BELANDRES VS LOPEZ SUGAR

ATTORNEY AND CLIENT; LIMITATION OF POWER OF COUNSEL TO BIND HIS CLIENT.

FACTS:

This action was brought by the plaintiff-appellant to recover damages for the death of
her son Querubin Villa, a train conductor employed by defendant-appellee in the
transportation of cane to its mill.

The complaint alleges that on May 5, 1952, while said Querubin Villa was riding as train
conductor on an empty car, some empty cars were derailed because of the negligence
of the employees of the defendant-appellee (the engine driver, superintendent,
brakemen and inspector),

and the car on which he was riding was also derailed;

that Villa fell from the empty car on which he was riding and the wheels of the empty
cars following that on which he rode passed over his body, crushed some of his bones
and caused his instant death.

The complaint asks for damages amounting to P9,000.

The defendant-appellee admit in its answer that the deceased Villa was a train
conductor employed by it and that his death was occasioned by a derailment of cars,
but denies that the said empty cars were under its direct control, or that the derailment
thereof was caused by the negligence of its superintendent, machinist, or other
employee.

It further alleges that it was the duty of Villa as conductor or brakeman to see that the
railroad tracks were open and free from obstruction and to notify the machinist of any
obstacle on the rails, but Villa, with apparent negligence and unpardonable
carelessness, failed to see that on the rails on which the cars were to pass, there were
pieces of iron placed there by some criminal hand and, therefore, failed to give the
necessary signal so that the engine driver might stop the train of cars in time to avoid
the accident.

In consequence, it prayed that the complaint be dismissed.

After the issues were joined the parties entered into a partial statement of facts, the
most important of which is that the deceased died as a result of the derailment of a
wagon of the defendant- appellee caused by an obstacle on the rails. After the above
stipulation was entered into, plaintiff presented evidence to substantiate the allegations
of the complaint. When plaintiff had closed her evidence, attorney for the defendant
moved for the dismissal of the case on the ground that the court had no jurisdiction
over the subject matter.

Plaintiff appealed from the dismissal and now contends that the lower court erred in
holding that it had no jurisdiction over the case and in not granting relief to the
plaintiff.
It is very evident that the action is not one for compensation with the provisions of the
Workmen’s Compensation Act (Act No. 3428 as amended).

In the case at bar, plaintiff seeks damages under the provisions of Article 2176 and
Article 2180 of the Civil Code, because it is alleged in her complaint that through fault
or negligence of the defendant’s employees, death was caused to her son while in the
employ of defendant. It is not alleged in the complaint that the deceased died because
of accident due to and in the course of employment, as defined in section 2 of Act No.
3428.

ISSUE: Whether or not the lower court erred in holding that it had no jurisdiction over
the case and in not granting relief to the plaintiff

Held:

The subject matter of any given case is determined, not by the nature of the action
which the party is entitled under the facts and the law to bring, but by the nature and
character of the pleadings and issues submitted by the parties to the court for trial and
judgment.

Under the pleadings submitted, the court a quo has jurisdiction over the subject
matter, because it is an action for damages caused by the negligence of defendant’s
employees.

As such it was its duty to act on the matter in issue as developed in the pleadings. If it
was of the opinion that the plaintiff was not entitled to the damage claimed in the
complaint because the death was accidental, it should have made a finding too this
effect and dismissed the action, or absolved the defendant therefrom. But it could not
under the pleadings declare that it had no jurisdiction of the subject matter.

The admission of plaintiff’s counsel to the effect that his client’s action was one
compensation under the Workmen’s Compensation Act is not a ground for taking the
action outside the jurisdiction of the Court of First Instance, for such admission is
certainly beyond the scope of authority as counsel, for the same does not refer to any
matter of judicial procedure related to the enforcement of the remedy, but to the
subject matter or cause of action of which the client alone can make the binding
admission.

It would seem to appear from the decision of the court a quo that the judge was of the
opinion that plaintiff’s action should have been one for compensation under Act No.
3428, perhaps because the evidence supporting the claim of negligence on the part of
the defendant’s employees may not have been sufficient to support the same; in other
words, that the death was accidental.

