SPECIAL THIRD DIVISION

VALERIANA U. DALISAY,
Complainant,

-versus-

ATTY. MELANIO MAURICIO, JR.,

Respondent.
A.C. No. 5655
Present:
PANGANIBAN, J., Chairman,
SANDOVAL-GUTIERREZ,
CORONA,
CARPIO MORALES, and
GARCIA, JJ.
Promulgated:
January 23, 2006
x-----------------------------------------------------------------------------------------x
RESOLUTION
SANDOVAL-GUTIERREZ, J.:
At bar is a motion for reconsideration of our Decision dated April 22,
2005 finding Atty. Melanio Batas Mauricio, Jr., respondent, guilty of
malpractice and gross misconduct and imposing upon him the
penalty of suspension from the practice of law for a period of six (6)
months.
A brief revisit of facts is imperative, thus:

On October 13, 2001, Valeriana U. Dalisay, complainant, engaged

respondents services as counsel in Civil Case No. 00-044, entitled
Lucio De Guzman, etc., complainants, v. Dalisay U. Valeriana,
respondent, pending before the Municipal Trial Court, Branch 1,
Binangonan, Rizal. Notwithstanding his receipt of documents and
attorneys fees in the total amount of P56,000.00 from complainant,
respondent never rendered legal services for her. As a result, she
terminated the attorney-client relationship and demanded the return
of her money and documents, but respondent refused.
On January 13, 2004, Investigating Commissioner Lydia A. Navarro
of the Integrated Bar of the Philippines (IBP) Commission on Bar
Discipline, found that for the amount of P56,000.00 paid by the
complainant x x x, no action had been taken nor any pleadings
prepared by the respondent except his alleged conferences and
opinions rendered when complainant frequented his law office.
She recommended that respondent be required to refund the
amount of P56,000.00 to the complainant, and surprisingly, that the
complaint be dismissed.
On February 27, 2004, the IBP Board of Governors passed Resolution
No. XVI-2004-121, adopting and approving in toto Commissioner
Navarros Report and Recommendation.
On April 22, 2005, we rendered the assailed Decision.
Incidentally, upon learning of our Decision, respondent went to the
MTC, Branch I, Binangonan, Rizal to verify the status of Civil Case
No. 00-044. There, he learned of the trial courts Decision dated
December 6, 2001 holding that the tax declarations and title
submitted by complainant are not official records of the Municipal
Assessor and the Registry of Deed. Thereupon, respondent filed a
Sworn Affidavit Complaint[1] against complainant charging her with
violations of Article 171[2] and 172,[3] and/or Article 182[4] of the
Revised Penal Code. He alleged that complainant offered tampered
evidence.
In this motion for reconsideration, respondent raises the following
arguments:
First, complainant did not engage his services as counsel in Civil
Case No. 00-044. She hired him for the purpose of filing two new
petitions, a petition for declaration of nullity of title and a petition
for review of a decree.

Second, Civil Case No. 00-044 was considered submitted for

decision as early as August 6, 2001, or more than two months prior
to October 13, 2001, the date he was engaged as counsel, hence,
he could not have done anything anymore about it.
Third, complainant refused to provide him with documents related to
the case, preventing him from doing his job.
And fourth, complainant offered tampered evidence in Civil Case No.
00-004, prompting him to file falsification cases against her.
In her opposition to the motion, complainant contends that:
(1) respondent violated the principle of confidentiality between a
lawyer and his client when he filed falsification charges against her;
(2) respondent should have returned her money; (3) respondent
should have verified the authenticity of her documents earlier if he
really believed that they are falsified; and (4) his refusal to return
her money despite this Courts directive constitutes contempt.
We deny respondents motion for reconsideration.
It is axiomatic that no lawyer is obliged to act either as
adviser or advocate for every person who may wish to become his
client. He has the right to decline employment. But once he accepts
money from a client, an attorney-client relationship is established,
giving rise to the duty of fidelity to the clients cause.[5] From then
on, he is expected to be mindful of the trust and confidence reposed
in him. He must serve the client with competence and diligence,
and champion the latters cause with wholehearted devotion.[6]
Respondent assumed such obligations when he received the amount
of P56,000.00 from complainant and agreed to handle Civil Case
No. 00-044. Unfortunately, he had been remiss in the
performance of his duties. As we have ruled earlier, there is
nothing in the records to show that
he (respondent) entered his appearance as counsel of record for
complainant in Civil Case No. 00-044. Neither is there any
evidence nor pleading submitted to show that he initiated new
petitions.
With ingenuity, respondent now claims that complainant did not
engage his services for Civil Case No. 00-044 but, instead, she
engaged him for the filing of two new petitions. This is obviously a
last-ditch attempt to evade culpability. Respondent knows very well
that if he can successfully disassociate himself as complainants
counsel in Civil Case No.00-044, he cannot be held guilty of any
dereliction of duties.

But respondents current assertion came too late in the day. He is

already bound by his previous statements. In his Verified Comment
on the Affidavit-Complaint,[7] he categorically stated that
complainant engaged his services in Civil Case No. 00-044, originally
handled by Atty. Oliver Lozano, thus:
4.a. Complainant was referred to the Respondent by Atty. Oliver
Lozano.
4.b. The referral intrigued Respondent no end, simply because Atty.
Oliver Lozano is a bright lawyer and is very much capable of
handling Civil Case No. 00-044.
4.c. Respondent-out of respect from Atty. Oliver Lozano did not
inquire the reason for the referral. But he was made to understand
that he was being referred because Atty. Oliver Lozano believed that
Respondent would be in a better position to prosecute and/or defend
the Complainant in Civil Case No. 00-044.
x x x

x x

5.c. Complainant went to the law office of Respondent on October

13, 2001 and demanded that he provides her with free legal service.
x x x

x x

5.e. Respondent, however, told Complainant that the case (Civil

Case No. 00-044) would not entitle her to a free legal service and
advised her to just re-engage the services of Atty. Oliver Lozano.
5.f. Undaunted, Complainant asked Respondent to assess her case
and how she and her lawyer should go prosecuting and/or defending
her position therein.
5.g. Honestly believing that Complainant was no longer
represented by counsel in Civil Case No. 00-044 at that time,
Respondent gave his professional opinion on the factual and legal
matters surrounding the said case.
5.h. Apparently impressed with the opinion of the Respondent,
Complainant became even more adamant in asking the former to
represent her in Civil Case No. 00-044.
5.i. Respondent then told Complainant that she would be charged as
a regular client is she insists in retaining his services.
5.j. It was at this juncture that Complainant asked Respondent
about his fees.

5.k. After re-assessing Civil Case No. 00-044, Respondent told

Complainant that he will have to charge her with an acceptance fee
of One Hundred Thousand Pesos (P100,000.00), aside form being
charged for papers/pleadings that may have to be prepared and
filed in court in connection with the aforesaid case.
x x x
x x x
5.n. A few days after, Respondent got a call from Atty. Oliver Lozano.
The said Atty. Oliver Lozano interceded for and in behalf of
Complainant and asked that the acceptance fee that Respondent
was charging the Complainant be reduced.
x x x

x x

5.r. Complainant then returned to the office of the Respondent on

October 20, 2001. The latter then informed the former of his
conversation with Atty. Oliver Lozano and his (respondents) decision
to reduce the acceptance fee.
5.s. Complainant was very grateful at the time, even shedding a
tear or two simply because Respondent had agreed to handle her
case at a greatly reduced acceptance fee.
Statements of similar tenor can also be found in respondents
Memorandum[8] filed with the IBP.
Undoubtedly, respondents present version is a flagrant departure
from his previous pleadings. This cannot be countenanced. A party
should decide early what version he is going to advance. A change
of theory in the latter stage of the proceedings is objectionable, not
due to the strict application of procedural rules, but because it is
contrary to the rules of fair play, justice and due process.[9] The
present administrative case was resolved by the IBP on the basis of
respondents previous admission that complainant engaged his legal
services in Civil Case No. 00-044. He cannot now unbind himself
from such admission and its consequences. In fact, if anything at
all has been achieved by respondents inconsistent assertions, it is
his dishonesty to this Court.
At any rate, assuming arguendo that complainant indeed engaged
respondents services in filing the two (2) new petitions, instead of
Civil Case No. 00-044, still, his liability is unmistakable. There is
nothing in the records to show that he filed any petition. The ethics
of the profession demands that, in such a case, he should
immediately return the filing fees to complainant. In Parias v.
Paguinto,[10] we held that a lawyer shall account for all money or
property collected from the client. Money entrusted to a lawyer for
a specific purpose, such as for filing fee, but not used for failure to

file the case must immediately be returned to the client on

demand. Per records, complainant made repeated demands, but
respondent is yet to return the money.
Neither do we find merit in respondents second argument. The
fact that Civil Case No. 00-044 was already submitted for decision
does not justify his inaction. After agreeing to handle Civil Case No.
00-044, his duty is, first and foremost, to enter his appearance.
Sadly, he failed to do this simple task. He should have returned
complainants money. Surely, he cannot expect to be paid for doing
nothing.
In his third argument, respondent attempts to evade responsibility
by shifting the blame to complainant. He claims that she refused to
provide him with documents vital to the case. He further claims
that he would be violating the Code of Professional Responsibility by
handling a case without adequate preparation. This is
preposterous. When a lawyer accepts a case, his acceptance is an
implied representation that he possesses the requisite academic
learning, skill and ability to handle the case.[11] As a lawyer,
respondent knew where to obtain copies of the certificates of title.
As a matter of fact, he admitted that his Law Office, on its own,
managed to verify the authenticity of complainants title. It bears
reiterating that respondent did not take any action on the case
despite having been paid for his services. This is tantamount to
abandonment of his duties as a lawyer and taking undue advantage
of his client.
Finally, in an ironic twist of fate, respondent became the accuser of
complainant. In his fourth argument, respondent accuses her of
offering falsified documentary evidence in Civil Case No. 00-004,
prompting him to file falsification cases against her. He thus
justifies his inability to render legal services to complainant.
Assuming that complainant indeed offered falsified documentary
evidence in Civil Case No. 00-044, will it be sufficient to exonerate
respondent? We believe not. First, Canon 19 outlines the
procedure in dealing with clients who perpetrated fraud in the
course of a legal proceeding. Consistent with its mandate that a
lawyer shall represent his client with zeal and only within the
bounds of the law, Rule 19.02 of the same Canon specifically
provides:
Rule 19.02 A lawyer who has received information that his clients
has, in the course of the representation, perpetrated a fraud upon a
person or tribunal, shall promptly call upon the client to rectify the
same, and failing which he shall terminate the relationship with such
client in accordance with the Rules of Court.

As a lawyer, respondent is expected to know this Rule. Instead of

inaction, he should have confronted complainant and ask her to
rectify her fraudulent representation. If complainant refuses, then he
should terminate his relationship with her.
Understandably, respondent failed to follow the above-cited Rule.
This is because there is no truth to his claim that he did not render
legal service to complainant because she falsified the documentary
evidence in Civil Case No.00-044. This brings us to the second
reason why we cannot sustain his fourth argument. The pleadings
show that he learned of the alleged falsification long after
complainant had terminated their attorney-client relationship. It
was a result of his active search for a justification of his negligence
in Civil Case No. 00-044. As a matter of fact, he admitted that he
verified the authenticity of complainants title only after the news
of his suspension spread in the legal community. To our mind,
there is absurdity in invoking subsequent knowledge of a fact as
justification for an act or omission that is fait accompli.
Obviously, in filing falsification charges against complainant,
respondent was motivated by vindictiveness.
In fine, let it be stressed that the authority of an attorney begins
with his or her retainer.[12] It gives rise to a relationship between
an attorney and a client that is highly fiduciary in nature and of a
very delicate, exacting, and confidential character, requiring a high
degree of fidelity and good faith.[13] If much is demanded from an
attorney, it is because the entrusted privilege to practice law carries
with it the correlative duties not only to the client but also to the
court, to the bar, and to the public. A lawyer who performs his duty
with diligence and candor not only protects the interest of his client;
he also serves the ends of justice, does honor to the bar, and helps
maintain the respect of the community to the legal profession.[14]
Indeed, law is an exacting goddess demanding of her votaries not
only intellectual but also moral discipline.
WHEREFORE, we DENY respondents motion for reconsideration.
Our Decision dated April 22, 2005 is immediately executory.
Respondent is directed to report immediately to the Office of the Bar
Confidant his compliance with our Decision.
Let a copy of this Resolution be attached to his personal record and
copies furnished the Integrated Bar of the Philippines and the Office
of the Court Administrator for dissemination to all courts.
SO ORDERED.
ANGELINA SANDOVAL-GUTIERREZ

