Under the Sec.

20, Rule 138, RoC, it is the duty of an attorney: (e) To

maintain inviolate the confidence, and at every peril to himself, to preserve
the secrets of his client, and to accept no compensation in connection with his
client’s business except from him or with his knowledge and approval

An attorney cannot, without the consent of his client, be examined as to any

communication made by the client to him or his advice given thereon in the
course of professional employment; nor can an attorney’s secretary,
stenographer, or clerk be examined, without the consent of the client and his
employer, concerning any fact the knowledge of which has been acquired in
such capacity [Sec. 24(b), Rule 130]

Art. 209. Betrayal of trust by an attorney or solicitor – Revelation

of secrets. – In addition to the proper administrative action, the
penalty of prision correccional in its minimum period or a fine
ranging from 200 to 1,000 pesos, or both, shall be imposed upon
any attorney-at-law or solicitor (procurador judicial) who, by any
malicious breach of professional duty or of inexcusable
negligence or ignorance shall prejudice his client or reveal any of
the secrets of the latter learned by him in his professional
capacity
PEOPLE V. SANDIGANBAYAN G.R. Nos. 115439-41

July 16, 1997
DOCTRINE:
To prevent a conniving counsel from revealing the genesis of a crime which
was later committed pursuant to a conspiracy, because of the objection
thereto of his conspiring client, would be one of the worst travesties in the
rules of evidence and practice in the noble profession of law.
EMERGENCY VERSION:
Paredes, a Provincial Attorney, applied for a free patent. It was granted by
later on cancelled as it was obtained through fraudulent misrepresentations,
as the land had been designated and reserved as a school site. A case for
perjury was led against him, and the Tanodbayan issued a recommendation
for criminal prosecution. In all these cases, Atty. Sansaet was the counsel for
Paredes. They led a motion for reconsideration on the recommendation for
the Tanodbayan attaching falsi ed documents, making it appear that a
criminal prosecution would bring about double jeopardy. Later on, a case
before the Sandiganbayan was led against Paredes, Atty, Sansaet, and another
for violation of R.A. 3019. The issue in this case is whether Atty. Sansaet can
be discharged as a state witness. The Sandiganbayan refused saying that it
was against attorney client privilege, but the court held that Sandiganbayan
erred as there was no such privilege in conspiring to do unlawful acts.
FACTS:

CASE #1, FREE PATENT: In 1976, respondent Paredes (a Provincial
Attorney) applied for a free

patent over a certain lot. His application was approved and, pursuant to a free
patent granted to him, an original certi cate of title was issued in his favor for
that lot which is situated in the poblacion of San Francisco, Agusan del Sur.
However, the Director of Lands led an action for the cancellation of the
patent and certi cate of title since the land had been designated and reserved
as a school site in the aforementioned subdivision survey. The trial court
rendered judgment nullifying said patent and title after nding that respondent
Paredes had obtained the same through fraudulent misrepresentations in his
application. Atty. Sansaet served as counsel for Paredes in this case.
CASE #2, PERJURY: Consequent to the land patent incident, a case for
perjury was led against Paredes and Atty. Sansaet again represented him in
this case.
The Tanodbayan, issued a resolution recommending the criminal prosecution
of respondent Pare-des. Atty. Sansaet, as counsel for Paredes moved for
reconsideration, alleging in his motion:
“x x x respondent had been charged already by the complainants before the
Municipal Circuit Court of San Francisco, Agusan del Sur, went to jail on
detention in 1984 under the same set of facts and the same evidence x x x but
said case after arraignment, was ordered dismissed by the court upon
recommendation of the Department of Justice. Copy of the dismissal order, certi cate
of arraignment and the recommendation of the Department of Justice are hereto
attached for ready reference; thus the ling of this case will be a case of double
jeopardy for respondent herein x x x.”
CASE #3, R.A. 3019: A criminal case was subsequently led with the
Sandiganbayan10 charging respondent Paredes with a violation of Section
3(a) of Republic Act No. 3019, as amended. However, a motion to quash led
by the defense was later granted in respondent court’s resolution of August 1,
1991 and the case was dismissed on the ground of prescription.
Teo lo Gelacio, a taxpayer who had initiated the perjury and graft charges
against respondent Paredes, sent a letter to the Ombudsman seeking the
investigation of the three respondents herein for falsi cation of public
documents. He claimed that respondents, simulated and certi ed as true
copies certain documents purporting to be a notice of arraignment, dated
July 1, 1985, and transcripts of stenographic notes supposedly taken during
the arraignment of Paredes on the perjury charge. These falsi ed documents
were annexed to respondent Paredes’ motion for reconsideration of the
Tanodbayan (in CASE #2) resolution for the ling of a graft charge against
him, in order to support his contention that the same would constitute double
jeopardy.
In support of his claim, Gelacio attached to his letter a certi cation that no
notice of arraignment was ever received by the O ce of the Provincial Fiscal
of Agusan del Sur in connection with that perjury case; and a certi cation of
Presiding Judge Ciriaco Ariño that said perjury case in his court did not reach
the arraignment stage since action thereon was suspended pending the review
of the case by the Department of Justice.
Respondents led their respective counter-a davits, but Sansaet subsequently
discarded and repudiated the submissions he had made in his counter-a davit.
In a so- called A davit of Explanations and Recti cations, respondent Sansaet
revealed that Paredes contrived to have the graft case under preliminary
investigation dismissed on the ground of double jeopardy by making it appear
that the perjury case had been dismissed by the trial court after he had been
arraigned therein.
Sandiganbayan denied petitioner’s motion for the discharge of respondent
Generoso S. Sansaet to be utilized as a state witness due to the attorney-client
privilege.
ISSUE:

Did Sandiganbayan err in not allowing Atty. Sansaet to become a
state witness against his former client?
HELD:

YES. Statements and communications regarding the commission of a crime
already committed, made by a party who committed it, to an attorney, consulted
as such, are privileged communications. Contrarily, the unbroken stream of
judicial dicta is to the e ect that communications between attorney and client
having to do with the client’s contemplated criminal acts, or in aid or furtherance
thereof, are not covered by the cloak of privileges ordinarily existing in reference to
communications between attorney and client.
Furthermore, Sansaet was himself a conspirator in the commission of that
crime of falsi cation which he, Paredes and Honrada concocted and foisted
upon the authorities. It is well settled that in order that a communication
between a
lawyer and his client may be privileged, it must be for a lawful purpose or in
furtherance of a lawful end.
It is evident, therefore, that it was error for respondent Sandiganbayan to
insist that such unlawful communications intended for an illegal purpose
contrived by conspirators are nonetheless covered by the so-called mantle of
privilege. To prevent a conniving counsel from revealing the genesis of a
crime which was later committed pursuant to a conspiracy, because of the
objection thereto of his conspiring client, would be one of the worst travesties
in the rules of evidence and practice in the noble profession of law.
REGALA VS. SANDIGANBAYAN (262 SCRA 122)
G.R. No. 105938 September 20, 1996
 
FACTS:
The Presidential Commission on Good Government (PCGG), raised a
complaint before the Sandiganbayan (SB) against Eduardo M. Cojuangco, Jr.
and Teodoro Regala and his partners in the ACCRA law firm, for the
recovery of alleged ill-gotten wealth, which includes shares of stocks in the
named corporations in PCGG Case No. 33 (Civil Case No. 0033), entitled
"Republic of the Philippines versus Eduardo Cojuangco, et al."
 
