PALE : ATTY.
CAPULE : CEAC
A.C. No. 9872 January 28, 2014
NATIVIDAD P. NAVARRO and HILDA S. PRESBITERO, Complainants,
vs.
ATTY. IVAN M. SOLIDUM, JR., Respondent.
DECISION
PER CURIAM:
This case originated from a complaint for disbarment, dated 26 May 2008,
filed by Natividad P. Navarro (Navarro) and Hilda S. Presbitero (Presbitero)
against Atty. Ivan M. Solidum, Jr. (respondent) before the Integrated Bar of
the Philippines Commission on Bar Discipline (IBP-CBD).
From the Report, dated 1July 2009, of the IBP-CBD, we gathered the
following facts of the case:
On 4 April 2006, respondent signed a retainer agreement with Presbitero to
follow up the release of the payment for the latters 2.7-hectare property
located in Bacolod which was the subject of a Voluntary Offer to Sell (VOS)
to the Department of Agrarian Reform (DAR). The agreement also included
the payment of the debts of Presbiteros late husband to the Philippine
National Bank (PNB), the sale of the retained areas of the property, and the
collection of the rentals due for the retained areas from their occupants. It
appeared that the DAR was supposed to payP700,000 for the property but
it was mortgaged by Presbitero and her late husband to PNB
for P1,200,000. Presbitero alleged that PNBs claim had already prescribed,
and she engaged the services of respondent to represent her in the matter.
Respondent proposed the filing of a case for quieting of title against PNB.
Respondent and Presbitero agreed to an attorneys fee of 10% of the
proceeds from the VOS or the sale of the property, with the expenses to be
advanced by Presbitero but deductible from respondents fees. Respondent
received P50,000 from Presbitero, supposedly for the expenses of the case,
but nothing came out of it.
In May 2006, Presbiteros daughter, Ma. Theresa P. Yulo (Yulo), also
engaged respondents services to handle the registration of her 18.85-
hectare lot located in Nasud-ong, Caradio-an, Himamaylan, Negros. Yulo
convinced her sister, Navarro, to finance the expenses for the registration
of the property. Respondent undertook to register the property in
consideration of 30% of the value of the property once it is registered.
Respondent obtained P200,000 from Navarro for the registration expenses.
Navarro later learned that the registration decree over the property was
already issued in the name of one Teodoro Yulo. Navarro alleged that she
would not have spent for the registration of the property if respondent only
apprised her of the real situation of the property.
On 25 May 2006, respondent obtained a loan of P1,000,000 from Navarro
to finance his sugar trading business. Respondent and Navarro executed a
Memorandum of Agreement (MOA) and agreed that the loan (a) shall be for
a period of one year; (b) shall earn interest at the rate of 10% per month;
and (c) shall be secured by a real estate mortgage over a property located
in Barangay Alijis, Bacolod City, covered by Transfer Certificate of Title No.
304688. They also agreed that respondent shall issue postdated checks to
cover the principal amount of the loan as well as the interest thereon.
Respondent delivered the checks to Navarro, drawn against an account in
Metrobank, Bacolod City Branch, and signed them in the presence of
Navarro.
In June 2006, respondent obtained an additional loan of P1,000,000 from
Navarro, covered by a second MOA with the same terms and conditions as
the first MOA. Respondent sent Navarro, through a messenger, postdated
checks drawn against an account in Bank of Commerce, Bacolod City
Branch. Respondent likewise discussed with Navarro about securing a
"Tolling Agreement" with Victorias Milling Company, Inc. but no agreement
was signed.
At the same time, respondent obtained a loan of P1,000,000 from
Presbitero covered by a third MOA, except that the real estate mortgage
was over a 263-square-meter property located in Barangay Taculing,
Bacolod City. Respondent sent Presbitero postdated checks drawn against
an account in Metrobank, Bacolod City Branch.
Presbitero was dissatisfied with the value of the 263-square-meter property
mortgaged under the third MOA, and respondent promised to execute a
real estate mortgage over a 1,000-square-meter parcel of land adjacent to
the 4,000-square-meter property he mortgaged to Navarro.
However, respondent did not execute a deed for the additional security.
Respondent paid the loan interest for the first few months. He was able to
pay complainants a total of P900,000. Thereafter, he failed to pay either
the principal amount or the interest thereon. In September 2006, the
checks issued by respondent to complainants could no longer be
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negotiated because the accounts against which they were drawn were
already closed. When complainants called respondents attention, he
promised to pay the agreed interest for September and October 2006 but
asked for a reduction of the interest to 7% for the succeeding months.
In November 2006, respondent withdrew as counsel for Yulo. On the other
hand, Presbitero terminated the services of respondent as counsel.
Complainants then filed petitions for the judicial foreclosure of the
mortgages executed by respondent in their favor. Respondent countered
that the 10% monthly interest on the loan was usurious and illegal.
Complainants also filed cases for estafa and violation of Batas Pambansa
Blg. 22 against respondent.
Complainants alleged that respondent induced them to grant him loans by
offering very high interest rates. He also prepared and signed the checks
which turned out to be drawn against his sons accounts. Complainants
further alleged that respondent deceived them regarding the identity and
value of the property he mortgaged because he showed them a different
property from that which he owned. Presbitero further alleged that
respondent mortgaged his 263-square-meter property to her
for P1,000,000 but he later sold it for only P150,000.
Respondent, for his defense, alleged that he was engaged in sugar and
realty business and that it was Yulo who convinced Presbitero and Navarro
to extend him loans. Yulo also assured him that Presbitero would help him
with the refining of raw sugar through Victorias Milling Company, Inc.
Respondent alleged that Navarro fixed the interest rate and he agreed
because he needed the money. He alleged that their business transactions
were secured by real estate mortgages and covered by postdated checks.
Respondent denied that the property he mortgaged to Presbitero was less
than the value of the loan. He also denied that he sold the property
because the sale was actually rescinded. Respondent claimed that the
property he mortgaged to Navarro was valuable and it was actually worth
more than P8,000,000.
Respondent alleged that he was able to pay complainants when business
was good but he was unable to continue paying when the price of sugar
went down and when the business with Victorias Milling Company, Inc. did
not push through because Presbitero did not help him. Respondent also
denied that he was hiding from complainants.
Respondent further alleged that it was Yulo who owed him P530,000 as
interest due for September to December 2005. He denied making any false
representations. He claimed that complainants were aware that he could
PALE : ATTY. CAPULE : CEAC
no longer open a current account and they were the ones who proposed
that his wife and son issue the checks. Respondent further alleged that he
already started with the titling of Yulos lot but his services were
terminated before it could be completed.
A supplemental complaint was filed charging respondent with accepting
cases while under suspension. In response, respondent alleged that he
accepted Presbiteros case in February 2006 and learned of his suspension
only in May 2006.
After conducting a hearing and considering the position papers submitted
by the parties, the IBP-CBD found that respondent violated the Code of
Professional Responsibility.
The IBP-CBD found that respondent borrowed P2,000,000 from Navarro
and P1,000,000 from Presbitero which he failed to pay in accordance with
the MOAs he executed. The IBP-CBD found that based on the documents
presented by the parties, respondent did not act in good faith in obtaining
the loans. The IBP-CBD found that respondent either promised or agreed to
pay the very high interest rates of the loans although he knew them to be
exorbitant in accordance with jurisprudence. Respondent likewise failed to
deny that he misled Navarro and her husband regarding the identity of the
property mortgaged to them. Respondent also mortgaged a property to
Presbitero for P1,000,000 but documents showed that its value was
only P300,000. Documents also showed that he sold that property for
only P150,000. Respondent conspired with Yulo to secure loans by
promising her a 10% commission and later claimed that they agreed that
Yulo would "ride" on the loan by borrowing P300,000 from the amount he
obtained from Navarro and Presbitero. Respondent could not explain how
he lost all the money he borrowed in three months except for his claim that
the price of sugar went down.
The IBP-CBD found that respondent misled Navarro and Presbitero
regarding the issuance of the postdated checks, and there was nothing in
the records that would show that he informed them that it would be his
wife or son who would issue the checks. The IBP-CBD also found that
respondent had not been transparent in liquidating the money he received
in connection with Presbiteros VOS with DAR. He was also negligent in his
accounting regarding the registration of Yulos property which was financed
by Navarro.
The IBP-CBD found that respondent was guilty of violating Rule 1.01 of the
Code of Professional Responsibility for committing the following acts:
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(1) signing drawn checks against the account of his son as if they
were from his own account;
(2) misrepresenting to Navarro the identity of the lot he mortgaged
to her;
(3) misrepresenting to Presbitero the true value of the 263-square-
meter lot he mortgaged to her;
(4) conspiring with Yulo to obtain the loans from complainants;
(5) agreeing or promising to pay 10% interest on his loans although
he knew that it was exorbitant; and
(6) failing to pay his loans because the checks he issued were
dishonored as the accounts were already closed.
The IBP-CBD also found that respondent violated Canon 16 and Rule 16.01
of the Code of Professional Responsibility when he failed to properly
account for the various funds he received from complainants.
In addition, the IBP-CBD found that respondent violated Rule 16.04 of the
Code of Professional Responsibility which prohibits borrowing money from a
client unless the clients interest is fully protected or the client is given
independent advice.
On the matter of practicing law while under suspension, the IBP-CBD found
that the records were not clear whether the notice of suspension
respondent received on 29 May 2006 was the report and recommendation
of the IBP-CBD or the final decision of this Court. The IBP-CBD likewise
found that there was insufficient evidence to prove that respondent
mishandled his cases.
The IBP-CBD recommended that respondent be meted the penalty of
disbarment.
In Resolution No. XIX-2011-267 dated 14 May 2011, the IBP Board of
Governors adopted and approved the recommendation of the IBP-CBD with
modification by reducing the recommended penalty from disbarment to
suspension from the practice of law for two years. The IBP Board of
Governors likewise ordered respondent to return the amount of his unpaid
obligation to complainants.
PALE : ATTY. CAPULE : CEAC
Complainants filed a motion for reconsideration, praying that the penalty of
disbarment be instead imposed upon respondent.
The only issue in this case is whether respondent violated the Code of
Professional Responsibility.
The records show that respondent violated at least four provisions of the
Code of Professional Responsibility.
Rule 1.01 of the Code of Professional Responsibility provides:
Rule 1.01. - A lawyer shall not engage in unlawful, dishonest, immoral or
deceitful conduct.
With respect to his client, Presbitero, it was established that respondent
agreed to pay a high interest rate on the loan he obtained from her. He
drafted the MOA. Yet, when he could no longer pay his loan, he sought to
nullify the same MOA he drafted on the ground that the interest rate was
unconscionable. It was also established that respondent mortgaged a 263-
square-meter property to Presbitero for P1,000,000 but he later sold the
property for only P150,000, showing that he deceived his client as to the
real value of the mortgaged property. Respondents allegation that the sale
was eventually rescinded did not distract from the fact that he did not
apprise Presbitero as to the real value of the property.
Respondent failed to refute that the checks he issued to his client
Presbitero and to Navarro belonged to his son, Ivan Garcia Solidum III
whose name is similar to his name. He only claimed that complainants
knew that he could no longer open a current bank account, and that they
even suggested that his wife or son issue the checks for him. However, we
are inclined to agree with the IBP-CBDs finding that he made complainants
believe that the account belonged to him. In fact, respondent signed in the
presence of Navarro the first batch of checks he issued to Navarro.
Respondent sent the second batch of checks to Navarro and the third batch
of checks to Presbitero through a messenger, and complainants believed
that the checks belonged to accounts in respondents name.
It is clear that respondent violated Rule 1.01 of the Code of Professional
Responsibility. We have ruled that conduct, as used in the Rule, is not
confined to the performance of a lawyers professional duties. 1 A lawyer
may be disciplined for misconduct committed either in his professional or
private capacity.2 The test is whether his conduct shows him to be wanting
in moral character, honesty, probity, and good demeanor, or whether it
renders him unworthy to continue as an officer of the court. 3
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In this case, the loan agreements with Navarro were done in respondents
private capacity. Although Navarro financed the registration of Yulos lot,
respondent and Navarro had no lawyer-client relationship. However,
respondent was Presbiteros counsel at the time she granted him a loan. It
was established that respondent misled Presbitero on the value of the
property he mortgaged as a collateral for his loan from her. To appease
Presbitero, respondent even made a Deed of Undertaking that he would
give her another 1,000-square-meter lot as additional collateral but he
failed to do so.
Clearly, respondent is guilty of engaging in dishonest and deceitful
conduct, both in his professional capacity with respect to his client,
Presbitero, and in his private capacity with respect to complainant Navarro.
Both Presbitero and Navarro allowed respondent to draft the terms of the
loan agreements. Respondent drafted the MOAs knowing that the interest
rates were exorbitant. Later, using his knowledge of the law, he assailed
the validity of the same MOAs he prepared. He issued checks that were
drawn from his sons account whose name was similar to his without
informing complainants. Further, there is nothing in the records that will
show that respondent paid or undertook to pay the loans he obtained from
complainants.
Canon 16 and Rule 16.01 of the Code of Professional Responsibility provide:
CANON 16. - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND
PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.
Rule 16.01 A lawyer shall account for all money or property collected or
received for or from the client.
The fiduciary nature of the relationship between the counsel and his client
imposes on the lawyer the duty to account for the money or property
collected or received for or from his client. 4 We agree with the IBP-CBD that
respondent failed to fulfill this duty. In this case, the IBP-CBD pointed out
that respondent received various amounts from complainants but he could
not account for all of them.
Navarro, who financed the registration of Yulos 18.85-hectare lot, claimed
that respondent received P265,000 from her. Respondent countered
that P105,000 was paid for real estate taxes but he could not present any
receipt to prove his claim. Respondent also claimed that he paid P70,000 to
the surveyor but the receipt was only for P15,000. Respondent claimed
that he paid P50,000 for filing fee, publication fee, and other expenses but
again, he could not substantiate his claims with any receipt. As pointed out
PALE : ATTY. CAPULE : CEAC
by the IBP-CBD, respondent had been less than diligent in accounting for
the funds he received from Navarro for the registration of Yulos property.
Unfortunately, the records are not clear whether respondent rendered an
accounting to Yulo who had since passed away.
As regards Presbitero, it was established during the clarificatory hearing
that respondent received P50,000 from Presbitero. As the IBP-CBD pointed
out, the records do not show how respondent spent the funds because he
was not transparent in liquidating the money he received from Presbitero.
Clearly, respondent had been negligent in properly accounting for the
money he received from his client, Presbitero.1wphi1Indeed, his failure to
return the excess money in his possession gives rise to the presumption
that he has misappropriated it for his own use to the prejudice of, and in
violation of the trust reposed in him by, the client. 5
Rule 16.04 of the Code of Professional Responsibility provides:
Rule 16.04. - A lawyer shall not borrow money from his client unless the
clients 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.
Here, respondent does not deny that he borrowed P1,000,000 from his
client Presbitero. At the time he secured the loan, respondent was already
the retained counsel of Presbitero.
While respondents loan from Presbitero was secured by a MOA, postdated
checks and real estate mortgage, it turned out that respondent
misrepresented the value of the property he mortgaged and that the
checks he issued were not drawn from his account but from that of his son.
Respondent eventually questioned the terms of the MOA that he himself
prepared on the ground that the interest rate imposed on his loan was
unconscionable. Finally, the checks issued by respondent to Presbitero
were dishonored because the accounts were already closed. The interest of
his client, Presbitero, as lender in this case, was not fully protected.
Respondent violated Rule 16.04 of the Code of Professional Responsibility,
which presumes that the client is disadvantaged by the lawyers ability to
use all the legal maneuverings to renege on his obligation. 6 In his dealings
with his client Presbitero, respondent took advantage of his knowledge of
the law as well as the trust and confidence reposed in him by his client.
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We modify the recommendation of the IBP Board of Governors imposing on
respondent the penalty of suspension from the practice of law for two
years. Given the facts of the case, we see no reason to deviate from the
recommendation of the IBP-CBD imposing on respondent the penalty of
disbarment. Respondent failed to live up to the high standard of morality,
honesty, integrity, and fair dealing required of him as a member of the
legal profession.7 Instead, respondent employed his knowledge and skill of
the law and took advantage of his client to secure undue gains for
himself8 that warrants his removal from the practice of law. Likewise, we
cannot sustain the IBP Board of Governors recommendation ordering
respondent to return his unpaid obligation to complainants, except for
advances for the expenses he received from his client, Presbitero, that
were not accounted at all. In disciplinary proceedings against lawyers, the
only issue is whether the officer of the court is still fit to be allowed to
continue as a member of the Bar.9 Our only concern is the determination of
respondents administrative liability.10
Our findings have no material bearing on other judicial action which the
parties may choose to file against each other. 11 Nevertheless, when a
lawyer receives money from a client for a particular purpose involving the
client-attorney relationship, he is bound to render an accounting to the
client showing that the money was spent for that particular purpose. 12 If
the lawyer does not use the money for the intended purpose, he must
immediately return the money to his client. 13 Respondent was given an
opportunity to render an accounting, and he failed. He must return the full
amount of the advances given him by Presbitero, amounting to P50,000.
WHEREFORE, the Court finds Atty. Ivan M. Solidum, Jr. GUILTY of violating
Rule 1.01, Canon 16, Rule 16.01, and Rule 16.04 of the Code of
Professional Responsibility. Accordingly, the Court DISBARS him from the
practice of law effective immediately upon his receipt of this Decision. Atty.
Solidum is ORDERED to return the advances he received from Hilda S.
Presbitero, amounting to P50,000, and to submit to the Office of the Bar
Confidant his compliance with this order within thirty days from finality of
this Decision. Let copies of this Decision be furnished the Office of the Bar
Confidant, the Integrated Bar of the Philippines for distribution to all its
chapters, and the Office of the Court Administrator for dissemination to all
courts all over the country. Let a copy of this Decision be attached to the
personal records of respondent. SO ORDERED.
A.C. No. 3773 September 24, 1997
PALE : ATTY. CAPULE : CEAC
ANGELITA C. ORCINO, complainant,
vs.
ATTY. JOSUE GASPAR, respondent.
PUNO, J.:
On June 14, 1992, complainant Angelita C. Orcino filed with this Court a
letter-complaint dated December 10, 1991 against respondent Atty. Josue
Gaspar, her former counsel. Complainant prayed that this Court impose
disciplinary sanctions on respondent for abandoning his duties and for
failing to return the legal fees she fully paid for his services.
The complaint arose from the following facts: Complainant engaged the
services of respondent to prosecute a criminal case she intended to file
against several suspects in the slaying of her husband. In consideration
thereof, complainant bound herself to pay respondent legal fees of
P20,000.00 P10,000.00 to be paid upon signing of the contract and the
balance to be paid on or before the conclusion of the case. Complainant
was also to pay P500.00 per appearance of respondent before the court
and fiscal. This agreement was embodied in a contract executed on
February 22, 1991. 1
In accordance with the contract, complainant paid respondent the sum of
P5,000.00 on February 25, 1991, 2 another P5,000.00 on March 31,
1991, 3 and P10,000.00 on May 21, 1991, 4 for a total of P20,000.00.
Forthwith, respondent entered into his duties. He interviewed witnesses
and gathered evidence to build a case against the suspects. He drew up
the necessary sworn statements and dutifully attended the preliminary
investigation. The case was thereafter filed with the Regional Trial Court,
Branch 37, Baloc, Sto. Domingo, Nueva Ecija. 5
As private prosecutor, respondent religiously attended the bail hearings for
the accused although these hearings were postponed on motion of the
accused's counsel. Respondent however failed to attend the hearing
scheduled in August 1991. It was at this nearing that the court, over
complainant's objections, granted bail to all the accused. After the hearing,
complainant immediately went to respondent's residence and confronted
him with his absence. 6Respondent explained that he did not receive formal
notice of the hearing. 7 Complainant became belligerent and started
accusing him of jeopardizing the case by his absence. Respondent said that
her suspicions were based on rumors and intrigues fed to her by her
relatives. 8 Complainant, however, continued accusing him belligerently.
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She asked for the records of the case saying that she could refer them to
another lawyer. Stung by her words, respondent gave her the records. 9
Complainant never returned the records nor did she see respondent. On
September 18, 1991, respondent filed before the trial court a "Motion to
Withdraw as Counsel." 10 The motion did not bear the consent of
complainant.
On October 23, 1991, the court issued an order directing respondent to
secure complainant's consent to the motion "and his appearance as private
prosecutor shall continue until he has secured this consent." 11
Complainant refused to sign her conformity to respondent's
withdrawal. 12 Meanwhile, the hearings in the criminal case continued.
Respondent did not appear at the hearings nor did he contact complainant.
Complainant was thus compelled to engage the services of another lawyer.
Hence, the letter-complaint.
We referred the letter-complaint to the Integrated Bar of the Philippines,
Commission on Bar Discipline, for investigation, report and
recommendation.
The rule in this jurisdiction is that a client has the absolute right to
terminate the attorney-client relation at any time with or without
cause. 13 The right of an attorney to withdraw or terminate the relation
other than for sufficient cause is, however, considerably
restricted. 14 Among the fundamental rules of ethics is the principle that an
attorney who undertakes to conduct an action impliedly stipulates to carry
it to its conclusion. 15 He is not at liberty to abandon it without reasonable
cause. 16 A lawyer's right to withdraw from a case before its final
adjudication arises only from the client's written consent or from a good
cause. 17
Section 26 of Rule 138 of the Revised Rules of Court provides:
Sec. 26. Change of attorneys An attorney may retire at any time
from any action or special proceeding, by the written consent of his
client filed in court. He may also retire at any time from an action
or special proceeding, without the consent of his client, should the
court, on notice to the client and attorney, and on hearing,
determine that he ought to be allowed to retire. In case of
substitution, the name of the attorney newly employed shall be
entered on the docket of the court in place of the former one, and
written notice of the change shall be given to the adverse party.
PALE : ATTY. CAPULE : CEAC
xxx xxx xxx
A lawyer may retire at any time from any action special proceeding with
the written consent of his client filed in court and copy thereof served upon
the adverse party. Should the client refuse to give his consent, the lawyer
must file an application with the court. The court, on notice to the client
and adverse party, shall determine whether he ought to be allowed to
retire. The application for withdrawal must be based on a good cause. 18
In the instant case, complainant did not give her written consent to
respondent's withdrawal. The court thus ordered respondent to secure this
consent. Respondent allegedly informed the court that complainant had
become hostile and refused to sign his motion. 19 He, however, did not file
an application with the court for it to determine whether he should be
allowed to withdraw.
Granting that respondent's motion without complainant's consent was an
application for withdrawal with the court, we find that this reason is
insufficient to justify his withdrawal from the case. Respondent's
withdrawal was made on the ground that "there no longer exist[ed] the . . .
confidence" between them and that there had been "serious differences
between them relating to the manner of private prosecution." 20
Rule 22.01 of Canon 22 of the Code of Professional Responsibility provides:
CANON 22 A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR
GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE
CIRCUMSTANCES.
Rule 22.01 A lawyer may withdraw his services in
any of the following cases:
a) When the client pursues an illegal or immoral
course of conduct in connection with the matter he
is handling;
b) When the client insists that the lawyer pursue
conduct violative of these canons and rules;
c) When his inability to work with co-counsel will
not promote the best interest of the client;
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d) When the mental or physical condition of the
lawyer renders it difficult for him to carry out the
employment effectively;
e) When the client deliberately fails to pay the fees
for the services or fails to comply with the retainer
agreement;
f) When the lawyer is elected or appointed to public
office; and
g) Other similar cases.
A lawyer may withdraw his services from his client only in the following
instances: (a) when a client insists upon an unjust or immoral conduct of
his case; (b) when the client insists that the lawyer pursue conduct
violative of the Code of Professional Responsibility; (c) when the client has
two or more retained lawyers and the lawyers could not get along to the
detriment of the case; (d) when the mental or physical condition of the
lawyer makes him incapable of handling the case effectively; (e) when the
client deliberately fails to pay the attorney's fees agreed upon; (f) when the
lawyer is elected or appointed to public office; (g) other similar cases.
The instant case does not fall under any of the grounds mentioned. Neither
can this be considered analogous to the grounds enumerated. As found by
the Commission on Bar Discipline, this case arose from a simple
misunderstanding between complainant and respondent. Complainant was
upset by respondent's absence at the hearing where bail was granted to
the suspected killers of her husband. She vehemently opposed the grant of
bail. It was thus a spontaneous and natural reaction for her to confront
respondent with his absence. Her belligerence arose from her
overzealousness, nothing more. Complainant's words and actions may
have hurt respondent's feelings considering the work he had put into the
case. But her words were uttered in a burst of passion. And even at that
moment, complainant did not expressly terminate respondent's services.
She made this clear when she refused to sign his "Motion to Withdraw as
Counsel."
Assuming, nevertheless, that respondent was justified in terminating his
services, he, however, cannot just do so and leave complainant in the cold
unprotected. The lawyer has no right to presume that his petition for
withdrawal will be granted by the court. 21 Until his withdrawal shall have
been approved, the lawyer remains counsel of record who is expected by
his client as well as by the court to do what the interests of his client
PALE : ATTY. CAPULE : CEAC
require. 22 He must still appear on the date of hearing 23 for the attorney-
client relation does not terminate formally until there is a withdrawal of
record. 24
Respondent expressly bound himself under the contract to bring the
criminal case to its termination. He was in fact paid in full for his services.
Respondent failed to comply with his undertaking, hence, it is but fair that
he return to complainant half of the amount paid him. The peculiar
circumstances of the case have rendered it impossible for respondent and
complainant to continue their relation under the contract.
IN VIEW WHEREOF, respondent is admonished to exercise more prudence
and judiciousness in dealing with his clients. He is also ordered to return to
complainant within fifteen (15) days from notice the amount of ten
thousand pesos (P10,000.00) representing a portion of his legal fees
received from the latter with a warning that failure on his part to do so will
result in the imposition of stiffer disciplinary action. SO ORDERED.
A.C. No. 6056 September 9, 2015
FELICISIMA MENDOZA Vda. DEROBOSA, Complainant,
vs.
Attys. JUAN B. MENDOZA and EUSEBIO P. NA VARRO,
JR., Respondent.
DECISION
VILLARAMA, JR., J.:
Before us is a complaint for disbarment against Atty. Juan B. Mendoza (Atty.
Mendoza) for alleged deceitful acts against his client, and Atty. Eusebio P.
Navarro, Jr. (Atty. Navarro) for negligence in the handling of his client's
defense in the collection case filed by Atty. Mendoza.
Factual Antecedents
Eladio Mendoza (Eladio) applied for original registration of two parcels of
land (Lot Nos. 3771 and 2489) situated in Calamba, Laguna before the
Community Environment and Natural Resources Office (CENRO) at Los
Banos, Laguna and Land Management Bureau (LMB) in Manila. 1 While his
application was still pending, Eladio died leaving all his children as heirs to
7