Associate Justice
WE CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
RENATO C. CORONA
Associate Justice
CONCHITA CARPIO MORALES
Associate Justice
CANCIO C. GARCIA
Associate Justice
SECOND DIVISION
[A.C. No. 3967. September 3, 2003]
ARTEMIO ENDAYA, complainant, vs. ATTY. WILFREDO OCA,
respondent.
DECISION
TINGA, J.:
The law is no brooding omnipresence in the sky, so spoke Justice
Holmes. He must have made the statement because invariably the
legal system is encountered in human form, notably through the
lawyers. For practical purposes, the lawyers not only represent the
law; they are the law.[1] With their ubiquitous presence in the social
milieu, lawyers have to be responsible. The problems they create in
lawyering become public difficulties. To keep lawyers responsible
underlies the worth of the ethics of lawyering. Indeed, legal ethics is
simply the aesthetic term for professional responsibility.
The case before us demonstrates once again that when a lawyer
violates his duties to his client, the courts, the legal profession and
the public, he engages in conduct which is both unethical and
unprofessional.
This case unfolded with a verified Complaint[2] filed on January 12,
1993 by complainant Artemio Endaya against respondent Atty.
Wifredo Oca for violation of the lawyers oath and what complainant

termed as professional delinquency or infidelity.[3] The

antecedents are:
On November 7, 1991, a complaint for unlawful detainer docketed
as Civil Case No. 34-MCTC-T was filed with the Municipal Circuit Trial
Court of Taysan-Lobo, Batangas by Apolonia H. Hornilla, Pedro
Hernandez, Santiago Hernandez and Dominador Hernandez against
complainant and his spouse Patrosenia Endaya.[4]
On December 13, 1991, the complainant and his wife as defendants
in the case filed their answer which was prepared by a certain Mr.
Isaias Ramirez. A preliminary conference was conducted on January
17, 1992, which complainant and his wife attended without counsel.
During the conference, complainant categorically admitted that
plaintiffs were the declared owners for taxation purposes of the land
involved in the case. Continuation of the preliminary conference was
set on January 31, 1992. Thereafter, complainant sought the
services of the Public Attorneys Office in Batangas City and
respondent was assigned to handle the case for the complainant
and his wife.[5]
At the continuation of the preliminary conference, respondent
appeared as counsel for complainant and his spouse. He moved for
the amendment of the answer previously filed by complainant and
his wife, but his motion was denied.[6] Thereafter, the court,
presided by Acting Trial Court Judge Teodoro M. Baral, ordered the
parties to submit their affidavits and position papers within ten days
from receipt of the order. The court also decreed that thirty days
after receipt of the last affidavit and position paper, or upon
expiration of the period for filing the same, judgment shall be
rendered on the case.[7]
Respondent failed to submit the required affidavits and position
paper, as may be gleaned from the Decision dated March 19, 1992
of the MCTC where it was noted that only the plaintiffs submitted
their affidavits and position papers.[8]
Nonetheless, the court dismissed the complaint for unlawful
detainer principally on the ground that the plaintiffs are not the real
parties-in-interest. The dispositive portion of the Decision reads:
WHEREFORE, this case is hereby dismissed on the ground that the
plaintiffs have no legal capacity to sue as they are not the real party
(sic) in interest, in addition to the fact that there is no privity of
contract between the plaintiffs and the defendants as to the verbal
lease agreement.
SO ORDERED.[9]

Plaintiffs appealed the Decision to the Regional Trial Court (RTC) of

Batangas City, Branch 1, where the case was docketed as Civil Case
No. 3378. On April 10, 1992, the RTC directed the parties to file
their respective memoranda.[10] Once again, respondent failed the
complainant and his wife. As observed by the RTC in its Decision[11]
dated September 7, 1992, respondent did not file the memorandum
for his clients, thereby prompting the court to consider the case as
submitted for decision.[12]
In its Decision, the RTC reversed the decision appealed from as it
held that plaintiffs are the co-owners of the property in dispute and
as such are parties-in-interest.[13] It also found that the verbal
lease agreement was on a month-to-month basis and perforce
terminable by the plaintiffs at the end of any given month upon
proper notice to the defendants.[14] It also made a finding that
defendants incurred rentals in arrears.[15] The decretal portion of
the Decision reads, thus:
WHEREFORE, premises considered, the Decision of the Municipal
Circuit Trial Court of Taysan-Lobo dated March 19, 1992, is
REVERSED and SET ASIDE and new one entered, to wit:
Defendants ARTEMIO ENDAYA and PATROSENIA ENDAYA and all
persons claiming under them are hereby ordered to vacate and
dismantle their house on the land subject of the verbal lease
agreement at their own expense. The defendants are likewise
ordered to pay the monthly rental of P25.00 from the month of
January 1991 to November 1991 and ONE THOUSAND (P1,000.00)
PESOS monthly from December 1991 until the defendants finally
vacate and surrender possession of the subject property to the
plaintiffs and to pay attorneys fee in the amount of TEN THOUSAND
(P10,000.00) PESOS.
No pronouncement as to cost.[16]
Complainant received a copy of the Decision on October 7, 1992.
Two days later, or on October 9, 1992, complainant confronted
respondent with the adverse decision but the latter denied receipt of
a copy thereof. Upon inquiry with the Branch Clerk of Court,
however, complainant found out that respondent received his copy
back on September 14, 1992.[17]
Having lost the unlawful detainer case, on January 12, 1993
complainant filed the present administrative complaint against the
respondent for professional delinquency consisting of his failure to
file the required pleadings in behalf of the complainant and his
spouse. Complainant contends that due to respondents inaction he
lost the opportunity to present his cause and ultimately the case
itself.[18]

In his Comment[19] dated March 17, 1993, respondent denies that

he committed professional misconduct in violation of his oath,
stressing that he was not the original counsel of complainant and his
spouse.[20] He further avers that when he agreed to represent
complainant at the continuation of the preliminary conference in the
main case, it was for the sole purpose of asking leave of court to file
an amended answer because he was made to believe by the
complainant that the answer was prepared by a non-lawyer. Upon
discovering that the answer was in fact the work of a lawyer,
forthwith he asked the court to relieve him as complainants
counsel, but he was denied. He adds that he agreed to file the
position paper for the complainant upon the latters undertaking to
provide him with the documents which support the position that
plaintiffs are not the owners of the property in dispute. As
complainant had reneged on his promise, he claims that he deemed
it more prudent not to file any position paper as it would be a
repetition of the answer. He offers the same reason for not filing the
memorandum on appeal with the RTC. Finally, respondent asserts
that he fully explained his stand as regards Civil Case No. 34-MCTCT to the complainant.[21]
Pursuant to our Resolution[22] dated May 10, 1993, complainant
filed his Reply[23] to respondents Comment wherein he merely
reiterated his allegations in the Complaint.
On July 28, 1993, this Court directed respondent to file his rejoinder
within ten days from notice of our Resolution.[24] But he failed to do
so despite the lapse of a considerable period of time. This prompted
the Court to require respondent to show cause why he should not be
disciplinarily dealt with or held in contempt and to file his rejoinder,
both within ten (10) days from notice.[25]
In his Explanation[26] dated February 28, 1997, respondent admits
having received a copy of the resolution requiring him to file a
rejoinder. However, he asserts that he purposely did not file a
rejoinder for he believed in good faith that a rejoinder to
complainants reply is no longer necessary.[27] He professes that in
electing not to file a rejoinder he did not intend to cast disrespect
upon the Court.[28]
On June 16, 1997, we referred this case to the Office of the Bar
Confidant for evaluation, report and recommendation.[29]
In its Report[30] dated February 6, 2001, the Office of the Bar
Confidant found respondent negligent in handling the case of
complainant and his wife and recommended that he be suspended
from the practice of law for one month. The pertinent portions of
the Report read, thus:

It is to be noted that after appearing at the preliminary conference

before the Municipal Circuit Trial Court, respondent was never heard
from again. Respondents seeming indifference to the cause of his
client, specially when the case was on appeal, caused the defeat of
herein complainant. Respondent practically abandoned complainant
in the midst of a storm. This is even more made serious of the fact
that respondent, at that time, was assigned at the Public Attorneys
Office- a government entity mandated to provide free and
competent legal assistance.
A lawyers devotion to his clients cause not only requires but also
entitles him to deploy every honorable means to secure for the
client what is justly due him or to present every defense provided by
law to enable the latters cause to succeed. (Miraflor vs. Hagad,
244 SCRA 106)
. . . .
The facts, however, do not show that respondent employed every
legal and honorable means to advance the cause of his client. Had
respondent tried his best, he could have found some other defenses
available to his client; but respondent was either too lazy or too
convinced that his client had a losing case.
. . . .
For intentionally failing to submit the pleadings required by the
court, respondent practically closed the door to the possibility of
putting up a fair fight for his client. As the Court once held, A client
is bound by the negligence of his lawyer. (Diaz-Duarte vs. Ong, 298
SCRA 388)[31]
However, the Bar Confidant did not find complainant entirely
faultless. She observed, viz:
Respondents allegation that complainant failed in his promise to
submit the documents to support his claim was not denied by
complainant; hence, it is deemed admitted. Complainant is not
without fault; for misrepresenting that he could prove his claim
through supporting documents, respondent was made to believe
that he had a strong leg to stand on. A party cannot blame his
counsel for negligence when he himself was guilty of neglect.
(Macapagal vs. Court of Appeals, 271 SCRA 491)[32]
On April 18, 2001, we referred the case to the Integrated Bar of the
Philippines for investigation, report and recommendation.
Several hearings were set by the IBP but complainant did not appear
even once. Respondent attended five hearings, but he failed to

present evidence in support of his defense, as required by

Investigating Commissioner Victor C. Fernandez. This compelled the
latter to make his report on the basis of the pleadings and evidence
forwarded by the Office of the Bar Confidant.
On October 11, 2002, Commissioner Fernandez issued his
Report[33] wherein he concurred with the findings and
recommendation of the Office of the Bar Confidant.
In a Resolution[34] dated April 26, 2003, the IBP Board of Governors
adopted the Report of Commissioner Fernandez.
The Court is convinced that respondent violated the lawyers oath
not only once but a number of times in regard to the handling of his
clients cause. The repeated violations also involve defilement of
several Canons in the Code of Professional Responsibility.
Right off, the Court notes that respondent attributes his failure to
file the required pleadings for the complainant and his wife
invariably to his strong personal belief that it was unnecessary or
futile to file the pleadings. This was true with respect to the
affidavits and position paper at the MCTC level, the appeal
memorandum at the RTC level and the rejoinder at this Courts level.
In the last instance, it took respondent as long as three years, under
compulsion of a show cause order at that, only to manifest his
predisposition not to file a rejoinder after all. In other words, at the
root of respondents transgressions is his seeming stubborn mindset
against the acts required of him by the courts. This intransigent
attitude not only belies lack of diligence and commitment but
evinces absence of respect for the authority of this Court and the
other courts involved.
The lawyers oath embodies the fundamental principles that guide
every member of the legal fraternity. From it springs the lawyers
duties and responsibilities that any infringement thereof can cause
his disbarment, suspension or other disciplinary action.[35]
Found in the oath is the duty of a lawyer to protect and safeguard
the interest of his client. Specifically, it requires a lawyer to conduct
himself to the best of his knowledge and discretion with all good
fidelity as well to the courts as to his clients.[36] This duty is
further stressed in Canon 18 of the Code of Professional
Responsibility which mandates that (A) lawyer shall serve his client
with competence and diligence.
In this case, evidence abound that respondent failed to demonstrate
the required diligence in handling the case of complainant and his
spouse. As found by the Office of the Bar Confidant,[37] after
appearing at the second preliminary conference before the MCTC,

respondent had not been heard of again until he commented on the

complaint in this case. Without disputing this fact, respondent
reasons out that his appearance at the conference was for the sole
purpose of obtaining leave of court to file an amended answer and
that when he failed to obtain it because of complainants fault he
asked the court that he be relieved as counsel.[38] The explanation
has undertones of dishonesty for complainant had engaged
respondent for the entire case and not for just one incident. The
alternative conclusion is that respondent did not know his procedure
for under the Rules on Summary Procedure[39] the amended
answer is a prohibited pleading.
Even assuming respondent did in fact ask to be relieved, this could
not mean that less was expected from him. Once a lawyer takes the
cudgels for a clients case, he owes it to his client to see the case to
the end. This, we pointed out in Legarda v. Court of Appeals,[40]
thus:
It should be remembered that the moment a lawyer takes a clients
cause, he covenants that he will exert all effort for its prosecution
until its final conclusion. A lawyer who fails to exercise due diligence
or abandons his clients cause make him unworthy of the trust
reposed on him by the latter.[41]
Also, we held in Santiago v. Fojas,[42] every case a lawyer accepts
deserves his full attention, diligence, skill, and competence,
regardless of its importance and whether he accepts if for a fee or
for free. In other words, whatever the lawyers reason is for
accepting a case, he is duty bound to do his utmost in prosecuting
or defending it.
Moreover, a lawyer continues to be a counsel of record until the
lawyer-client relationship is terminated either by the act of his client
or his own act, with permission of the court. Until such time, the
lawyer is expected to do his best for the interest of his client [43]
Thus, when respondent was directed to file affidavits and position
paper by the MCTC, and appeal memorandum by the RTC, he had no
choice but to comply. However, respondent did not bother to do so,
in total disregard of the court orders. This constitutes negligence
and malpractice proscribed by Rule 18.03 of the Code of
Professional Responsibility which mandates that (A) lawyer shall
not neglect a legal matter entrusted to him and his negligence in
connection therewith shall render him liable.
Respondents failure to file the affidavits and position paper at the
MCTC did not actually prejudice his clients, for the court
nevertheless rendered a decision favorable to them. However, the
failure is per se a violation of Rule 18.03.

It was respondents failure to file appeal memorandum before the

RTC which made complainant and his wife suffer as it resulted in
their loss of the case. As found by the Office of the Bar Confidant, to
which we fully subscribe, in not filing the appeal memorandum
respondent denied complainant and his spouse the chance of
putting up a fair fight in the dispute. Canon 19 prescribes that (A)
lawyer shall represent his client with zeal within the bounds of the
law. He should exert all efforts to avail of the remedies allowed
under the law. Respondent did not do so, thereby even putting to
naught the advantage which his clients apparently gained by
prevailing at the MCTC level. Verily, respondent did not even bother
to put up a fight for his clients. Clearly, his conduct fell short of what
Canon 19 requires and breached the trust reposed in him by his
clients.
We cannot sustain respondents excuse in not filing the affidavits
and position paper with the MCTC and the appeal memorandum
with the RTC. He claims that he did not file the required pleadings
because complainant failed to furnish him with evidence that would
substantiate complainants allegations in the answer. He argues
that absent the supporting documents, the pleadings he could have
filed would just be a repetition of the answer. However, respondent
admits in his comment that complainant furnished him with the
affidavit of persons purporting to be barangay officials attesting to
an alleged admission by Felomino Hernandez, the brother of the
plaintiffs in the unlawful detainer case, that he had already bought
the disputed property.[44] This did not precipitate respondent into
action despite the evidentiary value of the affidavit, which was
executed by disinterested persons. Said affidavit could have
somehow bolstered the claim of complainant and his wife which was
upheld by the MCTC that plaintiffs are not the real parties-ininterest. While respondent could have thought this affidavit to be
without probative value, he should have left it to the sound
judgment of the court to determine whether the affidavit supports
the assertions of his clients. That could have happened had he filed
the required position paper and annexed the affidavit thereto.
Further, notwithstanding his belief that without the supporting
documents filing the required pleadings would be a futile exercise,
still respondent should have formally and promptly manifested in
court his intent not to file the pleadings to prevent delay in the
disposition of the case.[45] Specifically, the RTC would not have
waited as it did for the lapse of three months from June 5,1992, the
date when plaintiffs-appellants submitted their appeal
memorandum, before it rendered judgment. Had it known that
respondent would not file the appeal memorandum, the court could
have decided the case much earlier.

