if 50% of it was to be awarded as attorney’s fees to Sesbreño
then such only defeats the purpose of the case. What a lawyer may charge and
receive as attorney’s fees is always subject to judicial control since he is an officer
of the court.
DOCTRINE:
The general rule in determining attorney’s fees is quantum meruit or “as much
as he deserves.” Attorney’s fees become unconscionable when the amount of the
fee 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.
FACTS:
1. 52 employees sued the Province of Cebu and Governor Rene Espina for
reinstatement and backwages.
a. Raul Sesbreño replaced the former counsel of the employees.
b. 32 out of the 52 employees signed two documents stating that they
will pay the following proportion of their backwages to Sesbreño for
his service:
i. 30% of their backwages for attorney’s fees
ii. 20% of their backwages for expenses
2. Later on, the Province of Cebu was ordered to reinstate and pay the
employees their backwages.
a. But a compromise agreement was subsequently done where the
former employees waived their right to reinstatement and got 2.3
Million pesos through Sesbreño as partial satisfaction of judgment.
3. 10 employees in this present case filed a manifestation that they agreed to pay
Sesbreño 40% only of their backwages. [This means that the 40% kukunin
lang sa backwages nila not from the entire judgment of the court which
includes payment not limited to their backwages.]
a. The lower court held that Sesbreño shall be paid 60% of all monies
of the employees. 40% as attorney’s fees and 20% as expenses.
b. In the MR, the fee was reduced to 50% instead of 60%.
c. When the case reached the CA, the CA changed the fee to 20%.
ISSUE/s: Whether or not the claim of Sesbreño to attorney’s fees amounting to 50%
of all movies awarded to his clients as contingent fees should be upheld for being
consistent with prevailing case law and the contract of professional services between
the parties – NO, it cannot be upheld for being unconscionable.
RULING: The petition is denied.
RATIO:
1. The 50% of all monies as attorney’s fees is excessive, unconscionable, and
contrary to the contract of professional services.
a. The general rule in determining attorney’s fees is quantum meruit
or “as much as he deserves.”
b. It becomes unconscionable when the amount of the fee 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.
c. Things that shall be considered:
i. time spent and extent of services rendered;
ii. novelty and difficulty of the questions involved;
iii. importance of the subject matter;
iv. skill demanded;
v. probability of losing other employment as a result of
acceptance of the proffered cause;
vi. customary charges for similar services;
vii. amount involved in the controversy and the benefits
resulting to the client;
viii. certainty of compensation;
ix. character of employment;
x. and professional standing of the lawyer
d. It is indeed unconscionable in this case because the employees here
have been dismissed and hence lost their livelihood. The purpose on
why counsel was employed was so they can recover income and if
he appropriates for himself 50% of the award – that will leave 52
employees dividing on only half of the income they should have
received.
 e. 20% of backwages is fair settlement. Plus, this 20% is only
applicable to the backwages of the 10 employees who sued in this
case. This means that Sesbreño has already gotten 50% from the
backwages of all the other employees [sad, if you think about it he
actually won kasi nakakuha siya ng 50% from 42 out of 52
employees.]
2. General rule as to the court’s power to review attorney’s fees: What a
lawyer may charge and receive as attorney’s fees is always subject to judicial
control. A lawyer is primarily an officer of the court charged with the duty of
administering justice and when he takes his oath he submits himself to the
authority of the court and subjects his professional fees to judicial control.
3. General rule as to a lawyer’s compensation through contracts: A
stipulation on a lawyer’s compensation in a written contract for professional
services ordinarily controls the amount of fees that a lawyer may receive.
a. Exception: When the court finds it unreasonable or unconscionable.
b. Hence, a contingent fee is binding but must be laid down expressly
in the contract. It is subject to the stipulation that the counsel will be
paid only if the suit will prosper.
 (89) PINEDA v. DE JESUS (DE CASTRO)
August 23, 2006 | Corona, J. | Rule 20.04 CPR
PETITIONER: VINSON B. PINEDA
RESPONDENTS: ATTY. CLODUALDO C. DE JESUS, ATTY.
