PALE REPORTING : CASE DIGESTS: ATTY.
CAPULE : CEAC
A.C. No. 9872 January 28, 2014
NATIVIDAD P. NAVARRO and HILDA S.
PRESBITERO, Complainants,
vs.
ATTY. IVAN M. SOLIDUM, JR., Respondent.
Brief history on how Atty. Solidum became counsel of
Presbitero:
Respondent signed a retainer agreement with Presbitero to
follow up the release of the payment for the latters 2.7-hectare
property located in Bacolod which was the subject of a Voluntary
Offer to Sell (VOS) to the Department of Agrarian Reform (DAR).
The agreement also included the payment of the debts of
Presbiteros late husband to the Philippine National Bank (PNB). .
Presbitero alleged that PNBs claim had already prescribed, and
she engaged the services of respondent to represent her in the
matter. Respondent proposed the filing of a case for quieting of
title against PNB. Respondent and Presbitero agreed to an
attorneys fee of 10% of the proceeds from the VOS or the sale
of the property, with the expenses to be advanced by Presbitero
but deductible from respondents fees. Respondent received
P50,000 from Presbitero, supposedly for the expenses of the
case, but nothing came out of it.
In May 2006, Presbiteros daughter, Ma. Theresa P. Yulo
(Yulo), also engaged respondents services to handle the
registration of her 18.85-hectare lot located in Nasud-ong,
Caradio-an, Himamaylan, Negros. Yulo convinced her sister,
Navarro, to finance the expenses for the registration of the
property. Respondent undertook to register the property in
consideration of 30% of the value of the property once it is
registered. Respondent obtained P200,000 from Navarro for the
registration expenses. Navarro later learned that the registration
decree over the property was already issued in the name of one
Teodoro Yulo. Navarro alleged that she would not have spent for
the registration of the property if respondent only apprised her
of the real situation of the property.
FACTS:
On 25 May 2006, respondent obtained a loan of P1,000,000
from Navarro to finance his sugar trading business.
Respondent and Navarro executed a Memorandum of
Agreement (MOA) and agreed that the loan (a) shall be for a
period of one year; (b) shall earn interest at the rate of 10% per
month; and (c) shall be secured by a real estate mortgage over
a property located in Barangay Alijis, Bacolod City, covered by
Transfer Certificate of Title No. 304688. They also agreed that
respondent shall issue postdated checks to cover the principal
amount of the loan as well as the interest thereon.
In June 2006, respondent obtained an additional loan of
P1,000,000 from Navarro, covered by a second MOA with the
same terms and conditions as the first MOA. At the same time,
respondent obtained a loan of P1,000,000 from
Presbitero covered by a third MOA, except that the real estate
mortgage was over a 263-square-meter property located in
Barangay Taculing, Bacolod City.
Presbitero was dissatisfied with the value of the 263-square-
meter property mortgaged under the third MOA, and respondent
promised to execute a real estate mortgage over a 1,000-
square-meter parcel of land adjacent to the 4,000-square-meter
property he mortgaged to Navarro. However, respondent did not
execute a deed for the additional security.
Respondent paid the loan interest for the first few months. He
was able to pay complainants a total of P900,000. Thereafter, he
failed to pay either the principal amount or the interest thereon.
In September 2006, the checks issued by respondent to
complainants could no longer be negotiated because the
accounts against which they were drawn were already closed.
In November 2006, respondent withdrew as counsel for Yulo. On
the other hand, Presbitero terminated the services of
respondent as counsel. Complainants then filed petitions for the
1