his estate; among them is herein complainant Felicisima Mendoza Vda. De
Robosa (Felicisima). Eladio's children pursued the application and
executed a Special Power of Attomey 2 (SP A) in favor of Felicisima. Their
relative, Atty. Mendoza, prepared and notarized the said SPA. They also
engaged the services of Atty. Mendoza as their counsel in the proceedings
before the CENRO and LMB.
On February 20, 1993, upon the behest of Atty. Mendoza, Felicisima signed
a Contract for Service3 prepared by Atty. Mendoza. The said contract
stipulated that in the event of a favorable CENRO or LMB resolution,
Felicisima shall convey to Atty. Mendoza one-fifth () of the lands subject
of the application or one-fifth () of the proceeds should the same
property be sold.
The CENRO and the LMB proceedings resulted in the dismissal of Felicisima
and her siblings application for Lot No. 2489 and the partial grant of their
application for Lot No. 3771.4 The Bureau of Lands issued an Original
Certificate of Title (OCT) covering one-third () or about 8,901 square
meters of Lot No. 3771 in the names of Felicisima and her siblings.
Subsequently, Felicisima and her siblings sold the land to Greenfield
Corporation (Greenfield) and received the amount of P2,000,000.00 as
down payment.
On October 15, 1998, Atty. Mendoza, joined by his wife Filomena S.
Mendoza, filed in the Regional Trial Court (RTC) of Tanauan, Batangas a
Complaint5 against Felicisima and her siblings (Civil Case No. T-1080).
Atty. Mendoza claimed that except for the amount of P40,000.00, Felicisima
and her siblings refused to pay his attorneys fees equivalent to of the
proceeds of the sale of the land as stipulated in the Contract for Service.
In their Answer with Counterclaim,6 Felicisima and her siblings denied the
"existence and authenticity of the x x x Contract of Service," adding that it
did not reflect the true intention of the parties as they only agreed to pay
Atty. Mendoza P1,500.00 per appearance and up to P1,500.00 for gasoline
expenses. They also asserted that, based on quantum meruit, Atty.
Mendoza is not entitled to the claimed attorneys fees because they lost in
one case and he failed to accomplish the titling of the land awarded to
them, which would have enhanced the value of the property.
Felicisima and her siblings hired the services of Atty. Navarro as their
counsel in Civil Case No. T-1080.
PALE : ATTY. CAPULE : CEAC
On March 29, 2000, the RTC rendered judgment in favor of Atty. Mendoza
and against Felicisima and her siblings. The RTC ruled that Felicisima failed
to substantiate her claim that she did not enter into a contingency contract
for legal services with Atty. Mendoza, and ordered Felicisima to pay Atty.
Mendoza P1,258,000.00 (for the land sold at P7,120,800.00) representing
attorneys fees as well as the total cost of suit. 7
Atty. Navarro then filed a Notice of Appeal 8on behalf of Felicisima. However,
Atty. Mendoza moved for an execution pending appeal with the RTC. Since
no opposition was filed by Felicisima and her siblings, the RTC granted the
said motion and issued a writ of execution, which resulted in the levy and
eventual transfer of Felicisimas properties covered by Transfer Certificate
of Title Nos. T-433859 and T-433860 in favor of Atty. Mendoza as the
highest bidder in the execution sale.9
Meanwhile, the Court of Appeals (CA) ordered Felicisima to file an
appellants brief but Atty. Navarro failed to file the same within the period
granted by the CA. Consequently, the CA dismissed Felicisimas appeal for
non-compliance with Section 1(e), Rule 50 of the Revised Rules of Court. 10
On June 3, 2003, Felicisima filed a complaint-affidavit for disbarment before
this Court against Atty. Mendoza for allegedly deceiving her into signing
the Contract for Service by taking advantage of her illiteracy, and against
Atty. Navarro for dereliction of duty in handling her case before the CA
causing her properties to be levied and sold at public auction. 11
Felicisima alleges that Atty. Mendoza made her sign a document at her
house without the presence of her siblings. Said document (Contract for
Service) was written in English which she does not understand. She claims
that Atty. Mendoza told her the document will shield her from her siblings
possible future claims on the property because she alone is entitled to the
property as her siblings did not help her in processing the application for
original registration. She was not given a copy of the said document and
she discovered only during the trial that Atty. Mendoza anchors his claim
over of proceeds from the sale of the land awarded by the CENRO and
LMB on the same document she had signed.12
As to Atty. Navarro, Felicisima claims that her case before the CA was
neglected despite repeated follow-ups on her part. She also points out that
Atty. Navarro abandoned her case before the RTC when the latter failed to
file an opposition to Atty. Mendozas motion for execution pending appeal,
which resulted in the loss of her properties.13
8

