IN RE CUNANAN

94 PHIL. 534

FACTS:

Congress passed Rep. Act No. 972, or what is known as the Bar Flunkers Act, in 1952. The title of the law
was, “An Act to Fix the Passing Marks for Bar Examinations from 1946 up to and including 1955.”

Section 1 provided the following passing marks:

1946-1951………………70%

1952 …………………….71%

1953……………………..72%

1954……………………..73%

1955……………………..74%

Provided however, that the examinee shall have no grade lower than 50%.

Section 2 of the Act provided that “A bar candidate who obtained a grade of 75% in any subject shall be
deemed to have already passed that subject and the grade/grades shall be included in the computation
of the general average in subsequent bar examinations.”

ISSUE:

Whether of not, R.A. No. 972 is constitutional.

RULING:

Section 2 was declared unconstitutional due to the fatal defect of not being embraced in the title of the
Act. As per its title, the Act should affect only the bar flunkers of 1946 to 1955 Bar examinations.
Section2 establishes a permanent system for an indefinite time. It was also struck down for allowing
partial passing, thus failing to take account of the fact that laws and jurisprudence are not stationary.

As to Section1, the portion for 1946-1951 was declared unconstitutional, while that for 1953 to 1955
was declared in force and effect. The portion that was stricken down was based under the following
reasons:
The law itself admits that the candidates for admission who flunked the bar from 1946 to 1952 had
inadequate preparation due to the fact that this was very close to the end of World War II;

The law is, in effect, a judgment revoking the resolution of the court on the petitions of the said
candidates;

The law is an encroachment on the Court’s primary prerogative to determine who may be admitted to
practice of law and, therefore, in excess of legislative power to repeal, alter and supplement the Rules of
Court. The rules laid down by Congress under this power are only minimum norms, not designed to
substitute the judgment of the court on who can practice law; and

The pretended classification is arbitrary and amounts to class legislation.

As to the portion declared in force and effect, the Court could not muster enough votes to declare it
void. Moreover, the law was passed in 1952, to take effect in 1953. Hence, it will not revoke existing
Supreme Court resolutions denying admission to the bar of an petitioner. The same may also rationally
fall within the power to Congress to alter, supplement or modify rules of admission to the practice of
law.

Case #19 (Zosa)

[G.R. No. 169079. February 12, 2007.]

FRANCISCO RAYOS, petitioner,

vs.

ATTY. PONCIANO G. HERNANDEZ, respondent.

TOPIC: Contingent Fee arrangement

FACTS:

1. Rayos was a client of Atty Hernandez in Rayos vs NAPOCOR.

The story of the case:

On Oct 26-27, 1978, typhoon Kading hit Bulacan and concurrently, NAPOCOR imprudently opened three
floodgates of the spillway of Angat Dam which caused flooding of Angat River. Consequently, 10
relatives of Rayos died and his family’s properties were destroyed. Rayos sued NAPOCOR. RTC dismissed
the case for lacking credible evidence. CA reversed the decision and awarded damages in favor of Rayos,
which was also affirmed by the SC.
Final and executory on Aug 4, 1993. The awards were as follows:

a. Actual damages - P520, 000

b. Moral damages – P500, 000

c. Litigation Expenses – P10,000.

2. The check issued by NAPOCOR was turned over to Atty Hernandez as he was the counsel of Rayos.
Rayos demanded the check from Atty H but Atty H refused

3. Rayos filed a motion with the RTC to direct Atty Hernandez to deliver to him the check. Despite the
Court Order, Atty H refused claiming that it was his means to ensure payment of his attorney’s fees.

4. Atty Hernandez deposited the amount of P502, 838. 79 to the bank account of Rayos.

5. Rayos filed a disbarment case against Atty H for his failure to return the remaining P557, 961. 21.

6. Atty H replied: Rayos allegedly agreed to a contingent basis fee on a 40%-60% (client-lawyer) sharing:

40% - attorney’s fees

20% - litigation expenses

7. The Court referred the case to Commission on Bar Discipline of IBP for investigation.

Investigating Commissioner recommended the DISMISSAL of the case.

IBP adopted and approved the same.

MAIN ISSUE:

Whether or not the contingent fee agreement is binding upon Rayos and Atty Hernandez.
DECISION:

YES, but with RESERVATIONS.

CONTINGENT FEE – the contingent fee is the amount agreed upon by the parties subject to the
stipulation that counsel will be paid for his legal services only if the suit or litigation prospers.

YES: Contracts of this nature are permitted because they redound to the benefit of the poor client and
the lawyer especially in cases where the client has meritorious cause of action but no means to pay for
legal services, unless he agrees to a contract of contingent fee. A much higher compensation is allowed
as contingent fee in consideration of the risk that the lawyer may get nothing if the suit fails.