His Honor’s opinion, however, as to the action which the plaintiff is entitled to bring
under the facts proven in the course of the trial, does not control or determine the
nature or character of the case under trial, for it is the pleadings that do so. The court
should have acted on the matter in issue as developed in the pleadings; it was its duty
to do so. If it was of the opinion that the plaintiff-appellee was not entitled to the
damages claimed in the complaint because the death was accidental, it should have
made a finding to this effect and dismissed the action, or absolved the defendant
therefrom. It could not under the pleadings declare that it had no jurisdiction of the
subject matter.

We note that one of the reasons stated by the Judge in dismissing the case is the
supposed admission of plaintiff’s counsel that the action is in the nature of a claim for
compensation for a workman. The judge must have misunderstood counsel, or the
latter must have failed to make his meaning clear. But admitting that he did admit his
client’s action was one for compensation under the Workmen’s Compensation Act, his
admission or statement in that respect is certainly beyond the scope of his authority as
counsel, for the same does not refer to any matter of judicial procedure related to the
enforcement of the remedy, but to the subject matter or cause of action. As to this,
client alone can make the binding admission.

"The broad implied or apparent powers of an attorney with respect to the conduct or
control of litigation are, however, limited to matters which relate only to the procedure
or remedy. The employment of itself confers upon the attorney no implied or apparent
power or authority over the subject matter of the cause of action or defense; and,
unless the attorney has expressly been granted authority with respect thereto, the
power to deal with or surrender these matters is regarded as remaining exclusively in
the client" (7 C. J. S. pp. 899-900.)

"The line of demarcation between the respective rights and powers of an attorney and
his client is clearly defined. The cause of action, the claim or demand sued upon, and
the subject matter of the litigation are all within the exclusive control of a client; and an
attorney may not impair, compromise, settle, surrender, or destroy them without his
client’s consent. But all the proceedings in court to enforce the remedy to bring the
claim, demand, cause of action, or subject matter of the suit to hearing, trial,
determination, judgment, and execution, are within the exclusive control of the
attorney." (6 C. J. S., p. 643.)

The decision appealed from shall be reversed and the case remanded to the court a quo
for continuation of the trial and the proceedings in accordance herewith. So ordered.
GUENTER BACH, Petitioner, v. ONGKIKO KALAW MANHIT & ACORDA LAW
OFFICES

FACTS:

The facts as culled from the records of the case are as follows:

On 7 November 1994, petitioner Guenter Bach engaged the services of respondent law
firm Ongkiko Kalaw Manhit & Accorda Law Offices to represent him in a Petition for
Declaration of Nullity of Marriage filed before the Regional Trial Court (RTC) of Makati
City, Branch 143, docketed as Civil Case No. 95-224. The parties signed a "Fee
Agreement," for the legal services to be rendered by respondent. The provision for
payment of the legal services reads:

(a) seven and one-half (7 - % ) of all cash recoveries, including damages, interests,
attorney's fees and costs; as well as

(b) five percent (5 %) of the market value of all properties awarded to [the petitioner]
by the court or obtained through the compromise agreement, valued at the time of
recovery.2

However, on 5 December 1995, respondent withdrew its appearance as counsel of

petitioner, due to policy differences.

On 18 December 1995, respondent sent the termination billing 3 for the services they
rendered and billed petitioner the total amount of P1,000,000.00 plus 2% interest for
every month of delay in payment, based on the provision for termination of services
stated in their Fee Agreement.

On 7 March 1996, respondent filed with the RTC a Notice 5 of Charging Lien over the
properties of the spouses Bach.

On 5 February 1997, the RTC issued an Order 6 directing the annotation of the charging
lien in the amount of P1,000,000.00 on all the titles of the spouses Bach's personal and
real properties enumerated in the notice of charging lien.

On 11 February 1999, respondent received a copy of the Order 7 dated 8 June 1998,
granting petitioner's Motion to Withdraw his petition in Civil Case No. 95-224.
Despite respondent's demands for his legal fees, petitioner failed and refused to pay.
Thus, respondent filed a Complaint 8 for a sum of money also before the RTC of Makati,
Branch 148, docketed as Civil Case No. 99-514.

