Miranda v.

Carpio, AC 6281, September 26, 2011

DOCTRINE: An attorney's retaining lien is fully recognized if the presence of the following elements concur: (1)
lawyer-client relationship; (2) lawful possession of the client's funds, documents and papers; and (3)  unsatisfied
claim for attorney's fees. Further, the attorney's retaining lien is a general lien for the balance of the account
between the attorney and his client, and applies to the documents and funds of the client which may come into
the attorney's possession in the course of his employment.

There was no proof of any agreement between Complainant Miranda and the respondent Atty. Carpio that the
latter is entitled to an additional professional fee consisting of 20% of the total area covered by OCT No. 0-94. The
agreement between the parties only shows that respondent will be paid the acceptance fee and the appearance
fees, which the respondent has duly received. Clearly, there is no unsatisfied claim for attorney's fees that would
entitle Atty. Carpio to retain his client's property. Hence, Atty. Carpio could not validly withhold the title of his
client absence a clear and justifiable claim.

"Quantum meruit, meaning `as much as he deserved' is used as a basis for determining the lawyer's professional
fees in the absence of a contract but recoverable by him from his client."  The principle of quantum meruit applies
if a lawyer is employed without a price agreed upon for his services. In such a case, he would be entitled to
receive what he merits for his services, as much as he has earned. In the present case, the parties had already
entered into an agreement as to the attorney's fees of the Atty. Carpio, and thus, the principle of quantum
meruit does not fully find application because Atty. Carpio is already compensated by such agreement.

FACTS: Complainant Valentin C. Miranda is one of the owners of a parcel of land. In 1994, complainant initiated
Land Registration Commission (LRC) Case For the registration of the aforesaid property. The case was filed before
the RTC. During the course of the proceedings, complainant engaged the services of respondent Atty. Carpio as
counsel.

In Miranda's Affidavit, complainant and Atty. Carpio agreed that Miranda was to pay Atty. Carpio PhP20, 000.00 as
acceptance fee and PhP2, 000.00 as appearance fee. Miranda paid Atty. Carpio the amounts due him. During the
last hearing of the case, Atty. Carpio demanded twenty percent (20%) of the total area of the subject property as
additional fees for his services.

Miranda did not accede to Atty. Carpio's demand for it was contrary to their agreement. Moreover, Miranda co-
owned the subject property with his siblings, and he could not have agreed to the amount being demanded by
Atty. Carpio without the knowledge and approval of his co-heirs.

A Decision was rendered in LRC Case No. M-226, granting the petition for registration. Miranda went to the RD to
get the owner's duplicate of the Original Certificate of Title (OCT). He was surprised to discover that the same had
already been claimed by and released to Atty. Carpio.

In defense of his actions, Atty. Carpio relied on his alleged retaining lien over the owner's duplicate of OCT No. 0-
94. Atty. Carpio admitted that he did not turn over to complainant Miranda the owner's duplicate of OCT No. 0-94
because of Miranda's refusal, to complete payment of his agreed professional fee consisting of 20% of the total
area of the property covered by the title.

Atty. Carpio admitted the receipt of the amount of PhP32,000.00, however, he alleged that the amount earlier paid
to him will be deducted from the 20% of the current value of the subject lot. He alleged that the agreement was
not reduced into writing, because the parties believed each other based on their mutual trust.

ISSUE: Whether or not Atty. Carpio’s act of retaining the property is valid.
RULING: No. Atty. Carpio's claim for his unpaid professional fees that would legally give him the right to retain the
property of his client until he receives what is allegedly due him has been paid has no basis and, thus, is invalid.

Section 37, Rule 138 of the Rules of Court specifically provides:

Section 37. Attorney’s liens. – An attorney shall have a lien upon the funds, documents and papers of his client,
which have lawfully come into his possession and may retain the same until his lawful fees and disbursements
have been paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extent
upon all judgments for the payment of money, and executions issued in pursuance of such judgments, which he
has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim
of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and
shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have
the same right and power over such judgments and executions as his client would have to enforce his lien and
secure the payment of his just fees and disbursements.

An attorney's retaining lien is fully recognized if the presence of the following elements concur: (1) lawyer-client
relationship; (2) lawful possession of the client's funds, documents and papers; and (3) unsatisfied claim for
attorney's fees. Further, the attorney's retaining lien is a general lien for the balance of the account between the
attorney and his client, and applies to the documents and funds of the client which may come into the attorney's
possession in the course of his employment.

There was no proof of any agreement between the complainant and the respondent that the latter is entitled to
an additional professional fee consisting of 20% of the total area covered by OCT No. 0-94. The agreement
between the parties only shows that Atty. Carpio will be paid the acceptance fee and the appearance fees, which
Atty. Carpio has duly received. Clearly, there is no unsatisfied claim for attorney's fees  that would entitle Atty.
Carpio to retain his client's property. Hence, Atty. Carpio could not validly withhold the title of his client absence a
clear and justifiable claim.

Atty. Carpio failed to live up to his duties as a lawyer by unlawfully withholding and failing to deliver the title of
the complainant Miranda, despite repeated demands, in the guise of an alleged entitlement to additional
professional fees. He has breached Rule 1.01 of Canon 1 and Rule 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 16.03 - 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 lawful 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.

Further, in collecting from complainant exorbitant fees, respondent Atty. Carpio violated Canon 20 of the Code of
Professional Responsibility, which mandates that "a lawyer shall charge only fair and reasonable fees."

It is highly improper for a lawyer to impose additional professional fees upon his client which were never
mentioned nor agreed upon at the time of the engagement of his services. At the outset, Atty. Carpio should have
informed Miranda of all the fees or possible fees that he would charge before handling the case and not towards
the near conclusion of the case. This is essential in order for the complainant to determine if he has the financial
capacity to pay respondent before engaging his services.

Atty. Caropio's further submission that he is entitled to the payment of additional professional fees on the
basis of the principle of quantum meruit has no merit. "Quantum meruit, meaning `as much as he deserved' is
used as a basis for determining the lawyer's professional fees in the absence of a contract but recoverable by him
from his client." The principle of quantum meruit applies if a lawyer is employed without a price agreed upon for
his services. In such a case, he would be entitled to receive what he merits for his services, as much as he has
earned. In the present case, the parties had already entered into an agreement as to the attorney's fees of the
respondent, and thus, the principle of  quantum meruit does not fully find application because the respondent is
already compensated by such agreement.

Atty. Macario D. Carpio is SUSPENDED from the practice of law for a period of six (6) months, effective upon
receipt of this Decision. He is ordered to RETURN to the complainant the owner's duplicate of OCT No. 0-94.