RESERVATIONS: Contingent fee contracts should always be subject to the supervision of a court as to its
reasonableness. When the courts find that the stipulated amount is excessive or found to have been
marred by fraud, mistake, undue influence on the part of the attorney, public policy demands that said
contract be disregarded to protect the client from unreasonable exaction.

In the case at bar, Atty H collected 53% of the total amount due to Rayos.

Rayos was unschooled and frustrated with the loss of his loved ones and the destruction of his family’s
properties. Given these facts, Rayos would easily succumb to the demands of Atty H regarding his
attorney’s fees.

Taking note also of Atty H’s efforts in litigating Rayos’ case for 15 years and the risk he took in
representing Rayos on a contingent fee basis, a fee of 35% of the amount awarded to Rayos would be a
fair compensation for Atty H’s legal services.

Disbarment should never be decreed where any lesser penalty, such as temporary suspension, would
accomplish the end desired. Thus, guided by previous rulings of the Court, Atty Hernandez’s
SUSPENSION FOR 6 MONTHS is justified in the case at bar.

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NB:
Factors which should guide a lawyer in determining his fees:

Rule 20.1 of CPR:

The time spent and the extent of the services rendered or required;

The novelty and difficulty of the questions involved;

The importance of the subject matter;

The skill demanded;

The probability of losing other employment as a result of acceptance of the proffered case;

The customary charges for similar services and the schedule of fees of the IBP Chapter to which he
belongs;

The amount involved in the controversy and the benefits resulting to the client from the service;

The contingency or certainty of compensation;

The character of the employment, whether occasional or established; and

The professional standing of the lawyer.

NPC v. HEIRS OF SANGKAY

656 SCRA 60

G.R. No. 165828

August 24, 2011

TOPIC: Eminent Domain; Just Compensation

FACTS: National Power Corporation (NPC) undertook the Agus River Hydroelectric Power Plant Project to
generate electricity for Mindanao. It included the construction of several underground tunnels to be
used in diverting the water flow from the Agus River to the hydroelectric plants.
On 1997, Respondents sued NPC for recovery of damages of the property and a prayer for just
compensation. They alleged that the tunnel deprived them of the agricultural, commercial, industrial
and residential value of their land; and that their land had also become an unsafe place for habitation,
forcing them and their workers to relocate to safer grounds.

ISSUE: Whether the Heirs of Sangkay have the right to just compensation

RULING: Just compensation is the full and fair equivalent of the property taken from its owner by the
expropriator. It has the objective to recover the value of property taken in fact by the governmental
defendant, even though no formal exercise of the power of eminent domain has been attempted by the
taking agency.

The underground tunnels impose limitations on respondents’ use of the property for an indefinite
period and deprive them of its ordinary use. Hence, respondents are clearly entitled to the payment of
just compensation.

Notwithstanding the fact that petitioner only occupies the sub-terrain portion, it is liable to pay not
merely an easement fee but rather the full compensation for land. It is settled that the taking of private
property for public use, to be compensable, need not be an actual physical taking or appropriation. This
is so because in this case, the nature of the easement practically deprives the owners of its normal
beneficial use. Compensable taking includes destruction, restriction, diminution, or interruption of the
rights of ownership or of the common and necessary use and enjoyment of the property in a lawful
manner, lessening or destroying its value

Czarina T. Malvar v. Kraft Foods Phils., Inc., et al., G.R. No. 183952, September 9, 2013.

The case initially concerned the execution of a final decision with the Court of Appeals in a labor
litigation. Petitioner Malvar, however, entered into a compromise agreement with the respondents
pending appeal without informing her counsel. Malvar’s counsel filed a Motion to Intervene to Protect
Attorney’s Rights.
The Supreme Court, on considerations of equity and fairness, disapproved of the tendencies of clients
compromising their cases behind the backs of their attorneys for the purpose of unreasonably reducing
or completely setting to naught the stipulated contingent fees. Thus, the Court granted the Motion for
Intervention to Protect Attorney’s Rights as a measure of protecting the Intervenor’s right to his
stipulated professional fees. The Court did so in the interest of protecting the rights of the practicing Bar
rendering professional services on contingent fee basis.

Although the compromise agreement was still approved by the Court, the payment of the counsel’s
adequate and reasonable compensation could not be annulled by the settlement of the litigation
without the counsel’s participation and conformity. He remains entitled to the compensation, and his
rights are safeguarded by the Court because its members are officers of the Court who are as entitled to
judicial protection against injustice or imposition of fraud committed by the client as much as the client
is against their abuses as her counsel. In other words, the duty of the Court is not only to ensure that the
attorney acts in a proper and lawful manner, but also to see to it that the attorney is paid his just fees.
Even if the compensation of the attorney is dependent only on winning the litigation, the subsequent
withdrawal of the case upon the client’s initiative would not deprive the attorney of the legitimate
compensation for professional services rendered.