judicial foreclosure of the mortgages executed by respondent in
their favor. Respondent countered that the 10% monthly interest
on the loan was usurious and illegal.
Complainants alleged that respondent induced them to grant
him loans by offering very high interest rates. He also prepared
and signed the checks which turned out to be drawn against his
sons accounts. Complainants further alleged that respondent
deceived them regarding the identity and value of the property
he mortgaged because he showed them a different property
from that which he owned. Presbitero further alleged that
respondent mortgaged his 263-square-meter property to her for
P1,000,000 but he later sold it for only P150,000.
Respondent, for his defense, alleged that he was engaged in
sugar and realty business and that it was Yulo who convinced
Presbitero and Navarro to extend him loans. Yulo also assured
him that Presbitero would help him with the refining of raw
sugar through Victorias Milling Company, Inc. Respondent
alleged that Navarro fixed the interest rate and he agreed
because he needed the money. He alleged that their business
transactions were secured by real estate mortgages and
covered by postdated checks. Respondent denied that the
property he mortgaged to Presbitero was less than the value of
the loan. He also denied that he sold the property because the
sale was actually rescinded. Respondent claimed that the
property he mortgaged to Navarro was valuable and it was
actually worth more than P8,000,000.
After conducting a hearing and considering the position papers
submitted by the parties, the IBP-CBD found that respondent
was guilty of violating Rule 1.01 of the Code of Professional
Responsibility for committing the following acts:
(1) signing drawn checks against the account of his son
as if they were from his own account;
(2) misrepresenting to Navarro the identity of the lot he
mortgaged to her;
(3) misrepresenting to Presbitero the true value of the
263-square-meter lot he mortgaged to her;
PALE REPORTING : CASE DIGESTS: ATTY. CAPULE : CEAC
(4) conspiring with Yulo to obtain the loans from
complainants;
(5) agreeing or promising to pay 10% interest on his
loans although he knew that it was exorbitant; and
(6) failing to pay his loans because the checks he issued
were dishonored as the accounts were already closed.
The IBP-CBD also found that respondent violated Canon 16
and Rule 16.01 of the Code of Professional Responsibility
when he failed to properly account for the various funds he
received from complainants.
In addition, the IBP-CBD found that respondent violated Rule
16.04 of the Code of Professional Responsibility which
prohibits borrowing money from a client unless the clients
interest is fully protected or the client is given independent
advice. The IBP-CBD recommended that respondent be meted
the penalty of disbarment.
The IBP Board of Governors adopted and approved the
recommendation of the IBP-CBD with modification by reducing
the recommended penalty from disbarment to suspension from
the practice of law for two years
ISSUE: Whether respondent violated the Code of Professional
Responsibility.
RULING: YES
I. Rule 1.01 of the Code of Professional Responsibility provides:
Rule 1.01. - A lawyer shall not engage in unlawful,
dishonest, immoral or deceitful conduct.
Respondent failed to refute that the checks he issued to his
client Presbitero and to Navarro belonged to his son, Ivan Garcia
Solidum III whose name is similar to his name. He only claimed
that complainants knew that he could no longer open a current
bank account, and that they even suggested that his wife or son
issue the checks for him. However, we are inclined to agree
with the IBP-CBDs finding that he made complainants
2

believe that the account belonged to him. In fact,
respondent signed in the presence of Navarro the first batch of
checks he issued to Navarro. Respondent sent the second batch
of checks to Navarro and the third batch of checks to Presbitero
through a messenger, and complainants believed that the
checks belonged to accounts in respondents name.
It is clear that respondent violated Rule 1.01 of the Code
of Professional Responsibility. We have ruled that conduct,
as used in the Rule, is not confined to the performance of a
lawyers professional duties.1 A lawyer may be disciplined for
misconduct committed either in his professional or private
capacity. The test is whether his conduct shows him to be
wanting in moral character, honesty, probity, and good
demeanor, or whether it renders him unworthy to
continue as an officer of the court.
In this case, the loan agreements with Navarro were done
in respondents private capacity. Although Navarro financed
the registration of Yulos lot, respondent and Navarro had no
lawyer-client relationship. However, respondent was Presbiteros
counsel at the time she granted him a loan. It was established
that respondent misled Presbitero on the value of the property
he mortgaged as a collateral for his loan from her. To appease
Presbitero, respondent even made a Deed of Undertaking that
he would give her another 1,000-square-meter lot as additional
collateral but he failed to do so.
Clearly, respondent is guilty of engaging in dishonest and
deceitful conduct, both in his professional capacity with
respect to his client, Presbitero, and in his private
capacity with respect to complainant Navarro. Both
Presbitero and Navarro allowed respondent to draft the terms of
the loan agreements. Respondent drafted the MOAs
knowing that the interest rates were exorbitant. Later,
using his knowledge of the law, he assailed the validity
of the same MOAs he prepared. He issued checks that
were drawn from his sons account whose name was
similar to his without informing complainants. Further,
PALE REPORTING : CASE DIGESTS: ATTY. CAPULE : CEAC
there is nothing in the records that will show that
respondent paid or undertook to pay the loans he
obtained from complainants.
II. Canon 16 and Rule 16.01 of the Code of Professional
Responsibility provide:
CANON 16. - A LAWYER SHALL HOLD IN TRUST ALL
MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY
COME INTO HIS POSSESSION.
Rule 16.01 A lawyer shall account for all money or
property collected or received for or from the client.
We agree with the IBP-CBD that respondent failed to fulfill this
duty. In this case, the IBP-CBD pointed out that respondent
received various amounts from complainants but he could not
account for all of them.
Navarro, who financed the registration of Yulos 18.85-hectare
lot, claimed that respondent received P265,000 from her.
Respondent countered that P105,000 was paid for real estate
taxes but he could not present any receipt to prove his
claim. Respondent also claimed that he paid P70,000 to the
surveyor but the receipt was only for P15,000. Respondent
claimed that he paid P50,000 for filing fee, publication fee, and
other expenses but again, he could not substantiate his claims
with any receipt. As pointed out by the IBP-CBD, respondent had
been less than diligent in accounting for the funds he received
from Navarro for the registration of Yulos property.
As regards Presbitero, it was established during the
clarificatory hearing that respondent received P50,000 from
Presbitero. As the IBP-CBD pointed out, the records do not
show how respondent spent the funds because he was
not transparent in liquidating the money he received from
Presbitero.
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 PALE REPORTING : CASE DIGESTS: ATTY. CAPULE : CEAC