During the course of the proceedings, PCGG filed a "Motion to Admit Third
Amended Complaint" which excluded private respondent Raul S. Roco from
the complaint on his undertaking that he will reveal the identity of the
principal/s for whom he acted as nominee/stockholder.
 
In their answer to the Expanded Amended Complaint, ACCRA lawyers
requested that PCGG similarly grant the same treatment to them as accorded
Roco. The PCGG has offered to the ACCRA lawyers the same conditions
availed of by Roco but the ACCRA lawyers have refused to disclose the
identities of their clients. ACCRA lawyers filed the petition for certiorari,
invoking that the Honorable Sandiganbayan gravely abused its discretion:

1.      In subjecting petitioners ACCRA lawyers who acted to

the strict application of the law of agency
2.     In not considering petitioners ACCRA lawyers and Mr.
Roco as similarly situated and, therefore, deserving of equal
treatment.
3.      In not holding that, under the facts of this case, the
attorney-client privilege prohibits petitioners ACCRA lawyers
from revealing the identity of their client(s) and other
information requested by PCGG.
4.   In not requiring that the dropping of party-defendants by
the PCGG must be based on reasonable and just grounds and
with due consideration to equal protection of the law
 
 
ISSUE:  WON the attorney-client privilege prohibits petitioners ACCRA
lawyers from revealing the identity of their clients and the other information
requested by the PCGG.
 
 
HELD:
ACCRA lawyers & Roco are similarly situated and, therefore, deserving of
equal treatment



Being “similarly situated” in that ACCRA LAWYERS’ and ROCO’s acts

were made in furtherance of “legitimate lawyering, PCGG must show that
there exist other conditions and circumstances which would warrant their
treating ROCO differently from ACCRA LAWYERS in the case at bench in
order to evade a violation of the equal protection clause of the Constitution.



To justify the dropping of ROCO from the case or the filing of the suit in the
Sandiganbayan without him, the PCGG should conclusively show that Mr.
Roco was treated as a species apart from the rest of the ACCRA lawyers on
the basis of a classification which made substantial distinctions based on real
differences. No such substantial distinctions exist from the records of the case
at bench, in violation of the equal protection clause.



We find that the condition precedent required by the respondent PCGG of

the petitioners for their exclusion as parties-defendants in PCGG Case No. 33
violates the lawyer-client confidentiality privilege. The condition also
constitutes a transgression by respondents Sandiganbayan and PCGG of the
equal protection clause of the Constitution.

It is grossly unfair to exempt one similarly situated litigant from prosecution

without allowing the same exemption to the others. Moreover, the PCGG's
demand not only touches upon the question of the identity of their clients but
also on documents related to the suspected transactions, not only in violation
of the attorney-client privilege but also of the constitutional right against self-
incrimination. Whichever way one looks at it, this is a fishing expedition, a
free ride at the expense of such rights.
CANON 21. A lawyer shall preserve the confidence and secrets of
his client even after the attorney-client relation is terminated.

Rule 15.04. A lawyer may, with the written consent of all

concerned, act as mediator, conciliator or arbitrator in settling
disputes.

Rule 15.05. A lawyer when advising his client shall give a candid
and honest opinion on the merits and probable results of the
client’s case, neither overstating nor understating the prospects
of the case.
Rule 1.04. A lawyer shall encourage his clients to avoid, end or
settle a controversy if it will admit of a fair settlement.

Rule 15.06. -  A lawyer shall not state or imply that he is able to

influence any public official, tribunal or legislative body.

Rule 15.07. A lawyer shall impress upon his client compliance

with the laws and principles of fairness.

Rule 15.08. A lawyer who is engaged in another profession or

occupation concurrently with the practice of law shall make clear
to his client whether he is acting as a lawyer or in another
capacity.

Exercise of dual profession is not prohibited but a lawyer must make it clear
when he is acting as a lawyer or when he is acting in another capacity,
especially in occupations related to the practice of law [In re: Rothman, 12
N.J. 528 (1953)]. Purpose: Certain ethical considerations may be operative in
one profession and not in the other [Agpalo (2004)]. Impropriety rises only
when the business is conducted in a manner inconsistent with his duties as a
member of the bar.
Nakpil vs Valdes [A.C. No. 2040. March 4, 1998]

FACTS:
Jose Nakpil, husband of the complainant, became interested in purchasing a
summer residence in Moran Street, Baguio City. For lack of funds, he
requested respondent to purchase the Moran property for him. They agreed
that respondent would keep the property in thrust for the Nakpils until the
latter could buy it back. Pursuant to their agreement, respondent obtained
two (2) loans from a bank which he used to purchase and renovate the
property. Title was then issued in respondent’s name.

The ownership of the Moran property became an issue in the intestate

proceedings when Jose Nakpil died. Respondent acted as the legal counsel
and accountant of his widow. Respondent excluded the Moran property from
the inventory of Jose’s estate and transferred his title to the Moran property to
his company, the Caval Realty Corporation.

ISSUE:
Whether or not there was conflict of interest between the
respondent Atty. Valdes and the complainant.

HELD:
YES. Respondent was suspended from practice of law for one (1) year.

RATIO:
[T]here is no question that the interests of the estate and that of its creditors
are adverse to each other. Respondent’s accounting firm prepared the list of
assets and liabilities of the estate and, at the same time, computed the claims
of two creditors of the estate. There is clearly a conflict between the interest
of the estate which stands as the debtor, and that of the two claimants who
are creditors of the estate.

[R]espondent undoubtedly placed his law firm in a position where his loyalty
to his client could be doubted. In the estate proceedings, the duty of
respondent’s law firm was to contest the claims of these two creditors but
which claims were prepared by respondent’s accounting firm. Even if the
claims were valid and did not prejudice the estate, the set-up is still
undesirable. The test to determine whether there is a conflict of interest in
the representation is probability, not certainty of conflict. It was respondent’s
duty to inhibit either of his firms from said proceedings to avoid the
probability of conflict of interest.

Public confidence in law and lawyers may be eroded by the irresponsible and
improper conduct of a member of the bar. Thus, a lawyer should determine
his conduct by acting in a manner that would promote public confidence in
the integrity of the legal profession. Members of the bar are expected to
always live up to the standards embodied in the Code of Professional
Responsibility as the relationship between an attorney and his client is highly
fiduciary in nature and demands utmost fidelity and good faith. In the case at
bar, respondent exhibited less than full fidelity to his duty to observe candor,
fairness and loyalty in his dealings and transactions with his clients.

CANON 16. A lawyer shall hold in trust all moneys and properties
of his client that may come into his possession.

Lawyers cannot acquire or purchase, even at a public or judicial auction,

either in person or through the mediation of another, the property and rights
which may be the object of any litigation in which they take part by virtue of
their profession [Art. 1491(5), Civil Code].

Purpose: The prohibition is based on the existing relation of trust or the

lawyer’s peculiar control over the property. The duty of a lawyer is derived
from the law on agency which requires separation, accounting, notification
and delivery by agents possessing the principal’s property [Funa].