CARLOS AMBROSIO and ATTY. EMMANUEL MARIANO
SUMMARY: Respondents De Jesus, Ambrosio and Mariano are the legal
counsel of petitioner Vinson Pineda in an action for declaration of nullity of
marriage filed by his wife, Aurora Pineda. Throughout the proceedings,
respondent counsels were well-compensated. They, including their relatives
and friends, even availed of free products and treatments from petitioner’s
dermatology clinic. This notwithstanding, they billed
petitioner additional legal fees amounting to P16.5 million which the latter,
however, refused to pay. Instead, petitioner issued them several checks
totaling P1.12 million as "full payment for settlement."
W/N respondents were entitled to additional legal fees. (No)
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.
DOCTRINE: Rule 20.04 of the CPR provides that a lawyer shall avoud
controversies with clients concerning his compensation and shall resoirt to
judicial action only to prevent imposition, injustice or fraud.
FACTS:
1. Aurora Pineda filed an action for declaration of nullity of marriage
against petitioner Vinson Pineda (Pineda).
2. Pineda is represented by respondents Attys. Clodualdo de Jesus,
Carlos Ambrosio and Emmanuel Mariano.
3. During the pendency of the case, Aurora proposed a settlement to
petitioner Pineda regarding her visitation rights over their minor child
and the separation of their properties. The proposal was accepted by
Pineda and both parties subsequently filed a motion for approval of
their agreement. This was approved by the trial court.
4. Soon after, the marriage between Vinson Pineda and Aurora Pineda
was declared null and void.
5. Throughout the proceedings, respondent counsels were well-
compensated. They, including their relatives and friends, even availed
of free products and treatments from petitioner’s dermatology clinic.
This notwithstanding, they billed petitioner additional legal fees
amounting to P16.5 million which the latter, however, refused to pay.
Instead, petitioner issued them several checks totaling P1.12
million as "full payment for settlement."
6. Still not satisfied, respondents filed in the same trial court7 a motion
for payment of lawyers’ fees for P50 million.
7. The trial court ordered petitioner to pay P5 million to Atty. de
Jesus, P2 million to Atty. Ambrosio and P2 million to Atty. Mariano.
8. On appeal, the Court of Appeals reduced the amount as follows: P1
million to Atty. de Jesus, P500,000 to Atty. Ambrosio and P500,000
to Atty. Mariano. The motion for reconsideration was denied. Hence,
this recourse.
ISSUE/s:
W/N respondents were entitled to additional legal fees. (No)
RULING: 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.
RATIO:
1. The professional engagement between petitioner and respondents was
governed by the principle of quantum meruit which means "as much
as the lawyer deserves."
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. Respondents’ claim for additional legal fees was not justified. They
could not charge petitioner a fee based on percentage, absent an
express agreement to that effect. The payments to them in cash,
checks, free products and services from petitioner’s business — all of
which were not denied by respondents — more than sufficed for the
work they did. The "full payment for settlement" should have
discharged petitioner’s obligation to them.
8. 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. When they took their oath, they submitted themselves to the
authority of the Court and subjected their professional fees to judicial
control.
 90 ROXAS v. DE ZUZUARREGUI, JR. (CHUA)
Jan. 31, 2006 | Chico-Nazario, J., | Canon 20
PETITIONER: ROMEO G. ROXAS and SANTIAGO N. PASTOR
RESPONDENTS: ANTONIO DE ZUZUARREGUI, JR., ENRIQUE DE
ZUZUARREGUI, PACITA JA IER,E!IZA"ET# R. GONZA!ES, JOSE$INA
R. DAZA, E!IAS RE%ES, NATI IDAD RE%ES,TERESITA RE%ES, JOSE
RE%ES and ANTONIO RE%ES
SUMMARY: The NHA filed expropriation proceedings against the Zuzuarreguis
for parcels of land, The Zuzuarreguis engaged the legal services of Attys. Roxas
and Pastor. They executed a Letter Agreement indicating their contingent fees.
