Canon 20
Ramos v Ngaseo
Facts: This is a complaint for suspension of
respondent Atty. Patricio A. Ngaseo for violation
of the Code of Professional Responsibility and
Article 1491 of the Civil Code by demanding
from his client, complainant Federico N. Ramos,
the delivery of 1,000 square meters of land, a
litigated property, as payment for his appearance
fees.
Sometime in 1998, complainant Federico Ramos
went to respondent Atty. Patricio Ngaseo's
Makati office to engage his services as counsel
in a case 1 involving a piece of land in San
Carlos, Pangasinan. Respondent agreed to
handle the case for an acceptance fee of
P20,000.00, appearance fee of P1,000.00 per
hearing and the cost of meals, transportation and
other incidental expenses. Complainant alleges
that he did not promise to pay the respondent
1,000 sq. m. of land as appearance fees
On September 16, 1999, complainant went to the
respondent's office to inquire about the status of
the case. Respondent informed him that the
decision was adverse to them because a
congressman exerted pressure upon the trial
judge. Respondent however assured him that
they could still appeal the adverse judgment and
asked for the additional amount of P3,850.00
and another P2,000.00 on September 26, 2000 as
allowance for research made.
Although an appeal was filed, complainant
however charges the respondent of purposely
failing to submit a copy of the summons and
copy of the assailed decision. Subsequently,
complainant learned that the respondent filed the
notice of appeal 3 days after the lapse of the
reglementary period
On January 29, 2003, complainant received a
demand-letter from the respondent asking for the
delivery of the 1,000 sq. m. piece of land which
he allegedly promised as payment for
respondent's appearance fee. In the same letter,
respondent also threatened to file a case in court
if the complainant would not confer with him
and settle the matter within 30 days.
Respondent argues that he did not violate Article
1491 of the Civil Code because when he
demanded the delivery of the 1,000 sq. m. of
land which was offered and promised to him in
lieu of the appearance fees, the case has been
terminated, when the appellate court ordered the
return of the 2-hectare parcel of land to the
family of the complainant.
Respondent further contends that he can collect
the unpaid appearance fee even without a written
contract on the basis of the principle of quantum
meruit. He claims that his acceptance and
appearance fees are reasonable because a Makati
based legal practitioner, would not handle a case
for an acceptance fee of only P20,000.00 and
P1,000.00 per court appearance.
Ruling:
Under Article 1491(5) of the Civil Code,
lawyers are prohibited from acquiring either by
purchase or assignment the property or rights
involved which are the object of the litigation in
which they intervene by virtue of their
profession. 7 The prohibition on purchase is all
embracing to include not only sales to private
individuals but also public or judicial sales. The
rationale advanced for the prohibition is that
public policy disallows the transactions in view
of the fiduciary relationship involved, i.e., the
relation of trust and confidence and the peculiar
control exercised by these persons. 8 It is
founded on public policy because, by virtue of
his office, an attorney may easily take advantage
of the credulity and ignorance of his client and
unduly enrich himself at the expense of his
client.
However, the said prohibition applies only if the
sale or assignment of the property takes place
during the pendency of the litigation involving
the client's property. Consequently, where the
property is acquired after the termination of the
case, no violation of paragraph 5, Article 1491
of the Civil Code attaches.
In the instant case, there was no actual
acquisition of the property in litigation since the
respondent only made a written demand for its
delivery which the complainant refused to
comply. Mere demand for delivery of the
litigated property does not cause the transfer of
ownership, hence, not a prohibited transaction
within the contemplation of Article 1491.
Even assuming arguendo that such demand for
delivery is unethical, respondent's act does
not fall within the purview of Article 1491. The
letter of demand dated January 29, 2003 was
made long after the judgment in Civil Case No.
SCC-2128 became final and executor on January
18, 2002.