Respondent prayed for the payment of the following: 

P1,000,000.00 as the latter's lawful fees for services rendered in Civil Case No. 95-224,
plus 2% interest from date of final demand until paid; P250,000.00 as exemplary
damages; P200,000.00 representing billable time spent in prosecuting the case, plus
another P150,000.00 for any appeal taken; and P50,000.00 as litigation expenses and
the cost of suit.

petitioner filed a Motion9 to dismiss on the ground that respondent's claim had already
been paid, waived, abandoned or otherwise extinguished. Petitioner contended that
prior to respondent's withdrawal as counsel in Civil Case No. 95-224, petitioner had
already paid respondent's services in the total amount of P200,000.00. On 9 August
1999, the Motion to Dismiss was denied 10 by the RTC for lack of merit. Petitioner failed
to file his Answer; thus, he was declared in default and respondent was allowed to
present its evidence ex parte.11

On 24 January 2002, the RTC rendered its judgment in favor of the respondent, the
dispositive portion of which reads:

Not satisfied, petitioner appealed to the Court of Appeals, which modified the RTC
Decision.

Hence, this Petition filed by petitioner Guenter Bach raising the following issues to wit:

WHETHER OR NOT UNDER THE CONCEPT OF QUANTUM MERUIT, THE AMOUNT

OF P750,000.00 AS FEES FOR SERVICES RENDERED WITH INTEREST PEGGED AT 2% A
MONTH FROM DATE OF DEMAND UNTIL FULLY PAID IS REASONABLE

WHETHER OR NOT THERE IS LEGAL BASIS TO AWARD P50,000.00 AS AND FOR

LITIGATION EXPENSES AND COSTS OF SUIT.14

On the first issue, petitioner contends that the P750,000.00 awarded to the respondent
by way of quantum meruit, with interest of 2% a month from date of demand until fully
paid, is excessive, unreasonable and confiscatory. Thus, petitioner prays for reduction
of the same.

Both the Court of Appeals and the trial court approved the attorney's fees in the total
amounts of P750,000.00 plus 2 % interest for the services rendered by respondent in
Civil Case No. 95-224.

In this regard, the rule is that the issue of the reasonableness of attorney's fees based
on quantum meruit is a question of fact, and well-settled is the rule that conclusions
and findings of fact by the lower courts are entitled to great weight on appeal and will
not be disturbed except for strong and cogent reasons.
Thus, in the exercise of the Supreme Court's power of review the findings of facts of the
Court of Appeals are conclusive and binding on the Supreme Court. There are, however,
recognized exceptions to this rule, namely: (1) when the findings are grounded entirely
on speculation, surmises or conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when
the judgment is based on misapprehension of facts; (5) when the findings of facts are
conflicting; (6) when in making the findings the Court of Appeals went beyond the
issues of the case, or its findings are contrary to the admissions of both the appellee
and the appellant; (7) when the findings are contrary to the trial court; (8) when the
findings are conclusions without citation of specific evidence on which they are based;
(9) when the facts set forth in the petition as well as in the petitioner's main and reply
briefs are not disputed by the respondent; (10) when the findings of facts are premised
on the supposed absence of evidence and contradicted by the evidence on record; and
(11) when the Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties, which if properly considered, would justify a different
conclusion.16 Exceptions (4) and (11) are present in the case at bar, and so this Court
shall make its own determination of the facts relevant for the resolution of the case.

There are two concepts of attorney's fees. In the ordinary sense, attorney's fees
represent the reasonable compensation paid to a lawyer by his client for the legal
services rendered to the latter. On the other hand, in its extraordinary concept,
attorney's fees may be awarded by the court as indemnity for damages to be paid by
the losing party to the prevailing party. 17

ISSUE:

The issue in this case concerns attorney's fees in the ordinary concept. Generally, the
amount of attorney's fees due is that stipulated in the retainer agreement which is
conclusive as to the amount of the lawyer's compensation. In the absence thereof, the
amount of attorney's fees is fixed on the basis of quantum meruit, i.e., the reasonable
worth of the attorney's services. Courts may ascertain also if the attorney's fees are
found to be excessive, what is reasonable under the circumstances. 18 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 attorney's fees; agreement as to fees. - An attorney shall be

entitled to have and recover from his client no more than a reasonable compensation
for his services, with a view to the importance of the subject - matter of the
controversy, the extent of the services rendered, and the professional standing of the
attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to
the proper compensation, but may disregard such testimony and base its conclusion on
its own professional knowledge. A written contract for services shall control the
amount to be paid therefor unless found by the court to be unconscionable or
unreasonable. (Underscoring supplied.)