Clearly, respondent had been negligent in properly accounting that the money was spent for that particular purpose. If
for the money he received from his client, Presbitero, Indeed, the lawyer does not use the money for the intended
his failure to return the excess money in his possession purpose, he must immediately return the money to his
gives rise to the presumption that he has client. Respondent was given an opportunity to render
misappropriated it for his own use to the prejudice of, an accounting, and he failed. He must return the full
and in violation of the trust reposed in him by, the client. amount of the advances given him by Presbitero,
amounting to P50,000.
III. Rule 16.04 of the Code of Professional Responsibility
provides:

Rule 16.04. - A lawyer shall not borrow money from his client
unless the clients interests are fully protected by the nature of
the case or by independent advice. Neither shall a lawyer lend
money to a client except, when in the interest of justice, he has
to advance necessary expenses in a legal matter he is handling
for the client.

While respondents loan from Presbitero was secured by a MOA,

postdated checks and real estate mortgage, it turned out that
respondent misrepresented the value of the property he
mortgaged and that the checks he issued were not drawn from
his account but from that of his son. Respondent eventually
questioned the terms of the MOA that he himself prepared on
the ground that the interest rate imposed on his loan was
unconscionable. Finally, the checks issued by respondent to
Presbitero were dishonored because the accounts were already
closed. The interest of his client, Presbitero, as lender in
this case, was not fully protected. Respondent violated Rule
16.04 of the Code of Professional Responsibility, which
presumes that the client is disadvantaged by the lawyers
ability to use all the legal maneuverings to renege on his
obligation. In his dealings with his client Presbitero,
respondent took advantage of his knowledge of the law
as well as the trust and confidence reposed in him by his
client.

Nevertheless, when a lawyer receives money from a client for a

particular purpose involving the client-attorney relationship, he
is bound to render an accounting to the client showing

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PALE REPORTING : CASE DIGESTS: ATTY. CAPULE : CEAC

A.C. No. 3773 September 24, 1997

ANGELITA C. ORCINO, complainant,

vs.
ATTY. JOSUE GASPAR, respondent.

FACTS: Complainant engaged the services of respondent to

prosecute a criminal case she intended to file against several
suspects in the slaying of her husband. In consideration thereof,
complainant bound herself to pay respondent legal fees of
P20,000.00 P10,000.00 to be paid upon signing of the
contract and the balance to be paid on or before the conclusion
of the case. Complainant was also to pay P500.00 per
appearance of respondent before the court and fiscal.

In accordance with the contract, complainant was able to the

P20,000.00 legal fees. Forthwith, respondent entered into his
corresponding duties.

As private prosecutor, respondent religiously attended the bail

hearings for the accused although these hearings were
postponed on motion of the accused's counsel. Respondent
however failed to attend the hearing scheduled in
August 1991. It was at this nearing that the court, over
complainant's objections, granted bail to all the accused.
After the hearing, complainant immediately went to
respondent's residence and confronted him with his absence.
Respondent explained that he did not receive formal notice of
the hearing. Complainant became belligerent and started
accusing him of jeopardizing the case by his absence.
Respondent said that her suspicions were based on rumors and
intrigues fed to her by her relatives. Complainant, however,
continued accusing him belligerently. She asked for the records
of the case saying that she could refer them to another lawyer.
Stung by her words, respondent gave her the records.
Complainant never returned the records nor did she see
respondent.
5