Another Letter-Agreement was later executed between the Zuzuarreguis and the
Attys. Roxas and Pastor fixing just compensation at P17 per sq m, and anything
in excess of that shall be the contingent fees for their legal services. The NHA
later had a resolution stating that it will pay at P19.50 per sq m, payable in NHA
Bonds. The NHA gave P54,500,000 worth of NHA bonds, but Atty. Roxass only
gave P30,520,000 to the Zuzuarreguis. The latter demanded from the former the
yield corresponding to bonds paid by the NHA. Attys. Roxas and Pastor said they
no longer had it. The issue in this case is W/N the contingent fees were reasonable
– NO. According to Canon 13 of the Canons of Professional Ethics and Canon 20
of the Code of Professional Responsibility, a lawyer has a duty to charge only
reasonable fees. Entwined with that duty is the power of the Court to reduce the
amount of attorney’s fees if the same is excessive and unconscionable. Attys.
Roxas and Pastor received an amount which isequal to 44% of the just
compensation paid by the NHA to the Zuzuarreguis. Thus the Court ruled that
87.17% of the yields of the bonds should be given to the Zuzuarreguis.
DOCTRINE: Attorney’s fees are unconscionable if they affront one’s sense of
justice, decency or reasonableness. Therefore, the power to determine the
reasonableness of attorney’s fees stipulated by the parties is a matter falling within
the regulatory prerogative of the courts
FACTS:
1. 1977, the National Housing Authority (NHA) filed expropriation proceedings
against the Zuzuarreguis for parcels of land belonging to them situated in
Antipolo, Rizal
a. The land area is 1,790,570.36 sq m
2. The Zuzuarreguis engaged the legal services of Attys. Romeo G. Roxas and
Santiago N. Pastor
3. They executed a Letter-Agreement dated April 22, 1983 which indicated that
the contingent fees that the lawyers will receive at P11 or more persquare
meter is thirty percent of the just compensation.
4. The appropriate proceedings thereafter ensued and on October 29, 1984, a
Partial Decision was rendered fixing the just compensation to be paid to the
Zuzuarreguis at P30 per square meter
5. The NHA filed a Motion for Reconsideration for the lowering of the amount
of just compensation in accordance with applicable laws
6. Pending the resolution of the MFR filed by the NHA, a joint special powerof
attorney was executed by the Zuzuarreguis in favor of Attys. Roxas and
Pastor
7. On December 10, 1985, a Letter-Agreement was executed by and between
the Zuzuarreguis and Attys. Roxas and Pastor which fixed the just
compensation due the Zuzuarreguis at P17, and anything in excess of
that shall be the contingent fees of Attys. Roxas and Pastor for their legal
services
8. A resolution by the NHA stated that the property would be acquired at a cost
of P19.50 per squaremeter and that it will be paid in NHA Bonds which the
yield would bebased on the Central Bank rate at the time of the payment
9. As a result of the NHA Resolution, a Compromise Agreement was executed
and it was approved by the Court in a Decision dated December 20, 1985
10. Computed at P19.50 per square meter, the property of the Zuzuarreguiswas
expropriated at a total price of P34, 916, 122. The total amount released by
the NHA was P54, 500, 000. The difference of P19, 583, 878 is, undoubtedly,
the yield of the bonds.
11. The amount turned over to the Zuzuarreguis by Atty. Roxas amounted toP30,
520, 000 in NHA bonds
12. On August 25, 1987, a letter was sent by the Zuzuarreguis’ new counsel to
Attys. Roxas and Pastor demanding that the latter deliver to the Zuzuarreguis
the yield corresponding to bonds paid by the NHA within a period of 10 days
from receipt, under pain of administrative, civil and/orcriminal action
13. Attys. Roxas and Pastor answered stating that the amount that they got seems
huge from the surface but it just actually passed their hands.