Requisites
1. There is an attorney-client relationship;
2. The property or interest of the client is in litigation;
3. The attorney takes part as counsel in the case;
4. The attorney purchases or acquires the property or right, by himself or
through another, during the pendency of litigation [Laig v. CA, G.R. No.
L-26882 (1978)]
Instances when prohibition in Art. 1491, Civil Code applies:

● Even if the purchase or lease of the property in litigation is in favor of a

partnership, of which counsel is a partner [Mananquil v. Villegas, A.C. No.
No. 2430 (1990)]
● If the purchase is made by the wife of the attorney [In re: Calderon, G.R.
No. L-2409 (1907)]
● Mortgage of property in litigation to the lawyer. In this case, acquisition is
merely postponed until foreclosure but effect is the same. It also includes
assignment of property [Ordonio v. Eduarte, A.M. No. 3216 (1992)].
● The purchase by a lawyer of the property in litigation from his client is void
and could produce no legal effect [Art. 1409(7), Civil Code]

Instances when prohibition in Art. 1491 does not apply:

● When the attorney is not a counsel in the case involving the same property
at the time of acquisition;
● When purchaser is a corporation, even if the attorney was an officer
[Tuason v. Tuason, G.R. No. L-3404 (1951)]
● When sale takes place after termination of litigation, except if there was
fraud or use/abuse of confidential information or where lawyer exercised
undue influence;
● Where property in question is stipulated as part of attorney’s fees, provided
that the same is contingent upon the favorable outcome of litigation and,
provided further, that the fee must be reasonable.

Rule 16.01. A lawyer shall account for all money or property

collected or received for or from the client.

Purpose: The lawyer merely holds said money or property in trust. When a
lawyer collects or receives money from his client for a particular purpose (such
as for filing fees, registration fees, transportation and office expenses), he
should promptly account to the client how the money was spent. If he does
not use the money for its intended purpose, he must immediately return it to
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.
A lawyer should not commingle a client’s money with that of other clients
and with his private funds, nor use the client’s money for his personal
purposes without the client’s consent.

SISON v. CAMACHO

Facts: Complainant, Atty. Antero M. Sison Jr., is the President of Marsman-

Drysdale Agribusiness Holdings, Inc., (MDAHI), the company having
employed the services of respondent, Atty. Manuel Camacho as counsel in an
insurance claim action against Paramount Life & General Insurance Corp.
Initial insurance claim of MDAHI against Paramount was Php 14,
863,777.00. Respondent met with Atty. Dimaano (secretary of MDAHI) to
propose an increase to their claim to Php 64, 412, 534.00, accounting the
interests imposed. Respondent clarified that increase in the claim would
require additional Php 1, 288, 260.00 for additional docket fees. MDAHI
agreed and granted said amount.

RTC ruled in favour of MDAHI granting its insurance claim plus interest in
amount approx. Php 65,000,000.00 Respondent sent a letter to MDAHI
recommending a settlement with Paramount amounting to Php
15,000,000.00 despite the already favourable ruling of RTC. MDAHI refused
and did not indicate in its conforme letter to respondent. But respondent,
even without conformity, filed Satisfaction of Judgment before RTC stating
that parties had entered into compromise. Complainant met with respondent
to clarify events.

Complainant asked respondent if the Php 1, 288, 260.00 for docket fees was
paid. Respondent replied that he simply gave it to clerk of court as payment
period had lapsed. Complainant argued that respondent violated the CPR,
particularly Rule 1.01 for dishonesty entering into a compromise agreement
without authorization and Rule 16.01 for failure to render an accounting of
funds wheich were supposed to be paid as additional docket fees. Respondent
denied allegations, stressed that he had authority to enter into compromise
agreement and alleged docket fees from MDAHI formed part of his
attorney’s fees; that judgment debt was paid and accepted by MDAHI
without objection as evidenced by an acknowledgement receipt; that Court
granted his Motion to Compel Plaintiff to Pay Attorney’s Fee (Sept. 13, 2011)
stating that Php 1,288,260.00 formed part of his attorney’s fees; that MDAHI
disregarded this RTC order because it filed an estafa case against him
concerning the Php 1,288,260.00 RTC ruled in respondent’s favour and
opined that only Php 300,000 was previously paid to respondent as attorney’s
fees. Case was elevated to Court.

Issue/s: Whether respondent violated the Code of Professional

Responsibility (CPR): Rule 1.01 “entering into a compromise
without written authority of the client”and Rule 16.01, “account
for all money or property collected or received for or from the
client.”

Decision: Court finds respondent violated Rules 1.01 and 16.01 of CPR. In
disciplinary proceedings against lawyers, the only issue is whether the officer
of court is still fit to be allowed to continue as member of the Bar.
Respondent’s defense that Php 1,288,00.00 formed part of his attorney’s fees
is grossly contradictory to the established purpose of said amount. Well-
settled is the rule that lawyers are not entitled to unilaterally appropriate their
clients’ money for themselves. Worse, the RTC ruling on May 26, 2011
entitling MDAHI to insurance claim of Php 65,000,000.00 showed that there
was no more need for additional docket fees. Despite decision, respondent did
not reject said amount nor return it to his client.

A lawyer’s failure to return upon demand, funds held to him on behalf of his
client gives rise to the presumption that he has appropriated the funds for his
own use, a gross violation of general morality, and professional ethics. Court
finds respondents acts are so reprehensible, exhibiting his moral unfitness and
inability to discharge his duties as member of the Bar. Wherefore, respondent
is found guilty of violating Rule 1.01 and Rule 16.1 of the Code of
Professional Responsibility. For reasons above stated, he is disbarred from the
practice of law and his name stricken off the Roll of Attorneys. Furthermore,
respondent is ordered to return to MDAHI, the amount of Php 1, 288,
260.00 within ninety (90) days from finality of this decision.
FERMINA LEGASPI DAROY, LYDIA LEGASPI and AGRIPINO
LEGASPI, complainants,
vs.
ATTORNEY RAMON CHAVES LEGASPI, respondent.
A.M. No. 936 July 25, 1975

FACTS:

Complainants hired the respondent to represent them in an intestate

proceeding. When the land was sold the complainant, Mrs. Daroy only
knew about the sale after the respondent informed her father through a
letter dated November 28, 1969, that the money could be withdrawn on
December 08, 1969. However complainants were not able to get the money
on the said date because on December 07, the respondent informed them
counter demanding his prior notice and instead rescheduled it for December
10. But on December 09 a certain Atty. Sugamo sent a handwritten note to
Mrs. Daroy informing her that her postdated checks are not yet available on
December 10. On the same day, Mrs. Daroy received another note from the
respondent himself confessing that he had already withdrawn the money
amounting to PHP 4,000.00 and had spent it. It turned out that the
respondent on October 20, 1969, as counsel for complainants received the
said amount from Deputy Provincial Sheriff. It is evident that when the
respondent informed complainants about the sale of the land on
November 08, 1969, and that the money deposited could be withdrawn
on December 08, acted in bad faith because he had already withdrawn the
money before that date.