We note that the report of the IBP
Commissioner, as adopted by the IBP Board of
Governors in its Resolution No. XVI-2003-47,
does not clearly specify which acts of the
respondent constitute gross misconduct or what
provisions of the Code of Professional
Responsibility have been violated. We find the
recommended penalty of suspension for 6
months too harsh and not proportionate to the
offense committed by the respondent. The power
to disbar or suspend must be exercised with
great caution. Only in a clear case of misconduct
that seriously affects the standing and character
of the lawyer as an officer of the Court and
member of the bar will disbarment or suspension
be imposed as a penalty. All considered, a
reprimand is deemed sufficient and reasonable.
WHEREFORE, in view of the foregoing,
respondent Atty. Patricio A. Ngaseo is found
guilty of conduct unbecoming a member of the
legal profession in violation of Rule 20.04 of
Canon 20 of the Code of Professional
Responsibility. He is REPRIMANDED with a
warning that repetition of the same act will be
dealt with more severely.
Director of Lands v Ababa
Facts: After winning a case for annulment of a
contract of sale with right of repurchase and
recovery of the parcels of land subject matter
thereof, petitioner Abarquez refused to comply
with his contractual obligation to his counsel to
give the latter 1/2 of the property recovered as
attorney's fees, and instead offered to sell the
whole parcels of land to the petitioner-spouses
Larrazabal. Hence, his counsel, Atty. Fernandez,
filed an affidavit of adverse claim with the
Register of Deeds of Cebu, annotating his claim
on petitioner Abarquez' Transfer Certificate of
Title. Despite said annotation, Abarquez sold 2/3
of the lands to petitioner-spouses Larrazabal.
Subsequently, the latter filed a cancellation
proceeding of the adverse claim before the trial
court where it was dismissed. The petitioner-
spouses appealed from the order of dismissal
directly to the Supreme Court contending among
others that a contract for a contingent fee is
violative of Article 1491 of the New Civil Code.
Ruling:
The Supreme Court affirmed the trial court's
decision and held that a contract for a contingent
fee is not covered by Article 1491 of the New
Civil Code since the transfer of 1/2 of the
property in litigation takes effect only after the
finality of a favorable judgment and not during
the pendency of the litigation of the property in
question; that Canon 13 of the Canons of
Professional Ethics expressly recognizes
contingent fees as an exception to
Canon 10; that the adverse-claimant's contingent
fee is valid; and that the registration thereof as
the only remedy open to him, substantially
complied with Section 110 of Act 496.
ATTORNEY AND CLIENT; CONTINGENT
FEES; PROHIBITION UNDER ARTICLE
1491, N.C.C. CONSTRUED. The prohibition
in Article 1491 of the New Civil Code applies
only to a sale or assignment to the lawyer by his
client of the property which is the subject of
litigation. For the prohibition to operate, the sale
or assignment of the property must take place
during the pendency of the litigation involving
the property. The prohibition does not apply to
cases where after completion of litigation the
lawyer accepts on account of his fee, an interest
in the assets realized by the litigation. There is a
clear distinction between such cases and one in
which the lawyer speculates on the outcome of
the matter in whichhe is employed.
SCHOOLS OF THOUGHT. Spanish civilists
differ in their views on whether or not a
contingent fee contract (quota litis agreement) is
covered by Article 1491, with Manresa
advancing that it is covered and Castoln
maintaining that it is not covered. The
Supreme Court of Spain, in its sentencia of 12
November 1917, has ruled that Article 1459 of
the Spanish Civil Code (Article 1491 of our
Civil Code) does not apply to a contract for a
contingent fee because it is not contrary to
morals or to law.
CANONS OF PROFESSIONAL ETHICS, NOT
INFRINGED BY CONTRACT FOR
CONTINGENT FEE. Contingent fees are not
prohibited in the Philippines. They are impliedly
sanctioned by law and are subject to the
supervision of the court in order that clients may
be protected from unjust charges.
