BASIC LEGAL ETHICS

IV. THE LAWYER AND THE CLIENT (Part II)

1. A sold to Attorney X a portion of his big parcel of land. Before said portion could be
segregated, B filed a complaint against A to recover title and possession of the big
parcel of land, including the portion already sold to Atty. X. Atty. X appeared in the
proceedings for A and won the case for A. Thereafter, the portion sold to Atty. X was
segregated and the corresponding certificate of title was issued in his name.
Subsequently, B filed a complaint for disbarment against Atty. X on the ground that
he violated Art. 1491(5) and Canon 16 which prohibit the acquisition by counsel of
any interest in property subject of litigation. Rule on the complaint of B. Reason.

Elements of Prohibition
1. There is an attorney-client relationship;
2. The property is in litigation;
3. The attorney is the counsel of record in the case;
4. The attorney, by himself or through an agent, purchases such property during the
pendency of said case [Art. 1491 of the Civil Code]

The prohibition does not apply to instances, such as in the problem, where
the purchase of the big parcel of land by Attorney Xfrom A took place before it
became involved in litigation, notwithstanding Attorney X was the counsel of record
during litigation of the subject property. An attorney may, however, properly acquire
property not in his professional capacity but as a legitimate investment. The fact that
a person happens to be a lawyer does not deprive him of the privilege to engage in
business activities as enjoyed by any other person.

Attorney X did not commit any act of impropriety nor did he violate any law
culpable of disbarment. The case for his disbarment should be dismissed.

2. What are the overt manifestations that a lawyer is serving his client with competence
and diligence?
By accepting a retainer, a lawyer impliedly represents that he possesses
requisite degree of learning, skill, ability which is necessary to the practice of his
profession and which other similarly situated possess;

That degree of vigilance and attention of a good father of a family (Lapena,

2009) or ordinary pater familias (Pineda, 2009). He is not required to exercise
extraordinary diligence. Diligence is the attention and care required of a person in a
given situation and is the opposite of negligence. It is axiomatic in the practice of law
that the price of success is eternal diligence to the cause of the client (Edquibal v.
Ferrer, Jr., A.C. No. 5687, February 3, 2005).

He will exert his best judgment in the prosecution or defense of the litigation
entrusted to him; he will exercise reasonable and ordinary care and diligence in the
use of his skill and in the application of his knowledge to his client’s cause; he will
take such steps as will adequately safeguard his client’s interest.

He attains and maintains competence by keeping abreast of currentlegal

literature, participating in legal education program, concentrating in particular areas
of the law, and availing himself with these means. (Pineda)

3. Due to the number of case handled by Atty. Santos, he failed to file a notice of change
of address with the Court of Appeals. Thus, he was not able to file an appellant’s brief
 and the case was consequently dismissed. Aggrieved, Atty. Santos filed a Motion for
Reconsideration of the resolution dismissing the appeal and to set aside the entry of
judgment on the ground that he already indicated in his “Urgent Motion for
Extension of Time to File Appeal Brief” his new address and that his failure to file a
notice of change of address is an excusable negligence. Will the motion prosper.
Explain your answer.

No. Pressure and large volume of legal work provide no excuse for the inability to
exercise due diligence. Counsel cannot presume that respondent court will take
cognizance of any other addresses that he may use in his pleadings, or assume that a
given address is his residence, for unless he files a notice of change of address, his
official address remains to be that of his address of record. It may well be a
temporary address or just one of the many offices maintained by counsel. At most, it
merely indicates (as was held in Lopez, supra) that the pleading was prepared in and
mailed from said place and therefore does not supersede his address of record.
Moreover, notices of court processes are ordinarily taken care of by clerks, who are
naturally guided by addresses of record. To require the court and its personnel before
sending out the notices, to be continuously checking the record and the various
addresses from which a counsel may have filed his pleadings and sending them to
such address(es) instead of his address of record which is duly recorded on the cover
of the Rollo is to sow confusion and add an intolerable burden which is not permitted
by the Rules of Court. (PHIL SUBURBAN DEVT. CORP vs.CA, G.R. No. L-33448 Sept.17,
1980)

The SC have held time and again that notices to counsel should properly be sent
to his address of record in the absence of due notice to the court of a change of
address. As held in Lopez vs. Delos Reyes, the fact that counsel used a different
address in later pleadings "should not be taken as notice to the court of either a
change of address or of another address in addition to that which was already of
record."