14. On September 29, 1987, a letter was again sent to Attys. Roxas and Pastor
formally terminating their services
15. The Zuzuarreguis then filed a civil action for Sum of Money and Damages,
they demanded that the yield on the NHA bonds be turned over to them
16. RTC dismissed; CA ordered Roxas and pastor to return the amount of P12,
596, 425, already deducting the reasonableattorney’s fees in the amount of
P4,476,426.275
17. Motion for Reconsideration for all parties were denied; Roxas and Pastor then
filed petition for certiorari
ISSUE:
1. WoN the letter agreement executed by the parties should stand as law
between them – YES
2. WoN the contingent fees were reasonable – NO
RULING: WHEREFORE, in view of all the foregoing considerations, the Decision
and Resolution of the Court of Appeals dated 25 June 2001 and 06 February 2002,
respectively, are AFFIRMED but with the MODIFICATION that Attys. Romeo G.
Roxas and Santiago N. Pastor are hereby ordered to return to the Zuzuarreguis the
amount of P17,073,224.84. No costs.

RATIO:

First Issue
1. A contract is a meeting of the minds between two persons wherebyone binds
himself, with respect to the other, to give something or torender some service.
2. The Zuzuarreguis, in entering into the Letter-Agreement, fully gave their
consent thereto. In fact, it was them who sent the said letter to Attys. Roxas
and Pastor, for the purpose of confirming allmatters which they had agreed
upon previously.
3. There is absolutely no evidence to show that anybody was forced into
entering into the Letter-Agreement. It is basic that a contract is the law
between the parties.

Second Issue:
1. Under the contract in question, Attys. Roxas and Pastor are toreceive
contingent fees for their professional services.
2. Canon 13 of the Canons of Professional Ethics states: a contract for
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
3. Canon 20, Rule 20.01 of the Code of Professional Responsibility states the
guidelines by which a lawyer should determine his fees
4. Indubitably entwined with the lawyer’s duty to charge only reasonable fees
is the power of this Court to reduce the amount of attorney’s fees if the same
is excessive and unconscionable (Section 24, Rule 138, Rules of Court).
5. Attorney’s fees are unconscionable if they affront one’s sense of justice,
decency or reasonableness. Therefore, the power to determine the
reasonableness of attorney’s fees stipulated by the parties is a matter falling
within the regulatory prerogative of the courts.
6. Attys. Roxas and Pastor received an amount which isequal to 44% of the just
compensation paid by the NHA to theZuzuarreguis.
7. Considering that there was no full blown hearing in theexpropriation case,
ending as it did in a Compromise Agreement, the 44%is undeniably excessive.
8. In the opinion of the Court, 87.17% of the yieldsof the bond should go to the
Zuzuarreguis computing from the amounts stipulated in the Letter-
Agreement. The remaining amount is what is dueto Attys. Roxas and Pastor.
 91 Law Firm of Tungol & Tibayan v CA (JANINE)
July 9, 2008 | QUISUMBING, J. | Excessive Fees
PETITIONER: LAW FIRM OF TUNGOL & TIBAYAN
RESPONDENTS: COURT OF APPEALS and SPOUSES RENATO M.
INGCO & MA. LUISA S. INGCO
SUMMARY: Renato M. Ingco and Ma. Luisa S. Ingco hired the services of
petitioner law firm to enforce delivery of a land title covering a 300-square meter
lot in Tivoli Royale Subdivision, Quezon City. They were informed by the law
firm that graduated attorney’s fees the firm would charge would depend on the
circumstances of the case. Subsequently, the law firm filed acomplaint against
Villa Crista on behalf of the Ingcos. Despite compromise agreement, Villa Cirsta
did not pay Incos hence the HLURB issued a writ of execution. The ex-
officio sheriff levied and auctioned ten lots belonging to Villa Crista. The
spouses bought three of the ten lots at a bid price of ₱7,193,505.56, which
includes the ₱5.1 million contract price for the 300- square meter lot, ₱1,350,000
attorney’s fees and other expenses. Thereafter, the Ingcos terminated the law
firm’s services. They alleged that they had already paid the law firm ₱1.5 million
in attorney’s fees. Atty. Tungol wrote the Ingcos and expressed his surprise at
the termination of their firm’s services. He contended that the spouses
terminated the law firm’s services because they merely wanted to escape paying
the firm. The law firm eventually also filed with the HLURB a Motion and
Statement of Claim for Attorney’s Lien and Motion to Enforce the Attorney’s
Lien. They sought to recover 25% of the excess of the existing prevailing selling
price or fair market value of the three levied lots over the total bid price and
expenses of ₱7,193,505.56. The issue is WoN the charged fees was fair and
reasonable. The Court said that it was not. In their comment, the Ingcos explain
that they were in disbelief when petitioner charged them ₱70,000 as
notarization fee for the final deeds. They had the same deeds notarized by
another lawyer for only ₱900. We note that the Ingcos acquired the three lots
as the highest bidder at the execution sale, since no one else bid higher. On this
point, it can be said that the lots had been acquired not through the recovery
efforts of the law firm. Courts can fix reasonable compensation which lawyers
should receive for their professional services. Nothing precludes the appellate
courts from reducing the award when it is deemed unconscionable or excessive.