In his Comment,14 Atty. Mendoza avers that he has been a lawyer since
1954 and retired sometime in 1983 due to partial disability. He went back
to practicing his profession in 1996 on a selective basis due to his disability
but completely stopped a year after. Being 82 years of age at the time of
filing his comment, Atty. Mendoza admits that he is now totally disabled,
cannot walk on his own, cannot even write and sign his name, and can only
move about with the help of his family for he has been suffering from a
severe case of "acute gouty arthritic attack" which causes extreme
difficulty in moving virtually all his joints. He points out that he had
previously handled pro bono a concubinage case filed by Felicisima against
her husband, having yielded to her repeated pleas as she was then
financially hard-up and psychologically distraught. For the application with
the CENRO and LMB, he agreed to be paid for his legal services on a
contingent basis, which contract was subsequently found by the RTC to be
valid. When it was time to collect his attorneys fees, Felicisima and her
siblings refused to pay him without any justifiable reason and even
threatened to shoot him if he continued to press for his compensation. This
left Atty. Mendoza with no other recourse but to avail of the judicial process
to enforce his claim.
Replying to the comment of Atty. Mendoza, Felicisima maintains that she
did not understand the contents of the Contract for Service and if it was
truly their agreement (contingent basis) they would not have given money
to Atty. Mendoza amounting to P66,000.00. In fact, she points out that Atty.
Mendoza failed to recover one of the lands applied for and to have the land
awarded to them titled because he became ill. Further, she denies the
allegation that she and her siblings threatened to shoot Atty. Mendoza for
how could they do it to a lawyer who will certainly have them jailed.
Besides, he never mentioned such incident during the hearing of the case.
On his part, Atty. Navarro asserts that he did his best to win Felicisimas
case although he was unsuccessful. He explains that even before handling
Felicisimas case, he had been saddled by many cases involving politicians
and sympathizers, having previously served as councilor in the Municipality
of Sto. Tomas, Batangas for two consecutive terms. He thus emphasized to
Felicisima that in order to "keep the case alive", he could file the Notice of
Appeal in her behalf, and instructed her to look for another lawyer who has
the time to attend to her case and that she would return to him only when
she failed to get one. However, Atty. Navarro admits that since he was too
preoccupied with so many cases in the local courts, he had altogether
forgotten about Felicisimas case, not having seen her again as per their
agreement.
Atty. Navarro avers that after a long time Felicisima suddenly showed up at
his office complaining why there was no appellants brief filed on her behalf
PALE : ATTY. CAPULE : CEAC
at the CA. He claims that Felicisima blamed her and even accused him of
conniving with Atty. Mendoza. Felicisima would not accept his explanation
and she obviously failed to understand his earlier instruction as he had
filed the Notice of Appeal precisely to give her enough time to secure the
services of a new lawyer having told her that he was quite busy with his
other cases. He therefore pleads for mercy and compassion if he had
somehow committed some lapses considering that this is the first time he
was charged administratively in his almost 39 years of law practice and
that he is too willing to take complainants cause if not for such apparent
miscommunication between a lawyer and his client. 15
On December 7, 2005, the Court referred the case to the Integrated Bar of
the Philippines (IBP) for investigation, report and recommendation. 16
On November 6, 2006, Felicisima filed a position paper 17 reiterating that
Atty. Mendoza clearly abused the trust and confidence she reposed in him,
depriving her of her material possessions by filing suit to enforce the
Contract for Service. She asserted that they could not have entered into a
contract with Atty. Mendoza for the conveyance of a portion of the land to
be awarded by the Bureau of Lands as his attorneys fees because they
already agreed to pay his fee per hearing plus transportation expenses and
the sum of P40,000.00. She contended that Atty. Mendoza should be held
liable for deceit and misrepresentation for tricking her to sign, to her
detriment, a document that she did not understand.
As to Atty. Navarro, Felicisima maintained that he abandoned his
responsibility to monitor and keep her updated of the status of her case
before the CA. She also alleges that Atty. Navarro made it appear to her
that he had already filed the appellants brief when, in fact, there was no
such undertaking. She thus prayed that Atty. Navarro be held liable for
negligence in the conduct and manner of handling her case before the CA.
IBPs Report and Recommendation
After two postponements, the mandatory conference was finally held on
September 25, 2006 where all parties appeared except for Atty. Mendoza.
Upon termination of the hearing, the parties were required to file their
position papers but only Felicisima complied.
On March 6, 2007, the Investigating Commissioner of the IBP Commission
on Bar Discipline (CBD) submitted her Report and
Recommendation18 finding Atty. Mendoza guilty of taking advantage of
Felicisimas ignorance just to have the Contract for Service signed. She
held that Atty. Mendoza violated Canon 17 of the Code of Professional
9