For his failure to inform the court, respondent violated Canon 12, to
wit:
Canon 12: A lawyer shall exert every effort and consider it his duty
to assist in the speedy and efficient administration of justice.
Respondent likewise failed to demonstrate the candor he owed his
client. Canon 17 provides that (A) lawyer owes fidelity to the cause
of his client and he shall be mindful of the trust and confidence
reposed in him. When complainant received the RTC decision, he
talked to respondent about it.[46] However, respondent denied
knowledge of the decision despite his receipt thereof as early as
September 14, 1992. Obviously, he tried to evade responsibility for
his negligence. In doing so, respondent was untruthful to
complainant and effectively betrayed the trust placed in him by the
latter.
On top of all these is respondents employment as a lawyer of the
Public Attorneys Office which is tasked to provide free legal
assistance for indigents and low-income persons so as to promote
the rule of law in the protection of the rights of the citizenry and the
efficient and speedy administration of justice.[47] Against this
backdrop, respondent should have been more judicious in the
performance of his professional obligations. As we held in Vitriola v.
Dasig[48] lawyers in the government are public servants who owe
the utmost fidelity to the public service. Furthermore, a lawyer
from the government is not exempt from observing the degree of
diligence required in the Code of Professional Responsibility. Canon 6
of the Code provides that the canons shall apply to lawyers in
government service in the discharge of their official tasks.
At this juncture, it bears stressing that much is demanded from
those who engage in the practice of law because they have a duty
not only to their clients, but also to the court, to the bar, and to the
public. The lawyers diligence and dedication to his work and
profession not only promote the interest of his client, it likewise help
attain the ends of justice by contributing to the proper and speedy
administration of cases, bring prestige to the bar and maintain
respect to the legal profession.[49]
The determination of the appropriate penalty to be imposed on an
errant attorney involves the exercise of sound judicial discretion
based on the facts of the case.[50] In cases of similar nature, the
penalty imposed by this Court consisted of reprimand,[51] fine of
five hundred pesos with warning,[52] suspension of three months,
[53] six months,[54] and even disbarment in aggravated cases.[55]
The facts and circumstances in this case indubitably show
respondents failure to live up to his duties as a lawyer in

consonance with the strictures of the lawyers oath and the Code of
Professional Responsibility, thereby warranting his suspension from
the practice of law. At various stages of the unlawful detainer case,
respondent was remiss in the performance of his duty as counsel.
To reiterate, respondent did not submit the affidavits and position
paper when required by the MCTC. With his resolution not to file the
pleadings already firmed up, he did not bother to inform the MCTC
of his resolution in mockery of the authority of the court. His
stubbornness continued at the RTC, for despite an order to file an
appeal memorandum, respondent did not file any. Neither did he
manifest before the court that he would no longer file the pleading,
thus further delaying the proceedings. He had no misgivings about
his deviant behavior, for despite receipt of a copy of the adverse
decision by the RTC he opted not to inform his clients accordingly.
Worse, he denied knowledge of the decision when confronted by the
complainant about it.
At this Courts level, respondents stubborn and uncaring demeanor
surfaced again when he did not file a rejoinder to complainants
reply.
Respondents story projects in vivid detail his appalling indifference
to his clients cause, deplorable lack of respect for the courts and a
brazen disregard of his duties as a lawyer.
However, we are not unmindful of some facts which extenuate
respondents misconduct. First, when complainant sought the
assistance of respondent as a PAO lawyer, he misrepresented that
his answer was prepared by someone who is not a lawyer. Second,
when complainant showed respondent a copy of their answer with
the MCTC, he assured him that he had strong evidence to support
the defense in the answer that plaintiffs were no longer the owners
of the property in dispute. However, all that he could provide
respondent was the affidavit of the barangay officials. Last but not
least, it is of public knowledge that the Public Attorneys Office is
burdened with a heavy caseload.
All things considered, we conclude that suspension for two (2)
months from the practice of law is the proper and just penalty.
WHEREFORE, respondent Atty. Wilfredo Oca is ordered SUSPENDED
from the practice of law for two (2) months from notice, with the
warning that a similar misconduct will be dealt with more severely.
Let a copy of this decision be attached to respondents personal
record in the Office of the Bar Confidant and copies be furnished to
all chapters of the Integrated Bar of the Philippines (IBP) and to all
the courts in the land.

SO ORDERED.
Bellosillo, (Chairman), Quisumbing, Austria-Martinez, and Callejo,
Sr., JJ., concur.
FIRST DIVISION
[A.C. CBD No. 190. January 28, 1998]
CORAZON T. REONTOY, complainant, vs. ATTY. LIBERATO R. IBADLIT,
respondent.
RESOLUTION
BELLOSILLO, J.:
This is a complaint filed by Corazon T. Reontoy for the disbarment of
her counsel, Atty. Liberato R. Ibadlit, for having been negligent in
handling her case for partition, accounting and reconveyance then
pending with the RTC-Br. 4, Kalibo, Aklan.[1]
Respondent lawyer admits that he was the lawyer of complainant
Corazon T. Reontoy in Civil Case No. 2805 which was decided by the
RTC against his client. He likewise admits that he received copy of
the adverse decision on 19 June 1989 and filed his notice of
appeal only on 17 July 1989 when the expiry date to appeal was 4
July 1989.[2]
Respondent alleges in his defense that after he received the adverse
decision he immediately contacted complainant's brother Proculo
Tomazar and requested the latter to inform complainant that they
lost the case and that after going over the decision he (respondent)
was convinced that appeal was futile. He also requested Proculo to
tell complainant to communicate immediately with respondent if
complainant disagreed with him on his position not to appeal the
RTC decision anymore. Confident that Proculo had conveyed the
message to complainant and having failed to receive any advice
from her respondent intentionally did not file the corresponding
notice of appeal. But after Proculo informed him later in his office
that complainant wished to appeal the decision, he forthwith filed a
notice of appeal, in the interest of justice, on 17 July 1989.
The notice of appeal having been filed beyond the reglementary
period, the trial court on 16 August 1989 denied the appeal and
granted the Motion for Execution of Judgment of the prevailing
parties.
In the investigation conducted by the Integrated Bar of the
Philippines, complainant presented her brother Proculo Tomazar to
deny, as he did, that he was authorized by her to communicate with
respondent regarding the case, claiming in fact that he had no
knowledge whatsoever of subject civil case.[3]

The testimony of Proculo Tomazar corroborated complainant's

testimony that she had never authorized him to be her
representative either to the court or to communicate with her
counsel for the reason that Proculo was unlettered. Complainant
further testified that when she went to see respondent in September
1989 to check on the status of her case the latter merely told her
that the period to appeal had already elapsed and then returned the
case records to her.
We hold respondent administratively liable. Indeed it was his fault
in not appealing within the reglementary period in the belief that
appeal would be useless. It was highly improper for him to adopt
such opinion without any clear instruction from his client not to
appeal the adverse verdict.
A lawyer owes entire devotion in protecting the interest of his client,
warmth and zeal in the defense of his rights. He must use all his
learning and ability to the end that nothing can be taken or withheld
from his client except in accordance with the law. He must present
every remedy or defense within the authority of the law in support
of his client's cause, regardless of his own personal views. In the full
discharge of his duties to his client, the lawyer should not be afraid
of the possibility that he may displease the judge or the general
public.[4]
A lawyer has no authority to waive his client's right to appeal. His
failure to perfect an appeal within the prescribed period constitutes
negligence and malpractice proscribed by Rule 18.03, Canon 18, of
the Code of Professional Responsibility which provides that "a
lawyer shall not neglect a legal matter entrusted to him and his
negligence in connection therewith shall render him liable."[5]
Had respondent filed the appeal on time he could have easily
withdrawn the case later so that he could have the time to confer
meticulously with his client and then decide whether to pursue the
case to the appellate court; or, he could have withdrawn his services
and advised complainant to look for another lawyer before the
period to appeal lapsed to give his client a chance to ventilate her
case on appeal.
Respondent claims that he nonetheless filed a notice of appeal in
the interest of justice. Notably, respondent filed the notice of
appeal on 17 July 1989, or only after the period to appeal had
already expired. The belated filing of the appeal cannot in any way
mitigate respondent's liability; on the contrary, it would show
ignorance on his part. As a lawyer, he ought to know that his notice
of appeal, having been filed beyond the reglementary period, would
surely be struck down for late filing.

In sum, respondent utterly failed to perform his duties and

responsibilities faithfully and well as to protect the rights and
interests of his client. The record shows that complainant lost the
case and suffered the corresponding loss of her real property in
Kalibo, Aklan, consisting of her undivided share or interest in five (5)
valuable parcels of land. Certainly, complainant paid dearly for
respondent's ignorance, laxity, if not incompetence, by failing to
appeal on time.
WHEREFORE, respondent, Atty. Liberato R. Ibadlit, is SUSPENDED
from the practice of law for one (1) year effective upon finality
hereof.
Let copies of this Resolution be furnished the Bar Confidant, the
Integrated Bar of the Philippines and all courts throughout the
country.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

A.C. No. 3294

February 17, 1993

MARIO S. MARIVELES, complainant,

vs.
ATTY. ODILON C. MALLARI, respondent.
Rodolfo B. Ta-asan for complainant.

PER CURIAM:
On January 11, 1989, Mario S. Mariveles of Davao City filed an
administrative complaint against his former counsel, Attorney Odilon
C. Mallari, whose legal services he had engaged in 1984 to handle
his defense in Criminal Case No. 6608 of the Regional Trial Court of
Davao City where he was charged with violation of B.P. Blg. 22,
otherwise known as the Bouncing Checks Law.

After an adverse decision was rendered on December 26, 1986,

Mariveles instructed Attorney Mallari to appeal the trial court's
decision to the Court of Appeals, which the respondent did.
However, in the Court of Appeals, despite numerous extensions of
time, totalling 245 days, which he obtained from the Court, Attorney
Mallari failed to file the appellant's brief, resulting in the dismissal of
the appeal.
Complainant discovered his lawyer's desertion only when he was
subpoenaed by the trial court to appear before it for the execution
of the decision which had become final.
Through new counsel, complainant filed a Petition for Reinstatement
of Appeal, Cancellation of Entry of Judgment and Admission of
Appellant's Brief in CA-G.R. CR No. 04482, but it was denied by the
appellate court.
He sought relief in this court (G.R. No. 85964, "Mario S. Mariveles vs.
Court of Appeal, et al.") which, on March 13, 1989, granted his
petition, ordered the Court of Appeals to cancel the entry of
judgment in CA-G.R. CR No. 04482, reinstate the appeal, and admit
the appellant's brief filed by his new counsel. The Court said:
It is true that the failure of counsel to file brief for the appellant
which led to the dismissal of the appeal does not necessarily
warrant the reinstatement thereof. However, where the negligence
of counsel is so great that the rights of accused are prejudiced and
he is prevented from presenting his defense, especially where the
appellant raises issues which place in serious doubt the correctness
of the trial court's judgment of conviction, the aforesaid rule must
not be rigidly applied to avoid a miscarriage of justice. These
teachings of jurisprudence are present in the case at bar.
On the first aspect, the failure of petitioner's former counsel to file
the brief, for reasons unknown and without any cause imputable to
petitioner, amounted to deliberate abandonment of his client's
interest and justifies reinstatement with consequent due
consideration of petitioner's appeal through a new counsel. (pp.
106-107, Rollo).
On February 15, 1989, the administrative complaint was referred to
the Integrated Bar of the Philippines (IBP) for investigation, report
and recommendation.
The IBP's Committee on Bar Discipline investigated the complaint
and held hearings. On March 3, 1992, it submitted to this Court a
report/resolution finding:

In sum, what was committed by the respondent is a blatant violation

of our Code of Professional Responsibility.
xxx

xxx

xxx

Rule 12.03 A lawyer shall not, after obtaining extensions of time

to file pleadings, memoranda or briefs, let the period lapse without
submitting the same or offering an explanation for his failure to do
so.
Rule 18.03 A lawyer shall not neglect a legal matter entrusted to
him and his negligence in connection therewith shall render him
liable.
Suffice it to state that a lawyer has no business practicing his
profession if in the course of that practice, he will eventually wreck
and destroy the future and reputation of his client and thus disgrace
the law profession. The last thing that his peers in the law profession
and the Integrated Bar of the Philippines would do is to disrobe a
member of the profession, for he has worked for the attainment of
his career burning the midnight oil throughout school and passing
the bar. The undersigned, however, could not find any mitigating
circumstances to recommend a lighter penalty. Disbarment is the
only recourse to remove a rotten apple if only to instill and maintain
the respect and confidence of all and sundry to the noble profession.
(pp. 249-250, Rollo)
The Court concurs with the above observations. The respondent
demonstrated not only appalling indifference and lack of
responsibility to the courts and his client but also a shameless
disregard for his duties as a lawyer. He is unfit for membership in
this noble profession.
WHEREFORE, the Court finds respondent Attorney Odilon C. Mallari
guilty of abandonment and dereliction of duty toward his client and
hereby orders him DISBARRED from the legal profession and to
immediately cease and desist from the practice of law. Let the Office
of the Court Administrator and the Executive Judges of the Ninth,
Tenth, Eleventh and Twelfth Judicial Regions, be furnished with
copies of this resolution for dissemination to all the courts in those
regions.

VICTORIA LEGARDA, petitioner, vs. THE HONORABLE COURT OF

APPEALS, NEW CATHAY HOUSE, INC., THE HONORABLE REGIONAL
TRIAL COURT OF QUEZON CITY, BRANCH 94, respondents.