Additionally, when the auction sale of the three lots was made, the attorney-
client relationship between petitioner and respondents no longer existed. Thus,
we cannot include in the attorney’s fees the 25% of the excess of the market
value of the lots over the ₱7,193,505.56 paid by the Ingcos in acquiring them.
DOCTRINE: Courts can fix reasonable compensation which lawyers should
receive for their professional services. Nothing precludes the appellate courts
from reducing the award when it is deemed unconscionable or excessive
FACTS:
1. Renato M. Ingco and Ma. Luisa S. Ingco hired the services of petitioner law
firm to enforce delivery of a land title covering a 300-square meter lot in
Tivoli Royale Subdivision, Quezon City.
2. Atty. Abelardo M. Tibayan, a partner in said law firm, specified in a letter
to respondent Renato Ingco that the graduated attorney’s fees the firm
would charge would depend on the circumstances of the case.
3. In behalf of the Ingcos, the law firm filed a Complaint against Villa Crista
Monte Realty and Development Corporation, Inc. (Villa Crista) before the
Housing and Land Use Regulatory Board (HLURB).
a. The complaint alleged that the Ingcos had paid the contract price
of ₱5.1 million for the lot, but Villa Crista did not deliver the title
to the Ingcos and refused to execute the final deed of sale in their
favor.
4. After a series of negotiations, Villa Crista entered into a compromise
agreement. The HLURB approved the compromise and rendered a
judgment upon compromise on December 21, 1999.
5. Despite the compromise agreement, however, Villa Crista did not pay the
Ingcos
6. This prompted the HLURB to issue a writ of execution, ordering the ex-
officio sheriff of the Regional Trial Court (RTC) to execute the judgment.
The writ required Villa Crista to refund to the spouses Ingco ₱5,081,856; to
pay them ₱200,000 liquidated damages; and to seize, garnish or levy any
property of Villa Crista to satisfy the judgment.
7. The ex-officio sheriff levied and auctioned ten lots belonging to Villa Crista.
The spouses bought three of the ten lots at a bid price of ₱7,193,505.56,
which includes the ₱5.1 million contract price for the 300- square meter lot,
₱1,350,000 attorney’s fees and other expenses.
8. Thereafter, in a Letter dated August 2, 2001, the Ingcos terminated the
law firm’s services. They alleged that they had already paid the law
firm ₱1.5 million in attorney’s fees.
9. In a Letter dated August 8, 2001, petitioner’s Atty. Danilo N. Tungol wrote
the Ingcos and expressed his surprise at the termination of their firm’s
services since, to their knowledge, the spouses were satisfied with its
services. Atty. Tungol contended that the spouses terminated the law
firm’s services because they merely wanted to escape paying the firm.
Atty. Tibayan also wrote the Ingcos a similar letter.
10. The law firm eventually also filed with the HLURB a Motion and Statement
of Claim for Attorney’s Lien and Motion to Enforce the Attorney’s Lien
a. Both motions sought to recover 25% of the excess of the existing
prevailing selling price or fair market value of the three levied lots
 over the total bid price and expenses of ₱7,193,505.56.