For his failure to file a notice of change of address being an inexcusable

negligence, therefore, the Motion for Reconsideration of the resolution dismissing
the appeal and to set aside the entry of judgment should be denied and Final
Judgment should be entered.

4. What should a lawyerdo if he knows that he is not qualified or competent to handle a

case being referred to him for handling? Is the rule regarding the matter absolute?
Why?

The lawyer’s acceptance, whether for a fee or not, is an implied

representation that he possesses the requisite degree of academic learning, skill and
ability to handle the case. He is therefore directed in Rules 18.01 - not to undertake a
legal service which he knows or should know that he is not qualified to
render.However, he may render such service if, with the consent of his client, he can
obtain as collaborating counsel a lawyer who is competent on the matter.

Yes. Some cases involve specialized fields of law and require special training.
A lawyer should not accept an undertaking in specific area of law which he knows or
should know he is not qualified to enter. However well- meaning he may be, a lawyer
cannot ask another lawyer to collaborate with him in a particular case without the
consent of the client. The fiduciary nature of attorney-client relationship prohibits
this. (Aguirre) &(Agpalo)

5. Atty. Primitivo, lawyer of Cresencio in a civil case, received an adverse decision on the
case. He entrusted to his secretary the duty to inform the client of the adverse
decision. The secretary informed the client rather late and with wrong information
 that they still have a period of thirty days within which to appeal the decision.
Cresencio, thus, lost his opportunity to appeal the adverse decision. Cresencio filed
an administrative case for disbarment against Atty. Primitivo where the latter for his
defense passed the blame on his secretary. Is Atty. Primitivo guilty of negligence?
(Roldan Vs Panganiban, AC No. 4552, Dec. 14. 2004, Adaza vs Barinaga, AC No., 1604,
May 29. 1981)

Yes.

Atty. Primitivofailed to ensure that the client was advised appropriately. He

entrusted entirely with his secretary the duty to inform the complainant about the
adverse decision. And the secretary informed the complainant rather late and worse
with the wrong information that the complainant has still a month within which to
file an appeal. This resulted to the lapse of the prescriptive period to appeal without
complainant having availed of the said remedy.(Roldan Vs Panganiban)As mandated
byRule 18.03, Canon 18 of the CPR that a lawyer shall not neglect a legal matter
entrusted to him and his negligence in connection therewith shall render him liable.A
lawyer shall represent his client with zeal within the bounds of the law.  Counsel
should exert all effort to protect the interest of his client.

The SC find respondent's explanation to be unsatisfactory. His negligence

prevented the Adaza’s from exhausting their legal remedies to secure a reversal of
the judgment against them.Making the law office secretary, clerk or messenger the
scapegoat patsy for the delay in the filing of pleadings, motions and other papers and
for the lawyer's dereliction of duty is a common alibi of practicing lawyers. Like the
alibi of the accused in criminal cases, counsel's shifting of the blame to his office
employee is usually a concoction utilized to cover up his own negligence,
incompetence, indolence and ineptitude. (Adaza vs.Barinaga)

6. May lawyers be held liable for damages for negligence in the handling of a case?

Rule 18.03, Canon 18 of the CPR providesthat a lawyer shall not neglect a legal
matter entrusted to him and his negligence in connection therewith shall render him
liable.

A lawyer is liable for his negligence, if by reason of a lawyer’s negligence,

actual loss has been caused to his client, the latter has a cause of action against him
for damages (5 A. Jur. 323). However, for a lawyer to be held liable, his failure to
exercise reasonable care, skill and diligence must be the proximate cause of the loss
(7 C.J.S. 980)