RESOLUTION
ROMERO, J.:
For our resolution is the motion for reconsideration of the March 18,
1991, decision of the Courts's First Division, filed by private
respondents New Cathay House, Inc. (Cathay). A brief narration of
facts is in order.
The parties hereto entered into a lease agreement over a certain
Quezon City property owned by petitioner Victoria Legarda. For
some reason or another, she refused to sign the contract although
respondent lessee, Cathay, made a deposit and a down payment of
rentals, prompting the latter to file before the Regional Trial Court of
Quezon City, Branch 94 a complaint[1] against the former for
specific performance with preliminary injunction and damages. The
court a quo issued the injunction. In the meantime, Legardas
counsel, noted lawyer Dean Antonio Coronel, requested a 10-day
extension of time to file an answer which the court granted. Atty.
Coronel, however, failed to file an answer within the extended
period. His client was eventually declared in default, Cathay was
allowed to present evidence ex-parte, and on March 25, 1985, a
judgment by default was reached by the trial court ordering Legarda
to execute the lease contract in favor of, and to pay damages to,
Cathay.
On April 9, 1985, a copy of said decision was served on Atty. Coronel
but he took no action until the judgment became final and
executory. A month later, the trial court issued a writ of execution
and a public auction was held where Cathays manager, Roberto V.
Cabrera, Jr., as highest bidder, was awarded the property for
P376,500.00 in satisfaction of the judgment debt. Consequently, a
Certificate of Sale was issued by the sheriff on June 27, 1985. Upon
failure of Legarda to redeem her property within the one-year
redemption period, a Final Deed of Sale was issued by the sheriff on
July 8, 1986, which was registered by Cabrera with the Register of
Deeds three days later. Hence, Legardas Transfer Certificate of Title
(TCT) No. 270814 was cancelled with the issuance of TCT No.
350892 in the name of Cabrera.
Despite the lapse of over a year since the judgment by default
became final and executory, Atty. Coronel made no move on behalf
of his client. He did not even inform her of all these developments.
When Legarda did learn of the adverse decision, she nevertheless
did not lose faith in her counsel[2] and prevailed upon him to seek
appropriate relief. Thus, on October 23, 1986, he filed a petition for
annulment of judgment with prayer for the issuance of a writ of
preliminary mandatory injunction before the Court of Appeals.[3]

On November 29, 1989, the appellate court rendered a decision

affirming the March 25, 1985, decision of the trial court, dismissing
the petition for annulment of judgment, and holding Legarda bound
by the negligence of her counsel. It considered her allegation of
fraud by Cathay to be improbable, and added that there was
pure and simple negligence on the part of petitioners counsel
who failed to file an answer and, later, a petition for relief from
judgment by default. Upon notice of the Court of Appeals decision,
Atty. Coronel again neglected to protect his clients interest by
failing to file a motion for reconsideration or to appeal therefrom
until said decision became final on December 21, 1989.
Sometime in March 1990, Legarda learned of the adverse decision
of the Court of Appeals dated November 29, 1989, not from Atty.
Coronel but from his secretary. She then hired a new counsel for the
purpose of elevating her case to this Court. The new lawyer filed a
petition for certiorari praying for the annulment of the decision of
the trial and appellate courts and of the sheriffs sale, alleging,
among other things, that Legarda lost in the courts below because
her previous lawyer was grossly negligent and inefficient, whose
omissions cannot possibly bind her because this amounted to a
violation of her right to due process of law. She, therefore, asked
Cathay (not Cabrera) to reconvey the subject property to her.
On March 18, 1991, a decision[4] was rendered in this case by Mr.
Justice Gancayco, ruling, inter alia, as follows: (a) granting the
petition; (b) nullifying the trial courts decision dated March 25,
1985, the Court of Appeals decision dated November 29, 1989, the
Sheriffs Certificate of Sale dated June 27, 1985, of the property in
question, and the subsequent final deed of sale covering the same
property; and (c) ordering Cathay to reconvey said property to
Legarda, and the Register of Deeds to cancel the registration of said
property in the name of Cathay (not Cabrera) and to issue a new
one in Legardas name.
The Court then declared that Atty. Coronel committed, not just
ordinary or simple negligence, but reckless, inexcusable and gross
negligence, which deprived his client of her property without due
process of law. His acts, or the lack of it, should not be allowed to
bind Legarda who has been consigned to penury because her
lawyer appeared to have abandoned her case not once but
repeatedly. Thus, the Court ruled against tolerating such unjust
enrichment of Cathay at Legardas expense, and noted that
counsels lack of devotion to duty is so gross and palpable that this
Court must come to the aid of his distraught client.
Aggrieved by this development, Cathay filed the instant motion for
reconsideration, alleging, inter alia, that reconveyance is not

possible because the subject property had already been sold by its
owner, Cabrera, even prior to the promulgation of said decision.
By virtue of the Gancayco decision, Cathay was duty bound to
return the subject property to Legarda. The impossibility of this
directive is immediately apparent, for two reasons: First, Cathay
neither possessed nor owned the property so it is in no position to
reconvey the same; second, even if it did, ownership over the
property had already been validly transferred to innocent third
parties at the time of promulgation of said judgment.
There is no question that the highest bidder at the public auction
was Cathays manager. It has not been shown nor even alleged,
however, that Roberto Cabrera had all the time been acting for or in
behalf of Cathay. For all intents and purposes, Cabrera was simply
a vendee whose payment effectively extinguished Legardas liability
to Cathay as the judgment creditor. No proof was ever presented
which would reveal that the sale occurred only on paper, with
Cabrera acting as a mere conduit for Cathay. What is clear from the
records is that the auction sale was conducted regularly, that a
certificate of sale and, subsequently, a final deed of sale were
issued to Cabrera which allowed him to consolidate his ownership
over the subject property, register it and obtain a title in his own
name, and sell it to Nancy Saw, an innocent purchaser for value, at
a premium price. Nothing on record would demonstrate that Cathay
was the beneficiary of the sale between Cabrera and Saw. Cabrera
himself maintained that he was acting in his private (as distinct
from his corporate) capacity[5] when he participated in the
bidding.
Since the decision of the Court of Appeals gained finality on
December 21, 1989, the subject property has been sold and
ownership thereof transferred no less than three times, viz.: (a) from
Cabrera to Nancy Saw on March 21, 1990, four months after the
decision of the Court of Appeals became final and executory and
one year before the promulgation of the March 18, 1991, decision
under reconsideration; (b) from Nancy Saw to Lily Tanlo Sy Chua on
August 7, 1990, more than one year before the Court issued a
temporary restraining order in connection with this case; and (c)
from the spouses Victor and Lily Sy Chua to Janet Chong Luminlun
on April 3, 1992. With these transfers, Cabreras TCT No. 350892
gave way to Saws TCT No. 31672, then to Chuas TCT No. 31673,
and finally to Luminluns TCT No. 99143, all issued by the Register of
Deeds of Quezon City on April 3, 1990, August 8, 1990, and
November 24, 1993, respectively.
We do not have to belabor the fact that all the successors-in-interest
of Cabrera to the subject lot were transferees for value and in good
faith, having relied as they did on the clean titles of their

predecessors. The successive owners were each armed with their

own indefeasible titles which automatically brought them under the
aegis of the Torrens System. As the Court declared in Sandoval v.
Court of Appeals,[6] (i)t is settled doctrine that one who deals with
property registered under the Torrens system need not go beyond
the same, but only has to rely on the title. He is charged with notice
only of such burdens and claims as are annotated on the title.[7] In
the case at bar, it is not disputed that no notice of lis pendens was
ever annotated on any of the titles of the subsequent owners. And
even if there were such a notice, it would not have created a lien
over the property because the main office of a lien is to warn
prospective buyers that the property they intend to purchase is the
subject of a pending litigation. Therefore, since the property is
already in the hands of Luminlun, an innocent purchaser for value, it
can no longer be returned to its original owner by Cabrera, much
less by Cathay itself.
Another point to consider, though not raised as an issue in this case,
is the fact that Cabrera was impleaded as a party-respondent only
on August 12, 1991, after the promulgation of the Gancayco
decision.[8] The dispositive portion itself ordered Cathay, instead of
Cabrera to reconvey the property to Legarda. Cabrera was never a
party to this case, either as plaintiff-appellee below or as respondent
in the present action. Neither did he ever act as Cathays
representative. As we held in the recent case of National Power
Corporation v. NLRC, et al.,[9] (j)urisdiction over a party is acquired
by his voluntary appearance or submission to the court or by the
coercive process issued by the court to him, generally by service of
summons.[10] In other words, until Cabrera was impleaded as
party respondent and ordered to file a comment in the August 12,
1991, resolution, the Court never obtained jurisdiction over him, and
to command his principal to reconvey a piece of property which
used to be HIS would not only be inappropriate but would also
constitute a real deprivation of ones property without due process
of law.
Assuming arguendo that reconveyance is possible, that Cathay and
Cabrera are one and the same and that Cabreras payment
redounded to the benefit of his principal, reconveyance, under the
facts and evidence obtaining in this case, would still not address the
issues raised herein
The application of the sale price to Legardas judgment debt
constituted a payment which extinguished her liability to Cathay as
the party in whose favor the obligation to pay damages was
established.[11] It was a payment in the sense that Cathay had to
resort to a court-supervised auction sale in order to execute the
judgment.[12] With the fulfillment of the judgment debtors
obligation, nothing else was required to be done.

Under the Gancayco ruling, the order of reconveyance was premised

on the alleged gross negligence of Legardas counsel which should
not be allowed to bind her as she was deprived of her property
without due process of law.
It is, however, basic that as long as a party was given the
opportunity to defend her interests in due course, she cannot be
said to have been denied due process of law, for this opportunity to
be heard is the very essence of due process. The chronology of
events shows that the case took its regular course in the trial and
appellate courts but Legardas counsel failed to act as any ordinary
counsel should have acted, his negligence every step of the way
amounting to abandonment, in the words of the Gancayco
decision. Yet, it cannot be denied that the proceedings which led to
the filing of this case were not attended by any irregularity. The
judgment by default was valid, so was the ensuing sale at public
auction. If Cabrera was adjudged highest bidder in said auction
sale, it was not through any machination on his part. All of his
actuations that led to the final registration of the title in his name
were aboveboard, untainted by any irregularity.
The fact that Cabrera is an officer of Cathay does not make him a
purchaser in bad faith. His act in representing the company was
never questioned nor disputed by Legarda. And while it is true that
he won in the bidding, it is likewise true that said bidding was
conducted by the book. There is no call to be alarmed that an
official of the company emerges as the winning bidder since in some
cases, the judgment creditor himself personally participates in the
bidding.
There is no gainsaying that Legarda is the judgment debtor here.
Her property was sold at public auction to satisfy the judgment debt.
She cannot claim that she was illegally deprived of her property
because such deprivation was done in accordance with the rules on
execution of judgments. Whether the money used to pay for said
property came from the judgment creditor or its representative is
not relevant. What is important is that it was purchased for value.
Cabrera parted with real money at the auction. In his Sheriffs
Certificate of Sale dated June 27, 1985,[13] Deputy Sheriff Angelito
R. Mendoza certified, inter alia, that the highest bidder paid to the
Deputy Sheriff the said amount of P376,500.00, the sale price of the
levied property. If this does not constitute payment, what then is
it? Had there been no real purchase and payment below, the
subject property would never have been awarded to Cabrera and
registered in his name, and the judgment debt would never have
been satisfied. Thus, to require either Cathay or Cabrera to
reconvey the property would be an unlawful intrusion into the lawful
exercise of his proprietary rights over the land in question, an act

which would constitute an actual denial of property without due

process of law.
It may be true that the subject lot could have fetched a higher price
during the public auction, as Legarda claims, but the fail to betray
any hint of a bid higher than Cabreras which was bypassed in his
favor. Certainly, he could not help it if his bid of only P376,500.00
was the highest. Moreover, in spite of this allegedly low selling
price, Legarda still failed to redeem her property within the one-year
redemption period. She could not feign ignorance of said sale on
account of her counsels failure to so inform her, because such
auction sales comply with requirements of notice and publication
under the Rules of Court. In the absence of any clear and
convincing proof that such requirements were not followed, the
presumption of regularity stands. Legarda also claims that she was
in the United States during the redemption period, but she admits
that she left the Philippines only on July 13, 1985, or sixteen days
after the auction sale of June 27, 1985. Finally, she admits that her
mother Ligaya represented her during her absence.[14] In short, she
was not totally in the dark as to the fate of her property and she
could have exercised her right of redemption if she chose to, but she
did not.
Neither Cathay nor Cabrera should be made to suffer for the gross
negligence of Legardas counsel. If she may be said to be
innocent because she was ignorant of the acts of negligence of
her counsel, with more reason are respondents truly innocent. As
between two parties who may lose due to the negligence or
incompetence of the counsel of one, the party who was responsible
for making it happen should suffer the consequences. This reflects
the basic common law maxim, so succinctly stated by Justice J.B.L.
Reyes, that . . . (B)etween two innocent parties, the one who made
it possible for the wrong to be done should be the one to bear the
resulting loss.[15] In this case, it was not respondents, Legarda,
who misjudged and hired the services of the lawyer who practically
abandoned her case and who continued to retain him even after his
proven apathy and negligence.
The Gancayco decision makes much of the fact that Legarda is now
consigned to penury and, therefore, this Court must come to the
aid of the distraught client. It must be remembered that this Court
renders decisions, not on the basis of emotions but on its sound
judgment, applying the relevant, appropriate law. Much as it may
pity Legarda, or any losing litigant for that matter, it cannot play the
role of a knight in shining armor coming to the aid of someone,
who through her weakness, ignorance or misjudgment may have
been bested in a legal joust which complied with all the rules of
legal proceedings.