On September 18, 1991, respondent filed before the trial court a
"Motion to Withdraw as Counsel." The court issued an order
directing respondent to secure complainant's consent to the
motion "and his appearance as private prosecutor shall continue
until he has secured this consent."
Complainant refused to sign her conformity to respondent's
withdrawal. 12 Meanwhile, the hearings in the criminal case
continued. Respondent did not appear at the hearings nor did he
contact complainant. Complainant was thus compelled to
engage the services of another lawyer.
ISSUE: Whether or not respondent is at liberty to withdraw as
counsel
RULING: NO
The rule in this jurisdiction is that a client has the absolute right
to terminate the attorney-client relation at any time with or
without cause. The right of an attorney to withdraw or terminate
the relation other than for sufficient cause is, however,
considerably restricted. Among the fundamental rules of ethics
is the principle that an attorney who undertakes to conduct an
action impliedly stipulates to carry it to its conclusion. He is not
at liberty to abandon it without reasonable cause. A lawyer's
right to withdraw from a case before its final adjudication arises
only from the client's written consent or from a good cause.
Section 26 of Rule 138 of the Revised Rules of Court provides:
Sec. 26. Change of attorneys An attorney may
retire at any time from any action or special proceeding,
by the written consent of his client filed in court. He may
also retire at any time from an action or special
proceeding, without the consent of his client, should the
court, on notice to the client and attorney, and on
hearing, determine that he ought to be allowed to retire.
In case of substitution, the name of the attorney newly
employed shall be entered on the docket of the court in
PALE REPORTING : CASE DIGESTS: ATTY. CAPULE : CEAC
place of the former one, and written notice of the change
shall be given to the adverse party.
Granting that respondent's motion without complainant's
consent was an application for withdrawal with the court, we
find that this reason is insufficient to justify his
withdrawal from the case. Respondent's withdrawal was
made on the ground that "there no longer exist[ed] the . . .
confidence" between them and that there had been "serious
differences between them relating to the manner of private
prosecution."
Rule 22.01 of Canon 22 of the Code of Professional
Responsibility provides:
CANON 22 A LAWYER SHALL WITHDRAW HIS
SERVICES ONLY FOR GOOD CAUSE AND UPON NOTICE
APPROPRIATE IN THE CIRCUMSTANCES.
Rule 22.01 A lawyer may withdraw his
services in any of the following cases:
a) When the client pursues an illegal or
immoral course of conduct in connection
with the matter he is handling;
b) When the client insists that the lawyer
pursue conduct violative of these canons
and rules;
c) When his inability to work with co-
counsel will not promote the best interest of
the client;
d) When the mental or physical condition of
the lawyer renders it difficult for him to
carry out the employment effectively;
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 PALE REPORTING : CASE DIGESTS: ATTY. CAPULE : CEAC

e) When the client deliberately fails to pay his part to do so will result in the imposition of stiffer
the fees for the services or fails to comply disciplinary action. SO ORDERED.
with the retainer agreement;

f) When the lawyer is elected or appointed

to public office; and

g) Other similar cases.

The instant case does not fall under any of the grounds
mentioned. Neither can this be considered analogous to
the grounds enumerated. As found by the Commission on Bar
Discipline, this case arose from a simple misunderstanding
between complainant and respondent.

Assuming, nevertheless, that respondent was justified in

terminating his services, he, however, cannot just do so and
leave complainant in the cold unprotected. The lawyer has no
right to presume that his petition for withdrawal will be granted
by the court. Until his withdrawal shall have been approved, the
lawyer remains counsel of record who is expected by his client
as well as by the court to do what the interests of his client
require. He must still appear on the date of hearing for the
attorney-client relation does not terminate formally until there is
a withdrawal of record.
Respondent expressly bound himself under the contract to bring
the criminal case to its termination. He was in fact paid in full
for his services. Respondent failed to comply with his
undertaking, hence, it is but fair that he return to
complainant half of the amount paid him.
IN VIEW WHEREOF, respondent is admonished to exercise more
prudence and judiciousness in dealing with his clients. He is
also ordered to return to complainant within fifteen (15)
days from notice the amount of ten thousand pesos
(P10,000.00) representing a portion of his legal fees
received from the latter with a warning that failure on
A.C. No. 6056 September 9, 2015
FELICISIMA MENDOZA Vda. DE ROBOSA, Complainant,
vs.
Attys. JUAN B. MENDOZA and EUSEBIO P. NAVARRO,
JR., Respondent.
FACTS: Eladio Mendoza (Eladio) applied for original registration
of two parcels of land (Lot Nos. 3771 and 2489) situated in
Calamba, Laguna before the Community Environment and
Natural Resources Office (CENRO) at Los Banos, Laguna and
Land Management Bureau (LMB) in Manila. 1 While his
application was still pending, Eladio died leaving all his children
as heirs to his estate; among them is herein complainant
Felicisima Mendoza Vda. De Robosa (Felicisima). Eladio's
children pursued the application and executed a Special Power
of Attomey2 (SPA) in favor of Felicisima. Their relative, Atty.
7