Complainants charged the respondent with malpractice for having

misappropriated the sum of four thousand pesos that he had collected
for them. They prayed that the respondent is disbarred.

ISSUE:

Whether respondent acts constitute malpractice and may be

disbarred.

RULING:
YES.
A lawyer, under his oath, pledges himself not to delay any man for money or
malice and is bound to conduct himself with all good fidelity to his clients. He
is obligated to report promptly the money of his clients that has come
into his possession. He should not commingle it with his private
property or use it for his purposes without his client's consent. He
should maintain a reputation for honesty and fidelity to private trust (Pars. 11
and 32, Canons of Legal Ethics). Section 25, Rule 138 of the Rules of Court
provides that when an attorney unjustly retains in his hand’s money of
his client after it has been demanded, he may be punished for
contempt as an officer of the court who has misbehaved in his official
transactions and he is liable to criminal prosecution. A lawyer may be
disbarred for any deceit, malpractice, or other gross misconduct in his office
as an attorney or any violation of the lawyer's oath (Ibid, sec. 27). A member
of the bar who converts the money of his client to his benefit through
pretenses is guilty of deceit, malpractice, and gross misconduct in his office
as a lawyer. The attorney, who violates his oath of office, betrays the
confidence reposed in him by a client, practices deceit, and cannot be
permitted to continue as a law practitioner. Not alone has he degraded
himself but as an unfaithful lawyer, he has besmirched the fair name of an
honorable profession (In re Paraiso, 41 Phil. 24, 25; In re David, 84 Phil. 627;
Manaloto vs. Reyes, Adm. Case No. 503, October 29, 1965, 15 SCRA 131;
See Cabigao and Yzquierdo vs. Fernando Rodrigo, 57 Phil. 20).

Therefore respondent is guilty of deceit, malpractice, and professional

misconduct for having misappropriated the funds of his clients. His
manufactured defenses, his lack of candor, and his repeated failure to appear
at the investigation conducted by the City Fiscal of Iligan and at the hearings
scheduled by this Court, thus causing this proceeding to drag on for a long
time, demonstrate his unworthiness to remain as a member of the noble
profession of law.
CAMINO v. ATTY. PASAGUI

FACTS

Disbarment complaint was filed against respondent Atty. Ryan Rey L.

Pasagani before the Integrated Bar of the Philippines-commission on bar
Discipline (IBP-CBD), that the respondent violated their agreement for the
latter to facilitate and secure a loan to finance the payment of necessary
expenses to transfer the title of a certain property under her name, she
claimed that respondent obtained a loan using their property as a collateral,
but atty. Pasagni arrogated the proceeds.

ISSUE

Whether or not a malpractice or gross misconduct can be used as grounds for

disbarment of a lawyer.

The court ruling was in favor of the complainant, the Court found that the
respondent was guilty of deceit, malpractice and gross misconduct in
converting the money of his client to his own use without her consent, his
failure to use the proceeds for the transfer of the title in complainant’s name.
He did not only betray the trust and confidence of his client, he is likewise
guilty of engaging in dishonest and deceitful conduct.

RULING

The Court affirmed the findings and conclusions of the IBP Board of
Governors and imposed the penalty to disbarment. The Court also ordered
to return the load proceeds he received from Perpetual Help Credit
Cooperative Inc.

Wherefore, Resolution No. XX1-2014-938 dated December 14, 2014 of the

IBP Board of Governors which found respondent Atty. Ryan Rey I Pasagan
GUILTY of violation for Rule 1.0 if the Code of Professional responsibility
affirmed with Modification as to the penalty. Respondent is instead meted the
penalty of Disbarment, Respondent is further ordered to Return the load
proceeds amounting to 1,000.000.00 and to pay legal interest at the rate of
twelve percent per annum computed from the release of the loan on February
15, 2011 up to June 30, 2013 and six percent per annum from July 1, 2013
until fully paid as well as the 120,000.00 received for the purpose or
transferring of the title in the name of the complainant to pay legal interest at
the rate of twelve percent per annum computed from receipt of the amount
on February 3, 2011 up to June 30, 2013 and six percent per annum from July
1, 2013 until fully paid. He is likewise ordered to return all other documents
pertinent to the load obtained from PHCCI and those received from
complaint.

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.

When an attorney unjustly retains in his hands money of his client after it has
been demanded, he may be punished for contempt as an officer of the Court
who has misbehaved in his official transactions; but proceedings under Sec.
25, Rule 138 shall not be a bar to criminal prosecution.

Money collected by a lawyer in pursuance of a judgment in favor of his

clients is held in trust and must be immediately turned over to them [Busiños
v. Ricafort, A.C. No. 4349 (1997)]

An attorney has 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 [Sec. 37, Rule 138, RoC]

Rule 16.04. A lawyer shall not borrow money from his client
unless the client’s 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.

A lawyer is prohibited from borrowing money from his client.

Purpose: This rule is intended to prevent the lawyer from taking advantage
of his influence over his client [Junio v. Grupo, A.C. No. 5020 (2001)].

The canon presumes that the client is disadvantaged by the lawyer’s ability to
use all the legal maneuverings to renege on her obligation [Frias v. Lozada,
A.C. No. 6656 (2005)].

The profession demands from the attorney an absolute abdication of every

personal advantage conflicting in any way, directly or indirectly, with the
interest of his client.

A lawyer is prohibited from lending money to his client.

Purpose: The canon intends to assure the lawyer’s independent professional

judgment, for if the lawyer acquires a financial interest in the outcome of the
case, the free exercise of his judgment may be adversely affected [Agpalo
(2004)].

Exception: When, in the interest of justice, he has to advance necessary

expenses in a legal matter he is handling.
Junior v. Grupo A.C. No. 5020, December 18, 2001

Facts: Complainant alleged that she engaged the services of respondent for
the redemption of a parcel of land. Complainant entrusted to respondent the
amount of P25,000.00 in cash to be used in the redemption of the aforesaid
property. Respondent received the said amount as evidenced by an
acknowledgment receipt. Notwithstanding the foregoing and for no valid
reason, respondent did not redeem the property; as a result of which the right
of redemption was lost and the property was eventually forfeited. Because of
respondent’s failure to redeem the property, complainant had demanded the
return of the money which she entrusted to the former for the above-stated
purpose. Despite repeated demands made by the complainant and without
justifiable cause, respondent has continuously refused to refund the money
entrusted to him. In his Answer, petitioner admitted receiving the amount in
question for the purpose for which it was given. However, he alleged that The
subject land for which the money of complainant was initially intended to be
applied could really not be redeemed anymore. By the time that complainant
was to return to Manila, it was already a foregone matter that respondent’s
efforts did not succeed. And so, when transaction failed, respondent requested
the complainant that he be allowed, in the meantime, to avail of the money
because he had an urgent need for some money himself to help defray his
children’s educational expenses. It was really a personal request, a private
matter between respondent and complainant, thus, respondent executed a
promissory note for the amount, a copy of which is probably still in the
possession of the complainant. Respondent did not ask for any fee. His
services were purely gratuitous; his acts [were] on his own and by his own. It
was more than pro bono; it was not even for charity; it was simply an act of a
friend for a friend. It was just lamentably unfortunate that his efforts failed.