Responsibility (CPR) that a lawyer owes fidelity to the cause of his client
and shall be mindful of the trust and confidence reposed on him, as well as
Rule 20.04, Canon 20 which exhorts lawyers to avoid controversies with
clients concerning matters of compensation and to resort to judicial action
only to prevent imposition, injustice or fraud.19
As to Atty. Navarro, the Investigating Commissioner held that his
participation in politics affected his law practice and caused him to forget
about Felicisimas case. Having failed to file the appellants brief as ordered
by the CA, Atty. Navarro even filed a Motion to Withdraw Appearance at a
very late stage, leaving no time for Felicisima to secure the services of
another lawyer. His infraction caused the eviction of Felicisima and her
children from their residence by virtue of the writ of execution and public
auction of her real properties. The Investigating Commissioner further said
that Atty. Navarros acts showed lack of diligence in violation of Canon 18
of the CPR and his Lawyers Oath.20
The Investigating Commissioner recommended that both Atty. Mendoza
and Atty. Navarro be suspended for two (2) years from the practice of law. 21
On September 19, 2007, the IBP Board of Governors issued a
Resolution22 modifying the Investigating Commissioners Report and
Recommendation by lowering the period of suspension from two (2) years
to six (6) months.
Atty. Navarro filed a motion for reconsideration 23 contending that the IBP
Board of Governors failed to consider that after the filing of the Notice of
Appeal, there was no more lawyer-client relationship between him and
Felicisima. Insisting that there was a miscommunication between him and
Felicisima regarding his instruction that she should engage the services of
another lawyer after the filing of the Notice of Appeal, he stressed that she
only later found it difficult to scout for a new lawyer because she was being
charged exorbitant acceptance fees. Hence, Felicisima should be held
equally negligent in not hiring the services of another lawyer despite a
clear understanding to this effect. He further cites the lack of
communication between him and Felicisima, which resulted in the late
filing of the Notice of Withdrawal that she volunteered to file a long time
ago.
In her comment to Atty. Navarros motion for reconsideration, Felicisima
reiterated that Atty. Navarro should be held liable for negligence in failing
to update her of the status of the case and admitting such oversight.
PALE : ATTY. CAPULE : CEAC
She claims that despite several demands, Atty. Navarro ignored them and
made himself scarce.24
On February 28, 2012, the IBP-CBD forwarded the case to this Court for
proper disposition pursuant to Section 12, Rule 139-B of the Rules of Court.
Among the records transmitted was the Resolution dated January 15, 2012
denying the motion for reconsideration filed by Atty. Navarro. 25
The Courts Ruling
The Court has consistently held that in suspension or disbarment
proceedings against lawyers, the lawyer enjoys the presumption of
innocence, and the burden of proof rests upon the complainant to prove
the allegations in his complaint. The evidence required in suspension or
disbarment proceedings is preponderance of evidence. In case the
evidence of the parties are equally balanced, the equipoise doctrine
mandates a decision in favor of the respondent. 26 For the Court to exercise
its disciplinary powers, the case against the respondent must be
established by clear, convincing and satisfactory proof. 27
Preponderance of evidence means that the evidence adduced by one side
is, as a whole, superior to or has greater weight than that of the other. 28 It
means evidence which is more convincing to the court as worthy of belief
than that which is offered in opposition thereto. 29 Under Section 1 of Rule
133, in determining whether or not there is preponderance of evidence, the
court may consider the following: (a) all the facts and circumstances of the
case; (b) the witnesses manner of testifying, their intelligence, their
means and opportunity of knowing the facts to which they are testifying,
the nature of the facts to which they testify, the probability or improbability
of their testimony; (c) the witnesses interest or want of interest, and also
their personal credibility so far as the same may ultimately appear in the
trial; and (d) the number of witnesses, although it does not mean that
preponderance is necessarily with the greater number.
After a thorough review of the evidence and pleadings submitted by the
parties, we hold that Felicisima was able to prove her charges against Atty.
Navarro but not Atty. Mendoza.
Contract for Service with Atty.
Mendoza a contract for contingent
Fees
The Contract for Service dated February 20, 1993 reads:
10