In Vales v. Villa,[16] this Court warned against the danger of jumping

to the aid of a litigant who commits serious error of judgment
resulting in his own loss:
x x x Courts operate not because one person has been defeated or
overcome by another, but because he has been defeated or
overcome illegally. Men may do foolish things, make ridiculous
contracts, use miserable judgment, and lose money by them indeed, all they have in the world; but not for that alone can the law
intervene and restore. There must be, in addition, a violation of law,
the commission of what the law knows as an actionable wrong,
before the courts are authorized to lay hold of the situation and
remedy it."
Respondents should not be penalized for Legardas mistake. If the
subject property was at all sold, it was only after the decisions of the
trial and appellate courts had gained finality. These twin judgments,
which were nullified by the Gancayco decision, should be respected
and allowed to stand by this Court for having become final and
executory.
A judgment may be broadly defined as the decision or sentence of
the law given by a court or other tribunal as the result of
proceedings instituted therein.[17] It is a judicial act which settles
the issues, fixes the rights and liabilities of the parties, and
determines the proceeding, and it is regarded as the sentence of the
law pronounced by the court on the action or question before
it.[18]
In the case at bar, the trial courts judgment was based on Cathays
evidence after Legarda was declared in default. Damages were duly
awarded to Cathay, not whimsically, but upon proof of its
entitlement thereto. The issue of whether the plaintiff (Cathay)
deserved to recover damages because of the defendants
(Legardas) refusal to honor their lease agreement was resolved.
Consequently, the right of Cathay to be vindicated for such breach
and the liability incurred by Legarda in the process were
determined.
This judgment became final when she failed to avail of remedies
available to her, such as filing a motion for reconsideration or
appealing the case. At the time, the issues raised in the complaint
had already been determined and disposed of by the trial court.[19]
This is the stage of finality which judgments must at one point or
another reach. In our jurisdiction, a judgment becomes ipso facto
final when no appeal is perfected or the reglementary period to
appeal therefrom expires. The necessity of giving finality to
judgments that are not void is self-evident. The interests of society
impose it. The opposite view might make litigations more

unendurable than the wrongs (they are) intended to redress. It

would create doubt, real or imaginary, and controversy would
constantly arise as to what the judgment or order was. Public policy
and sound practice demand that, at the risk of occasional errors,
judgments of courts should become final at some definite date fixed
by law. The very object for which courts were instituted was to put
an end to controversies.[20] When judgments of lower courts gain
finality, they, too, become inviolable, impervious to modification.
They may, then, no longer be reviewed, or in any way modified
directly or indirectly, by a higher court, not even by the Supreme
Court.[21] In other words, once a judgment becomes final, the only
errors that may be corrected are those which are clerical.[22]
From the foregoing precedents, it is readily apparent that the real
issue that must be resolved in this motion for reconsideration is the
alleged illegality of the final judgments of the trial and appellate
courts.
Void judgments may be classified into two groups: those rendered
by a court without jurisdiction to do so and those obtained by fraud
or collusion.[23] This case must be tested in light of the guidelines
governing the latter class of judgments. In this regard, an action to
annul a judgment on the ground of fraud will not lie unless the fraud
is extrinsic or collateral and facts upon which it is based (have) not
been controverted or resolved in the case where (the) judgment was
rendered.[24] Where is the fraud in the case at bar? Was Legarda
unlawfully barred from the proceedings below? Did her counsel sell
her out to the opponent?
It must be noted that, aside from the fact that no extrinsic fraud
attended the trial and resolution of this case, the jurisdiction of the
court a quo over the parties and the subject matter was never
raised as an issue by Legarda. Such being the case, the decision of
the trial court cannot be nullified. Errors of judgment, if any, can
only be reviewed on appeal, failing which the decision becomes final
and executory, valid and binding upon the parties in the case and
their successors in interest.[25]
At this juncture, it must be pointed out that while Legarda went to
the Court of Appeals claiming precisely that the trial courts decision
was fraudulently obtained, she grounded her petition before the
Supreme Court upon her estranged counsels negligence. This could
only imply that at the time she filed her petition for annulment of
judgment, she entertained no notion that Atty. Coronel was being
remiss in his duties. It was only after the appellate courts decision
had become final and executory, a writ of execution issued, the
property auctioned off then sold to an innocent purchasers for value,
that she began to protest the alleged negligence of her attorney. In
most cases, this would have been dismissed outright for being

dilatory and appearing as an act of desperation on the part of a

vanquished litigant. The Gancayco ruling, unfortunately, ruled
otherwise.
Fortunately, we now have an opportunity to rectify a grave error of
the past.
WHEREFORE, the Motion for Reconsideration of respondent New
Cathay House, Inc. is hereby GRANTED. Consequently, the decision
dated March 18, 1991, of the Courts First Division is VACATED and
SET ASIDE. A new judgment is hereby entered DISMISSING the
instant petition for review and AFFIRMING the November 29, 1989,
decision of the Court of Appeals in CA-G.R. No. SP-10487. Costs
against petitioner Victoria Legarda.
DECISION
PANGANIBAN, J.:
The failure to file an appellate court brief without any justifiable
reason deserves sanction. Lawyers who disagree with the pursuit of
an appeal should properly withdraw their appearance and allow
their client to retain another counsel.
The Case and the Facts
In a Complaint[1] dated June 21, 2002, Eduardo T. Abay charges
Atty. Raul T. Montesino with gross negligence, gross incompetence
and evident bad faith, in violation of his oath as a member of the
Philippine bar.
Complainant avers that the Negros Institute of Technology (NIT), of
which he is a stockholder, hired respondent as counsel in an action
for Cancellation of Title of Ownership, Recovery of Ownership and
Possession and Damages with Preliminary Injunction against the
estate of Vicente T. Galo. The matter was docketed as Civil Case No.
1329 at the Regional Trial Court (RTC) of Bacolod City (Branch 45).
On April 27, 1995, the RTC rendered a Decision dismissing the civil
case. Respondents Motion for Reconsideration of the judgment of
dismissal was denied by the trial court in its Order dated November
3, 1995. Although respondent filed a Notice of Appeal with the
Court of Appeals (CA), he thereafter failed to submit an appellants
brief. Consequently, in a Resolution dated March 19, 1999, the CA
dismissed the appeal with the following admonition:
We made a warning in our Resolution dated as early as October 20,
1998 that no further extension will be entertained. Precisely
because of non-submission of the Brief, we directed, on January 8,

1998, the dismissal of the appeal. This is not to mention the fact
that a total of 120 days extension, over and above the 45-day
reglementary period, had already been granted. This brings us to
the February 9, 1999 ruling by the Supreme Court (A.M. No. 99-2-03SC) giving the Solicitor General a limited time of 60 days and 90
days within which to submit his comment or appellees brief, with a
warning that no further extension will be granted. This precisely
applies to a First Motion for Extension. The period can even be
shortened, in cases of extreme urgency.
We cannot see any reason why the courts admonishing for a
limited time to do compliance does not apply to this case now
before Us.[2]
Complainant attributes the failure of respondent to submit the brief
to the latters gross negligence and evident bad faith. Respondent
allegedly abandoned the appeal without the knowledge and consent
of the NIT. Worse, he supposedly never told the Institute that its
appeal had already been dismissed. Complainant thus prayed that
respondent be duly sanctioned with disbarment.[3]
In his Comment[4] dated October 29, 2002, respondent denied that
he was negligent in his duty as counsel of NIT. According to him,
while Civil Case No. 1329 was pending appeal, he discovered that
the property that it was seeking to recover had been the subject of
another case, Civil Case No. 6017, which was for Annulment of
Sale, Deed of Donation, Cancellation of Titles and Damages. The
latter case was a result of the overlapping transfers of rights
effected by the heirs of Vicente Galo through (1) a Contract of Sale
executed on April 12, 1985[5] in favor of Floserfina Grandea[6] and
(2) a Contract of Mortgage executed on September 3, 1985 in favor
of Ludovico Hilado.[7]
Believing that the heirs of Vicente Galo had already validly
transferred to another party the ownership of the property that the
NIT was seeking to recover, respondent felt that to pursue the
appeal would be dilatory, expensive, frivolous and taxing [to] the
precious time of the [CA].[8] Thus, he deemed it wise to advise the
stockholders of the NIT to abandon the appeal and instead file
appropriate Complaint(s) against x x x Floserfina Grandea of
Bacolod City and x x x Ludovico Hilado x x x of Silay City x x x to
recover the ownership and possession of the NITs claimed
properties.[9]
Respondent avers that complainant was unjustly adamant in his
demand to continue with [the] appeal despite x x x said legal
[advice]. However, because he sincerely felt that the best way to
protect the rights of NIT was to file appropriate complaint(s) against

[Grandea] and [Hilado], x x x [he] x x x allowed the period to submit

NITs Appellants Brief to [lapse].[10]
Furthermore, respondent maintains that despite the fact that the NIT
did not pay his legal fees or reimburse him for his expenses, he still
faithfully performed his duty during the entire time he served as its
counsel.
In a Resolution[11] dated January 20, 2003, the Court referred this
case to the Integrated Bar of the Philippines (IBP) for investigation,
report and recommendation.
Report of the Investigating Commissioner
In her April 24, 2003 Report,[12] Investigating IBP Commissioner
Milagros V. San Juan found respondent guilty of violating the Code of
Professional Responsibility.
According to Commissioner San Juan, respondent was not able to
justify his failure to file the brief. She explained that if respondent
actually believed [that] it was futile to pursue [the appeal], why did
he request from the Court of Appeals numerous extensions of time
to file x x x the same within the given extension periods? Also, it
should be noted that respondent admits that after he advised NIT
and herein complainant [about] the futility of pursuing the appeal,
the latter expressed the wish to continue with [the appeal]. At the
very least, respondent should have given due importance to the
decision of his client to avail of a legal remedy available to it under
the legal system.[13]
She recommended that respondent be suspended from the practice
of law for a period of six months, with a warning that a harsher
penalty would be meted out for a similar infraction in the future.[14]
Recommendation of the IBP Board of Governors
On June 21, 2003, the Board of Governors of the IBP passed
Resolution No. XV-2003-339[15] adopting the Report and
Recommendation of the investigating commissioner.[16]
The Courts Ruling
We agree with the findings and recommendation of the IBP.
Administrative Liability of Respondent
The legal profession is invested with public trust.[17] Its goal is to
render public service and secure justice for those who seek its aid.
[18] Thus, the practice of law is considered a privilege, not a right,

bestowed by the State on those who show that they possess and
continue to possess the legal qualifications required for the
conferment of such privilege.[19]
Verily, lawyers are expected to maintain at all times a high standard
of legal proficiency and of morality -- which includes honesty,
integrity and fair dealing.[20] They must perform their four-fold
duty to society, the legal profession, the courts and their clients in
accordance with the values and norms of the legal profession, as
embodied in the Code of Professional Responsibility. Any conduct
found wanting in these considerations, whether in their professional
or private capacity, shall subject them to disciplinary action. In the
present case, the failure of respondent to file the appellants brief
was a clear violation of his professional duty to his client.
The Code of Professional Responsibility mandates lawyers to serve
their clients with competence and diligence.[21] Rules 18.03 and
18.04 specifically provide:
Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to
him and his negligence in connection therewith shall render him
liable.
Rule 18.04 A lawyer shall keep the client informed of the status of
his case and shall respond within a reasonable time to the clients
request for information.
It must be noted that respondent and complainant disagreed on the
legal course to be taken regarding the appealed case. The former
strongly advised the latter to abandon the appeal and to consider
the other available remedies. Complainant, on the other hand,
wanted to pursue it. Feeling that he was unjustly adamant in
wanting to do so, respondent -- contrary to the desire of the former
-- deemed it wise to abandon the appeal without informing his
client.
Not filing an appellants brief is prejudicial because, as happened in
this case, such failure could result in the dismissal of the appeal.[22]
The conduct of respondent shows that he failed to exercise due
diligence, and that he had a cavalier attitude towards the cause of
his client. The abandonment by the former of the latters cause
made him unworthy of the trust that his client reposed in him. Even
if respondent was honestly and sincerely protecting the interests
of complainant, the former still had no right to waive the appeal
without the latters knowledge and consent. If indeed respondent
felt unable or unwilling to continue his retainership, he should have
properly withdrawn his appearance and allowed the client to appoint
another lawyer.

Moreover, the appellate court noted that respondent failed to file

the appellants brief despite being granted several extensions of
time to file it. He therefore violated Rule 12.03 of the Code of
Professional Responsibility, which mandates that [a] lawyer shall
not, after obtaining extensions of time to file pleadings, memoranda
or briefs, let the period lapse without submitting the same or
offering an explanation for his failure to do so.
We emphasize that all lawyers owe fidelity to their clients cause.
[23] Regardless of their personal views, they must present every
remedy or defense within the authority of the law in support of that
cause.[24] We have said in Ong v. Atty. Grijaldo:[25]
Once [a lawyer] agrees to take up the cause of a client, the lawyer
owes fidelity to such cause and must always be mindful of the trust
and confidence reposed in him. He must serve the client with
competence and diligence, and champion the latters cause with
wholehearted fidelity, care, and devotion. [Other]wise stated, he
owes entire devotion to the interest of the client, warm zeal in the
maintenance and defense of his clients rights, and the exertion of
his utmost learning and ability to the end that nothing be taken or
withheld from his client, save by the rules of law, legally applied.
This simply means that his client is entitled to the benefit of any and
every remedy and defense that is authorized by the law of the land
and he may expect his lawyer to assert every such remedy or
defense. If much is demanded from an attorney, it is because the
entrusted privilege to practice law carries with it the correlative
duties not only to the client but also to the court, to the bar, and to
the public. A lawyer who performs his duty with diligence and
candor not only protects the interest of his client; he also serves the
ends of justice, does honor to the bar, and helps maintain the
respect of the community to the legal profession.[26]
WHEREFORE, Atty. Raul T. Montesino is found guilty of negligence
and is hereby SUSPENDED from the practice of law for six months,
effective upon receipt of this Decision. He is WARNED that a
repetition of the same or a similar act will be dealt with more
severely.
A copy of this Decision shall be entered in the record of respondent
as attorney. Further, let copies of this Decision be served on the IBP
as well as on the court administrator, who is directed to circulate
these to all the courts in the country for their information and
guidance.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC
A.C. No. 492

September 5, 1967

OLEGARIA BLANZA and MARIA PASION, complainants,

vs.
ATTY. AGUSTIN ARCANGEL, respondent.