Issue: Whether respondent who is not paid for extending legal

assistance to the complainant constitutes a lawyer-client
relationship and the non-payment of his debt of the former to the
latter violates his oath and the Code of Professional
Responsibility?

Held: Yes, To constitute professional employment it is not essential that the

client should have employed the attorney professionally on any previous
occasion. It is not necessary that any retainer should have been paid.
promised, or charged for; neither is it material that the attorney consulted did
not afterward undertake the case about which the consultation was had. If a
person, in respect to his business affairs or troubles of any kind, consults with
his attorney in his professional capacity with the view to obtaining
professional advice or assistance, and the attorney voluntarily permits or
acquiesces in such consultation, then the professional employment must be
regarded as established. The court ordered the respondent suspended for one
month from the practice of law and directed him to pay the amount given
him by his clients within 30 days from notice for his failure to return the
money in question notwithstanding his admission that he did not use the
money for the filing of the appellee’s brief, as agreed by them, because of an
alleged quarrel with his clients.

Michelle A. Buenaventura vs Atty. Dany B. Gille A.C. No. 7446, 09

December 2020

FACTS:
Petition for Suspension and Disbarment filed by complainant Michelle A.
Buenaventura (Michelle) against Atty. Dany B. Gille (Atty. Gille) for Gross
Misconduct. Michelle engaged Atty. Gille’s services. Subsequently, Atty. Gille
borrowed P300,000.00 from Michelle. As a collateral, Atty. Gille gave
Michelle a copy of Transfer Certificate of Title (TCT) No. N-272977 which
allegedly covered a 1,000-square meter land situated in Quezon City worth
P20 Million and a check postdated August 10, 2006 as payment for the
principal obligation. When Michelle and her father Adolfo went to the
Register of Deeds (RD) of Quezon City, they were surprised upon
being informed by Atty. Elbert T. Quilala (Atty. Quilala) of the RD Quezon
City that the TCT was a forgery issued by a syndicate. Michelle and Adolfo
then demanded from Atty. Gille the return of the borrowed amount.
However, he failed to pay. Instead, he executed a promissory note
acknowledging having issued a check postdated August 10, 2006, and
promising to pay Michelle the outstanding amount on September 10, 2006.
On its due date, Michelle deposited the check but it was dishonored due to
"Account Closed". As a result, she filed a criminal complaint for Estafa
against Atty. Gille Michelle likewise filed the instant Petition for suspension or
disbarment against respondent for allegedly committing deceit, and gross
immoral conduct in violation of his Lawyer's Oath and the Code of
Professional Responsibility (CPR). IBP found that Atty. Gille liable for Gross
Misconduct for issuing a postdated check that was subsequently dishonored
and for presenting a fraudulent certificate of title to obtain money from
Michelle. Suspended from the practice of law for a period of two (2) years
and ordered to return the loaned amount of P300,000.00 with legal interest
reckoned from the time the demand was made.

ISSUE: Whether or not Atty. Gille is guilty of Gross Misconduct?

RULING:

Atty. Gille violated Rule 16.04, Canon 16 of the CPR, which prohibits a
lawyer from borrowing money from his client unless the client's interests are
fully protected, to wit:
CANON 16 — A LAWYER SHALL HOLD IN TRUST ALL
MONIES AND PROPERTIES OF HIS CLIENTS THAT MAY
COME INTO HIS POSSESSION.

Rule 16.04 — A lawyer shall not borrow money from his client unless the
client's 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. The mere act of borrowing money
from his client is considered unethical and an abuse of the latter’s
confidence reposed upon him. In doing so, Atty. Gille took
advantage of his influence over his client Michelle. Further, Michelle
was at a disadvantage because of respondent's ability to use all
the legal maneuverings to evade his obligation. All told, the Court agrees
with the IBP that Atty. Gille committed Gross Misconduct. His utter
disregard for his bounden duties inscribed in the CPR is clearly manifested in
the following acts: (a) borrowing money from his client; (b) presenting a
spurious title of a mortgaged property; (c) refusing to pay his debt despite
demand; (d) issuing a worthless check; and (e) failing to comply with the
orders of the IBP. His lack of honesty and good moral character are evident
and renders him unworthy of
the trust and confidence reposed upon him by his clients. This warrant the
imposition of severe disciplinary action on him. WHEREFORE, Atty. Dany
B. Gille is found GUILTY of violating Rules 1.01, 7.03, and 16.04, of the
Code of Professional Responsibility, and of the Lawyer's Oath. He is thus
DISBARRED from the practice of law and his name stricken off from the
Roll of Attorneys, effective immediately. Atty. Dany B. Gille is also hereby
meted a FINE in the amount P5,000.00 for his disobedience to the orders of
the Integrated Bar of the Philippines

CANON 17. A lawyer owes fidelity to the cause of his client and he
shall be mindful of the trust and confidence reposed in him.

The failure to exercise due diligence and the abandonment of a client’s cause
make such a lawyer unworthy of the trust which the client has reposed on
him.

Once he agrees to take up the cause of the client, no fear or judicial disfavor
or public unpopularity should restrain him from the full discharge of his duty.

In the discharge of his duty of entire devotion to the client's cause, a lawyer
should present every remedy or defense authorized by law in support of his
client’s cause, regardless of his personal views. He should not be afraid of the
possibility that he may displease the judge or the general public [Agpalo
(2004)]

Read along: CANON 19. A lawyer shall represent his client with
zeal within the bounds of the law.

A lawyer’s duty is not to his client but to the administration of justice; To that
end, his client’s success is wholly subordinate and his conduct ought to and
must always be unscrupulously observant of law and ethics.

CANON 18. A lawyer shall serve his client with competence and
diligence.

A lawyer must exercise ordinary diligence or that reasonable degree of care

and skill having reference to the character of the business he undertakes to
do, as any other member of the bar similarly situated commonly possesses
and exercises.
In the absence of evidence on the contrary, however, a lawyer is presumed to
be prompt and diligent in the performance of his obligations and to have
employed his best efforts, learning, and ability in the protection of his client’s
interests and in the discharge of his duties as an officer of the court.

Rule 18.02. A lawyer shall not handle any legal matter without
adequate preparation.

A lawyer should safeguard his client’s rights and interests by thorough study
and preparation, mastering applicable law and facts involved in a case, and
keeping constantly abreast of the latest jurisprudence and developments in all
branches of the law [Agpalo (2004)]. A lawyer should give adequate
attention, care and time to his cases. This is the reason why a practicing
lawyer should accept only so many cases he can handle.

Rule 18.03. A lawyer shall not neglect a legal matter entrusted to

him, and his negligence in connection therewith shall render him
liable.

If by reason of the lawyer’s negligence, actual loss has been caused to his
client, the latter has a cause of action against him for damages [Callanta].

General rule: A client is bound by the attorney’s conduct, negligence and

mistake in handling the case or in management of litigation and in
procedural technique, and he cannot be heard to complain that the result
might have been different had his lawyer proceeded differently.
● Doctrine of Imputed Knowledge: Notice to counsel is notice to client.