That the client hereby employs the Attorney as their counsel for the titling
and recovery of their two parcels of land situated at Barangay Maunong,
Calamba, Laguna, [Lot] No. 2489 with an area of approximately 21,784
Square Meters and [L]ot No. 3771 with an area of more or less 26,703 and
in consideration of the services of the client agrees to pay the following:
1. For the prosecution of said proceedings (titling and recovery of the said
parcels of land and hearing at the Land Management Bureau, Manila, and
at the Office of the Community Environment and Natural Resources Office
at Los Baos, Laguna the client will give the Attorney one fifth (1/5[)] of the
said two parcels of land or one fifth (1/5[)] of the selling price of the said
properties if sold.
Said Attorney hereby accepts said employment on said terms and
conditions and to do his best care, skill and ability, and at all times to
protect the rights and interest of said client.
2. That the expenses of the proceedings, and such others as filing fees,
expenses of publication, costs legally taxable and all others shall be for the
account of the client.30
We cannot sustain the finding of the IBP that Atty. Mendoza misled
Felicisima into signing the above contract which supposedly was intended
to protect her from the claims of her siblings who did not spend for the
application with the CENRO and LMB. Such finding was based solely on the
statements of Felicisima in her affidavit-complaint. While Felicisima made a
reference to her testimony before the RTC, she did not attach the transcript
of stenographic notes of the said testimony detailing the circumstances of
her signing the Contract for Service. Neither is the receipt by Atty. Mendoza
of the sum of P40,000.00 after Felicisima and her siblings sold the land, by
itself an indication of fraud and deceit in the execution of the Contract for
Service.
Upon the other hand, Atty. Mendoza presented the RTC Decision in Civil
Case No. T-1080 dated March 29, 2000, the relevant portions of which
state:
It is not disputed that Atty. Mendoza was paid P1,000.00 for every
appearance and he was also given P300.00 for hiring a vehicle and driver
for each scheduled hearing. He also received P40,000.00 from Felicisima
Mendoza when defendants one-third portion of Lot No. 3771 was sold.
Atty. Mendoza filed the instant case to collect one-fifth of the sale price of
defendants land which was sold for P7,120,800.00 or the amount of
PALE : ATTY. CAPULE : CEAC
P1,424,000.00 minus the amount of P40,000.00 he received, or the amount
of P1,384,000.00.
During her testimony, Felicisima Mendoza admitted the authenticity of the
Special Power of Attorney whereby her brothers and sisters authorized her
to secure the services of the plaintiff Juan Mendoza adding that it was in
writing, in English and was explained to her before she signed it; that on
the basis of the authority given sisters she engaged the services of Atty.
Mendoza; that the signature in the document, entitled Contract of Service,
is that of her name which she signed in "his house."
On the basis of the evidence, the Court finds no ground to support
Felicisimas claim that she did not enter into any written agreement with
the plaintiff, Juan Mendoza, for the latter to render legal services and the
corresponding compensation therefor as set forth in the Contract of
Service. However, the Court finds that the amounts received by the
plaintiff Juan Mendoza from defendant Felicisima Mendoza during the
course of his legal services for the twenty hearings in the amount of
P1,300.00 per hearing or a total of P26,000.00 should also be deducted
from his claim of P1,384,000.00 leaving an unpaid balance of
P1,258,000.00 due plaintiff Juan Mendoza for legal services rendered the
defendants.31
Given the above finding of the RTC that Felicisima in fact entered into a
contract for legal services with Atty. Mendoza, thus debunking her defense
in her Answer denying the existence and authenticity of the said
document, it appears that Felicisima raised the issue of voluntariness of
her signing the Contract for Service only during the hearing when she
supposedly testified that, having reached only Grade IV and trusting
completely her lawyer cousin, Atty. Mendoza who told her that the
document will protect her from the claims of her siblings, she actually
signed the Contract for Service. 32 The RTC, however, found the evidence
adduced by Felicisima as insufficient to defeat Atty. Mendozas claim for
attorneys fees. Said judgment had attained finality and even pending
appeal was already executed on motion by Atty. Mendoza.
It bears to stress that a contingent fee arrangement is valid in this
jurisdiction and is generally recognized as valid and binding but must be
laid down in an express contract. 33 The validity of contingent fees depends,
in large measure, upon the reasonableness of the amount fixed as
contingent fee under the circumstances of the case. 34Nevertheless, when it
is shown that a contract for a contingent fee was obtained by undue
influence exercised by the attorney upon his client or by any fraud or
imposition, or that the compensation is clearly excessive, the Court must,
and will protect the aggrieved party.35
11