BENGZON, J.P., J.:

Complainants Olegaria Blanza and Maria Pasion ask this Court to
take disciplinary action against respondent Atty. Agustin Arcangel
for professional non-feasance. They complain that way back in April,
1955, respondent volunteered to help them in their respective
pension claims in connection with the deaths of their husbands,
both P.C. soldiers, and for this purpose, they handed over to him the
pertinent documents and also affixed their signatures on blank
papers. But subsequently, they noticed that since then, respondent
had lost interest in the progress of their claims and when they finally
asked for the return of their papers six years later, respondent
refused to surrender them.
Respondent answered these accusations before Fiscal Raa to whom
this case was referred by the Solicitor General for investigation,
report and recommendation. He admitted having received the
documents from complainants but explainer that it was for
photostating purposes only. His failure to immediately return them,
he said, was due to complainants' refusal to hand him the money to
pay for the photostating costs which prevented him from
withdrawing said documents from the photostat service. Anyway, he
had already advanced the expenses himself and turned over, on
December 13, 1961, the documents, their respective photostats and
the photostat service receipt to the fiscal.
Finding respondent's explanation satisfactory and considering that
he charged complainants nothing for his services, Fiscal Raa
recommended the former's exoneration, or at most, that he be
reprimanded only. The Solicitor General, however, feels that
respondent deserves at least a severe reprimand considering (1) his
failure to attend to complainants' pension claims for six years; (2)
his failure to immediately return the documents despite repeated
demands upon him, and (3) his failure to return to complainant
Pasion, allegedly, all of her documents.
At the hearing of the case before this Court on October 21, 1963,
only respondent, thru counsel, appeared. In lieu of oral arguments,
therefore, respondent submitted his memorandum, annexing

therewith an affidavit executed by Olegaria Blanza asking for the

dismissal of the administrative case.1
Respondent first submits that he was not obliged to follow up
complainants' pension claims since there was no agreement for his
compensation as their counsel. Respondent, however, overlooks the
fact that he volunteered his professional services and thus was not
legally entitled to recover fees.2 But having established the
attorney-client relationship voluntarily, he was bound to attend to
complainants' claims with all due diligence.
Nevertheless, We find the evidence adduced insufficient to warrant
the taking of disciplinary action against respondent attorney. There
is no clear preponderance of evidence substantiating the
accusations against him.3
Respondent's explanation for the delay in filing the claims and in
returning the documents has not been controverted by
complainants. On the contrary, they admitted4 that respondent
asked them to shoulder the photostating expenses but they did not
give him any money therefor. Moreover, the documents and their
photostats were actually returned by respondent during the fiscal's
investigation with him paying for the photostating costs himself. And
the condition of the photostats themselves they appear to have
been in existence for quite some time5 supports respondent's
allegation that they remained in possession of the photostat service
for the failure of the owners (respondents and/or complainants), to
withdraw the same upon payment of the corresponding costs.
Hence, complainants themselves are partly to blame for the delay in
filing their respective claims.1awphl.nt
As for the alleged failure of respondent to return all her documents
to complainant Pasion, the former denies this. Fiscal Raa made no
findings on the matter. The affidavit of Mrs. Blanza pardoning
respondent cannot prejudice complainant Pasion because res inter
alios acta alteri nocere non debet. Still, there is equiponderance of
evidence which must necessarily redound to respondent's benefit.
Complainant Pasion had another opportunity to substantiate her
charges in the hearing set for October 21, 1963 but she let it go.
Neither she nor her counsel of record appeared.
But while We are constrained to dismiss the charges against
respondent for being legally insufficient, yet We cannot but counsel
against his actuations as a member of the bar. A lawyer has a more
dynamic and positive role in the community than merely complying
with the minimal technicalities of the statute. As a man of law, he is
necessarily a leader of the community, looked up to as a model
citizen. His conduct must, perforce, be par excellence, especially so
when, as in this case, he volunteers his professional services.

Respondent here has not lived up to that ideal standard. It was

unnecessary to have complainants wait, and hope, for six long years
on their pension claims. Upon their refusal to co-operate,
respondent should have forthwith terminated their professional
relationship instead of keeping them hanging indefinitely. And altho
We voted that he not be reprimanded, in a legal sense, let this be a
reminder to Atty. Arcangel of what the high standards of his chosen
profession require of him.
Accordingly, the case against respondent is dismissed. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro, Angeles and Fernando, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
A.C. No. 9532

October 8, 2013

MARIA CRISTINA ZABALJAUREGUI PITCHER, Complainant,

vs.
ATTY. RUSTICO B. GAGATE, Respondent.
DECISION
PERLAS-BERNABE, J.:
For the Court s resolution is an administrative complaint1 filed by
Maria Cristina Zabaljauregui Pitcher (complainant) against Atty.
Rustico B. Gagate (respondent), . charging him for gross ignorance
of the law and unethical practice of law.
The facts
Complainant claimed to be the legal wife of David B. Pitcher
(David),2 a British national who passed away on June 18, 2004.3
Prior to his death, David was engaged in business in the Philippines
and owned, among others, 40% of the shareholdings in Consulting
Edge, Inc.4 (Consulting Edge), a domestic corporation. In order to
settle the affairs of her deceased husband, complainant engaged
the services of respondent.5
On June 22, 2004, complainant and respondent met with Katherine
Moscoso Bantegui Bantegui),6 a major stockholder of Consulting
Edge,7 in order to discuss the settlement of Davids interest in the
company.8 They agreed to another meeting which was, however,

postponed by Bantegui. Suspecting that the latter was merely

stalling for time in order to hide something, respondent insisted that
the appointment proceed as scheduled.9
Eventually, the parties agreed to meet at the company premises on
June 28, 2004. However, prior to the scheduled meeting,
complainant was prevailed upon by respondent to put a paper seal
on the door of the said premises, assuring her that the same was
legal.10
On the scheduled meeting, Bantegui expressed disappointment over
the actions of complainant and respondent, which impelled her to
just leave the matter for the court to settle. She then asked them to
leave, locked the office and refused to give them a duplicate key.11
Subsequently, however, respondent, without the consent of
Bantegui, caused the change in the lock of the Consulting Edge
office door,12 which prevented the employees thereof from entering
and carrying on the operations of the company. This prompted
Bantegui to file before the Office of the City Prosecutor of Makati
(Prosecutors Office) a complaint for grave coercion against
complainant and respondent.13 In turn, respondent advised
complainant that criminal and civil cases should be initiated against
Bantegui for the recovery of David's personal records/business
interests in Consulting Edge.14 Thus, on January 17, 2005, the two
entered in Memorandum of Agreement,15 whereby respondent
undertook the filing of the cases against Bantegui, for which
complainant paid the amount of P150,000.00 as acceptance fee and
committed herself to pay respondent P1,000.00 for every court
hearing.16
On November 18, 2004, the Prosecutors Office issued a
Resolution17 dated October 13, 2004, finding probable cause to
charge complainant and respondent for grave coercion. The
corresponding Information was filed before the Metropolitan Trial
Court of Makati City, Branch 63, docketed as Criminal Case No.
337985 (grave coercion case), and, as a matter of course, warrants
of arrest were issued against them.18 Due to the foregoing,
respondent advised complainant to go into hiding until he had filed
the necessary motions in court. Eventually, however, respondent
abandoned the grave coercion case and stopped communicating
with complainant.19 Failing to reach respondent despite diligent
efforts,20 complainant filed the instant administrative case before
the Integrated Bar of the Philippines (IBP) - Commission on Bar
Discipline (CBD), docketed as CBD Case No. 06-1689.
Despite a directive21 from the IBP-CBD, respondent failed to file his
answer to the complaint. The case was set for mandatory
conference on November 24, 2006,22 which was reset twice,23 on

January 12, 2007 and February 2, 2007, due to the absence of

respondent. The last notice sent to respondent, however, was
returned unserved for the reason "moved out."24 In view thereof,
Investigating Commissioner Tranquil S. Salvador III declared the
mandatory conference terminated and required the parties to
submit their position papers, supporting documents, and
affidavits.25
The IBPs Report and Recommendation
On March 18, 2009, Investigating Commissioner Pedro A. Magpayo,
Jr. (Commissioner Magpayo) issued a Report and
Recommendation,26 observing that respondent failed to safeguard
complainant's legitimate interest and abandoned her in the grave
coercion case. Commissioner Magpayo pointed out that Bantegui is
not legally obliged to honor complainant as subrogee of David
because complainant has yet to establish her kinship with David
and, consequently, her interest in Consulting Edge.27 Hence, the
actions taken by respondent, such as the placing of paper seal on
the door of the company premises and the changing of its lock, were
all uncalled for. Worse, when faced with the counter legal measures
to his actions, he abandoned his client's cause.28 Commissioner
Magpayo found that respondents acts evinced a lack of adequate
preparation and mastery of the applicable laws on his part, in
violation of Canon 529 of the Code of Professional Responsibity
(Code), warranting his suspension from the practice of law for a
period of six months.30
The IBP Board of Governors adopted and approved the
aforementioned Report and Recommendation in Resolution No. XX2011-261 dated November 19, 2011 (November 19, 2011
Resolution), finding the same to be fully supported by the evidence
on record and the applicable laws and rules.31
In a Resolution32 dated October 8, 2012, the Court noted the Notice
of the IBPs November 19, 2011 Resolution, and referred the case to
the Office of the Bar Confidant (OBC) for evaluation, report and
recommendation.33
The OBC's Report and Recommendation
On February 11, 2013, the OBC submitted a Report and
Recommendation34 dated February 6, 2013, concluding that
respondent grossly neglected his duties to his client and failed to
safeguard the latter's rights and interests in wanton disregard of his
duties as a lawyer.35 It deemed that the six-month suspension from
the practice of law as suggested by the IBP was an insufficient
penalty and, in lieu thereof, recommended that respondent be
suspended for three years.36 Likewise, it ordered respondent to

return the P150,000.00 he received from complainant as acceptance

fee.37
The Court's Ruling
After a careful perusal of the records, the Court concurs with and
adopts the findings and conclusions of the OBC.
The Court has repeatedly emphasized that the relationship between
a lawyer and his client is one imbued with utmost trust and
confidence. In this regard, clients are led to expect that lawyers
would be ever-mindful of their cause and accordingly exercise the
required degree of diligence in handling their affairs. For his part,
the lawyer is expected to maintain at all times a high standard of
legal proficiency, and to devote his full attention, skill, and
competence to the case, regardless of its importance and whether
he accepts it for a fee or for free.38 To this end, he is enjoined to
employ only fair and honest means to attain lawful objectives.39
These principles are embodied in Canon 17, Rule 18.03 of Canon 18,
and Rule 19.01 of Canon 19 of the Code which respectively 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.
xxxx
Rule 18.03 A lawyer shall not neglect a legal matter entrusted to
him, and his negligence in connection therewith shall render him
liable.
xxxx
CANON 19 A lawyer shall represent his client with zeal within the
bounds of the law.
Rule 19.01 A lawyer shall employ only fair and honest means to
attain the lawful objectives of his client and shall not present,
participate in presenting or threaten to present unfounded criminal
charges to obtain an improper advantage in any case or proceeding.
xxxx
Keeping with the foregoing rules, the Court finds that respondent
failed to exercise the required diligence in handling complainants
cause since he: first, failed to represent her competently and
diligently by acting and proffering professional advice beyond the

proper bounds of law; and, second, abandoned his clients cause

while the grave coercion case against them was pending.
Anent the first infraction, it bears emphasis that complainant's right
over the properties of her deceased husband, David, has yet to be
sufficiently established. As such, the high-handed action taken by
respondent to enforce complainant's claim of ownership over the
latters interest in Consulting Edge i.e., causing the change of the
office door lock which thereby prevented the free ingress and egress
of the employees of the said company was highly improper. Verily,
a person cannot take the law into his own hands, regardless of the
merits of his theory. In the same light, respondent's act of advising
complainant to go into hiding in order to evade arrest in the criminal
case can hardly be maintained as proper legal advice since the
same constitutes transgression of the ordinary processes of law. By
virtue of the foregoing, respondent clearly violated his duty to his
client to use peaceful and lawful methods in seeking justice,40 in
violation of Rule 19.01, Canon 19 of the Code as above-quoted. To
note further, since such courses of action were not only improper
but also erroneous, respondent equally failed to serve his client with
competence and diligence in violation of Canon 18 of the Code. In
the same regard, he also remained unmindful of his clients trust in
him in particular, her trust that respondent would only provide her
with the proper legal advice in pursuing her interests thereby
violating Canon 17 of the Code.
With respect to the second infraction, records definitively bear out
that respondent completely abandoned complainant during the
pendency of the grave coercion case against them; this
notwithstanding petitioners efforts to reach him as well as his
receipt of the P150,000.00 acceptance fee. It is hornbook principle
that a lawyers duty of competence and diligence includes not
merely reviewing the cases entrusted to his care or giving sound
legal advice, but also consists of properly representing the client
before any court or tribunal, attending scheduled hearings or
conferences, preparing and filing the required pleadings,
prosecuting the handled cases with reasonable dispatch, and urging
their termination even without prodding from the client or the
court.41 Hence, considering respondents gross and inexcusable
neglect by leaving his client totally unrepresented in a criminal case,
it cannot be doubted that he violated Canon 17, Rule 18.03 of Canon
18, and Rule 19.01 of Canon 19 of the Code.
In addition, it must be pointed out that respondent failed to file his
answer to the complaint despite due notice.1wphi1 This
demonstrates not only his lack of responsibility but also his lack of
interest in clearing his name, which, as case law directs, is
constitutive of an implied admission of the charges leveled against
him.42 In fine, respondent should be held administratively liable for