We have identified the circumstances to be considered in determining the

reasonableness of a claim for attorney's fees as follows: (1) the amount and character
of the service rendered; (2) labor, time, and trouble involved; (3) the nature and
importance of the litigation or business in which the services were rendered; (4) the
responsibility imposed; (5) the amount of money or the value of the property affected
by the controversy or involved in the employment; (6) the skill and experience called
for in the performance of the services; (7) the professional character and social
standing of the attorney; (8) the results secured; 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. 19

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 extent of 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 the 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;

andcralawlibrary

(j) the professional standing of the lawyer.

In determining a reasonable fee to be paid to respondent as compensation for their

services on quantum meruit, based on the factors abovequoted, it is proper to consider
all the facts and circumstances obtaining in this case.

It is undisputed that respondent firm had rendered services as counsel for the
petitioners in Civil Case No. 95-244. The services rendered consist of the following:

1. Respondent was able to annotate a notice 20 of lis pendens on the property of

Spouses Bach in Caloocan City covered by TCT No. C-12112, thereby preventing easy
disposition of the property by Luzviminda Bach;

2. Respondent was likewise able to annotate a notice 21 of lis pendens on the property of
Spouses Bach in Pasig City covered by TCT No. 48223, thereby preventing disposition
of the property by Luzviminda Bach;
3. Further, respondent annotated a notice 22 of lis pendens on the property of Spouses
Bach in Dasmarinas, Cavite covered by TCT No. T-339282, thereby preventing
disposition of the property by Luzviminda Bach;

4. Additionally, respondent annotated a notice 23 of lis pendens on the property of

Spouses Bach in Tanza, Cavite, covered by TCT No. T-255263, thereby preventing
disposition of the property by Luzviminda Bach;

5. Respondent also worked on the annotation of the notice 24 of lis pendens on the
property of Spouses Bach in Makati, covered by TCT No. S-62541, thereby preventing
disposition of the property by Luzviminda Bach;

6. Respondent worked on the annotation of a notice of lis pendens on the property of

Spouses Bach in Dasmariñas, Cavite, covered by TCT No. T-380848, thereby
preventing disposition of the property by Luzviminda Bach;

7. Respondent annotated a notice 25 of lis pendens on the property of Spouses Bach

situated in Tagaytay City, covered by TCT No. P-705, thereby preventing disposition of
the property by Luzviminda Bach;

8. Respondent filed the Petition 26 for Declaration of Nullity of Marriage and Dissolution
of the Conjugal Partnership of Gains of petitioner with his wife;

9. Respondent prepared an affidavit 27 in favor of petitioner attesting to the fact of

petitioner's marriage and their properties acquired during his marriage with Luzviminda
Bach:

10. Respondent prepared an ex parte motion28 to declare petitioner's wife to have

waived her right to file answer for failure to file the same within the period granted by
law and to direct the public prosecutor to determine whether or not a collusion exist;

11. Respondent prepared a Petition 29 for appointment of a receiver and to compel

petitioner's wife to render an accounting;

12. Other services included the filling of several oppositions 30 to certain motions filed by
petitioner's wife;

13. Respondent filed a motion31 to set the case for preliminary investigation;

14. Respondent filed an ex parte motion32 to declare petitioner's wife in default;

15. Respondent submitted a supplemental comment 33 on the motion for leave to
withdraw funds from Certificate of Participation filed by petitioner's wife;

16. Respondent filed a manifestation and motion 34 praying the court to direct
petitioner's wife to designate her lead counsel in the case;

17. Respondent prepared a Reply35 to comments on opposition of petitioner;

18. Respondent was able to secure an Order 36 from the said court freezing the United
Coconut Planters Bank (UCPB) account in the name of petitioner's wife, Luzviminda
Bach, containing about P6,500,000.00, representing the balance of the proceeds from
the sale of their conjugal property in Pasig City;

19. Respondent represented petitioner in numerous hearings in Civil Case No. 95-224,
evidenced by the signatures of the lawyers of respondent Law Firm in the minutes
dated 25 April 1995, 27 April, 1995, 14 June 1995, 27 June 1995, 1 August 1995, 11
August 1995, 22 September 1995,10 October 1995, 17 October 1995, 1 December
1995, 7 December 1995, 29 March 1996 and 16 January 1997; 37