Exceptions: The client is not so bound where the ignorance, incompetence

or inexperience of a lawyer is so great and error so serious that the client,
who has good cause, is prejudiced and denied a day in court.
MARCIANA ALARCON v. CA GR No. 152085, Jul 08, 2003

FACTS: Respondent corporation, Pascual and Santos, Inc., is the owner of

several salt beds with an area of around 4 hectares, situated in Barangay San
Dionisio, Manuyo, Parañaque. In 1950, it instituted petitioners as tenants of
the saltbeds under a fifty-fifty share tenancy agreement. The harmonious
tenurial relationship between petitioners and private respondent was
interrupted in 1994, when the city government of Parañaque, represented by
then Mayor, authorized the dumping of garbage on the adjoining lot. The
garbage polluted the main source of salt water, which adversely affected salt
production on the subject landholding.

Petitioners informed respondent of this, but failed to take any step to stop the
dumping of garbage on the adjoining lot. Petitioners filed a protest but their
complaint was ignored. They again filed with the RARAD of Region IV a
complaint against respondent and the Mayor for maintenance of peaceful
possession and security of tenure with damages. Subsequently, they amended
their complaint to one for damages and disturbance compensation, with
prayer for temporary restraining order and injunction. RARAD rendered a
decision holding that under Metro Manila Zoning Ordinance No. 8101,
issued in 1981, the subject salt beds have been reclassified to residential lands.
Consequently, the juridical tie between petitioners and respondent was
severed, for no tenurial relationship can exist on a land that is no longer
agricultural with petitioners entitled to disturbance compensation. It was held
that the DAR had no jurisdiction over the complaint against the Mayor and
dismissed the same. On appeal, the DARAB affirmed in toto the above
decision of the RARAD. The CA reversed the decision of the DARAB, and
ordered the dismissal of petitioners' complaint.

ISSUES: Whether or not a mere reclassification of the land from agricultural

to residential, without any court action by the landowner to eject or dispossess
the tenant, entitles the latter to disturbance compensation?

HELD: A tenancy relationship, once established, entitles the tenant to a

security of tenure. He can only be ejected from the agricultural landholding
on grounds provided by law. This is clearly stated in Section 7 of RA 3844.
Section 36 provides the different grounds and manner by which a tenant can
be lawfully ejected or dispossessed of his landholding. One of them is the
reclassification of the landholding from agricultural to nonagricultural. It is
clear that a tenant can be lawfully ejected only if there is a court
authorization in a judgment that is final and executory and after a hearing
where the reclassification of the landholding was duly determined. If the
court authorizes the ejectment, the tenant who is dispossessed of his tenancy
is entitled to disturbance compensation.

Moreover, contrary to petitioners' claim, the reclassification of the land is not

enough to entitle them to disturbance compensation. The law is clear that
court proceedings are indispensable where the reclassification of the
landholding is duly determined before ejectment can be effected, which in
turn paves the way for the payment of disturbance compensation. The parties
can still continue with their tenurial relationship even after such
reclassification. In fact, it is undisputed that in this case, the parties continued
with their landlord-tenant relationship even after the enactment of Metro
Manila Zoning Ordinance No. 81-01. It was only in 1994 when this
relationship was interrupted because of the dumping of garbage by the city
government. Clearly, it was this latter event which caused petitioner's
dispossession, and it would be unfair to oblige respondent to pay
compensation for acts it did not commit.

In the case at bar, there is no final order of conversion. The subject

landholding was merely reclassified. Conversion is different from
reclassification. Conversion is the act of changing the current use of a piece
of agricultural land into some other use as approved by the Department of
Agrarian Reform. Reclassification, on the other hand, is the act of specifying
how agricultural lands shall be utilized for non-agricultural uses such as
residential, industrial, commercial, as embodied in the land use plan, subject
to the requirements and procedure for land use conversion. Accordingly, a
mere reclassification of agricultural land does not automatically allow a
landowner to change its use and thus cause the ejectment of the tenants. He
has to undergo the process of conversion before he is permitted to use the
agricultural land for other purposes. Since in this case, there is neither a final
order of conversion by the DAR nor a court judgment authorizing the
tenants' ejectment on the ground of reclassification, as a result of the
landowner's court action, there is no legal basis to make respondent liable to
pay disturbance compensation.
Failure to attend a trial without filing a motion for postponement
or without requesting either of his two partners in the law office
to take his place and appear for the defendants.

JOSE AGRAVANTE and JUAN AGRAVANTE vs. JUANA PATRIARCA

Facts:

A case was set for pre-trial but before it was held, a fire broke out on June 26,
1976 in the capitol building. The records of the court were burned, including
the present case. The record was reconstituted and was rescheduled for pre-
trial on January 25, 1978. The defendant‘s counsel move for the cancellation
of this setting. The Court reset the pre-trial to February 27, 1978. But again,
the defendant‘s counsel pleading illness, sought this be cancelled and
rescheduled again. This motion was dated February 14, 1978 but was only
filed on February 22, 1978. This motion contained no notice of hearing, but
a photocopy of a medical certificate dated January 30, 1978 stating that Atty.
Pacamarra has headache and is advised to take a rest. The motion filed was
denied for being not in accordance with the rules because of lack of notice to
the adverse party, lack of setting of the date of hearing, and the attached
medical certificate was only a photocopy. At the scheduled pre-trial on
February 27, neither the counsel nor the defendants appeared. The Court
declared them in default. On March 4, the Court was informed of Juana
Patriarca‘s death and her heirs requested that she be substituted which was
granted. The heirs of Juana moved for reconsideration of the three orders
dated February 22, February 27, and March 4. But this was denied by the
court. Hence, they filed a petition for certiorari to the SC contending that
they had been denied their day in court.

Issue:
Whether or not Atty. Pacamarra violated Rule 18.03 of the Code
of Professional Responsibility?

Ruling:

Yes. He neglected his duties to legal matters. His petition for the rescheduling
of the pre-trial set on Feb 27, 1978 is untenable. A party or counsel desiring a
postponement of a pre-trial must comply with the requisites set out in Rule
15 of the Rules of Court. The requisites were not complied with by the
defendants. The SC also noted that the character of illness of Atty.
Pacamarra is not so severe as to render his non-attendance excusable. The
notice of the denial of his motion for postponement was served to him in Feb
24, 3 days before the pre-trial date. The SC also held that defendant‘s
contention that the demise of Juana Patriarca prevented the trial court‘s
acquisition of jurisdiction over her is untenable. The death of Juana does not
affect the Court‘s jurisdiction. She was substituted. The defendant‘s
actuations give rise to the conclusion that they were motivated by a desire to
delay the disposition of the case. Petition for certiorari dismissed.

Rule 18.04. A lawyer shall keep the client informed of the status
of his case and shall respond within a reasonable period of time
to client’s request for information.

Duty to Keep the Client Fully Informed

1. The client must receive from the lawyer, full and periodic updates on the
developments affecting the case;
2. The lawyer should apprise the client of the mode and the manner which
he is utilizing to defend the clients’ interests;
3. The lawyer must advise the client of the risks, alternatives and their
consequences; and
4. The client must be informed within the period to appeal to enable him to
decide whether or not he will still seek appellate review of an adverse
decision.

Even if the lawyer was honestly and sincerely protecting the interests of his
client, he still does not have the right to waive the appeal without the
knowledge and consent of his client.

