Tanhueco v.
de Dumo compensation
Facts:
Complainant Hilaria Tanhueco filed before the Court a Petition for
Disbarment against respondent Justiniano G. de Dumo for having
violated the Canons of Professional Ethics by his (a) refusal to remit
to her money collected by him from debtors of the complainant; and
(b) refusal to return documents entrusted to him as counsel of
complainant in certain collection cases.
A year later, one Jose Florencio N. Tanhueco claiming to be the
nephew and representative of the complainant, addressed a sworn
letter complaint to Mrs. Imelda R. Marcos against the respondent for
(a) refusal to remit the money collected by respondent from debtors
of complainant's aunt, Mrs. Hilaria Tanhueco Vda. de David; (b)
refusal to return documents entrusted to him in his capacity as
counsel in certain cases; and (c) abandonment of cases in respect of
which his professional services had been engaged.
The Solicitor General found that:
There is in the case at bar clear admissions by both complainant and
respondent of an attorney-client relationship between them,
specifically in the collection of debts owing complainant. Respondent
also admitted, in his answer to the complaint and in his testimony,
having received P12,000.00 from indebtor Constancia Manosca
without turning over the amount to his client, complainant herein, and
applying it instead as part of his attorney's fees.
The circumstance that an attorney has a lien for his attorney's fees
on the money in his hands collected for his client does not relieve
him from the obligation to make a prompt accounting. Undoubtedly,
respondent's failure to account for the P12,000.00, representing
payment of the judgement debt of Mañosca constitutes
unprofessional conduct and subjects him to disciplinary action.
Nonetheless, it has likewise been recognized that a lawyer is as
much entitled to judicial protection against injustice, imposition or
fraud on the part of his client; and that the attorney is entitled to be
paid his just fees. The attorney should be protected against any
attempt on the part of his client to escape payment of his just
Applicable Law:
Canon 20 – A lawyer shall charge only fair and reasonable fees
Held:
We find the findings of fact of the Solicitor General supported by the
evidence of record. We are, however, unable to accept his
recommendation.
Moneys collected by an attorney on a judgment rendered in favor of
his client, constitute trust funds and must, be immediately paid over
to the client.
Money of the client or collected for the client or other trust property
coming into the possession of the lawyer should be reported and
accounted for promptly and should not under any circumstance be
comingled with his own or be used by him.
When respondent withheld and refused to deliver the money
received by him for his client, the deceased complainant Hilaria
Tanhueco, he breached the trust reposed upon him. The claim of the
respondent that complainant had failed to pay his attorney's fees, is
not an excuse for respondent's failure to deliver any amount to the
complainants.
The fact that a lawyer has a lien for fees on moneys in his hands
collected for his client, does not relieve him from his duty promptly to
account for the moneys received; his failure to do so constitutes
professional misconduct.
In the present case, what respondent could have properly done was
to make an account with his client, the complainant, deduct his
attorney's fees due in respect of the amount actually collected by
him, and turn over the remaining balance to the complainant. The
Court notes that the services of respondent de Dumo were engaged
by the complainant on a number of cases and that these were on
differing stages of completion. Respondent was not entitled to hold
on to the entire amount of P12,000.00 collected by him until all his
fees for the other cases had also been paid and received by him.
There was not enough evidence in the record to show how much
money, if any, respondent had in fact previously (i.e., other than the
P12,000.00 from Mañosca) collected for and turned over to
complainant (thereby waiving his lien thereon) without deducting
therefrom his claimed contingent fees in respect of such collections.
The relationship of attorney and client has always been rightly
regarded as one of special trust and confidence. An attorney must
exercise the utmost good faith and fairness in all his relationships
vis-a-vis his client. Respondent fell far short of this standard when he
failed to render an accounting for the amount actually received by
him and when he refused to turn over any portion of such amount
received by him on behalf of his client upon the pretext that his
attorney's fees had not all been paid. Respondent had in fact placed
his private and personal interest above that of his client.
Respondent's act constitutes a breach of his lawyer's oath and a
mere reprimand is not an adequate sanction.
Respondent claimed that he charged complainant, his client, a
contingent fee of fifty percent (50%) of the amount collected by him,
plus interest and whatever attorney's fees may be awarded by the
trial court chargeable to the other party. In this jurisdiction, contingent
fees are not per se prohibited by law. 8 But when it is shown that a
contract for a contingent fee are 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.
Respondent attorney claimed as his contingent fee the following:
1) fifty percent (50%) of the sum of principal and interest collectible
from different debtors; and
2) attorney's fees charged to the defendant (presumably under
promissory notes or written agreements) and "not to be included in
the computation."
Under this scheme, respondent was actually collecting as attorney's
fees sixty percent (60%) or more than half of the total amount due
from defendant debtors; indeed, he was appropriating for himself
more than what he was, according to him, to turn over to his client.
We believe and so hold that the contingent fee here claimed was,
under the
facts obtaining in this case, grossly excessive and unconscionable.
The complainant was an old and sickly woman and, in respondent's
own words, "penniless." She was at the time she filed her complaint
in 1976, already seventy-six (76) years old. In her circumstances,
and given her understandable desire to realize upon debts owed to
her before death overtook her, she would easily succumb to the
demands of respondent attorney regarding his attorney's fees. It
must be stressed that the mere fact that an agreement had been
reached between attorney and client fixing the amount of the
attorney's fees, does not insulate such agreement from review and
modification by the Court where the fees clearly appear to be
excessive or unreasonable.
This Court has power to guard a client, especially an aged and
necessitous client, against such a contract. We hold that on a
quantum meruit basis, no circumstances of special difficulty
attending the collection cases having been shown by respondent,
respondent attorney's fees should be reduced from sixty percent
(60%) to ten percent (15%) of the total amount (including attorney's
fees stipulated as chargeable to the debtors) collected by him on
behalf of his client
Suspended for 6 months.