Apart from the allegations in her affidavit-complaint, Felicisima failed to
establish by clear and satisfactory proof of the deception allegedly
committed by Atty. Mendoza when she agreed in writing for the latters
contingent fees. Fraud and irregularity in the execution of their contingency
fee contract cannot be deduced from the fact alone that Atty. Mendoza
filed suit to enforce their contract.
Atty. Navarros Gross Negligence
With respect to Atty. Navarro, the facts on record clearly established his
failure to live up to the standards of diligence and competence of the legal
profession.
Lawyers engaged to represent a client in a case bear the responsibility of
protecting the latters interest with warmth, zeal and utmost
diligence.36 They must constantly keep in mind that their actions or
omissions would be binding on the client.37
In this case, Atty. Navarro agreed to represent Felicisima and her siblings in
Civil Case No. T-1080 and as their counsel he filed the Answer with
Counterclaim. He likewise attended the hearings of the case until the RTC
rendered an adverse judgment. However, after filing the Notice of Appeal,
nothing was heard of again from him. He did not file any opposition when
Atty. Mendoza moved for execution pending appeal, which resulted in the
sale of Felicisimas properties at public auction and eventual eviction of
Felicisima and her children from the said premises. Worse, he failed to file
an appellants brief despite receipt of the order from the CA directing him
to do so within the period specified therein, and to file a motion for
reconsideration when the appeal was dismissed due to non-filing of such
brief. His motion for extension of time to submit an appellants brief was
filed 93 days late and was thus denied by the CA. Barely a week after, he
filed a notice of withdrawal of appearance bearing the conformity of his
clients which was granted. It is evident from the foregoing that Atty.
Navarro failed to inform Felicisima of the status of the case so that the
latter was surprised upon being served the eviction order of the court and
eventual dismissal by the CA of their appeal.
Canon 18 of the CPR mandates that a lawyer shall serve his client with
competence and diligence.1wphi1 Rule 18.03 further provides that a
lawyer shall not neglect a legal matter entrusted to him and his negligence
in connection therewith shall render him liable.
Thus:
PALE : ATTY. CAPULE : CEAC
Once he agrees to take up the cause of a client, a lawyer owes fidelity to
such cause and must always be mindful of the trust and confidence
reposed in him. He must serve the client with competence and diligence
and champion the latters cause with wholehearted fidelity, care and
devotion. Elsewise stated, he owes entire devotion to the interest of the
client, warm zeal in the maintenance and defense of his clients rights, and
the exertion of his utmost learning and ability to the end that nothing be
taken or withheld from his client, save by the rules of law, legally applied.
This simply means that his client is entitled to the benefit of any and every
remedy and defense that is authorized by the law of the land and he may
expect his lawyer to assert every such remedy or defense. If much is
demanded from an attorney, it is because the entrusted privilege to
practice law carries with it the correlative duties not only to the client but
also to the court, to the bar and to the public. A lawyer who performs his
duty with diligence and candor not only protects the interest of his client;
he also serves the ends of justice, does honor to the bar and helps
maintain the respect of the community to the legal profession. 38
Atty. Navarros asseveration that he had instructed Felicisima to look for
another lawyer and given them the Notice of Withdrawal of Appearance for
them to file in the CA, fails to convince. If it is true that he did not agree to
continue being Felicisimas counsel before the CA, he should have
immediately filed the Notice of Withdrawal of Appearance himself after
filing the Notice of Appeal. Despite receipt of the order to file appellants
brief from the CA, he did not inform Felicisima about it nor did he inquire
from the latter whether they already secured the services of a new
counsel. That such withdrawal was filed long after the expiration of the
period to file appellants brief and the denial by the CA of the motion for
extension also belatedly filed by him, clearly indicate that he never
updated Felicisima on the status of their appeal, such information being
crucial after Atty. Mendoza succeeded in having the judgment executed
pending appeal.
Atty. Navarro, in fact, admitted that he forgot about Felicisimas case due
to his political activities. Despite having received notices from the CA, he
allowed the period of filing the appellants brief to lapse and failed to file a
motion for extension before such period expired. He did file a motion for
extension but only three months later and when such motion was denied,
he finally moved to withdraw from the case. There being no appellants
brief filed, the CA granted Atty. Mendozas motion to dismiss the appeal.
Under the circumstances, Atty. Navarro was grossly negligent in his duties,
resulting in great prejudice to Felicisima who lost her properties to satisfy
the judgment in favor of Atty. Mendoza.
12
 PALE : ATTY. CAPULE : CEAC

We have held that the failure of counsel to submit the appeal brief for his misconduct that seriously affects the standing and character of the lawyer
client within the reglementary period constitutes inexcusable as an officer of the court and a member of the bar.45
negligence,39 an offense that entails disciplinary action. 40 The filing of a
brief within the period set by law is a duty not only to the client, but also to WHEREFORE, the Court finds respondent Atty. Eusebio P. Navarro, Jr. GUILTY
the court.41 The failure to file an appellate court brief without any justifiable of violation of Rule 18.03 and Rule 18.04 of the Code of Professional
reason thus deserves sanction.42 Responsibility, and is hereby SUSPENDED from the practice of law for six
(6) months effective upon finality of this Decision, with warning that a
Atty. Navarros negligent handling of Felicisimas case was exacerbated by repetition of the same or similar violation shall be dealt with more severely.
his failure to inform her of the status of her case. There was no mention in The charges against Atty. Juan B. Mendoza are DISMISSED.
his pleadings of any attempt on his part to contact Felicisima at the crucial
stages when Atty. Mendoza moved for execution pending appeal and the SO ORDERED.
CA sent a directive for the filing of the appellants brief. If indeed, he had
already instructed Felicisima to look for another lawyer, he should have
apprised her of these developments and explained to her the urgency of
filing the notice of withdrawal of appearance and entry of appearance of a
new counsel she may have already engaged.

Atty. Navarro's failure to communicate vital information to his client

violated Rule 18.04 which provides:

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

The lawyer's duty to keep his client constantly updated on the

developments of his case is crucial in maintaining the client's confidence.
Indeed, the relationship of lawyer-client being one of confidence, there is
ever present the need for the lawyer to infonn timely and adequately the
client of important developments affecting the client's case. The lawyer
should not leave the client in the dark on how the lawyer is defending the
client's interests.43

In cases involving a lawyer's failure to file a brief or other pleading before

an appellate court, this Court has imposed suspension from the practice of
law for periods ranging from three to six months, and in most serious
cases, even disbannent.44

We find the recommendation of the IBP-Board of Governors to suspend

Atty. Navarro from the practice of law for six months appropriate under the
circumstances. Considering that this is his first administrative offense, such
penalty, and not disbarment as prayed for by complainant, serves the
purpose of protecting the interest of the public and the legal profession.
For this Court will exercise its power to disbar only in clear cases of

13

Supreme Court of Tennessee,at Nashville.
Greg SWAFFORD, M.D., Plaintiff/Appellee, v. Robert G. Greg
HARRIS, and Darrell R. Ryland, Individually and P.C.,
Defendants/Appellants.
Decided: March 16, 1998
William J. Simmons, Memphis, for Plaintiff-Appellee. Marc E. Overlock,
Nashville, for Amicus Curiae, Tennessee Medical Association. William L.
Bomar, Glankler Brown, PLLC, Memphis, for Defendant-Appellant, Harris.
George T. Lewis, III, Bradley E. Trammell, Baker, Donelson, Bearman &
PALE : ATTY. CAPULE : CEAC
Caldwell, Memphis, for Defendant-Appellant, Ryland. Dale H. Tuttle,
Memphis, for Amicus Curiae, Tennessee Defense Lawyers Association.
OPINION
The United States District Court for the Western District of Tennessee has
certified the following questions to this Court pursuant to Rule 23 of the
Tennessee Supreme Court:1
1.Whether a contract between a personal injury plaintiff and his
physician to pay the physician a fee contingent on the outcome of litigation
for the coordination of and consultation with respect to the medico/legal
aspects of the lawsuit, including potentially the giving of expert medical
testimony at trial, is enforceable under the laws of Tennessee;
2. Whether a contract between a personal injury plaintiff and his
physician to pay the physician a fee contingent on the outcome of litigation
for medical services and treatment (i.e., actual care and treatment for the
injuries) to the plaintiff/patient is enforceable under the laws of Tennessee;
and
3. If either or both of the above contracts are unenforceable, whether the
physician may recover on a quantum meruit theory for the expert and/or
medical services.
We accepted these important legal questions of first impression under Rule
23 and, in response, conclude that a contract requiring a party to pay a
physician a fee for medico-legal expert services and/or medical treatment
that is contingent on the outcome of litigation is contrary to public policy in
this state and therefore void. We also conclude that under the facts of
this case, payment for the physician's expert services and/or medical
treatment pursuant to a theory of quantum meruit is not appropriate.
On June 21, 1990, the defendant, Robert G. Harris, a resident of Mississippi,
was injured in an automobile accident occurring in Louisiana. Harris filed
a lawsuit against several defendants in Tennessee in connection with the
accident, and the case was removed to the United States District Court for
the Western District of Tennessee. Harris went to the plaintiff, Dr. Greg
Swafford of Memphis, Tennessee, for treatment of a cold and his injuries.
The injured Harris and the physician Swafford entered into two contractual
agreements. The first was an oral agreement between Harris and Dr.
Swafford whereby Dr. Swafford would act as medico/legal consultant and
assist with the preparation of Harris's personal injury suit in return for
151/313 percent of any monetary recovery received by Harris. The
agreement was reduced to writing on April 16, 1995.
14