his infractions as herein discussed. That said, the Court now

proceeds to determine the appropriate penalty to be imposed
against respondent.
Several cases show that lawyers who have been held liable for gross
negligence for infractions similar to those committed by respondent
were suspended from the practice of law for a period of two years.
In Jinon v. Jiz,43 a lawyer who neglected his client's case,
misappropriated the client's funds and disobeyed the IBPs
directives to submit his pleadings and attend the hearings was
suspended from the practice of law for two years. In Small v.
Banares,44 the Court meted a similar penalty against a lawyer who
failed to render any legal service even after receiving money from
the complainant; to return the money and documents he received
despite demand; to update his client on the status of her case and
respond to her requests for information; and to file an answer and
attend the mandatory conference before the IBP. Also, in Villanueva
v. Gonzales,45 a lawyer who neglected complainants cause; refused
to immediately account for his clients money and to return the
documents received; failed to update his client on the status of her
case and to respond to her requests for information; and failed to
submit his answer and to attend the mandatory conference before
the IBP was suspended from the practice of law for two years.
However, the Court observes that, in the present case, complainant
was subjected to a graver injury as she was prosecuted for the
crime of grave coercion largely due to the improper and erroneous
advice of respondent. Were it not for respondents imprudent
counseling, not to mention his act of abandoning his client during
the proceedings, complainant would not have unduly suffered the
harbors of a criminal prosecution. Thus, considering the superior
degree of the prejudice caused to complainant, the Court finds it apt
to impose against respondent a higher penalty of suspension from
the practice of law for a period of three years as recommended by
the OBC.
In the same light, the Court sustains the OBCs recommendation for
the return of the P150,000.00 acceptance fee received by
respondent from complainant since the same is intrinsically linked to
his professional engagement. While the Court has previously held
that disciplinary proceedings should only revolve around the
determination of the respondent-lawyers administrative and not his
civil liability,46 it must be clarified that this rule remains applicable
only to claimed liabilities which are purely civil in nature for
instance, when the claim involves moneys received by the lawyer
from his client in a transaction separate and distinct and not
intrinsically linked to his professional engagement (such as the
acceptance fee in this case). Hence, considering further that the fact
of respondents receipt of the P150,000.00 acceptance fee from

complainant remains undisputed,47 the Court finds the return of the

said fee, as recommended by the OBC, to be in order.
WHEREFORE respondent Atty. Rustico B. Gagate is found guilty of
violating Canon 17 Rule 18.03 of Canon 18 and Rule 19.01 of Canon
19 of the Code of Professional Responsibility. Accordingly, he is
hereby SUSPENDED from the practice of law for a period of three 3)
years, effective upon the finality of this Decision, with a stem
warning that a repetition of the same or similar acts will be dealt
with more severely.
Further, respondent is ORDERED to return to complainant Maria
Cristina Zabaljauregui Pitcher the P150,000.00 acceptance fee he
received from the latter within ninety (90) days from the finality of
this Decision. Failure to comply with the foregoing directive will
warrant the imposition of a more severe penalty.
Let a copy of this Decision be furnished the Office of the Bar
Confidant, the Integrated Bar of the Philippines, and the Office of
the Court Administrator for circulation to all the courts.
SO ORDERED.
ESTELA M. PERLAS-BERNABE
Associate Justice
WE CONCUR:
THIRD DIVISION
[G.R. No. 124074. January 27, 1997]
RESEARCH and SERVICES REALTY, INC., petitioner, vs. COURT OF
APPEALS and MANUEL S. FONACIER, JR., respondents.
DECISION
DAVIDE, JR., J.:
This petition for review on certiorari under Rule 45 of the Rules of
Court questions the propriety of the award for, and the
reasonableness of the amount of, attorney's fees granted in favor of
the private respondent by the Regional Trial Court (RTC) of Makati
City, Branch 64,[1] in Civil Case No. 612,[2] which the Court of
Appeals affirmed in its decision[3] of 31 March 1995 in CA-G.R. CV
No. 44839.
The undisputed facts are as follows:
On 3 November 1969, the petitioner entered into a Joint Venture
Agreement with Jose, Fidel, and Antonia Carreon. Under the said

agreement, the petitioner undertook to develop, subdivide,

administer, and promote the sale of the parcels of land owned by
the Carreons. The proceeds of the sale of the lots were to be paid to
the Philippine National Bank (PNB) for the landowner's mortgage
obligation, and the net profits to be shared by the contracting
parties on a 50-50 basis.
On 4 April 1983, the Carreons and a certain Patricio C. Sarile
instituted before the RTC of Makati City an action against the
petitioner for rescission of the Joint Venture Agreement. They
prayed therein that pending the hearing of the case, a writ of
preliminary injunction be issued to enjoin the petitioner from selling
the lots subject of the agreement and that after hearing, the writ be
made permanent; the agreement be rescinded; and the petitioner
be ordered to pay the PNB the stipulated 15% per annum of the
outstanding obligation and to pay the plaintiffs attorney's fees,
exemplary damages, expenses of litigation, and costs of suit. This
case was docketed as Civil Case No. 612 at Branch 64 of the said
court.
In its answer, which was prepared and signed by Atty. Apolonio G.
Reyes, the petitioner sought the denial of the writ of preliminary
injunction, the dismissal of the complaint, and payment in its favor
of (a) P10 million by way of actual damages; (b) P5 million by way of
return to the petitioner of the amount advanced to the Carreons,
payments to the PNB, and cost of the work on the subdivision; (c)
P100,000.00 by way of exemplary damages; (d) any and all
damages up to the amount of P4,638,420.00 which the petitioner
may suffer under the terms of its Performance Bond in favor of the
National Housing Authority; (e) P50,000.00 as attorney's fees; and
(f) costs of suit.
On 9 April 1985, the petitioner engaged the services of private
respondent Atty. Manuel S. Fonacier, Jr., [4] who then entered his
appearance in Civil Case No. 612.
While the said case was pending, or on 24 July 1992, the petitioner,
without the knowledge of the private respondent, entered into a
Memorandum of Agreement (MOA)[5] with another land developer,
Filstream International, Inc. (hereinafter Filstream). Under this MOA,
the former assigned its rights and obligations under the Joint
Venture Agreement in favor of the latter for a consideration of P28
million, payable within twenty-four months.
On 31 March 1993, the petitioner terminated the legal services of
the private respondent. At the time the petitioner had already
received P7 million from Filstream.

Upon knowing the existence of the MOA, the private respondent

filed in Civil Case No. 612 an Urgent Motion to Direct Payment of
Attorney's Fees and/or Register Attorney's Charging Lien praying,
among other things, that the petitioner be ordered to pay him the
sum of P700,000.00 as his contingent fee in the case.[6]
After hearing the motion, the trial court issued an order dated 11
October 1993 directing the petitioner to pay the private respondent
the sum of P600,000.00 as attorney's fees on the basis of quantum
meruit.
The trial court justified the award in this manner:
Insofar as material to the resolution of this Motion the records of this
case show that movant Atty. Fonacier became the counsel of
defendant Research in May 1985 while this case has been in
progress. (Records, p.770). By this time also, the defendant
Research has been enjoined by the Court from executing Contracts
To Sell involving Saranay Homes Subdivision . . . . (Order dated
December 3, 1984, Records pp. 625-626). However, the said
counsel for defendant Research prepared for the latter various
pleadings and represented it in Court (See Records after May 1985).
Until his services were terminated the lawyer client relationship
between Atty. Fonacier and Research was governed by a "contract"
embodied in a letter addressed to Atty. Fonacier on April 19, 1985
[sic], the pertinent portion of which is reproduced below, as follows .
..
xxx
Soon after said letter, cases were referred to him including this case.
In accordance with their agreement, there were instances that
Research gave Atty. Fonacier ten (10%) percent of the amount
received as the latter's attorney's fees pursuant to their agreement.
The instant case in which defendant is praying to be awarded
attorney's fees, is an action for rescission of the Joint Venture
Agreement between plaintiffs, Patricio Sarile, et al., as owners of a
parcel of land and defendant Research & Service Realty, Inc., as
developer of the land. At the time Atty. Fonacier entered his
appearance as counsel for defendant Research, the Court has issued
a preliminary injunction against Research. Thus all developmental
and commercial activities of defendant had to stop. In this regard,
Atty. Fonacier did spade work towards persuading the plaintiffs to
agree to the relaxation of the effects of the injunction to pave the
way to a negotiation with a third-party, the Filstream. Atty.
Fonancier's efforts were complemented by the efforts of his
counterpart in the plaintiff's side. The third-party Filstream Inc.,
became the assignee of defendant Research. In this connection, a

memorandum of agreement was entered into between them. By

the terms of agreement, defendant Research will be receiving from
the third party Filstream International, Inc. (Filstream) the following
amount. . . .
xxx
The termination of the legal services of Atty. Fonacier was made
definite on March 31, 1993 at which time the Memorandum of
Agreement which Research entered into with Filstream, Inc., has
already been effective. By this time also, defendant Research has
already received the first two stipulated consideration of the
agreement in the total sum of Six Million (P6,000,000.00). The
necessary and legal consequence of said "Memorandum of
Agreement" is the termination of the case insofar as plaintiff Patricio
Sarile, et al. and defendant Research is concerned. The conclusion
of the Memorandum of Agreement insofar as the cause of Research
is concerned, is a legal victory for defendant Research. What could
have been a loss in investment has been turned to a legal victory.
Atty. Fonancier's effort contributed to defendant's victory, albeit
outside the Court which would not have been possible without the
legal maneuvering of a lawyer.
The dismissal of the case before this Court will come in a matter of
time considering that plaintiffs, with the assumption by the third
party, Filstream Inc., of what were supposed to be the obligations to
them of defendant Research pursuant to their Joint Venture
Agreement, is no longer interested in pursuing the rescission.
It is a matter of record that Atty. Fonacier is the last of the three
lawyers who handled this case. Moreover it is Atty. Fonacier who
contributed to the forging of the memorandum of agreement as
testified to by Atty. Rogel Atienza one of the two retained counsels
of plaintiffs.
Considering the importance which is attached to this case, certainly
it would not be fair for Atty. Fonacier if his attorney's fees in this
case would be equated only to the measly monthly allowance of
(P800.00) Pesos and office space and other office facilities provided
by defendant Research. Ten (10%) per cent of the amount which
Research had received from Filstream at the time of the termination
of a lawyer-client relationship between Atty. Fonacier and Research
or P600,000.00 will be a just and equitable compensation for Atty.
Fonancier's legal services, by way of quantum meruit (See Cabildo v.
Provincial Treasurer, Ilocos Norte, et al., 54 SCRA 26).[7]
In its Order[8] of 12 January 1994, the trial court denied the
petitioner's motion for reconsideration of the above order.

The petitioner appealed to the Court of Appeals. In its Appellant's

Brief,[9] the petitioner alleged that the private respondent was not
entitled to attorney's fees under the retainer contract. Moreover,
the private respondent did not exert any effort to amicably settle
the case, nor was he even present during the negotiations for the
settlement of the same. There was, therefore, no legal and factual
justification for the private respondent's "fantastic and unreasonable
claim for attorney's fees of P600,000.00."
On the other hand, the private respondent asserted that he was
assured by the petitioner that non-collection cases were included in
the contingent fee arrangement specified in the retainer contract
wherein there was to be contingent compensation for any award
arising from any lawsuit handled by him. According to him, Civil
Case No. 612 was not the only "non-collection" case he handled for
the petitioner. There was a "right of way" dispute where the
petitioner was awarded P50,000.00, and the latter paid him
P5,000.00, or 10% of the award as attorney's fees. He thus stressed
that since under the memorandum of agreement the petitioner was
to receive P28 million, he should be entitled to 10% thereof or P2.8
million as attorney's fees.
In its decision [10] of 31 March 1995, the Court of Appeals affirmed
the challenged order of the trial court. It ratiocinated as follows:
Movant-appellee, on the other hand, correctly argues that it was the
clear intention of appellant and counsel to compensate the latter for
any legal services rendered by him to the former. Stated otherwise,
it was never the intention of the parties in the instant appeal that
counsel's services shall be free or to be rendered ex gratia.
xxx
It must in addition be underscored that the retainer contract of April
9, 1985 is the law that governs the relationship between appellant
and appellee. In fact, the following provisions squarely and
categorically supports the award of P600,000.00 to counsel, to wit:
Minimal allowance of P800 per month plus contingent fees and
collection cases (case to case basis) aside from the attorney's fee
recovered from any law suit.
(Paragraph 3, Retainer Contract)
In an American jurisprudence on this point cited in local annotation
on the Canon of Professional Ethics, it was held that "if a lawyer
renders valuable services to one who receives the benefits thereof,
a promise to pay a reasonable value is presumed, unless such
services were intended to be gratuitous" (Young vs. Buere, 78 Cal.

Am. 127) In effect, to compensate a lawyer, we are faced with the

pivotal question: "was the legal services intended to be free or not?"
If it is not free, then, appellant must simply pay. The 10%
contingent fee of the amount collected and/or to be collected in Civil
Case No. 612 of the lower court, is, to Our mind fair and reasonable.
As ruled by the Supreme Court in the case of Cosmopolitan
Insurance Co. vs. Angel Reyes (G.R. L-20199, Nov. 23, 1965) 15%
was even deemed reasonable. [11]
The petitioner filed a motion for reconsideration [12] on the ground
among other things, that the decision is contrary to the evidence, as
the trial court granted the claim for attorney's fees based on
quantum meruit, yet, the Court of Appeals granted the same on a
contingent basis which it based on an erroneous quotation and
comprehension of the following provision of the retainer contract:
Minimal allowance of P800.00 per month plus contingent fees on
collection cases (case to case basis) aside from the attorney's fees
recovered from any law suit. (underscoring ours) [13]
In its decision, the Court of Appeals substituted the word "on" after
"contingent fees" with the word "and." Under the aforequoted
paragraph, the private respondent was entitled to attorney's fees on
contingent basis in collection cases only. In non collection cases, he
was entitled only to the attorney's fees that might be recovered in
the lawsuit. [14] Since Civil Case No. 612 is not a collection case but
an action for rescission of a contract, then the aforequoted
paragraph is not applicable as a basis for awarding attorney's fees
to the private respondent. [15]
Finding nothing new in the motion for reconsideration, the Court of
Appeals denied it in the re-solution [16] of 15 February 1996.
The petitioner then came to us via this petition for review wherein it
contends that
I
RESPONDENT COURT OF APPEALS HAD DECIDED THE CASE NOT IN
ACCORD WITH LAW AND THE UNDISPUTED FACTS OF THE CASE.
II
RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION IN AWARDING ON CONTINGENT BASIS RESPONDENTAPPELLEE'S ATTORNEY'S FEES ON THE BASIS OF A MEMORANDUM
OF AGREEMENT IN WHICH HE HAD NO PARTICIPATION IN THE
NEGOTIATION AND PREPARATION THEREOF.