11. According to the law firm, the spouses Ingco still owed attorney’s fees of
₱4,506,500 on top of the advance payment of ₱1.5 million. It asserted that
as agreed upon in their contract, the law firm shall be entitled to additional
attorney’s fees equivalent to 25% of the excess of the price value of the
three lots over the total bid price and expenses in case Villa Crista fails to
redeem the three lots the spouses bought in the auction sale.
a. The additional attorney’s fees, according to the law firm, were due
because of the additional benefit derived by the spouses since the
three lots which Villa Crista failed to redeem were worth more
than the bid price and expenses the spouses paid.
12. The Ingcos opposed the aforementioned motions, contending that it
terminated the services of the firm because it demanded ₱70,000 for
notarial fees
13. On March 17, 2005, the HLURB Regional Director Jesse A. Obligacion
issued a writ of execution, ordering the Ingcos to pay the firm ₱4,506,500
ISSUE:
1. WoN the charged fees was fair and reasonable – NO
RULING: WHEREFORE, the instant petition is DENIED. The Decision dated March 17, 2005 of the
Court of Appeals in CA-G.R. SP No. 85540, entitled "Spouses Renato M. Ingco and Ma. Luisa S. Ingco v.
Law Firm of Tungol and Tibayan," is AFFIRMED. Costs against petitioner.
RATIO:
1. According to the law firm, the Court of Appeals erred when it concluded
that since the subject of the contract was only the lot worth ₱5.1 million,
and it was only the delivery of title or refund of its value which petitioner
committed to enforce, these should be the only basis for attorney’s fees.
2. The law firm likewise stressed that the compromise, judgment, execution,
levy, sale and finally, consolidation of ownership in favor of private
respondents constitute a series of events which petitioner persistently aimed
at and worked on. The identification of the three lots was the result of its
continuous and tedious search and verifications of the numerous properties
of the erring developer, which were traced by petitioner.
3. The law firm avers there was no truth to the claims of the Ingcos that it was
not through the law firm’s efforts that the three lots were recovered because
those were acquired through the execution sale. To entertain such premise,
would allegedly render nugatory every contract for legal services, and then
every counsel, despite his efforts, would not deserve his fees every time
execution sale became necessary to enforce judgment.
4. The Ingcos explain that they were in disbelief when petitioner charged
them ₱70,000 as notarization fee for the final deeds. They had the same
deeds notarized by another lawyer for only ₱900.
5. Further, the law firm would not let them borrow the case files such that their
relationship turned sour, prompting them to terminate the firm’s services.
6. In our own perusal of the contract, we find that the contract did not provide
for any other basis for the computation of attorney’s fees other than the
value of the property protected/recovered, amount of claim collected, or the
total interests including gains which actually inured to the client’s benefit.
7. In our view, the law firm had been adequately paid its lawyer’s fees and is
no longer entitled to additional fees on top of the ₱1.5 million it had
received. In fact, the 25% attorney’s fees based on the value of the lot,
which is ₱5.1 million, multiplied by 25%, will only amount to ₱1,275,000.
Thus, the firm had a bonus of ₱225,000, since they received ₱1,500,000
from the clients.
8. We note that the Ingcos acquired the three lots as the highest bidder at the
execution sale, since no one else bid higher. On this point, it can be said that
the lots had been acquired not through the recovery efforts of the law firm.
Had other persons bidded a higher price, the matter of the three lots would
be entirely impertinent here. It is stretching the firm’s contractual rights to
say that the three lots acquired in the auction by the Ingcos’ was thru the
law firm’s contractual services.
9. The law firm appears to have extended the following services to the Ingcos:
(1) sent three demand letters to the developer; (2) filed a complaint against
the latter on March 29, 1999; (3) appeared for the Ingcos during the July 29,
1999 pre-trial before the HLURB arbiter; (4) filed the joint motion to
approve compromise agreement between the parties dated October 21, 1999;
and (5) attended four preliminary conferences, three of which were reset,
and only one called..