Mendoza, prepared and notarized the said SPA. They also
engaged the services of Atty. Mendoza as their counsel in the
proceedings before the CENRO and LMB.
On February 20, 1993, upon the behest of Atty. Mendoza,
Felicisima signed a Contract for Service 3 prepared by Atty.
Mendoza. The said contract stipulated that in the event of a
favorable CENRO or LMB resolution, Felicisima shall convey to
Atty. Mendoza one-fifth () of the lands subject of the
application or one-fifth () of the proceeds should the same
property be sold.
The CENRO and the LMB proceedings resulted in the dismissal of
Felicisima and her siblings application for Lot No. 2489 and the
partial grant of their application for Lot No. 3771. 4 The Bureau of
Lands issued an Original Certificate of Title (OCT) covering one-
third () or about 8,901 square meters of Lot No. 3771 in the
names of Felicisima and her siblings. Subsequently, Felicisima
and her siblings sold the land to Greenfield Corporation
(Greenfield) and received the amount of P2,000,000.00 as down
payment.
On October 15, 1998, Atty. Mendoza, joined by his wife Filomena
S. Mendoza, filed in the Regional Trial Court (RTC) of Tanauan,
Batangas a Complaint5 against Felicisima and her siblings.
Atty. Mendoza claimed that except for the amount of
P40,000.00, Felicisima and her siblings refused to pay his
attorneys fees equivalent to of the proceeds of the sale of
the land as stipulated in the Contract for Service.
In their Answer with Counterclaim,6 Felicisima and her siblings
denied the "existence and authenticity of the x x x Contract of
Service," adding that it did not reflect the true intention of the
parties as they only agreed to pay Atty. Mendoza P1,500.00 per
appearance and up to P1,500.00 for gasoline expenses.
Felicisima and her siblings hired the services of Atty. Navarro as
their counsel in Civil Case No. T-1080.
PALE REPORTING : CASE DIGESTS: ATTY. CAPULE : CEAC
On March 29, 2000, the RTC rendered judgment in favor of Atty.
Mendoza and against Felicisima and her siblings. The RTC ruled
that Felicisima failed to substantiate her claim that she did not
enter into a contingency contract for legal services with Atty.
Mendoza, and ordered Felicisima to pay Atty. Mendoza
P1,258,000.00 (for the land sold at P7,120,800.00) representing
attorneys fees as well as the total cost of suit.7
Atty. Navarro then filed a Notice of Appeal8on behalf of
Felicisima. The Court of Appeals (CA) ordered Felicisima to file
an appellants brief but Atty. Navarro failed to file the same
within the period granted by the CA. Consequently, the CA
dismissed Felicisimas appeal for non-compliance with Section
1(e), Rule 50 of the Revised Rules of Court.
On June 3, 2003, Felicisima filed a complaint-affidavit for
disbarment before this Court against Atty. Mendoza for allegedly
deceiving her into signing the Contract for Service by taking
advantage of her illiteracy, and against Atty. Navarro for
dereliction of duty in handling her case before the CA causing
her properties to be levied and sold at public auction.
Felicisima alleges that Atty. Mendoza made her sign a document
at her house without the presence of her siblings. Said
document (Contract for Service) was written in English which
she does not understand. She claims that Atty. Mendoza told her
the document will shield her from her siblings possible future
claims on the property because she alone is entitled to the
property as her siblings did not help her in processing the
application for original registration. She was not given a copy of
the said document and she discovered only during the trial that
Atty. Mendoza anchors his claim over of proceeds from the
sale of the land awarded by the CENRO and LMB on the same
document she had signed.12
As to Atty. Navarro, Felicisima claims that her case before the CA
was neglected despite repeated follow-ups on her part. She also
points out that Atty. Navarro abandoned her case before the RTC
8