20. Conducted several preliminary and post litigation conferences in the proceedings for
preliminary injunction leading to the freezing of the bank account of the parties;
andcralawlibrary

21. Prepared and sent out numerous letters to third parties and entities to protect the
interest of petitioner and notices to petitioner updating him of the status of the case
and the courses of action taken by respondent Law Firm.38

In sum, the services rendered by the respondent as enumerated above and as

admitted39 by Atty. Mario Ongkiko during the ex parte hearing, consist of annotating
notice of lis pendens on the conjugal properties of petitioner and his wife; filing the
Petition for Declaration of Nullity of Marriage; preparing and filing various pleadings and
documents relevant to the case; obtaining a freeze order of petitioner's funds in the
UCPB; attending hearings in Civil Case No. 05-224, and sending notices to petitioner
updating the latter of the status of the case. Nothing in Civil Case No. 95-224 so far
appears complicated and no extra ordinary skill was needed for lawyers of respondent
Law Firm to accomplish what they had done in the case before they withdrew their
appearance. We do not find herein a situation so intricate that demands more than a
careful scrutiny of the legal matters involved. These are simply the normal duties of a
lawyer that he is bound by law to render to his clients with utmost fidelity for which his
client must not be burdened to pay an extra price. It bears stressing that at the time
respondent firm withdrew their appearance due to policy differences with petitioner, the
case was still in its initial stage.

Guided by the above yardstick and so much of the pertinent data as are extant in the
records of this case and in the exercise of our sound discretion, we hold that the
amount of P500,000.00 is a reasonable and fair compensation for the legal services
rendered by respondent to the petitioner.

The imposition of legal interest on the amount payable to private respondent as

attorney's fees is unwarranted. Even as we agree that parties can freely stipulate on
the terms of payment, still the imposition of interest in the payment of attorney's fees
is not justified. In the case of Cortes v. Court of Appeals,40 we ruled that Article
220941 of the Civil Code does not even justify the imposition of legal interest on the
payment of attorney's fees as it is a provision of law governing ordinary obligations and
contracts. It deleted the 6% interest imposed by the appellate court on the payment of
attorney's fees. It ratiocinated by citing Mambulao Lumber Co. v. Philippine National
Bank,42 thus:
Contracts for attorney's services in this jurisdiction stands upon an entirely
different footing from contracts for the payment of compensation for any other
services. x x x [A]n attorney is not entitled in the absence of express contract to
recover more than a reasonable compensation for his services; and even when an
express contract is made, the court can ignore it and limit the recovery to reasonable
compensation if the amount of the stipulated fee is found by the court to be
unreasonable.

This is a very different rule from that announced in section 1091 of the Civil Code with
reference to the obligation of contracts in general, where it is said that such obligation
has the force of law between the contracting parties. Had the plaintiff herein made an
express contract to pay his attorney an uncontingent fee of P2,115.25 for the services
to be rendered in reducing the note here in suit to judgment, it would not have been
enforced against him had he seen fit to oppose it, as such a fee is obviously far greater
than is necessary to remunerate the attorney for the work involved and is therefore
unreasonable. In order to enable the court to ignore an express contract for attorney's
fees, it is necessary to show, as in other contracts, that it is contrary to morality
or public policy (Art.1255, Civil Code). It is enough that it is unreasonable or
unconscionable. (Emphases supplied.)

We have held that lawyering is not a moneymaking venture and lawyers are not
merchants.43 Law advocacy, it has been stressed, is not capital that yields profits. The
returns it births are simple rewards for a job done or service rendered. It is a calling
that, unlike mercantile pursuits which enjoy a greater deal of freedom from
governmental interference, is impressed with a public interest, for which it is subject to
State regulation.44

A lawyer is not merely the defender of his client's cause and a trustee of his client's
cause of action and assets; he is also, and first and foremost, an officer of the court
and participates in the fundamental function of administering justice in society. 45 It
follows that a lawyer's compensation for professional services rendered are subject to
the supervision of the court, not just to guarantee that the fees he charges and
receives remain reasonable and commensurate with the services rendered, but also to
maintain the dignity and integrity of the legal profession to which he belongs. Upon
taking his attorney's oath as an officer of the court, a lawyer submits himself to the
authority of the courts to regulate his right to charge professional fees. 46