The second agreement, entitled Medical Reports and Doctor's Lien, was
entered into in August of 1994. This agreement, which was signed by
Harris and his attorney, Darrell Ryland, required Ryland to pay Dr. Swafford
any money owed to him for medical services provided to Harris. This
agreement, according to the District Court's order of certification, was not
contingent on the outcome of the personal injury litigation.
In preparation for the trial, Dr. Swafford testified at one deposition relating
to Harris's personal injury claim and also, according to the complaint,
provided medical consultation, treatment, and services. When Harris's
personal injury claim settled for $625,000, Dr. Swafford demanded 151/313
percent as provided in the first contract. When he was not paid, Dr.
Swafford filed suit for breach of contract against Harris and his attorney
Ryland, as well as a suit for inducement to breach a contract against
Ryland.
The parties dispute the nature of the contractual agreements. Harris and
Attorney Ryland contend that the agreement for medico-legal services was
a contingency fee contract, while the agreement for medical treatment was
not a contingency fee contract. Dr. Swafford, on the other hand, argues
that the contingency fee contract included medico-legal services as well as
medical treatment services. He also contends that if the contingency fee
contract is unenforceable, he is entitled to recovery under a quantum
meruit theory.
The District Court, finding that a response to the questions of law set forth
above would substantially dispose of the case, certified the questions to
this Court pursuant to Rule 23 of the Tennessee Supreme Court. We
agreed to review these important questions of first impression.
CONTINGENCY FEE FOR CONSULTING AND EXPERT TESTIMONY
The defendants, Harris and his attorney Ryland, relying on extensive
authority in Tennessee and elsewhere, contend that a contingency fee
contract for the expert services of a physician is contrary to sound public
policy and void. Dr. Swafford, although not challenging this authority,
contends that at the time of contracting, there was no existing law in
Tennessee, and no guidelines applicable to him, which [gave] notice [of]
any public policy against contingency fee contracts.
We begin our analysis by determining whether the contingent fee contract
violated existing Tennessee public policy and if so, how such policy was
established.
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We first examine the American Medical Association Code of Ethics, 6.01,
which condemns contingency fees for the provision of medical services:
Contingent Physician Fees: If a physician's fee for medical services is
contingent on the successful outcome of a claim, such as a malpractice or
worker's compensation claim, there is the ever present danger that the
physician may become less of a healer and more of an advocate or
partisan in the proceedings. Accordingly, a physician's fee for medical
service should be based on the value of the service provided by the
physician to the patient and not on the uncertain outcome of a contingency
that does not in any way relate to the value of the medical service.
Similarly, although the Code of Ethics recognizes that as a citizen and as a
professional with special training and experience, the physician has an
ethical obligation to assist in the administration of justice, it again
prohibits the use of a contingency fee by a medical witness:
[t]he medical witness must not become an advocate or a partisan in the
legal proceeding. The medical witness should be adequately prepared
and should testify honestly and truthfully. The attorney for the party who
calls the physician as a witness should be informed of all favorable and
unfavorable information developed by the physician's evaluation of the
case. It is unethical for a physician to accept compensation that is
contingent upon the outcome of litigation.
American Medical Association Code of Ethics, 9.07 (emphasis added).
The AMA Code has been adopted as a regulatory policy by the Tennessee
Board of Medical Examiners, the Tennessee statutory agency charged with
the licensing and supervision of physicians in this jurisdiction. The Board
of Medical Examiners has the statutory responsibility and authority to
deny, suspend, or revoke a license for, among other things,
unprofessional, dishonorable or unethical conduct. Tenn.Code Ann. 63-
6-214(b)(1)(1997).2 Accordingly, a violation of the AMA Code constitutes
unprofessional conduct and violates public policy established by the
Tennessee Board of Medical Examiners.
The Supreme Court, under its inherent and statutory authority, governs the
admission and discipline of attorneys in this State. See, e.g., Dockery v.
Bd. of Professional Responsibility, 937 S.W.2d 863 (Tenn.1996). The Code
of Professional Responsibility and Disciplinary Rules governing the conduct
of attorneys are a part of the Rules of the Supreme Court. Tenn. Sup.Ct. R.
8. Disciplinary Rule 7-109(C) of the Code of Professional Responsibility
provides that a lawyer shall not pay, offer to pay, or acquiesce in the
payment of compensation to a witness contingent upon the content of the
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witness's testimony or the outcome of a case. (Emphasis added).
Similarly, ethical consideration 7-28 provides:
Witnesses should always testify truthfully and should be free from any
financial inducements hat might tempt them to do otherwise. A lawyer
should not pay or agree to pay a non-expert witness an amount in excess
of reimbursement for expenses and financial loss incident to being a
witness; however, a lawyer may pay or agree to pay an expert witness a
reasonable fee for services as an expert. But in no event should a lawyer
pay or agree to pay a contingent fee to any witness.
(Emphasis added). In our view, these provisions of the Code of
Professional Responsibility, promulgated by the Supreme Court and
authorized by the Tennessee Constitution and statutes, reflect public
policy, just as it is reflected in the American Medical Association Code of
Ethics. See, e.g., Spiegel v. Thomas, Mann & Smith, P.C., 811 S.W.2d 528,
531 (Tenn.1991)(holding that a contract which violated sections of the
Code of Professional Responsibility was void as against the public policy of
Tennessee.).
Accordingly, the medical and legal communities share the ethical
prohibition against the use of contingency fees for expert witnesses which
is contained in the respective professional codes for each profession and
adopted by the State as the public policy of Tennessee. This public policy
is re-enforced by the actions of the Tennessee Bar Association and the
Tennessee Medical Association in adopting the Interprofessional Code of
Cooperation, which provides in part that [u]nder no circumstances may a
physician charge or accept compensation for any service which is
contingent upon the outcome of a lawsuit. Article VI, 2.
Courts from other jurisdictions have likewise relied upon professional codes
in concluding that contingency fees for expert medical witnesses are
unenforceable as against sound public policy. For example, in Dupree v.
Malpractice Research, Inc., 179 Mich.App. 254, 445 N.W.2d 498 (1989),
contracts were executed whereby the defendant, Malpractice Research,
Inc., provided expert testimony and advice in connection with the plaintiff's
medical malpractice action in exchange for payment of costs and 20% of
the plaintiff's recovery. The Court of Appeals, citing professional codes in
the medical and legal professions, ruled that the contracts were against
public policy because they threaten[ed] the legitimate recoveries of
injured plaintiffs and imperil[ed] defendants and the fundamental truth-
seeking mission of our court system. Id. at 502. The Court also
reasoned:
The [expert's] interest in the amount of the damages furnished a powerful
motive for exaggeration, suppression, and misrepresentation, a temptation
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to swell the damages so likely to color his testimony as to be inimical to
the pure administration of justice, and therefore invalid.
Id. (quoting, Sherman v. Burton, 165 Mich. 293, 130 N.W. 667 (1911)).
In a New Jersey case, Polo v. Gotchel, 225 N.J.Super. 429, 542 A.2d 947
(1987), the plaintiffs contracted with a medical-legal consulting service
that was to locate medical experts to provide opinions and testimony as to
medical aspects of the plaintiff's malpractice suit. In return, the
defendant was to receive a contingency fee of 6 percent of the plaintiff's
gross recovery. In deciding the enforceability of the contract, the New
Jersey Supreme Court considered the AMA Code of Ethics provisions that
condemn contingency fees, a New Jersey statute that prohibited the use of
contingency fees by physicians, and sections of the Code of Professional
Responsibility that prohibit an attorney from sharing a contingency fee with
a non-lawyer. After observing that the 6 percent fee invaded the plaintiff's
right of recovery and that the defendant's service would not exist but for
the participation of doctors, the Court concluded that the contract was void
as against public policy. Id. at 948-49.
Similar public policy concerns have been emphasized by courts and
commentators with regard to contingency fee contracts with other types of
experts as well. For example, in Belfonte v. Miller, 212 Pa.Super. 508, 243
A.2d 150 (1968), the court invalidated a 10 percent contingency fee for the
services of a real estate appraiser, stating that improper conduct or bias
can be predicted easily when the compensation of the witness is directly
related to the absolute amount of an award which may in turn be
dependent to a great degree on the testimony of that same witness. Id.
at 153; see also New England Telephone and Telegraph Co. v. Board of
Assessors, 392 Mass. 865, 468 N.E.2d 263, 265 (1984)(the majority rule in
this country is that an expert witness may not collect compensation which
by agreement was contingent on the outcome of the controversy.);
Restatement of Contracts 552(2)(a bargain to pay an expert witness for
testifying to his opinion is illegal if the agreed compensation is
contingent on the outcome of the controversy.); cf. Ojeda v. Sharp
Cabrillo Hospital, 8 Cal.App.4th 1, 10 Cal.Rptr.2d 230 (1992)(contingency
fee contract with medical consulting service not per se void). 3
Given this overwhelming weight of authority, we disagree with Dr.
Swafford's contention that no controlling public policy existed or that the
public policy was not applicable simply because he is not a member of the
American or Tennessee Medical Associations. On the contrary, it is our
view that sound public policy in this jurisdiction, as in others, is crystal
clear: a contingency fee contract for the services of a physician acting in a
medico-legal expert capacity is void as against public policy and therefore
unenforceable.
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CONTINGENCY FEE FOR MEDICAL TREATMENT
Much of the foregoing authority and discussion is pertinent to the issue
of a contingency fee for medical treatment as well. In particular, the
American Medical Association Code of Ethics, 6.01, emphasizing the
ever present danger that the physician may become less of a healer and
more of an advocate or partisan, states that a physician's fee for medical
services should be based on the value of the service provided by the
physician to the patient and not on the uncertain outcome of a contingency
that does not in any way relate to the value of the medical service.
The prohibition in the American Medical Association Code of Ethics, which
has been adopted by the Tennessee Board of Medical Examiners, is a clear
reflection of public policy. As the New Jersey Supreme Court said in Polo v.
Gotchel, supra,
Section 8.04 This section clearly enunciates the public policy that
doctor's fees should not be based on an uncertain outcome of a
contingency, the underlying public policy being the danger of the physician
becoming more of an advocate and less of a healer. A doctor's fee should
be calculated only on the value of the medical services provided, in
accordance with accepted standards of fee payment for services rendered.
542 A.2d at 948 (emphasis added).
The same public policy is contained in the Interprofessional Code of
Cooperation adopted by the Tennessee Medical Association and the
Tennessee Bar Association, which states that under no circumstances may
a physician receive a contingency fee for any service. Article VI, 2. scope of the contingency fee contract. Harris and Attorney Ryland
Simply put, contingency fees for medical services not only imperil the
sanctity of the doctor/patient relationship but also create the potential that
pecuniary interests may influence professional judgment.
In this case the contracts indicate that the parties contemplated the legal
action and also Dr. Swafford's role in the proceedings. With the financial
incentives already in place, it is immaterial whether the contingency fee
contract was for medico-legal expert services and/or for medical
treatment. Under the authority discussed above, a contingency fee for
either is against sound public policy and therefore void and unenforceable.
QUANTUM MERUIT
We turn to the third and final question certified for our review. Dr.
Swafford contends that if contingency fee contracts for the services of a
physician are unenforceable, he is entitled to receive payment for the
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services rendered under a theory of quantum meruit. The defendants,
Harris and his attorney Ryland, argue that a quantum meruit recovery is
not appropriate where the underlying contract is void as against public
policy.4
A quantum meruit action is an equitable substitute for a contract claim
pursuant to which a party may recover the reasonable value of goods and
services provided to another if the following circumstances are shown:
1. There is no existing, enforceable contract between the parties
covering the same subject matter;
2. The party seeking recovery proves that it provided valuable goods or
services;
3. The party to be charged received the goods or services;
4. The circumstances indicate that the parties to the transaction should
have reasonably understood that the person providing the goods or
services expected to be compensated; and
5. The circumstances demonstrate that it would be unjust for a party to
retain the goods or services without payment.
Castelli v. Lien, 910 S.W.2d 420, 427 (Tenn.Ct.App.1995); see Paschall's,
Inc. v. Dozier, 219 Tenn. 45, 54, 407 S.W.2d 150, 154 (1966).
With regard to the first factor, we observe that the parties dispute the
contend it was solely for medico-legal expert services and that a separate,
non-contingency fee agreement existed for the medical treatment. Dr.
Swafford, on the other hand, contends that the contingency fee contract
included expert services and medical treatment and that, if void, he is
entitled to quantum meruit recovery for both.
We need not dwell on this factual dispute because our decision with
respect to recovery under quantum meruit rests principally upon the fifth
factor. Although we have not addressed this issue before under these
circumstances, we have held on at least one prior occasion that quantum
meruit was not available where the underlying contract was found void as
against public policy. For example, in White v. McBride, 937 S.W.2d 796
(Tenn.1996), a contract provided that an attorney would receive a
contingency fee plus a $2,500 retainer. The trial court found that the
contingency fee was clearly excessive in relation to the work performed by
the attorney in violation of Code of Professional Responsibility, Disciplinary
17