when the latter failed to file an opposition to Atty. Mendozas
motion for execution pending appeal, which resulted in the loss
of her properties.13
In his Comment, Atty. Mendoza avers that for the application
with the CENRO and LMB, he agreed to be paid for his legal
services on a contingent basis, which contract was subsequently
found by the RTC to be valid. When it was time to collect his
attorneys fees, Felicisima and her siblings refused to pay him
without any justifiable reason and even threatened to shoot him
if he continued to press for his compensation. This left Atty.
Mendoza with no other recourse but to avail of the judicial
process to enforce his claim.
Atty. Navarro asserts that he did his best to win Felicisimas case
although he was unsuccessful. He explains that even before
handling Felicisimas case, he had been saddled by many cases
involving politicians and sympathizers, having previously served
as councilor in the Municipality of Sto. Tomas, Batangas for two
consecutive terms. He thus emphasized to Felicisima that in
order to "keep the case alive", he could file the Notice of Appeal
in her behalf, and instructed her to look for another lawyer who
has the time to attend to her case and that she would return to
him only when she failed to get one. However, Atty. Navarro
admits that since he was too preoccupied with so many cases in
the local courts, he had altogether forgotten about Felicisimas
case, not having seen her again as per their agreement.
IBPs Report and Recommendation: The Investigating
Commissioner of the IBP Commission on Bar Discipline (CBD)
submitted her Report and Recommendation 18 finding Atty.
Mendoza guilty of taking advantage of Felicisimas ignorance
just to have the Contract for Service signed. She held that Atty.
Mendoza violated Canon 17 of the Code of Professional
Responsibility (CPR) that a lawyer owes fidelity to the cause of
his client and shall be mindful of the trust and confidence
reposed on him, as well as Rule 20.04, Canon 20 which exhorts
lawyers to avoid controversies with clients concerning matters
PALE REPORTING : CASE DIGESTS: ATTY. CAPULE : CEAC
of compensation and to resort to judicial action only to prevent
imposition, injustice or fraud.19
As to Atty. Navarro, the Investigating Commissioner held that
his participation in politics affected his law practice and caused
him to forget about Felicisimas case. Having failed to file the
appellants brief as ordered by the CA, Atty. Navarro even filed a
Motion to Withdraw Appearance at a very late stage, leaving no
time for Felicisima to secure the services of another lawyer. His
infraction caused the eviction of Felicisima and her children from
their residence by virtue of the writ of execution and public
auction of her real properties. The Investigating Commissioner
further said that Atty. Navarros acts showed lack of diligence in
violation of Canon 18 of the CPR and his Lawyers Oath.20
MAIN ISSUE: Whether the Contract for Service between
complainant and Atty. Mendoza is valid
RULING: YES
We cannot sustain the finding of the IBP that Atty.
Mendoza misled Felicisima into signing the above
contract which supposedly was intended to protect her from
the claims of her siblings who did not spend for the application
with the CENRO and LMB. Such finding was based solely on the
statements of Felicisima in her affidavit-complaint. While
Felicisima made a reference to her testimony before the RTC,
she did not attach the transcript of stenographic notes of the
said testimony detailing the circumstances of her signing the
Contract for Service. Neither is the receipt by Atty. Mendoza of
the sum of P40,000.00 after Felicisima and her siblings sold the
land, by itself an indication of fraud and deceit in the execution
of the Contract for Service. Upon the other hand, Atty. Mendoza
presented the RTC Decision in Civil Case No. T-1080.
Since the RTC found that Felicisima in fact entered into a
contract for legal services with Atty. Mendoza, thus debunking
her defense in her Answer denying the existence and
9

authenticity of the said document, it appears that Felicisima
raised the issue of voluntariness of her signing the Contract for
Service only during the hearing when she supposedly testified
that, having reached only Grade IV and trusting completely her