Though we reduced the award of attorney's fees and disallowed the imposition of
interest thereon, the fact that an attorney plays a vital role in the administration of
justice underscores the need to secure to him his honorarium lawfully earned as a
means to preserve the decorum and respectability of the legal profession. A lawyer is
as much entitled to judicial protection against injustice, imposition of fraud on the part
of his client as the client against abuse on the part of his counsel. The duty of the court
is not alone to see that a lawyer acts in a proper and lawful manner; it is also its duty
to see that a lawyer is paid his just fees. With his capital consisting only of his brains
and with his skill acquired at tremendous cost not only in money but in expenditure of
time and energy, he is entitled to the protection of any judicial tribunal against any
attempt on the part of his client to escape payment of his just compensation. It would
be ironic if after putting forth the best in him to secure justice for his client, he himself
would not get his due.47
Thus, the Court of Appeals did not err in awarding expenses of litigation. Article 2208,
paragraphs 2, 5 and 11, of the Civil Code, authorize the recovery of such fees "(2)
When the defendant's act or omission has compelled the plaintiff to litigate x x x or to
incur expenses to protect his interest; x x x (5) Where the defendant acted in gross and
evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable
claim; x x x and (11) In any other case where the court deems it just and equitable
that attorney's fees and expenses of litigation should be recovered." Considering the
fact that respondent was drawn into this litigation by petitioner to protect and defend
their interest and taking into account the services already rendered by respondent to
petitioner, the sum of P30,000.00 as expenses of litigation and cost of suit would be
reasonable under the premises.

WHEREFORE, the Decision appealed from is AFFIRMED WITH MODIFICATIONS to

the effect that the attorney's fees awarded to respondent is REDUCED to P500,000.00,
the legal interest of 2% on the amount due to respondent is DELETED, and the award
of litigation expenses is REDUCED to P30,000.00.
REYNARIA BARCENAS, Complainant, v. ATTY. ANORLITO A. ALVERO
FACTS:

Before us is a Complaint1cЃa dated May 17, 2005 for disciplinary action

against respondent Atty. Anorlito A. Alvero filed by Reynaria Barcenas with
the Integrated Bar of the Philippines-Commission on Bar Discipline (IBP-
CBD), docketed as CBD Case No. 05-1452, now Administrative Case (A.C.)
No. 8159.

The facts as culled from the records are as follows:

On May 7, 2004, Barcenas, through her employee Rodolfo San Antonio (San
Antonio), entrusted to Atty. Alvero the amount of P300,000.00, which the
latter was supposed to give to a certain Amanda Gasta to redeem the rights
of his deceased father as tenant of a ricefield located in Barangay San
Benito, Victoria, Laguna.

The receipt of the money was evidenced by an acknowledgment

receipt2cЃa dated May 7, 2004. In the said receipt, Atty. Alvero said that he
would deposit the money in court because Amanda Gasta refused to accept
the same.3cräläwvirtualibräry

Later, Barcenas found out that Atty. Alvero was losing a lot of money in
cockfights.

To check if the money they gave Atty. Alvero was still intact, Barcenas
pretended to borrow P80,000.00 from the P300,000.00 and promised to
return the amount when needed or as soon as the case was set for hearing.
However, Atty. Alvero allegedly replied, "Akala nyo ba ay madali kunin ang
pera pag nasa korte na?" Subsequently, Barcenas discovered that Atty.
Alvero did not deposit the money in court, but instead converted and used
the same for his personal needs.
In his letters dated August 18, 2004 4cЃa and August 25, 2004, 5cЃa Atty.
Atty. Alvero admitted the receipt of the P300,000.00 and promised to return
the money.

However, as of the filing of the instant complaint, despite repeated

demands, Atty. Alvero failed to return the same. Thus, Barcenas prayed that
Atty. Alvero be disbarred for being a disgrace to the legal profession.