7. Elena Bustamante and Leonora Catabian filed a Disbarment case against Atty.
FlorentinoLibatique. Atty. Florentino filed a civil case for the complainants involving a
portion of a parcel of land which they should have inherited from their parents.
However, the case was dismissed upon motion of the Heirs of Zarate, who cited a
1982 ruling of the CA in a previous case also handled by Atty. Libatique for
complainants,upholdingZarate's ownership of the property, which had become final
and executory. Complainants claimed to have been unaware of the appeal made by
Zarate to the CA, and confronted respondent about the matter.  However,
respondent allegedly claimed ignorance of such appeal. Hence, this complaint, in
which complainants aver that they lost their share in a property worth millions of
pesos due to the gross negligence and irresponsible conduct of respondent. 
Complainants argue that respondent could not have been unaware of the appeal
made by Zarate, since a check of court records allegedly made by them revealed that
respondent was duly served court processes in connection with the appeal.
 In his Comment, respondent admits that he was counsel for the complainants in the
action for partition (the previous case) filed before the CFI of Bauang, La Union.  He
also admits that he agreed to handle a new case, this time for recovery of ownership
and declaration of nullity of an extrajudicial partition, for complainants.  Respondent
stated that in agreeing to accept the new case, he only relied on the order of the CFI
dated October 2, 1975, which he believed could still be enforced.  He also believed
that the extrajudicial partition made by Zarate's heirs was null and void, owing to the
CFI's order of partition.Respondent likewise admits having received P10,000.00 from
complainants as acceptance fee. However, he claims to have "no recollection" as to
the status of the case filed before the CFI as it has been a long time ago and he hasno
more record of the case on file in his office.
Are the defenses of Atty. Libatique meritorious?
No. Atty. Libatique’s defenses are devoid of merit. It is his duty as a lawyer to
serve his client with competence and diligence and he should exert his best efforts to
protect the interest of his client.
Canon 18 provides that a lawyer shall serve his client with competence and
diligence.
Rule 18.03, Canon 18 of the CPR A lawyer is enjoined not to 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.

Respondent cannot simply say that he lost track of the first partition case
because he had numerous other commitments to attend to. Like all professionals, he
is expected to devise ways to follow the course of his cases and to keep his files
updated. None of these would have happened had respondent been more mindful of
his responsibilities as an attorney.

Neither is the passage of time an excuse. It is a fundamental rule of ethics that

an attorney who undertakes to conduct an action impliedly stipulates to carry it to its
conclusion.  It is Atty. Libatique’s bounden duty to see his cases through until properly
completed and not abandon or neglect them in midstream.

Respondent breached his duty to his client when he conveniently forgot about
the appeal filed by Zarate. His negligence shows a glaring lack of the competence and
diligence required of every lawyer, and his admission of negligence does not mitigate
his liability. He cannot now shift the blame to complainants for failing to inquire
about the status of the case, since, as stated above, it was his duty as lawyer to
inform his clients of the status of cases entrusted to him. His failure to do so is an
infraction that the SC will not countenance.(Zarate-Bustamante vs. Libatique)

Clearly, there is want of required diligence when Atty. Libatique failed without
sufficient justification to notify and to update his client of the status of the case, of
the appeal the adverse party had taken, to take steps to have the adverse decision
reconsidered or appealed, to ascertain the correct date of receipt of decision, to
acquaint himself with what has happened to the litigation, though records revealed
that respondent was duly served court processes in connection with the appeal.

8. (a) Is a client bound by the negligence of his counsel? Reason.

Yes. The Client is generally bound by attorney’s conduct, negligence and

mistake in handling a case or in the management of litigation and in procedural
technique, and he cannot complain that the result might have been different had his
lawyer proceeded differently.

Exceptions: (LIPIG)

1. Lack of acquaintance with technical aspect of procedure;

2. When adherence thereto results in outright deprivation of client’s liberty
or property or where Interest of justice so requires;
3. Where error by counsel is Purely technical which does not substantially
affect client’s cause;
4. Ignorance, incompetence, or inexperience of lawyer is so great and error so
serious that client, who has a good cause, is prejudiced and denied a day in
court; and
5. Gross negligence of lawyer.

InBejarasco,JR.,vsPeople, the SC held that the party-litigant should not rely

totally to the counsel to litigate his case. The general rule is that a client is bound by
the counsel’s acts, including even mistakes in the realm of procedural
technique. The rationalefor the rule is that a counsel, once retained, holds the
implied authority to do all acts necessary or, at least, incidental to the prosecution
and management of the suit in behalf of his client, such that any act or omission by
counsel within the scope of the authority is regarded, in the eyes of the law, as the act
or omission of the client himself.A recognized exception to the rule is when the
reckless or gross negligence of the counsel deprives the client of due process of law.
For the exception to apply, however, the gross negligence should not be
accompanied by the client’s own negligence or malice, considering that the client has
the duty to be vigilant in respect of his interests by keeping himself up-to-date on
the status of the case. Failing in this duty, the client should suffer whatever adverse
judgment is rendered against him.

Truly, a litigant bears the responsibility to monitor the status of his case, for
no prudent party leaves the fate of his case entirely in the hands of his lawyer. It is
the client’s duty to be in contact with his lawyer from time to time in order to be
informed of the progress and developments of his case; hence, to merely rely on the
bare reassurances of his lawyer that everything is being taken care of is not enough.
(Bejarasco,JR.,vsPeople)

(b) Explain the doctrine of imputed knowledge (notice to counsel is notice to client).