The client should not, however, sit idly by. It is also his duty to make proper
inquiries from his counsel concerning his case, in keeping with that standard
of care which an ordinarily prudent man bestows upon his important
business.

CANON 19. A lawyer shall represent his client with zeal within the
bounds of the law.
A lawyer’s duty is not to his client but to the administration of justice; To that
end, his client’s success is wholly subordinate and his conduct ought to and
must always be unscrupulously observant of law and ethics.

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.

It is the duty of an attorney to employ, for the purpose of maintaining the

causes confided to him, such means only as are consistent with truth and
honor, and never seek to mislead the judge or any judicial officer by an
artifice or false statement of fact or law [Sec. 20(d), Rule 138, RoC].

A lawyer should not file or threaten to file any unfounded or baseless criminal
case or cases against the adversaries of his client designed to secure a leverage
to compel adversaries to yield or withdraw their own cases against the
lawyer’s client.

Under the Sec. 20, Rule 138, RoC, it is the duty of an attorney: To employ,
for the purpose of maintaining the causes confided to him, such means only
as are consistent with truth and honor, and never seek to mislead the judge or
any judicial officer by an artifice or false statement of fact or law;

Rule 19.02. 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 accordance with the Rules of Court.

This rule merely requires the lawyer to terminate his relationship with the
client in the event the latter fails or refuses to rectify the fraud. The lawyer
may not volunteer the information concerning the client’s commission of
fraud to anyone, as it will violate his obligation to maintain the client’s secrets
undisclosed.
Rule 19.03. A lawyer shall not allow his client to dictate the
procedure on handling the case.

An attorney may not impair, compromise, settle, surrender, or destroy rights

without his client's consent. A lawyer has no implied authority to waive his
client’s right to appeal or to withdraw a pending appeal.

If a lawyer believes that the appeal of his client is frivolous, he cannot move
to dismiss the appeal, without the consent of his client. His remedy is to
withdraw from the case People v. Pagarao, G.R. No. 930026-27 (1991)].

Presumption of Authority
An attorney is presumed to be properly authorized to represent any cause in
which he appears in all stages of the litigation and no written authority is
required to authorize him to appear. A mere denial by a party that he has
authorized an attorney to appear, in the absence of compelling reason, is
insufficient to overcome the presumption especially when the denial comes
after an adverse judgment.

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

Any counsel worthy of his hire is entitled to be fully recompensed for his
services. With his capital consisting solely of his brains and with his skill,
acquired at tremendous cost not only in money but in the expenditure of time
and energy, he is entitled to the protection of any judicial tribunal against any
attempt of the part of the client to escape payment of his fees [Albano v.
Caloma, A.C. No. 528 (1967)].

An attorney is entitled to have and to recover from his client no more than a
reasonable compensation for his services with a view to:

1. The importance of the subject matter of the controversy;

2. The extent of the services rendered; and
3. The professional standing of the attorney.

No court shall be bound by the opinion of attorneys as expert witnesses as to

the proper compensation and 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 therefore unless found by the court to be
unconscionable or unreasonable.

TRADERS ROYAL BANK EMPLOYEES UNION-INDEPENDENT

vs. NLRC AND CRUZ DIGEST
FACTS:

Petitioner and private respondent Atty. Emmanuel Noel A. Cruz entered into
a retainer agreement whereby the former obligated itself to pay the latter a
monthly retainer fee of P3,000.00 in consideration of the undertaking to
render the services enumerated in their contract.

During the existence of that agreement, petitioner union referred to private

respondent the claims of its members for holiday, mid-year and year-end
bonuses against their employer, Traders Royal Bank (TRB). A complaint was
filed by petitioner. NLRC favored the employees, awarding them holiday pay
differential, mid-year bonus differential, and year-end bonus differential. TRB
challenged the decision of the NLRC before the SC. The SC deleted the
award of mid-year and year-end bonus differentials while affirming the award
of holiday pay differential.

After private respondent received the decision of the SC he notified the

petitioner union, the TRB and the NLRC of his right to exercise and enforce
his attorney’s lien over the award of holiday pay differential, he filed a motion
before LA for the determination of his attorney’s fees, praying that 10% of
the total award for holiday pay differential computed by TRB at
P175,794.32, or the amount of P17,579.43, be declared as his attorney’s fees,
and that petitioner union be ordered to pay and remit said amount to him.

Petitioner opposed said motion. LA favored private respondent. Petitioner

appealed to NLRC but NLRC affirmed LA’s decision. Hence the petition at
bar.

ISSUE:
Is the private respondent entitled to Atty.’s fees aside from his retainer fee?

RULING:

Yes. There are 2 commonly accepted concepts of attorney’s fees, the so-called
ordinary and extraordinary.  In its ordinary concept, an attorney’s fee is the
reasonable compensation paid to a lawyer by his client for the legal services
he has rendered to the latter. The basis of this compensation is the fact of his
employment by and his agreement with the client.

In its extraordinary concept, an attorney’s fee is an indemnity for damages

ordered by the court to be paid by the losing party in a litigation. The basis of
this is any of the cases provided by law where such award can be made, such
as those authorized in Article 2208, Civil Code, 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.

It is the first type of attorney’s fees which private respondent demanded

before the labor arbiter. A claim for attorney’s fees may be asserted either in
the very action in which the services of a lawyer had been rendered or in a
separate action. While a claim for attorney’s fees may be filed before the
judgment is rendered, the determination as to the propriety of the fees or as
to the amount thereof will have to be held in abeyance until the main case
from which the lawyer’s claim for attorney’s fees may arise has become final.
  Otherwise, the determination to be made by the courts will be premature.
 Of course, a petition for attorney’s fees may be filed before the judgment in
favor of the client is satisfied or the proceeds thereof delivered to the client.

Private respondent was well within his rights when he made his claim and
waited for the finality of the judgment for holiday pay differential, instead of
filing it ahead of the award’s complete resolution.

The P3,000.00 which petitioner pays monthly to private respondent does not
cover the services the latter actually rendered before the LA and the NLRC in
behalf of the former. As stipulated in their retainer’s agreement, the monthly
fee is intended merely as a consideration for the law firm’s commitment to
render the services.

There are two kinds of retainer fees a client may pay his lawyer. These are a
general retainer, or a retaining fee, and a special retainer.

A general retainer, or retaining fee, is the fee paid to a lawyer to secure his
future services as general counsel for any ordinary legal problem that may
arise in the routinary business of the client and referred to him for legal
action. The future services of the lawyer are secured and committed to the
retaining client. For this, the client pays the lawyer a fixed retainer fee. The
fees are paid whether or not there are cases referred to the lawyer. The reason
for the remuneration is that the lawyer is deprived of the opportunity of
rendering services for a fee to the opposing party or other parties. In fine, it is
a compensation for lost opportunities.

A special retainer is a fee for a specific case handled or special service

rendered by the lawyer for a client. A client may have several cases
demanding special or individual attention. If for every case there is a separate
and independent contract for attorney’s fees, each fee is considered a special
retainer.

The P3,000.00 monthly fee provided in the retainer agreement between the
union and the law firm refers to a general retainer, or a retaining fee, as said
monthly fee covers only the law firm’s commitment to render the legal
services enumerated in said agreement..