On March 30, 2005, the IBP-CBD ordered Atty. Alvero to submit his Answer
to the complaint.8cräläwvirtualibräry

In compliance, in his Answer 9cЃa dated April 18, 2005, Atty. Alvero claimed
that he did not know Barcenas prior to the filing of the instant complaint nor
did he know that San Antonio was an employee of Barcenas. He alleged that
he came to know Barcenas only when the latter went to him to
borrow P60,000.00 "from the amount entrusted to Rodolfo San Antonio" who
entrusted to respondent. At that time, Atty. Alvero claimed that San Antonio
was reluctant to grant the request because it might jeopardize the main and
principal cause of action of the Department of Agrarian Reform Adjudication
Board (DARAB) case. Atty. Alvero, however, admitted that he received an
amount of P300,000.00 from San Antonio, though he claimed that said
money was the principal cause of action in the reconveyance
action.10cräläwvirtualibräry

Atty. Alvero stressed that there was no lawyer-client relationship between

him and Barcenas. He, however, insisted that the lawyer-client relationship
between him and San Antonio still subsisted as his service was never
severed by the latter. He further emphasized that he had not breached the
trust of his client, since he had, in fact, manifested his willingness to return
the said amount as long as his lawyer-client relationship with San Antonio
subsisted. Finally, Atty. Alvero prayed that the instant complaint be
dismissed.

On June 20, 2005, the IBP-CBD notified the parties to appear for the
mandatory conference.11cräläwvirtualibräry

Meanwhile, in a separate Affidavit12cЃa dated September 19, 2005, San

Antonio narrated that he indeed sought Atty. Alvero's professional services
concerning an agricultural land dispute. He claimed that Atty. Alvero made
him believe that he needed to provide an amount of P300,000.00 in order to
file his complaint, as the same would be deposited in court. San Antonio
quoted Atty. Alvero as saying: "Hindi pwedeng hindi kasabay ang pera sa
pagpa-file ng papel dahil tubusan yan, kung sakaling ipatubos ay nasa korte
na ang pera." Believing that it was the truth, San Antonio was forced to
borrow money from Barcenas in the amount of P300,000.00. Subsequently,
San Antonio gave the said amount to Atty. Alvero, in addition to the
professional fees, as shown by an acknowledgment
receipt.13cräläwvirtualibräry

San Antonio further corroborated Barcenas' allegation that they tried to

borrow P80,000.00 from the P300,000.00 they gave to Atty. Alvero after
they found out that the latter lost a big amount of money in cockfighting. He
reiterated that Atty. Alvero declined and stated, "Akala nyo ba ay madali
kunin ang pera pag nasa korte na." Later on, they found out that Atty. Atty.
Alvero lied to them since the money was never deposited in court but was
instead used for his personal needs. For several times, Atty. Alvero promised
to return the money to them, but consistently failed to do so. San Antonio
submitted Atty. Atty. Alvero's letters dated August 18, 2004 14cЃa and August
25, 200415cЃa showing the latter's promises to return the amount
of P300,000.00.

During the mandatory conference, Atty. Alvero failed to attend despite

notice. Thus, he was deemed to have waived his right to participate in the
mandatory conference.

In its Report and Recommendation dated May 21, 2008, the IBP-CBD
recommended that Atty. Alvero be suspended from the practice of law for a
period of one (1) year for gross misconduct. Atty. Alvero was, likewise,
ordered to immediately account for and return the amount of P300,000.00
to Barcenas and/or Rodolfo San Antonio. The pertinent portion thereof
reads:

The record does not show and no evidence was presented by

respondent to prove that the amount of  P300,000 which was
entrusted to him was already returned to complainant or Rodolfo
San Antonio,

Up to the time of the filing of the instant complaint, no such deposit

or consignment took place and no evidence was presented that
respondent deposited the amount in court.

The fact is respondent promised to return the amount (Annex "B"

and "C" of the Complaint), but he failed to do so. The failure
therefore of respondent to account for and return the amount
of  P300,000 entrusted or given to him by his client constitute gross
misconduct and would subject him to disciplinary action under the
Code.16
In Notice of Resolution No. XVIII-2008-342 dated July 17, 2008, the IBP
Board of Governors adopted and approved with modification as to penalty
the Report and Recommendation of the IBP-CBD.

Instead, it ordered that Atty. Alvero be suspended from the practice of law
for two (2) years and, likewise, ordered him to account for and return the
amount of P300,000.00 to complainants within thirty (30) days from receipt
of notice.

The Office of the Bar Confidant redocketed the instant case as a regular
administrative complaint against Atty. Alvero and, subsequently,
recommended that this Court issue an extended resolution for the final
disposition of the case.

We sustain the findings and recommendations of the IBP-CBD.