REASON FOR ALLOWANCE. The reason
for allowing compensation for professional
services based on contingent fees is that of a
person could not secure counsel by a promise of
large fees in case of success, to be derived from
the subject matter of the suit, it would often
place the poor in such a condition as to amount
to a practical denial of justice. It not infrequently
happens that persons are injured through the
negligence or willful misconduct of others, but
by reason of poverty are unable to employ
counsel to assert their rights. In such event their
only means of redress lies in gratuitous service,
which is rarely given, or in their ability to find
someone who will conduct the case for a
contingent fee. That relations of this kind are
often abused by speculative attorneys or that
suits of this character are turned into a sort of
commercial traffic by the lawyer does not
destroy the beneficial result to one who is so
poor to employ counsel.
CONTINGENT FEE CONTRACT SUBJECT
TO SUPERVISION OF COURTS. A
contingent fee contract is always subject to the
supervision of the courts with respect to the
stipulated amount and may be reduced or
nullified. So that in the event that there is any
undue influence or fraud in the execution of the
contract or that the fee is excessive, the client is
not without remedy because the court will amply
protect him.
PROFESSIONAL ETHICS; CONTRACT FOR
CONTINGENT FEE IS VALID. Canon
13 of the Canons of Professional Ethics
expressly recognizes contingent fees by way of
exception to Canon 10. For while Canon 10
prohibits a lawyer from purchasing ". . . any
interest in the subject matter of the litigation he
is conducting", Canon 13, on the other hand,
allows reasonable contingent fee contract, thus:
"A contract for a contingent fee where
sanctioned by law, should be reasonable under
all circumstances of the case, including the risk
and uncertainty of the compensation, but should
always be subject to the supervision of a court,
as to its reasonableness." The distinction is
between buying an interest in the litigation as a
speculation, which Canon 10 condemns, and
agreeing, in a case which the lawyer undertakes
primarily in his professional capacity, to accept
his compensation contingent on the outcome.
NATURE. Canons of Professional Ethics
have already received judicial recognition by
being cited and applied by the Supreme Court of
the Philippines in its opinion. And they have
likewise been considered sources of Legal
Ethics. More importantly, the American Bar
Association, speaking through Chairman Howe
of the Ethics Committee, opined that "The
Canons of Professional Ethics are legislative
expressions of professional opinion." Therefore,
the Canons have some binding effect.
LAND REGISTRATION; SECTION 110,
REGISTRATION OF INTEREST OR
ADVERSE CLAIM, ALLOWED. An
adverse claim may be registered only by
whoever claims any part or interest in registered
land adverse to the registered owner, arising
subsequent to the date of the original
registration, if no other provision is made in this
Act (496) for registering the same. A contract for
a contingent fee being valid, it vested in the
adverse claimant an interest or right over the lots
in question to the extent of one-half thereof. The
interest become vested in adverse-claimant after
the case was won on appeal because only then
did the assignment of the one half portion of the
lots in question became effective and binding.
Since the interest or claim of counsel in the lots
in question arose long after the original
registration, there is no other provision of the
Land Registration Act under which the interest
or claim may be registered except as an adverse
claim under Section 110 of the Act. The interest
or claim cannot be registered as an attorney's
charging lien. There being substantial
compliance with Section 110 of Act 496, the
registration of the adverse claim is valid. Being
valid, its registration should not be canceled
because it is only when such claim is found
unmeritorious that the registration thereof may
be canceled.
EFFECT. The annotation of an adverse claim
is an measure designed to protect the interest of
a person over a piece of real property where the
registration of such interest or right is not
otherwise provided for by the Land Registration
Act, and serves as a notice and warning to third
parties dealing with said property that someone
is claiming an interest in the same or a better
right than the registered owner thereof.
PLEADING AND PRACTICE; RULE 138,
SECTION 37, SCOPE. A charging lien under
Section 37, Rule 138 of the Revised Rules of
Court is limited only to money judgments and
not to judgments for the annulment of a contract
or for delivery of real property.