Whether there is an agreement or not, the courts can fix a reasonable

compensation which lawyers should receive for their professional services.
However, the value of private respondent’s legal services should not be
established on the basis of Article 111 of the Labor Code alone. Said article
provides:
“(a) In cases of unlawful withholding of wages the culpable party may be assessed
attorney’s fees equivalent to ten percent of the amount of the wages recovered.”

The implementing provision 38 of the foregoing article further states:

“Sec. 11.    Attorney’s fees.  Attorney’s fees in any judicial or administrative proceedings for
the recovery of wages shall not exceed 10% of the amount awarded. The fees may be
deducted from the total amount due the winning party.”

The fees mentioned here are the extraordinary attorney’s fees recoverable as
indemnity for damages sustained by and payable to the prevailing part. The
10% attorney’s fees fixes only the limit on the amount of attorney’s fees the
victorious party may recover in any judicial or administrative proceedings and
it does not revent the NLRC from fixing an amount lower than 10% ceiling
prescribed by the article when circumstances warrant it.

The measure of compensation for private respondent’s services as against his

client should properly be addressed by the rule of quantum meruit which
means “as much as he deserves,” which is used in the absence of a contract,
but recoverable by him from his client. Where a lawyer is employed without a
price for his services being agreed upon, the courts shall fix the amount on
quantum meruit basis.

But instead of adopting the above guidelines, the labor arbiter erroneously set
the amount of attorney’s fees on the basis of Article 111 of the Labor Code.
He completely relied on the operation of Article 111 when he fixed the
amount of attorney’s fees.

Article 111 of the Labor Code may not be used as the lone standard in fixing
the exact amount payable to the lawyer by his client for the legal services he
rendered. While it limits the maximum allowable amount of attorney’s fees, it
does not direct the instantaneous and automatic award of attorney’s fees in
such maximum limit. The criteria found in the Code of Professional
Responsibility are to be considered, in assessing the proper amount. These
are: (a) the time spent and the 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 acceptance of the proffered case; (f) the customary
charges for similar services and the schedule of fees of the IBP chapter to
which the lawyer belongs; (g) the amount involved in the controversy and the
benefits resulting to the client from the services; (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.

WHEREFORE, the Resolution of respondent is MODIFIED, and petitioner

is hereby ORDERED to pay the amount of P10,000.00 as attorney’s fees to
private

Rule 20.01. A lawyer shall be guided by the following factors in

determining his fees:

a) The time spent and the extent of the 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
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.

Manners by which attorneys may be paid

● A fixed or absolute fee which is payable regardless of the result of the case;
A fixed fee payable per appearance;
● A fixed fee computed by the number of hours spent;
● A fixed fee based on a piece of work;
● contingent fee that is conditioned upon the securing of a favorable
judgment and recovery of money or property and the amount of which
may be on a percentage basis;
● A combination of any of the above stipulated fees.

Rule 20.02. A lawyer shall, in cases of referral, with the consent

of the client, be entitled to a division of fees in proportion to work
performed and responsibility assumed.

The referral of a client by a lawyer to another lawyer does not entitle the
former to a commission or to a portion of the attorney’s fees. It is only when,
in addition to the referral, he performs legal service or assumes responsibility
in the case that he will be entitled to a fee [Agpalo (2004)].

Rule 20.03. A lawyer shall not, without the full knowledge and
consent of the client, accept any fee, reward, costs, commission,
interest, rebate or forwarding allowance or other compensation
whatsoever related to his professional employment from anyone
other than the client.

Purpose: The rule is designed to secure the lawyer’s fidelity to the client’s
cause and to prevent that situation in which receipt by him of rebate or
commission from another in connection with the client’s cause may interfere
with the full discharge of his duty to his client [Agpalo (2004)]. It is the duty
of an attorney to accept no compensation in connection with his client’s
business except from him or with his knowledge and approval.

Acceptance Fees Acceptance of money from a client establishes an attorney-

client relationship and gives rise to the duty of fidelity to the client’s cause.

Failure to render the legal services agreed upon, despite receipt of an

acceptance fee, is a clear violation of the CPR.

A contingent contract is an agreement in which the lawyer’s fee, usually a

fixed percentage of what may be recovered in the action, is made to depend
upon the success in the effort to enforce or defend the client’s right. The
lawyer does not undertake to shoulder the expenses of litigation. - It is a valid
agreement.

A champertous contract is one where the lawyer stipulates with his client that
he will bear all the expenses for the prosecution of the case, the recovery of
things or property being claimed, and the latter pays only upon successful
litigation - This contract is void for being against public policy.

Contingent fee contracts are subject to the supervision and close scrutiny of
the court in order that clients may be protected from unjust charges. A much
higher compensation is allowed as contingent fees because of the risk that the
lawyer may get nothing if the suit fails.

Attorney’s Liens

RETAINING LIEN

An attorney shall have a lien upon the funds, documents and papers of his
client which have lawfully come into his possession. Thus:
1. He may retain the same until his lawful fees and disbursements have been
paid;
2. May apply such funds to the satisfaction thereof. [Sec. 37, Rule 138, RoC]
Requisites:
1. Attorney-client relationship;
2. Lawful possession by lawyer of the client’s funds, documents and papers in
his professional capacity; and
3. Unsatisfied claim for attorney’s fees or disbursements.

CHARGING LIEN
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.

This lien exists from and after the time when he shall have caused:

1. 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
2. Written notice thereof to be delivered to his client and to the adverse
party.

Requisites:
1. Attorney-client relationship;
2. The attorney has rendered services;
3. A money judgment favorable to the client has been secured in the action;
and
4. The attorney has a claim for attorney’s fees or advances statement of his
claim has been recorded in the case with notice served upon the client and
adverse party.

Rule 20.04. A lawyer shall avoid controversies with clients

concerning his compensation and shall resort to judicial action
only to prevent imposition, injustice or fraud.

A lawyer should avoid controversies with clients concerning compensation so

far as shall be compatible with self-respect and with his right to receive a
reasonable recompense for his services, and he should resort to lawsuits with
clients only to prevent injustice, imposition or fraud. Lawyers thus seldom, if
ever, file judicial actions for the recovery of their fees unless righteous and
well founded and unless forced by the client's intolerable attitude because
such lawsuits cannot fail to create the impression, however, wrong it may be,
that those instituting them are mercenaries.

Judicial actions to recover attorney’s fees:

1. An appropriate motion or petition as an incident in the main action where

he rendered legal services;
2. A separate civil action for collection of attorney’s fees.

QUANTUM MERUIT: “as much as a lawyer deserves.” Essential requisite:

Acceptance of the benefits by one sought to be charged for services rendered
under circumstances as reasonably to notify him that lawyer expects
compensation.

CANON 21. A lawyer shall preserve the confidence and secrets of

his client even after the attorney-client relation is terminated.
Purposes
● Unless the client knows that his attorney cannot be compelled to reveal
what is told to him, he will suppress what he thinks to be unfavorable and
the advice which follows will be useless if not misleading
● To encourage a client to make full disclosure to his attorney and to place
unrestricted confidence in him in matters affecting his rights or obligations
●