lawyer cousin, Atty. Mendoza who told her that the document
will protect her from the claims of her siblings, she actually
signed the Contract for Service.32 The RTC, however, found the
evidence adduced by Felicisima as insufficient to defeat Atty.
Mendozas claim for attorneys fees. Said judgment had attained
finality and even pending appeal was already executed on
motion by Atty. Mendoza.
It bears to stress that a contingent fee arrangement is valid
in this jurisdiction and is generally recognized as valid
and binding but must be laid down in an express
contract.33 The validity of contingent fees depends, in
large measure, upon the reasonableness of the amount
fixed as contingent fee under the circumstances of the
case.34Nevertheless, when it is shown that a contract for a
contingent fee was obtained by undue influence exercised by
the attorney upon his client or by any fraud or imposition, or
that the compensation is clearly excessive, the Court must, and
will protect the aggrieved party.35
Apart from the allegations in her affidavit-complaint, Felicisima
failed to establish by clear and satisfactory proof of the
deception allegedly committed by Atty. Mendoza when
she agreed in writing for the latters contingent fees.
Fraud and irregularity in the execution of their contingency fee
contract cannot be deduced from the fact alone that Atty.
Mendoza filed suit to enforce their contract.
The charges against Atty. Juan B. Mendoza are DISMISSED.
SIDE ISSUE: Whether or not Atty. Navarro was grossly negligent
RULING: YES
PALE REPORTING : CASE DIGESTS: ATTY. CAPULE : CEAC
With respect to Atty. Navarro, the facts on record clearly
established his failure to live up to the standards of diligence
and competence of the legal profession.
Lawyers engaged to represent a client in a case bear the
responsibility of protecting the latters interest with warmth,
zeal and utmost diligence.
In this case, Atty. Navarro failed to file an appellants brief
despite receipt of the order from the CA directing him to do so
within the period specified therein, and to file a motion for
reconsideration when the appeal was dismissed due to non-filing
of such brief. His motion for extension of time to submit an
appellants brief was filed 93 days late and was thus denied by
the CA. Barely a week after, he filed a notice of withdrawal of
appearance bearing the conformity of his clients which was
granted. It is evident from the foregoing that Atty.
Navarro failed to inform Felicisima of the status of the
case so that the latter was surprised upon being served
the eviction order of the court and eventual dismissal by
the CA of their appeal.
Canon 18 of the CPR mandates that a lawyer shall serve his
client with competence and diligence. Rule 18.03 further
provides that a lawyer shall not neglect a legal matter entrusted
to him and his negligence in connection therewith shall render
him liable.
Atty. Navarros asseveration that he had instructed Felicisima to
look for another lawyer and given them the Notice of Withdrawal
of Appearance for them to file in the CA, fails to convince. If it is
true that he did not agree to continue being Felicisimas counsel
before the CA, he should have immediately filed the Notice of
Withdrawal of Appearance himself after filing the Notice of
Appeal.
Despite having received notices from the CA, he allowed the
period of filing the appellants brief to lapse and failed to file a
motion for extension before such period expired. He did file a
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motion for extension but only three months later and when such
motion was denied, he finally moved to withdraw from the case.
There being no appellants brief filed, the CA granted Atty.
Mendozas motion to dismiss the appeal. Under the
circumstances, Atty. Navarro was grossly negligent in his duties,
resulting in great prejudice to Felicisima who lost her properties
to satisfy the judgment in favor of Atty. Mendoza.
WHEREFORE, the Court finds respondent Atty. Eusebio P.
Navarro, Jr. GUILTY of violation of Rule 18.03 and Rule 18.04 of
the Code of Professional Responsibility, and is hereby
SUSPENDED from the practice of law for six (6) months effective
upon finality of this Decision, with warning that a repetition of
the same or similar violation shall be dealt with more severely.