Canon 21
Suntay v Suntay
Facts: A complaint for disbarment was filed by
the complainant against his nephew, Atty. Rafael
G. Suntay. Complainant alleged that respondent
was his legal counsel, adviser and confidant who
was privy to all his legal, financial, and political
affairs from 1956 to 1964. However, since they
parted ways because of politics, respondent had
been filing complaints and cases against
complainant, making use of confidential
information gained while their attorney-client
relationship existed. Thereafter, this case was
referred to the Office of the Solicitor General
(OSG) for investigation, report and
recommendation. After almost four years in
1982, the OSG submitted its report and
recommendation finding respondent guilty as
charged. Resolution of this case was delayed due
to several motions filed by the respondent. In
1988, the case was forwarded to the Integrated
Bar of the Philippines (IBP). Finally in 2001 the
IBP recommended that respondent Suntay be
suspended from the practice of law for two years
for immoral conduct. The investigating
commissioner adopted in toto the report and
recommendation of the OSG. In view of the
penalty involved, the case was referred to the
Court en banc for final action.
Ruling:
For violating the confidentiality of lawyer-client
relationship and for unethical conduct,
respondent Suntay was suspended by the
Supreme Court from the practice of law for two
years. After review of the records of this case,
the Court found the IBP recommendation to
be well taken. As found by both the OSG and
the IBP investigating commissioner,
respondent acted as counsel for clients in cases
involving subject matter regarding which he had
either been previously consulted by complainant
or which he had previously helped complainant
to administer as the latter's counsel and
confidant from 1956 to 1964.
LEGAL AND JUDICIAL ETHICS;
ATTORNEY-CLIENT RELATION;
CONSTRUED. A lawyer shall preserve the
confidences and secrets of his clients even after
termination of the attorney-client relation. As his
defense, respondent averred that complainant
failed to specify the alleged confidential
information used against him. Such defense is
unavailing. As succinctly explained in Hilado v.
DavidCommunications between attorney and
client are, in a great number of litigations, a
complicated affair, consisting of entangled
relevant and irrelevant, secret and well known
facts. In the complexity of what is said in the
course of the dealings between an attorney and a
client, inquiry of the nature suggested would
lead to the revelation, in advance of the trial, of
other matters that might only further prejudice
the complainant's cause. And the theory would
be productive of other unsalutary results. To
make the passing of confidential communication
a condition precedent, i.e., to make the
employment conditioned on the scope and
character of the knowledge acquired by an
attorney in determining his right to change sides,
would not enhance the freedom of litigants,
which is to be sedulously fostered, to consult
with lawyers upon what they believe are their
rights in litigation. The condition would of
necessity call for an investigation of what
information the attorney has received and in
what way it is or it is not in conflict with his new
position. Litigants would in consequence be
wary in going to an attorney, lest by an
unfortunate turn of the proceeding, if an
investigation be held, the court should accept the
attorney's inaccurate version of the facts that
came to him . . . Hence, the necessity of setting
down the existence of the bare relationship of
attorney and client as the yardstick for testing
incompatibility of interests. This stern rule is
designed not alone to prevent the dishonest
practitioner from fraudulent conduct, but as well
to protect the honest lawyer from unfounded
suspicion of unprofessional practice . . . It is
founded on principles of public policy, on good
taste . . . [T]he question is not necessarily one of
the rights of the parties, but as to whether the
attorney has adhered to proper professional
standard. With these thoughts in mind, it
behooves attorneys, like Caesar's wife, not only
to keep inviolate the client's confidence, but also
to avoid the appearance of treachery and double-
dealing. Only thus can litigants be encouraged to
entrust their secrets to their attorneys which is of
paramount importance in the administration of
justice.
Canon 22
Montano v IBP
FACTS: The complainant hired the services of
Atty. Juan S. Dealca as his counsel in
collaboration with Atty. Ronando L. Gerona in a
case pending before the Court of Appeals
docketed wherein the complainant was the
plaintiff-appellant.