10. There were no long-drawn trials. It was respondent Renato Ingco who
actually negotiated in person with the developer. There is no positive
evidence shown that the law firm battled for its clients against Villa Crista
during the negotiation stage.
11. Courts can fix reasonable compensation which lawyers should receive for
their professional services. Nothing precludes the appellate courts from
reducing the award when it is deemed unconscionable or excessive.
a. Further, here we note that when the auction sale of the three lots
was made, the attorney-client relationship between petitioner and
respondents no longer existed. Thus, we cannot include in the
attorney’s fees the 25% of the excess of the market value of the
lots over the ₱7,193,505.56 paid by the Ingcos in acquiring them.
 92 CORTEZ v CORTES (Justin)
March 12, 2018 | Tijam, J. |
PETITIONER: EUGENIO E. CORTEZ, Complainant
RESPONDENTS: ATTY. HERNANDO P. CORTES, Respondent
SUMMARY: Eugenio engaged the services of Atty. Cortes as his counsel in an
illegal dismissal case. They had a handshake agreement on 12% contingency fee
as attorney’s fees. They won the case but now Atty. Cortes insisted that they
agreed on a 50% contingency fee instead of 12%. Eugenio went to the IBP which
recommended that Atty. Cortes be suspended to 6 months.
WoN the acts complained of constitute misconduct on the part of Atty. Cortes,
which would subject him to disciplinary action? – YES
A contingency fee arrangement is valid in this jurisdiction and is generally
recognized as valid and bind but must be laid down in an express contract. In this
case, these was no express contract.
Based on the circumstces of the case, the issue therein was not novel and Atty.
Cortes already knew that Eugenio was hard up the court deemed 12% as
reasonable in this case. Also, Eugenio was okay with the 12% contingency fee.
DOCTRINE: Canon 20 of the CPR states that “a lawyer shall charge only fair
and reasonable fees.” Rule 20.01 of the same canon enumerates the factors which
should guide a lawyer in determining his fees.
FACTS:
1. Eugenio alleged that he engaged the services of Atty. Cortes as his counsel
in an illegal dismissal case agains Philippine Explosives Corporation (PEC).
He further alleged that tey had a handshake agreement on a 12% contingency
fee as attorney’s fees.
2. Eugenio eventually won the case, which the CA affirmed, and was awarded
1.1m in 3 staggered payments (550k,275k,275k)
3. Eugenio said that after the maturity of the 1 st check, both parties went to
China Bank, Southmall Las Pinas to open an account and deposit the check.
a. Atty. Cortes made Eugenio wait outside while he facilitate the
opening of the bank account.
b. After 30 mins, Eugenio was asked to go inside and sign a joint
savings account with Atty Cortes.
4. On Apr 7, 2005, Eugenio tried to withdraw the amount of the initial deposit
but Atty. Cortes arrived and ordered the teller to hold off the transaction
because Atty. Cortes sid that 50% of the total awarded claims belongs to hom
as attorney’s fees.
5. Eugenio tried to pacify Atty. Cortes by offering him 200k which was rejected
and then offered him the 3rd check of 275k instead but was still rejected.
Eugenio was forced to endorse the 2nd and 3rd check to Atty. Cortes so that he
could withdraw the proceeds of the 1st check.
6. With the help of the lawyers in the IBP, Eugenio was able to have the drawer
of one of the checks cancel one of the checks endorsed to Atty. Cortes.
7. Atty. Cortes answer:
a. Admitted that his services were engaged by Eugenio but denied the
12% contingency fee.
b. Both parties were relatives but the case was to be filed in Pampanga
while he lived in Las Pinas so he would only accept the case on a
50-50 basis.
c. He had to assist Eugenio to open an account and depost the checks
because the checks were issued in the name of Eugene instead of
Eugenio.
d. Kept on insisting that the 12% contingency fee agreement was false
and that the 50-50 agreement was not unconscionably high because
Eugenio was given the chance to hire other lawyers but he still
engaged Atty. Cortes’ services.