Doctrine of Imputed Knowledge − the knowledge acquired by an attorney during the

time that he is acting within the scope of his authority is imputed to the client. It is
based on the assumption that an attorney, who has notice of matter affecting his
client, has communicated the same to his principal in the course of professional
dealings. The doctrine applies regardless of whether or not the lawyer actually
communicated to the client what he learned in his professional capacity, the attorney
and his client being one juridical person.

Exceptions to the Rule that Notice to Counsel is Notice to Client

1. If strict application might foster dangerous collusion to the detriment of justice.
2. Service of notice upon party instead of upon his attorney is ordered by court.
3. Notice of pre- trial is required to be served upon parties and their respective
lawyers.
4. In appeal from the lower court to the RTC, upon docketing of appeal.
 Note: Notice to counsel is notice to client, but not vice versa if the latter appeared by
attorney

General Rule: The law requires that service of any notice upon a party who has
appeared by attorney shall be made upon his attorney. Notice sent to a party who has
appeared by counsel is not notice in law, it being immaterial that the client actually
received the notice or volunteered to get a copy thereof.

9. (a) How far may a lawyer go in supporting a client’s cause?

Canon 19. A lawyer shall represent his client with zeal within the bounds of law.

The right to counsel must be more than just the presence of a lawyer in the
courtroom or the mere propounding of standard questions and objections. The right
to counsel means that the accused is simply accorded legal assistance extended by a
counsel who commits himself to the cause of the defense and acts accordingly. The
right assumes an active involvement by the lawyer in the proceedings, particularly at
the trial of the case, his bearing constantly in mind the basic rights of the accused, his
being well-versed on the case, and his knowing the fundamental procedure, essential
laws and existing jurisprudence. The right of an accused to counsel finds substance in
the performance by the lawyer of his sworn duty of fidelity to his client. Tersely put, it
means an efficient and truly decisive legal assistance and not a simple perfunctory
representation. (People v. Bemas, 306 SCRA 293 [1999], cited in People v. Sta.
Teresa, 354 SCRA 697 [2001]). However, a lawyer shall employ only honorable and
honest means in the maintenance of his client’s cause. (Section 20, Rule 128).

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.

Rule 19.02 A lawyer who has received information that his client has, in the course of
the representation, perpetuated 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.

(b) What is the extent of a lawyer’s authority in handling a case for the client? Whose
will must prevail in the handling of the case – the lawyer’s or the client’s?

Rule 19.03. A lawyer shall not allow his client to dictate the procedure in handling the
case.

Extent of lawyer’s authority in litigation

A lawyer has authority to bind the client in all matters of ordinary judicial
procedure. The cause of action, the claim or demand sued upon and the subject
matter of the litigation are within the exclusive control of the client. A client may
waive, surrender, dismiss, or compromise any of his rights involved in litigation in
favor of the other party even without or against the consent of his attorney.
Who has control over the case

1. As to matters of procedure - it is the client who yields to the lawyer and not the
lawyer yielding to the client. (Lapena 2009)
 NOTE: The basis of this rule is that the lawyer is better trained and skilled in law.

2. As to subject matter - the client is in control.

NOTE: Cause of action, claim or demand, and subject of litigation are within client’s
control. Proceedings to enforce the remedy are within the exclusive control of the
attorney.

10. Atty. Maximo prepared and sent a demand letter on behalf of his client wherein he
threatened the adverse party that should the latter fail to pay the amounts proposed
as settlement, he would file a case against them and would claim bigger amounts
including moral damages, as well as multiple charges such as tax evasion, falsification
of documents, and cancellation of business license to operate due to violations of
law. Was the move of Atty. Maximo ethical? Why?

No.

Canon 19. A lawyer shall represent his client with zeal within the bounds of 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.

This rule obligates a lawyer, in protecting the interest of his client, to employ only
such means as are consistent with truth and honor. Atty. Maximo should not file or
threaten to file multiple charges whether civil or criminal or that hewould claim
bigger amounts including moral damages against the adversaries of his client
designed to compel the adversaries to yield to the proposed monetary settlement
stated in the demand letter. The lawyer’s obligation to represent his client with zeal
and devotion must always be within the bounds of the law.

11. What is the duty of a defense counsel when his client intends to plead guilty to the
offense with which he is charged?