The parties agreed upon attorneys fees in the
amount of P15,000.00 fifty percent (50%) of
which was payable upon acceptance of the case
and the remaining balance upon the termination
of the case. Accordingly, complainant paid
respondent the amount of P7,500.00
representing 50% of the attorneys fee.
Thereafter, even before respondent counsel had
prepared the appellants brief and contrary to
their agreement that the remaining balance be
payable after the termination of the case, Atty.
Dealca demanded an additional payment from
complainant obliged by paying the amount of
P4,000.00.
Prior to the filing of the appellants brief,
respondent counsel again demanded payment of
the remaining balance of P3,500.00. When
complainant was unable to do so, respondent
lawyer withdrw his appearance as complainants
counsel without his prior knowledge and/or
conformity.
Thus this complaint charging respondent with
misconduct and praying that he be sternly dealt
with administratively.
ISSUE: W/N respondent committed misconduct
and violated provisions of the CPR?
HELD: Yes. The Court finds respondents
conduct unbecoming of a member of the legal
profession. Under Canon 22 of the Code of
Professional Responsibility, a lawyer shall
withdraw his services only for good cause and
upon notice appropriate in the circumstances.
Although he may withdraw his services when
the client deliberately fails to pay the fees for the
services, under the circumstances of the present
case, Atty. Dealcas withdrawal was unjustified
as complainant did not deliberately fail to pay
him the attorneys fees. In fact, complainant
exerted honest efforts to fulfill his obligation.
Respondents contemptuous conduct does not
speak well of a member of the bar considering
that the amount owing to him was only
P3,500.00. rule 20.4 of Canon 20, mandates that
a lawyer shall avoid controversies with clients
concerning his compensation and shall resort to
judicial action only to prevent imposition,
injustice or fraud. Sadly, for not so large a sum
owed to him by complainant, respondent lawyer
failed to act in accordance with the demands of
the Code.

The Court, however, does not agree with
complainants contention that the maximum
penalty of disbarment should be imposed on
respondent lawyer. In the present case,
reprimand is deemed sufficient.
Respondent was REPRIMANDED.
Canoy v Ortiz
Facts: Canoy was among those low-income
clients whom Atty. Ortiz deigned to represent.
He claims having prepared the position paper of
Canoy, but before he could submit the same, the
Labor Arbiter had already issued the order
dismissing the case. Atty. Ortiz admits though
that the period within which to file the position
paper had already lapsed. He attributes this
failure to timely file the position paper to the
fact that after his election as Councilor because
he was too busy. Eventually, he withdrew from
his other cases and his free legal services.
Complainant filed this complaint but later on
withdrew .
claims that the reason why he took no further
Held: SUSPENDED: (1) month, with
WARNING that a repetition of the same
negligence will be dealt with more severely.
Still, the severance of the relation of attorney-
client is not effective until a notice of discharge
by the client or a manifestation clearly
indicating that purpose is filed with the court or
tribunal, and a copy thereof served upon the
adverse party, and until then, the lawyer
continues to be counsel in the case.
Assuming that Atty. Ortiz was justified in
terminating his services, he, however, cannot
just do so and leave complainant in the cold
unprotected. Indeed, Rule 22.02 requires that a
lawyer who withdraws or is discharged shall,
subject to a lien, immediately turn over all
papers and property to which the client is
entitled, and shall cooperate with his successor
in the orderly transfer of the matter. Atty. Ortiz
action on the case was that he was informed that
Canoy had acquired the services of another
counsel. Assuming that were true, there was no
apparent coordination between Atty. Ortiz and
this new counsel.
There are no good reasons that would justify a
lawyer virtually abandoning the cause of the
client in the midst of litigation without even
informing the client of the fact or cause of
desertion. That the lawyer forsook his legal
practice on account of what might be perceived
as a higher calling, election to public office,
does not mitigate the dereliction of professional
duty. Suspension from the practice is the usual
penalty, and there is no reason to deviate from
the norm in this case.