We have held that the failure of counsel to submit the appeal

brief for his client within the reglementary period constitutes
inexcusable negligence,39 an offense that entails disciplinary
action.

Atty. Navarros negligent handling of Felicisimas case was

exacerbated by his failure to inform her of the status of her
case. There was no mention in his pleadings of any attempt on
his part to contact Felicisima at the crucial stages when Atty.
Mendoza moved for execution pending appeal and the CA sent a
directive for the filing of the appellants brief. If indeed, he had
already instructed Felicisima to look for another lawyer, he
should have apprised her of these developments and explained
to her the urgency of filing the notice of withdrawal of
appearance and entry of appearance of a new counsel she may
have already engaged.

Atty. Navarro's failure to communicate vital information to his

client violated Rule 18.04 which provides:

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 client's request for information.

The lawyer's duty to keep his client constantly updated on the

developments of his case is crucial in maintaining the client's
confidence. In cases involving a lawyer's failure to file a brief or
other pleading before an appellate court, this Court has imposed
suspension from the practice of law for periods ranging from
three to six months, and in most serious cases, even
disrbarment.

11

Greg SWAFFORD, M.D., Plaintiff/Appellee, v. Robert G.
Greg HARRIS, and Darrell R. Ryland, Individually and
P.C., Defendants/Appellants.
Decided: March 16, 1998
FACTS: On June 21, 1990, the defendant, Robert G. Harris, a
resident of Mississippi, was injured in an automobile accident
occurring in Louisiana. Harris filed a lawsuit against several
defendants in Tennessee in connection with the accident, and
the case was removed to the United States District Court for the
Western District of Tennessee. Harris went to the plaintiff, Dr.
Greg Swafford of Memphis, Tennessee, for treatment of a cold
and his injuries.
The injured Harris and the physician Swafford entered into two
contractual agreements. The first was an oral agreement
between Harris and Dr. Swafford whereby Dr. Swafford would act
as medico/legal consultant and assist with the preparation of
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Harris's personal injury suit in return for 151/313 percent of any
monetary recovery received by Harris.
The second agreement, entitled Medical Reports and
Doctor's Lien, was entered into in August of 1994. This
agreement, which was signed by Harris and his attorney,
Darrell Ryland, required Ryland to pay Dr. Swafford any money
owed to him for medical services provided to Harris. This
agreement, according to the District Court's order of
certification, was not contingent on the outcome of the personal
injury litigation.
When Harris's personal injury claim settled for $625,000, Dr.
Swafford demanded 151/313 percent as provided in the first
contract. When he was not paid, Dr. Swafford filed suit for
breach of contract against Harris and his attorney Ryland, as
well as a suit for inducement to breach a contract against
Ryland.
The parties dispute the nature of the contractual agreements.
Harris and Attorney Ryland contend that the agreement for
medico-legal services was a contingency fee contract, while the
agreement for medical treatment was not a contingency fee
contract. Dr. Swafford, on the other hand, argues that the
contingency fee contract included medico-legal services as well
as medical treatment services. He also contends that if the
contingency fee contract is unenforceable, he is entitled to
recovery under a quantum meruit theory.
The defendants, Harris and his attorney Ryland, relying on
extensive authority in Tennessee and elsewhere, contend that a
contingency fee contract for the expert services of a physician is
contrary to sound public policy and void. Dr. Swafford,
although not challenging this authority, contends that at the
time of contracting, there was no existing law in Tennessee, and
no guidelines applicable to him, which [gave] notice [of] any
public policy against contingency fee contracts.
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ISSUE: Whether the contingent fee contract violated existing
Tennessee public policy and if so, how such policy was
established.
RULING: YES
American Medical Association Code of Ethics, 6.01,
which condemns contingency fees for the provision of medical
services:
Contingent Physician Fees: If a physician's fee for
medical services is contingent on the successful outcome
of a claim, such as a malpractice or worker's
compensation claim, there is the ever present danger
that the physician may become less of a healer and more
of an advocate or partisan in the proceedings.
Accordingly, a physician's fee for medical service should
be based on the value of the service provided by the
physician to the patient and not on the uncertain
outcome of a contingency that does not in any way relate
to the value of the medical service.
The Code of Professional Responsibility and Disciplinary Rules
governing the conduct of attorneys are a part of the Rules of the
Supreme Court. Tenn. Sup.Ct. R. 8. Disciplinary Rule 7-
109(C) of the Code of Professional Responsibility provides
that a lawyer shall not pay, offer to pay, or acquiesce in the
payment of compensation to a witness contingent upon the
content of the witness's testimony or the outcome of a case.
Witnesses should always testify truthfully and should be free
from any financial inducements hat might tempt them to do
otherwise. A lawyer should not pay or agree to pay a non-
expert witness an amount in excess of reimbursement for
expenses and financial loss incident to being a witness;
however, a lawyer may pay or agree to pay an expert witness a
reasonable fee for services as an expert. But in no event
should a lawyer pay or agree to pay a contingent fee to
any witness.
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In our view, these provisions of the Code of Professional
Responsibility, promulgated by the Supreme Court and
authorized by the Tennessee Constitution and statutes,
reflect public policy, just as it is reflected in the
American Medical Association Code of Ethics.
Accordingly, the medical and legal communities share the
ethical prohibition against the use of contingency fees for expert
witnesses which is contained in the respective professional
codes for each profession and adopted by the State as the
public policy of Tennessee.
We disagree with Dr. Swafford's contention that no controlling
public policy existed or that the public policy was not applicable
simply because he is not a member of the American or
Tennessee Medical Associations. On the contrary, it is our view
that sound public policy in this jurisdiction, as in others, is
crystal clear: a contingency fee contract for the services of a
physician acting in a medico-legal expert capacity is void as
against public policy and therefore unenforceable.
Contingency fees for medical services not only imperil
the sanctity of the doctor/patient relationship but also
create the potential that pecuniary interests may
influence professional judgment.
In this case the contracts indicate that the parties contemplated
the legal action and also Dr. Swafford's role in the proceedings.
With the financial incentives already in place, it is immaterial
whether the contingency fee contract was for medico-legal
expert services and/or for medical treatment. Under the
authority discussed above, a contingency fee for either is
against sound public policy and therefore void and
unenforceable.
As to the issue of quantum meruit, we have held on at least
one prior occasion that quantum meruit was not available where
the underlying contract was found void as against public policy.
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The contingency fee contract for physician services is expressly expert services and/or medical treatment that is contingent on
prohibited by both the American Medical Association Code of the outcome of litigation is against public policy and
Ethics and the Tennessee Code of Professional Responsibility. unenforceable. We also conclude that a quantum meruit
For the reasons previously discussed, the violation not only recovery is not appropriate under the facts of this case.
subverts the doctor/patient relationship but also converts Dr.
Swafford into a partisan with an economic interest in the Costs of this appeal are taxed to the plaintiff, Dr. Greg Swafford,
outcome. Swafford's principal defense on appeal is that he was for which execution may issue if necessary.
either unaware of the ethical provisions or did not belong to the
organizations that promulgate the provisions-an explanation
tantamount to suggesting he is subject to no public policy or
regulatory authority whatsoever. We conclude that allowing
quantum meruit under these circumstances would
undermine and subvert strong public policies established
to prohibit unprofessional conduct which affects the
integrity of the judicial process and the administration of
justice.

CONCLUSION

Based on the foregoing authority and discussion we conclude

that a contract requiring a party to pay a fee for medico/legal

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