III
RESPONDENT COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION
IN AWARDING EXCESSIVE AND UNREASONABLE ATTORNEY'S FEES.
IV
THE TRIAL COURT AND THE RESPONDENT COURT OF APPEALS HAVE
NO JURISDICTION TO SATISFY ATTORNEY'S CHARGING LIEN ON A
SUM OF MONEY THAT THE COURT HAD NO AUTHORITY TO DISPOSE
OF AND OVER WHICH THE TRIAL COURT HAD MADE NO FINAL
ADJUDICATION.
The petitioner's more important argument in support of the first
error is the Court of Appeals' misquotation of the provision in the
retainer contract regarding attorney's fees on contingent basis,
which the petitioner had stressed in its motion for reconsideration.
The petitioner maintains that under the contract, attorney's fees on
contingent basis could only be awarded in collection cases, and Civil
Case No. 612 is not a collection case. Hence, the Court of Appeals
erred in affirming the award on that basis, while the trial court was
correct in applying the principle of quantum meruit.
In its second assigned error, the petitioner asserts that the private
respondent admitted in his Urgent Motion to Direct Payment of
Attorney's Fees and/or Register Attorney's Charging Lien that he had
not participated in the negotiations and preparation of the
memorandum of agreement, thus:
Despite the dishonest concealment, by the light of Providence
coupled with a streak of good luck, counsel discovered in the first
week of March 1993 that the parties had respectively entered into a
meaningful agreement with a third-party as early as July 27, 1992,
which in the case of client, case in the form of a "Memorandum of
Agreement" (MOA) . . . . [17]
The third assigned error is but a logical consequence of the second,
and the petitioner maintains that since the private respondent "did
not do anything spectacular or out of the ordinary" in Civil Case No.
612, "except to ask for the suspension or postponement of the
proceedings thereof from 1985 to 1993," the P600,000.00 attorney's
fees, whether on contingent basis or quantum meruit, is excessive
and unreasonable.
In the fourth imputed error, the petitioner argues that the
memorandum of agreement was never submitted to the trial court,
and the trial court never made any disposition or adjudication over
the proceeds of the said agreement. What would eventually happen
then is the dismissal of Civil Case No. 612, as the trial court itself

had intimated in its challenged order. Necessarily then, there would

be no money adjudication in favor of the petitioner as the defendant
therein. Since such lien is collectible only from an award of money
that a court would adjudicate in a judgment rendered in favor of the
attorney's client pursuant to Section 37, Rule 138 of the Rules of
Court, it would follow that no attorney's charging lien could be
validly entered.
We uphold the petitioner, but not necessarily on the strength of it
arguments.
The parties are in agreement that the lawyer-client relationship
between the petitioner and the private respondent, Atty. Manuel S.
Fonacier, Jr., was governed by a retainer contract dated 9 April
1985. The petitioner's undertakings thereunder are outlined as
follows:
I.
1.

CORPORAT[ION]:
Corporation will provide the following:

a.
Office space airconditioned
b.
Furnishings, tables, executive chairs, visitor's chair &
steel filing cabinet
c.
Telephone facilities and partial secretarial services.
2.
Legal service referrals by the corporation to its clients for
additional income of the lawyer.
3.
Minimal allowance of P800 per month plus contingent fees on
contingent fees on collection cases (case to case basis) aside from
the attorney's fees recovered from any lawsuit.
4.
That in case of legal problems to be attended to outside
Metro Manila and Suburbs, the corporation shall defray expenses for
transportation, lodging and other legal expenses incidental in the
case. [18]
An analysis of the contract clearly shows that it was a general
retainer, since its primary purpose was to secure beforehand the
services of the private respondent for any legal problem which
might afterward arise. [19] The fixed retaining fee was P800.00 a
month. A retaining fee is a preliminary fee paid to ensure and
secure a lawyer's future services, to remunerate him for being
deprived, by being retained by one party, of the opportunity of
rendering services to the other party and of receiving pay from him.
In the absence of an agreement to the contrary, the retaining fee is
neither made nor received in consideration of the services

contemplated; it is apart from what the client has agreed to pay for
the services which he has retained him to perform. [20]
In the retainer contract in question, there was no intention to make
the retaining fee as the attorney's fees for the services
contemplated. This is evident from the provision allowing additional
attorney's fees in collection cases consisting of (1) a "contingent
fee" and (2) whatever the petitioner might recover as attorney's
fees in each case. The latter could only refer to the attorney's fees
which the court might award to the petitioner in appropriate cases.
While the contract did not mention non-collection cases, it is,
nevertheless, clear therefrom that such cases were not excluded
from the retainership, as borne out by the provision requiring the
private respondent to "make appearances in Court for cases
involving the corporation or any allied cases pertaining to the
latter." As to such cases, there was no specific stipulation of
additional attorney's fees. Nevertheless, nothing therein shows that
the private respondent agreed to render professional service in such
cases gratuitously. The absence then of the stipulation of additional
attorney's fees cannot be construed as a bar to the collection of
additional attorney's fees in non-collection cases.
Two basic principles come into play. The first is as stated earlier,
viz., that the retaining fee is neither made nor received in
consideration of the services contemplated unless the contract itself
so provides. The second is that, unless expressly stipulated,
rendition of professional services by a lawyer is for a fee or
compensation and is not gratuitous. This is implicit from the
opening clause of Section 24, Rule 138 of the Rules of Court, which
states that "[a]n attorney shall be entitled to have and recover from
his client no more than a reasonable compensation for his
services . . .," and by virtue of the innominate contract of facio ut
des (I do and you give), as enunciated by this Court in Corpus v.
Court of Appeals, [21] thus:
Moreover, the payment of attorney's fees . . . may also be justified
by virtue of the innominate contract of facio ut des (I do and you
give) which is based on the principle that "no one shall unjustly
enrich himself at the expense of another." Innominate contracts
have been elevated to a codal provision in the New Civil Code by
providing under Article 1307 that such contracts shall be regulated
by the stipulations of the parties, by the general provisions or
principles of obligations and contracts, by the rules governing the
most analogous nominate contracts, and by the customs of the
people. The rationale of this article was stated in the 1903 case of
Perez vs. Pomar (2 Phil. 682).
In Perez v. Pomar, [22] this Court stated:

[B]ut whether the plaintiff's services were solicited or whether they

were offered to the defendant for his assistance, inasmuch as these
services were accepted and made use of by the latter, we must
consider that there was a tacit and mutual consent as to the
rendition of the services. This gives rise to the obligation upon the
person benefited by the services to make compensation therefor,
since the bilateral obligation to render service as interpreter, on the
one hand, and on the other to pay for the services rendered, is
thereby incurred. (Arts. 1088, 1089, and 1262 of the Civil Code).
Accordingly, as to non-collection cases where the petitioner was
either a plaintiff or a defendant, the private respondent could still
collect attorney's fees, apart from his regular retaining fee, on the
basis of any-supplemental agreement or, in its absence, under the
principle of quantum meruit. There was no such supplemental
agreement in this case.
We cannot sustain the private respondent's theory that he could
collect attorney's fees on contingent basis because in the other
"non-collection" cases he handled for the petitioner' he was paid on
contingent basis at the rate of 10% of what was awarded to the
petitioner. In the first place, Civil Case No. 612 is still unresolved,
and no judgment has yet been rendered in favor of the petitioner.
The amount in the memorandum of agreement could not be made
the basis of a "contingent fee" in the said case for at least three
reasons. First, in his own Urgent Motion to Direct Payment of
Attorney's Fees and/or Register Attorney's Charging Lien, the private
respondent based the contingent fee not only in Civil Case No. 612
but in a "multitude of peripheral cases," and the contingent fee
would become due and collectible only if and when the petitioner
obtains a judgment in his favor in Civil Case No. 612. The second
paragraph of page 3 of the said motion reads as follows:
Hence, from May 1985 and continuously thru the years without
interruption and surviving a series of no less than five (5) changes of
Presiding Judges, the undersigned counsel labored tirelessly in
handling the defense of client. In addition to the instant lawsuit, a
multitude of peripheral cases, civil, criminal and administrative,
arising from the non-delivery of titles by client on fully paid lots in
the subdivision project were also filed as a consequence, not only
against defendant but also against its President and Chief Executive
Officer (CEO). Needless to state, the undersigned was designated to
handle majority of these cases for both, where he appeared and
conducted trial without any "appearance fees" for more than eight
(8) long years solely relying on the contingent fee in case of
recovery in the instant main case. [23] (underscoring supplied for
emphasis)

Second, the amount of P28 million, which Filstream agreed to pay

the petitioner, was not a judgment or award in favor of the
petitioner in Civil Case No. 612. It was the consideration of the
assignment, transfer, and conveyance to Filstream of all the
petitioner's "rights, interest and participation embodied and
specified in the Joint Venture Agreement (Annex "A") and in all the
eight hundred seventy-five (875) parcels of land comprising the
SARANAY HOMES subdivision. . . ." The plaintiffs in Civil Case No.
612 were not parties to the memorandum of agreement, and there
is no showing that they agreed to the assignment of the petitioner's
rights, interest, and participation in the Joint Venture Agreement.
While paragraph 10 of the memorandum of agreement provides that
the petitioner
shall cause to sign a JOINT MOTION TO DISMISS, together with the
CARREONS regarding Civil Case No. 612 of the Regional Trial Court
of Makati and to further DISMISS, the case filed against PNB
docketed as Civil Case No. 6918 of the Regional Trial Court of Makati
. . . [and] shall obtain the dismissal of all cases filed by lot buyers
against it now pending with the HLURB
the fact remains that no such motion to dismiss has been filed yet in
Civil Case No. 612, and there is no assurance whatsoever that the
plaintiffs therein will sign a joint motion to dismiss. Third, as
correctly posited by the petitioner, the private respondent had no
participation in the negotiations leading to, and in the preparation
of, the memorandum of agreement.
Indisputably then, the private respondent's attorney's fee on
"contingent basis" in Civil Case No. 612 is unwarranted. If at all, he
could only be entitled to attorney's fees on quantum meruit basis as
of the expiration of his retainer contract on 31 March 1993.
Quantum meruit simply means "as much as he deserves." [24] In no
case, however, must a lawyer be allowed to recover more than what
is reasonable pursuant to Section 24, Rule 138 of the Rules of Court,
which provides:
SEC. 24.
Compensation of attorneys, agreement as to fees.
An attorney shall be entitled to have and recover from his client no
more than a reasonable compensation for his services, with a view
to the importance of the subject-matter of the controversy, the
extent of the services rendered, and the professional standing of the
attorney. No court shall be bound by the opinion of attorneys as
expert witnesses as to the proper compensation, but may disregard
such testimony and base its conclusion on its own professional
knowledge. A written contract for services shall control the amount
to be paid therefor unless found by the court to be unconscionable
or unreasonable.

This Court had earlier declared the following as circumstances to be

considered in determining the reasonableness of a claim for
attorney's fees: (1) the amount and character of the service
rendered; (2) labor, time, and trouble involved; (3) the nature and
importance of the litigation or business in which the services were
rendered; (4) the responsibility imposed; (5) the amount of money
or the value of the property affected by the controversy or involved
in the employment; (6) the skill and experience called for in the
performance of the services; (7) the professional character and
social standing of the attorney; (8) the results secured; and (9)
whether the fee is absolute or contingent, it being recognized that
an attorney may properly charge a much larger fee when it is
contingent than when it is not. [25]
Rule 20.1, Canon 20 of the Code of Professional Responsibility
enumerates the following factors which should guide a lawyer in
determining his fees:
(a)
The time spent and the extent of the services
rendered or required;
(b)
The novelty and difficulty of the questions
involved;
(c)
The importance of the subject matter;
(d)
The skill demanded;
(e)
The probability of losing other employment as
a result of acceptance of the proffered case;
(f)
The customary charges for similar services
and the schedule of fees of the IBP Chapter to which he belongs;
(g)
The amount involved in the controversy and
the benefits resulting to the client from the service;
(h)
The contingency or certainty of compensation;
(i)
The character of the employment, whether occasional
or established; and
(j)
The professional standing of the lawyer.
It was incumbent upon the private respondent to prove the
reasonable amount of attorney's fees, taking into account the
foregoing factors or circumstances. The records before us and the
trial court's 11 October 1993 order do not confirm that the private
respondent proved by either testimonial or documentary evidence
that the award of P600,000.00 was reasonable. The private
respondent's testimony thereon was crucial. Yet, it does not appear
from the 11 October 1993 order that he took the witness stand.
From the Minutes of the trial court attached to the Rollo of CA-G.R.
CV No. 44839, [26] it appears that only Atty. Atienza and Mr. Suazo
gave oral testimony on the motion.

It necessarily follows then that the 11 October 1993 order has

insufficient factual basis, and the trial court committed grave abuse
of discretion in arbitrarily fixing the private respondent's attorney's
fees at P600,000.00. The affirmance of the said order by the Court
of Appeals premised on the provision in the retainer contract
regarding contingent fee is thus fatally flawed.
The interest for both the petitioner and the private respondent
demands that the trial court should conduct further proceedings in
Civil Case No. 612 relative to the private respondent's motion for the
payment of attorney's fees and, thereafter, fix it in light of Section
24, Rule 138 of the Rules of Court; Rule 20.1, Canon 20 of the Code
of Professional Responsibility; and the jurisprudentially established
guiding principles in determining attorney's fees on quantum meruit
basis.
WHEREFORE, the instant petition is GRANTED. The challenged
Decision of 31 March 1995 of the Court of Appeals in CA-G.R. CV No.
44839 and the Order of 11 October 1993 of the Regional Trial Court
of Makati, Branch 64, in Civil Case No. 612 are hereby SET ASIDE.
The trial court is further DIRECTED to set for further hearing the
private respondent's Urgent Motion to Direct Payment of Attorney's
Fees and/or Register Attorney's Charging Lien and thereafter to fix
the private respondent's attorney's fees in Civil Case No. 612 as of
31 March 1993 when his contract with the petitioner was effectively
terminated, taking into account Section 24, Rule 138 of the Rules of
Court; Rule 20.1, Ca