Undoubtedly, Atty. Alvero breached Rule 1.01 of Canon 1 and Rules 16.01,
16.02 and 16.03 of Canon 16 of the Code of Professional Responsibility,
which read:

CANON 1.

A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF

THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESS.

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

deceitful conduct.

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.

Rule 16.02. A lawyer shall keep the funds of each client separate and apart
from his own and those of others kept by him.

Rule 16.03. A lawyer shall deliver the funds and property of his client when
due or upon demand. However, he shall have a lien over the funds and may
apply so much thereof as may be necessary to satisfy his unlawful fees and
disbursements, giving notice promptly thereafter to his client. He shall also
have a lien to the same extent on all judgments and executions he has
secured for his client as provided for in the Rules of Court.

In the instant case, Atty. Alvero admitted to having received the amount
of P300,000.00 from San Antonio, specifically for the purpose of depositing it
in court. However, as found by the IBP-CBD, Atty. Alvero presented no
evidence that he had indeed deposited the amount in or consigned it to the
court. Neither was there any evidence that he had returned the amount to
Barcenas or San Antonio.

From the records of the case, there is likewise a clear breach of lawyer-client
relations. When a lawyer receives money from a client for a particular
purpose, the lawyer is bound to render an accounting to the client showing
that the money was spent for a particular purpose. And if he does not use
the money for the intended purpose, the lawyer must immediately return
the money to his client.17cЃa These, Atty. Alvero failed to do.

Jurisprudence dictates that a lawyer who obtains possession of the funds

and properties of his client in the course of his professional employment
shall deliver the same to his client (a) when they become due, or (b) upon
demand. In the instant case, respondent failed to account for and return
the P300,000.00 despite complainant's repeated
demands.18cräläwvirtualibräry

Atty. Alvero cannot take refuge in his claim that there existed no attorney-
client relationship between him and Barcenas. Even if it were true that no
attorney-client relationship existed between them, case law has it that an
attorney may be removed, or otherwise disciplined, not only for malpractice
and dishonesty in the profession, but also for gross misconduct not
connected with his professional duties, making him unfit for the office and
unworthy of the privileges which his license and the law confer upon
him.19cräläwvirtualibräry

Atty. Alvero's failure to immediately account for and return the money when
due and upon demand violated the trust reposed in him, demonstrated his
lack of integrity and moral soundness, and warranted the imposition of
disciplinary action. It gave rise to the presumption that he converted the
money for his own use, and this act constituted a gross violation of
professional ethics and a betrayal of public confidence in the legal
profession.20cЃa They constitute gross misconduct and gross unethical
behavior for which he may be suspended, following Section 27, Rule 138 of
the Rules of Court, which provides:
Sec. 27. Disbarment or suspension of attorneys by Supreme Court, grounds
therefor. - A member of the bar may be disbarred or suspended from his
office as attorney by the Supreme Court for any deceit, malpractice, or other
gross misconduct in such office, grossly immoral conduct, or by reason of his
conviction of a crime involving moral turpitude, or for any violation of the
oath which he is required to take before the admission to practice, or for a
willful disobedience appearing as attorney for a party without authority to do
so.

We come to the penalty imposable in this case.

As a final note, we reiterate: the practice of law is not a right, but a

privilege. It is granted only to those of good moral character. The Bar must
maintain a high standard of honesty and fair dealing. 22cЃa For the practice of
law is a profession, a form of public trust, the performance of which is
entrusted to those who are qualified and who possess good moral character.
Those who are unable or unwilling to comply with the responsibilities and
meet the standards of the profession are unworthy of the privilege to
practice law.23cräläwvirtualibräry

WHEREFORE, Notice of Resolution No. XVIII-2008-342 dated July 17, 2008

of the IBP-CBD Board of Governors, which found respondent Atty. Anorlito A.
Alvero GUILTY of gross misconduct, is AFFIRMED. He is
hereby SUSPENDED for a period of two (2) years from the practice of law,
effective upon the receipt of this Decision. He is warned that a repetition of
the same or a similar act will be dealt with more severely.

Let a copy of this Decision be furnished to the Office of the Bar Confidant, to
be appended to the personal record of Atty. Alvero as a member of the Bar;
the Integrated Bar of the Philippines; and the Office of the Court
Administrator for circulation to all courts in the country for their information
and guidance.

This Decision shall be immediately executory.