It is the duty of defense counsel when his client desires to enter a plea of guilty, to:
1. Fully acquaint himself with the records and surrounding circumstances of the case;
2. Confer with the accused and obtain from him his account of what had happened;
3. Advise him of his constitutional rights;
4. Thoroughly explain to him the import of a guilty plea and the inevitable conviction
that will follow; and
5. See to it that the prescribed procedure which experience has shown to be
necessary to the administration of justice is strictly followed and disclosed in the
court records.

12. Conrado, client of Atty. Carreon, intimated to him that he intends to liquidate the
essential witnessin the criminal case where Conrado is the accused.

(a) What should Atty. Carreon do under the circumstance?

A lawyer should use his best efforts to restrain and to prevent his client from
doing such unlawful act, he has the moral obligation to advise his client not to
continue with his plan, if his client persists to continue with his wrongdoings,
 particularly with reference to the conduct toward the court, judicial officer, witness
and suitor, then Atty. Carreon should terminate their relation.

He has theobligation to disclose such facts to authorities. The announced

intention of a client to commit a crime is not included within the confidences which
his attorney is bound to respect. The attorney cannot reveal to anybody the facts
stated by the client as regards the case proceedings. However, this is not an absolute
rule. The privilege is limited or has reference only to communications which are
within the ambit of lawful employment and does not extend to those transmitted in
contemplation of future crimes or fraud.Canon 19 states the lawyer’s obligation to
represent his client with zeal and devotion must always be within the bounds of the
law.

(b) Suppose the information that Conrado bribed the Judge was disclosed by him to
Atty. Carreon after the act had already been consummated, what must Atty. Carreon
do?
A lawyer who has received information that his client 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 accordancewith the Section 26, Rule 138 of the Rules
of Court. As provided for by Rule 19.02 of Canon 19, a lawyer shall not allow his
client to perpetrate fraud. He shall promptly advise the client to rectify the same, and
if the client refuses to heed the lawyer's advice for rectification, the lawyer must
withdraw from the case (People v. Sandiganbayan, 275 SCRA 505)

(c) Relative to question (b), may Atty. Carreon report his client to the authorities for
the filing of a bribery case against him?

No. Rule 19.02 merely requires a lawyer who has received information that
his client has, in the course of the representation, perpetuated 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.

Yes. Canon 41 of the Canons of Professional Ethicspermits that when a

lawyer discovers that some fraud or deception has been practiced, which was
unjustly imposed upon the court or party, he should endeavor to rectify it; at first by
advising his client, and if his client refuses to forego the advantage thus unjustly
gained, he should promptly inform the injured person or his counsel, so that they
may take appropriate steps.

13. What are parameters to be followed so that a lawyer’s fees are considered fair and
reasonable?

CANON 20 - A lawyer shall charge only fair and reasonable fees.

Rule 20.01-A lawyer shall be guided by the following factors in determining
his fees: [STIPSNACCC]
a. The time spent and the extent of the service 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

NOTE: Generally, the amount of attorney’s fees due is that stipulated in the
retainer agreement which is conclusive as to the amount of lawyer’s
compensation (Funa, 2009) unless the stipulated amount in the written
contract is found by the court to be unconscionable or unreasonable. (Sec. 24,
Rule 138, RRC)

In the absence thereof, the amount of attorney’s fees is fixed on the basis of
quantum meruit. (Sesbreno v. Court of Appeals, G.R. No. 117438, June 8,
1995; Funa, 2009)

14. What is/are the difference/s between ordinary and extraordinary attorney’s fees?

Two Concepts of Attorney’s Fees

1. Ordinary Attorney’s Fee- it is the reasonable compensation paid to the

lawyer for the legal services he had rendered the client. The basis of this
compensation is the fact of employment by the client.

2. Extraordinary Attorney’s Fee- an indemnity for damages ordered by the

court to be paid by the losing party to the prevailing party in a litigation. The
basis of this is any of the cases authorized by law and is payable not to the
lawyer but to the client unless they have agreed that the award shall pertain
to the lawyer as additional compensation or as part thereof.

15. Discuss what is QUANTUM MERUIT. Cite at least five examples when lawyer’s fee will
be on quantum meruit basis.

Quantum Meruit− means as much as the lawyer deserves or such amount as his
services merit.

Determining Attorney’s Fees on Quantum Meruit Basis (TINS)

1. Time spent and extent of the services rendered or required – a lawyer is justified
in fixing higher fees when the case is so complicated and requires more time and
effort to finish it.