8. Upon hearing, IBP recommended a 6-month suspension of Atty. Cortes. It
ruled that the contingency fee arrangement should generally be n writing, and
that the contingent fees depend upon an express contract without which the
lawyer can only recover on the basis of quantum meruit. It also pointed out
that the Labor Code establishes a limit as to the amount of attorney’s fees that
a lawyer may collect or charge his client in labor cases. MR was denied.
ISSUE:
1. WoN the acts complained of constitute misconduct on the part of Atty Cortes,
which would subject him to disciplinary action? – YES
RULING: WHEREFORE, premises considered, respondent Atty. Hernando P. Cortes
is found GUILTY of violation of Canon 20 of the Code of Professional
Responsibility and is hereby SUSPENDED from the practice of law for three (3)
months, and is ordered to return to complainant Eugenio E. Cortez the amount
he received in excess of the 12% allowable attorney's fees.
RATIO:
First Issue
1. In the case of Rayis v. Atty Hernandez, a contingent fee arrangement is valid
in this jurisdiction and is generally recognized as valid and binding but must
be laid down in an express contract. The amount of contingent fee agreed
upon by the parties is subject to the stipulation that counsel will be paid for
his legal services only if the suit or litigation prospers. A much higher
compensation is allowed as contingent fee in consideration of the risk that the
lawyer may get nothing if the suit fails. 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
2. In this case, there was no express contract with regard to the payment of fees.
Eugenio alleges 12% handshake agreement while Atty. Cortes counters that
the agreement was 50%.
3. IBP Commission on Discipline says that because the case was only a labor
case, his attorney’s fees should not exceed 10%, the rate allowed under Art
111 of the Labor Code.
4. In the case of Masmud v NLRC, there are 2 concepts of attorney’s fees: deems as reasonable, the Court held that 12% was proper and that Atty.
a. In the ordinary sense, attorney's fees represent the reasonable Cortes is to return the excess. The 6-month suspension is reduced to 3 months
compensation paid to a lawyer by his client for the legal services since Atty. Cortes is nearly 90 years old and there was no question that Atty.
rendered to the latter. On the other hand, in its extraordinary Cortes was able to get a favorable outcome.
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
such that, in any of the cases provided by law where such award can
be made. 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
5. It would appear that the contingency fees that Atty. Cortes required is in the
ordinarysense as it represents reasonable compensation for legal services he
rendered for Eugenio. So, the 10% limit of the Labor Code is not applicable.
Between a lawyer and the client, the attorney’s fees may exceed 10% on the
basis of quantum meruit. However, we are hard-pressed to accept the
justification of the 50% contingency fee that Atty. Cortes is inssting on for
being exorbitant.
6. Generally, the attorney’s fees due is that stipulated in the retainer agreement
which is conclusive as o the amount. In the absence thereof, amount is based
on quantum meruit (reasonable worth of attorney’s services). Courts may also
ascertain if the fees are excessive under the circumstances. In nocase,
however, must a lawyer be allowed to recover more than what is reasonable,
pursuant to Sec 24 Rule 138 of the RoC.
7. Canon 20 of the CPR states that “a lawyer shall charge only fair and
reasonable fees.” Rule 20.01 of the same canon enumerates the factors which
should guide a lawyer in determining his fees.
8. In this case, Eugenio’s case was merely grounded on Eugenio’s alleged
AWOL for the 2nd time and challenging the plant manager to a fist fight. Atty.
Cortes also claimed that the travel from his home in Las Pinas to Pampanga
was costly. Atty. Cortes also admitted that Eugenio was a close kin of his and
that Eugenio had no visible means of income because of his separation from
work which is why he went to Atty. Cortes. These are the circumstances cited
by Atty. Cortes to justify the fes. To us, these do not exculpate Atty. Cortes
but makes us question all the more the reasonablesness of the fees.
9. We believe and so hold that the contingent fee here claimed by Atty. Cortes
was grossly excessive and unconscionable. The issues were not novel and
Atty. Cortes already knew Eugenio was hard up. Lawyering is not a money-
making venture and lawyers are not merchants. 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 public interes, for which it is subject to State
regulation.
10. Since Eugenio was amenable to a 12% contingency fee which the court also