Rule 2-106, but awarded the attorney $12,500 based on quantum meruit.
We held that although attorneys should not be unfairly penalized for
innocent errors in drafting that might render a contract unenforceable, the
violation of Disciplinary Rule 2-106 was an ethical transgression of the
most flagrant sort as it goes to the heart of the fiduciary relationship that
exists between attorney and client. Id. at 803. We therefore reversed
the trial court's award of quantum meruit.
The Michigan Court of Appeals reached a similar conclusion with respect to
a contingency fee contract for physician services in Dupree, supra. After
holding that the contingency fee contract was void as against public policy,
the court said:
While it is not necessarily the case that quantum meruit is an inappropriate
consideration where the underlying contract is void as against public
policy, where a contract violates strong, established public policies
quantum meruit will not be given in aid of or to encourage unprofessional
conduct infringing the integrity of judicial proceedings. In this case, we
find contingent fee contracts of the type at issue so repugnant to
established public policy, as expressed by statutes, court rules, and court
opinions, that to permit recovery on a quantum meruit basis would defeat
or subvert those policies and threaten the integrity of the judicial system.
445 N.W.2d at 500 (emphasis added; citations omitted).
In our view, White and Dupree are applicable in this case. The
contingency fee contract for physician services is expressly prohibited by
both the American Medical Association Code of Ethics and the Tennessee
Code of Professional Responsibility. For the reasons previously discussed,
the violation not only subverts the doctor/patient relationship but also
converts Dr. Swafford into a partisan with an economic interest in the
outcome. Swafford's principal defense on appeal is that he was either
unaware of the ethical provisions or did not belong to the organizations
that promulgate the provisions-an explanation tantamount to suggesting
he is subject to no public policy or regulatory authority whatsoever. We
conclude that allowing quantum meruit under these circumstances would
undermine and subvert strong public policies established to prohibit
unprofessional conduct which affects the integrity of the judicial process
and the administration of justice.
CONCLUSION
Based on the foregoing authority and discussion we conclude that a
contract requiring a party to pay a fee for medico/legal expert services
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and/or medical treatment that is contingent on the outcome of litigation is
against public policy and unenforceable. We also conclude that a
quantum meruit recovery is not appropriate under the facts of this case.
Costs of this appeal are taxed to the plaintiff, Dr. Greg Swafford, for which
execution may issue if necessary.
FOOTNOTES
1. The Supreme Court may, at its discretion, answer questions of law
certified to it by the Supreme Court of the United States, a Court of
Appeals of the United States, a District Court of the United States in
Tennessee, or a United States Bankruptcy Court in Tennessee. This rule
may be invoked when the certifying court determines that, in a proceeding
before it, there are questions of law of this state which will be
determinative of the cause and as to which it appears to the certifying
court there is no controlling precedent in the decisions of the Supreme
Court of Tennessee. Tenn. Sup.Ct. R. 23, 1.
2. Relying on these provisions, the Tennessee Medical Association,
proceeding as amicus curiae, asserts that the contingency fee contracts
used for medical services or medical-legal consulting are void as against
public policy. It further asserts that the harm in such contracts is that the
inherent pecuniary interest diverts the physician's attention from the
paramount interest of providing quality health care.
3. We note that a few commentators, while acknowledging the
legitimate public policy goals of the majority rule against contingency fee
contracts for experts, have proposed alternative arrangements based on
the competing policy of providing expert services for litigants who may not
otherwise be able to afford expert services. See J. Parker, Contingent
Expert Witness Fees: Access and Legitimacy, 64 S. Cal. L.Rev. 1363 (1991)
(proposing contingency fee based on hours worked rather than amount of
plaintiff's recovery); Note, Contingent Fees for Expert Witnesses in Civil
Litigation, 86 Yale L.J. 1680 (1977)(proposing extensive court supervision of
contingency fee contract).
4. The Tennessee Medical Association, proceeding as amicus curiae,
agrees that a recovery under quantum meruit is not appropriate under the
facts of this case.
ANDERSON, Chief Justice. BIRCH, DROWOTA, REID and HOLDER, JJ., concur.
18