2. Novelty and difficulty of questions involved – when the questions in a case are
novel and difficult, greater effort, deeper study and research are bound to burn the
lawyer’s time and stamina considering that there are no local precedents to rely upon

3. Importance of subject matter − the more important the subject matter or the
bigger the value of the interest of property in litigation, the higher is the attorney’s
fees
 4. Skill demanded of a lawyer − the totality of the lawyer’s experience provides him
the skill and competence admired in lawyers.

Instances of Recovery of Attorney’s Fees on the Basis of Quantum Meruit

1. There is no express contract for payment of attorney’s fees agreed upon between
the lawyer and the client.

2. When although there is a formal contract for attorney’s fees, the fees stipulated
are found unconscionable.

3. When the contract for attorney’s fees is void due to formal matter.

4. When for justifiable cause the lawyer was not able to finish the case.

5. When the lawyer and the client disregard the contract for fees.

6. When the client dismissed his counsel before the termination of the case or the
latter withdrew therefrom for valid reasons.

16. Differentiate retaining lien and charging lien.

ATTORNEY’S LIEN

1. Charging Lien - is an equitable right to have the fees and lawful disbursements due
a lawyer for his services in a suit secured to him out of the judgment for the payment
of money and executions issued in pursuance thereof in the particular suit.

Requisites of a Charging Lien

1. Existence of a client-lawyer relationship;
2. The attorney has rendered services;
3. Favorable judgment secured by the counsel for his client which judgment is a
money judgment;
4. The attorney has a claim for attorney’s fees or advances;
5. Noting into the records of the case through the filing of an appropriate motion of
the statement of the lawyer’s claim for attorney’s fee with copies furnished to the
client and adverse party.

2. Retaining Lien – a right merely to retain the funds, documents, and papers as
against the client until the attorney is fully paid his fees.

Requisites: (ALU)
1. Attorney-client relationship;
2. Lawful possession by the lawyer of the client’s funds, documents and papers in his
professional capacity;
3. Unsatisfied claim for attorney’s fees

RETAINING LIEN VS.CHARGING LIEN

Point of Retaining Lien Charging Lien

Distinction
1. Nature Passive Lien. Active Lien.
It cannot be actively enforced. It can be enforced by execution.
It is a general lien. It is a special lien.
2. Basis Lawful possession of papers, Securing of a favorable of
documents, property money judgment for the client.
 belonging to the client.
3. Coverage Covers papers, documents,
and properties in the lawful
possession of the attorney by
reason of his professional
employment
4. Effect As soon as the attorney gets
possession of the papers,
documents, or property.
Covers all judgment for the
payment of money and execution
issued in pursuance of such
judgments.
As soon as the claim for
attorney’s fees had been entered
into the records of the case.

5. Notice Client need not be notified to Notice must be served upon

make it effective. client and adverse party.
6. Applicability May be exercised before Generally, exercisable only when
judgment or execution or the attorney had already secured
regardless thereof. a favorable judgment for his
client
7.Extinguishment When possession lawfully ends When client loses action as lien
when as lawyer voluntarily may only be enforced against
parts with funds, documents, judgment awarded in favor of
and papers of client or offers client, proceeds thereof/
them as evidence. executed thereon.

17. Is contingent contract for attorney’s fee allowed? Is it a champertous contract or not?
No, it is not a champertous
contract.

CONTINGENT FEE – payment which may be stipulated uponby the attorney and
clientthat is conditioned on the securing of a favorable judgment and recovery of
money or property and the amount of which may be on a percentage basis.It is
allowed since it neither gives nor purports to give to the attorney an absolute right,
personal or real, in the subject matter during the pendency of the litigation; the
measure of compensation provided is a mere basis for the computation of fees and
the payment made from the proceeds of the litigation is effected only after its
successful termination.

CHAMPERTOUS CONTRACT- one where the lawyer stipulates with his client in the
prosecution of the case that he will bear all of the expenses for the recovery of things
or property being claimed by the client, and the latter agrees to pay the former a
portion of the thing or property recovered as compensation. It is void for being
against public policy; it is purchasing an interest in the litigation to enable a lawyer to
litigate on his own account or to abuse the client’s confidence which is prohibited.

CONTINGENT CONTRACT CHAMPERTOUS CONTRACT

1. Contingent fee is payable in cash 1. Payable in kind ONLY
2. Lawyers do not undertake to pay all 2.Lawyers undertake to pay all expenses
expenses of litigation of litigation
3. Not prohibited 3. Void